technical report on the agata nickel project scoping study

BOYD WILLIS HYDROMET

CONSULTING

TECHNICAL REPORT ON THE AGATA NICKEL PROJECT

SCOPING STUDY

November 19, 2010

Boyd Willis

Mark G. Gifford

Boyd Willis Hydromet Consulting Mindoro Resources Ltd

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2. TABLE OF CONTENTS 3. SUMMARY .......................................................................................................................................... 9

3.1 Preamble .................................................................................................................................... 9

3.2 Project Location ....................................................................................................................... 11

3.3 Geology, Resources and Mining .............................................................................................. 11

3.3.1 Geology and Resources ............................................................................................. 11 3.3.2 Process Plant Feed Grades ........................................................................................ 13 3.3.3 Mining ......................................................................................................................... 14

3.4 Scope of Work ......................................................................................................................... 14

3.5 Metallurgical Development ...................................................................................................... 14

3.6 Process Plant, Utilities and Infrastructure ................................................................................ 16

3.6.1 Base case and Option 1 ............................................................................................. 16 3.6.2 Option 2 ...................................................................................................................... 20

3.7 Capital Cost ............................................................................................................................. 24

3.7.1 Capital cost summary ................................................................................................. 24 3.7.2 Scope of the Capital Cost Estimate ............................................................................ 25 3.7.3 Basis of the Capital Cost Estimates............................................................................ 26 3.7.4 Capital Estimate Exclusions ....................................................................................... 26

3.8 Operating Costs ....................................................................................................................... 26

3.8.1 Operating Cost Summary ........................................................................................... 26 3.8.2 Basis of the Agata Nickel Project Operating Cost Estimates ..................................... 28 3.8.3 Estimate exclusions .................................................................................................... 29

3.9 Technical Discussion ............................................................................................................... 29

3.9.1 Technical Drivers for the HPAL/AL/SN-SX-EW Flowsheet (Base Case/Option 1) .... 29 3.9.2 Technical Drivers for the AL-MHP Flowsheet (Option 2) ........................................... 31 3.9.3 Future Study Enhancements ...................................................................................... 31

3.10 Environment and Social ........................................................................................................... 32

3.10.1 Overview ..................................................................................................................... 32 3.10.2 Governing Laws and Principles .................................................................................. 33 3.10.3 Environmental Impacts ............................................................................................... 33 3.10.4 Environmental Mitigations ........................................................................................... 34 3.10.5 Social Impacts and Mitigations ................................................................................... 36 3.10.6 Sustainable Development/Mine Closure .................................................................... 37

4. INTRODUCTION ............................................................................................................................... 38

5. RELIANCE ON OTHER EXPERTS ................................................................................................... 40

6. PROPERTY DESCRIPTION AND LOCATION ................................................................................. 41

6.1 Location ................................................................................................................................... 41

6.2 Property Description ................................................................................................................ 43

6.2.1 Tenement Type: .......................................................................................................... 46 7. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE and PHYSIOGRAPHY 47

7.1 Climate ..................................................................................................................................... 47

7.2 Local Resources and Infrastructure ......................................................................................... 48

7.3 Physiography ........................................................................................................................... 48

7.4 Access ..................................................................................................................................... 49

8. HISTORY ........................................................................................................................................... 49


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9. GEOLOGICAL SETTING .................................................................................................................. 50

9.1 Regional Geology .................................................................................................................... 50

9.2 Local Geology of Agata Project Area....................................................................................... 53

9.2.1 Greenschist (Cretaceous) ........................................................................................... 53 9.2.2 Ultramafics (Cretaceous) ............................................................................................ 53 9.2.3 Nabanog Limestone (Upper Eocene) ......................................................................... 53 9.2.4 Andesite and Tuff (Oligocene) .................................................................................... 54 9.2.5 Volcanic Intrusives (Upper Oligocene to Lower Miocene) .......................................... 54 9.2.6 Kitcharao Limestone (Lower Miocene) ....................................................................... 54 9.2.7 Recent Alluvium .......................................................................................................... 54

9.3 Laterite Ni Deposit Geology ..................................................................................................... 56

10. DEPOSIT TYPES .............................................................................................................................. 56

11. MINERALIZATION............................................................................................................................. 58

11.1 Agata Nickel Laterite Project ................................................................................................... 58

12. EXPLORATION ................................................................................................................................. 59

12.1 MRL Exploration (1997-2000) .................................................................................................. 59

12.2 MRL Exploration (2004-2009) .................................................................................................. 60

12.3 MRL Laterite Ni Exploration ..................................................................................................... 61

13. DRILLING .......................................................................................................................................... 62

13.1 Drilling Phases: ........................................................................................................................ 62

13.1.1 BHP-Billiton (2006) ..................................................................................................... 62 13.1.2 MRL Phase 1 (2007) ................................................................................................... 62 13.1.3 MRL Phase 2 (2007/08) .............................................................................................. 63 13.1.4 MRL Phase 3 (2008) ................................................................................................... 63 13.1.5 MRL Phase 4 (2010) ................................................................................................... 64

13.2 Summary .................................................................................................................................. 64

13.3 Drillhole Collars Survey ........................................................................................................... 65

14. SAMPLING METHOD AND APPROACH ......................................................................................... 65

15. SAMPLE PREPARATION, SECURITY AND ANALYSES ................................................................ 66

15.1 MRL Protocols ......................................................................................................................... 66

15.1.1 MRL Core Sampling ................................................................................................... 66 15.1.2 Checking of Laboratory Performance ......................................................................... 67

15.2 Laboratory Protocols ................................................................................................................ 69

15.2.1 McPhar Geoservices (Phil.), Inc. ................................................................................ 69 15.2.2 Intertek Testing Services Phils., Inc. .......................................................................... 69

15.3 Results of Internal Check Assays (McPhar and Intertek) ........................................................ 72

15.4 External Check Assays (MRL) ................................................................................................. 73

15.4.1 Nickel Standards ......................................................................................................... 73 15.4.2 Field Duplicates .......................................................................................................... 74 15.4.3 Coarse Rejects ........................................................................................................... 74 15.4.4 Pulp Rejects Analyzed by Primary Laboratory ........................................................... 77 15.4.5 Pulp Rejects Analyzed by Umpire Laboratory ............................................................ 77 15.4.6 Summary ..................................................................................................................... 78

16. DATA VERIFICATION ....................................................................................................................... 78

17. ADJACENT PROPERTIES ............................................................................................................... 80

18. MINERAL PROCESSING AND METALLURGICAL TESTING ......................................................... 80


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18.1 Introduction .............................................................................................................................. 80

18.2 Metallurgical Testing by Enlin Stainless Steel Corporation ..................................................... 81

18.2.1 Ore Samples ............................................................................................................... 81 18.2.2 Ore Slurry Thickening ................................................................................................. 81 18.2.3 HPAL Testing .............................................................................................................. 82 18.2.4 Atmospheric Leaching ................................................................................................ 83 18.2.5 Saprolite Neutralisation ............................................................................................... 83 18.2.6 CCD Settling ............................................................................................................... 83 18.2.7 Iron Removal............................................................................................................... 84 18.2.8 Nickel-Cobalt Precipitation .......................................................................................... 84

18.3 Testing at SGS Lakefield Oretest (SGS) ................................................................................. 85

18.4 Process Selection .................................................................................................................... 85

18.5 Development of Process Design Criteria ................................................................................. 87

18.5.1 Ore Treatment............................................................................................................. 87 18.5.2 High Pressure Acid Leaching ..................................................................................... 87 18.5.3 Atmospheric Leaching ................................................................................................ 88 18.5.4 Saprolite Neutralisation ............................................................................................... 88 18.5.5 Counter-Current Decantation ...................................................................................... 89 18.5.6 Iron/Aluminium Removal ............................................................................................. 89 18.5.7 CMN Direct Solvent Extraction Process ..................................................................... 90 18.5.8 Nickel Electrowinning .................................................................................................. 90 18.5.9 Final Neutralisation ..................................................................................................... 90

18.6 Mass Balance Calculations ...................................................................................................... 91

18.7 Process Description ................................................................................................................. 92

18.7.1 Overview ..................................................................................................................... 92 18.7.2 Leach Plant ................................................................................................................. 94 18.7.3 Metals Refinery ........................................................................................................... 95 18.7.4 Plant Services ............................................................................................................. 95

18.8 Alternative Process .................................................................................................................. 96

18.8.1 Leach Plant ................................................................................................................. 96 18.8.2 Product Section........................................................................................................... 97 18.8.3 Plant Services ............................................................................................................. 97

18.9 Recommended Additional Testwork and Process Review ...................................................... 98

18.9.1 HPAL/AL/SN Flowsheet .............................................................................................. 98 18.9.2 AL/SN Flowsheet ........................................................................................................ 99 18.9.3 Other Process Options and Testwork ......................................................................... 99 18.9.4 Continuous Pilot Plant Testing .................................................................................... 99

19. MINERAL RESOURCE ESTIMATE .................................................................................................. 99

19.1 Geometric Interpretation .......................................................................................................... 99

19.2 Raw Assay Statistics: ............................................................................................................ 100

19.3 Exploratory Data Analysis ...................................................................................................... 101

19.5 Bulk Density Determinations .................................................................................................. 113

19.6 Resource Classification ......................................................................................................... 119

19.7 Previous Resource Estimate (Cox, D.M., Decemebr 22, 2009) ............................................ 122

20. OTHER RELEVANT DATA AND INFORMATION .......................................................................... 125

20.1 Mining .................................................................................................................................... 125

20.1.1 Mining Operations ..................................................................................................... 125 20.1.2 Mine Infrastructure .................................................................................................... 125


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20.1.3 Haul Roads ............................................................................................................... 126 20.2 Plant and General Infrastructure ............................................................................................ 126

20.2.1 Introduction ............................................................................................................... 126 20.2.2 Existing Regional Infrastructure ................................................................................ 127 20.2.3 Site Development ..................................................................................................... 127 20.2.4 Water ........................................................................................................................ 129 20.2.5 Power Supply ............................................................................................................ 131 20.2.6 Port ........................................................................................................................... 133 20.2.7 Bulk Liquid Handling ................................................................................................. 133 20.2.8 Bulk Solids Handling ................................................................................................. 134 20.2.9 Fuel Tank Farm......................................................................................................... 135 20.2.10 Liquid and Solid Waste Management ....................................................................... 135 20.2.11 Plant Process Control System .................................................................................. 135 20.2.12 Buildings ................................................................................................................... 137 20.2.13 Access Roads ........................................................................................................... 138 20.2.14 Communications ....................................................................................................... 138 20.2.15 Security and Fencing ................................................................................................ 139

20.3 Environmental and Social Impact Assessment ..................................................................... 139

20.3.1 Potential Environmental & Social Impacts ................................................................ 139 20.3.2 Environmental Risk Management ............................................................................. 148 20.3.3 Sustainable Development/Mine Closure .................................................................. 150 20.3.4 Community Engagement Programs ......................................................................... 151

21. INTERPRETATION AND CONCLUSIONS ..................................................................................... 153

21.1 Base Case ............................................................................................................................. 153

21.2 Larger Production Case ......................................................................................................... 154

21.3 Atmospheric Leach Case ....................................................................................................... 154

22. RECOMMENDATIONS ................................................................................................................... 156

22.1 Prefeasibility Study ................................................................................................................ 156

22.2 Drilling of the Regional Exploration Target ............................................................................ 157

22.3 Future Testwork and Piloting ................................................................................................. 157

22.4 Potential Process Enhancements .......................................................................................... 158

22.4.1 Sulphuric Acid Plant .................................................................................................. 158 22.4.2 Electrowinning Cell House ........................................................................................ 158 22.4.3 Magnesia Supplier .................................................................................................... 158

22.5 Alternative Processing Options .............................................................................................. 158

22.5.1 Heap Leaching .......................................................................................................... 158 22.5.2 Direct Shipped Ore (DSO) and Thermal Upgrading ................................................. 159 22.5.3 Alternative Downstream Processing Options ........................................................... 160

22.6 Identify Plant and Port Sites .................................................................................................. 160

23. REFERENCES ................................................................................................................................ 161

24. DATE AND SIGNATURES .............................................................................................................. 163

25. ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES & PRODUCTION PROPERTIES ........................................................................................................... 167

25.1 Mining Operations .................................................................................................................. 167

25.1.1 General ..................................................................................................................... 167 25.1.2 Cut-Off Grades.......................................................................................................... 167 25.1.3 Mine Planning ........................................................................................................... 168

25.2 Recoverability ........................................................................................................................ 169


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25.2.1 General ..................................................................................................................... 169 25.2.2 HPAL of Agata Limonite Ore .................................................................................... 169 25.2.3 Atmospheric Leaching of Agata Saprolite Ore ......................................................... 169 25.2.4 Saprolite Neutralisation ............................................................................................. 169 25.2.5 Counter-Current Decantation .................................................................................... 170 25.2.6 CMN Direct Solvent Extraction Process ................................................................... 170 25.2.7 Iron/Aluminum Removal .......................................................................................... 170

25.3 Markets .................................................................................................................................. 171

25.3.1 Nickel Cathode Product ............................................................................................ 171 25.3.2 Mixed Hydroxide Product (MHP) .............................................................................. 171

25.4 Contracts ................................................................................................................................ 171

25.5 Environmental Considerations ............................................................................................... 171

25.5.1 Introduction ............................................................................................................... 171 25.5.2 Governing Laws and Principles ................................................................................ 172

25.6 Taxes and Dues ..................................................................................................................... 175

25.7 Capital Cost Summary ........................................................................................................... 176

25.7.1 Scope of the Capital Cost Estimate .......................................................................... 178 25.7.2 Basis of the Capital Cost Estimates.......................................................................... 178 25.7.3 Capital Estimate Exclusions ..................................................................................... 179

25.8 Operating Cost Summary ...................................................................................................... 179

25.8.1 Basis of the Agata Nickel Project Operating Cost Estimates ................................... 181 25.8.2 Estimate exclusions .................................................................................................. 182

25.9 Economic Analysis ................................................................................................................. 182

25.10 Payback ................................................................................................................................. 182

25.11 Mine Life ................................................................................................................................ 183

26. ILLUSTRATIONS............................................................................................................................. 183

LIST OF FIGURES

Figure 3-1: Agata Nickel Project in Northern Mindanao, Philippines .................................................... 9 Figure 3-2: Agata Nickel Project Location ........................................................................................... 11 Figure 3-3: Limonite and Saprolite Zone Identification in the Agata Deposit ...................................... 12 Figure 4-1: Map of the Philippines showing MRL project areas. ......................................................... 40 Figure 6-1: MRL Tenements and Projects in the Surigao Mineral District .......................................... 43 Figure 6-2: Map showing broad outline of ANLP and Agata Cu-Au Prospects ................................... 43 Figure 6-3: Compilation Map showing areas of mapped Ni Laterite within Surigao District ............... 44 Figure 7-1: Panoramic view of ANLP showing the main area of laterite development. ...................... 49 Figure 9-1: Geological Map of Surigao Mineral District ....................................................................... 52 Figure 9-2: Local Geologic Map of northern Agata Project Area ........................................................ 55 Figure 13-1: ANLP Drillhole Location Map – BHP Billiton and MRL (2007) Drilling .............................. 63 Figure 13-2: ANLP Drillhole Location Map – All Drilling ........................................................................ 64 Figure 15-1: Flowchart of Mcphar‟s Sample Preparation for Laterite.................................................... 70 Figure 15-2: McPhar‟s Laterite Analysis Procedure Flowsheet ............................................................ 71 Figure 15-3: Intertek‟s Sample Preparation Procedure for Laterite ....................................................... 71 Figure 15-4: Graphs of Nickel Standards Assays ................................................................................. 76 Figure 16-1: Comparison of Independent Checks and MRL Assays .................................................... 79 Figure18-1: Process Flowsheet ............................................................................................................ 93 Figure 19-1: Bedrock, Saprolite, and Topography triangulations in cross section with drillholes ....... 100 Figure 19-2: Block model, coloured by laterite horizon ....................................................................... 101


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Figure 19-3: Histograms for Limonite. ................................................................................................. 103 Figure 19-4: Histograms for Saprolite. ................................................................................................ 104 Figure 19-5: Contact analysis for Ni, Fe, Al, Co, MG and SiO2 from Limonite to Saprolite ................ 105 Figure 19-6: Variograms for Al, (Limonite top, Saprolite bottom). ....................................................... 107 Figure 19-7: Variograms for Co, (Limonite top, Saprolite bottom). ..................................................... 108 Figure 19-8: Variograms for Fe, (Limonite top, Saprolite bottom). ...................................................... 108 Figure 19-9: Variograms for Mg, (Limonite top, Saprolite bottom). ..................................................... 109 Figure 19-10: Variograms for Ni, (Limonite top, Saprolite bottom). ....................................................... 110 Figure 19-11: Variograms for SiO2, (Limonite top, Saprolite bottom). ................................................... 110 Figure 19-12: Comparison of composites against the block model for Ni in Saprolite .......................... 112 Figure 19-13: Agata Bulk Density Test Pit Location Map ...................................................................... 114 Figure 19-14: Graphs of Dry Bulk Density Measurements .................................................................... 118 Figure 19-15: Graphs of Moisture Content ............................................................................................ 118 Figure 19-16: Resource classification, Agata Nickel Deposit. ............................................................... 119 Figure 19-17: Grade-tonnage curve, Measured + Indicated, Limonite. ................................................ 121 Figure 19-18: Grade tonnage curve, Measured + Indicated Saprolite .................................................. 121 Figure 20-1 Approximate Locations of Marine Fish Sanctuaries in Tubay Coastal Area .................. 145 Figure 20-2 General Land Use Map of the Agata MPSA ................................................................... 146 Figures 20-3 & 20-4 - Extensive open areas at the eastern slope of Agata prospect. ............................. 147

LIST OF TABLES

Table 3-1: Project Options and Costs Summary ................................................................................ 10 Table 3-2 : Recalculated Agata Laterite Resources (NI 43–101), September 2010 .......................... 12 Table 3-3: Agata Nickel Project Plant Feed ....................................................................................... 13 Table 3-4: Key Operating Parameters ............................................................................................... 16 Table 3-5: Key Process Design Assumptions for Base Case and Option 1 ...................................... 16 Table 3-6: Key Operating Parameters for Option 2............................................................................ 20 Table 3-7: Key Process Design Assumptions for Option 2 ................................................................ 21 Table 3-8: Capital Cost Estimates for the Agata Nickel Project Processing Options ........................ 24 Table 3-9: Residue Storage Facility Deferred Capital Costs ............................................................. 25 Table 3-10: Base Case Operating Cost Estimate ................................................................................ 27 Table 3-11: Operating Cost Estimate for Option 1 (Larger HPAL Autoclave) ...................................... 27 Table 3-12: Operating Cost Estimate for Option 2 (Atmospheric Leach Only) .................................... 28 Table 3-13: Summary of Discharge Streams from the Nickel Project .................................................. 32 Table 3-14: Marine Discharge Standards ............................................................................................ 35 Table 5-1: List of Consultants and Contributors ................................................................................. 40 Table 6-1: Agata Project Tenements held by Mindoro: ...................................................................... 45 Table 7-1: Climate Averages and Extremes 1961-2000 .................................................................... 48 Table 13-1: NAMRIA Tie Points Technical Description ....................................................................... 65 Table 15-1: Nickel standards used at ANLP and frequency ................................................................ 69 Table 15-2: Variance of Original and Internal Laboratory Duplicate Analysis ..................................... 72 Table 15-3: Variance of Ni Standard and Laboratory Assays .............................................................. 73 Table 15-4: Variance of Field Duplicate and Original Assays .............................................................. 74 Table 15-5: Variance of Coarse Rejects and Original Assays ............................................................. 74 Table 15-6: Variance of Pulp Duplicates and Original Assays ............................................................. 77 Table 15-7: Variance of Pulp Duplicates and Interlab Assays ............................................................. 78 Table 16-1: Results of Independent Check on Drill Core Assays ........................................................ 79 Table 18-1: Ore Samples Tested by ESSC ......................................................................................... 81 Table 18-2: Size Fraction Analysis ....................................................................................................... 81 Table 18-3: Selected HPAL Test Results ............................................................................................. 82 Table 18-4: HPAL Discharge Solution Assays ..................................................................................... 82 Table 18-5: Selected Saprolite Neutralisation Test Results ................................................................. 83 Table 18-6: Iron Removal Product Solution Assays............................................................................. 84 Table 18-7: HPAL Design Criteria ........................................................................................................ 87 Table 18-8: AL Design Criteria ............................................................................................................. 88


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Table 18-9: Saprolite Neutralization Design Criteria ............................................................................ 88 Table 18-10: CCD Design Criteria.......................................................................................................... 89 Table 18-11: Iron/Aluminum Removal Design Criteria ........................................................................... 90 Table 18-12: Final Neutralisation Design Criteria .................................................................................. 90 Table 19-1: Block Model Properties ................................................................................................... 100 Table 19-2: Basic Statistics, Agata Nickel Deposit ............................................................................ 101 Table 19-3: Limonite and Saprolite Variogram Models ...................................................................... 106 Table 19-4: Estimation neighborhood parameters, Agata Nickel Resource ...................................... 111 Table 19-5: Composites vs blocks comparison .................................................................................. 112 Table 19-6: Summary of Bulk Density Measurements ....................................................................... 113 Table 19-7: Bulk Density Measurements on Ferruginous Laterite Materials ..................................... 114 Table 19-8: Bulk Density Measurements on Limonite Materials ........................................................ 115 Table 19-9: Bulk Density Measurements on Saprolite Materials (Pit Samples) ................................ 116 Table 19-10: Bulk Density Measurements on Saprolite Materials (Core Samples) ............................. 116 Table 19-11: Agata Nickel Mineral Resource Estimate as of 8

thSeptember 2010. .............................. 120

Table 19-12: Agata Nickel Mineral Resource Estimate as of 18th

November 2009. ............................ 123 Table 19-13: Agata Nickel Mineral Resource Estimate sub-set ........................................................... 124 Table 20-1: Water Consumption Summary ........................................................................................ 129 Table 20-2: Power Summary .............................................................................................................. 131 Table 20-3: Marine Discharge Standards .......................................................................................... 148 Table 21-1: Agata Nickel Project Plant Feed ..................................................................................... 155 Table 25-1: Agata Nickel Project Plant Feed ..................................................................................... 168 Table 25-2: Philippine Fiscal Statutes for Mineral Products .............................................................. 175 Table 25-3: Capital Cost Estimates for the Agata Processing Options.............................................. 177 Table 25-4: Residue Storage Facility Deferred Capital Costs ........................................................... 177 Table 25-5: Base Case Operating Cost Estimate .............................................................................. 180 Table 25-6: Operating Cost Estimate for Option 1 (Larger HPAL Autoclave) .................................... 180 Table 25-7: Operating Cost Estimate for Option 2 (Atmospheric Leach) .......................................... 181

LIST OF APPENDICES

Appendix 1: Process Deliverables Appendix 1.1: Design Basis Appendix 1.2: Design Criteria Appendix 1.3: Mass and Energy Balances Appendix 1.4: Block Flow Diagrams Appendix 2: Capital Cost Estimates Appendix 3: Operating Cost Estimates Appendix 4: Project Layouts Appendix 5: ANLP QAQC Procedures


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3. SUMMARY

3.1 Preamble

MRL Gold Phils., Inc. (MRL) a Philippine subsidiary of Mindoro Resources Ltd. (Mindoro), a company incorporated in Alberta, Canda and listed on the TSX – Venture Exchange, is currently investigating the potential to develop their Agata nickel laterite deposit in Northern Mindanao, Philippines (Figure 3-1). A recently completed Development Options Study performed by Boyd Willis Hydromet Consulting (BHWC) for MRL had recommended an initial Direct Shipped Ore (DSO) operation exploiting isolated parcels of high grade ore, followed by the establishment of a hydrometallurgical processing plant to treat the ROM limonite and saprolite ore.

The potential quantity and grade of the Exploration Target described is conceptual in nature, there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Until a feasibility study has been completed there is no certainty that the Company's projections will be economically viable.

Figure 3-1: Agata Nickel Project in Northern Mindanao, Philippines

The preliminary characterisation of the ore types and their amenability to acid leaching, have identified the following suitable processing routes, which are evaluated in this study:

Base Case – a major integrated High Pressure Acid Leaching (HPAL)/Atmospheric Leaching (AL)/Saprolite Neutralisation (SN) process. This option employs a Coral Bay Nickel sized autoclave (4.7 m ID). The nickel will be recovered by Direct Solvent Extraction (DSX) followed by Electrowinning to produce a Ni-cathode product. The base case is designed to produce 27 400 tonnes per annum nickel as Ni-cathode.


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Option 1 – a scale-up of the base case, which employs the maximum HPAL autoclave size to date (5.4 m ID) as per the Ambatovy Nickel autoclaves in Madagascar. The nickel production for this option is increased to 42 000 tonnes per annum nickel as Ni-cathode.

Option 2 – Atmospheric leaching of saprolitic materials only. The nickel will be recovered by hydroxide precipitation producing an intermediate Mixed Hydroxide Precipitate (MHP) product. The design capacity for this option is 14 300 tonnes per annum nickel contained in MHP.

Ausenco Vector were commissioned by BWHC to assist with the development of a scoping study for the above mentioned processing options. The study aimed to provide a preliminary economic assessment of the processing options at ±30 – 35% accuracy and to identify the accompanying issues such as environmental and technological risks. This report details the results of the scoping study.

A general summary of the project options and costs is presented in Table 3-1.

Table 3-1: Project Options and Costs Summary

Description Base Case

(HPAL/AL/SN)

4.7 m ID

Autoclave

Option 1

(HPAL/AL/SN)

5.4 m ID

Autoclave

Option 2

(AL/SN)

Ore Treated

Limonite (Mdt/y) 1.31 2.01 n/a

Saprolite (Mdt/y) 1.44 2.20 1.44

Product Tonnage

Nickel (as Ni-Cathodes) (t/y) 27 400 42 000

Cobalt Sulphide (t/y) 2 560 3 920

Mixed Hydroxides (wt/y) 58 300

Contained Metal

Nickel (t/y) 27 400 42 000 14 300

Cobalt (t/y) 1 660 2 540 310

Capital Cost

Project Cost (USD million) 1 325.6 1 735.5 740.5

Project Cost (USD/annual lb Ni) 21.94 18.73 23.49

Total Deferred Cost (USD million) 53.57 88.77 27.99

Operating Cost

Operating Cost (USD million/y) 148.9 206.1 102.6

Operating Cost (USD/lb Ni) 2.47 2.22 3.25

After Co-Credit (USD/lb Ni) 1.59 1.35 2.94


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3.2 Project Location

The Agata Nickel Project is located about 47 km northwest of Butuan City and 73 km southwest of Surigao City. The project‟s ore deposits lie within the municipalities of Tubay, Santiago and Jabonga, all in the province of Agusan del Norte in Northern Mindanao, Philippines (Figure 3-2). The Agata Nickel Project is located in an established mining district of Surigao and offers several advantages such as proximity to established infrastructure, protected ocean access, raw water source, a short shipping distance to China and other potential Asian markets, and an abundant supply of limestone on site.

The project‟s mine site and proposed process plant site are all accessible by any land vehicle from Butuan City or Surigao.

Figure 3-1: Agata Nickel Project Location

3.3 Geology, Resources and Mining

3.3.1 Geology and Resources

The Agata Nickel Project deposits are situated along the southern part of the uplifted and fault-bounded Western Range of the northern end of the east Mindanao Ridge. Greenschists, ultramafics, limestones, andesite and tuff, younger limestones, intrusive, and alluvium underlie the area. The laterite profile in the Agata nickel deposit (in increasing depth) consists of ferruginous laterite, limonite and saprolite zones or horizons, and saprolitic rock. The limonite zone is characteristically iron oxide-rich where the predominant minerals are hematite, goethite and clays, and with moderate nickel content (>1%) and low magnesium content (>1%), while

Proposed

Process Plant

and Port Site


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the saprolite zone has much less iron oxide, is magnesium-rich (generally well over 10%), and has a slightly higher nickel content than the limonite zone. The identification of the laterite and saprolite zones is shown in the following block model (Figure 3-3).

Figure 3-2: Limonite and Saprolite Zone Identification in the Agata Deposit

On September 8, 2010, MRL reported the result of their recalculated NI 43-101 compliant mineral resource estimate using a cut-off grade of 0.5% Ni for limonite and 0.8% Ni for

shown in

Table 3-1

Table 3-1. The Ni grade increases slightly compared to the previous estimate (from 1.03% to 1.04%), so the contained Ni metal for the Measured and Indicated increases by 10.9% (from 307kt Ni to 340kt Ni). The company is currently drilling an Exploration Target consisting of 50–70 million DMT at a grade of 0.9 to 1.2% Ni with the objective of converting a significant proportion of the Exploration Target to a Mineral Resource.

The reader is cautioned that the potential quantity and grade of the Exploration Target described is conceptual in nature, that there has been insufficient exploration to define a mineral resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource. Until a feasibility study has been completed there is no certainty that the Company's projections will be economically viable.

Table 3-1 : Recalculated Agata Laterite Resources (NI 43–101), September 2010

Classification Horizon kTonnes Ni % Co % Fe % Al % Mg % SiO2 %

Measured + Indicated

Limonite 10 210 0.94 0.11 45.59 3.37 1.24 5.82

Saprolite 22 382 1.09 0.03 11.46 0.51 17.06 39.95

Total 32 592 1.04 0.05 22.15 1.41 12.11 29.24

Inferred

Limonite 260 1.00 0.11 44.52 3.24 1.77 9.91

Saprolite 1 421 1.05 0.03 11.80 0.53 17.06 40.26

Total 1 681 1.04 0.04 16.85 0.95 14.69 35.58

Total metal contents in the reported resources represent metal in the ground and have not been adjusted for metallurgical recoveries and other factors which will be considered in later studies


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Mineral resources which are not mineral reserves do not have demonstrated economic viability

The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.

3.3.2 Process Plant Feed Mineral Resource Estimate

A sub-set of the November 2009 mineral resource estimate, released in December 2009, completed by Dallas Cox, BE (Min), an independent qualified person as defined by NI 43-101, was applied to the scoping study at commencement.

For the purposes of the scoping study, relatively aggressive cut-off grades were applied to the resource to approximate plant-feed to the base case project sufficient for a production rate of >2.5 million tonnes treated per annum for six years. MRL is currently drilling the regional Exploration Target to further evaluate the potential of supplying sufficient material to the base case project to support 20 years or more of operation.

The cut-off grades applied were:

limonite: 0.85% Ni

transition: 0.90% Ni

saprolite: 1.0% Ni.

Additionally, an upper cut-off of 1.35% Ni was applied to all three resource types above to classify the high grade material for potential direct shipped ore (DSO) operations, excluding 4.86 million additional tonnes of high-grade material.

A similar exercise applied to the new (2010) resource estimate (see tonnage grade curves) does not result in a materially different outcome, apart from a lower proportion of >1.35% DSO material. Further cut-off grade subsets of the new resource will be applied to future studies that will incorporate open-pit optimisation to produce mining inventory/mineral reserves estimates.

The resulting plant feed mineral resource is summarised in Table 3-2. For the purposes of defining plant feeds, transition ore has subsequently been included with limonite ore.

Table 3-2: Agata Nickel Project Plant Feed Mineral Resource (November 2009 Est)

Category Type COG Ni% kTonnes Ni % Co % Fe % Al % Mg % SiO2 %

Me

asu

red

an

d

Ind

ica

ted Limonite 0.85 – 1.35 6,435 1.04 0.12 45 3.0 1.4 6.8

Transition 0.90 – 1.35 425 1.18 0.06 22 0.7 14.0 37.7

Saprolite 1.00 – 1.35 6,835 1.15 0.02 11 0.5 16.9 40.5

Infe

rred

Limonite 0.85 – 1.35 647 1.01 0.10 43 3.0 1.4 6.8

Transition 0.90 – 1.35

Saprolite 1.00 – 1.35 2,045 1.14 0.02 12 0.5 16.9 40.5

Measured, Indicated and Inferred

Total Feed Resource

Limonite 7,507 1.05 0.11 43 2.9 2.1 8.6

Saprolite 8,880 1.15 0.02 11 0.5 16.9 40.5


14

The reader is cautioned that the preliminary assessment is preliminary in nature, it includes inferred material that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

3.3.3 Mining

Mining is planned to be carried out by industry standard open cut methods that are commonly applied in the Philippines and elsewhere. Excavators and articulated dump trucks, supported by standard auxiliary fleet (dozers, graders, water carts), are proposed and will be operated by an experienced Philippine contractor. Mining will be relatively selective on 2-3m high benches and will involve a range of grade control and stockpiling strategies. No high-risk technologies or strategies are envisaged for the mining operation. The excavators are expected to be approximately 30t operating weight in backhoe configuration loading 40t capacity articulated dump trucks, which are well suited to tropical operations. The minor amounts of overburden generated will ultimately be used in rehabilitation of the natural surface. Management of road quality and surface water flows will be the key areas of focus for the mining operation to minimise and control the sediments generated from the earthmoving activities. The tropical and monsoonal climate imposes typically high annual rainfall.

Mining costs in this study have been assumed based on information from comparable local operations, adjusted for differences in haulage distance and scale of operation.

Relevant operating experience is well established in the Philippines and is particularly strong in the Surigao-Butuan area where many mines are operating. Training and empowerment of local people is a key objective as part of the employment strategy for the mine.

The haulage of ore to plant stockpiles will be carried out by the mine contractor‟s fleet as the haulage distance is assume to be less than 4 km. The possibility to use an owner-operated fleet was not considered during the scoping study but will be assessed in future phases of study.

The necessary infrastructure to support the mining operation includes a laboratory, workshops, mine offices, accommodation, messing facilities and a medical clinic.

3.4 Scope of Work

The objective of the Agata Nickel Project Scoping Study is to provide a preliminary assessment of the processing options economics at ±30 – 35% accuracy and identify the other project drivers such as environmental and technology risks. The scoping study includes the investigation of the mining, processing, process services, power generation, infrastructure, and major environmental issues. The accuracy of the study estimates is prepared in accordance with the Ausenco Class 1 estimating guidelines.

3.5 Metallurgical Development

A preliminary metallurgical testwork investigation for the Agata nickel laterite deposits was conducted by Enlin Stainless Steel Corporation (ESSC) in the Philippines. The bench scale testwork included atmospheric leaching, HPAL, saprolite neutralisation, limestone neutralisation / iron removal and mixed hydroxide precipitation. The following summarises the results of the testwork:

The testwork was conducted using limonite, transitional and saprolite ore.


15

The particle size analysis revealed that nickel and other components were distributed throughout the size fractions of the material, hence beneficiation or ore upgrading was deemed to be not applicable. No ore scrubbing or de-agglomeration was applied to the ore prior to size analysis.

Ore slurry thickening to 50% solids was achieved within just three minutes without the aid of flocculant. This is questionable since laterites are typically clayey materials and hard to settle without proper flocculation. A conservative value of 35% solids was therefore assumed for the current scoping study.

90% nickel extraction was achieved in Atmospheric leaching at an acid consumption of 900 kg/t. The results are typical for a Philippine laterite processed under AL.

Typical HPAL results were obtained, with good extractions and short residence times. However, attempts at process optimisation lacked direction.

Saprolite neutralisation reported good metal recoveries from the saprolite ore. However, critical details of the testwork were not reported, such as the initial and terminal acid concentrations and the amount of limonite leached to produce the HPAL slurry.

No comprehensive CCD settling data were reported apart from the flocculant rates and settling times.

Iron neutralisation was conducted using limestone addition and typical results were obtained.

Mixed hydroxide precipitation was tested to recover the nickel and cobalt using caustic soda or magnesia slurry. An optimum pH range for recovery was reported using the two reagents.

A more comprehensive bench scale testwork is currently being conducted at SGS Lakefield Oretest in Perth, and includes the following:

Head Analysis and Size by Size Analysis: limonite, transition and saprolite ores

Scrubbing, Screening and Size by Size Analysis: limonite, transition and saprolite ores

Mineralogy (QEMSCAN, High Resolution PMA, Interpretative SEM-EDX, semi-quantitative XRD and optical microscopy): limonite and saprolite ores

Preparation of ore slurries in seawater for subsequent testwork, including crushing (if required), de-agglomeration (scrubbing), screening with rejection of O/S (subject to assay) and grinding (if required)

Ore slurry thickening and settling testwork, including flocculant screening and settling tests using 2 m raked columns

HPAL testing of a limonite or a limonite/transition blend, including examination of acid addition rate and residence time

Atmospheric leach testing of a saprolite or a saprolite/transition ore blend, including examination of acid addition rate and residence time

Bottle Roll testing to examine the amenability of a saprolite or a saprolite/transition ore blend to heap leaching, including acid agglomeration and percolation testing


16

Saprolite Neutralisation testing using a saprolite or a saprolite/transition ore blend to partially neutralise free acid in a combined HPAL/atmospheric leach product slurry, including examination of saprolite addition ratio and residence time

Leach discharge slurry thickening and settling testwork, including flocculant screening and settling tests using 2 m raked columns

Limestone available CaCO3 and Reactivity testing

Limestone Calcination and testing of Lime Reactivity, including examination of optimum calcination time and temperature.

3.6 Process Plant, Utilities and Infrastructure

3.6.1 Base case and Option 1

3.6.1.1 Design Basis and Key Assumptions

The key operating parameters for the process flowsheet considered for the Base Case and Option 1 in this study are outlined in Table 3-3.

Table 3-3: Key Operating Parameters

Case Base Case Option 1

Case Description: HPAL/AL/Sap Neut

4.7 m ID Autoclave

HPAL/AL/Sap Neut

5.4 m ID Autoclave

Ore Feed to Plant:

Limonite, Mdt/y 1.31 2.01

Saprolite, Mdt/y 1.44 2.20

Overall Recovery:

Nickel, % 90.75 90.75

Cobalt, % 91.70 91.70

Products:

Nickel Metal, t/y 27 400 42 000

Cobalt Sulphide, dt/y 2 560 3 920

The key process plant assumptions are listed in Table 3-4.

Table 3-4: Key Process Design Assumptions for Base Case and Option 1

Item Value

HPAL:

Autoclave Residence Time, min 40

Temperature, °C 255

Nickel Extraction, % 97

Cobalt Extraction, % 96


17

Item Value

Acid Consumption, kg/t ore 320

Terminal Acid Concentration, g/L 50

Atmospheric Leaching:





Saprolite Neutralisation:

Saprolite Nickel Dissolution, % 86

Saprolite Cobalt Dissolution, % 93

Terminal Acid Concentration, g/L 12.3

Direct SX Circuit:

Primary SX Extractant Mg loaded Versatic Acid

Nickel Extraction, % 99.6

Cobalt Extraction, % 97.8

Final Neutralisation:

Target pH 7.5

Residual Manganese in solution, mg/L <200

3.6.1.2 Process Plant Configuration

Leach Plant

The ore treatment plant includes separate circuits to treat limonite and saprolite ores. The limonite ore preparation circuit produces fully de-agglomerated limonite slurry for high pressure acid leaching (HPAL) and the saprolite circuit produces ground slurry for atmospheric leaching (AL) and saprolite neutralisation (SN). The limonite ore treatment plant comprises the following principal operations:

primary crushing to <200 mm by roll sizer

limonite de-agglomeration by wet rotary drum scrubbing and rejection of the coarse oversize fraction (>10 mm) by screening

single stage, closed circuit ball milling to produce a ground limonite slurry.

The saprolite ore treatment plant consists of the following principal operations:


single stage, closed circuit saprolite SAG milling to produce ground saprolite slurry


18

thickening of the ground saprolite slurry for delivery to leach plant.

The leach plant includes limonite slurry thickening, slurry heating, leaching of nickel and cobalt from limonite ore at high temperature (255 °C) and pressure (4425 kPag). In the atmospheric leach circuit nickel and cobalt are leached from saprolite ore at atmospheric conditions (95-100 °C and ambient pressure). Sulphuric acid is used as the lixiviant for both HPAL and atmospheric leaching. The HPAL circuit maximises heat recovery by recycling steam flashed during depressurisation of the slurry back to the preheat circuit.

A recycle leach circuit utilises a waste acid stream from the metals refinery to re-dissolve nickel and cobalt precipitated in the downstream iron/aluminium removal circuit. Discharge slurries from the HPAL, atmospheric leach and recycle leach circuits are combined and fed to the saprolite neutralisation circuit where the neutralising capacity of saprolite ore consumes some of the excess free acid. Additional nickel and cobalt are leached from saprolite during this process. The resultant slurry flows to a seven-stage counter-current decantation (CCD) circuit, to separate and wash soluble nickel and cobalt from the waste residue solids.

The recovered pregnant liquor (CCD-1 overflow) is forwarded to two stages of iron/aluminium removal. In the first stage of iron/aluminium removal the majority of the remaining free acid in solution is neutralised with limestone slurry and most of the ferric iron and some of the aluminium in solution are precipitated. The product slurry is thickened and the precipitated solids are directed to CCD-3 for recovery of soluble nickel and cobalt across the back half of the CCD circuit. In the second stage of iron/aluminium removal the remaining iron and aluminium are precipitated. The pregnant liquor is separated from the precipitated solids by thickening prior to transfer to the metals refinery. Some nickel and cobalt are co-precipitated so the thickener underflow slurry is directed to the recycle leach circuit for recovery of the metal values.

The barren leach residue solids from the final stage of CCD washing along with barren raffinate from the metals refinery report to final neutralisation (FN) circuit where limestone and lime slurries are added to raise the pH of the slurry and precipitate most of the remaining metals from solution. An air stream is used as an oxidant in this process to aid manganese precipitation. Treated residue is pumped through an approximately 6 km long slurry pipeline to the residue storage facility (RSF).

The excess neutralised barren liquor is discharged to ocean outflow and is closely monitored to ensure compliance with the environmental discharge standards.

Metals Refinery

The Metals Refinery flowsheet employs the CMN Process, a proprietary direct solvent extraction (DSX) technology developed by Canopean Pty Ltd (Canopean). The CMN Process is a nickel refining technology developed specifically for processing leach solutions generated from the acid leaching of nickel laterites. The process uses field proven solvent extraction reagents to efficiently extract and recover nickel and cobalt into separate high value products.

Solvent extraction is accepted as one of the most economical methods for recovering, separating and producing metals at industrial scale and is particularly suited to the high solution flow rates typical of large nickel refineries. The major process steps involved in the CMN Process are briefly summarised as follows:

Primary Metals Extraction: Cobalt, nickel (and manganese if desired) are extracted using an organic phase composed of magnesium loaded versatic acid. The magnesium loaded extractant is formed by the use of lime via Canopean owned and patented process technology. Lime is a


19

low cost industrial chemical available in bulk worldwide, and is common to most metallurgical installations. In the Agata Nickel Project lime is produced on site for other purposes by calcining cheap locally quarried limestone. The use of lime rather than expensive reagents such as caustic soda to facilitate the metals extraction step is a key advantage of the CMN Process.

Organic Purification: The loaded organic phase containing nickel, cobalt and other unwanted metals is contacted with a concentrated nickel chloride solution in a process step designed to remove cobalt and other non-nickel metals from the organic phase. This simple and robust step forms the basis of the CMN Process, and leads to the production of separate high purity nickel and cobalt products.

Nickel Cathode Production: The purified nickel loaded organic is further processed to produce LME grade nickel cathode via electrowinning, which is a well established and proven approach that integrates effectively with solvent extraction.

Cobalt Sulphide Production: The nickel chloride solution generated from the organic purification step is further processed to produce a high purity cobalt sulphide product suitable for sale directly to toll refiners or smelters. This product will attract higher payable cobalt values than a mixed sulphide precipitate (MSP) on account of its higher purity.

Process Packages

Major process packages include a sulphur-burning acid plant, a limestone slurrying plant, a lime kiln and lime slaking plant, and a residue storage facility.

The Sulphuric Acid Plant provides sulphuric acid for the leaching circuits and other process consumers, and high pressure (HP) steam for power generation and heating the HPAL autoclave. The acid plant products are:

Base Case – up to 4000 t/d of 98.5% sulphuric acid and 213 t/h of HP steam

Option 1 – up to 6000 t/d of 98.5% sulphuric acid and 293 t/h of HP steam.

The Limestone Plant provides limestone in slurry form for neutralisation of acidic process liquors and crushed limestone for burnt lime production. The limestone plant consists of crushing and slurrying facilities. The limestone slurry at 30% solids is pumped to the process plant via a limestone slurry ring main.

The Lime Plant provides lime in the form of milk-of-lime slurry for neutralisation of acidic process liquors and precipitation of magnesium hydroxide in the CMN circuit. The plant consists of a fuel-oil fired limestone calciner and lime slaking facilities. The milk-of-lime is pumped to the process plant via a ring main.

The Residue Storage Facility (RSF) area includes transport and storage facilities for process residue slurry. The impoundment area consists of either walled coastal valleys or lined, shallow, nested impoundments constructed on flat land to the east of the project area. The tailings are neutralised at the process plant and pumped, at about 23% solids content, via a 5 km slurry pipeline to the RSF. At the impoundment, the residue is hydraulically deposited behind the retaining wall. Consolidation of residue over time produces a decant liquor which is returned via a decant pipeline to the process plant.

3.6.1.3 Utilities and Infrastructure

Significant infrastructure development will be required to support both the mining and process plant operations during construction and subsequent operations.


20

The key infrastructure areas will be:

a port and associated facilities for offloading construction supplies, sulphur, fuel and process consumables

an accommodation camp and township for the construction and operations phases of the project

haul roads for ore and limestone

water supply and water treatment facilities

waste management facilities

a power plant which will utilise excess steam from the acid plant and make-up steam produced by oil fired package boilers to generate power for use by the process plant and infrastructure

communications systems

a plant control system.

Seawater will be used for ore preparation and slurrying. Fresh water for other process plant requirements will be sourced from the Tubay River system.

The plant will include all the required buildings to house operations and administration staff, and all warehouses and workshops.

Operations personnel will be accommodated in the township, which has the capacity to provide short term housing for approximately 50% of the workforce.

Facilities for medical services, religious and social activities, shopping and recreation are provided in the township.

3.6.2 Option 2

3.6.2.1 Design Basis and Key Assumptions

The key operating parameters for the Option 2 flowsheet considered in this study are outlined in Table 3-5.

Table 3-5: Key Operating Parameters for Option 2

Case Option 2

Case Description: Atmospheric Leach Only

Ore Feed to Plant:

Limonite, Mdt/y n/a

Saprolite, Mdt/y 1.44

Overall Recovery:

Nickel, % 86.9

Cobalt, % 89.0

Products:

Mixed Hydroxides, dt/y 35 000


21

Case Option 2

Contained Nickel, t/y 14 300

Contained Cobalt, t/y 310

The key process plant assumptions are listed in

Table 3-6 below.

Table 3-6: Key Process Design Assumptions for Option 2

Item Option 2

Case Description: Atmospheric Leach Only

Atmospheric Leaching:





Saprolite Neutralisation:

Saprolite Nickel Dissolution, % 86

Saprolite Cobalt Dissolution, % 93

Terminal Acid Concentration, g/L 12.3

3.6.2.2 Process Plant Configuration

Leach Plant

The ore preparation circuit produces a ground saprolite ore slurry for atmospheric leaching (AL) and saprolite neutralisation (SN).

The ore treatment plant consists of the following principal operations:



thickening the mill product slurry for delivery to leach plant.

In the atmospheric leach circuit nickel and cobalt are leached from saprolite ore at atmospheric conditions (95–100 °C and ambient pressure). Sulphuric acid is used as the lixiviant.

The recycle leach circuit utilises a small flow of concentrated sulphuric acid to re-dissolve nickel and cobalt precipitated in the downstream iron/aluminium removal circuit and the second stage mixed hydroxide precipitation circuit. Discharge slurries from the atmospheric leach and recycle leach circuits are combined and fed to the saprolite neutralisation circuit where the neutralising


22

capacity of saprolite ore consumes some of the excess free acid. Additional nickel and cobalt are leached from saprolite during this process. The resultant slurry flows to a seven-stage counter-current decantation (CCD) circuit, to separate and wash soluble nickel and cobalt from the waste residue solids.

The recovered pregnant liquor (CCD-1 overflow) is forwarded to two stages of iron/aluminium removal. In the first stage of iron/aluminium removal the majority of the remaining free acid in solution is neutralised with limestone slurry and most of the iron and some of the aluminium in solution are precipitated. The product slurry is thickened and the precipitated solids are directed to CCD-3 for recovery of soluble nickel and cobalt across the back half of the CCD circuit. In the second stage of iron/aluminium removal the remaining iron and aluminium are precipitated. The pregnant liquor is separated from the precipitated solids by thickening prior to transfer to the mixed hydroxide precipitation area. Some nickel and cobalt are co-precipitated so the thickener underflow slurry is directed to the recycle leach circuit for recovery of the metal values.

The barren leach residue solids from the final stage of CCD washing along with barren solution from the mixed hydroxide precipitation circuit report to final neutralisation (FN) circuit where limestone and lime slurries are added to raise the pH of the slurry and precipitate most of the remaining metals from solution. An air stream is used as an oxidant in this process to aid manganese precipitation. The discharge slurry is thickened and the clear overflow solution is return to the CCD circuit as wash water. Treated residue is pumped through an approximately 6 km long slurry pipeline to the residue storage facility (RSF), with excess discharge liquor from RSF directed to ocean outflow.

Product Section

The virtually iron/aluminium-free pregnant liquor solution (PLS) is forwarded to the 1st stage MHP reactors to precipitate the nickel and cobalt from the solution by the addition of magnesia slurry. The resulting precipitate contained in the slurry is subsequently directed to thickening. A portion for the thickener underflow slurry is recycled as seed to the first stage MHP reactors and the balance is forwarded to wash filtration. In wash filtration, the precipitate is filtered for further dewatering and washed with demineralised water to displace the chlorides and other sea salts entrained with the precipitates. The filter cake is then repulped with demineralised water and filtered in a pressure filter to achieve the required product moisture specification. The MHP product is packaged in 2 t bulk bags and stored in standard 20 ft containers for shipment and sale.

The un-precipitated nickel and cobalt values present in the 1st stage MHP thickener overflow are further recovered by lime precipitation in the second stage MHP reactors. The resulting precipitate is thickened and recycled back to the recycle leach area to re-dissolve the nickel and cobalt. The barren liquor solution is forwarded to final neutralisation, where the heavy metals are precipitated with limestone slurry and lime, and the discharge slurry is thickened. The clarified thickener overflow solution is directed to the CCD circuit as wash water.

Process Packages

Major process packages include a sulphur-burning acid plant, a limestone slurrying plant, a lime kiln and lime slaking plant, a magnesia slurrying plant and a residue storage facility.

The sulphuric acid plant provides sulphuric acid for the leaching circuit and other process consumers, and high pressure (HP) steam for power generation. The acid plant products for Option 2 are up to 3600 t/d of 98.5% sulphuric acid and 192 t/h of HP steam.


23

The limestone plant provides limestone in slurry form for neutralisation of acidic process liquors and crushed limestone for burnt lime production. The limestone plant consists of crushing and slurrying facilities. The limestone slurry at 30% solids is pumped to the process plant via a limestone slurry ring main.

The lime plant provides lime in the form of milk-of-lime slurry for neutralisation of acidic process liquors and precipitation of nickel and cobalt in the second stage MHP circuit. The plant consists of a fuel-oil fired limestone calciner and lime slaking facilities. The milk-of-lime is pumped to the process plant via a ring main.

The magnesia slurrying plant provides magnesia slurry for the precipitation nickel and cobalt as mixed hydroxides in the first stage MHP circuit. The magnesia slurry is pumped into the MHP reactors under dosage control.

The residue storage facility (RSF) area includes transport and storage facilities for process residue slurry. The impoundment area consists of either walled coastal valleys or lined, shallow, nested impoundments constructed on flat land to the east of the project area. The tailings are neutralised at the process plant and pumped, at about 30% solids content, via a 5 km slurry pipeline to the RSF. At the impoundment, the residue is hydraulically deposited behind the retaining wall. Consolidation of residue over time produces a decant liquor which is returned via a decant pipeline to the process plant.

3.6.2.3 Utilities and infrastructure

Significant infrastructure development will be required to support both the mining and process plant operations during construction and subsequent operations.

The key infrastructure areas will be:

a port and associated facilities for offloading construction supplies, sulphur, fuel and process consumables

an accommodation camp and township for the construction and operations phases of the project

haul roads for ore and limestone

water supply and water treatment facilities

waste management facilities

a power plant which will utilise excess steam from the acid plant and make-up steam produced by an oil fired package boiler to generate power for use by the process plant and infrastructure

communications systems

a plant control system.

Sea water will be used for ore preparation and slurrying. Fresh water for other process plant requirements will be sourced from the Tubay River system.

The plant will include all the required buildings to house operations and administration staff, and all warehouses and workshops.

Operations personnel will be accommodated in the township, which has the capacity to provide short term housing for approximately 50% of the workforce.


24

Facilities for medical services, religious and social activities, shopping and recreation are provided in the township.

3.7 Capital Cost

3.7.1 Capital cost summary

The capital cost estimates for the three Agata Nickel Project flowsheet options are presented in

Table 3-7. In addition to the phased capital expenditure from Year 1 to 3, deferred capital is required for the residue storage facility, which is shown in Table 3-8.

The project costs are presented in July 2010 US dollar (US$) values. Where applicable, the following foreign exchange rates are used in developing these estimates:

USD 1.0 = AUD 1.136

USD 1.0 = PHP 45.00

USD 1.0 = Euro 0.69

Table 3-7: Capital Cost Estimates for the Agata Nickel Project Processing Options

Description Capital Costs (Million US$)

Base Case Option 1 Option 2

Ore Preparation 34.23 43.73 15.96

Leach Section 175.28 226.57 72.17

Refinery/Products Section 161.56 208.87 13.10

Sulphuric Acid 105.81 134.95 99.32

Power Plant 77.42 98.16 45.50

Other Major Process Packages 46.30 61.44 47.47

Services and Utilities 39.26 49.34 22.05

Process Plant Infrastructure 154.75 215.15 129.70

General Infrastructure 33.40 40.83 28.49

Other Direct Cost 9.56 12.51 4.83

Total Direct Cost 837.56 1 091.54 478.60

EPCM 103.53 135.83 52.82

Other Construction Services 78.64 107.64 38.22

Total Indirect Cost 182.17 243.47 91.04

Direct + Indirect Cost 1019.73 1 335.01 569.63

Contingency 305.92 400.50 170.89


25

Total Project Cost 1325.65 1 735.51 740.52

Project Cost, US$/annual lb Ni 21.94 18.73 23.49

Table 3-8: Residue Storage Facility Deferred Capital Costs


Base Case Base Case

RSF Expansion – Phase 21 17.86 29.59 14.00


RSF Expansion – Phase 43 17.86 29.59 -

Total Deferred Cost4 53.57 88.77 27.99

1 Base Case and Option 1 Phase 2 expansion – Year 8, Option 2 – Year 10,

2 Base Case and Option 1 Phase 3 expansion – Year 12,

Option 2 – Year 15, 3 Base Case and Option 1 Phase 3 expansion – Year 16,

4 Estimates are based on this study‟s costing and foreign

exchange (2nd

quarter 2010)

The capital cost estimates are developed using the factored estimating techniques. Where applicable, an equipment scale-up/down and cost escalation is applied. Two factored estimating approaches are used in the study estimates: the model driven approach, which is applied to the direct costs and the approach that factors the facility cost from the total equipment cost, which is applied to the project indirect costs.

The level of estimate detail for this study is developed in accordance with the Ausenco Class I Estimate guidelines. The accuracy of the capital cost estimates are aimed at ± 30-35%.

3.7.2 Scope of the Capital Cost Estimate

The scope of the Agata Nickel Project direct costs estimate includes the capital for the following:

process plant including ore preparation, leach plant section and products section

major process packages such as the sulphuric acid plant, acid storage facility, limestone and lime plants and reagents preparation

utilities and Services including water supply and treatment, power plant, power and air supply, plant control system and mobile equipment

process plant infrastructure including site development, process plant buildings, port facility, residue storage facility and unloading and storage facilities at the process plant

general infrastructure including roads, workforce accommodation and communications facilities.

The indirect cost includes the following costs:

EPCM and vendor supervision

construction facilities

construction camp and operating expenses

mobile equipment operating costs

first fills


26

spares

other construction services

contingency.

3.7.3 Basis of the Capital Cost Estimates

The process plant costs for the three Agata options (with the exception of the refinery area for the Base Case and Option 1) were developed from similar nickel projects and locations compiled in the Ausenco Vector and BWHC databases. The applicable data were adjusted for flow or equipment capacity and currency movements. The refinery area of the Base Case and Option 1 were costed separately by Canopean Pty Ltd.

The sulphuric acid plant cost was based on a recent pricing from a western supplier for a nickel laterite project in the Philippines. Other major packages such as the power plant and auxiliary boilers, the limestone and lime plant were all based on a recent vendor quotation for a similar nickel project.

The residue storage facility cost was developed from a costing calculation done for a nickel project in Northern Philippines.

The infrastructure costs were based on a nickel project in the Surigao area that has recently begun construction.

The indirect costs were prepared on the basis of a project management team being retained to perform the services of engineering, procurement of major equipment and management of construction.

A contingency of 35% has been applied to direct costs. The contingency reflects the state of development of the project, and allows a margin for changes to the process and equipment selection and sizing where specific design criteria are not yet available.

3.7.4 Capital Estimate Exclusions

The following items have not been included in the capital estimate developed for the Project:

Owner‟s costs

mining related capital costs – which are assumed to be included in contract mining rates

duties and taxes for equipment

technology fees/project support. No provision had been made for technology fees

EPCM assistance following introduction of feed to the plant, during commissioning and ramp up

a fully detailed estimate of working capital to include items such as work in progress, and sales contracts.


27

3.8 Operating Costs

3.8.1 Operating Cost Summary

Operating costs have been developed for the first three years of operation based on the projected project ramp-up. Year 3 is considered to represent full nameplate production. Annualised nickel grades are based on the mine production schedule detailed in Table 3-3.

Table 3-9, Table 3-10and

Table 3-11 detail the operating cost data for the Base Case, Option 1 and Option 2 respectively. Costs are presented in August 2010 United States dollar (US$) values. For Year 3 onwards (full nameplate capacity), the project operating costs are US$ 148.9 million per annum or US$ 2.47 per pound of nickel (excluding cobalt credits). The main operating cost items were sulphur, mining and haulage, and plant maintenance (in order). Operating costs (per pound of nickel) are higher in Years 1 and 2 of production due to lower metal production during project ramp-up, particularly Year 1 of the project.

Table 3-9: Base Case Operating Cost Estimate

Base Case Operating Costs in US$

million/year Year 1 Year 2 Year 3

Expense Item:

Mining and Haulage 19.3 28.9 32.2

Labour 14.5 14.4 13.8

Consumables 44.9 60.8 63.5

Maintenance Materials 22.9 22.9 22.9

Contract Expenses 10.8 11.8 12.1

Administration and General Expenses 4.5 4.5 4.5

Total Operating Cost 116.9 143.4 148.9

Operating Cost US$/lb Ni 3.22 2.64 2.47

Operating Cost after co-credits * 2.35 1.77 1.59

* Assumes a cobalt price of US$18/lb (12-month low) and 80% payable for cobalt contained in cobalt sulphide.

Table 3-10: Operating Cost Estimate for Option 1 (Larger HPAL Autoclave)

Option 1 Operating Costs in US$


Expense Item:


Labour 14.6 14.7 14.0




28









Table 3-11: Operating Cost Estimate for Option 2 (Atmospheric Leach Only)



Expense Item:


Labour 12.9 12.8 12.1









The accuracy of the operating cost estimates is considered to be at ±30-35%.

Option 2 generates more power from acid plant surplus steam than the project requires. Approximately 190 000 MWh per year of power is available for export to the grid. Mindanao is experiencing a power crisis and power costs are high, with long-term costs forecast to be PhP 12–15/kWh. After applying a credit of PhP 12/kWh (US$266.67/MWh) for power exported to the grid, the Option 2 operating cost reduces to US$1.34/lb nickel for Year 3 onwards.

3.8.2 Basis of the Agata Nickel Project Operating Cost Estimates

The operating cost estimates for the three Agata Nickel Project options are based on the process mass and energy balances (Appendix 1-3) which have been developed using the process design criteria (Appendix 1-2) and overall process flowsheet (Appendix 1-4).

The significant exchange rates used in the development of this estimate are:

USD 1.0 = AUD 1.136

USD 1.0 = PHP 45.00


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USD 1.0 = Euro 0.69

Operating costs were developed for six areas:

mining and haulage

labour

consumables

maintenance materials

contract expenses

administration and general expenses.

The basis upon which the operating cost estimates have been developed is discussed in detail in Section 10.5 of this report. The key inputs to the operating cost development were as follows:

mining and haulage costs of US$8.50 per wet tonne of ore were developed by MRL

manning levels were evaluated for each project area and labour rates at different salary levels, including on-costs, were sourced from a database of Philippine based HR consultant‟s data

reagent and consumables quantities were based on the process mass and energy balances and unit pricing was sourced from both budget pricing or from data for recent projects

the costs of maintenance consumables, which are replacement parts necessary to maintain equipment, were estimated using historical ratios for similar scale plants based on the installed equipment costs

contract expenses were estimated for a range of services provided to the project on a contract basis, including: product transport and insurance, contract maintenance, periodic metallurgical testing and consultants fees in areas such as safety and training

administration and general expenses were estimated for a range of miscellaneous expenses associated with providing services to the project, including: insurances, safety equipment and training, medical costs, community relations, vehicle operating costs, environmental costs, human relations costs, telecommunications costs, business travel, Manila and Butuan City office costs.

3.8.3 Estimate exclusions

There are a number of costs that have been excluded from the operating cost estimate for the scoping study. These are outlined below:

sustaining capital costs

some government charges

royalties

marketing costs

corporate consultancies

duties, customs or other imposts.


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3.9 Technical Discussion

3.9.1 Technical Drivers for the HPAL/AL/SN-SX-EW Flowsheet (Base Case/Option 1)

The following are the technical drivers that must be addressed for a successful nickel hydrometallurgical plant utilising the combined HPAL/AL/SN flowsheet option:

Capacity to treat the entire ore body and the size of the resources

o Conversion of the Exploration Target to a resource will be necessary to support economic project life.

o Identification of additional limonite reserves and opportunities to blend of low magnesium saprolite into HPAL feed in order to maintain a satisfactory limonite to saprolite ratio for the leach processes.

o Consider retention of limonite allocated to DSO for HPAL feed.

HPAL availability and ramp-up

o best HPAL availability 83% at Coral Bay

o at least two years ramp up to 100%

Ability to supply high percent solids feed slurry to the HPAL circuit

o prefer>35% feed solids for optimum HPAL performance

o 40% solids typical for low Si Philippine limonites – testwork required to determine Agata ore settling properties.

Acid consumption in the AL and HPAL circuits

o preliminary testwork indicates typical acid consumption rates for Agata ores

o testwork required to establish an optimal MgO grade in HPAL feed (blending of low Mg saprolite with limonite).

Metal recoveries

o superior extractions in HPAL and AL compared to heap leaching

o nickel and cobalt losses in iron removal residue in DSX and MHP flowsheets

o negligible nickel and cobalt losses in MSP based flowsheets.

Solid-liquid separation in the CCD circuit

o ratio of limonite (HPAL feed) to saprolite ore in leach feeds critical to CCD settling performance, and hence metal recovery and size of CCD thickeners and downstream process equipment

o acceptable ratio typically in the order of 1:1 – testwork required to establish optimum ratio for Agata ores

o testwork is required to demonstrate the settling properties of leach discharge slurry from an Agata HPAL/AL/SN process.

Complexity of the processing operations

o HPAL adds complexity (high temperature/pressure) therefore AL option (Option 2) less complex than HPAL/AL/SN option (Base Case/Option 1)


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o historical concerns with DSX process for nickel laterites; however, these are well addressed in the CMN process proposed for Agata

o low degree of complexity in AL/MHP process.

Scale of the project - larger capacity generally enhances economics

o lower contribution of infrastructure costs to overall capital cost

o lower process plant capital cost per annual pound of nickel due to economies of scale

o lower operating costs due to reduced impact of labour and fixed costs.

Product type and marketability

o Ni-cathodes widely marketable

o can be sold on the LME.

3.9.2 Technical Drivers for the AL-MHP Flowsheet (Option 2)

The following are the technical drivers for the AL-MHP Option:

Capacity to treat the entire ore body and the size of the resources

o Conversion of the Exploration Target to a resource will be necessary to support economic project life.

Acid consumption in the AL circuit

o preliminary testwork indicates typical acid consumption rates for Agata saprolite ore

o testwork is required to establish potential to treat transition and/or limonite ores via AL.

Solid-liquid separation in the CCD circuit

o the leach residue slurry from a saprolite leach circuit typically has poor solid-liquid separation properties, impacting metal recovery and size of CCD thickeners and downstream process equipment

o testwork is required to demonstrate the settling properties of leach discharge slurry from an Agata AL/SN process.

Product type and marketability

o limited markets exist for MHP

o low payable metal value (typically 76-80%).

3.9.3 Future Study Enhancements

Potential enhancements and options recommended for investigation during future study work are detailed in Section 11 and summarised below:

Sulphuric Acid Plant

o The acid plant is a major contributor to the capital costs at 13% and 22% of the Base Case and Option 2 direct cost estimates respectively.


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o Potential exists to reduce the acid plant cost by up to 33% through joint western/Chinese design and construction.

Electrowinning Cell House

o late quote for equipment supply received from Zincobre at 50% less than the cell house cost used in the estimate.

Magnesia Supplier

o magnesia (MgO) is the key reagent used for precipitating the MHP product

o MgO cost for study based on supply from QMag in Australia

o quote received from a Chinese supplier at half the QMag price; however, recent evaluations indicate that Chinese MgO exhibits low reactivity

o testwork recommended on a sample of the Chinese MgO.

Alternative Processing Options – Heap Leaching

o several advantages including lower costs, lower process complexity and dry stack tailings

o several disadvantages including lower metal extractions, lower product revenue, patents and concern that the Agata limonite ore may be unsuitable for heap leaching

o key drivers are: heap permeability, ore mineralogy, acid consumption, high iron extraction and water management

o permeability and column testing recommended for a future testwork stage.

Other Alternative Processing Options

o options unlikely to be suitable for Agata include ferro-nickel smelting and the Caron process

o options potentially applicable for Agata include HPAL/AL/SN (current Base Case), AL (current Option 2), heap leaching, mixed sulphide recovery route; nickel and cobalt briquettes

Future Testwork Recommendations

o investigation of ore blends for the HPAL/AL/SN flowsheet, particularly blending of saprolite/transition ore into the limonite for HPAL feed, and continuous pilot testing of the leach and CCD circuits based on optimised parameters from the bench scale testwork

o heap leaching testwork including permeability testing of agglomerated and un-agglomerated ore and continuous column testwork to evaluate leach performance.

3.10 Environment and Social

3.10.1 Overview

The Agata Nickel project would need to establish an environmentally and socially sound facility, which is in full compliance with the World Bank Guidelines. The preliminary environmental


33

analysis provides a basis for the development of a future management strategy in order to reduce the environmental impact of the project.

The following table summarises the discharges from the Agata Nickel Project processing options.

Table 3-12: Summary of Discharge Streams from the Nickel Project

Stream Unit Amount Discharge

Point Base

Case

Option

1

Option

2 Feed:

Ore dt/y 2 742 000 4 195 000 1 435 000 Plant stockpiles

Discharge:

Neutralised Residue to RSF dt/y 2 717 000 4 157 000 1 582 000 RSF

Neutralised Discharge Effluent ML/d 18.8 28.8 7.3 Ocean outflow

3.10.2 Governing Laws and Principles

The Agata Nickel Project is planned to develop into an integrated mining and processing project which will involve potential social and environmental impacts. These will require comprehensive assessment and planning of mitigating measures to ensure they are appropriately managed. The Company shall implement this in accordance with the International Finance Corporation Performance Standards on Social and Environmental Sustainability and the requirements under Philippine law.

MRL has committed to a Health, Safety, Environment and Community Policy (HSEC) document jointly developed with IFC. The Company has also agreed on an „Environmental & Social Action Plan‟ to cover all HSEC aspects related to exploration activities, feasibility work and potential future mine development. MRL, with IFC‟s assistance, is developing an Environmental Management System (EMS) to adequately manage, plan and document the environmental and social issues relating to their activities in the Philippines. The Company is also preparing a Stakeholder Engagement Plan which will describe their strategy and program for engaging with stakeholders in a culturally appropriate manner.

A key element is the Social and Environmental Impact Assessment (SEIA), which considers in an integrated manner the potential social and environmental (including labour, health, and safety) risks and impacts of the project. The SEIA will be based on current information, including an accurate project description, and appropriate social and environmental baseline data. The SEIA will consider all relevant social and environmental risks and impacts of the project, and those who will be affected by such risks and impacts.

MRL completed an SEIA for submission to the Environmental Management Bureau in January 2008, as part of its application for the ECC permit covering DSO operations that was granted on May 19th 2008. Although fully compliant with Philippine regulatory requirements, this SEIA will be upgraded to meet IFC Performance Standards prior to the commencement of any mining and/or processing operations. MRL has committed to the SEIA upgrade and reaching full compliance with IFC Performance Standards.

The project will comply with other requirements as defined under: the Philippine Environmental Impact Statement System (PEISS), the Pollution Control Law (1976), the Water Code (1976),


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the Clean Water Act (2003), the Clean Air Act (1998), the Ecological Solid Waste Management Act (2000), the Toxic Substances and Hazardous and Nuclear Wastes Control Act (1990) and numerous other environmental and social legislations and regulations which are outlined in detail in Section 12.2.

3.10.3 Environmental Impacts

A preliminary assessment of the potential issues arising from the impact of the processing plant on the current social and environmental conditions has been conducted for this study.

As discussed above, the Agata Nickel Project will require an upgraded SEIA for the environmental permitting of industrial activities. This will involve the identification and description of mitigation measures for negative impacts, the preparation of plans for monitoring programs, and the definition of compensatory measures for impacts that are not mitigated.

Potential environmental and social impacts are discussed in detail in Section 12.3 and summarised below.

3.10.3.1 Air Quality

Dust, gaseous emissions and noise are the primary pollutants in the construction and operation phases. The primary sources will include site development, erection of structures, transportation and handling of construction raw materials, mining operation, heavy equipment movement to and from the project site. Activities associated with site development are land clearing, drilling, and excavation. MRL has conducted baseline studies of the Agata Project area‟s ambient air environment to check the project site‟s compliance with the standards set in the DENR Administrative Order (DAO) 2000-81 and PD 984. The tested parameters passed both standards.

Mitigating measures are planned to minimise if not avoid the noise and atmospheric emissions during mining and processing operations.

3.10.3.2 Water Resources

Sedimentation and erosion are two perceived impacts during the mining operation. Laterite mining residues such as spoil piles, sediments in settling ponds or sediments reaching natural water courses can become long-term sources for the continual, or periodic, introduction of contaminants into the environment. Both of these impacts have various physical and chemical consequences for water quality and aquatic ecosystem. MRL commissioned qualified consultants that have conducted baseline studies of the existing water quality of the inland surface and coastal waters that will be affected by the laterite mining as shown in the tables below to foresee possible mitigating measures.

Mitigating measures are planned to minimise if not avoid impacts on water quality during mining and processing operations.

3.10.4 Environmental Mitigations

Preliminary mitigation measures have been developed and proposed for each of the environmental issues identified for the project. These are detailed in Section 12 and include:

Noise abatement, sound level monitoring and buffer zones.

Air quality monitoring and programs to minimise greenhouse gas emissions.


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Dust control measures.

Reforestation and re-vegetation of the mined-out areas.

Construction of sediment traps and ponds to contain and settle the run-off sediments prior to run-off water release.

Careful design and construction of a robust RSF. This involves detailed geotechnical evaluation and assessment.

Specific control measures in case of sulphuric acid spillage like acid storage bunding, double piping and control valves and emergency procedure in place. Comprehensive training and education, and use of appropriate Personal Protective Equipment are also required.

Establishment of pollution control measures relating to the transport of reagents. This includes proper signage; training and education of drivers and supervisors, and a well equipped spill response team. Sulphur transport requires a specific risk assessment to ensure the residual risk is within acceptable limits.

A critical issue in the project is the discharge water quality to the ocean outflow. The discharge water should comply with an established standard such as the World Bank guidelines prior to discharge. The quality of Agata discharge water; in comparison to the Philippine and World Bank standards is shown in Table 3-13.

Table 3-13: Marine Discharge Standards

Parameter1 Agata Discharge

Liquor

DENR Effluent

Standards for

Marine Waters

(Class SC)

WB – IFC2

(provided for

reference)

pH 7.5 to 9 6 to 9 6 to 9

TSS 70 50

Oil or grease 5 10

Cyanide 1.0

Cyanide (free) 0.1

Cyanide WAD 0.5 0.5

COD 100 150

As 1.0 0.1

Cu <0.1 0.5

Cd 0.2 0.1

Zn 1.5

Pb 1.0 0.2

Hg 0.005 0.01

Ni <0.5 0.5

Cr (6+) <0.1 0.1

Cr total <0.1 0.5


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Liquor

DENR Effluent

Standards for

Marine Waters

(Class SC)

WB – IFC2

(provided for

reference)

Fe <0.2 3.5

Co <0.1

Ca 450 to 500

Mn 50–200

Mg 20–50 000

Total Metals 10

1 Metals concentrations for dissolved part, except Cr total. Concentrations in mg/L except for Ph.

2 Guidelines for Base metals and iron ore mining activity. Dilution is not accepted as a means of achieving the concentrations criteria. The criteria should be

met for 95% of operating time.

The main element in discharge effluent that will require some focus is manganese. Although there are no marine discharge effluent standards for manganese, this has been the controlling element in effluent discharge for recent nickel laterite projects. Philippines „best practice‟ is at Coral Bay where the manganese discharge levels are controlled to less than 10 mg/L by a lime oxidation circuit. Similar standards apply at Ambatovy (Madagascar) and more rigorous standards currently apply at Goro (New Caledonia). It is therefore likely that the current final neutralisation circuit will need to be enhanced to ensure compliance with manganese discharge practice.

3.10.5 Social Impacts and Mitigations

Social impacts of the project are discussed in detail in Section 12. Key impacts include:

changes to socio-economic and socio-cultural conditions

resettlement requirements

effect on the marine ecology (impact on fisheries)

loss of terrestrial habitat and habitat fragmentation

changes to the visual aesthetics of the project area

impacts on indigenous peoples.

The project requires a responsibility to minimise the social impacts discussed above and more importantly to integrate the Agata Nickel Project into the local community. The cost of the social obligations should be included in the Owner‟s cost for the project. The following are some of the social mitigations developed based on the social impacts identified:

Establishment of a comprehensive community relations activity. This includes educating the community about the project and related hazards, medical outreach, etc.

Maximising local employment.

Establishment of alternative sources of livelihood.


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Supporting local projects such as infrastructure construction and improvements.

MRL has been actively engaged with local communities since prior to 2004, in association with minor activities such as reconnaissance work or implementation of drilling activities. Through several years of immersion in the community, MRL has recognised that it can only be successful if it has the support of the locals, thus a Community Relations Division was formally created. Several activities were undertaken to gather information on the communities and to determine their main concerns. This includes the identification of host communities, community immersion, networking, massive and effective Information, Communication and Education (ICE) campaigns. MRL also implements social development programs and exercises transparency to the people and other community groups and organisations. MRL‟s community engagement is a progressive process with a well-defined strategy and approach along with the project development stages.

In consultation with the communities themselves, MRL has launched and assisted with social development programs that focus on improving economic, education, health and social well-being of its community-partners within budget constraints and dictates.

MRL has implemented the Community Technical Working Group (CTWG) system in collaboration with local government units and non-government organisations, including representatives from business and the church. 19 CTWGs were established which comprise representatives at a Barangay (village) level from: existing village organisations, religious groups, village Council, youth groups, women, local NGOs, farmers, fisherfolk, focal government agencies and vulnerable peoples. The CTWG provides valuable input into the communities and has acted as MRL‟s partner in planning and implementing the company‟s extensive community development programs.

MRL has implemented several programs in the area of social development including:

Partnering with the Department of Education in the implementation of the “Adopt-a-School” Program, which benefits five elementary schools on the Agata Project.

A Computer Literacy Program to accommodate MRL scholars, out-of-school youth, teachers and other locals.

Supporting host communities and local government units with small infrastructure programs; such as road construction, building barangay and municipal centres, day care and health centres, water reticulation projects, school rooms, and has assisted in many socio-cultural projects.

The possibility of future mining operations and the resultant land acquisition for the development of the mine and jetties in the project area has been discussed extensively with the affected landowners. MRL have undertaken demographic profiling and understand the consequences of possible future land acquisition on each individual, and plan to write up this assessment and their management plan for land acquisition into a Land Acquisition and Compensation Plan.

3.10.6 Sustainable Development/Mine Closure

One of the important challenges for a project is the development of a sustainable mine. Hence, it is vital to develop a mine closure plan during the feasibility stages of the study that examines closely at the need to return the land to as close as possible to its pre-mine condition if not to a stable state. Additionally, it is possible to look at taking advantage of some of the environmental challenges and promoting them as part of the project development. Micro-impresario


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development opportunities might include timber management, composting and production of topsoil, re-vegetation programs, reclaimed land management and the like.

Sustainable development concepts generally focus on using the economic engine created by exploiting the mineral deposit to survive the closure of the mine. In this case the mineral resource (including the exploration target) is large enough to continue through at least one generation of workers and thus sustainability issues will be important but not critical for several decades.

4. INTRODUCTION

The Agata Lateritic Nickel resource in the Philippines forms part of the resource base of Mindoro Resources Limited (Mindoro) and has been under active exploration by this company since 1997, with the first lateritic nickel resource drilling program completed in 2006. Since resource drilling has commenced there have been 4 further drill programs completed, with this report summarising and re-evaluating all the historic data as well as including the latest infill drilling results into the resource estimate.

This technical report was prepared at the request of Mr J Dugdale, CEO of Mindoro, a company incorporated in Alberta, Canda and listed on the TSX – Venture Exchange.

Four previous technical reports have been completed in relation to the mineral resource estimate for the Agata North Laterite Nickel Project (ANLP) located within the northern areas of Mindanao, the southernmost Island within the Philippines (Figure 4-1).

Further drilling conducted between March and September 2010 was followed by the compilation of a new mineral resource estimate completed by Mike Job, a qualified geological statistician and Principal Consultant for Quantitative Group (QG) – a geological consulting firm based in Perth, West Australia, and supervised by Mark Gifford, MSc. (Hons), MAusImm, an independent qualified person as defined by NI 43-101.

This resource estimate was disclosed in a Technical Report issued on November 10, 2010. A sub-set of the mineral resource estimate released in November 2009, completed by Dallas Cox, BE (Min), an independent qualified person as defined by NI 43-101, was applied to the scoping study at commencement. For the purposes of the scoping study, relatively aggressive cut-off grades were appled to the resource to approximate plant-feed to the base case project sufficient for a production rate of >2.5 million tonnes treated per annum for six years. The cut-ff grades applied were Limonite: 0.85% Ni, Transition: 0.90% Ni, and Saprolite: 1.0% Ni. Additionally, an upper cut-off of 1.35% Ni was applied to all three resource types to classify the high grade material for potential direct shipped ore operations, excluding 4.86 million additional tonnes of high-grade material. A similar exercise applied to the new resource estimate does not result in a materially different outcome (see grade-tonnage curves), apart from a reduction of higher grade DSO material. Further cut-off grade subsets of the new resource will be applied to future studies that will incorporate open-pit optimisation to produce mining inventory/mineral reserve determinations.

The basis of the scoping study is a proposal for MRL to construct a hybrid High Pressure Acid Leach / Atmospheric Leach / Saprolite Neutralisation (HPAL/AL/SN) or AL/SN plant capable of treating the Agata limonite and saprolite ores and recovering the nickel as Ni-cathode or Mixed Hydroxide Product (MHP). A Scoping Study considering these options was coordinated by Boyd Willis of Boyd Willis Hydromet Consulting with significant input by Ausenco Vector of Brisbane, Australia. Mr. Willis is a Process Consultant – Hydrometallurgy with 29 years experience, and a


39

member of the AusIMM. The Scoping Study was prepared to aid MRL in determining the best approach to exploiting the resources in the short to long term. Mr. Willis has prepared contributions to this technical report based on the content of the Scoping Study report.

Boyd Willis has visited site on one occasion, and has seen the resource area and potential plant and port sites, and has been able to review local infrastructure and services. Tony Climie, the managing MRL exploration geologist based in Manila has visited site on numerous occasions and was in charge of all drill programs completed upon the ANLP since 1997. He and his technical staff have provided significant detail to this report and this has ensured the accuracy and completeness of the dataset upon which the author has made few changes or alterations.

The apparent success of the Coral Bay Nickel Corp. (CBNC) operation in processing their stockpiled limonite ore using High Pressure Acid Leaching technology has encouraged MRL to evaluate the technology as one of the possible options to treat their limonite deposit, which is of comparable composition to the CBNC feed. Additionally, the recent start of the Taganito Nickel Project (a sister company of CBNC) in Surigao District, also employing the HPAL process, was considered a major advancement in launching the region into the ranks of globally important nickel laterite processing zones. However, for Agata Nickel, the project value will be further enhanced by the addition of Atmospheric Leaching to treat the saprolite ore and Saprolite Neutralisation to utilise the free acid from leaching. The nickel extracted using this process will be recovered and refined by DSX-EW to produce a high purity Nickel cathode product, which has a wide global market.

Another option evaluated is the Atmospheric Leaching alone of the saprolitic material (with Saprolite Neutralisation). Atmospheric Leaching of nickel laterites has gained recognition recently as an alternative to the high capital cost HPAL system. The process is currently being investigated by Weda Bay Nickel Project (Eramet) in Indonesia, Berong Mining in Palawan and BHP Billiton nickel projects to treat their high grade saprolitic material. This nickel and cobalt values extracted in the AL/SN process option for Agata are recovered by Hydroxide Precipitation producing an intermediate MHP that is saleable to several Chinese refineries, a Scandinavian refinery and an Australian refinery in Queensland.

Supporting metallurgical testwork will be required to evaluate key processing parameters of both options, as discussed further in Sections 18 and 22.

The plant will require specific purpose infrastructure in view of its greenfield nature and is expected to include the following elements:

mine and support facilities

process plant and associated major facilities including a sulphuric acid plant, power plant, limestone and lime plants

port and associated facilities

materials, reagent and fuel offloading and storage

accommodation townsite for half of the project total workforce

road access from mine site/port site to the process plant

existing roads upgrade

water supply facilities and management at the Tubay River and process plant

initial Residue Storage Facility


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A dedicated construction camp will be built adjacent to the process plant site during construction phase of the project.

Figure 4-1: Map of the Philippines showing MRL project areas.

5. RELIANCE ON OTHER EXPERTS

The QPs, authors of this Report, state that they are qualified persons for those areas as identified in each “Certificate of Qualified Person” attached to this Report. The authors have relied on the fact that all the information and existing technical documents listed in Section 23 “References” of this report are accurate and complete in all material aspects. While all of the available information presented to the authors was examined and is believed to be reliable as determined to the best of their professional abilities, the accuracy and completeness of such information cannot be guaranteed and the authors have relied on the belief that the previous documents have been subject to peer review and prepared in a professional and ethical manner. The authors reserve the right, but will not be obligated, to revise the report and conclusions if additional information becomes known subsequent to the date of this report.


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Table 5-1: List of Consultants and Contributors

Ausenco Vector Agata Nickel Project Scoping Study:

Preliminary process design

Flowsheets & plant layouts

Contribution to infrastructure design

Capital cost estimate

Preliminary environmental review

Technical discussion

Coffey Philippines Inc. Preliminary baseline social and environmental studies

Enlin Stainless Steel Company Preliminary metallurgical testwork

Dallas Cox Mineral Resource Estimates 2007 to 2009

Mark Gifford Mineral Resource Estimates 2010

6. PROPERTY DESCRIPTION AND LOCATION

6.1 Location

The Agata Projects are located within the northern part of Agusan del Norte province in northeastern Mindanao, Republic of the Philippines. It lies within the Western Range approximately 10 kilometers south of Lake Mainit (Figures 1-1 and 6-2). The Agata Project falls within the political jurisdiction of the municipalities of Tubay, Santiago and Jabonga. The Mineral Production Sharing Agreement (MPSA) Contract Area, encompassing the Agata Projects, is bounded by geographical coordinates 9010‟30” and 9019‟30” north latitudes and125029‟30” to 125033‟30” east longitudes.

The ANLP is located in barangays Lawigan and Tinigbasan, municipality of Tubay, barangays E. Morgado (formerly Agata) and La Paz, municipality of Santiago, and barangay Colorado, municipality of Jabonga, all in the province of Agusan del Norte. It lies about 73 km southwest of Surigao City and 47 km north-northwest of Butuan City. The majority of MRL‟s exploration activities on the project area are located in barangays Lawigan and E. Morgado.

The Agata South Laterite Project (ASLP) is located in barangays Binuangan, Tagpangahoy, and Tinigbasan, municipality of Tubay. It is under a joint venture agreement with Delta Earthmoving, Inc. (Delta).

The locations of the known mineralized zones on the Agata MPSA relative to the property boundaries are illustrated in Figure 6-2 and Figure 6-3. The ANLP mineralized zone, as defined


42

by drilling and mapping to date, lies entirely within the Agata MPSA. Other known nickel laterite zones exist near the southern boundary of the property. Artisanal copper and gold mining is active in the Agata MPSA area and are shown in Figure 6-2. These are outside the delineated nickel laterite mineralized zones.


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Figure 6-1: MRL Tenements and Projects in the Surigao Mineral District


44

Figure 6-2: Map showing broad outline of ANLP and Agata Cu-Au Prospects

There are no existing mineral reserves within or near the property boundaries. The nearest mine infrastructures, including settling ponds, are those of the SRMI Mine located in between the parcels of the Agata MPSA at the southern boundaries (Figure 6-3). The National Highway runs parallel to the length of the Agata MPSA, just outside the eastern boundary. In addition, a farm-to-market road transects the northern portion of the MPSA area, near the Tubay River.

6.2 Property Description

The ANLP area is part of the Agata Projects and is covered by the approved MPSA of Minimax denominated as MPSA 134-99-XIII, which is comprised of 66 blocks covering an area of 4,995 hectares (ha) (Figure 6-2). To the southeast of the ANLP area, and surrounded by the Minimax MPSA, is the Estrella Bautista Exploration Permit (EP) Area denominated as EP 00021-XIII, covering 84.39 ha. This lone claim block is also part of MRL‟s Agata Projects and was acquired through an Agreement to Explore, Develop and Operate Mineral Property. The MPSA Contract and the EP areas are located within the Western Range in the northern part of Agusan del Norte province.


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Figure 6-3: Compilation Map showing areas of mapped Ni Laterite within Surigao District


46

The MPSA was approved on May 26, 1999 by the Department of the Environment and Natural Resources (DENR) and was registered on June 17, 1999 with the Mines and Geosciences Bureau (MGB) Regional Office No. XIII in Surigao City. A MOA was signed by Mindoro and Minimax on January 19, 1997. Mindoro assigned all its rights in the MOA to MRL on June 27, 1997. The MOA granted MRL the exclusive and irrevocable right to earn the Option Interests in the project. At present, MRL has earned a 75% interests in the Agata Tapian Main, and Tapian San Francisco and the Extension Projects (tenements acquired after the finalization of the MOA) in the Surigao Mineral District. It also has a further option to acquire an additional 25% direct and indirect participating interest. The 2nd and 3rd exploration periods for the MPSA were July 23, 2004 to July 22, 2006 and February 7, 2007 to February 6, 2009, respectively. The fourth exploration was granted on June 19, 2009. The Agata-Bautista-EP was approved on October 2, 2006 and the first renewal was applied for on September 29, 2008.

Both tenements are in good standing. Since the first Exploration Period in 1999, submission of all quarterly and annual accomplishment reports, and quarterly drilling reports; and the payment of the mandated occupation fees were accomplished by MRL, on behalf of Minimax. The same was done for the Agata-Bautista EP.

Table 6-1: Agata Project Tenements held by Mindoro:

TENEMENT ID AGATA AGATA-BAUTISTA

PERMIT NUMBER MPSA-134-99-XIII EP-21-XIII

APPLICATION NUMBER APSA-XIII-007 EPA-00080-XIII

DATE FILED (MGB XIII) 4-Jul-97

DATE APPROVED 26-May-99 2-Oct-06

PERMITTEE/ APPLICANT MINIMAX BAUTISTA

LOCATION Jabonga, Santiago, & Tubay, Agusan del Norte Santiago, Agusan del Norte

AREA (ha**) 4,995.00 84.39

STATUS - 4th Exploration Pd. approved-June 19, 2009

1st renewal of EP approved on June

23, 2010

-ECC granted May 20, 2008 MPSA - Mineral Production Sharing Agreement EP - Exploration Permit APSA - Application for Mineral Production Sharing Agreement EPA - Exploration Permit Application

The boundaries of these tenements were located by the claimowners on a topographic map and submitted to the MGB-DEMR for approval. A tenement boundary survey approved by the MGB will be required through an “Order to Survey” once a mining project feasibility study has been submitted by the proponent. The coordinates used by Mindoro are those indicated in the MPSA document issued by the MGB. The surveyed drillhole collars are tied to a local grid, which in turn is tied to National Mapping and Resource Information Authority (NAMRIA) satellite/GPS points and benchmarks.

The original area of the MPSA was 7,679 ha comprising 99 blocks, but 32 claim blocks with an approximate area of 2,700 ha were later relinquished. This leaves 4,995 ha of the approved Contract area as of May 18, 2000. The details of the original 99 claim blocks may be referenced on Item 6.2, pages 11-13 of the January 22, 2009 NI 43-101 Report on the Agata North Nickel Laterite Project available on sedar.com and Mindoro‟s website.

With the issuance of an MPSA covering the Agata Projects, the landuse classification of the area is therefore for mineral production. Those outside the Contract area are essentially classified as timberland. There are no dwellers within the ANLP and ASLP drilling areas. The


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author is not aware of any environmental liabilities to which the property is subject other than those that fall under the Philippine Mining Act of 1995.

On May 20, 2008, an Environmental Compliance Certificate (ECC) was issued by the DENR to MRL for nickel laterite mineral production covering 600 ha within the Agata MPSA Contract area, including both the Agata North and Agata South projects.

The barangay (village) centers where the projects are located, are mostly populated by Christians. There are some indigenous peoples (IP) that live in the surrounding areas within and outside the Minimax MPSA Contract area. Sitio Coro, Bgy. Colorado is almost entirely populated by IPs while other IP groups have merged with the non-IP inhabitants in barangays E. Morgado and La Paz, municipality of Santiago, and Bgy. Tagmamarkay, Tubay.

MRL, through the assistance of the National Commission on Indigenous Peoples (NCIP) - Regional Office No. XIII, has signed a Memorandum of Agreement with the IPs living within the MPSA Contract Area in 2008 albeit the latter have neither Certificate of Ancestral Domains Claim (CADC) nor Certificate of Ancestral Domains Title (CADT) within the Contract area. The MOA calls for a 1% royalty on gross sales of mineral products to be given to the IPs as provided for in the Indigenous Peoples Reform Act (IPRA) of the Republic of the Philippines.

Areas of nickel laterite mineralization have been mapped at a regional scale in the ASLP located in the southern part of the Agata Projects and are the subject of a Mining Services Agreement between MRL, Minimax and Delta. No drilling or sampling has been carried out in this area prior to the negotiations with Delta. Delta, at its sole cost and risk, may carry out exploration of the ASLP and may select an area of up to 250 ha to advance to production if warranted.

6.2.1 Tenement Type:

An MPSA is a form of Mineral Agreement, for which the government grants the contractor the exclusive right to conduct mining operations within, but not title over, the contract area during a defined period. Under this agreement, the Government shares in the production of the Contractor, whether in kind or in value, as owner of the minerals. The total government share in a mineral production sharing agreement shall be the excise tax on mineral products. The excise tax is 2% of the actual market value of the gross output at the time of extraction. In return, the Contractor shall provide the necessary financing, technology, management and personnel for the mining project. Allowable mining operations include exploration, development and utilization of mineral resources.

The approved MPSA has a term not exceeding 25 years from the date of the execution thereof and renewable for another term not exceeding 25 years. It gives the right to the Contractor to explore the MPSA area for a period of 2 years renewable for like periods but not to exceed a total term of 8 years, subject to annual review by the Director to evaluate compliance with the terms and conditions of the MPSA.

The Contractor is required to strictly comply with the approved Exploration and Environmental Work Programs together with their corresponding budgets. These work programs are submitted by the Contractor as requirements in securing the renewal of the Exploration Period within the MPSA term. The Contractor is likewise required to submit quarterly and annual accomplishment reports under oath on all activities conducted in the Contract Area. All the reports submitted to the Bureau shall be subject to confidentiality clause of the MPSA. The Contractor is further


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required to pay at the same date every year reckoned from the date of the first payment, to the concerned Municipality an occupation fee over the Contract Area amounting to PhP 75.00 per hectare. If the fee is not paid on the date specified, the Contractor shall pay a surcharge of 25% of the amount due in addition to the occupation fees.

If the results of exploration reveal the presence of mineral deposits economically and technically feasible for mining operations, the Contractor, during the exploration period, shall submit a Declaration of Mining Project Feasibility together with a Mining Project Feasibility Study, a Three Year Development and Construction or Commercial Operation Work Program, a complete geologic report of the area and an Environmental Compliance Certificate (ECC). Failure of the Contractor to submit a Declaration of Mining Project Feasibility during the Exploration Period shall be considered a substantial breach of the MPSA.

Once the ECC is secured, the Contractor shall complete the development of the mine including construction of production facilities within 36 months from the submission of the Declaration of Mining Project Feasibility, subject to such extension based on justifiable reasons as the Secretary may approve, upon the recommendation of the Regional Director, through the MGB Director.

Any portion of the contract area, which shall not be utilized for mining operations, shall be relinquished to the Government. The Contractor shall also show proof of its financial and technical competence in mining operations and environmental management.

On February 2005, the Philippine Supreme Court decided with finality allowing for the 100% foreign ownership of the mineral tenement under the Financial and Technical Assistance Agreement (FTAA).

An Exploration Permit (EP) is an initial mode of entry in mineral exploration allowing a Qualified Person to undertake exploration activities for mineral resources in certain areas open to mining in the country. Any corporation may be allowed a maximum area of 32,400 ha in the entire country. The term of an EP is for a period of two (2) years from date of its issuance, renewable for like periods but not to exceed a total term of four (4) years for non-metallic mineral exploration or six (6) years for metallic mineral exploration. Renewal of the Permit is allowed if the Permittee has complied with all the terms and conditions of the Permit and he/she/it has not been found guilty of violation of any provision of “The Philippine Mining Act of 1995” and its implementing rules and regulations. Likewise, the conduct of a feasibility study and filing of the declaration of mining project feasibility are undertaken during the term of the Permit.

7. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE and PHYSIOGRAPHY

7.1 Climate

The climate of Jabonga, Santiago and Tubay municipalities where the project area is situated belongs to Type II on the Philippines Atmospheric Geophysical & Astronomical Services Administration (PAGASA) Modified Coronas Classification. It has no dry season with very pronounced rainfall months. Climate averages from 1981-2000 show that peak rainfall months are from October to February. The highest mean monthly rainfall is 308 mm during January and the lowest mean monthly rainfall is 104.8 mm during May while mean annual rainfall is 2027 mm.


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Table 7-1: Climate Averages and Extremes 1961-2000

MONTH

RAINFALL TEMPERATURE RH %

WIND CLOUD AMT

(okta) AMOUNT

(mm) # OF RD

MAX MIN MEAN Dry

Bulb Wet Bulb

Dew Pt.

DIR SPD

Jan 308.0 21 30.1 22 26.1 25.7 24.2 23.6 88 NW 1 6

Feb 211.8 15 30.8 22 26.4 26.0 24.2 23.5 86 NW 1 6

Mar 149.8 16 31.8 22.4 27.1 25.7 24.5 23.7 83 NW 1 5

Apr 107.2 12 33.1 23.1 28.1 27.7 25.2 24.3 82 ESE 1 5

May 104.8 14 33.8 23.8 28.8 28.3 25.8 25.0 82 ESE 1 6

Jun 135.1 16 33.0 23.6 28.3 27.8 25.5 24.7 83 ESE 1 6

Jul 157.5 16 32.5 23.3 27.9 27.5 25.3 24.5 84 NW 1 6

Aug 105.1 12 32.8 23.5 28.1 27.8 25.4 24.6 82 ESE 2 6

Sep 140.2 14 32.8 23.3 28.1 27.7 25.4 24.6 83 NW 2 6

Oct 195.3 17 32.3 23.2 27.8 27.4 25.3 24.6 84 NW 1 6

Nov 193.7 18 31.6 22.9 27.2 26.9 25.1 24.5 86 NW 1 6

Dec 218.4 19 30.8 22.5 26.7 26.3 24.7 24.1 88 NW 1 6

Annual 2026.9 190 32.1 23.0 27.6 27.1 25.1 24.3 84 NW 1 6

Based on Butuan City Synoptic Station

7.2 Local Resources and Infrastructure

A farm-to-market road was constructed by MRL in 2005 and is currently servicing three (3) barangays in two (2) towns. This road was turned-over to the local government. Road maintenance is being supported by the company.

The drill site and the whole plateau is a fern-dominated (bracken heath) open grassland sparsely interspersed with forest tree seedlings and saplings of planted species. A few secondary growth trees line the streams along the lower slopes. The floodplain of Tubay River is planted with agricultural crops such as rice, corn, banana, squash, etc.

7.3 Physiography

Most part of the Agata Projects spans the NNW-SSE-trending Western Range, which towers over the Mindanao Sea to the west and Tubay River to the east, which drains southward from Lake Mainit. The western part of the area is characterized by a rugged terrain with a maximum elevation of 528 meters above sea level. This part is characterized by steep slopes and deeply-incised valleys. The eastern portion, on the other hand, is part of the floodplain of Tubay River, which is generally flat and low-lying, and has an elevation of less than 30m above sea level.

Within the project area, steep to very steep slopes are incised by gullies and ravines while the central portion is characterized by broad ridges dissected in the west section by a matured valley formation exhibiting gentle to moderate slopes. Elevations range from 200-320m above sea level extending similar topographic expressions going to the south. In the northern expanse, it abruptly changes to rugged terrain having very steep slopes. Nickel enriched laterite is widespread on the ridges stretching from the central part going to the south.

Based on the initial evaluation of the area, the development of laterite mineralization is extensive, but not limited to the broad ridges and is present on gently-moderately sloping


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topography. The topography over the principal laterite development together with the position of the area of detailed drilling is shown in Figure 7-1 below.

Figure 7-1: Panoramic view of ANLP showing the main area of laterite development (2km across).

7.4 Access

The ANLP site is accessible by any land vehicle from either Surigao City or Butuan City via the Pan-Philippine Highway. At the highway junction at Barangay Bangonay, Jabonga, access is through partly cemented, gravel-paved Jabonga Municipal road for approximately 4 km, then for another 6 km thru a farm-to-market road to Barangay E. Morgado in the municipality of Santiago. From Manila, daily flights are available going to Butuan City. Moreover, commercial sea transport is available en-route to Surigao City and Nasipit (west of Butuan City) ports.

An alternate route is available from the Pan-Philippine Highway via the Municipality of Santiago. From Santiago town proper, barangay E. Morgado can be accessed through a 1.5 km municipal-barangay road going to Bgy. La Paz, thence by pump boats. The travel time is about 15 minutes via the Tubay River.

The northern portion of the ANLP can be reached from Bgy. E. Morgado by hiking for about 1 hour along existing foot trails (approximately 1.5 km).

8. HISTORY

The earliest recognized work done within the area is mostly from government-related projects including:

The Regional Geological Reconnaissance of Northern Agusan reported the presence of gold claims in the region (Teves et al. 1951). Mapped units include sedimentary rocks (limestone, shale and sandstone) of Eocene to mid-Tertiary age.

Geologists from the former Bureau of Mines and Geosciences Regional Office No. X (BMG-X) in Surigao documented the results of regional mapping in the Jagupit Quadrangle within coordinates 125°29´E to 125°45´ east longitude and 9°10´ to 9°20´ north latitudes. The geology of the Western Range was described as a belt of pre-


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Tertiary metasediments, metavolcanics, marbleized limestone, sporadic schist and phyllite and Neogene ultramafic complex. (Madrona, 1979) This work defined the principal volcano-sedimentary and structural framework of the region and recognized the allochtonous nature of two areas of ultramafic rocks that comprise serpentinized peridotite in the Western Range, one between the Asiga and Puya rivers in the Agata project area and the other west of Jagupit. These were mapped by Madrona (1979) as blocks thrust westward, or injected into the metavolcanics between fault slices.

The United Nations Development Program (UNDP, 1982) conducted regional geological mapping at 1:50,000 scale and collected stream sediment samples over Northern Agusan. The UNDP report of 1984 described the geological evolution of this region and included a detailed stratigraphic column for the Agusan del Norte region. Two anomalous stream sediment sites were defined near the Agata project during this phase of work. The Asiga porphyry system that lies east of the Agata tenements was explored by Sumitomo Metal Mining Company of Japan in the 1970‟s and 1980‟s (Abrasaldo 1999).

La Playa Mining Corporation, financed by a German company in the late 1970‟s, explored within the Agata Project area for chromiferrous laterite developed over weathered ultramafic rocks. There were five (5) test pits dug in the area.

In 1987, Minimax conducted reconnaissance and detailed mapping and sampling. Geological mapping at 1:1,000 scale was undertaken in the high-grading localities, and an aerial photographic survey was conducted and interpreted. MRL established a mining agreement with Minimax in January 1997, and commenced exploration in the same year.

Several artisanal miners are active within the project site since the 1980‟s up to the present. These miners are conducting underground mining operations at the Assmicor and American Tunnels area and gold panning of soft, oxidized materials within Assmicor and Lao Prospect areas and of sediments in major streams including that of Tubay River. The region of small-scale mining activity was later named “Kauswagan de Oro” (translated: “progress because of gold”). The majority subsequently left the region for other high-grading areas in Mindanao. In more recent years, a group of copper “high-graders” emerged in the American Tunnels area mining direct-shipping grade copper ore. However, this new trend waned due to the softening of metal prices in the latter part of 2008.

9. GEOLOGICAL SETTING

9.1 Regional Geology

The principal tectonic element of the Philippine archipelago is the elongate Philippine Mobile Belt (PMB – Rangin, 1991), which is bounded to the east and west by two major subduction zone systems, and is bisected along its north-south axis by the Philippine Fault (Figure 9-1). The Philippine Fault is a 2000 km long sinistral strike-slip wrench fault. In the Surigao district, this fault has played an important role in the development of the Late Neogene physiography, structure, magmatism and porphyry copper-gold plus epithermal gold metallogenesis. There has been rapid and large-scale uplift of the cordillera in the Quaternary, and limestone of Pliocene age is widely exposed at 1000-2000 meters elevation (Mitchell and Leach 1991). A cluster of deposits on the Surigao Peninsula in the north consists chiefly of epithermal gold stockwork, vein and manto deposits developed in second-order splays of the Philippine Fault (Sillitoe


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1988). The mineralization-associated igneous rocks in Surigao consist mostly of small plugs, cinder cones and dikes dated by K-Ar as mid-Pliocene to mid-Pleistocene (Mitchell and Leach 1991; Sajona et al. 1994). (B.D. Rohrlach, 2005)

The basement rocks consist of the Concepcion greenschist and metamorphic rocks of Cretaceous age overthrusted by the pillowed Pangulanganan Basalts of Cretaceous to Paleogene age, which in turn, were overthrust by the Humandum Serpentinite. Its emplacement probably occurred during the Cretaceous time. This unit occupies a large part in the tenement area, which have high potential for nickel laterite mineralization. (Tagura, et.al., 2007)

The Humandum Serpentinite is overlain by Upper Eocene interbedded limestone and terrigenous clastic sediments of the Nabanog Formation. These are in turn overlain by a mixed volcano-sedimentary package of the Oligocene Nagtal-O Formation, which comprises conglomeratic andesite, wacke with lesser pillow basalt and hornblende andesite, and the Lower Miocene Tigbauan Formation. The latter is comprised of conglomerates, amygdaloidal basalts, wackes and limestones. Intrusive events associated with the volcanism during this period resulted in the emplacement of plutons and stocks that are associated with porphyry copper-gold and precious metal epithermal mineralization in the region. (Tagura, et.al., 2007)

Lower Miocene Kitcharao Limestone and the lower part of the Jagupit Formation overlie the Tigbauan Formation. The Jagupit Formation consists of conglomeratic sandstone, mudstone and minor limestone. The youngest stratigraphic unit is the Quaternary Alluvium of the Tubay River floodplain.

Mineral deposits within the region are dominated by epithermal precious metal deposits and porphyry copper-gold. There is a rather close spatial and probably genetic association between epithermal precious metals and porphyry deposits. These deposits exhibit strong structural control. First order structures are those of the Philippine Fault system, which play a role in the localization of the ore deposits, while the second order structures that have developed as a result of the movement along the Philippine Fault system are the most important in terms of spatial control of ore deposition. (Tagura, et.al., 2007)

Other mineral deposits are related to ultramafic rocks of the ophiolite suite and comprise lenses of chromite within harzburgite and lateritic nickel deposits that have developed over weathered ultramafic rocks.


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Figure 9-1: Geological Map of Surigao Mineral District


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9.2 Local Geology of Agata Project Area

The Agata Projects area is situated along the southern part of the uplifted and fault-bounded Western Range on the northern end of the east Mindanao Ridge. The Western Range is bounded by two major strands of the Philippine Fault that lie on either side of the Tubay River topographic depression (B. Rohrlach, 2005). The western strand lies offshore on the western side of the Surigao Peninsula, whereas the eastern strand, a sub-parallel splay of the Lake Mainit Fault, passes through a portion of the property and separates the Western Range from the Central Lowlands to the east (Figure 9-1). These segments have juxtaposed lithologies consisting of at least six rock units including pre-Tertiary basement cover rocks, ophiolite complex, clastic limestone and late-stage Pliocene calc-alkaline intrusive rocks. (Tagura, et.al., 2007)

The rock units within the ANLP from oldest to youngest are discussed below (Figure 9-2):

9.2.1 Greenschist (Cretaceous)

The basement sequence on the property comprises greenschists, correlative to the Concepcion Greenschists (UNDP, 1984), which occur mostly in the central to southern portions of the Agata Project. This rock outcrops in Guinaringan, Bikangkang and Agata Creek as long, elongated bodies. In the northern half, this unit is mapped as narrow, scattered erosional windows. The predominant minerals are quartz, albite, and muscovite with associated chlorite, epidote and sericite. In places, talc and serpentine are the main components. (Tagura, et.al., 2007) The exposure of the schist by the late Eocene implies a metamorphic age of Paleocene or older and a depositional age of Cretaceous. (UNDP, 1984)

9.2.2 Ultramafics (Cretaceous)

Ultramafic rocks unconformably overlie the basement schist and formed as conspicuously peneplaned raised ground on the property area. These are comprised of serpentinites, serpentinized peridotites, serpentinized pyroxenites, serpentinized harzburgites, peridotites, pyroxenites and lesser dunite, which are fractured and cross-cut by fine networks of talc, magnesite and/or calcite veins. These rocks are usually grayish-green, medium- to coarse-grained, massive, highly-sheared and traversed by meshwork of serpentine and crisscrossed by talc, magnesite and calcite veinlets. The serpentinites in the Agata Projects correlate with the Humandum Serpentinite (B. Rohrlach, 2005). The Humandum Serpentinite was interpreted by UNDP (1984) to be emplaced over the Concepcion greenschists probably before the Oligocene, and before late Eocene deposition of the Nabanog Formation. MGB (2002) classified the Humandum Serpentinite as a dismembered part of the Dinagat Ophiolite Complex, which is established to be of Cretaceous age.

These rocks have potential for nickel due to nickel-enrichment in the weathering profile as observed in its deep weathering into a reddish lateritic soil. (B. Rohrlach, 2005).

9.2.3 Nabanog Limestone (Upper Eocene)

Several bodies of limestone correlative to the Nabanog Formation (UNDP 1984), were mapped in the project area. The easternmost limestone body lies in the Assmicor-Lao prospect region, in the central portion of the property, Guinaringan-Bikangkang area and at Payong-Payong area located at the western side. In the northern half of the property, these limestones occur as narrow scattered bodies probably as erosional remnants. In places, this unit exhibits well-defined beddings and schistosity and crisscrossed by calcite ± quartz veinlets. The limestones


55

outcropping near intrusive bodies are highly-fractured with limonite and fine pyrite, associated with gold mineralization in fractures and show green hue due to chloritization. In places, the limestone is interbedded with thin sandstone, siltstone, and shale beds.

9.2.4 Andesite and Tuff (Oligocene)

Sparsely distributed across the property are narrow bodies of andesite and tuff. Towards the vicinity of Peak 426 at the northwestern part, the andesite occurs as a volcanic edifice. It is generally fine-grained to locally porphyritic in texture. The tuff grades from crystal tuff to lithic lapilli. Several exposures of this unit are described by Abrasaldo (1999) as being strongly fractured adjacent to northeast-trending faults.

9.2.5 Volcanic Intrusives (Upper Oligocene to Lower Miocene)

A series of intrusives of alkalic and calc-alkaline composition occur in close vicinity to Lake Mainit Fault. These include syenites, monzonites, monzodiorites and diorites that are closely associated with gold mineralization as most of the workings and mining activities are concentrated within the vicinity of these intrusive rocks. The syenites are well-observed in the American and Assmicor tunnels and consist mostly of potash feldspar. The monzonites are noted in the Lao Area, in the American Tunnels and occasionally along Duyangan Creek. Monzodiorite outcrops in the Kinatongan and Duyangan creeks and sparsely in the American Tunnel. Trachyte to trachyandesite porphyry is noted in the Kinatongan Creek. Diorites were observed in the American and Assmicor tunnels, which occur mostly as dikes. The intrusions in the Lao and American Tunnel prospects have been tentatively correlated with the Mabaho Monzonite (UNDP, 1984).

9.2.6 Kitcharao Limestone (Lower Miocene)

Correlatives of the Kitcharao limestone are scattered through large areas of the Agata Projects area. Minor outcrops of the Jagupit Formation lie in the eastern claim block adjacent to barangay Bangonay (Abrasaldo, 1999).

9.2.7 Recent Alluvium

Quaternary Alluvium underlies the Tubay River floodplain, within the valley between the Western Range and the Eastern Highlands.


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Figure 9-2: Local Geologic Map of northern Agata Project Area


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9.3 Laterite Ni Deposit Geology

The widespread occurrence of harzburgite, peridotite, pyroxenite, their serpentinized equivalents, serpentinite, and localized lenses of dunite/serpentinized dunite comprise the lithology in the project area. These rocks are confined to broad ridges extending down to the footslopes. The ultramafic bodies are of probable Cretaceous age, and were emplaced as part of an ophiolite sequence during the Upper Eocene (Abrasaldo, 1999). Schists are also present in the extremities of the laterite area. Several of these rock types were likewise identified in petrographic/mineragraphic analyses of drill core and rock samples as wehrlite (peridotite), serpentinized wehrlite, serpentinized websterites (pyroxenite), websterites, serpentinites and cataclasite. The location of these samples is shown in Figure 9-2. Lineaments trending NE are interpreted to be present in the area.

Geological mapping in the project area showed favourable development of laterite along the broad ridges characterized by peneplane topography. These areas are where the drilling activities are concentrated. In areas with moderate to semi-rugged topography, erosion proceeds much faster than soil development, hence the laterite is thinner.

In the Agata Project, there are two distinct geomorphic features that have influenced laterite formation and consequent nickel enrichment. The Eastern part of the delineated body has a moderate relief whose bedrocks are exposed in ridge tops and in the nearby creeks. On the other hand, the Western laterite occurs on a low relief terrain and with no exposures of bedrock on its hillcrests. In the Western area, the laterite is well developed and contains thick and highly mineralized limonite/saprolite and transition rocks. The Eastern Laterite Zones contain boulders across the laterite profile suggesting transport. Its limonite zone is usually thinner. (A. Buenavista, 2008)

Test pits that were previously excavated by a previous company showed a maximum depth of 9.40 m and an average depth of 4.96 m. All these test pits have bottomed in limonite. Drilling done by QNI, Phils. (QNPH) and MRL showed thicker laterite profile than what was revealed by previous test pitting.

10. DEPOSIT TYPES

The Surigao Mineral District is host to several deposit types. The Philippine Fault has played an important role in the development of the Late Neogene physiography, structure, magmatism and porphyry Cu-Au plus epithermal Au metallogenesis. An intense clustering of porphyry Cu-Au and epithermal Au deposits occurs along the Eastern Mindanao Ridge.

There is a strong structural control on the distribution of Cu-Au deposits in the Surigao district, and a clear association of deposits and mineral occurrences with high-level intrusives and subvolcanic bodies. Most of the centers of mineralization are located along NNW-SSE-trending second-order fault splays of the Philippine Fault, and where these arc-parallel structures are intersected by northeast-trending cross-faults. The Tapian-San Francisco property lies in a favourable structural setting at the district-scale, at the intersection between multiple strands of a NE-trending cross-structure and the Lake Mainit Fault. This same NE-trending structural axis encapsulates both the Boyongan porphyry deposit and the Placer epithermal gold deposits. (B. Rohrlach, 2005)

Most of the known hydrothermal gold mineralization within the district is of low-sulfidation epithermal character developed in second-order splays of the Philippine Fault. The mineralization is predominantly of Pliocene age and is spatially and temporally associated with


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the Mabuhay andesitic volcanism. Epithermal mineralization tends to be confined to the Mabuhay Clastics and associated andesitic stocks, lavas and pyroclastics, and in older rocks immediately beneath the unconformity at the base of the Mabuhay Clastics. The principal low-sulfidation epithermal-type, carbonate-replacement-type and porphyry-type deposits and occurrences include: vein-type (Tabon-Tabon vein, Plancoya vein); bulk-mineable stringer stockworks (Placer, Motherlode, Mapaso, Nabago); stratabound ore or carbonate-hosted (Siana mine); surface workings in argillized zones (Mapawa, Hill 664, Manpower, Layab, Gumod); placer gold (Malimono-Masgad region); porphyry Cu-Au (Boyongan, Bayugo, Asiga and Madja); high-level porphyry-style alteration (Masgad, Malimono, Tapian-San Francisco) and high sulfidation (Masapelid Island). (B.D. Rohrlach, 2005)

The principal deposit types that are being explored for in the Agata tenement area are:

Porphyry Cu-Au of calc-alkaline or alkaline affinity Low-sulfidation epithermal Au Carbonate-hosted Disseminated Au-Ag Ore Skarn Au-(Cu) Nickeliferrous Laterite

The first four deposit types collectively belong to the broad family of magmatic-hydrothermal Cu-Au deposits that form above, within and around the periphery of high-level intrusive stocks of hydrous, oxidized, calc-alkaline to potassic alkaline magmas that are emplaced at shallow levels in the crust of active volcanic arcs. These different deposit types form at different structural levels of magmatic intrusive complexes, and their character is governed by a multiplicity of factors that include depth of magmatic degassing, degassing behaviour, host-rock lithology and structural preparation. (B.D. Rohrlach, 2005)

The Agata Projects area has high potential for the presence of one or more porphyry-type Cu-Au hydrothermal systems associated with 3 principal targets, and multiple satellite targets, that are associated with zones of high IP chargeability. Porphyry-style mineralization has been encountered previously in the Agata region by shallow drill holes in targets that are associated with modest IP chargeability anomalies. The Agata Projects possess multiple conceptual target styles such as porphyry, epithermal, Carlin-type and Ni-laterite. (Figure 6-2)

American Tunnels is a small erosional window through ultramafic cap rocks. It is in the center of a six kilometer trend of chargeability anomalies and at a point where the chargeability is near-surface, and actually daylights. It is also associated with extensive alteration, geochemical anomalies, and abundant gold and copper-gold showings. American Tunnels is characterized by a chargeability anomaly, extending over 800 meters by 300 meters. There are over 100 shallow artisanal mines and workings within the trend, but mineralization is mostly obscured by ultramafic cap rock of variable thickness. Where the mineralization is exposed, younger gold mineralization is telescoped into interpreted porphyry copper-gold related mineralization. (Figure 6-2)

Mineralization is at the top of multi-phase intrusives, on the cusp of the chargeability anomaly, and is interpreted as a high-grade, late-stage concentration at the upper contact of the intrusive stocks and dykes, and derived from porphyry copper-gold mineralization below. Petrology indicates mineralization is principally within late, more-fractionated monzonite phases of a syenite, monzonite, monzodiorite and diorite intrusive complex of dykes, sills, and small stocks intruding ultramafic rocks. Mineralization is associated with complex alteration assemblages of chlorite, epidote, actinolite, biotite ± k-feldspar, sericite, magnetite and albite. Copper minerals


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are chalcopyrite and bornite. These features, as well as the high molybdenum values, are consistent with a porphyry copper-gold setting.

Gold is mined from a honeycombing of shallow (5 to 20 meters) underground workings, estimated to be several hundred meters in extent, within an area of about 200 meters by 225 meters at American Tunnels. Free gold is also present in streams draining ultramafic cap rocks several hundred meters north of American Tunnels. There are also dozens of artisanal gold workings within other erosional windows to the south on the Agata Project.

Having artisanal workings producing both gold and copper throughout the local region indicates that there is significant opportunity within the project area and provides Mindoro with significant opportunity outside of the Ni Laterite resource defined in this report.

11. MINERALIZATION

11.1 Agata Nickel Laterite Project

Nickeliferrous laterite deposits are present over a broad region in the Agata Projects area (Figure 4). They are divided into two (2) major areas known as the ANLP and the ASLP. Based on mapping, the former has an area of approximately 286 hectares while the latter comprises about 235 hectares. In the ANLP, drilling is concentrated in about eighty (80) percent of the interpreted nickel laterite mineralization to date.

The laterites are developed over ultramafic rocks that lie along the Western Range. The rock types within the ultramafics are harzburgite, serpentinized harzburgite, peridotite, serpentinized peridotite, pyroxenite, serpentinized pyroxenite, serpentinite with localized lenses of dunite/serpentinized dunite. The ultramafic bodies are of probable Cretaceous age, and were emplaced as part of an ophiolite sequence during the Upper Eocene (Abrasaldo, 1999). Formation of the laterites is thought to have occurred during the Pliocene or early Pleistocene. The largest of the laterite bodies overlies the central ultramafic body (Figure 9-2).

Initially, MRL undertook aerial photograph interpretations and field inspections, to define areas of potential laterite formation. The soil profile is intensely ferruginous in this region, and relic cobbles of intensely fractured and serpentinized ultramafic rock lie scattered throughout the region of observed laterite development. At higher elevations along the topographic divide, ferruginous pisolites and blocks of lateritic crust were observed developed on an ultramafic protolith.

Nickel laterites are the products of laterization or intense chemical weathering of the ultramafic rocks, especially the olivine-rich varieties like harzburgite and dunite. The high rainfalls and intense weathering breaks down the easily weathered harzburgite and dunite and the more mobile elements of Mg and Si tend to leave the profile at a much faster rate than the less mobile Fe and Ni/Co. Thus high Fe laterite and limonite zones overlie the weathering saprolite of the ultramafic rocks and where erosion of the upper Fe laterite is low quite deep depths can be formed (<10m).

The Ni mineralization is predominantly at the base of the Fe laterite and the top of the saprolite, as this mineral is concentrated in minerals that can hold it within their matrix (limonite and to a lesser degree hematite, goethite and Fe-rich clays in the Fe Laterite, and more primary Mg rich clays (saponite and stevensite) in the ultramafic saprolite. When weathering is very deep, in zones of interpreted crush or fault zones, then more Ni can be located in the Fe laterite, but


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predominantly the largest Ni enrichment is within the saprolite of the underlying ultramafic rock near the contact zone with the Fe laterite.

Within the saprolitic ultramafic there are areas of more weathering resistant “boulders” and these tend to carry less Ni mineralization than the surrounding more degraded saprolite – this is related to the lower level presence of the Mg rich clays and their capacity to carry Ni and Co within their structure.

Patches of garnierite are present within the saprolite. Abundant garnierite was observed in a trench along the slopes on the western portion of ANLP.

12. EXPLORATION

All exploration work on the Agata Project carried out by Mindoro was under the direct supervision of James A. Climie, P.Geol., Exploration Manager and MRL President. Local staff formed the exploration team with qualified geologists logging all drill core and the site manager also being a qualified geologist.

12.1 MRL Exploration (1997-2000)

Initial work by MRL on the Agata Project from 1997 to 2000 comprised a geological evaluation conducted by Marshall Geoscience Services Pty Ltd. It was part of a due-diligence assessment of the property prior to entering into a Joint Venture with Minimax. This work suggested that hydrothermal gold mineralization at Agata is related to andesitic or dioritic intrusives, that vein mineralization is representative of the upper levels of a porphyry system and that there is prospectivity for skarn mineralization within limestones on the property (Marshall, 1997; Climie et al., 2000).

The 1st phase of exploration activity commenced in May 1997 in the Assmicor region and consisted of grid establishment followed by soil geochemical survey (1,617 soil samples analyzed for Au, Ag, Cu, Pb, Zn, As), geological mapping plus selective rockchip sampling and petrographic studies. Furthermore, DOZ technologies of Quebec, Canada, interpreted a RadarSat image of the Agata area and generated a 1:50,000 scale interpretation of the region. In addition, MRL re-sampled by channel sampling, five test pits (ATP-1 to ATP-5) excavated by La Playa Mining Corporation. These pits encountered laterite thicknesses of 2.48 to 9.40 meters. The composited assay values for each of the re-sampled test pits range from 0.43% to 0.94% nickel.

The 2nd phase of exploration activities on the Agata Projects was undertaken between June 1999 and December 1999. This included grid re-establishment, geological mapping within the Assmicor Prospect and American Tunnels, ground magnetic survey, soil geochemistry (50 samples), rock/core sampling, petrography and drilling of 11 holes. (Climie et al., 2000).

The soil sampling survey generated widespread Cu and Au soil anomalies. Soil Cu anomalies tend to be closely restricted to mapped intrusions at American Tunnels and Assmicor-Lao. Soil Au anomalies are more widespread and extend into the surrounding and overlying carbonate rocks. In contrast, soil As anomalies appear to be weakly developed over the intrusions but more strongly developed over carbonates. The Cu and Au soil anomalies associated with the Assmicor-Lao prospect region are open to the east beneath the alluvial flood plain sediments of the Tubay River. The potential for an extension of the Assmicor mineralization to the immediate


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east beneath the Tubay River floodplain is strengthened by the observation that the dikes and intrusives encountered in drilling at

Assmicor dip towards the east, that porphyry-like quartz veins were encountered in drillhole DH 99-11, which lies east of the Assmicor prospect, and the evidence of a resistivity anomaly developing on the edge of the IP survey east of the Assmicor prospect.

Nineteen surface channel samples were collected in the Limestone Prospect area. Sixteen of these samples yielded grades ranging from 0.02 g/t Au to 0.85 g/t Au. Three of the samples graded 2.79 g/t Au over 3.7 meters, 3.77 g/t Au over 2 meters and 1.48 g/t Au over 3 meters. The channel samples indicate a zone of anomalous gold above 0.1 g/t in rock samples that extends over an area of 100m by 50m in oxidized limestone.

Petrographic analyses by Comsti (1997) and Comsti (1998) reveal that the intrusive rocks at Agata consist of alkalic, silica-undersaturated plutonic rocks. These comprise of syenites and monzonites that display varying degrees of sericitic and propylitic alteration. Potassic feldspar is a primary mineral phase in many of these rocks.

An in-house ground magnetic survey was conducted in 1999. The magnetic data comprised a series of semi-continuous magnetic highs, with values >40250nT, that broadly coincide with the distribution of ultramafic rocks along the western margin of the Lao and Assmicor areas. The magnetic signature decreases gradually westward where the ultramafics are thought to be buried at deeper levels beneath the limestones.

MRL drilled eleven (11) diamond drill holes into the Assmicor and Limestone prospects in 1999 and encountered Au intersections associated with limonitic stockworks in biotite monzodiorite intrusive. These include 18.8m @ 1.13 g/t Au and 24.2m @ 1.38 g/t Au in holes DH 99-05 and DH 99-06, respectively. The intrusives comprise larger biotite monzodiorite bodies that are cross-cut by younger diorite dikes, plagioclase diorite dikes, biotite diorites and quartz diorites. These dikes and intrusive bodies dip predominantly eastward, suggesting that a deeper magmatic source lies to the east, possibly along the trace of the Lake Mainit splay of the Philippine Fault, beneath the alluvial floodplain of the Tubay River. Drillhole DH 99-11, collared east of the Assmicor shaft, intersected porphyry-style quartz-magnetite veins in biotite diorite, quartz diorite and in hornblende-quartz diorite.

12.2 MRL Exploration (2004-2009)

MRL undertook a third phase of exploration activity in 2004 on the Agata Project. This activity involved gridding, mapping and extensive grid-based pole-dipole induced polarization (IP) geophysical surveying along 30 east-west-oriented survey lines that extend from 7,800 mN to 13,400 mN. The IP data were acquired by Elliot Geophysics International using a Zonge GGT-10 transmitter, a Zonge GDP-32 receiver and a 7.5 KVA generator. A total of 77.10 km of grid were surveyed by pole-dipole IP. The dipole spacing used in the survey was 150 meters. The data were modelled by Dr Peter Elliot of Elliot Geophysics International using inversion modelling.

Induced polarization (IP) surveying on the Agata Project has identified numerous IP chargeability anomalies that form finger-like apophyses at shallow levels, and which amalgamate into larger anomalies at deeper levels. The IP chargeability anomalies tend to strengthen with depth in the core anomaly regions (Southern Target anomaly and Northern Target anomaly). The IP chargeability anomalies attain values that locally exceed 40 msecs,


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and routinely exceed 20 msecs on most of the IP pseudo-sections from Agata. Weaker modelled IP chargeability anomalies are associated with known mineralization at Assmicor (10-18 msec) and in other satellite positions adjacent to the two cores Northern and Southern target anomalies. There is an indication, from the four plan views of the IP chargeability data, that NNW to NW faults may be important in controlling the distribution and shape of many of the IP anomalies at Agata. Faults that lie along these trends are expected to lie in a dilational orientation in relation to the regional stress field associated with sinistral movement on the near north-trending Philippine Fault splay.

Preliminary drilling on the Agata Project was carried out between November 2, 2005 and October 28, 2006. This was conducted under a joint-venture among MRL, Panoro Minerals Ltd. (Panoro), and Minimax. The prospects were highly recommended priority targets for drill evaluation as these prospects exhibit classic stacking of geophysical, geological and geochemical features associated with Philippine porphyry copper-gold systems (Rohrlach, 2005). The preliminary drilling program was aimed to test the area of highest chargeabilities in the North and South Porphyry Targets.

Great operational difficulties were encountered in extraordinarily bad ground conditions. A total of five drill holes with a combined length of only 756.45 meters were completed, four of which were drilled within the North Porphyry Target and one at South Porphyry Target. All five holes were prematurely terminated, not reaching target depths. The chargeability anomalies were interpreted to occur at around 375m below surface (N=4) based on IP geophysical inversion models. The deepest hole bottomed at only 251.20m, a long way from the 500-meter target.

All drill holes have intersected and bottomed in strongly serpentinized ultramafics with very minimal pyrite mineralization. Dr. Peter Elliot, Consulting Geophysicist, affirmed that the serpentine was not the cause of the anomalies, and would only cause a weak IP anomaly.

From 2008 to 2009, underground mapping and sampling (continuous rock chip and grab sampling) of the American Tunnels prospect was undertaken. To date, results of 48 rock samples have been reported by Mindoro. Significant results include an aggregate of 26m @ 1.94 g/t Au; 21.90m @ 3.67 %Cu; and 17.5m @ 2.01% Cu. Results of the underground sampling are incorporated in the rock geochemistry map.

12.3 MRL Laterite Ni Exploration

Lateritic Nickel mineralization was known within the ANLP area since the early 1990‟s and grades were confirmed in the development of test pits in 1997 (See Section 7.1). The project since this initial definition has moved ahead so as to better define the resource and to provide better technical information with regards to eventual exploitation.

In June 2004, Taganito Mining Corporation was selected from several interested parties and granted the non-exclusive right to assess the nickel laterite potential of the Agata Project. Taganito carried out two phases of evaluation and reported encouraging results. Forty-eight surface laterite and rock samples were collected from an area of about 300 ha within a much more extensive area of nickel laterite mineralization. Nickel contents range from very low to a high of 2.09%, with most of the values exceeding 0.5%. Taganito considered these values to be within the range that normally cap the secondary nickel enriched zone and have recommended a detailed geological survey and drilling. However, MRL elected to allow Queensland Nickel Phils., Inc. (QNPH) to proceed with a reconnaissance drill program in 2006.


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Since Taganito, exploration has been carried out by the use of open core drilling on a drill pattern that has been successively closed down with each subsequent drill program so as to enhance the accuracy of the future reported lateritic Ni resource.

13. DRILLING

13.1 Drilling Phases:

Since Taganito, exploration has been carried out by the use of open core drilling on a drill pattern that has been successively closed down with each subsequent drill program so as to enhance the accuracy of the future reported lateritic Ni resource. All drilling to date has been completed by the use of small mobile open hole NQ coring rigs, which are highly mobile in difficult to access terrain. Recovery from these drill rigs is high, with losses generally occurring where there are changes in the hardness of the drilled material, causing material to be disrupted at the bit face. The major ore zone is generally a softer material and losses within the ore zones have been minimal at all stages of the drilling programs. A variety of contractors have been used over time, with the drilling rate being the only variation with regards to their performance and sampling rate.

Each of the individual drill programs will be discussed and summarized.

13.1.1 BHP-Billiton (2006)

QNPH, a subsidiary of BHP-Billiton, conducted reconnaissance drilling over the ANLP from January 23, 2006 to April 26, 2006 at an initial drilling grid of 200m x 200m followed by in-fill drilling at 100-m grid spacing. A full report of the drilling program entitled “Evaluation of Preliminary Exploration on Agata Nickel Laterite Prospect of MRL Gold Philippines, Inc, Agusan del Norte, Philippines” was completed by QNPH in June 2006 and submitted to MRL immediately thereafter. A total of 35 holes were drilled over an area of approximately 80 ha, which is 21% of the 340-hectare ANLP. The drillhole locations are incorporated in the MRL‟s AGL Drillhole Location Map (Figure 13-1).

This drilling program was subsequent to a Memorandum of Understanding (MOU) signed between MRL and QNPH on December 5, 2005. The MOU allowed QNPH to conduct exploration in the property, which also include technical review and geological mapping. It was intended to evaluate and establish resource potential of the area and as a possible Yabulu Refinery ore source, and to present a resource model. QNPH were looking for high Ni / high Fe ore and were not intending to formalise any agreements with MRL until the results of the exploration proved positive.

To evaluate the potential of the ANLP for the Chinese market, MRL commissioned Denny Ambagan to re-evaluate QNPH‟s data with the aim of estimating low-grade resources for the Chinese market. Ambagan is a geologist, who worked for Crew Minerals in its Lagonoy and Mindoro nickel laterite exploration areas for three years. An in-house estimate was tabled. QNPH post this estimate did not take up an option with MRL with regards to the ANLP.

13.1.2 MRL Phase 1 (2007)

The first drilling program in the ANLP managed and developed by MRL was conducted from February 22 to August 3, 2007 with 100 holes completed and a total meterage of 2267.12.


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Drilling was confined to the area defined for an initial DSO operation. The drilling area related to areas covered by initial Exploration Targets A and B. The drilling rate averaged 3.8m / day / drill rig and the recovery of drill core over the program was 88.2%.

Figure 13-1: ANLP Drillhole Location Map – BHP Billiton and MRL (2007) Drilling

13.1.3 MRL Phase 2 (2007/08)

A follow-up infill drilling program in ANLP was started in December 17, 2007 to May 30, 2008, completing 773.12 meters in 48 drill holes (37 new drill holes and 11 twin holes). The purpose of this exercise was to better define the mineralization and extend the initial resource. The drilling rate averaged 4.6m / day / drill rig and the recovery of drill core over the program was 93.9%.

13.1.4 MRL Phase 3 (2008)

From June 18, 2008 to September 26, 2008, step-out drilling was carried out with hole spacing widened to 100m by 100m centers. Drilling totalled 3,601 meters in 225 holes. This program was aimed to drill out the greater part of Agata North resource potential based on areas covered by Exploration Targets C and D. The drilling rate averaged 11.5m / day / drill rig and the recovery of drill core over the program was 95.0%.

A total of 408 vertical holes were completed during the first 4 phases of drilling in the ANLP, including the previous BHP-Billiton drilling. The drilling patterns are all located on a 50m- to


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100m-spaced grid. Total meterage is 7,300.83 with an average depth of 17.89m/per hole, a maximum of 46.6m, and a minimum of 4.35m.

13.1.5 MRL Phase 4 (2010)

During 2010 the program continued to infill the resource so as to gain both a greater level of accuracy for the resource estimate, but also to be able to study the variography of the resource within a close spaced pattern combining both high grade limonite and saprolite ores. From April 23, 2010 to July 10, 2010 infill drilling totalled 147 drill holes for 2682 meters of drilling. The drilling rate averaged 13.6m / day / drill rig and the recovery of drill core over the program was 91.5%. Lower recovery is explained by the variably lithified ultramafic in the close spaced pattern to be used for variographical purposes, this is not common throughout the deposit but the location weighting in this program has skewed the recovery data.

For the resource being compiled in this report, the total number of drillholes completed is 593 for 10,851.84m meters with an average drillhole depth being 18.30m. All drillholes completed within the ANLP area are located on Figure 13-2.

13.2 Summary

All exploration completed to date has been systematic and appropriate with regards to the development of a resource estimate. The author considers the drilling methodology used within the ANLP area and the various sample recovery rates appropriate and accurate with regards to providing a sampling platform for resource estimation.

Figure 13-2: ANLP Drillhole Location Map – All Drilling


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13.3 Drillhole Collars Survey

Surveying of drillhole collars‟ position and elevation was undertaken by MRL surveyors using a Nikon Total Station DTM-332. This, together with the topographic survey of the ANLP is tied to five National Mapping and Resource Information Authority (NAMRIA) satellite/GPS points and benchmarks with certified technical descriptions (Table 13-1). The Reference System used is PRS 92 or WGS 84, used interchangeably by mathematical conversions.

Consequently, the baseline for the local gridlines is based on 51 MRL control stations. About 65,535 survey points, including drillhole collars, were established with varying shot distances. These are downloaded into the computer by seamless data transfer, imported to MAPINFO, which are then used for the Digital Terrain Modeling to derive the contour map.

Table 13-1: NAMRIA Tie Points Technical Description

STATION LATITUDE LONGITUDE EASTING NORTHING LOCATION

AGN_45 9°11'07.88738" 125°33'39.04409" 561636.287 1015703.065 SW-end corner of Sta. Ana Bridge, Tubay

AGN_46 9°11'11.29480" 125°33'39.28491" 561643.476 1015807.756 NW-end corner of Sta. Ana Bridge, Tubay

AGN_48 562018.601 1019260.784

AGN_153 9°19'23.02761" 125°33'15.95108" 560907.623 1030913.182 NW-end corner of Puyo Bridge, Jabonga

AGN_154 9°19'14.68259" 125°33'13.72449" 560840.077 1030656.707 NW-end corner of Bangonay Bridge, Jabonga

14. SAMPLING METHOD AND APPROACH

The ANLP QA/QC Procedures for the whole ANLP drilling program was set up by MRL geologists and was followed by all personnel involved in all stages of the program (Appendix 5). This was adapted from the QA/QC Protocols of QNPH for the 2006 drill program carried out on the ANLP. Periodically, the protocols were evaluated and improvements implemented. The core handling, logging and sampling procedures applied in the program are briefly described below.

Core checkers, under the supervision of MRL technical personnel, are present on every drill rig during operation. This is to record drilling activities from core recovery, core run, pull-out and put-back, casing and reaming at the drill site. Once a core box is filled, it is sealed with a wooden board then secured with a rubber packing band. This is placed in a sack and manually carried to the core house some 300m to 1km m from the drill area.

Core logging was carried out in the core shed by MRL geologists. For standardization of logging procedures, the geologists are guided by different codes for laterite horizon classification, weathering scale, boulder size, and color.

After logging, the geologist determines the sampling interval. Core sampling interval is generally at one (1) meter intervals down the hole, except at laterite horizon boundaries, when actual boundaries are used. The sample length across the boundaries is normally in the range of 1.0 ± 0.30m to avoid excessively short and long samples. In the saprolitic rocks and bedrock layers, some sample intervals have lengths greater than 1.30 meters to a maximum of 2.00 meters.


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15. SAMPLE PREPARATION, SECURITY AND ANALYSES

15.1 MRL Protocols

As in all stages of the program, the ANLP QA/QC Procedures (Appendix 5) were diligently followed during the sample preparation and security procedures. The analyses for the first 2,689 core samples were performed by McPhar Geoservices (Philippines), Inc. (McPhar), which follows internationally-accepted laboratory standards in sample handling, preparation and analysis.

For the rechecking of the integrity of laboratory assays, independent consultant Dr. Bruce D. Rohrlach, also a qualified person, provided MRL geologists with sampling procedures in May, 2007 after several site visits. This was incorporated into the QA/QC Procedures.

Following the recommendations of another qualified person, F. Roger Billington in May, 2008, the sampling protocols were slightly modified. The most important modification was the insertion of pulp rejects in the same batch as the mainstream samples. This is to ensure that all conditions in assaying are similar, if not completely the same for both the mainstream and check samples. All of the analyses are completed by Intertek Testing Services, Phils., Inc. (ITS) for analysis using the XRF analytical method, and thus all 8,411 core samples since have been analysed by this group.

The ITS Phils. facility is among Intertek‟s global network of mineral testing laboratories. It provides high quality assay analysis of mineral samples for nickel deposit exploration projects. Intertek mineral testing laboratories implement quality protocols.

15.1.1 MRL Core Sampling

During the first two phases of drilling, whole core sampling was conducted for 132 drill holes, and 17 holes were split-sampled. Whole core considering the relatively small core diameter, and to achieve better precision by assaying the largest possible sample.

Whole core splitting was manually performed. The core was laid on a canvas sheet, pounded and crushed by use of a pick, thoroughly mixed, quartered, then the split sample is taken from 2 opposite quarter portions. The other 2 quarters are combined and kept as a duplicate in a properly-sealed and labelled plastic bag and arranged in core boxes according to depth. The duplicates are stored in the core house at the Agata Base Camp, some 1.5 km from the drill area.

For the third and latest drilling phase, split-sampling was conducted to ensure the availability of reference samples in the future (except for 45 drillholes from the third drilling phase). The cores were cut in half using either a core saw or spatula. The remaining half is stored in properly-labelled core boxes at the Mindoro Camp site in Agata.

The sampling interval is marked in the core box by means of masking tape/aluminum strip labelled with the sampling depth. The sample collected is placed in a plastic bag with dimension of 35cmx 25cm secured with a twist tie. The plastic bag is labelled with the hole number and sample interval.


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After the samples are collected, they are weighed then sun-dried for about 5 hours and weighed again before final packing for delivery to the laboratory. In cases where there is continuous rain, the samples are pan-dried for 5-6 hours using the constructed drying facility or wood-fired oven.

MRL prepared its own sample tags for all samples including pulp repeats, pulp standards, and coarse rejects samples. The samples were placed in a rice sack and then in a crate to ensure the security of the samples during transport.

For all of the 2007 cores and batch 2008 AGL 10, the prepared samples were sent to the McPhar laboratory in Makati City, Metro Manila via a local courier (LBC Express). The samples were carefully packed in craters with proper labels. This was accompanied by an official Submission Form and a Courier Transmittal Form. The crates were transported to Butuan City where LBC Express branches are present. The transportation of the crates containing the samples is always accompanied by designated MRL staff. The courier received the package and provided MRL with receipts indicating contents. For batches 2008 AGL 1, 3 and 6, the samples were delivered by MRL to McPhar‟s sample preparation facility in General Santos City. The assaying was performed in their laboratory in Makati City.

Counting and cross-checking of samples vis-à-vis the McPhar Submission Form were performed by McPhar supervisors. Notice is given to MRL if there are discrepancies, otherwise it is understood that sample preparation and analysis will be carried out as requested. A sample tracking, quality control, and reporting system was maintained between MRL and McPhar.

For batches 2008 AGL-13, 16, 18 and onwards, the core samples were delivered to Intertek‟s sample preparation facility in Surigao City. Likewise, checking of samples against the list was done upon submission. Once prepared, Intertek-Surigao sends the samples to their assay laboratory in Muntinlupa City, Metro Manila.

The core sampling and logging facility was under the supervision of MRL geologist or mining engineer at all times. This facility was originally within the drill area and is about 300m to 1km from the drill pads, however though logging of the core was completed at the drill rig for the phase 4 drilling, core trays were delivered to Bgy. E. Morgado base camp for sample splitting preparation under the guidance of MRL staff. A civilian guard secures the base camp premises during the night.

The ANLP drilling was directly under the supervision of James A. Climie, P. Geol., Exploration Manager of Mindoro.

15.1.2 Checking of Laboratory Performance

In addition to stringent sampling protocols, QA/QC procedures were also employed following Dr. B. Rohrlach‟s and F.R. Billington‟s (MRL independent consultants) guidelines. Standard reference materials, field duplicates, coarse rejects and pulp rejects were resubmitted to the analysing laboratory to check the accuracy of the primary laboratory results. A total of 1269 analyses of check samples were used in confirming the accuracy and repeatability of all assays to be used within the resource estimation of the ANLP. Selection of check samples are spread throughout all holes and in various laterite horizons.

The field duplicates totalled 325 or 2.93% of the 11,100 mainstream core samples of MRL. Normally, 1 in every 20 core samples is duplicated. The duplicate sample is selected to ascertain that the full range of different laterite horizons is systematically covered. The samples were selected to cover the full range of Ni grades at Agata, and to extensively cover the


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different stages and spatial distribution of the drill program, so as to provide a representative check on the reliability of the original sample splitting process undertaken by MRL at Agata North. Originally, the splitting method is the same as for obtaining duplicates for storage but 1/4 part of the prepared sample represents the field duplicate while the 3/4 part is the regular sample. For the half-core sampling, the field duplicates were taken by cutting the remaining ½ core into 2. These samples were sent to the laboratory in the same batch and were treated in the same way as the mainstream core samples.

A set of 81coarse reject samples, comprising 0.73 % of the 11,100 core samples, were submitted to the laboratory where the original samples were analyzed for resampling and assaying. Resampling was done by taking a duplicate split from the coarse rejects and then placing it back into the assay stream for analysis. Again, as in all duplicates, the submitted samples were chosen to cover the natural range of assays. The reanalysis of the coarse reject samples was undertaken as an internal check on the crushing and sub-sampling procedures of the laboratory to ensure that the samples taken for analysis were representative of the bulk sample.

There were two sets of pulp rejects sent for re-assaying. One was sent to the laboratory where it was originally analyzed. A total of 250 pulp rejects were sent under this category. The other set was sent to an umpire laboratory wherein a total of 319 pulp rejects were analyzed. This is to establish reproducibility of analysis and determine the presence or absence of bias between laboratories. Samples were taken on all of the different laterite horizons. Originally, pulp rejects were collected and sent in separate batches. Starting on June 2008, pulps were inserted together with the mainstream samples (1 in each set of 40 samples). The pulp rejects for inter-laboratory checking were sent at a later date.

The umpire laboratory for the 2007 drilling program was Intertek in Jakarta. Selected pulp samples were sent by MRL to Intertek‟s Manila office, after which they forward the samples to Jakarta in Intertek Cilandak Commercial Estate 103E, JI Cilandak KKO, Jakarta 12560. Intertek (Jakarta) has acquired an ISO 17025 2005 accreditation from KAN(National Accreditation Body of Indonesia) denominated as LP 130_IDN. This is valid until 2010. With the change of primary laboratory to Intertek Phils., Mcphar becomes the umpire laboratory. In 2008, Mcphar samples/assays were checked by Intertek Phils. and vice-versa.

Nickel standards or certified reference materials are routinely inserted to the batches of core samples sent for assaying. This is done as a double check on the precision of the analytical procedures of Mcphar and Intertek on a batch by batch basis. The standards, which have known assay values for Ni, were provided by Geostats Pty Ltd of Australia in pulverized (pulp) form weighing about 5 grams contained in 7.5cm X 10cm heavy duty plastic bags. Originally, one (1) standard sample is inserted for every batch of 40 to 45 samples. However, there were some standards inserted in smaller intervals of 25-35 samples. Starting with Batch 2008 AGL-18, one standard sample was included in every set of approximately 40 samples. In all, 294 standards equivalent to 2.65 % of the core samples were used.

Eighteen types of Ni standards were used with grade ranging from 0.01% to 2% Ni. Each one comes with a certificate that shows the accepted mean Ni value and standard deviation, which are available in the website of Geostats (www.geostats.com.au). The specific nickel standards and the frequency of using each one are listed in Table 15-1.


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Table 15-1: Nickel standards used at ANLP and frequency

Ni

Standard

#

Assays %Ni

Ni

Standard

#

Assays %Ni

GBM305-9 32 0.25 GBM906-7 6 0.56

GBM307-13 16 2 GBM996-1 5 1.27

GBM901-1 55 0.8 GBM302-8 6 1.08

GBM903-2 27 0.11 GBM397-6 5 0.03

GBM905-13 41 1.51 GBM901-4 6 0.02

GBM906-8 44 0.55 GBM903-5 10 0.18

GBM398-4 5 0.41 GBM995-4 10 0.03

GBM900-9 5 1.16 GBM997-4 5 0.01

GBM901-2 8 0.88 GBM998-3 8 0.03

9 Standards 233 9 Standards 61

15.2 Laboratory Protocols

15.2.1 McPhar Geoservices (Phil.), Inc.

McPhar carries out high quality sample preparation and analytical procedures. It is an ISO 9001-2000-accredited laboratory and has been providing assay laboratory services to both local and foreign exploration and mining companies for more than 35 years. It served as the primary laboratory for the ANLP drilling. Its address is 1869 P. Domingo St., Makati City, Metro Manila.

Mcphar‟s sample preparation procedures and analytical processing are illustrated in the flowcharts below. Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum (Al), silica (SiO2) and some samples for phosphorous (P).The Ni, Co, Fe, Mg and Al are assayed by dissolving a 25g charge with a two acid digest using hot hydrochloric (HCl) and nitric acid (HNO3) and reading the results by Atomic Absorption Spectroscopy (AAS). The SiO2 and P are analyzed by a gravimetric process.

McPhar has its own Quality Assurance / Quality Control (QA/QC) program incorporated in their sample preparation and analyses procedures. Every tenth sample and samples with "anomalous" results, i.e., samples having abnormally high or low results within a sample batch, are routinely checked. This is done by preparing a solution different from the solution on the regular sample taken on the same pulp of a particular sample.

15.2.2 Intertek Testing Services Phils., Inc.

Intertek Testing Services Phils., Inc. (ITS) is among Intertek‟s global network of mineral testing laboratories. It provides quality assay analysis of mineral samples for nickel deposit exploration projects. Measures are taken by Intertek mineral testing laboratories to ensure that correct method development and quality protocols are in place to produce good quality results.


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Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum (Al), silica (SiO2), CaO, Cr2O3, K2O, MnO, Na2O, P2O5, and TiO2. Whole rock analyses are done using X-ray Fluorescence. The samples are fused using lithium metaborate. XRF analysis determines total element concentrations that are reported as oxides.

For its internal QAQC, Intertek performs repeat analyses plus split sample analyses in every 15-20 samples. Furthermore, on the average, one standard reference material is inserted in every 40 samples, and one blank in every 60 samples.

Flowcharts of McPhar and Intertek sample preparation and analysis procedure flowsheets are presented in Figures 15-1 to 15-3.

Figure 15-1: Flowchart of Mcphar‟s Sample Preparation for Laterite


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Figure 15-2: McPhar‟s Laterite Analysis Procedure Flowsheet

Figure 15-3: Intertek‟s Sample Preparation Procedure for Laterite


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15.3 Results of Internal Check Assays (McPhar and Intertek)

The laboratories of Mcphar and Intertek in Manila have a Quality Assurance/Quality Control programs incorporated in their sample preparation and analyses procedures. The two laboratories regularly conduct duplicate analysis of Ni and other elements as a check on analytical reproducibility within their own laboratories. Repeats are routinely conducted on all elements being analyzed and are typically on every 10th sample for McPhar and on every 20th sample for Intertek. All in all there are 770 (6.94%) repeat analyses that are spread evenly throughout the entire database.

In analyzing the correlation between the original and duplicate sample, the Variance between the primary assay and the duplicate was computed as follows:

(a – b) Var = ________ x 100

a Where: a - is the original sample analyzed

b - is the duplicate sample analyzed and Var - is the percentage relative difference

To interpret the Variance value, a value of zero means the two values are identical and the duplication is perfect, a negative value means the duplicate is higher, while a positive value means the original is higher. Values less than 10% variance (either negative or positive), are considered excellent when reviewing comparative samples within lateritic Ni deposit assays. [NB This methodology is used in all sections of Section 15: Sample Preparation, Security and Analyses within this report.]

There is an excellent correlation for all of the elements within an internal repeat with all below Variances <1% (0.03 – 0.28%) as shown in Table 15-2, which is consistent with high precision repeatability. There is generally a very even spread of the check assay being both higher and lower than the primary assay which indicates that there is no systematic bias occurring in the check analyses routine.

Table 15-2: Variance of Original and Internal Laboratory Duplicate Analysis

Internal Laboratory Comparative Statistics

McPhar Ni Co Fe Al Mg Si

Variance from 1st Assay 0.05% -0.26% -0.15% -0.08% 0.28% 0.03%

Duplicates = 1st Assay 98 204 4 98 23 16

Duplicates < 1st Assay 84 38 146 94 137 120

Duplicates > 1st Assay 90 30 122 80 112 136

Intertek Ni Co Fe Al Mg Si

Variance from 1st Assay -0.06% 0.36% 0.09% -0.04% 0.33% 0.01%

Duplicates = 1st Assay 15 74 0 5 0 2

Duplicates < 1st Assay 100 73 98 107 105 115

Duplicates > 1st Assay 117 85 134 120 127 115


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15.4 External Check Assays (MRL)

MRL has also set up its own QA/QC protocols vis-à-vis the laboratories‟ sample preparation and analytical procedures, which the author has observed in the field and analysed the results for this report. The external laboratory checks determine the assaying laboratories to replicate a known standard, the repeatability of the assay from the field splitting and the pulp repeats (i.e external and internal repeats of the primary assays), the consistency of grade between laboratories, and the determination of any bias within the sample preparation process through the analyses of the coarse rejects. It is a comprehensive series of analyses compiled to ensure grade estimates are of the highest calibre.

15.4.1 Nickel Standards

As a double check on the precision of the analytical procedures of both Mcphar and Intertek laboratories, nickel standards were inserted by MRL into the sample runs at approximately 1 to 45 samples on the average. A total of 303 nickel standards, representing 2.73 % of the 11,100 core samples were sent. These standards were purchased from Geostats Pty. Ltd of Australia. Twelve types of standards were used for the whole drilling course to date, with grade ranging from 0.11 to 2.00 % nickel.

Table 15-3 presents the data standards for nickel for two of the Ni standards used by MRL which were lateritic nickel standards and most closely related to the ANLP samples submitted. From the statistical analyses it is confirmed that the external standards submitted by MRL fell within a small range from the accepted mean, and that comparative statistics were well within acceptable standards. A point to note is that both McPhar and Intertek consistently underestimated Fe for both standards, and though the variation is <3.2% of the Ni standards Fe grade, it was the only example of a systematic variation encountered within the dataset.

Table 15-3: Variance of Ni Standard and Laboratory Assays

Ni Standard GBM901-1 Ni Standard GBM905-13

Ni Co Fe Ni Co Fe Variance from Std

-1.66% -8.68% 3.15% Variance from Std

-0.33% -4.25% 1.92%

# Assays = Std 0 0 0 # Assays = Std 0 2 0

# Assays > Std 46 45 0 # Assays > Std 25 20 0

# Assays < Std 9 10 55 # Assays < Std 16 19 41

The graphical representation of the standards data shows that the Ni grade is extremely consistent within the standard and within both standards the check assays vary above and below the standard‟s value (Figure 15-4). However, when a new batch of the same standard was put into the sample runs the minor elements within the standard varied (especially Co), and this indicates the difficulty of ensuring an even spread of the minor elements within a product like a Ni standard. The variation for the minor elements can therefore be explained by batch variation rather than a systematic error within the assaying process.


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15.4.2 Field Duplicates

The analytical reproducibility of field duplicate samples is a measure of the representativity of the original split of the sample, a check on the reliability of the sample reduction procedure (splitting) undertaken by MRL at the field area.

The field duplicates were sent together with the regular core samples for assaying. A total of 325 core field duplicates (2.93% of the 11,100 core samples) were analyzed. Of these, 134 were analyzed by Mcphar (1 in 20 cores) while 191 duplicates were by Intertek (1 in every 40 samples).

Table 15-4: Variance of Field Duplicate and Original Assays

Field Duplicates Comparative Statistics

Ni Co Fe Al Mg Si

Variance from Assay -0.16% -2.1% 0.1% 0.3% -0.6% -0.9%

(Abs Variance from Assay) 3.30% 7.2% 3.1% 6.1% 9.5% 6.2%

Field Duplicates = Assay 22 81 0 28 9 1

Field Duplicates < Assay 164 133 157 163 154 171

Field Duplicates > Assay 139 111 168 130 158 149

The results presented in Table 15-4 range from 0.1% to -2.1% for all elements, which indicates that there is an extremely high repeatability for all field samples. When reviewing the Absolute Variance, i.e the maximum variance from the sample average, all values for all elements are still under 10% of the average grade which supports the consistency of the splitting method and the reliability of the assays. Reviewing the split of duplicate samples being higher or lower in grade on average, the total count indicates that there is an equal chance of any duplicate being higher or lower than the original assay.

The author confirms that the field splitting and sampling protocol was excellent and supports the validity of the samples to be assayed for use in estimation purposes for all elements.

15.4.3 Coarse Rejects

The reanalysis of the coarse reject samples was undertaken as an internal check on the crushing and sub-sampling procedures of McPhar and Intertek to ensure that the samples taken for analysis were representative of the bulk sample. The Variance results for the Coarse fraction post crushing in comparison to the primary assay is shown in Table 15-5.

Table 15-5: Variance of Coarse Rejects and Original Assays

Coarse Reject Comparative Statistics

Ni Co Fe Al Mg Si

Variance from Assay -0.04% 4.0% -0.4% -0.6% 1.9% -0.9%


Coarse Rejects = Assay 5 19 0 3 1 0

Coarse Rejects < Assay 42 38 45 46 45 39

Coarse Rejects > Assay 34 24 36 32 35 42


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The results presented in Table 15-5 range from -0.04% to -4.0% for all elements, which indicates that there is an extremely good correlation of the coarse rejects with the passing material that formed the pulp for assaying. When reviewing the Absolute Variance, i.e the maximum variance from the sample average, there are 3 elements (Co, Fe, and Mg), that are more variable and this may be due to specific minerals that may crush less evenly due to hardness or platiness (Corundum for Al as an example) – but even with these minor variances for some minor elements the coarse sample rejects are very similar to the fines material. Reviewing the split of coarse rejects being higher or lower in grade on average, the total count indicates that there is an equal chance of any duplicate being higher or lower than the original assay.

The author confirms that the crushing of the primary sample protocol was excellent and supports the validity of the resultant pulps to be assayed for use in estimation purposes for all elements.


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Figure 15-4: Graphs of Nickel Standards Assays


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15.4.4 Pulp Rejects Analyzed by Primary Laboratory

A total of 30 of the McPhar pulp rejects during the first and second drilling phases were re-sampled and analyzed representing 1.07% of the 2,793 core samples. These were selected from previously submitted batches covering a range of sample grades, a range of horizons and a range of holes from the core drilling programs, so as to be representative of all the samples.

The method of pulp reject sampling for Intertek Laboratory was modified in June 2008. Starting with batch 2008 AGL-18, pulp rejects were randomly selected one in every set of 40 and were pre-numbered. These pulps were inserted to its assigned numbers right after sample preparation and were analyzed in the same batch as its source. A further 220 pulp rejects were submitted to the completion of the 2010 drill program.

The duplicate pulp analyses were conducted to test for homogeneity of the pulps generated by the two laboratories. Insufficiently milled samples will lead to multiple assaying of pulps with poor precision (i.e. poor repeatability). Inversely, agreement between assays of duplicates of the pulp would indicate that the milling procedure in the laboratory was efficient and generated a suitably homogeneous pulp.

Table 15-6: Variance of Pulp Duplicates and Original Assays

Pulp Duplicates Comparative Statistics

Ni Co Fe Al Mg Si

Variance from Assay 0.59% -2.6% 0.0% -0.6% -0.3% 0.4%


Pulp Duplicates = Assay 13 58 0 8 1 1

Pulp Duplicates < Assay 102 108 117 147 119 117

Pulp Duplicates > Assay 135 84 133 95 130 132

The results presented in Table 15-6 range from 0.0% to -2.6% for all elements, which indicates that there is an extremely high correlation of the repeat pulp assay with the primary assay. When reviewing the Absolute Variance, i.e the maximum variance from the sample average, the range is extremely small at 1.97-6.0% which indicates an extremely good repeatability for the pulps presented to the laboratories prior to assaying. Reviewing the split of pulp repeats being higher or lower in grade on average, the total count indicates that there is an equal chance of any pulp duplicate being higher or lower than the original assay.

It is confirmed that the pulp repeatability was excellent and supports the validity of the primary pulps to be assayed for use in estimation purposes for all elements.

15.4.5 Pulp Rejects Analyzed by Umpire Laboratory

Two laboratories have been used since the inception of the laterite Ni exploration at ANLP, and during the drilling programs check pulps have been forwarded to the alternate laboratory to confirm assay reliability. There are minor issues for some element analyses due to the varying


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assay methodologies (McPhar use AAS process and Intertek use an XRF), but this is predominantly within the minor elements and not the Ni assay.

Table 15-7: Variance of Pulp Duplicates and Interlab Assays

Interlab Pulp Duplicates Comparative Statistics

Ni Co Fe Al Mg Si

Variance from Assay 1.97% -0.9% 1.2% 2.7% 2.4% 0.0%


McPhar = Intertek 9 60 0 7 1 1

McPhar < Intertek 117 127 135 140 129 74

McPhar > Intertek 193 132 184 172 189 81

The results presented in Table 15-7 range from -0.9% to 2.7% for all elements, which indicates that there is an extremely high correlation of the interlab repeat pulp assay with the primary assay, and in fact are very similar to the range of variance encountered within the single lab pulp repeats (Table 15-6). When reviewing the Absolute Variance, i.e the maximum variance from the sample average, the range is larger at 1.0-20.5% which indicates that though their is good repeatability for the pulps, the differing methodologies do provide some contrast in the minor elements (Al and Mg especially). Reviewing the split of pulp interlab repeats being higher or lower in grade on average, the total count indicates that there is an equal chance of any pulp duplicate being higher or lower than the original assay.

It is confirmed that the pulp interlab repeatability was excellent and further supports the validity of the primary pulps to be assayed for use in estimation purposes for all elements.

15.4.6 Summary

In the authors opinion the sampling protocols, procedures and methods performed by MRL, and their implementation are of acceptable standards. Assays performed at the McPhar and Intertek in Metro Manila, are also of acceptable standards. Variations encountered by the McPhar and Intertek QA/QC program on the Agata samples were all within acceptable limits.

16. DATA VERIFICATION

Mark Gifford has visited site twice in the past 6 months (March to August) and in each occasion has reviewed protocols and processes set in place at the Mindoro base camp in Agata. The datasets provided by Mindoro were checked and verified by comparing a random portion against original field sheets and official Certificates of Analytical Results. Selected core trays were visually inspected against the logs. In addition, the core photos were viewed and compared with the cross sections showing laterite horizons generated by MRL. The lithology was checked in the field and in the drill cores. The digital file was checked for logical errors or data entry errors. There were a few but very minor errors found.


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Previously, Dallas Cox who has compiled the 3 previous resource reports also completed a series of random checks made in the field, to corroborate the acceptable quality of the data. As a further test, he collected twelve field duplicate samples and sent them to the same laboratory where they were originally assayed. Five samples come from the limonite horizon, six are from the saprolite and one from the saprolitic rock horizon. Table 16-1 and Figure 16-1 show the results and the correlation vis-à-vis original MRL assay values.

The random checks made in the field corroborate the acceptable quality of the data. As a further test, the author collected twelve field duplicate samples and sent them to the same laboratory where they were originally assayed. Five samples come from the limonite horizon, six are from the saprolite and one from the saprolitic rock horizon. The following table and figure show the results and the correlation vis-à-vis original MRL assay values.

Table 16-1: Results of Independent Check on Drill Core Assays

HOLE ID FROM TO RUN MRL Ni

% DMC Ni %

MRL Co %

DMC Co %

MRL Fe %

DMC Fe %

MRL Al %

DMC Al %

MRL Mg %

DMC Mg %

AGL 2008-281 1.00 2.00 1.00 1.46 1.43 0.09 0.09 38.94 39.75 2.45 2.64 1.07 1.13

AGL 2008-355 2.00 3.00 1.00 1.02 0.91 0.07 0.07 30.47 31.55 2.57 2.61 2.28 1.44

AGL 2008-175 2.60 3.45 0.85 1.59 1.58 0.05 0.05 23.32 23.60 0.74 0.66 10.51 10.32

AGL 2008-194 6.00 7.25 1.25 0.92 0.95 0.03 0.03 15.22 15.89 0.71 0.69 12.93 12.64

AGL 2008-174 3.40 4.20 0.80 1.31 1.35 0.03 0.03 14.45 15.25 0.46 0.45 15.57 15.63

AGL 2008-297 8.00 9.00 1.00 1.27 1.25 0.14 0.13 52.05 50.62 3.88 3.36 0.36 0.42

AGL 2008-299 1.00 2.00 1.00 1.20 1.32 0.14 0.13 47.57 44.50 1.82 1.69 2.75 3.89

AGL 2008-355 2.00 3.00 1.00 0.87 0.92 0.03 0.03 14.24 14.64 0.52 0.55 15.89 15.65

AGL 2007-17 27.00 28.00 1.00 1.33 1.31 0.02 0.02 6.38 8.14 0.11 0.21 15.02 17.24

AGL 2008-135 5.55 6.45 0.90 1.03 1.12 0.12 0.11 50.10 50.73 2.46 2.12 0.71 0.77

AGL 2008-74A 17.40 18.40 1.00 0.46 0.51 0.01 0.01 5.40 6.07 0.15 0.16 14.66 15.43

AGL 2008-14A 13.55 14.85 1.30 0.80 0.97 0.02 0.02 8.48 10.20 0.16 0.19 14.53 15.15

* DMC - Dallas M. Cox

Figure 16-1: Comparison of Independent Checks and MRL Assays


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The graphs show good correlation between the MRL assays and that of Dallas Cox‟s samples. This is attested by the values of the coefficient of determination R2, which range from 0.947 for nickel to 0.996 for iron.

The author has verified all aspects drill hole collar locations, sampling and assay procedures, examined mineralized material in the field and in drill core, as well as the geological and assay databases during two site visits in the Agata Project and meetings with MRL staff and Dallas Cox a previous independent analyst of the Agata north Resource. With these factors, as well as the evaluation of the results of assay rechecking, the writer is satisfied that all data utilised in the resource estimate can be relied upon.

17. ADJACENT PROPERTIES

No review of the adjacent properties was done. Other tenements of Mindoro surround the Agata Projects (Figure 3-1).

18. MINERAL PROCESSING AND METALLURGICAL TESTING

18.1 Introduction

Mindoro understands that only very limited scoping metallurgical testwork has been completed for Agata material. In developing their plant design and process projections, (Boyd Willis Hydromet Consulting (BWHC) and Ausenco Vector (Vector) have supplemented the scoping testwork with the results of metallurgical testwork completed for similar southeast Asian nickel laterite ores. Mindoro stresses that more metallurgical testwork for Agata material is required before progressing to the pre-feasibility study stage.

A preliminary metallurgical testwork investigation for the Agata nickel laterite deposits was conducted by Enlin Stainless Steel Corporation (ESSC) in 2008. Enlin Stainless Steel Corporation is a major stainless steel producer with branches in Taiwan, Hong Kong, the Philippines and China.

The bench scale testwork program included atmospheric leaching, HPAL, saprolite neutralisation, limestone neutralisation/iron removal and mixed hydroxide precipitation. BWHC reviewed the ESSC testwork report and produced the summary presented in section 18.2.

A more comprehensive bench scale program was commenced at SGS Lakefield Oretest (SGS) in Perth in August 2010. This program includes detailed mineralogy, beneficiation (scrubbing), ore slurry settling, atmospheric leaching, HPAL, saprolite neutralisation, CCD settling and limestone calcining.


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18.2 Metallurgical Testing by Enlin Stainless Steel Corporation

The preliminary metallurgical testwork report produced by ESSC is summarised below. Readers are cautioned that the sample size was limited and may not be representative of the deposit.

18.2.1 Ore Samples

ESSC tested six ore samples, with compositions as summarised by Table 18-1.

Table 18-1: Ore Samples Tested by ESSC

Sample Ni % Fe % Co % Mg % Mn % Cr % Al % Ca %

Ore 1# 0.97 47.85 0.17 0.83 1.27 1.33 8.40 4.03

Ore 2# 1.17 50.41 0.05 0.64 0.75 0.86 5.73 2.48

Ore 3# 1.14 44.64 0.17 0.69 0.97 1.70 7.01 3.62

Ore 4# 1.41 46.16 0.19 0.77 1.08 1.81 6.02 2.77

Ore 5# 1.29 33.64 0.14 2.49 0.75 1.06 2.87 2.17

Ore 6# 1.76 16.34 0.03 13.54 0.28 0.35 1.49 1.93

Samples 1 to 4 were limonite, Sample 5 transitional and Sample 6 saprolite.

A limonite sample was screened for size by size analysis. The results, presented in Table 18-2, indicate somewhat even distribution of the components across the size range, and ESSC concluded that there was little potential for beneficiation. It should be noted that no de-agglomeration work was attempted.

Table 18-2: Size Fraction Analysis

Mesh Ni % Fe % Co % Mg % Mn % Cr % Al % Ca %

20 1.10 47.20 0.165 2.19 1.21 1.279 11.17 9.78

60 1.08 46.48 0.173 0.91 1.31 1.243 9.83 5.15

100 0.98 39.34 0.334 1.25 1.84 0.996 12.10 6.01

140 1.03 36.04 0.589 1.17 2.69 0.947 10.91 5.44

-140 1.12 46.81 0.138 0.40 1.10 1.28 4.33 1.53

18.2.2 Ore Slurry Thickening

ESSC conducted a thickening test on an unidentified ore sample and reported that 50% w/w solids was achieved in just three minutes. It was also concluded that flocculation was not required. These results are not characteristic of nickel laterite ore and have been viewed with some scepticism. Insufficient test data was published by ESSC to permit a review of procedures and calculations.


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A more conservative settled density of 35% w/w solids was subsequently assumed for the scoping study.

18.2.3 HPAL Testing

The equipment and procedures employed by ESSC for HPAL testing have not been disclosed. A range of tests were performed to investigate the effects of temperature, acid to ore ratio and residence time, however any attempt at optimisation of test conditions lacked direction. Some of the more relevant HPAL test results are summarised in Table 18-3.

Table 18-3: Selected HPAL Test Results

Temp

(°C)

Duration

(min)

Acid: Ore

(kg/t)

% Extraction (Residue Basis)

Ni Co Fe Mn Mg Cr

240 40 275 97.34 100.0 2.14 79.24 n/a -20.03

240 40 250 93.55 91.73 2.64 67.66 n/a -17.39

250 60 250 95.73 100.0 1.68 66.09 n/a -34.63

250 60 400 96.42 97.02 5.64 79.45 26.33 -6.35

255 60 400 97.81 96.96 2.13 86.50 46.00 -26.95

260 20 400 99.22 97.84 3.27 83.46 18.48 -34.45

260 60 225 96.83 92.78 2.55 71.28 56.21 76.19

While some of the results highlight issues with material balancing, the extractions are generally typical of other Philippine limonite ores. HPAL discharge solution assays reported by ESSC are presented in Table 18-4.

Table 18-4: HPAL Discharge Solution Assays

Sample

Concentration (g/L)

Ni Fe Co Mn Mg Cr Al Ca

1 3.72 2.15 0.485 2.38 0.45 0.03 1.66 0.17

2 4.33 1.78 0.56 2.66 0.52 0.027 3.15 0.20

3 3.91 1.42 0.42 2.16 0.45 0.28 1.17 0.23

4 4.15 0.97 0.46 1.35 0.54 0.01 0.12 0.29

Avge 4.03 1.58 0.48 2.14 0.49 0.09 1.53 0.22

Based on the nickel, iron, aluminium and chromium tenors, these results are fairly typical of a limonite HPAL solution and thus provide further confidence in the experimental methods applied.


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18.2.4 Atmospheric Leaching

No detailed results from the atmospheric leaching testwork program were presented by ESSC. The report states that 90% nickel extraction was obtained from saprolite ore at an acid dosage of 900 kg/t. This is comparable to other Philippine nickel laterite projects.

18.2.5 Saprolite Neutralisation

Partial neutralisation of HPAL discharge slurry by the addition of saprolite ore was tested by ESSC. Unfortunately some critical details of this testwork were not reported:

the initial and terminal acid concentrations are not stated;

saprolite dosage was reported in grams per 800ml of HPAL solution, with no indication of how much limonite ore was leached to produce the HPAL solution.

The information reported by ESSC suggests that good metal recoveries from saprolite ore can be achieved in saprolite neutralisation. Some of the more relevant test results are summarised in Table 18-5.

Table 18-5: Selected Saprolite Neutralisation Test Results

Saprolite

(g)

Duration

(min)

Temp

(°C)

% Extraction from Saprolite Ore

Ni Co Fe Mg Mn

30 120 80 94.58 122.97 16.93 54.53 72.62

40 120 80 81.93 38.85 8.37 61.12 0.89

30 120 90 94.81 64.59 17.48 70.21 -46.03

40 120 90 87.96 102.70 11.50 65.57 15.95

50 120 90 83.18 82.92 8.53 50.52 23.52

Issues with material balancing are again evident, however in general the results are typical of other southeast Asian saprolite ores. ESSC reports that terminal acidity was in the range of pH 1.3–1.5. Better extractions would be expected if a higher terminal acidity, in the range 5–10 g/L, was targeted.

18.2.6 CCD Settling

No useful CCD settling data was reported by ESSC. Settling tests were performed on slurry samples produced during the saprolite neutralisation testwork, however only flocculant rates and settling times were reported. No underflow density data was presented in the ESSC report.

For the purposes of developing the scoping study mass balance an underflow density of 45% w/w solids was assumed, based on data for similar Philippines laterites.


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18.2.7 Iron Removal

Iron removal tests were performed by pH adjustment using limestone. The results of testwork performed at 85 °C are presented in Table 18-6.

Table 18-6: Iron Removal Product Solution Assays

Final

pH

Concentration (g/L)

Fe Al Cr Ni Co Mn Mg

Feed 1.72 3.52 0.12 2.91 0.166 1.65 5.28

3.0 0.19 2.46 0.01 3.14 0.155 1.47 4.41

3.5 0.09 2.23 0.01 3.24 0.162 1.53 3.62

3.8 0.09 1.31 0 3.21 0.161 1.51 4.60

4.0 0.05 0.15 0 3.32 0.165 1.58 4.81

4.2 0.05 0.49 0 3.17 0.158 1.49 4.52

4.5 0.03 0.07 0 2.92 0.147 1.39 4.26

4.8 0.02 0.03 0 2.88 0.148 1.43 4.39

5.0 0.01 0.01 0 3.04 0.155 1.54 4.43

These results compare well with data from other nickel laterite projects.

Reconciliations indicated nickel and cobalt co-precipitation of 0.6–0.9% at pH 3 rising to 3.4–4.5% at pH 4.5.

18.2.8 Nickel-Cobalt Precipitation

Precipitation of mixed nickel-cobalt hydroxides was tested using both sodium hydroxide (NaOH) and magnesia (MgO). ESSC concluded that:

for precipitation of mixed hydroxides using sodium hydroxide the optimum pH is 6.6–6.7

for precipitation of mixed hydroxides using magnesia the optimum pH is 6.5–6.7

two stages of precipitation are required to achieve a satisfactory nickel grade in the product.


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18.3 Testing at SGS Lakefield Oretest (SGS)

A bench scale testwork program was commenced at SGS in Perth, Western Australia, in August 2010. This program includes:

head analysis and size by size analysis: limonite, transition and saprolite ores

scrubbing, screening and size by size analysis: limonite, transition and saprolite ores

mineralogy (QEMSCAN, High Resolution PMA, Interpretative SEM-EDX, semi-quantitative XRD and optical microscopy): limonite and saprolite ores

preparation of ore slurries in seawater for subsequent testwork, including crushing (if required), de-agglomeration (scrubbing), screening with rejection of O/S (subject to assay) and grinding (if required)

ore slurry thickening and settling testwork, including flocculant screening and settling tests using 2 m raked columns

HPAL testing of a limonite or a limonite/transition blend, including examination of acid addition rate and residence time

atmospheric leach testing of a saprolite or a saprolite/transition ore blend, including examination of acid addition rate and residence time

bottle roll testing to examine the amenability of a saprolite or a saprolite/transition ore blend to heap leaching, including acid agglomeration and percolation testing

saprolite neutralisation testing using a saprolite or a saprolite/transition ore blend to partially neutralise free acid in a combined HPAL/atmospheric leach product slurry, including examination of saprolite addition ratio and residence time

leach discharge slurry thickening and settling testwork, including flocculant screening and settling tests using 2 m raked columns

limestone available CaCO3 and reactivity testing

limestone calcination and testing of lime reactivity, including examination of optimum calcination time and temperature.

The findings of the SGS program will be published in a future report.

18.4 Process Selection

The process design for the leach plant will be based largely on the hydrometallurgical route proven at Moa Bay in Cuba for more than 40 years. The leach flowsheet incorporates high pressure acid leaching and counter-current decantation.

Limonite ore will be treated by conventional high pressure acid leaching (HPAL) and saprolite ore will be treated by a parallel atmospheric leach (AL) circuit. The Base Case design limonite throughput has been based on one Coral Bay Nickel Project (Philippines) sized HPAL autoclave (4.7 m diameter). This was chosen because both autoclave trains at Coral Bay had very fast and relatively uneventful ramp-ups to full production. The Option 1 design limonite throughput has been based on one Ambatovy Nickel Project (Madagascar) sized HPAL autoclave (5.4 m


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diameter). Autoclave throughput is based on 28.9% solids in the autoclave feed slurry (after direct steam heating).

A parallel atmospheric leaching circuit will treat nearly two-thirds of the saprolite ore fed to the process. Atmospheric acid leaching is well established technology practised in many industries over several decades.

An innovation in the proposed processing route will be the inclusion of saprolite neutralisation. This will involve pre-neutralisation of the residual free acid in the combined leach discharge streams using the balance of the saprolite ore. This process, performed at atmospheric pressure, will consume much of the free acid while recovering additional nickel and cobalt values from the saprolite ore. Neutralisation of the remaining acid will be achieved using limestone.

The concept of saprolite neutralisation was first established in testwork conducted on Philippine laterite ores in 1998. Recovery of 60–65% of the nickel and cobalt contained in the high magnesium saprolite ore was achieved. In recent years much higher recoveries have been achieved in testwork for the Weda Bay (Indonesia), Sulawesi (Indonesia) and Mindoro (Philippines) nickel projects. Preliminary bench-scale testwork using Agata saprolite indicates that recoveries of 85-90% are achievable. Higher recoveries may be possible and future testwork on the Agata ores may improve upon the scoping study assumptions.

After saprolite neutralisation, the pregnant solution will be recovered by conventional counter-current decantation (CCD), followed by limestone neutralisation of excess acid and precipitation of iron, aluminium and chromium, prior to metal recovery by direct solvent extraction.

The metal refinery process option, incorporating direct SX, is a variation of the flowsheets adopted by the Bulong and Goro nickel projects. Direct SX is also a well established and proven technology throughout the copper refining industry. The problems encountered with calcium saturation and gypsum precipitation at Bulong are overcome through three practices:

provision of a PLS pond ahead of primary extraction, where gypsum precipitation due to calcium saturation can preferentially take place;

the addition of a threshold inhibitor (sodium polyphosphate) that delays the onset of gypsum precipitation and scale formation;

recycle of two calcium sulphate free liquors to the PLS ahead of primary extraction, resulting in a 2.6% dilution of the SX feed.

Continuous mini-plant testing demonstrated that no signs of gypsum scale formation were observed at a sodium polyphosphate dosage of 20 ppm.

Nickel metal will be recovered by electrowinning. Electrowinning of nickel from acidic sulphate solution is practised by Sumitomo at Niihama (Japan), at Outokumpu‟s Harjavalta refinery (Finland), at the Bindura Nickel operation (Zimbabwe), and more recently at the Cawse Nickel Project (Western Australia), until the tankhouse was decommissioned after the sale of the plant to OMG.


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18.5 Development of Process Design Criteria

18.5.1 Ore Treatment

Based on the ore treatment processes typically selected for southeast Asian nickel laterites, separate facilities were proposed for limonite and saprolite ore preparation.

ESSC thickened a limonite ore slurry sample and reported that 50% w/w solids was achieved. It was also concluded that flocculation was not required. These results have been viewed with some scepticism and consequently a conservative settled density of 35% w/w solids was assumed in developing the process design criteria.

The ESSC testwork did not include de-agglomeration, however based on the behaviour of other southeast Asian nickel limonites, additional equipment has been included in the design to allow for de-agglomeration (scrubbing/screening) to potentially liberate nickel bearing fines from barren coarse material. The limonite ore treatment plant design comprises the following principal operations:



single stage, closed circuit ball milling to produce ground limonite slurry.

thickening the fine slurry to 35% w/w solids after the first stage of slurry heating.




thickening the ground saprolite slurry to 40% w/w solids for delivery to leach plant.

18.5.2 High Pressure Acid Leaching

Design criteria for the HPAL section was selected from the ESSC results, supplemented by metallurgical response data typical for southeast Asian nickel laterites. The key design parameters used are summarised in Table 18-7.

Table 18-7: HPAL Design Criteria

Criteria ESSC Results Selected Value

Residence Time (min) 20 - 60 40

Temperature (°C) 240 - 260 255

Acid Addition (kg/t ore) 225 - 400 321 *

Residual Free Acid (g/L H2SO4) not reported 50

Extractions (%): Ni 93.6 – 99.2 97

Co 91.7 - 100 96

Mg 18.5 – 56.2 43


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Terminal Concs (g/L): Fe(III) 0.97 - 2.15 1.5

Al 0.12 – 3.15 1.5 * calculated using METSIM®

18.5.3 Atmospheric Leaching

ESSC reported only the acid consumption. Other criteria have been assumed based on the metallurgical response of similar southeast Asian saprolites. Key parameters are summarised in the following table.

Table 18-8: AL Design Criteria

Criteria Selected

Value

Residence Time (min) 360

Temperature (°C) 100

Acid Addition (kg/t ore) 890 *

Residual Free Acid (g/L H2SO4) 25

Extractions (%): Ni 90

Co 94

Fe 80

Al 45

Mg 86

* calculated using METSIM®


Some critical details of the ESSC testwork were not reported, however the information reported by ESSC suggests that good metal recoveries can be achieved in saprolite neutralisation. Design criteria have been assumed based on the metallurgical response of similar southeast Asian saprolites and are summarised in the following table.

Table 18-9: Saprolite Neutralization Design Criteria


Residence Time (min) 120 240

Temperature (°C) 80 - 90 90 - 95

Residual Free Acid (g/L H2SO4)

pH 1.3 – 1.5 5 - 10


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Extractions (%): Ni

81.9 – 94.8 86

Co 38.9 - 123 93

Fe 8.4 – 17.5 25

Mg 50.5 – 70.2 75

Terminal Concs (g/L): Fe(III)

n/a 0.6 *

Al n/a 1.0 *

* based on other projects with seawater matrix (Na present)

18.5.5 Counter-Current Decantation

ESSC did not report any meaningful data for CCD design. Design criteria have been assumed based on the metallurgical response of similar southeast Asian laterites and are summarised in the following table.

Table 18-10: CCD Design Criteria

Criteria Selected

Value

Number of CCDs 7

Underflow % solids 45

Flocculant Dosage CCD 1 100

(g/t solids) CCD 2-7 50

Thickener unit area (m2/t/d) 0.2

Soluble Ni recovery across CCD train (%) 99

18.5.6 Iron/Aluminium Removal

The ESSC tests for iron/aluminium removal were preliminary in nature and the results were used only to confirm that the behaviour of the pregnant solution was similar to other nickel laterites. The design criteria have been assumed based on the metallurgical response of similar southeast Asian laterites and are summarised in the following table.


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Table 18-11: Iron/Aluminum Removal Design Criteria

Criteria Stage 1 Stage 2


Temperature (°C) 80 - 85 60 - 70

Terminal pH 3.4 4.2

Terminal Concs (mg/L): Fe(III)

< 80 1

Al < 200 5

Co-precipitation (%): Ni 0.5 3.0

Co 0.3 1.2

Thickener underflow % solids 50 40

Flocculant Dosage 150 g/t solids 3 g/m3 solution

Thickener unit area (m2/t/d) 0.2 0.3

18.5.7 CMN Direct Solvent Extraction Process

The process design criteria for the CMN process were provided by the developers of the technology, Canopean Pty Ltd (Canopean). Canopean has performed extensive developmental testwork using its own direct solvent extraction continuous pilot facility. CMN is a proprietary technology and some basic design criteria were reported in the scoping study report.

18.5.8 Nickel Electrowinning

Recovery of nickel metal from purified nickel sulphate solution via electrowinning is established and commercially proven technology. Industry standard process design criteria were used for this circuit.

18.5.9 Final Neutralisation

The suite of elements present in the barren solution is similar for most nickel laterites and flowsheets. The scoping study used standard process design criteria for the precipitation of residual metals from solution, summarised in the table below.

Table 18-12: Final Neutralisation Design Criteria



Reagent Limestone slurry Milk-of-lime

Terminal pH 4.5 7.5

Terminal Concs (mg/L): < 5 2


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Fe(III)

Al < 5 2

Cr < 2 < 1

Ni 40 1

Co < 5 < 1

Mn < 200

18.6 Mass Balance Calculations

The process flowsheets, process design criteria and the testwork data from the preliminary metallurgical testwork program were used to develop a process mass and energy balance. The simulation software used for the scoping study was METSIM®, and the model was developed by BWHC. The mass and energy balance for the CMN direct solvent extraction circuit was developed independently by Canopean. The CMN circuit was incorporated into the METSIM® model as a „black box‟ using simplified function blocks (component and phase splitters) to generate the key CMN inputs and outputs, enabling closure of the mass balance.

The METSIM® model was developed using the selected flowsheet, including the major equipment item such as ball mills, leach tanks, thickeners and the like. METSIM® employs a comprehensive component database, including detailed thermodynamic properties, to balance the mass and energy flows, and to simulate the performance of a full scale operating plant. The inputs into the model included:

plant feed tonnages;

ore head grades;

chemical reactions and reaction extents;

reagent composition and utilisation;

operating conditions (temperature, pressure, etc).

The objective of the METSIM® model was to generate:

mass balance;

energy balance;

reagent consumptions;

product tonnages;

waste/effluent quantities.

The METSIM® model generated stream mass and volume flows, which were used in developing the capital and operating cost estimates.


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18.7 Process Description

18.7.1 Overview

The processing plant consists of the following operations:

Leach Plant:

Ore Preparation

High Pressure Acid Leach

Atmospheric Leach

Recycle Leach

Saprolite Neutralisation

CCD Circuit

Iron/Aluminium Removal Stages 1 and 2

Final Neutralisation Stages 1 and 2.

Metals Refinery:

CMN Direct Solvent Extraction Plant

Nickel Electrowinning

Copper Recovery Circuit.

Process Services:

Sulphur Handling

Sulphuric Acid Plant

Limestone Plant

Lime Plant

Residue Storage Facility

Reagent Preparation.

The process flowsheet is depicted in the figure below.


Figure 18-1: Process Flowsheet


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18.7.2 Leach Plant

The ore treatment plant includes separate circuits to treat limonite and saprolite ores. The limonite ore preparation circuit produces a fully de-agglomerated limonite slurry for high pressure acid leaching (HPAL) and the saprolite circuit produces a ground slurry for atmospheric leaching (AL) and saprolite neutralisation (SN). The limonite ore treatment plant comprises the following principal operations:



single stage, closed circuit ball milling to produce a ground limonite slurry.




thickening of the ground saprolite slurry for delivery to leach plant.

The leach plant includes limonite slurry thickening, slurry heating, leaching of nickel and cobalt from limonite ore at high temperature (255 °C) and pressure (4425 kPag). In the atmospheric leach circuit nickel and cobalt are leached from saprolite ore at atmospheric conditions (95-100 °C and ambient pressure). Sulphuric acid is used as the lixiviant for both HPAL and atmospheric leaching. The HPAL circuit maximises heat recovery by recycling steam flashed during depressurisation of the slurry back to the preheat circuit.

A recycle leach circuit utilises a waste acid stream from the metals refinery to re-dissolve nickel and cobalt precipitated in the downstream iron/aluminium removal circuit. Discharge slurries from the HPAL, atmospheric leach and recycle leach circuits are combined and fed to the saprolite neutralisation circuit where the neutralising capacity of saprolite ore consumes some of the excess free acid. Additional nickel and cobalt are leached from saprolite during this process. The resultant slurry flows to a seven-stage counter-current decantation (CCD) circuit, to separate and wash soluble nickel and cobalt from the waste residue solids.

The recovered pregnant liquor (CCD-1 overflow) is forwarded to two stages of iron/aluminium removal. In the first stage of iron/aluminium removal the majority of the remaining free acid in solution is neutralised with limestone slurry and most of the ferric iron and some of the aluminium in solution are precipitated. The product slurry is thickened and the precipitated solids are directed to CCD-3 for recovery of soluble nickel and cobalt across the back half of the CCD circuit. In the second stage of iron/aluminium removal the remaining iron and aluminium are precipitated. The pregnant liquor is separated from the precipitated solids by thickening prior to transfer to the metals refinery. Some nickel and cobalt are co-precipitated so the thickener underflow slurry is directed to the recycle leach circuit for recovery of the metal values.

The barren leach residue solids from the final stage of CCD washing along with barren raffinate from the metals refinery report to final neutralisation (FN) circuit where limestone and lime slurries are added to raise the pH of the slurry and precipitate most of the remaining metals from solution. An air stream is used as an oxidant in this process to aid manganese precipitation. Treated residue is pumped through an approximately 6 km long slurry pipeline to the residue storage facility (RSF).


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The excess neutralised barren liquor is discharged to ocean outflow and is closely monitored to ensure compliance with the environmental discharge standards.

18.7.3 Metals Refinery

The Metals Refinery flowsheet employs the CMN Process, a proprietary direct solvent extraction (DSX) technology developed by Canopean Pty Ltd (Canopean). The CMN Process is a nickel refining technology developed specifically for processing leach solutions generated from the acid leaching of nickel laterites. The process uses field proven solvent extraction reagents to efficiently extract and recover nickel and cobalt into separate high value products.

Solvent extraction is accepted as one of the most economical methods for recovering, separating and producing metals at industrial scale and is particularly suited to the high solution flow rates typical of large nickel refineries. The major process steps involved in the CMN Process are briefly summarised as follows:

Primary Metals Extraction: Cobalt, nickel (and manganese if desired) are extracted using an organic phase composed of magnesium loaded versatic acid. The magnesium loaded extractant is formed by the use of lime via Canopean owned and patented process technology. Lime is a low cost industrial chemical available in bulk worldwide, and is common to most metallurgical installations. In the Agata Nickel Project lime is produced on site for other purposes by calcining cheap locally quarried limestone. The use of lime rather than expensive reagents such as caustic soda to facilitate the metals extraction step is a key advantage of the CMN Process.

Organic Purification: The loaded organic phase containing nickel, cobalt and other unwanted metals is contacted with a concentrated nickel chloride solution in a process step designed to remove cobalt and other non-nickel metals from the organic phase. This simple and robust step forms the basis of the CMN Process, and leads to the production of separate high purity nickel and cobalt products.

Nickel Cathode Production: The purified nickel loaded organic is further processed to produce LME grade nickel cathode via electrowinning, which is a well established and proven approach that integrates effectively with solvent extraction.

Cobalt Sulphide Production: The nickel chloride solution generated from the organic purification step is further processed to produce a high purity cobalt sulphide product suitable for sale directly to toll refiners or smelters. This product will attract higher payable cobalt values than a mixed sulphide precipitate (MSP) on account of its higher purity.

18.7.4 Plant Services

Major process services include a sulphur-burning acid plant, a limestone slurrying plant, a lime kiln and lime slaking plant, and a residue storage facility.

The Sulphuric Acid Plant provides sulphuric acid for the leaching circuits and other process consumers, and high pressure (HP) steam for power generation and heating the HPAL autoclave. The acid plant products are:

Base Case – up to 4000 t/d of 98.5% sulphuric acid and 213 t/h of HP steam

Option 1 – up to 6000 t/d of 98.5% sulphuric acid and 293 t/h of HP steam.

The Limestone Plant provides limestone in slurry form for neutralisation of acidic process liquors and crushed limestone for burnt lime production. The limestone plant consists of crushing and


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slurrying facilities. The limestone slurry at 30% solids is pumped to the process plant via a limestone slurry ring main.

The Lime Plant provides lime in the form of milk-of-lime slurry for neutralisation of acidic process liquors and precipitation of magnesium hydroxide in the CMN circuit. The plant consists of a fuel-oil fired limestone calciner and lime slaking facilities. The milk-of-lime is pumped to the process plant via a ring main.

The Residue Storage Facility (RSF) area includes transport and storage facilities for process residue slurry. The impoundment area consists of either walled coastal valleys or lined, shallow, nested impoundments constructed on flat land to the east of the project area. The tailings are neutralised at the process plant and pumped, at about 23% solids content, via a 5 km slurry pipeline to the RSF. At the impoundment, the residue is hydraulically deposited behind the retaining wall. Consolidation of residue over time produces a decant liquor which is returned via a decant pipeline to the process plant.

18.8 Alternative Process

An alternative process considered (Option 2) treats saprolite ore only, and the product will be a mixed nickel-cobalt hydroxide precipitate (MHP).

The leach circuit excludes the complex HPAL circuit, employing atmospheric leaching only and saprolite neutralisation, followed by CCD and iron/aluminium precipitation. Atmospheric Leaching of nickel laterites has gained recognition recently as an alternative to the high capital cost HPAL route, and was operated in parallel to the HPAL circuit at Ravensthorpe. The process is currently being investigated by Weda Bay Nickel (Eramet) in Indonesia, Berong Mining in the Philippines and BHP Billiton nickel projects to treat their high grade saprolitic material.

Metal recovery will be by a two-stage mixed hydroxide precipitation circuit similar to that operated for several years at the Cawse Nickel Project (Western Australia) and more recently at Ravensthorpe Nickel Operation (Western Australia).

All metallurgical process steps represent proven technology and no complex, high pressure processes are employed.

18.8.1 Leach Plant

The ore preparation circuit produces a ground saprolite ore slurry for atmospheric leaching (AL) and saprolite neutralisation (SN).

The ore treatment plant consists of the following principal operations:



thickening the mill product slurry for delivery to leach plant.

In the atmospheric leach circuit nickel and cobalt are leached from saprolite ore at atmospheric conditions (95–100 °C and ambient pressure). Sulphuric acid is used as the lixiviant.


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The recycle leach circuit utilises a small flow of concentrated sulphuric acid to re-dissolve nickel and cobalt precipitated in the downstream iron/aluminium removal circuit and the second stage mixed hydroxide precipitation circuit. Discharge slurries from the atmospheric leach and recycle leach circuits are combined and fed to the saprolite neutralisation circuit where the neutralising capacity of saprolite ore consumes some of the excess free acid. Additional nickel and cobalt are leached from saprolite during this process. The resultant slurry flows to a seven-stage counter-current decantation (CCD) circuit, to separate and wash soluble nickel and cobalt from the waste residue solids.

The recovered pregnant liquor (CCD-1 overflow) is forwarded to two stages of iron/aluminium removal. In the first stage of iron/aluminium removal the majority of the remaining free acid in solution is neutralised with limestone slurry and most of the iron and some of the aluminium in solution are precipitated. The product slurry is thickened and the precipitated solids are directed to CCD-3 for recovery of soluble nickel and cobalt across the back half of the CCD circuit. In the second stage of iron/aluminium removal the remaining iron and aluminium are precipitated. The pregnant liquor is separated from the precipitated solids by thickening prior to transfer to the mixed hydroxide precipitation area. Some nickel and cobalt are co-precipitated so the thickener underflow slurry is directed to the recycle leach circuit for recovery of the metal values.

The barren leach residue solids from the final stage of CCD washing along with barren solution from the mixed hydroxide precipitation circuit report to final neutralisation (FN) circuit where limestone and lime slurries are added to raise the pH of the slurry and precipitate most of the remaining metals from solution. An air stream is used as an oxidant in this process to aid manganese precipitation. The discharge slurry is thickened and the clear overflow solution is return to the CCD circuit as wash water. Treated residue is pumped through an approximately 6 km long slurry pipeline to the residue storage facility (RSF), with excess discharge liquor from RSF directed to ocean outflow.

18.8.2 Product Section

The virtually iron/aluminium-free pregnant liquor solution (PLS) is forwarded to the 1st stage MHP reactors to precipitate the nickel and cobalt from the solution by the addition of magnesia slurry. The resulting precipitate contained in the slurry is subsequently directed to thickening. A portion for the thickener underflow slurry is recycled as seed to the first stage MHP reactors and the balance is forwarded to wash filtration. In wash filtration, the precipitate is filtered for further dewatering and washed with demineralised water to displace the chlorides and other sea salts entrained with the precipitates. The filter cake is then repulped with demineralised water and filtered in a pressure filter to achieve the required product moisture specification. The MHP product is packaged in 2 t bulk bags and stored in standard 20 ft containers for shipment and sale.

The un-precipitated nickel and cobalt values present in the 1st stage MHP thickener overflow are further recovered by lime precipitation in the second stage MHP reactors. The resulting precipitate is thickened and recycled back to the recycle leach area to re-dissolve the nickel and cobalt. The barren liquor solution is forwarded to final neutralisation, where the heavy metals are precipitated with limestone slurry and lime, and the discharge slurry is thickened. The clarified thickener overflow solution is directed to the CCD circuit as wash water.

18.8.3 Plant Services

Major process services include a sulphur-burning acid plant, a limestone slurrying plant, a lime kiln and lime slaking plant, a magnesia slurrying plant and a residue storage facility.


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The sulphuric acid plant provides sulphuric acid for the leaching circuit and other process consumers, and high pressure (HP) steam for power generation. The acid plant products for Option 2 are up to 3600 t/d of 98.5% sulphuric acid and 192 t/h of HP steam.

The limestone plant provides limestone in slurry form for neutralisation of acidic process liquors and crushed limestone for burnt lime production. The limestone plant consists of crushing and slurrying facilities. The limestone slurry at 30% solids is pumped to the process plant via a limestone slurry ring main.

The lime plant provides lime in the form of milk-of-lime slurry for neutralisation of acidic process liquors and precipitation of nickel and cobalt in the second stage MHP circuit. The plant consists of a fuel-oil fired limestone calciner and lime slaking facilities. The milk-of-lime is pumped to the process plant via a ring main.

The magnesia slurrying plant provides magnesia slurry for the precipitation nickel and cobalt as mixed hydroxides in the first stage MHP circuit. The magnesia slurry is pumped into the MHP reactors under dosage control.

The residue storage facility (RSF) area includes transport and storage facilities for process residue slurry. The impoundment area consists of either walled coastal valleys or lined, shallow, nested impoundments constructed on flat land to the east of the project area. The tailings are neutralised at the process plant and pumped, at about 30% solids content, via a 5 km slurry pipeline to the RSF. At the impoundment, the residue is hydraulically deposited behind the retaining wall. Consolidation of residue over time produces a decant liquor which is returned via a decant pipeline to the process plant.

18.9 Recommended Additional Testwork and Process Review

A number of metallurgical testwork recommendations have been made in the scoping study report. To explore the potential of treating the Agata resources with the selected processing route, further metallurgical testwork and piloting are recommended.

18.9.1 HPAL/AL/SN Flowsheet

Recommendations for further testwork include:

ore blending – to obtain the optimum blend for limonite and saprolite feed for HPAL

comprehensive ore slurry settling testwork

continuous HPAL and AL testwork utilising the optimised parameters obtained from the current bench scale testwork

optimisation of the ratio of limonite to saprolite feed, and split of saprolite between AL and SN, based on solid-liquid separation properties of the product slurry (CCD feed)

continuous leach discharge slurry settling tests.

In addition, preliminary results from the current SGS testwork program suggest that de-agglomeration (scrubbing and screening) has the potential to reject barren oversize material from the limonite and transition ores, resulting in a nickel upgrade. This could potentially allow the limonite cut-off grade to be lowered without reducing the feed grade to HPAL. A more detailed investigation of this opportunity is recommended.


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18.9.2 AL/SN Flowsheet

Recommendations for further testwork include:

ore blending – to obtain the optimum blend for transition and saprolite ores in feed for AL and SN, and to evaluate the potential to blend a proportion of the limonite into the AL feed

comprehensive ore slurry settling testwork

continuous AL and SN testwork utilising the optimised parameters obtained from the current bench scale testwork

optimisation of the split of saprolite between AL and SN, based on solid-liquid separation properties of the product slurry (CCD feed)


18.9.3 Other Process Options and Testwork

A more detailed evaluation of the potential for Heap Leaching has been recommended. This testwork would include:

ore permeability testwork with different ore blends; agglomerated or unagglomerated ore

continuous column testwork.

18.9.4 Continuous Pilot Plant Testing

Once the preferred process flowsheet for ongoing project development studies has been selected, a continuous pilot plant program should be performed using samples representative of plant feed based on mine planning. Preferably this work would take place after the pre-feasibility study and before commencement of a bankable or definitive feasibility study.

It is essential that the Exploration Target is converted to a resource before any continuous pilot testwork is undertaken, so that ore samples representative of ROM plant feed can be selected for the testwork program.

19. MINERAL RESOURCE ESTIMATE

The resource estimate calculations were completed by Mike Job, Principal Consultant for Quantitative Group based out of Fremantle, West Australia. All data was checked and forwarded by Mark Gifford, and all modelling methodologies were discussed prior to commencement of developing the resource. The latter takes responsibility as qualified person for this estimate and is a qualified person as defined by NI 43-101.

19.1 Geometric Interpretation

The sample dataset provided was loaded into Datamine, along with the new topography points. These topography points were used to construct a wireframe surface. Quantitative Group (QG) performed only cursory validation of the dataset, with no serious issues arising. There is a total


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of 593 drillholes in the dataset, with 185 of these being drilled between April and July 2010. All of the holes are vertical and relatively shallow, with the deepest hole ending at 46.6m depth. The UTM coordinates (rather than the local grid) have been used.

The Limonite / Saprolite contact point was identified in each drillhole by using the Mg assay data. There is an abrupt change in the level of Mg in Limonite (usually less than 1% Mg) to Saprolite (generally well over 10% Mg, although sometimes down to about 5% Mg), and there is also an abrupt drop of Fe in Limonite (~40% to 50%) to Saprolite (less than 10%). The Saprolite / Bedrock contact point in each drillhole was identified by using the Ni assay data (bedrock generally less than 0.25%) and the geological logging. The geological logging provided in the dataset matched these grade-determined boundaries extremely closely.

These points were triangulated to produce 3D surfaces, and these were visualised against drillholes in cross section. Additional control points were inserted at interpreted locations in-between drillholes in order maintain geological consistency and to account for drillholes finishing before hitting bedrock. The triangulations were then updated to incorporate the new control points.

The topography surface was then used to cut the base of Limonite and base of Saprolite triangulations (see Figure 19-1) and these three surfaces were used to generate a 3D block model. A parent cell size of 50m x 50m x 1m was used with 10m x 10m x 1m sub-blocking (see Table 19-1 and Figure 19-2). The model origin was chosen so that the drillholes would mostly be located in the centre of a parent block.

Table 19-1: Block Model Properties

Easting (m) Northing (m) RL (m)

Origin 775,625 1,025,225 0

Parent block size 50 50 1

Sub-block size 10 10 1

Extent 778,225 1,029,025 400

19.2 Raw Assay Statistics:

Figure 19-1: Bedrock, Saprolite, and Topography triangulations in cross section with drillholes

Base of Saprolite surface Base of Limonite surface

Topography surface


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Figure 19-2: Block model, coloured by laterite horizon

1m composites were generated from the sample database, as 46% of the raw sample length was on 1m intervals, 29% were <1m and 25% were >1m. The maximum sample length was 7m, but there are less than twenty samples that have a raw length of greater than 2m. These composites and a regularised version of the block model were exported to Isatis for exploratory data analysis.

19.3 Exploratory Data Analysis

Table 19-2 shows the basic statistics for the Limonite, Saprolite and Bedrock domains for the six variables that were to be estimated.

Table 19-2: Basic Statistics, Agata Nickel Deposit

DOMAIN VARIABLE Count Minimum Maximum Mean Std. Dev. Variance CV

Limonite AL_PCT 2615 0.04 10.75 3.36 1.53 2.34 0.46

CO_PCT 2796 0.01 0.71 0.11 0.07 0.00 0.62

FE_PCT 2796 6.00 56.00 45.81 6.32 39.91 0.14

MG_PCT 2615 0.01 19.84 1.02 2.15 4.60 2.10

NI_PCT 2796 0.11 2.27 0.96 0.31 0.09 0.32


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DOMAIN VARIABLE Count Minimum Maximum Mean Std. Dev. Variance CV

SIO2_PCT 2615 0.40 61.14 5.33 6.91 47.77 1.30

Saprolite AL_PCT 6146 0.01 11.82 0.40 0.55 0.30 1.37

CO_PCT 6531 0.01 0.27 0.02 0.02 0.00 0.83

FE_PCT 6531 4.00 55.00 9.75 4.99 24.90 0.51

MG_PCT 6147 0.08 27.99 18.19 4.16 17.33 0.23

NI_PCT 6531 0.05 3.26 0.87 0.50 0.25 0.57

SIO2_PCT 6147 2.04 76.73 40.99 5.12 26.24 0.12

Bedrock AL_PCT 1423 0.01 10.05 0.51 1.22 1.48 2.40

CO_PCT 1518 0.01 0.06 0.01 0.00 0.00 0.36

FE_PCT 1521 3.00 25.00 5.76 1.36 1.84 0.24

MG_PCT 1424 1.21 27.66 21.29 3.67 13.45 0.17

NI_PCT 1521 0.01 1.94 0.26 0.13 0.02 0.49

SIO2_PCT 1424 24.31 68.69 41.57 3.13 9.81 0.08

The six variables that were estimated are heterotopically sampled; more data is available for Ni, Co and Fe than for Al, Mg and SiO2 (approximately 6 to 7% fewer composite values are available for the latter). Histograms for the Limonite and Saprolite estimation domains are shown in Figures 19-3 to 19-5.

QG analysed grades across the Limonite / Saprolite boundary using contact analysis. The technique analyses two zones at a time (one contact), calculating the distance of each sample from the interpreted contact. Samples are then „binned‟ according to their distance either side of the contact and the average grade of each bin is calculated for each variable of interest. The mean grades across the contact are plotted, providing a visual guide as to whether the transition is gradational or sharp.

Plots for the contacts and variables of interest are contained in Figure 19-5. In the plots, each sample is represented by a red point, and the mean grade by distance class across the contact is represented by the black line series; the interpreted contact itself is represented by the vertical black line (at zero distance).


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Figure 19-3: Histograms for Limonite.


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Figure 19-4: Histograms for Saprolite.


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Figure 19-5: Contact analysis for Ni, Fe, Al, Co, MG and SiO2 from Limonite to Saprolite

Ni tends to increase in grade with depth through the Limonite and decrease in grade with depth through the Saprolite; the maximum mean Ni grade is found around the Limonite / Saprolite contact. The Limonite to Saprolite contact is marked by a sharp and substantial decrease in Fe and increases in Mg and SiO2. Al decreases in grade with depth steadily through the Limonite, flattening out in the Saprolite. This analysis supports the use of a hard estimation boundary between Limonite and Saprolite.

Note that the variables were to be estimated into the Limonite and Saprolite domains only – default grades were assigned to the Bedrock domain.


107

19.4 Variography and Estimation

Experimental variograms were generated for the six variables in the two estimation domains. No anisotropy in the horizontal plane was identified, so omnidirectional variograms within the horizontal plane were generated with an additional downhole direction to help model short range structure. A lag value of 50m in the horizontal plane was used with 1m in the vertical direction. Using a slicing height of 2m in the horizontal plane provided an improvement in variogram structure. Experimental variograms and their associated models are contained in Figure 19-6 to Figure 19-11, and the models are tabulated in Table19-3 below.

Table 19-3: Limonite and Saprolite Variogram Models

Nugget Nugget Sill

Variable (C0) (as %) Major Semi Minor Sill (as %) Structure

AL_PCT 0.5 21.4% 70 70 5 1.32 56.4% 1

600 600 7 0.52 22.2% 2

CO_PCT 0.0007 16.0% 7.5 7.5 3.5 0.002 45.8% 1

80 80 4 0.00167 38.2% 2

FE_PCT 10 23.8% 30 30 4 6.5 16.3% 1

325 325 10 23.9 59.9% 2

MG_PCT 1 21.8% 15 15 7 0.58 12.7% 1

300 300 12 3 65.5% 2

NI_PCT 0.01 10.8% 7.5 7.5 4 0.018 19.4% 1

110 110 5 0.065 69.9% 2

SIO2_PCT 8 16.8% 11 11 3 10.5 22.1% 1

225 225 7 29 61.1% 2

Range

Limonite Variogram Models

Nugget Nugget Sill

Variable (C0) (as %) Major Semi Minor Sill (as %) Structure

AL_PCT 0.02 6.7% 13 13 10 0.047 15.8% 1

300 300 12 0.23 77.4% 2

CO_PCT 0.00008 23.3% 10 10 7 0.000085 24.7% 1

60 60 11 0.000179 52.0% 2

FE_PCT 5 20.1% 25 25 9 4.5 18.1% 1

115 115 9 15.4 61.8% 2

MG_PCT 2.1 12.1% 7.5 7.5 7 4.1 23.7% 1

100 100 10 11.1 64.2% 2

NI_PCT 0.015 6.0% 8 8 8 0.033 13.3% 1

95 95 9 0.2 80.6% 2

SIO2_PCT 5 19.1% 10 10 5 5 19.1% 1

125 125 14 16.2 61.8% 2

Saprolite Variogram ModelsRange


108

Figure 19-6: Variograms for Al, (Limonite top, Saprolite bottom).


109

Figure 19-7: Variograms for Co, (Limonite top, Saprolite bottom).

Figure 19-8: Variograms for Fe, (Limonite top, Saprolite bottom).


110

Figure 19-9: Variograms for Mg, (Limonite top, Saprolite bottom).


111

Figure 19-10: Variograms for Ni, (Limonite top, Saprolite bottom).

Figure 19-11: Variograms for SiO2, (Limonite top, Saprolite bottom).


112

Grade variables tend to have relatively low nugget variance, typically around 10%, with a maximum range of continuity typically around 100m. This behaviour is relatively consistent between all of the variables and has been modelled as such in order to maintain relativity between variables during independent estimation (therefore maintaining reasonable total assay back calculation).Spatial behaviour of grade does not appear to change dramatically between Limonite and Saprolite.

Downhole drift is evident in many of the variables; this was accounted for in estimation by using Ordinary Kriging with a restricted search in the vertical direction. Ordinary Kriging was carried out independently for each variable in both of the estimation domains using the neighbourhood parameters presented in Table 19-4 and a block discretisation of 5x5x1.

The search ellipses were oriented according to the local dip and dip direction using the Datamine dynamic search feature ,which allows the search neighbourhood ellipse dip and dip direction to be defined separately for each block (in this instance, the variogram was also rotated to align with the search, but this does not always need to occur). This has the advantage of having a locally-varying orientation over a domain, where an „average‟ dip and dip direction would not necessarily honour the local grade geometry.

The local dips and dip directions were calculated from the orientation of the limonite/saprolite boundary wireframe triangles, approximating the dip of each of the mineralised domains. Note that tolerances can be set during this process, so that „erroneous‟ points will not be generated, such as vertical dips at the edges of the wireframe.

These points were then used to produce the dip and dip direction for each parent block - essentially the dip and dip direction are treated as variables and estimated into the block model using special parameters (to account for dip between 90° and -90°, and dip direction between 0° and 360°).

Then, during estimation of the grade variables, the search ellipse and variogram orientation is rotated appropriately for each parent block.

Three estimation runs were carried out (the same search was used for all variables in both domains), the second run with less restrictive parameters, attempting to estimate blocks that were not estimated in the first. Any blocks not estimated in the first two runs were estimated using a very large search. Approximately 71% of the model volume was estimated in run 1, and 28% in run 2, so only 1% of the model was estimated using run 3. The run number was recorded during estimation along with various geostatistical metrics such as the slope of regression.

Table 19-4: Estimation neighborhood parameters, Agata Nickel Resource

Estimation

run number

X direction

(m)

Y direction

(m)

Z direction

(m)

Minimum

number of

samples

Maximum

number of

samples

Run 1 150 150 5 10 40

Run 2 300 300 10 4 40

Run 3 600 600 20 4 20


113

To validate the estimate, swath plots were generated. These plots represent E-W and N-S „slices‟ (at 100m spacings) through the deposit, and the mean grade of the block model and the composites within each of these slices was reported and compared for all of the variables in Limonite and Saprolite. An example is illustrated in Figure 19-12, which compares composites and blocks for Ni in Saprolite. As expected, in all cases the block model follows the trends of the composites, with less variability.

Figure 19-12: Comparison of composites against the block model for Ni in Saprolite

A limited visual validation of the block model grades against drillhole grades was carried out with no anomalies identified. The estimated block means (above a zero cut-off) match relatively closely to the composite means (Table 19-5).

Table 19-5: Composites vs blocks comparison

Domain Variable Composites Blocks

Limonite Ni 0.96 0.94

Co 0.11 0.11

Fe 45.8 45.5

Saprolite Ni 0.87 0.84

Co 0.02 0.02

Fe 9.8 10.1

0

100

200

300

400

500

600

700

0

0.2

0.4

0.6

0.8

1

1.2

775725

775825

775925

776025

776125

776225

776325

776425

776525

776625

776725

776825

776925

777025

777125

777225

777325

777425

777525

777625

777725

777825

777925

Nu

mb

er

of

Sam

ple

s

Ni %

Easting

Ni by Easting, Saprolite

No. Samples Model Sample


114

Dry bulk density was flagged into the model (Limonite 1.24, Saprolite 1.45, Bedrock 1.8). The default values applied to the Bedrock are 0.25% Ni, 0.01% Co, 6% Fe, 0.5% Al, 22% Mg and 42% SiO2. Determination of these values is discussed in the following section.

19.5 Bulk Density Determinations

MRL have completed a significant number of bulk density tests so as to provide data for estimating the tonnages of each specific mineralized zone within the ore body. Samples were predominantly taken from test pits prepared for the taking of density samples. A total of 30 samples from 15 test pits were used for the ferruginous laterite horizon; 37 samples from 19 pits for limonite; and 17 pit samples from 6 pits for saprolite. In addition 19 core samples were tested from the saprolite zone. All primary data used for these determinations are in Tables 19-6 to 19-10 and Figures 19-13 to 19-15.

For BD measurements done on site, large samples ranging in volume from 0.005 m3 to 0.08 m3 were collected from twenty test pits. The locations of these test pits are distributed around the drilling area (Figure 19-10). The bulk samples were measured for volume, wet weight, and dry weight. The description of the methodology is detailed in the ANLP QA/QC Procedures (Appendix 5).

The BD and moisture content were computed with the following formulas.

Weight (kg) Bulk Density = _______________ ÷ 1000 (kg/ton) Volume (m

3)

Weight wet – Weight dry % Moisture Content = __________________ x 100

Weight wet

For the drill cores, relatively solid/less compressed portions of 10cm-20cm lengths were selected from drill holes that are spatially distributed and coated in paraffin wax to preserve the moisture. These were then dispatched to McPhar Laboratories wherein the samples were measured using the water displacement method. It is standard practice for McPhar to check the wax coating and perform re-waxing if needed.

Table 19-6: Summary of Bulk Density Measurements

HORIZON Wet

Density

Dry

Density

Moisture

Content

%

No. of

Samples

FERRUGINOUS LATERITE 1.72 1.20 30.49 30

LIMONITE 1.81 1.24 31.74 37

SAPROLITE (Pit Samples) 1.98 1.46 26.11 17

SAPROLITE (Core Samples) 1.82 1.45 20.60 19


115

Table 19-6 shows the summary results of these measurements, and the dry density values used in the resultant block model were 1.24 dt/m3 for Limonite and 1.45 dt/m3 for Saprolite. A dry density of 1.8 dt/m3 for bedrock has been applied in the model, but there is no mineralised ore within this defined region and as such is simply a differential figure to aid in planning and design.

Figure 19-13: Agata Bulk Density Test Pit Location Map

Table 19-7: Bulk Density Measurements on Ferruginous Laterite Materials

Sample No. Wet Density Dry Density Moisture Content %

1 1.70 1.15 32.37

2 1.85 1.29 30.19

3 1.62 1.26 21.98

4 1.67 1.15 31.13

5 1.98 1.34 32.06

6 2.03 1.49 26.70

7 1.63 1.10 32.85

8 1.88 1.33 29.41

9 1.63 1.15 29.16

10 1.54 1.03 33.00

12 1.69 1.24 27.06


116


13 1.54 1.03 33.26

14 1.56 1.05 32.53

15 1.86 1.17 37.14

16 1.53 1.13 26.32

17 1.61 1.10 31.52

18 1.58 1.05 33.11

19 1.59 1.07 32.65

20 1.60 1.24 22.35

21 1.95 1.32 32.28

22 1.96 1.29 33.83

23 1.57 1.13 28.29

24 1.62 1.19 26.61

25 1.59 1.09 31.63

26 1.78 1.22 31.65

27 1.78 1.27 28.82

28 1.88 1.27 32.13

29 1.54 1.05 31.74

30 2.07 1.38 33.12

31 1.84 1.29 29.82

Table 19-8: Bulk Density Measurements on Limonite Materials


32 1.76 1.14 34.97

33 2.07 1.46 29.50

34 1.75 1.22 30.40

35 1.67 1.13 32.75

36 1.88 1.34 28.52

37 1.97 1.35 31.45

38 1.99 1.36 31.72

39 1.90 1.30 31.24

40 2.00 1.34 32.83

41 2.04 1.40 31.44

42 1.82 1.25 31.42

43 1.82 1.22 33.21

44 2.02 1.40 30.72

45 1.82 1.21 33.67

46 1.67 1.13 32.10

47 1.74 1.21 30.50

48 1.73 1.17 32.43

49 1.91 1.36 28.84

50 1.86 1.27 31.86

51 1.64 1.09 33.65

52 1.63 1.06 34.75

53 1.83 1.20 34.29


117


54 1.58 1.06 33.35

55 1.77 1.26 28.86

56 1.66 1.19 28.48

57 1.75 1.28 26.83

58 1.79 1.14 36.50

59 1.67 1.03 38.31

60 1.82 1.32 27.17

61 1.87 1.31 30.06

62 1.60 1.05 34.19

63 1.83 1.21 33.91

64 1.89 1.31 30.87

65 1.82 1.17 35.80

66 1.75 1.23 30.00

67 1.82 1.23 32.55

68 1.97 1.47 25.23

Table 19-9: Bulk Density Measurements on Saprolite Materials (Pit Samples)


69 2.08 1.338 35.8

70 1.96 1.336 31.8

71 2.17 1.548 28.5

72 2.12 1.609 24.1

73 2.20 1.711 22.3

74 2.23 1.380 38.1

75 1.71 1.425 16.7

76 1.91 1.338 29.8

77 2.03 1.498 26.2

78 2.16 1.714 20.8

79 1.95 1.355 30.6

80 1.89 1.323 30.0

81 1.73 1.340 22.6

82 1.651 1.348 18.4

83 1.90 1.505 20.7

84 1.83 1.558 14.9

85 2.15 1.449 32.6

Table 19-10: Bulk Density Measurements on Saprolite Materials (Core Samples)


13666 1.96 1.52 22.24

13905 1.61 1.18 26.84

13909 1.68 1.31 21.90

13913 2.13 1.93 9.33


118


13603 1.79 1.30 27.48

13612 1.75 1.11 36.58

13606 1.74 1.39 19.90

13877 1.96 1.67 14.61

13880 2.13 1.80 15.35

13884 1.89 1.44 23.99

13907 1.72 1.37 20.37

13912 1.62 1.15 28.79

13917 1.84 1.53 16.68

13923 1.90 1.66 12.72

17582 1.64 1.28 21.98

17586 1.70 1.28 24.66

17596 1.90 1.68 11.43

17604 1.70 1.26 25.64

17610 1.90 1.69 10.82


119

Figure 19-14: Graphs of Dry Bulk Density Measurements

Figure 19-15: Graphs of Moisture Content

0.0

0.5

1.0

1.5

2.0

Dry

Den

sit

y

DRY DENSITYLimonite

0.0

1.0

2.0

3.0

Dry

Den

sit

y

DRY DENSITYSaprolite (Core Samples)

0.00

0.50

1.00

1.50

2.00

Dry

Den

sit

y

DRY DENSITY Saprolite (Pit Samples)

0

10

20

30

40

Mo

istu

re C

on

ten

t (%

)

MOISTURE CONTENTFerruginous Laterite

0

10

20

30

40

Mo

istu

re C

on

ten

t (%

)

MOISTURE CONTENT Saprolite (Core Samples)

0

10

20

30

40

Mo

istu

re C

on

ten

t (%

)

MOISTURE CONTENT Saprolite (Pit Samples)


120

19.6 Resource Classification

The resource classification approach reflects confidence in both geometric interpretation and confidence in geostatistical grade estimates, and also classifies the resource in a spatially coherent manner, avoiding small patches of different categories. The vast majority of the deposit is drilled on 50m x 50m or 100m x 100m grids, which is enough to support a category of Indicated. The only areas of Inferred are around the steep-sided creek systems, where the drilling is on a broader pattern and the laterite horizons thin out. The only Measured part of the resource is where the drilling has been on 25m x 25m centres. The figure below shows the block model coloured by resource classification.

Figure 19-16: Resource classification, Agata Nickel Deposit.


121

The Mineral Resource Estimate figures above a 0.5% Ni cut-off for Limonite and above a 0.8% Ni cut-off for Saprolite are presented in the following table.

Table 19-11: Agata Nickel Mineral Resource Estimate as of 8thSeptember 2010.

Classification Horizon kTonnes Ni % Co % Fe % Al % Mg % SiO2 %

Measured Limonite 247 1.01 0.12 48 2.94 0.98 4.70

Saprolite 535 1.15 0.03 11 0.37 18.03 41.68

Subtotal 782 1.10 0.06 23 1.18 12.66 30.02

Indicated Limonite 9,963 0.94 0.11 46 3.39 1.25 5.85

Saprolite 21,847 1.09 0.03 11 0.51 17.04 39.90

Subtotal 31,811 1.04 0.05 22 1.41 12.09 29.24


Limonite 10,210 0.94 0.11 46 3.37 1.24 5.82

Saprolite 22,382 1.09 0.03 11 0.51 17.06 39.95

Total 32,592 1.04 0.05 22 1.41 12.11 29.26

Inferred Limonite 260 1.00 0.11 44 3.24 1.77 9.91

Saprolite 1,421 1.05 0.03 12 0.53 17.06 40.26

Total 1,681 1.04 0.04 17 0.95 14.69 35.58

Total metal contents in the reported resources represent metal in the ground and have not been adjusted for metallurgical recoveries and other factors which will be considered in later study

Mineral resources which are not mineral reserves do not have demonstrated economic viability

The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.

This is an increase of 2.8Mt in the Measured and Indicated compared to the August 2010 Mineral Resource Estimate (Gifford, November 2010). The Ni grade increases slightly compared to the previous estimate (from 1.03% to 1.04%), so contained Ni metal for the Measured and Indicated increases by 10.9% (from 307kt Ni to 340kt Ni).

This report is based on the data that were produced and compiled by MRL. Data verification performed by the author found no discrepancies in the sampling and analyses that biased the data set. Hence, the database is considered adequate to meet industry standards to estimate mineral resources.

The resource was calculated by Quantitative Group using Ordinary Kriging as the estimation method. Both the limonite zone and the saprolite zones were estimated independently as the form of mineralisation in both zones were unique and could not be used for comparative statistics. The measured and indicated resource estimated from this report is as below:

32,592,000 t ore @ 1.04% Ni, 0.05% Co, 22% Fe

The cut-offs applied to the resource were 0.5% Ni for Limonite and 0.8% Ni for Saprolite (as per the previous estimates completed upon the ANLP, (Cox, 2008 2009a 2009b)). The last resource calculated on the ANLP (Gifford, November 2010), had the following tonnage and grade:

29,794,000 t ore @ 1.03% Ni, 0.05% Co, 23% Fe


122

Nickel grade-tonnage curves for the Measured plus Indicated resource at cut-offs from 0.05% Ni to 1.5% Ni are shown for Laterite in Figure 19-17 and for Saprolite in Figure 19-18.

Variations in grade can be explained by the application of a more robust and accountable resource methodology (ordinary kriging compared to inverse distance squared), and variation in tonnes are explained by the extra drilling completed in 2010 and the slightly broader spread of grade caused by the estimation methodology. With the increase in tonnage there is also a tonnage increase in total Ni tonnes (from 307kt to 340kt contained Ni).

Figure 19-17: Grade-tonnage curve, Measured + Indicated, Limonite.

Figure 19-18: Grade tonnage curve, Measured + Indicated Saprolite

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

0

2,000

4,000

6,000

8,000

10,000

12,000

0.0

5

0.1

0.1

5

0.2

0.2

5

0.3

0.3

5

0.4

0.4

5

0.5

0.5

5

0.6

0.6

5

0.7

0.7

5

0.8

0.8

5

0.9

0.9

5 1

1.0

5

1.1

1.1

5

1.2

1.2

5

1.3

1.3

5

1.4

1.4

5

1.5

Ni%

gra

de

Tho

usa

nd

To

nn

es

Ni% Cut-off

Grade-Tonnage Curve, Measured + IndicatedLimonite

Tonnes ('000) Ni %

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

0

5000

10000

15000

20000

25000

30000

35000

40000

0.0

5

0.1

0.1

5

0.2

0.2

5

0.3

0.3

5

0.4

0.4

5

0.5

0.5

5

0.6

0.6

5

0.7

0.7

5

0.8

0.8

5

0.9

0.9

5 1

1.0

5

1.1

1.1

5

1.2

1.2

5

1.3

1.3

5

1.4

1.4

5

1.5

Ni%

gra

de

Tho

usa

nd

To

nn

es

Ni% Cut-off

Grade-Tonnage Curve, Measured + IndicatedSaprolite

Tonnes ('000) Ni %


123

19.7 Previous Resource Estimate (Cox, D.M., December 22, 2009)

The Agata Nickel Project plant feed listed in Tables 3-3, 21-1 and 25-1 for the purposes of the preliminary assessment are based on the resource estimate released on the company‟s website on November 18, 2009 and reported and filed on sedar.com dated December 22, 2009 by Dallas M. Cox.

This report is based on the data that were produced and compiled by MRL as of November 2008. Data verification performed by the author found no discrepancies. Hence the database is considered adequate to meet industry standards to estimate mineral resources.

The same assay and drilling datasets in the January 22, 2009 resource report were used. The assay data were collected from February 2007 to September 2008 Mindoro drilling program and the BHP Billiton drilling program in 2006. This comprises a total of 408 drill holes, comprising 7300.83 meters of diamond drill core and 7271 assay samples. Further variographic study on the data was conducted for possible upside potential to increase indicated and inferred resource category tonnages, as recommended in the previous report. The results were then applied to the present resource estimation.

The MineSight ® IDW Interpolation procedure was used to interpolate nickel, cobalt and iron grades. Inverse Distance Weighting (IDW) Power 2 was used for grade estimation. This method was considered acceptable given the tight constraints applied to limonite and saprolite domaining. Grades were interpolated in limonite and saprolite domains only. The transformed composited data set was used for grade estimation in order to generate block grade estimates that would honour the undulating lateral spatial position of composited assays within the laterite profile. Block grade estimation was constrained by coded composites in the respective domains.

Raw assay data were analyzed above a cut-off grade of 0.5 Ni% for the limonite, and 0.8 Ni% for the saprolite. Visual and statistical techniques were used to determine a geochemical Iron (Fe) cutoff grade in order to set a geochemical limonite/saprolite contact. There exists a very dramatic change in Fe grades within 1m below the occurrence of 30 Fe% in the downhole profile. The geochemical technique to determine limonite was chosen. The points generator tool within MineSight ® DH View was also used to determine top-of-sequence occurrences of 0.5 Ni% and 0.8 Ni % above the limonite/saprolite contact, and bottom-of-sequence occurrence of 0.8 Ni% in each drillhole. In this resource estimate, the bottom-of-sequence occurrence of 0.8 Ni% was extended at depth to include additional transitional-saprolite mineralization in the footwall of the ore zone profile.

There is an abrupt drop in Nickel grades below 1.2 Ni% at the base of the laterite profile. The 0.8 Ni % (bottom-of-sequence occurrence) bedrock cut-off grade for the saprolite domain was chosen to account for the influence of footwall wall dilution given the block size selected for resource estimation.

Generally, nickel grades in the limonite horizon, increase and peak at a point about the base of the limonite. Nickel grades remain respectively high and thereafter diminish as the mineralization grades into basement/bedrock. Unfolding to this surface ensures that nickel grades in both limonite and saprolite are preferentially honored in the mid-section of the laterite profile.

The Bulk Density for limonite and saprolite were measured in places and has been set at 1.24 and 1.52 respectively, for the mineral resource estimates. Determination of these values are discussed in Section 19.5.


124

A variographic review of nickel, cobalt and iron composite data from the September 2008 data set showed a low nugget effect for all elements, and well behaved cumulative probability plots at higher grades which supports not top cutting the dataset. The variograms used spherical models and nested structures (two for Ni and Fe, and three for Co) and long range structures were robust in both limonite and saprolite domains. The nickel variograms showed little anisotropy with better correlation at 150o. Search direction used in the grade estimation procedure was orientated at 165o, which is the orientation of the Philippine Fault feature in this district. A conservative approach was taken in respect to the use of short and long range structures as method for resource estimation confidence.

A review of the double nested correlograms for nickel was carried out as basis for classifying the resource. Both limonite and saprolite exhibit a low nugget effect although higher in the saprolite zone which is expected.

Measured ore classification was restricted within the 50m x 50m drilled area using ~1/2 of the short range structures. Whilst the short range structures in the major and minor axes generally varied between 50m and 75m, this is a function of the drilling density.

Indicated ore was classified using ~1/3 and ~1/4 of the average of the long range structures, for limonite and saprolite respectively. Inferred ore was classified using ~2/3 of the average of the long range structures for limonite and saprolite.

The estimate for combined Measured and Indicated Resources is 36.48 million wet metric tonnes (WMT), or 26.92 million dry metric tonnes (DMT), grading 1.11 percent nickel, 0.06 percent cobalt and 24 percent iron. In addition, the Inferred Resource estimate is 5.03 million WMT, or 3.79 million DMT, grading 1.06 percent nickel, 0.05 percent cobalt and 21 percent iron.

The summary of results @ 0.5% Ni cutoff grade (limonite) and 0.8% Ni cutoff grade (saprolite) is presented in the following table:

Table 19-12: Agata Nickel Mineral Resource Estimate as of 18th November 2009.

Category Laterite

Horizon Mil. WMT

Mil.

DMT Ni% Co% Fe%

Measured Limonite 2.16 1.40 1.00 0.11 44

Saprolite 0.64 0.51 1.16 0.03 11

Indicated Limonite 12.98 8.44 0.98 0.11 46

Saprolite 20.70 16.56 1.18 0.03 11


Limonite 15.14 9.84 0.98 0.11 45

Saprolite 21.34 17.07 1.18 0.03 11

Total Measured + Indicated 36.48 26.92 1.11 0.06 24

Inferred

Limonite 1.56 1.01 0.92 0.10 44

Saprolite 3.48 2.78 1.11 0.03 12

Total 5.03 3.79 1.06 0.05 21

Mineral resources which are not mineral reserves do not have demonstrated economic viability.

The tonnage and nickel grades above have been rounded to the nearest 2nd or 3rd

decimal, which may have resulted in minor discrepancies.

The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

It is uncertain if further exploration will result in upgrading the Inferred mineral resource to an Indicated or Measured mineral resource or the Indicated mineral resource to a Measured Resource category.


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A sub-set of this mineral resource estimate was applied to the scoping study at commencement. For the purposes of the scoping study, relatively aggressive cut-off grades were applied to the resource to approximate plant-feed to the base case project sufficient for a production rate of >2.5 million tonnes treated per annum for six years. The cut-off grades applied were Limonite: 0.85% Ni, Transition: 0.90% Ni, and Saprolite: 1.0% Ni. The transition was broken up from the previously identified saprolite based on the geochemical criteria: <30 Fe% ≥20; <20 Mg% ≥10.

Additionally, an upper cut-off of 1.35% Ni was applied to all three resource types to classify the high grade material for potential direct shipped ore operations, excluding the additional tonnes of high-grade material. A similar exercise applied to the new resource estimate does not result in a materially different outcome. Further cut-off grade subsets of the new resource will be applied to future studies that will incorporate open-pit optimisation to produce mining inventory determinations.

The resulting sub-set is summarized below:

Table 19-13: Agata Nickel Mineral Resource Estimate sub-set at cut-offs of Limonite: 0.85% Ni, Transition: 0.90% Ni, Saprolite: 1.0% Ni (from Nov 2009 resource).

Category Laterite

Horizon COG Ni % DMT Ni% Co% Fe%

Measured

Limonite 0.85 - 1.35 883,047 1.05 0.112 45

+1.35 121,554 1.53 0.142 39

Trans & Sap 0.90 & 1.0 - 1.35 243,815 1.16 0.026 11

+1.35 106,238 1.55 0.030 13

Indicated

Limonite 0.85 - 1.35 5,551,663 1.04 0.118 45

+1.35 412,967 1.48 0.154 41

Trans & Sap 0.90 & 1.0 - 1.35 7,663,872 1.15 0.026 11

+1.35 3,803,443 1.61 0.030 13


Limonite 0.85 - 1.35 6,434,710 1.04 0.117 45

+1.35 534,521 1.49 0.151 40

Trans & Sap 0.90 & 1.0 - 1.35 7,907,687 1.15 0.026 11

+1.35 3,909,681 1.61 0.030 13

Sub-Total 0.85, 0.90 & 1.0 -

1.35 14,342,397 1.10 0.067 26

+1.35 4,444,202 1.59 0.045 16

Inferred

Limonite 0.85 - 1.35 646,746 1.01 0.099 43

+1.35 5,919 1.37 0.153 40

Trans & Sap 0.90 & 1.0 - 1.35 1,398,089 1.14 0.024 12

+1.35 410,943 1.56 0.031 13

Sub-Total 0.85, 0.90 & 1.0 -

1.35 2,044,835 1.10 0.048 22

+1.35 416,862 1.56 0.033 13

Mineral resources which are not mineral reserves do not have demonstrated economic viability.

The tonnage and nickel grades above have been rounded to the nearest 2nd or 3rd

decimal, which may have resulted in minor discrepancies.

The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

It is uncertain if further exploration will result in upgrading the Inferred mineral resource to an Indicated or Measured mineral resource or the Indicated mineral resource to a Measured Resource category.


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20. OTHER RELEVANT DATA AND INFORMATION

20.1 Mining

20.1.1 Mining Operations

Mining will be carried out by industry standard open cut methods that are commonly practised in the Philippines and elsewhere. Excavators and articulated dump trucks, supported by standard auxiliary fleet (dozers, graders, watercarts) are proposed, and will be operated by an experienced Philippine contractor. Mining will be relatively selective on 2-3m high benches and will involve a range of grade control and stockpiling strategies. The minor amounts of overburden generated will ultimately be used in rehabilitation of the natural surface. Management of road quality and surface water flows will be the key areas of focus for the mining operation to minimise and control the sediments generated from the earthmoving activities.

The haulage of ore to plant stockpiles will be carried out by the mine contractor‟s fleet as the haulage distance is assumed to be less than 4km.

The option to use an owner operated fleet was not considered in this scoping study but will be assessed in future studies.

20.1.2 Mine Infrastructure

The mine camp includes accommodation and an industrial area. The mine camp has been designed to accommodate approximately 50% of the mining workforce, with the balance of the personnel commuting to site daily from local towns. The mine accommodation camp consists of the following:

one unit at 14 personnel – expatriate/senior staff accommodation

one unit at 10 personnel – national staff accommodation

three units at 48 personnel – non-staff accommodation

84-seat mess hall and kitchen

laundry building

recreation hall

indoor sport hall to accommodate table tennis and badminton

sewage treatment plant complete with catch basin.

The mine industrial area consists of the following:

mine admin building

workshop building

general warehouse

two generators: silent type at 750 kVA complete with 5000 L diesel day tanks.

All buildings (except warehouse and explosives and detonators storage) at the mine area will be constructed from reinforced concrete structure, brick walling and corrugated metal sheet roofing.


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Foundations will be reinforced concrete spread footings with maximum depth of 1.5 m from ground level. No allowance has been made for pile foundations.

Warehouse and explosives/detonator storage will be made of steel containers. The explosives and detonators storage area will be designed as a secure, contained area and located at least 500 m from the industrial area and 1000 m from the accommodation camp. It will be constructed of seven containers sitting on concrete plinths and fenced by concrete blast walls forming an inner boundary with the steel chain link fencing at the perimeter.

20.1.3 Haul Roads

The road to the Agata ore deposits extends approximately 4 km from the process plant to the minesite at approximately 400 m above MSL. It is proposed that this road be constructed with an unsealed 10 m wide crushed rock pavement (including shoulders).

The route generally traverses steep terrain requiring high steep batters in cuts and reinforced earth type slope protection infills. Maximum grades will generally be limited to 10% in order allow safe and efficient truck operation.

20.2 Plant and General Infrastructure

20.2.1 Introduction

The provision of infrastructure is a significant part of the overall development of the project due to the green field nature of the proposed site.

Existing infrastructure facilities are virtually non-existent in the immediate area of the proposed site except for an existing gravel public road and the exploration camp facilities.

Key factors affecting the layout of infrastructure for the project include:

the location of the ore bodies

the site topography

access to site for equipment, operating personnel and reagents

the position of the industrial and port sites.

The facilities will be located predominantly in a coastal valley west of the mine site, as the topography is relatively flat compared to the steeper inland terrain.

The infrastructure facilities to be provided for the project include:

water supply and treatment

power station and power reticulation

port

bulk materials handling

fuel tank farm

solid and liquid waste management

plant control system


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plant site and service buildings and ancillary facilities

accommodation village and facilities

communications

mobile equipment

roads

security.

The following sections describe these facilities with respect to the Base Case project in detail.

20.2.2 Existing Regional Infrastructure

The nickel laterite deposits and proposed process plant site are located in the province of Agusan del Norte, one of the five provinces of northeast Mindanao. Agusan del Norte is bounded to the north by Butuan Bay and Surigao del Norte, to the east by Surigao del Sur, to the west by Misamis Oriental, and to the south and southwest by Agusan del Sur. Agusan del Norte occupies a total land area of 2503.9 km2.

A substantial population base exists within a short distance of the project area. The municipalities of Santiago and Jabonga, located within 10 km of the project area, each have populations of around 20 000 people. Situated about 35 km by road to the south, Cabadbaran City has a population of over 60 000. Butuan City, located about 65 km by road to the south, has a population of approximately 310 000, and Surigao City, located about 80 km by road to the north, has a population of approximately 132 000.

Facilities and services in Cabadbaran City include:

hospital (Cabadbaran District Hospital)

rescue service (Rescue 085)

fire station

police station

electrical utility (ANECO: Agusan del Norte Electric Cooperative)

elementary and high schools

university (a campus of Caraga State University).

20.2.3 Site Development

20.2.3.1 Process Plant Site

The process plant site is proposed to be located on a coastal site to the west of the mine site. The advantages of this location are:

It has excellent access to the port facilities and the sea.

It largely avoids land currently under agriculture.

It provides an opportunity to locate the plant at a level above any likely tsunami effect created by seismic activity.


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It provides a platform to locate very heavy plant items on a cut bench therefore reducing foundation costs and potential impacts of differential settlement.

The site is proposed to be located about 200 m inland in order to place the heavier plant on solid ground at an elevation of 30–80 m above MSL. The process plant pad will be approximately 700 m in length and 400 m in width in a north–south orientation. Some of the lighter plant equipment will be located in fill areas. Surface drainage is directed from a central elevated part of the site towards the north-east. Vehicle access to and from the plant site is from the north.

The plant site will be cleared of all vegetation, tree roots grubbed and topsoil stripped from the site will be stored in stockpiles for later reuse as topsoil on the completed earthworks.

Cut material shifted from the more elevated areas of the plant site will be utilised as fill in the lower areas of the plant site and in the port area to meet a minimum plant floor level above MSL.

This cut to fill construction will include nearby facilities such as: ore stockpile areas, port facilities areas, process plant offices, laboratories and control room pads.

20.2.3.2 Surface Water Management

The main surface water management objectives set out for the project can be summarised as follows:

to prevent and control possible downstream pollution of existing rivers, creeks and streams

to provide facilities for the required drainage, storage and disposal of low quality water produced

to manage runoff from the plant site to enable the mine and its facilities to operate efficiently

to provide an acceptable degree of protection for the plant site and its associated facilities against flooding.

The surface water management system is required for the following areas:

plant site

port site

mine sites

accommodation village

limestone quarry.

In order to meet the objectives listed above, various catch drains, sediment control basins, diversions and return water pump/pipeline systems are required.

The following works are included in the system:

diversion channels

flood protection earthworks

storm water drainage systems


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storm water containment/ sediment control basins

recycling water pumps and pipe systems.

The major and minor surface drainage system will operate such that larger events will surcharge the minor system and flow in the major system. The site runoff will be contained on-site within the sediment basins and dams.

20.2.4 Water

20.2.4.1 General

The project has significant water requirements for mining, processing and other uses. The main water requirements are:

raw water for dust suppression

seawater for ore slurrying

filtered raw water for general process plant use

potable water for domestic use

demineralised water for steam generation and processing.

Seawater and river water sources were identified as two potential water supply sources for this Project. Coffey1 („Consulting Services for the Conduct of Preliminary Baseline Environmental Studies, Volume 3: Water‟) established that there was ample fresh water available from the Tubay River system, approximately 3 km to the east of the process plant site.

The Water Supply system will consist of the following:

main raw water supply to the process plant, port area and accommodation facilities

seawater supply to the process plant.

20.2.4.2 Water Requirements

The water requirements were estimated based on the process water balance and typical potable water demands.

The total raw water requirement has been assessed at approximately 13 000 kL per day. For design purposes, an additional 15% allowance was added to this flow requirement.

The overall water consumption for the project is summarised in the following table.

Table 20-1: Water Consumption Summary

Water Quality Daily Consumption

(kL)

Total raw water 13 100

Filtered water 8 880

Demineralised water 2 850

Potable water 100

Seawater 15 600


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20.2.4.3 Concept Design

The conceptual design for the water supply and major distribution system for this Project has been divided into the following elements:

pump station intake works at the Tubay River

major pumping station at the Tubay River

pipeline from pumping station to raw water storage pond

raw water storage pond

pipeline from storage pond to process plant and water treatment plant balance tanks.

20.2.4.4 Water Reticulation

The water reticulation system will provide water for the following uses: filtered raw water, potable water, demineralised water and firewater.

Treated water will be reticulated throughout the site including to the process plant, port and accommodation facilities.

20.2.4.5 Water Treatment

The water treatment system produces water to three water quality standards:

filtered raw water for process and general plant use including gland seal water, cooling water and fire water

potable water for human consumption and ablutions

demineralised water for boiler feed water and other process water requirements.

The primary source of water supply will be the Tubay River. The Coffey report states that the river water quality is generally good, with little suspended solids and turbidity.

The proposed treatment consists of the following processes:

coagulation/settlement for treatment of filtered raw water

R.O. for demineralised water

chlorination treatment for potable water.

The water treatment plant will be located on a designated site at the south of the process plant.

20.2.4.6 Seawater Supply

Seawater for the process plant is harvested near the wharf. The water is screened and then pumped from a pumping station near the barge loading area to the sea water storage tank for distribution. Most of the seawater is used for ore preparation and in the HPAL vent scrubber.


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20.2.5 Power Supply

20.2.5.1 Power Station

The power station utilises steam generators to provide electrical power for the operation of the process plant, services and utilities, as well as for the accommodation village and all other related infrastructure.

High pressure steam is produced from two sources. The major source of high pressure steam is from waste heat boilers in the sulphuric acid plant. The secondary source of high pressure steam is from auxiliary boilers that will produce supplementary steam into the same header for the high pressure steam distribution system.

The power station is designed to satisfy two main operating scenarios:

provision of 38.4 MW of power for normal plant operations, with 143 t/h of HP steam imported from the sulphuric acid plant and approximately 17 t/h of HP steam produced by the auxiliary boilers

provision of 20.5 MW of power and 43 t/h of process steam, to maintain refinery operation, critical equipment in other areas, and the accommodation village during acid plant outages.

The plant configuration comprises three 20 MW condensing steam turbine generators and three 50 t/h package boilers. The three boilers provide significant flexibility to meet varied steam demands. The selection of condensing turbines allows low pressure steam to be extracted for process use.

In addition, for emergency conditions and the black start of the power station, there are two diesel powered generators located within the power station complex. These ex-construction generators will be of sufficient capacity for their intended long-term function.

Electric power will be generated at 13.8 kV 60 Hz with the generators connected to a main distribution substation for supply to the various process and infrastructure substations.

The substations will contain switch gear, transformers and motor control centres for the connected loads.

20.2.5.2 Power Usage Summary

The estimated power requirements for the project are summarised in Table 20-2.

Table 20-2: Power Summary

Project Area Connected

Power (MW)

Absorbed

Power (MW)

Ore Preparation Plant 5.1 3.8

Leach Plant 8.5 5.0

Metal Refinery 20.2 16.0

Major Process Packages 12.4 10.8

Process Services and Utilities 2.4 1.5


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Project Area Connected

Power (MW)

Absorbed

Power (MW)

Plant Infrastructure 0.3 0.2

General Infrastructure 1.0 0.8

Allowances 0.5 0.4

Total 50.4 38.6

20.2.5.3 Power Reticulation

The power station complex will contain the Main High Voltage Distribution Room from which will originate the feeders to all areas of the facility.

High voltage distribution from the power station main switchboard will be via 13.8 kV cable. For major load centres within the process plant area the cables will go to the relative step down transformers for local distribution.

For sites remote to the process plant, the cables will be connected to open wire 13.8 kV overhead transmission lines once they are outside the plant area. These areas include the accommodation facilities/camp, river water supply and similar areas.

The transmission lines generally follow either roads or service corridors to the respective load centres.

Ex-construction generators will be utilised at the mine site and at the limestone quarry.

20.2.5.4 System voltage and frequency

System voltages and frequency shall be as follows:

13.8 kV, 3 phase, 60 Hz, 3 wire supply shall be utilised for Primary Distribution from 13.8 kV Main Switchgear at Power Plant

4.16 kV, 3 phase, 60 Hz, 3 wire supply shall be utilised for selected applications

460 V, 3 phase, 60 Hz, 3 wire supply shall be utilised for distribution to motor control centres and related loads

220 V, 3 phase, 60 Hz, 4 wire, shall be utilised for lighting panel boards

220 V, 3 phase, 60 Hz, 4 wire, shall be utilised for receptacle panel boards, and miscellaneous single-phase loads

220/110 V, 3 phase, 60 Hz, 4 wire, or 110 V, 1 phase 60 Hz, shall be utilised for critical duty, Uninterruptible Power Supply (UPS) loads

24 V DC, 2 wire, shall be utilised for motor control circuitry.

In general, utilisation voltages for motors shall be as follows:

motors less than 350 kW: 460 V, three-phase, 60 Hz


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motors 350 kW and less than 1500 kW: 4.16 kV, three-phase, 60 Hz

motors 1,500 kW and larger: 13.8 kV, three-phase, 60 Hz.

Motors will be DOL system.

20.2.6 Port

The wharf is located on the north-eastern side of the plant area. The water depths beyond 50 m offshore are unknown at this stage as well as the seabed geotechnical properties. Assumptions have been made for the design and cost estimate for the underwater structures/foundations. The main wharf measures approximately 500 m x 35 m. Concrete caissons foundation type will be used in shallow water and steel tubular piles in deeper water. The estimate has allowed for piles with maximum length of 40 m.

The following wharf facilities provide the functional requirements of port operations:

the main berth accommodating: 20 000 DWT liquid tankers for acid, heavy fuel oil and diesel fuel, 50 000 DWT bulk cargo ships for sulphur and product despatch, and 5000–10 000 DWT barges

pipeline corridor and pumps for unloading liquid materials (diesel fuel, heavy fuel oil and acid) from the ships to storage tanks

a 100 Tonne crawler crane for loading and unloading containers

admin office and warehouse.

A heavy lift ramp is provided for unloading autoclaves, at up to 700 tonnes, and other heavy modules during construction. This ramp will be designed such that it can be utilised as a permanent facility for accessing heavy loads for construction for future expansion and/or for operations. An access road, with maximum slope 6% and a road width of 6m, accommodates multi-wheeler trailers with due allowance to minimise curves.

20.2.7 Bulk Liquid Handling

The quantities of petroleum products to be consumed by the mining and process operations are sufficiently large to make bulk tankers the most cost effective solution.

The main storage area will be located at the port with service (day) tanks located at the process plant and the mine sites etc. Supply is from either within the Philippines or from Singapore, and it is anticipated that vessels would be 20 000 DWT.

Products that would be delivered by these vessels are Heavy Fuel Oil (power generation, lime kiln) and diesel fuel (mobile equipment fleet, etc).

20.2.7.1 Heavy Fuel Oil

Heavy Fuel Oil (HFO) will be pumped ashore by the ship‟s on-board pumps through a flexible hose to the wharf product piping contained in a gallery on the back of the wharf. Product will be metered during delivery to bunded storage tanks located onshore adjacent to the wharf.

The HFO will be pumped from the port storage tanks to the process plant day tank at the rate of 25 m3/hr using pumps situated adjacent to the port tanks. A stand-by pump will be provided in case of a breakdown.


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20.2.7.2 Diesel Fuel

Diesel Fuel will be pumped ashore by the ship‟s on-board pumps through a flexible hose to the wharf product piping contained in a gallery on the back of the wharf. Product will be metered during delivery to bunded storage tanks located onshore adjacent to the wharf.

Diesel fuel will be pumped from the port storage tanks to the day storage tanks at the vehicle refueling facilities adjacent to the process plant at the rate of 25 m3/h using pumps situated adjacent to the port tanks. Stand-by pumps will be provided in case of a breakdown.

A road tanker loading facility will be located adjacent to the port storage tank farm. Diesel fuel will then be transported to mine site day storage tanks. At these facilities the tanker will be unloaded into the day tank using flexible hoses between tanker and unloading pump manifold.

At the mine site fuelling facilities, diesel fuel will be independently pumped from day storage tank to heavy and light vehicle fuel dispensing equipment according to the required demand.

A marine fuelling facility will be located at the barge unloading wharf where provision is made to meter and control refuelling of marine vessels such as the tugs and line boats. It may be possible for this facility to be gravity fed from the port storage tanks.

20.2.8 Bulk Solids Handling

20.2.8.1 Bulk Sulphur Handling and Storage

Bulk prilled sulphur will be delivered in geared Handymax vessels (52–58 000 DWT), and will be unloaded using the ships gear and mechanical grabs of 7.5 m3 capacity.

The grabs will discharge to rubber tyred hoppers at the wharf. The hoppers will incorporate a variable speed belt feeder discharging to cross-wharf conveyors. The cross-wharf conveyors will also be mounted on rubber tyres.

Sulphur will be transported by a wharf conveyor and transfer conveyor to a radial stacker that will discharge to a rectangular stockpile of 65 000 t capacity. The stockpile will be located close to the port area.

Sulphur will be reclaimed from the stockpile by front-end loader for feed to the plant.

20.2.8.2 Bulk Limestone Handling and Storage

Limestone will be quarried from a deposit regional to the process plant.

Limestone will be delivered by quarry trucks to a ROM hopper adjacent to the quarry. The ROM hopper will incorporate a fixed grizzly and a hydraulic rock breaker mounted on the hopper at the grizzly level for secondary breakage of any oversize material delivered to the ROM hopper.

Limestone will then be trucked from the ROM hopper to the process plant site for further crushing and processing. For details of this process, please refer to the Process Description section of this report.


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20.2.9 Fuel Tank Farm

The main storage area will be located at the port with service (day) tanks located at the process plant and the mine sites etc. The size of the storage required is governed by the size of the bulk ships which are readily available for charter. It is anticipated that vessels would be up to 40 000 DWT. Products that would be delivered by these vessels are Heavy Fuel Oil (power generation, lime kiln) and diesel fuel (mining fleet and mobile equipment fuelling).

The storage tank capacities are sized on the basis of the compartment volumes of the sea tankers likely to be used to deliver bulk liquids and the need to have service storage at the site to cover any interruption to supply. This interruption could be in the form of a delay in the arrival of a tanker to a break down or failure in the transfer pumping system. The storage tanks will be located on-shore, adjacent to the wharf facilities.

Tanks will be fabricated from mild steel and placed inside separate earth bunds at the port and mine sites, and inside bunding appropriate to the location in the process plant. The size of tanks at the process plant and mine site is based on daily consumption estimates.

20.2.10 Liquid and Solid Waste Management

20.2.10.1 Waste Water Treatment

In order to meet the appropriate environmental standards for the disposal of sewage effluent from the facility, it is proposed to construct a centralised sewage reticulation system to cater for the administration centre, change house and other buildings. A packaged sewage treatment plant to handle domestic type waste water will be installed.

As the service buildings are scattered over a wide area it may not be practical to connect some of the more remote buildings, with only one or two toilets, to the central sewage reticulation system, and in these cases septic tanks with transpiration beds to absorb the partially treated effluent would be provided. Alternatively the septic tanks could be increased in size to form holding tanks and the influent could be pumped out to a tanker and carted on a daily basis to the main sewage treatment plant for further processing.

20.2.10.2 Solid Municipal Waste Management

Infrastructure facilities will be developed to provide for the disposal of solid wastes generated by (a) the process plant and (b) the accommodation village facilities and construction camp, etc, in separate sites. These solid waste disposal facilities will most likely be located in a remote valley close to the mine area. They will be provided with secure access to ensure safe and efficient operation and storage.

20.2.11 Plant Process Control System

The process control system is a vital element in achieving safety of personnel and plant as well as efficiency and reliability of plant operation. It will be designed to maximise the operability and availability of the respective operating areas, while minimising the operator intervention required to control the plant. However, in accordance with normal operating procedures, sufficient full time operators are still required to handle potential plant upsets.

All plant devices are to be operated and controlled from a single Central Control Room (CCR) by Operator Interface Stations (OIS) via a Distributed Control System (DCS). All interlocking and sequencing will be performed by the DCS. The DCS will be capable of upward data


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integration to a Management Information System (MIS) and a Maintenance Management System (MMS). A secure internet connection will also be included to allow remote plant monitoring.

Sufficient measuring devices are to be installed to enable the operator to have a total view of the plant. This will allow the operator to control all aspects of the plant, such that faults and hazardous occurrences can be detected and monitored, and the consequences minimised.

The parts of the processing plant supplied as vendor packaged equipment are, in some cases, essentially „stand-alone‟ and may be controlled locally by the vendor supplied control panel. The stand alone control systems will form part of and be supervised by the plant control system.

Control of the entire plant is possible from the CCR, which is interconnected via a dual redundant fibre-optic data highway to substations and field auxiliary rooms located around the plant. A telemetry system for monitoring of remote sites (i.e. the residue storage facility) is integrated with the plant DCS system.

Each control room operator works on a control panel of multiple OISs. An additional OIS is provided for engineering activities and can be used as an operator station in the event of an emergency. The control panels are adjacent to each other to allow efficient interaction of the operators. Each panel is capable of controlling all areas of the plant, but will typically display the control screens for only part of the plant.

The CCR is to be located in the leach plant to allow a high interaction between the control room operator and the field operators in this area. The control room operators will be in communication with the field operators chiefly by hand held radios. Closed circuit television (CCTV) will be installed to allow the control room operators to visually monitor critical equipment. The field operators will perform all other visual equipment monitoring.

The system provides fully redundant main processor modules operating in parallel. The processor units operate independently from each other and any failure detected during internal diagnostic routines will not degrade operation of the system. Failure of any one of these processors will cause the system to switch over to the back-up module and an alarm to be initiated.

Communications between different modules on the DCS network will be via a dual redundant data highway. Communications between the substation/field auxiliary rooms control system modules will be via a dual redundant fibre optic network.

The DCS controller electronics will be supported by a UPS which will provide 30 minutes of continuous operations in the event of a power system failure.

As the exception to this rule several large equipment items and package plants such as the power station, water treatment plant, HPAL feed pumps and process filters may be supplied with their own PCS/PLC control equipment. These vendor-supplied systems will form part of, and be supervised by, the plant control system and shall be supplied in accordance with the project selection requirements and design criteria.

Suitable graphic/control group displays will be configured on the OISs in the DCS to monitor the operating conditions on each of the above packages. Interlocking between these packages and other process equipment will be performed by the plant control system.

All motors shall have a „MANUAL/LOCAL‟ condition reported on the DCS and some motors shall have „AUTO/MANUAL‟ selection on the DCS.


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An emergency bus will supply the emergency lighting distribution boards, UPSs, critical plant instruments (including the DCS) and critical equipment such as thickener rake mechanisms, the autoclave agitator seal water system and certain utilities.

20.2.12 Buildings

20.2.12.1 Plant Site Buildings

A number of buildings will be constructed at the plant site to support operational activities.

Below is the list of buildings and infrastructures:

Main Admin Office Building – two-storey building

Canteen, Clinic and Change House – two-storey building

Workshop

Spare Parts Storage Building

Product Storage Building

Laboratory

Process Control Room

Chemical Storage Building

Bulk Limestone Storage Shelter

Bulk Sulphur Storage Shelter.

Office, canteen, clinic and change house, and laboratory buildings will be reinforced concrete structure with brick walling and corrugated metal sheet roofing.

Workshop, storage, shelter buildings will be steel framed structures with corrugated metal sheet walling and roofing.

Foundations will be reinforced concrete spread footings with a maximum depth of 1.5 m from ground level. No allowance has been applied for pile foundation.

The estimate has allowed for furniture, kitchen/laundry equipment and mechanical equipment such as overhead crane at the workshop, HVAC, pumps, etc.

20.2.12.2 Town/Village

A town/village will be built as the main accommodation facilities to support plant operations. The village has been designed to accommodate approximately 50% of the project workforce, with the balance of the personnel commuting to site daily from local towns. The accommodation village is located about 1 km from the plant area. A dedicated access road will connect the village and plant.

The town consists of the following:

four units at 14 personnel – expatriate/senior staff accommodation

four units at 10 personnel – national staff accommodation

eight units at 48 personnel – non staff accommodation


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300-seat mess hall and kitchen

emergency clinic building – can accommodate four patients

laundry building

general storage building

admin building

recreation hall

Indoor Sport Hall to accommodate table tennis and badminton

outdoor sport fields comprise of three lawn tennis courts, one football field, two volley ball/basket ball fields

sewage treatment plant complete with catch basin

two generators: silent type at 750 kVA complete with 5000 L diesel day tanks.

All buildings at the town/village will be constructed from reinforced concrete structure, brick walling and corrugated metal sheet roofing.

Foundations will be reinforced concrete spread footings with max depth of 1.0 m from ground level. No allowance has been made for pile foundations.

The cost estimate has allowed some assumptions as below:

a water supply pipeline, 1000 m long x 150 NB, to transport potable water from the plant

allowances for culverts crossing the internal road at the town

landscaping

furniture, kitchen/laundry equipment and general mechanical equipment, e.g. pumps, HVAC, etc.

20.2.13 Access Roads

Access roads are provided to link various coastal infrastructure facilities with the process plant site. These facilities include the permanent accommodation facilities and construction camps, port, construction industrial area, water and sewerage treatment plants, limestone quarry, waste tips, etc.

The site access roads will consist of a 6m wide unsealed crushed rock pavement (i.e. 4m wide travel lane with 2m wide shoulder allowance). The maximum grades will be limited to 16% to allow truck access for maintenance purposes.

20.2.14 Communications

20.2.14.1 Overview

Good communications are vital for both the construction and the operation of a large plant such as that proposed for the Agata Nickel Project. The key focus of this stage of the study has been to produce an estimate for a solution that will provide a good compromise between functionality and cost.


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The proposed communications system integrates telephone, facsimile, UHF radio and computer data requirements on a VSAT satellite circuit linked to the public network. For mobile communications, a multi-channel trunked radio system will provide mobile voice communication. A broadband cable will be provided to link the plant area into the main system.

20.2.14.2 Communications Infrastructure and Equipment

The scope of the project communications includes:

voice communications, both fixed and mobile

data communications including network infrastructure and hardware

desktop hardware and software (excludes business software and hardware for sulphuric acid plant, etc)

security video system

satellite television for the permanent accommodation facilities.

20.2.15 Security and Fencing

Chain link fencing complete with security posts at access gates will be installed at the perimeter of process plant site, village, port, mine camp, mine industrial area and magazine-explosive storage area. A concrete wall fence will also be installed at the magazine-explosive storage area for blast containment.

The fences shall be constructed from:

posts: galvanized steel pipe 75 mm x 2 m high, at 3 m spacing

galvanized steel chain link 50 mm diamond mesh

three lines of galvanized barbed wire on top of fence

post bracing: galvanized steel pipe 50 mm with 45° angle, to be installed at corners or at 12 m spacing for straight fence

foundation: reinforced concrete with minimum 0.5 m post embedment

gates shall be made of the same material as the fence, and may be either swing or slide operated.

20.3 Environmental and Social Impact Assessment

20.3.1 Potential Environmental & Social Impacts

20.3.1.1 Air Quality

Dust, gaseous emissions, and noise are the primary pollutants in the construction and operation phases. The primary sources will include site development, erection of structures, transportation and handling of construction raw materials, mining operation, heavy equipment movement to and from the project site. Activities associated with site development are land clearing, drilling, and excavation. Perceived impacts include:


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SO2 and NO2 ambient levels are expected to increase due to the operation of heavy equipment and temporary electricity generating facilities during construction.

Increase in emission concentration is expected to be short term and insignificant. The increase will mainly affect workers in and near the area of disturbance.

The amount of airborne dust generation and gaseous by-products will be dependent on climate conditions and the intensity of the construction activities.

Alteration of ambient air quality in the area is expected to occur at the long term. The major residual is fugitive and suspended particulates from unpaved access roads, ore stockpiles, motor vehicles and operation of heavy mine equipment.

The incidence of upper and lower respiratory tract diseases may increase among the workers and the population at the immediate vicinities.

The use of heavy equipment during the construction of related infrastructure as well as development activities within mining area will create noise and vibrations in the area.

Mitigating measures are planned to minimise if not avoid the noise and atmospheric emissions during mining and processing operations. These include, but are not limited to:

For noise abatement:

Provision of shields or other physical barriers to restrict the transmission of noise

Efficient intake and exhaust mufflers on internal combustion engines

Regular maintenance of mufflers of diesel engines and other pertinent equipment,

Provision of ear plugs to workers directly exposed to high noise equipment and areas at the mining site

Provision of buffer zones at active mining parcels to improve noise attenuation and aesthetics. The proper vegetation and tree species should be planted in the prescribed buffer zone

Speed limits shall be instituted, and

Regular sound level monitoring

For air quality impacts mitigation during the operation phase:

Regular maintenance of standby generators to minimise greenhouse gas generation

Implement a motor vehicle maintenance program, including emissions testing

During dry months, haul and access roads shall be regularly sprayed with water using water lorries

Road maintenance such as grading and sloping shall be undertaken

Speed limits shall be instituted

Implement a re-vegetation program along haul and access roads

Regular maintenance of equipment and service vehicles shall be conducted to prevent deleterious emissions of gases


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Training on the proper use of mining equipment including defensive course

Conduct regular ambient air quality monitoring

Mindoro has conducted baseline studies of the Agata Project area‟s ambient air environment. This report presents the results of ambient air monitoring of Particulate Matter (PM10), Mercury (Hg), Nitrogen Dioxide (NO2) and Sulphur Dioxide (SO2) with Noise Level Measurement. The four station areas where monitoring was done were located at Brgy. E. Morgado, Sitio Sua, Brgy. Tinigbasan, and Brgy. Binuangan. In general, the ambient air monitoring was conducted to check the project site‟s compliance with the standards set in the DENR Administrative Order (DAO) 2000-81 and PD 984. The tested parameters passed both standards.

20.3.1.2 Water Resources

Sedimentation and erosion are two perceived impacts during the mining operation. Laterite mining residues such as spoil piles, sediments in settling ponds or sediments reaching natural water courses can become long-term sources for the continual, or periodic, introduction of contaminants into the environment. Both of these impacts have various physical and chemical consequences for water quality and aquatic ecosystem. Mindoro commissioned qualified consultants that have conducted baseline studies of the existing water quality of the inland surface and coastal waters that will be affected by the laterite mining to foresee possible mitigating measures.

Water quality parameters for inland surface waters of the Kalinawan (Tubay) River were collected during the EIA study conducted for the Agata nickel project in 2007. The pH values obtained are within the DENR standards for Class B and C waters. The survey yielded lower TSS values (4 and 18 mg/L), indicating that the water at the time of sampling was clear. The level of BOD5 is very low (i.e., below the detection limit). The two stations gave mercury, lead and chromium levels below the DENR limit.

Water quality data were also obtained by Mindoro from a number of sampling sites along the Kalinawan (Tubay) River on October 2007 and January 2008.

Results of the monitoring work showed that pH values ranged from 7.3 to 7.7, which were well within the normal limits for marine or freshwater bodies. Total suspended solids (TSS) levels taken in October 2007 varied from < 1 to 12 mg/L. January 2008 results showed high concentrations of TSS levels ranging from 7.2 to 159.5 mg/L. These exceed DENR standards for both Class B and Class C waters.

Total dissolved solids (TDS) were detected in all stations, which ranged from 72 to 262 mg/L. However, there are no TDS standards for marine or freshwater bodies in the Philippines.

The detectable levels of biological oxygen demand (BOD5) ranged from 3 to 4 mg/L, which are within the DENR standards. Both total and fecal coliforms were detected in all stations. Total coliform levels ranged from 220 to >1600 MPN/100mL, while fecal (E. coli) coliform levels ranged from 23 to 900 MPN/100mL.

Oil and grease ranged from <0.20 to 1.00 mg/L, which were within the permissible levels of 1 and 2 mg/L for Class B and C waters, respectively. Detectable levels of heavy metals As, Cd, Cr hexavalent; Pb and Hg were all below the prescribed limits.

Nitrogen levels ranged from <0.14 to 0.14 mg/L while phosphate ranged from 0.09 to 0.15 mg/L, which did not exceed the DENR standards. Calcium (4.00-17.50 mg/L), magnesium (1.50-


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25.62 mg/L), potassium (0.38-3.00 mg/L), sodium (0.82-7.52 mg/L) and sulphate (0.30-3.21 mg/L) were detected in all stations.

Mitigating measures are planned to minimise if not avoid the impacts on water resources during mining and processing operations. These include, but are not limited to:

Sediment traps made of coco coir and settling ponds will be built on the creeks prior to stripping. Dirty water from the mining area will flow to these settling ponds instead of flowing out straight to the downstream water body.

During a heavy downpour, localised water impounding at the mine pit may occur. To speed up the drying process of the pit, benches are super-elevated to direct water to toe lines.

The risk of soil erosion and surface runoff is high particularly during rainy season. All dried ore stockpiles shall be covered with tarpaulins to reduce vulnerability to erosion.

The stockyard edges will be lined up with drainage canal to convey all runoff within the pad to a sediment control pond located at the ends of the pier stockyards. The pond will detain the runoff temporarily to allow the sediment to settle.

Runoff is contained by canals and directed towards settling ponds.

Regular sediment removal will also be done.

20.3.1.3 Socio-economics

The opening of the mining project will certainly have significant effects on the socio-cultural and economic situation not only of the host villages but the neighbouring villages as well. The socio-cultural practice of the community will fundamentally change as this project changes the land use and sources out human, mineral and biological resources for project subsistence. It will provide additional wealth to the community and at the same time cause either favourable or adverse impacts to the people and the environment. More livelihood opportunities and social development projects will be given to the local community through the Social Development and Management Program budget.

The project will also provide employment for the locals, thereby lessening their dependency on fishing and farming. Generally, the economic status of the community will improve and the project subsequently will offer growth and development of each resident as the company requires more permanent, contractual or even rotational employees. The project will improve incomes in the area so more people will be attracted to settle in the locality. Demand for basic products such as food, housing, health, and basic services will increase. This may also enhance external influences and change the values and lifestyle of the residents.

The project will bring wealth not only to the local government but to the national government as well, in the form taxes and fees. These taxes fund the infrastructure, health and basic services, and development projects of the community. The project will also make direct contributions to the community through its Social Development and Management Program (SDMP), where the community shall benefit through programs such as training, livelihood, infrastructure, education and health services.


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20.3.1.4 Resettlement

Physical and/or economic displacement is the most immediate and personal of all social issues in mine development. Compensation packages for loss of assets will include payment for the land and assistance to help restore the original or improve the living standards of affected landowners/occupants, along with other development benefits.

In the case of Mindoro‟s laterite mining project, only those people living near the pier yard, causeway, plant site and access roads, like communities in Sitio Payongpayong, Sitio Awasan, Sitio Coro and Barangay Lawigan are likely to be affected by the project. Initial consultations with these people have been undertaken. Final negotiations will follow a detailed Resettlement Action Plan (RAP) in consonance with Philippines regulatory requirement and IFC guidelines.

20.3.1.5 Marine Ecology

The marine ecosystem is generally composed of coral reefs, seaweed, sea grasses and mangroves. The majority of the species within them provide a number of functions key to human survival and well‐being. These are: food; source of income; animal feed; fertiliser; clothing; jewellery; additives in food, cosmetics and other household products, etc.

This ecosystem will eventually be affected with the threats that may be caused by construction and operation activities, specifically the construction and operation of the pier. The planktons in the project area are chiefly composed of microscopic floating algae and microscopic animals. The phytoplankton productivity and zooplankton feeding and respiration few meters of the construction activity will be interfered by the turbidity of water. The benthic fauna usually associated with surface structures such as rocks, shells, vegetation, or colonies of other animals will be crushed during the filling of boulders. The other benthic organisms shall be disturbed from the dragging of chains and setting of anchors.

A survey of the coral reef was made in Lawigan and portion of Jabonga in Pitogo during the EIA study. Five line-intercept transect (LIT) stations were studied. According to the report, the majority of the substratum in all stations is mainly composed of dead corals (rubble) and the remaining live corals in all the surveyed areas were classified as poor (0-25% coral cover). In Lawigan, for example, the study showed that almost 80% of the total coastal areas are composed of coral rubble, with the exception of the coral reef within the fish sanctuary (Bugtong na Bato) in the area. In Pitogo, Jabonga, the entire substrate is mainly composed of boulders of rocks, while in the deeper region (20-45 feet depth), the entire substrate are mainly composed of sandy bottom. There was also a complete absence of life form even in the shallow regions where boulders of rocks abound.

These survey results were verified during another survey (23 August 2008). A similar poor condition (mainly dead corals) of the coral reefs in the area was observed. Historic destructive fishing such as the use of dynamite and sodium cyanide may have caused these observed mortalities and a decline in coral cover. The only reef area with fair coral cover (25 - 50%) is the one within the fish sanctuary. However, this reef is relatively small. The reef area in Lokbon Gamay is very shallow and probably a large portion of the reef area is exposed during lowest low tide. The only conspicuous marine organisms found in the area are the soft corals Sarcophyton spp. and the brown algae Sargassum.

Results of the EIA also showed a complete absence of sea grass community in the entire coastal waters of the Tubay municipality. In Lawigan, however, a small benthic seaweed bed of Sargassum was observed on a reef flat portion 1 km south of the marine sanctuary.


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No mangroves are found in all the municipalities of Agusan del Norte except in Tubay with about 20 hectares and most of these are concentrated along the lower banks and tributaries of Tubay River. The higher concentrations of mangrove, that are mainly dominated by nipa, are found in the central portion of Tubay municipality.

It was also observed during the 2008 survey that the fishing operations of the local fisherfolks in the area belong to the artisanal fisheries sector. At the time of the survey, fishes caught were mainly tamban (Dussumieria sp.) and galunggong (Decapterus sp.). The majority of the catch is sold within the area.

Figure 20-1 shows the approximate locations of the marine fish sanctuaries along the shoreline of Tubay. These fish sanctuaries are now acting as “recruitment centres” where fishery resources from unfished areas will spill over to the fished area. This means larger catches and larger fish will be available. One of these sanctuaries situated in Lawigan is adopted by Mindoro as part of its Coastal Resource Management Program to monitor and ensure protection, even before commencement of the mining operation.


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Figure 20-1 Approximate Locations of Marine Fish Sanctuaries in Tubay Coastal Area

Mitigating measures for the protection of the marine ecosystem:

Avoidance of ore erosion and release of heavy metals during abnormal rainfall by immediately covering ore using canvas sheets or tarpaulin.

Establishment of settling ponds.

Proper implementation of solid waste management to prevent any impacts on water bodies and resources. The hired vessels shall be required to comply with the company‟s environmental regulations particularly on the discharge of their wastes to the water body.

Daily fish catch monitoring along the Tubay Coastal Area to monitor the trend of the fish catch rate.


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Periodic water quality monitoring, specifically on the concentration of TDS and TSS in Tubay marine waters.

Strengthening of the implementation of the adopted Coastal Resource Management. Trainings such as underwater diving, coastal resource appraisal for the deputised fish wardens shall be intensified.

20.3.1.6 Loss of Terrestrial Habitat and Habitat Fragmentation

Characteristics of the Agata Area Terrestrial Habitat

No exotic faunal species are found in the project site and the density of faunal population is low. This is attributable to the predominance of bare or sparse vegetation in the area as cited in the baseline study.

The two most important land use categories are – predominantly timberland plus built-up areas (Figure 20-2). The whole mining prospect areas fall under timberland, but about 65% coincides with single use production zone. About 33% falls under strict protection zone while only about 2% is production zone. Based on actual land use, most of the vast strict protection zones in the MPSA are already open areas (grasslands, bushlands and bare areas) with trees and other arborescent species being confined to the riparian areas, declivitous portions, and steep coastal areas and rocky cliffs. There is a need for the re-classification of the existing land uses where extensive areas, previously declared as strict protection zones, are to be downgraded to restoration zones.

Figure 20-2 General Land Use Map of the Agata MPSA


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Figure 20-3 depicts the major vegetation types encountered in the project area. As observed, the eastern slope of the Agata mountain range is almost open area with grassland and the bracken fern in almost complete domination (Figure 20-4).Signs of burning were noticeable in the area as manifested by burned vegetative parts and soil surface. The forested areas are confined in the riverine areas or gullies of the micro watersheds, especially at the plateau-like, very moderately rolling ridge. The most dominant of the grasses is talahib (Saccharum spontaneum).

Figures 20-3 & 20-4 - Extensive open areas at the eastern slope of Agata prospect.

The aggressive bracken fern (Pteridium aquilinium) enjoys almost complete dominance, with some arborescent species barely scattered. Burnt plant parts and soil surface are evident. This is indicative of the almost ritual annual burning of the area.

At the western slopes of the Agata hills, there are beech and limestone forests, which are confined to declivitous portions and steep coastal areas and rocky cliffs. There are patches of sandy transition forests in the built-up areas. However, this area has undergone dramatic land use transformation due to alienation, settlement and cultivation. The original vegetation was reduced to vestiges of low-volume and sparse associated arboreal vegetation.

The only mangrove area within the project site is of landward fringes, upstream type, composed of a very small, pure stand of nipa in Brgy. Binuangan, Tubay. The nearest and most important mangrove areas outside of the MPSA which may be affected by off-site impacts of the project are landward fringes, upstream type, and estuarine-type coastal vegetation near the mouth of the Tubay River.


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Perceived Impacts

During the operational phase, more areas will be cleared, reducing the effective vegetative cover of the entire project site. Out of the total area of 4,955 ha, only 300 ha are initially identified for mining, roughly 6% of the total mining claim. The mining activities will engage heavy equipment that will create noise in the area that will interrupt the natural habitat of the faunal species. The clearing of vegetation will cause loss of habitat and dispersal of faunal population due to sensory disturbance. The majority of the vegetation that will be removed are grassland species that rapidly colonise in open areas.

Mitigating Measures

Since mining activities will be conducted by parcel, the rehabilitation or reforestation program shall also be in stages (progressive). This method is highly significant with respect to environmental impacts because only small areas are mined at each given period thus minimising any potential adverse impacts on the environment. At least 10 hectares shall be rehabilitated per year. Mindoro will endeavour to replant the mined-out areas with local species. Exotic species such as mangium and mahogany will be replanted as nurse species to provide shade to slow-growing premium species. Non-mineable areas that are usually fern-dominated will also be included in the reforestation programs.

20.3.1.7 Aesthetics

The operation stage will result in the change of the visual aesthetics of the project area. The previously grass/fern dominated area will be cleared where mine ore will be exposed. There will be regular movement of trucks and light vehicles along the haul road carrying the ore from the mining area to the stockyard, while some trucks are dumping soil wastes to stockpile dumps from the mined-out area.

Creation of buffer zones will ease the visual impacts of ore mining, stockpiling and transport. The operations will still be visible from the National Highway and Butuan Bay, but the visual impacts at this stage are localised, and the duration limited to end of project life.

20.3.2 Environmental Risk Management

20.3.2.1 Discharge Effluent to Ocean Outflow

The current effluent treatment scheme involves the neutralisation of heavy metals from discharge liquor, producing a magnesium sulphate and calcium sulphate containing discharge liquor for marine disposal. The relevant current World Bank and Philippines (DENR Administrative Order No 35) standards for marine discharge are summarised inTable 20-3, as compared with the expected quality of the neutralised discharge liquor.

Table 20-3: Marine Discharge Standards


Liquor

DENR Effluent

Standards for

Marine Waters

(Class SC)

WB – IFC2

(provided for

reference)

pH 7.5 to 9 6 to 9 6 to 9

Cu <0.1 0.5


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Liquor

DENR Effluent

Standards for

Marine Waters

(Class SC)

WB – IFC2

(provided for

reference)

Ni <0.5 0.5

Cr (6+) <0.1 0.1

Cr total <0.1 0.5

Fe <0.2 3.5

Mn 50–200

Mg 20–50 000

Total Metals 10

1 Metals concentrations for dissolved part, except Cr total. Concentrations in mg/L except for pH.

2 Guidelines for Base metals and iron ore mining activity. Dilution is not accepted as a means of achieving the

concentrations criteria. The criteria should be met for 95% of operating time.

A preliminary analysis of the water quality in the discharge liquor indicates that the discharge water should be acceptable for discharge. As ocean water is rich in dissolved solutes, including Ca2+, Mg2+ and SO4

2-, the discharge of a Mg2+ and SO42- containing effluent should pose

negligible risk, and be acceptable by international and Philippines standards. Such a practice is currently in place at Coral Bay (Rio Tuba), and has been implemented by the Goro Nickel Project in New Caledonia and the Ambatovy Nickel Project in Madagascar. A formal ecological risk assessment should be conducted to assess potential ecological impacts.

The main element in discharge effluent that will require some focus is manganese. Although there are no marine discharge effluent standards for manganese, this has been the controlling element in effluent discharge for recent nickel laterite projects. Philippines „best practice‟ is at Coral Bay where the manganese discharge levels are controlled to less than 10 mg/L by a lime oxidation circuit. Similar standards apply at Ambatovy and more rigorous standards currently apply at Goro. It is therefore likely that the current final neutralisation circuit will need to be enhanced to ensure compliance with manganese discharge practice.

20.3.2.2 Solid Residue Storage

Tailings management facilities tend to be one of the higher risk activities in modern mining and a recent survey found 122 modern Tailings Storage Facility (TSF) failures. Of these, 75% were directly related to seepage or poor drainage issues. Recent significant TSF failures include: Omai (Guyana, 1995), Manila Mining (Philippines, 1995 & 1999), El Porco (Bolivia, 1996), Marcopper (Philippines, 1996), Las Frailes (Spain, 1998), Aurul/Baia Mare (Romania, 2000), Remin (Romania, 2000), and Zhen‟an Gold (China, 2006).

Careful consideration therefore needs to be given to the design of the residue storage facility, especially as the project area is within a tropical rainfall environment. The facility will need to be designed to conventional tailings standards including a robust dam (or series of dams) and appropriate provisions for water management. For wet climate sites this will include a large spillway and management of any spilled water. Other engineering controls will include:


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Lined RSF facility using geomembrane and/or compacted clay liners (or similar material) with leachate collection systems to minimize hydraulic head on the liner.

Sub-surface drains beneath the liner system to depressurise the system and provide early detection and collection of any leakage from the RSF.

Aggressive surface water controls to divert surface flows away from the RSF and to control water within the RSF.

Further information will be required on site geotechnical conditions and the geotechnical properties of the leach residue.

20.3.2.3 Sediment Run-off

The main source of sediment runoff will be mining activity. Limonite soils are dispersive and take a long time to settle from suspension. The main consequence of sediment runoff is a decrease in the quality of discharge water into local rivers, principally due to suspended sediment and turbidity but all potenially related to metal loading from the limonites. To minimize this the following controls can be implemented:

All topsoil stripped from distrubed areas will be stockpiled for use in subsequent reclamation. Tropical laterite areas generally have a thin topsoil layer immediately underlain by a nutriant-poor soil and thus some manufacturing of topsoil may be required. This is often accomplished by combining nutrient-poor soils with composted organic matter, which could include chipped lumber (from those areas to be cleared and with timber of sub-commercial dimensions), sludge from wastewater treatment plants, or other organic sources.

Revegetation of waste dumps and barren slopes needs to be carried out immediately and is best achieved by placing a seed and either manure or topsoil/compost mix (or other nutrient source) over track-rolled dump surfaces. Trials should be carried out to see what type of vegetation should be re-established (simulating the natural ultrabasic terrain vegetation) and how to achieve this with plants native to the area.

The waste dumps should be contoured to a landform design that includes relatively short drainage distance to lined drains.

Good earthworks practices including aggressive control of sediment from being mobilised along with systematic de-siltation of any affected waters.

Engineered landforming of the surface of waste dumps; including runoff distances limited to soil characteristics and reporting to lined drainage paths.

Use of sediment ponds in order to drop sediment from runoff water prior to release.

20.3.3 Sustainable Development/Mine Closure

One of the important challenges for a project is the development of a sustainable mine. Hence, it is vital to develop a mine closure plan during the feasibility stages of the study that examines closely at the need to return the land to as close as possible to its pre-mine condition if not to a stable state. Additionally, it is possible to look at taking advantage of some of the environmental challenges and promoting them as part of the project development. Opportunities might include timber management, composting and production of topsoil, re-vegetation programs, reclaimed land management and the like.


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Sustainable development concepts generally focus on using the economic engine created by exploiting the mineral deposit to survive the closure of the mine. In this case the mineral resource (including the exploration target) is large enough to continue through at least one generation of workers and thus sustainability issues will be important but not critical for several decades.

20.3.4 Community Engagement Programs

20.3.4.1 General

Mindoro has been actively engaged with local communities since early exploration work conducted prior to 2004, in association with minor activities such as reconnaissance work or implementation of drilling activities carried out many years ago. In the early years, the technical people performed as community relations officers in parallel with their technical work. Through several years of immersion in the community, Mindoro has recognised that it can only be successful if it has the support of the locals, thus a Community Relations Division was formally created. Several activities were undertaken to gather information on the communities and to determine their main concerns. This includes the identification of host communities, community immersion, networking, massive and effective Information, Communication and Education (ICE) campaigns. Mindoro also implements social development programs and exercises transparency to the people and other community groups and organisations. Mindoro‟s community engagement is a progressive process with a well-defined strategy and approach along with the project development stages.

In consultation with the communities themselves, Mindoro has launched and assisted with social development programs that focus on improving economic, education, health and social well-being of its community-partners within budget constraints and dictates.

Mindoro has implemented the Community Technical Working Group (CTWG) system in collaboration with local government units and non-government organisations, including representatives from business and the church. 19 CTWGs were established which comprise representatives at a Barangay (village) level from: existing village organisations, religious groups, village Council, youth groups, women, local NGOs, farmers, fisherfolk, focal government agencies and vulnerable peoples. It is structured to represent all aspects of a village and usually has members varied from 30-60 people. This multi-sector group, formed in the spirit of transparency and volunteerism, is primarily tasked to monitor the exploration activities of the Company in terms of their social and environmental impacts. Moreover, with its wide representation of the various sectors within a community, it has become an avenue by which issues and concerns of the community are raised, discussed, and resolved. The CTWG provides valuable input into the communities and has acted as Mindoro‟s partner in planning and implementing the company‟s extensive community development programs.

Included among the milestones that Mindoro has accomplished in the area of social development is, for education, Mindoro partnered with the Department of Education (DepEd) in the implementation of the “Adopt-a-School” Program, which benefits five elementary schools on the Agata Project. In areas where there are a number of students and where the DepEd cannot provide for the honorarium for volunteer teachers, Mindoro provides a minimal honorarium to volunteer teachers.

Mindoro also implements the Computer Literacy Program to accommodate Mindoro scholars, out-of-school youth, teachers and other locals. This is a program of which Mindoro is especially proud; utilising the Company‟s computer equipment and the education skills of its staff, Mindoro


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is able, at low-cost, to introduce these skills into remote communities with a paucity of such high technical skills and assets.

Mindoro has also supported its host communities and local government units with small infrastructure programs; such as road construction, building barangay and municipal centres, day care and health centres, water reticulation projects, school rooms, and has assisted in many socio-cultural projects.

Meanwhile the possibility of future mining operations and the resultant land acquisition for the development of the mine and jetties in the project area has been discussed extensively with the affected landowners. Mindoro has undertaken demographic profiling and understands the consequences of possible future land acquisition on each individual, and plan to write up this assessment and their management plan for land acquisition into a Land Acquisition and Compensation Plan.

20.3.4.2 Indigenous Peoples

There is no Indigenous People (IP) community physically or economically displaced or otherwise directly impacted by exploration activities or by land access. One IP community is indirectly and lightly affected by the development and the use of the existing access road to the exploration camp site.

The access road passes a small village named Sitio Coro where two IP groups (the Manobo and the Mamanwa) currently reside. The village of Coro is experiencing indirect impacts from additional 5-10 light vehicles per day travelling through the village. During a meeting in the village of Coro, people spoke favourably about Mindoro‟s exploration and expressed their high level support to the project‟s potential mining activities. The Mamanwa and Manobo are all tenants and they do not own the land on which they reside.

20.3.4.3 Free, Prior, Informed Consultation

To the extent that Indigenous Peoples have been impacted by the Project, the National Commission of Indigenous Peoples (NCIP) has concluded that Free, Prior, Informed Consent (FPIConsent) has been given for the Project by the Manobo and Mamanwa of Coro. The consultation process includes on-going engagement with communities and individuals, signing of formal agreements with communities as appropriate, provision of timely information and time for decision-making according to local cultural practices.

Identification of the local Indigenous community was conducted in 1999 by the NCIP prior to any of Mindoro‟s activities in the areas. Neither indigenous people nor indigenous customary lands were recognised. Interaction between the village of Coro and MRL commenced in 2005, when Mindoro recognised the village of Coro as an indigenous village through its extension of a 7km farm to market road. Formal engagement with Coro commenced in late 2005, with extensive consultation and community development activities. Under the Philippines Indigenous Peoples Rights Act, FPI Consent of indigenous peoples is required for a project to proceed. The NCIP therefore conducted another field-based investigation and declared the existence of the FPI Consent in early 2008. A Memorandum of Understanding was signed between the Mamanwa, Manobo, Mindoro and the NCIP.


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20.3.4.4 Development Benefits

The area where the village of Coro is located is not considered a Certificate of Ancestral Domain Claim/Title (CADC/T) area under Philippine law, and therefore the company is not required to pay a 1% of revenue royalty to indigenous peoples as otherwise would be applied. Mindoro recognised the vulnerability of the IP groups, and is determined to maximise sharing of project benefits with the IP community. Mindoro has volunteered to contribute the 1% revenue royalty to the IP‟s in the area regardless.

The Memorandum of Understanding and subsequent royalty agreements have been developed through Good Faith Negotiations. Once Mindoro starts generating revenue, the 1% royalty will be managed through an Ancestral Domain Sustainable Development and Protection Plan (ADSDPP).

Meanwhile, Coro residents were given first priority for jobs on the farm to market road construction and maintenance work which was undertaken. Mindoro has also assisted the village of Coro in applying for ancestral domain rights on the area. Mindoro established a nutritional program for children in Coro in 2006, which has now been rolled into an “Adopt a School” program. The town of Coro was also highly involved in the Medical, Surgical, Optometry and Dental Mission initiated by Mindoro in early 2008.

The host IP was the venue of a capacity building and enhancement program presented through the collaborative efforts of the Canadian Embassy, NCIP, other concerned government agencies, and Mindoro.

21. INTERPRETATION AND CONCLUSIONS

The Scoping Study commissioned by MRL for the Agata Nickel Project indicates potential to establish a low operating cost nickel operation.

The objective of the Scoping Study was to provide a preliminary assessment of the economics of three identified processing options at ±30 - 35% accuracy and identify the other project drivers such as environmental and technology risks. The scoping study includes the investigation of the mining, processing, process services, power generation, infrastructure, and major environmental issues. The study was based on the current Agata mineral resource estimate, including inferred resources. The study did not address certain economic parameters, such as Net Present Values or Internal Rates of Return, which will be evaluated in a more advanced economic assessment that includes the DSO stage of the project, currently underway.

The preliminary characterisation of the ore types and their amenability to acid leaching identified the following suitable processing routes, which are evaluated in this study.

21.1 Base Case

A major integrated High Pressure Acid Leaching (HPAL) / Atmospheric Leaching (AL) / Saprolite Neutralisation (SN) process based in scale on the highly successful Sumitomo/Nickel Asia Coral Bay Nickel project, on Palawan Island, the Philippines. In this case 27,400 tonnes


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per annum of nickel as Ni-cathode product would be produced. The estimated average cash-cost of production (after year three) for this case is US$2.47 per pound of nickel or US$1.59 per pound of nickel with cobalt credits (assuming cobalt price of US$18/lb and 80% payable for cobalt contained in cobalt sulphide). The Capital Cost estimate for this processing option, including electrowinning and acid production plant, is US$1.33Bn. This includes a direct cost of US$837 million, indirect infrastructure costs of US$182 million and a 30% contingency.

21.2 Larger Production Case

A scale-up of the base case, which employs the maximum sized HPAL autoclave fabricated to date (as installed at the Ambatovy Nickel Project in Madagascar). The nickel production for this option is increased to 42,000 tonnes per annum nickel as Ni-cathode. The estimated average cash-cost of production (after year three) for this case is US$2.22 per pound of nickel or US$1.35 per pound of nickel with cobalt credits (assuming cobalt price of US$18/lb and 80% payable for cobalt contained in cobalt sulphide). The Capital Cost estimate for this processing option, including electrowinning and acid production plant, is US$1.74Bn. This includes a direct cost of US$1.1 Bn, indirect infrastructure costs of US$243 million and a 30% contingency.

21.3 Atmospheric Leach Case

This case involves Atmospheric Leaching of Saprolite only, without the use of autoclaves. The nickel will be recovered by hydroxide precipitation producing an intermediate Mixed Hydroxide Precipitate (MHP) product. The design capacity for this option is 14,300 tonnes per annum of nickel contained in MHP. The estimated average cash-cost of production for this case (after year three) is US$3.25 per pound of nickel or US$2.94 per pound of nickel with cobalt credits (assuming cobalt price of US$18/lb and 80% payable for cobalt contained in cobalt sulphide). The Capital Cost estimate for this processing option, including acid production plant, is US$740 million. This includes a direct cost of US$479 million, indirect infrastructure costs of US$91 million and a 30% contingency.

The capital cost estimates do not include owner's costs, mining related capital costs, duties and taxes for equipment, technology fees/project support, EPCM assistance following introduction of feed to the plant, or an estimate of working capital. The operating cost estimates do not include sustaining capital costs, government charges, royalties, marketing costs, corporate consultancies or duties, customs or other imposts.

The Scoping study is based on the current Agata mineral resource estimate disclosed on September 8, 2010. For the purposes of the scoping study, relatively aggressive cut-off grades were applied to the resource to approximate plant-feed for the base case project sufficient for a production rate of >2.5 million tonnes treated per annum for six years. The Company is currently drilling the regional Exploration Target to further evaluate the potential of supplying sufficient total resource tonnes to the base case project for 20 years or more of similar production. The cut-off grades applied were limonite: 0.85% Ni, transition: 0.90% Ni and saprolite: 1.0% Ni cut off. Additionally an upper cut-off of 1.35% Ni was applied to all three ore types to classify the high grade material for potential direct shipped ore operations, excluding 4.86 million additional tonnes of high-grade DSO material. The estimated plant feed inventory


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derived from the current Agata resource, including the DSO component, is presented in Table 21-.

Table 21-1: Agata Nickel Project Plant Feed Mineral Resource Est. (November 2009 Est)

Category Type COG Ni% kTonnes Ni % Co % Fe % Al % Mg % SiO2 %

Me

asu

red

an

d

Ind

ica

ted

Limonite 0.85 – 1.35 6,435 1.04 0.12 45 3.0 1.4 6.8

Transition 0.90 – 1.35 425 1.18 0.06 22 0.7 14.0 37.7

Saprolite 1.00 – 1.35 6,835 1.15 0.02 11 0.5 16.9 40.5

Infe

rred

Limonite 0.85 – 1.35 647 1.01 0.10 43 3.0 1.4 6.8

Transition 0.90 – 1.35

Saprolite 1.00 – 1.35 2,045 1.14 0.02 12 0.5 16.9 40.5

Measured, Indicated and Inferred

Total Feed Resource

Limonite 7,507 1.05 0.11 43 2.9 2.1 8.6

Saprolite 8,880 1.15 0.02 11 0.5 16.9 40.5

As disclosed in the Company's January 11, 2010, press release, the potential quantity and grade of the Exploration Target is conceptual in nature; there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource, and there is no guarantee that these resources, if delineated, will be economic or sufficient to support a commercial mining operation. The preliminary assessment is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

Previous metallurgical testing on the Agata mineral resource was completed by Enlin Steel Corporation (Enlin) in 2008. Enlin is a major stainless steel producer in the Asian region. The bench scale testwork program was conducted on 6 samples and included atmospheric leaching and HPAL. This work was reviewed by BWHC. Limonite HPAL gave results of >95% recovery for both nickel and cobalt with average acid consumption of 314 kg/t. Saprolite atmospheric leach gave results of 90% nickel recovery with 900kg/t acid.

While the Enlin testing was performed in a private, non-accredited lab and the equipment and procedures employed for HPAL testing were not disclosed to the Company, the results are considered comparable to other Philippines laterite test results and thus provide some confidence in the methods applied. Readers are cautioned that the sample size was limited and may not be representative of the deposit. For the purposes of the scoping study, BWHC applied more conservative assumed recoveries for each of the identified processes based on projects of similar size and scope in the Philippines and elsewhere. A more comprehensive bench scale testing program by SGS Lakefield Oretest, a NATA accredited laboratory in Perth, is due to be finalised and reported in November 2010.

The study concludes that the potential to establish a low operating cost nickel operation is subject to satisfying certain key technical factors, including the conversion of the regional Exploration Target to sufficient mineral resources to support an economic project life. Currently identified resources will support a mine life of six years and are not considered sufficient to warrant commencement of production, based on the base case integrated High Pressure Acid Leaching (HPAL) / Atmospheric Leaching (AL) / Saprolite Neutralisation project processing 2.75 million tonnes per annum. However integrated processing options including DSO and the


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Atmospheric Leach case will be advanced to provide an economic assessment of the opportunity to develop an integrated and staged project based on the current Agata Resource.

The company's production objectives are intended to provide an indication of management's current expectations and are still conceptual in nature. It is uncertain that it will be established that these resources will be converted into economically viable mining reserves. Until a feasibility study has been completed, there is no certainty that these objectives will be met.

Mining will be carried out by industry standard open cut methods that are commonly applied in the Philippines and elsewhere. Mining will be relatively selective on two to three meter high benches and will involve a range of grade control and stockpiling strategies. Mining costs in this study have been assumed based on information from comparable local operations, adjusted for differences in haulage distance and scale of operation.

Internal DSO and thermal upgrading studies in progress, based on the September 9, 2010, resource, include investigation of various open pit optimization scenarios, capital and operating cost estimates and review of markets for both DSO and thermally upgraded laterite product. The information from these studies will allow the Company to develop a preliminary economic model around this stage of the project and then initiate further DSO and thermal upgrading studies to be incorporated into the Agata Nickel Project pre-feasibility study and testing program.

The company's production objectives are intended to provide an indication of management's current expectations and are still conceptual in nature. It is uncertain that sufficient resources will be established and if established that these resources will be converted into economically viable mining reserves. Until a feasibility study has been completed, there is no certainty that these objectives will be met.

Based on the project results to date, it can be concluded that the Agata Nickel Project represents a potential mining situation of sufficient merit to warrant more advanced, pre-feasibility level engineering studies.

22. RECOMMENDATIONS

22.1 Prefeasibility Study

It is recommended that the Agata Nickel Project is advanced to the Prefeasibility Study stage.

In order to do so, specific recommendations are as follows:

Further drilling of the regional Exploration Target should be undertaken with the objective of increasing the estimates of inferred mineral resources, then through further drilling moving the inferred mineral resources into the indicated resource category. There is no assurance that these objectives will be achieved.

A plan for representative sampling and further metallurgical testwork should be developed in order to ensure that accurate data are obtained for prefeasibility and feasibility studies.

Investigate potential process enhancements and processing options.

Investigate and select plant and port sites.

Develop capital and operating cost estimates to a level of accuracy suitable for a prefeasibility study.


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Conduct preliminary site geotechnical evaluation work.

The key points above are discussed further in the following sub-sections.

22.2 Drilling of the Regional Exploration Target

A drilling program has commenced testing regional nickel laterite exploration target(s), located 10km to 40km north of Agata, previously defined through mapping and hand auger sampling. A total aggregate area of 800Ha of laterite in six areas has been defined at an estimated average thickness of 5-7 m and specific gravity of 1.25, resulting in an exploration target range of 50-70 million DMT @ 0.9% to 1.2% nickel.

The objective of the drilling program is to convert a significant proportion of the exploration target to NI 43-101 compliant Mineral Resource. A total of 7,000m to 10,000m are planned during the first phase of the program, to define Inferred mineral resources. The second phase will be designed to convert inferred resources to indicated resources by completing drilling on a 50m x 50m grid.

Any mineral resources defined during the regional program would be in addition to the existing Agata Mineral Resource.

The reader is cautioned that the potential quantity and grade of the Exploration Target is conceptual in nature; it is uncertain if further exploration will result in the Exploration Target being delineated as a mineral resource and there is no guarantee that these resources, if delineated, will be economic or sufficient to support a commercial mining operation. The company's production objectives are intended to provide an indication of management's current expectations and are still conceptual in nature. It is uncertain that it will be established that these resources will be converted into economically viable mining reserves. Until a feasibility study has been completed, there is no certainty that these objectives will be met.

22.3 Future Testwork and Piloting

A number of metallurgical testwork recommendations have been made in preceding parts of this section. To explore the potential of treating the Agata resources with the selected processing route, further metallurgical testwork and piloting are recommended, such as HPAL/AL/SN:

ore blending – to obtain the optimum blend for limonite and saprolite feed for HPAL

ore slurry settling testwork

continuous HPAL and AL testwork utilising the optimised parameters obtained from the current bench scale testwork program at SGS


In addition, preliminary results from the current SGS testwork program suggest that de-agglomeration (scrubbing and screening) has the potential to reject barren oversize material from the limonite and transition ores, resulting in a nickel upgrade. This could potentially allow the limonite cut-off grade to be lowered, increasing the treatable resource without reducing the feed grade to HPAL. A more detailed investigation of this opportunity is recommended.

Heap Leach:

ore permeability testwork with different ore blends; agglomerated or unagglomerated ore

continuous column testwork.


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It is essential that the Exploration Target is converted to a resource before any continuous pilot testwork is undertaken, so that ore samples representative of ROM plant feed can be selected for the testwork program.

22.4 Potential Process Enhancements

22.4.1 Sulphuric Acid Plant

The sulphuric acid plant is the single most expensive item in the project capital cost. It represents 13% (Base Case and Option 1) and 22% (Option 2) of the direct cost estimate. The Scoping Study estimated the acid plant cost based on pricing for a western supplied acid plant. An alternative to reduce the acid plant capital cost significantly is to choose a Chinese/western joint venture acid plant. An acid plant proposal from a Chinese/Western engineering consortium that was evaluated recently for a South American heap leach project was 33% lower than that of a wholly Western supplied acid plant. The proposed acid plant included an integrated power plant and water demineralisation plant (for the waste heat boilers and turbo alternators). This option includes proven western sulphuric acid plant technology, equipment and QA procedures.

It is recommended that the potential for utilising a hybrid Chinese/Western acid plant should be investigated in the next phase of the study considering the significant difference in costs.

22.4.2 Electrowinning Cell House

A recent supply quote obtained from Zincobre group, which has an established track record in nickel and zinc electrowinning, is 50% lower than the cellhouse cost presented in the Scoping Study. This would reduce the capital cost of the Base Case and Option 1 significantly. It is recommended that the Zincobre proposal be carefully considered if the electrowinning option is favoured in the next phase of the study.

22.4.3 Magnesia Supplier

For the purposes of the Scopng Study the magnesia (MgO), which is the main reagent for producing the MHP product, is sourced from QMag in Australia. A quote received by MRL (from a Chinese supplier) with the same specifications as the QMag product is about 50% lower than the Australian supplied MgO. However, previous evaluation tests, conducted for a South American laterite project using MgO from different suppliers, established that China sourced MgO generally has the lowest reactivity and produces the poorest quality MHP product. Hence, if the potential of using a China-sourced MgO is to be considered, MHP testwork should first be conducted using a sample of the MgO.

22.5 Alternative Processing Options

22.5.1 Heap Leaching

The composition of the current Agata mineral resource suggests that heap leaching is one of the potential alternative treatment options for the whole ore body. With a blended orebody, heap leaching may not be able to treat all of the resources because excessive amounts of limonite (in particular high goethite containing limonite) can reduce heap permeability and make agglomeration more difficult. This needs to be examined in the mineralogical testing of the limonite ore. If the exploration target proves to be dominated by saprolite ore, the suitability of


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the resource for heap leaching increases. Although heap leaching of nickel laterite ores has not yet been proven at a commercial scale, several high profile nickel producers are currently evaluating the potential of heap leaching to treat their resources, for example BHP Billiton, Vale, Xstrata Nickel and European Nickel.

The advantages of heap leaching for the Agata project are:

can treat both limonite and saprolite ore

low capital intensity

the leach process is less complex compared to HPAL and AL

dry stack tailings.

The disadvantages of heap leaching for the Agata project are:

lower metal recoveries (lower extractions) from the ore resulting in 15-20% less product revenue

numerous patents cover several facets of the technology

dilution and run-off issues during high rainfall periods

much of the limonite ore may be unsuitable for heap leaching due to high goethite content (excessive mass loss, slumping and high soluble high concentrations)

significant areas of flood-free level land are required for the heap leach pads.

The critical technical drivers of heap leaching are as follows:

heap permeability is a critical issue – this can be improved by agglomeration

dependent on the mineralogy – especially the high goethite containing limonite

acid consumption – can be optimised by reducing the amount of low Ni/high MgO containing ore in the blend

high Iron extraction – can be optimised by counter-current heap leaching (needs to be evaluated by long term testwork)

water management – water ingress to the heap can be minimised by the use of „raincoat‟ covers.

The current overall Agata resources (including the ore excluded by the 1.35% Ni DSO cut-off grade) indicate that it is composed of 36% limonite, 4% transition and 60% saprolite ore. With insufficient supply of limonite, HPAL/AL/SN or AL may not be the most suitable option due to problems in solid-liquid separation. Hence, it is recommended that heap leaching be considered in the next phase of the study as one of the possible options.

22.5.2 Direct Shipped Ore (DSO) and Thermal Upgrading

The Company has an Environmental Compliance Certificate (ECC) approved to develop a DSO project, subject to certain lesser permit requirements, producing up to two million dry metric tonnes (DMT) per annum. Preliminary discussions with potential offtakers have confirmed there is a market for limonite material containing >0.9% Nickel and >48% Iron as Nickel Pig-Iron feedstock, and for saprolite material containing >1.5% Nickel for Electric Arc Furnace Ferronickel production. Internal DSO studies in progress, based on the September 8, 2010,


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resource, include investigation of various open pit optimization scenarios, and capital and operating cost estimates which will allow the Company to develop an economic model around this stage of the project. However, DSO is viewed as an interim development stage prior to the commencement of downstream, value-added processing, such as thermal upgrading (see notes below) and on-site acid leach processing.

Hatch Associates, an international firm of consulting engineers (Perth office), recently completed a concept study into thermal upgrading of nickel laterite material from the Agata Project in the Philippines. Unprocessed laterite contains from 30% up to 45% moisture. Thermal upgrading removes the moisture from the material, which improves blending and handling properties. Most importantly, this dramatically reduces the shipping cost, which, in combination, achieves a premium price over unprocessed DSO material. Further upgrading of the nickel content can be achieved through optional process enhancements.

Further review of markets for both DSO and thermally upgraded laterite product, and the capital and operating costs for their production, will be completed before the DSO and thermal upgrading studies are incorporated into the Agata Nickel Project pre-feasibility study and testing program.

The company's production objectives are intended to provide an indication of management's current expectations and are still conceptual in nature. It is uncertain that sufficient resources will be established and if established that these resources will be converted into economically viable mining reserves. Until a feasibility study has been completed, there is no certainty that these objectives will be met.

22.5.3 Alternative Downstream Processing Options

Two of the major downstream processing options have been evaluated in this study: electrowinning and MHP. Other downstream processing options that have not been evaluated at this stage are:

Mixed Sulphide Precipitation (MSP) – intermediate product;

Ni and Co Briquettes – LME-grade product;

Nickel sulphate and cobalt sulphatecrystals

22.6 Identify Plant and Port Sites

As engineering and project cost estimation becomes more detailed moving into the prefeasibility study stage, it will be necessary to investigate and select preferred sites for the processing plant and port facilities in order to facilitate accurate costings for site preparation, earthworks and civils.


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23. REFERENCES

Abrasaldo, E.M. 1999. Exploration Report Agata Project June 1997-April 1998. MRL Gold Phils., Inc., Internal Company Report (unpubl)

Ambagan, D. 2007. Notes on Resource Estimation of Agata Nickel Laterite Project of MRL Gold Phils., Inc., Internal Report., (unpubl). January 2007.

Aurelio, M.A. and Peña R.E. 2002. Geology and Mineral Resources of the Philippines, Volume 1: Geology. (eds) Aurelio, M.A. and Peña, R.E., Department of Environment and Natural Resources, Mines and Geosciences Bureau, Philippines.

Ausenco Vector, Boyd Willis Hydromet Consulting & MRL Gold Phils, Inc., “Agata Nickel Project Scoping Study”, Final Report, USVC-00008-00, September 2010

Bailey, D.G. 2003. Surigao Property Group, Northeastern Mindanao, Geology and Exploration Potential. Bailey Geological Consultants (Canada), Technical Report for Panoro Minerals Ltd.

Buenavista, A.G. 2008. Notes on the Geology and Mineralization in the Surigao Western Range. MRL Gold Phils., Inc. Internal Report, February 2008.

Buenavista, A.G. 2008. Geochemistry of the Agata Nickeliferrous Laterite Deposit. MRL Gold Phils., Inc. Internal Report, May 2008.

Coffey Philippines Inc., “Consulting Services for the Conduct of Preliminary Baseline Environmental Studies, Volume 3. Water”, Project Ref. E63511-1, September 30, 2008.

Cox, D.M. 2008. Independent Geologic Report on the Nickel Laterite Resource at Agata North Laterite Project Area, Agata Project, Agusan del Norte Province, Northern Mindanao, Phillipines. MRL Gold Phils., Inc., September 2008, rev. Oct 2008.

Cox, D.M. 2009a. 43-101 Technical Report on the Mineral Resource Estimate for the Agata North Nickel Laterite Project of Mindoro Resources Ltd., January 22, 2009.

Cox, D.M. 2009b. 43-101 Technical Report on the Mineral Resource Estimate for the Agata North Nickel Laterite Project of Mindoro Resources Ltd., December 22, 2009.

Climie, J.A., et,al. 2000. Accomplishment Report for the Period: June to December 1999. MRL Gold Phils., Inc., Internal Company Report (unpubl). January 2000.

Climie, J.A., et,al. 2005. Interim Exploration Program Report, Surigao Joint Venture Projects: March 1 to June 20, 2005. MRL Gold Phils., Inc., Internal Company Report (unpubl). July 2005.

De Luna, R., et.al., 2004. Report on the Reconnaissance Geologic Survey of the Nickeliferrous Laterite Deposits at Barangay Tapian, Mainit, Surigao del Norte and Barangay E. Morgado, Santiago, Agusan del Norte. Taganito Mining Corp. Report, July 2004.

Elliott, P.J. 2005. Report on IP and Magnetic Surveys Over the: Agata Prospect, San Francisco Project, Philippines. MRL Gold Phils., Inc. and Panoro Minerals Ltd,, Company Report, June 2005

Enlin Stainless Steel Company, “Extraction Ni/Co from laterite ore by HPAL Method”, August 2008.

Fang, E.F.E and C.A. Matilac. 2006. Evaluation of Preliminary Exploration on Agata Nickel Laterite Prospect of MRL Gold Phils., Inc., QNPH Report, June 2006


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Fetiza, I.A. Jr. 1999. Exploration Report: Tapian-San Francisco Project, May 1997 - May 1998. MRL Gold Phils., Inc. Internal Company Report (unpubl.).

Gifford, M.G. 2010. Independent Report on the Nickel Laterite Resource at Agata North, Philippines. Agata North Project, Agusan del Norte Province, Philippines. MRL Gold Phils., Inc., November 10, 2010.

Marshall, N.J. 1997. Geological Report on the Agata, Mat-I, Nabago and Tapian Gold Prospects, Northern Mindanao, Republic of the Philippines. Marshall Geoscience Services Pty. Ltd., Australia.

Mitchell, A.H.G. and Leach, T.M. 1991. Epithermal gold in the Philippines: Island arc metallogenesis, geothermal systems and geology. Academic Press Geology Series.

Rangin, C. 1991. The Philippine Mobile Belt: A complex plate boundary. Journal of Southeast Asian Earth Sciences, 6 (3/4), pp. 209-220.

Rohrlach, B.D. 2005. Independent Geological Report on the Surigao Property Group, Northern Mindanao, Philippines. MRL Gold Phils., Inc. and Panoro Minerals Ltd., Company Report, April 2005

Sajona, F.G., et.al., 1994. Magmatic response to abrupt changes in geodynamic settings: Pliocene-Quaternary calc-alkaline and Nb-enriched lavas from Mindanao (Philippines). Tectonophysics, 237(1-2), pp. 47-72.

Sillitoe, R.H. 1988. Geotectonic setting of western Pacific gold deposits. In: M.J. Bartholomew. D.W. Hyndman, D.W. Mogk, and R. Mason, (eds), 8th International Conference on Basement Tectonics, 8, pp. 665-678. Kluwer Publishers, Butte, Montana.

Tagura, F. et. al. 2006. Comprehensive Report, MPSA-134-99-XIII, Agata Tenement Blocks. MRL Gold Phils., Inc. Internal Company Report (unpubl.), 2006

Tagura, F. et. al. 2006. Report on the Preliminary Drill Evaluation on Canaga (MPSA-33-95-X), Malimono, Surigao del Norte. MRL Gold Phils., Inc. Internal Company Report (unpubl.), September 2006

Tagura, F. et. al. 2007. Report on Agata Drilling Program, Agusan del Norte, Philippines (Phase 1 Year 2 Expenditure Period 2005-2006), MRL Gold Phils., Inc. Internal Company Report (unpubl.), January 2007

UNDP. 1984. Geology of Northern Agusan, Mindanao, United Nations Technical Report No. 2, DP/UN/PHI-79-004/6, New York.

UNDP. 1987. Geology and Gold Mineralization of Surigao del Norte, United Nations Technical Report No. 4, DP/UN/PHI-85-001/4, New York.

Zurkic, N. 2009. AGL-Vario_Report. Zurkic Mining Consultants Pty. Ltd., Internal Report (unpubl)


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24. DATE AND SIGNATURES


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DALLAS M. COX 52 Somerville Street Bendigo Victoria, Australia 3550

Email: [email protected] Consent of Professional (Qualified Person)

Alberta Securities Commission British Columbia Securities Commission 4th Floor, 300-5th Ave SW 701 West Georgia Street Calgary, AB T2P 3C4 P.O. Box 10142, Pacific Centre Vancouver, B.C. V7Y 1L2 Saskatchewan Financial Services Commission Securities Commission of Newfoundland Suite 601 and Labrador 1919 Saskatchewan Drive P.O. Box 8700 Regina, Saskatchewan 2nd Floor, West Block S4P 4H2 Confederation Building

St. John’s, NFLD, Canada A1B 4J6

TSX Venture Exchange 10th Floor, 300 - 5 Avenue SW Calgary, AB T2P 3C4 Canada Re: Mindoro Resources Ltd. (The “Issuer”) I, Dallas M. Cox of Crystal Sun Consulting with the address of 52 Somerville Street Bendigo Victoria, Australia 3550, have prepared Subsection 19.7 of the report entitled "Technical Report on the Agata Nickel Project Scoping Study Report” (the “Technical Report”) and dated November 19, 2010. I do not own nor do I expect to receive any interest (direct, indirect or contingent) either in the Agata property nor in the securities of the Issuer in respect of services rendered in the preparation of the Report. I hereby consent to the filing with the above Securities Commissions, TSX Venture Exchange and on Sedar of the Technical Report. I consent to the filing of extracts from the Technical Report in the written disclosure of Mindoro entitled “Agata Nickel Scoping Study Indicates Low Cost Project Potential” and dated October 6, 2010 (the press release). I also consent to the inclusion of parts of the Technical Report as electronic publication on the company’s websites that are accessible to the public. I certify that I have read the written disclosure filed by Mindoro on October 6, 2010 and do not believe that there are any misinterpretations. Dated 19 November 2010. DALLAS M. COX, BE (Min) AusIMM

CERTIFICATE OF QUALIFICATION

I, Dallas M. Cox, hereby certify that:

1. I am a Professional Mining Engineer and a private consultant under a sole trader

business registered under Crystal Sun Consulting, with Australian Business Number ABN 28 818 090 933 at 52 Somerville Street Bendigo Victoria, Australia 3350.

2. I am responsible for the preparation of Subsection 19.7 of the technical report entitled “Technical Report on the Agata Nickel Project Scoping Study Report” (the “Technical Report”)" and dated November 19, 2010.

3. I am a member in good standing of the Australian Institute of Mining and Metallurgy with membership number 201098.

4. I am a graduate of the University of New South Wales, Kensington with a degree in Mining Engineering.

5. I have practiced my profession for 30 years including 23 years as a degree qualified Mining Engineer. I have been operating as an Independent Consultant since July 2004.

6. I certify that by reason of my education, affiliation with a professional association (as defined by NI 43-101) and past relevant work experience, I fulfill the requirements to be a qualified person for the purposes of NI 43-101. I am an independent qualified person as defined by NI 43-101 and by the companion policy 43-101 CP to National Instrument 43-101.

7. This subsection of the technical report is based on my review of available published data and company reports, and personal visits to the property. I have spent in excess of 25 days working on the property and various offsite meetings/consultations with geologists and mining engineers on the property. My visits were on the July 2007, January and November 2008, May and June 2010. It is my professional opinion that the Agata Property shows strong development potential and that further exploration of this property is warranted.

8. I have read N.I.43-101 and Form 101F1. The technical report has been prepared in compliance with that instrument and form.

9. I, Dallas Cox, do not expect to receive any interest (direct, indirect or contingent) in the properties described herein, nor in the securities of Mindoro Resources or any of their affiliates. I am independent of the issuer under all criteria of Section 1.5 of National Instrument 43-101.

10. I am not aware of any material factor material change with respect to the subject matter of this technical report which is not reflected in this report, the omission to disclose which would make this report misleading.

11. I consent to the filing of the Technical report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes. I consent to the filing of extracts from the technical report in the written disclosure entitled “Agata Nickel Scoping Study Indicates Low Cost Project Potential”, which was filed on October 6, 2010 (the press release). I also consent to the inclusion of parts of the Technical Report as electronic publication on the companies’ websites that are accessible to the public.

12. I have read the written disclosure filed on November 19th, 2010, and do not believe that there are any misinterpretations.

Signed in Batangas, Philippines. Dated 19 November 2010

Signature of Qualified Person Dallas M. Cox, BE (Min). AusIMM Name of Qualified Person


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25. ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES & PRODUCTION PROPERTIES

25.1 Mining Operations

25.1.1 General

Mining is planned to be carried out by industry standard open cut methods that are commonly applied in the Philippines and elsewhere. Excavators and articulated dump trucks, supported by standard auxiliary fleet (dozers, graders, water carts), are proposed and will be operated by an experienced Philippine contractor. Mining will be relatively selective on 2-3m high benches and will involve a range of grade control and stockpiling strategies. No high risk technologies or strategies are envisaged for the mining operation. The excavators are expected to be approximately 30t operating weight in backhoe configuration loading 40t capacity articulated dump trucks, which are well suited to tropical operations. The minor amounts of overburden generated will ultimately be used in rehabilitation of the natural surface. Management of road quality and surface water flows will be the key areas of focus for the mining operation to minimise and control the sediments generated from the earthmoving activities. The tropical and monsoonal climate imposes typically high annual rainfall.

Mining costs in this study have been assumed based on information from comparable local operations, adjusted for differences in haulage distance and scale of operation.

Relevant operating experience is well established in the Philippines and is particularly strong in the Surigao-Butuan area where many mines are operating. Training and empowerment of local people is a key objective as part of the employment strategy for the mine.

The haulage of ore to plant stockpiles will be carried out by the mine contractor‟s fleet as the haulage distance is assumed to be less than 4 km.

The option to use an owner operated fleet was not considered in this scoping study but will be assessed in future studies.

The necessary infrastructure to support the mining operation includes a laboratory, workshops, mine offices, accommodation, messing facilities and a medical clinic.

25.1.2 Cut-Off Grades

Mindoro has commenced drilling the regional nickel laterite exploration target with the objective of converting a significant proportion of the 50 million to 70 million DMT (at 0.9% to 1.2% nickel) Exploration Target to NI 43-101 compliant Mineral Resource. Based on an assumption that the Exploration Target will add sufficient resources to extend the life of the project to 20 years or more, more aggressive cut-off grades were applied to the ore feed to the plant for the purposes of the scoping study, to approximate plant-feed to the base case project sufficient for a production rate of >2.5 million tonnes treated per annum for six years..

A sub-set of the mineral resource estimate released in November 2009, completed by Dallas Cox, BE (Min), an independent qualified person as defined by NI 43-101, was applied to the scoping study at commencement.

The cut-off grades applied were:


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limonite: 0.85% Ni

transition: 0.90% Ni

saprolite: 1.0% Ni.

In addition to this, an upper cut-off of 1.35% Ni has been applied to all three ore types based on a subset of the resource released on November 2009 (Cox 2009) to approximate extractable material but setting aside some higher grade material allocated for potential direct shipped ore (DSO) operations, the economics of which are the subject of ongoing studies including open pit optimisation. No mining dilution has been applied to the resource subset at this stage as this would be expected to be minimal. The resulting plant feeds are summarised in Table 25-1. For the purposes of defining plant feeds, transition ore has subsequently been included with limonite ore.

Table 25-1: Agata Nickel Project Plant Feed

Type COG

%Ni

kTonn

es

%Ni %Co %Fe %Al %Mg %SiO2

Limonite 0.85–1.35 7081 1.04 0.115 45.0 2.98 1.41 6.83

Transition 0.90–1.35 425 1.18 0.059 21.5 0.69 14.0 37.7

Saprolite 1.00–1.35 8880 1.15 0.024 10.8 0.46 16.9 40.5

Plant Feed

Limonite 7507 1.05 0.112 43.7 2.85 2.12 8.59

Saprolite 8880 1.15 0.024 10.8 0.46 16.88 40.5

As disclosed in the Company's press release of January 11, 2010, the potential quantity and grade of the Exploration Target is conceptual in nature; there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource, and there is no guarantee that these resources, if delineated, will be economic or sufficient to support a commercial mining operation. The reader is cautioned that the preliminary assessment is preliminary in nature, it includes inferred material that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized.

25.1.3 Mine Planning

Lerchs Grossmann pit limit optimization was not applied due to the simple geometry and shallow depths of mining. Various production scenarios were modelled by spreadsheet methodologies to optimize the tonnes and grades as required for each option. Mine planning and conceptual pit design was carried out using Minesight® software using the block model generated for the NI 43-101 resource estimate of Mark Gifford (November 2010).

A digital terrain model was used to limit the pit outlines and to correctly represent the natural topography.

Pit slopes have minimal influence on the economics given the very shallow mineralisation, however slopes assumed were 45 degrees. No specialist geotechnical work for pit slopes has yet been conducted.


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25.2 Recoverability

25.2.1 General

The Scoping Study was based on process design criteria developed from preliminary testwork performed by ESSC. Where the results of the ESSC testwork were not adequately reported, data from operations and metallurgical test programs for similar southeast Asian laterites ores has been used to augment the available information. The ESSC data has been used to guide the selection of the most applicable data from other nickel laterite projects.

Confirmatory testwork is underway at SGS and early results have demonstrated better extractions of nickel and cobalt from the ore, in both HPAL and AL processes, than the ESSC results.

Readers are cautioned that the sample sizes were limited and may not be representative of the deposit.

25.2.2 HPAL of Agata Limonite Ore

ESSC reported HPAL nickel extractions in the range 94 - 99% for autoclave residence times of 20 - 60 minutes and leaching temperatures of 240 – 260 °C. A value of 97% was adopted for the scoping study, based primarily on the data for a test at 240 °C and 40 minutes residence time. This was considered conservative given that a higher leach temperature of 255°C was selected for the study. The selected nickel extraction is also comparable to similar southeast Asian limonite ores.

Test results received from SGS since the completion of the scoping study indicate that >98% nickel extraction and >95% cobalt extraction are achieved in less than 30 minutes at an acid addition rate of 325 kg/t ore, confirming that the values used in the scoping study are conservative.

25.2.3 Atmospheric Leaching of Agata Saprolite Ore

ESSC reported 90% nickel extraction in AL, at an acid addition rate of 900 kg/t ore, but no other information was provided. A value of 90% was adopted for the scoping study, based primarily on the ESSC report, at a calculated acid addition rate of 890 kg/t ore. This was considered conservative given that >95% nickel extraction is typical of similar southeast Asian saprolite ores.

Test results received from SGS since the completion of the scoping study indicate that >96% nickel extraction and about 92% cobalt extraction are achieved in 4 hours at an acid addition rate of 950 kg/t ore, confirming that the values used in the scoping study are conservative.


High nickel extraction from the saprolite ore fed to saprolite neutralisation is an important facet of the project economics. ESSC reported HPAL nickel extractions in the range 82 - 95% for a residence time of 2 hours; however the feed acid concentrations were not stated. Due to the missing information, a value of 86% at a residence time of 4 hours was adopted for the scoping study, based primarily on data for a similar southeast Asian saprolite ore.


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25.2.5 Counter-Current Decantation

The CCD circuit has been modelled in detail in METSIM®. Based on testwork data for similar southeast Asian laterite ores a conservative thickener underflow density of 45% w/w solids was selected. A declining mixing efficiency was used in the model, from 98% in CCD 1 to 92% in CCD 7. The modelling demonstrated that 7 CCDs were required to achieve a 99% recovery of soluble nickel from the feed slurry, at a wash ratio of 2.6 m3 per m3 of solution in CCD 7 underflow.

The underflow % solids has by far the greatest influence on the overall recovery.

25.2.6 CMN Direct Solvent Extraction Process

The metal recoveries in the CMN direct solvent extraction circuit were developed by Canopean, based on extensive continuous piloting of the process.

In the CMN process more than 99.2% of the nickel in feed is recovered to product. The major sources of loss are:

0.3% reports to the copper liberator discharge stream, however as this stream is recycled back into the process for acid credit, most of the contained nickel is recovered;

0.4% reports to the CMN raffinate, however as a large proportion of this stream is recycled as CCD wash liquor, some of this nickel is also recovered.

In the CMN process more than 96.2% of the cobalt in feed is recovered to product. The major sources of loss are:

0.2% reports to the copper liberator discharge stream, however as this stream is recycled back into the process for acid credit, most of the contained cobalt is recovered;

2.2% reports to the CMN raffinate, however as a large proportion of this stream is recycled as CCD wash liquor, some of this cobalt is also recovered.

0.3% as cobalt sulphide rejects;

0.2-0.3% with the zinc IX waste stream;

0.2-0.3% with the leach residue from the small MHP circuit within the CMN process;

The major unit operations of the CMN Process have been tested either continuously (via SX mini-rigs) or in a batch-wise fashion, where appropriate, to demonstrate the key aspects of process. Nickel and cobalt recoveries during the multi-stage primary extraction step demonstrated high metal recoveries, and the results were in accordance with other plants and testwork campaigns where versatic acid is used as the nickel and cobalt extractant. Due to the efficient nickel/cobalt separation technology employed in the process, nickel units reported to the advance electrolyte stream without significant cobalt contamination, and cobalt units likewise were efficiently recovered into a high purity cobalt sulphide product stream. Extensive mass balance modeling based upon testwork data and standard engineering design tracks the deportment of all nickel and cobalt values to their respective product and waste streams.

25.2.7 Iron/Aluminum Removal

The ESSC tests for iron/aluminium removal were preliminary in nature and the results were used only to confirm that the behaviour of the pregnant solution was similar to that of other


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nickel laterites. In Stage 1 Iron/Aluminium Removal a nickel recovery of 99.5% has been assumed based on the metallurgical response of similar southeast Asian laterites. There is a 3.0% co-precipitation of nickel in Stage 2 Iron/Aluminium Removal, however the resulting solids are treated in the Recycle Leach circuit where 95% of the nickel is recovered, hence the net loss of nickel in stage 2 is less than 0.2%.

25.3 Markets

25.3.1 Nickel Cathode Product

Nickel Cathode is the selected product type for the Base Case and Option 1. It has broad marketability due its high purity, and can be sold on the LME. LME grade nickel is freely traded, at prices that are widely known, so that the sale of any production is reasonably assured.

25.3.2 Mixed Hydroxide Product (MHP)

An MHP intermediate product is the selected product for the alternative process (Option 2). The capital and operating costs of producing MHP are considerably lower, and the process involved is not complicated. However, there are limited markets for MHP due to the manganese content. A purpose-built refinery for MHP or processing the MHP through a ferro-nickel plant is two product treatment options. Currently there are limited markets for MHP such as Queensland Nickel‟s Yabulu Expansion Project (YEP) refinery in North Queensland, the Harjavalta refinery in Finland, and a few Chinese refineries. YEP has substantial spare capacity to treat MHP as it was constructed to process the MHP product from Ravensthorpe, which has since closed. Product revenue is lower for MHP as the product typically fetches only 76-80% of the contained metal value. Additionally there is no credit for cobalt if sold to a ferro-nickel operation.

A drawback with MHP is the high cost of shipping compared with nickel metal. The nickel content of „as shipped‟ MHP is only 24-25%, meaning that approximately four tonnes of product must be shipped for each tonne of nickel metal contained.

25.4 Contracts

There are currently no contracts related to the mining, processing, or handling of product sales from the project. This is normal for a project at this stage. It will be necessary for Mindoro to negotiate contracts for the planned contract mining prior to the commencement of development.

25.5 Environmental Considerations

25.5.1 Introduction

The Agata Nickel Project would need to establish an environmentally and socially sound facility fully compliant with World Bank Guidelines. The project is located in a tropical forest area, is adjacent to local communities and farmland, and will therefore have a significant impact on the local community both during construction and during on-going operation.

This preliminary analysis provides a basis for the development of a future management strategy in order to reduce the environmental impact of the Project.


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25.5.2 Governing Laws and Principles

The Agata Nickel Project is planned to develop into an integrated mining and processing project which will involve potential social and environmental impacts. These will require comprehensive assessment and planning of mitigating measures to ensure they are appropriately managed. The Company shall implement this in accordance with the International Finance Corporation Performance Standards on Social and Environmental Sustainability and the requirements under Philippine law.

25.5.2.1 International Finance Corporation (IFC) Performance Standards on Social and Environmental Sustainability

The Company commits to manage the potential social and environmental impacts in a manner consistent with all applicable Performance Standards in addition to the requirements under Philippine laws, regulation, and permits that pertain to social and environmental matters. The performance standards are as follows:

PS1: Social and Environmental Assessment and Management Systems

PS2: Labor and Working Conditions

PS3: Pollution Prevention and Abatement

PS4: Community Health, Safety and Security

PS5: Land Acquisition and Involuntary Resettlement

PS6: Biodiversity Conservation and Sustainable Natural Resource Management

PS7: Indigenous Peoples

PS8: Cultural Heritage

MRL has committed to a Health, Safety, Environment and Community Policy (HSEC) document jointly developed with IFC. The Company has also agreed on an „Environmental & Social Action Plan‟ to cover all HSEC aspects related to exploration activities, feasibility work and potential future mine development. MRL, with IFC‟s assistance, is developing an Environmental Management System (EMS) to adequately manage, plan and document the environmental and social issues relating to their activities in the Philippines. The Company is also preparing a Stakeholder Engagement Plan which will describe their strategy and program for engaging with stakeholders in a culturally appropriate manner.

A key element is the Social and Environmental Impact Assessment (SEIA), which considers in an integrated manner the potential social and environmental (including labour, health, and safety) risks and impacts of the project. The SEIA will be based on current information, including an accurate project description, and appropriate social and environmental baseline data. The SEIA will consider all relevant social and environmental risks and impacts of the project, and those who will be affected by such risks and impacts.

The Company completed an SEIA for submission to the Environmental Management Bureau in January 2008, as part of its application for the ECC permit covering DSO operations that was granted on May 19th 2008. Although fully compliant with Philippine regulatory requirements, this SEIA will be upgraded to meet IFC Performance Standards prior to the commencement of


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any mining and/or processing operations. MRL has committed to the SEIA upgrade and reaching full compliance with IFC Performance Standards.

25.5.2.2 Philippine Environmental Impact Statement System

The Philippine Environmental Impact Statement System (PEISS) established through Presidential Decree (PD) 1586 in 1978 sets a systematic Environmental Impact Assessment (EIA) System. It requires Environmental Impact Statements (EIS) to be submitted to the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources (DENR) for review, evaluation, and approval. It further stipulates that the President or his duly authorised representative issues the Environmental Compliance Certificate (ECC) for a positive review of the EIA Report for Environmentally Critical Projects (ECP) and projects within Environmentally Critical Areas (ECA). Administrative Order No. 42 specifies that the DENR Secretary has the power to grant or deny ECCs on behalf of the President and further designates the EMB Central and Regional Directors as approving authorities for ECC applications.

The implementing rules and regulations (IRR) of the PEISS are defined under Department Administrative Order (DAO) 2003-30. These define the EIA as a process that involves the evaluation and prediction of the potential socio-environmental impacts of a project, including the design of appropriate preventive, mitigating and enhancement measures. The process is undertaken by the project proponent and/or EIA Consultant, EMB, a Review Committee, host communities and other stakeholders.

The Agata nickel project is subject to the PEISS. Pursuant to PD 1586 and its implementing guidelines the EIA for the Agata nickel laterite project was submitted in 2007, after which MRL was granted an ECC on May 20, 2008. This, however, is limited to Direct Shipping Ore (DSO) operations and will need to be revised for processing operations. The ECC certifies that, based on the representations of the proponent, the proposed project or undertaking will not cause significant negative environmental impact. The ECC also certifies that the proponent has complied with all the requirements of the EIS System and has committed to implement its approved Environmental Management Plan. The issuance of ECC does not exempt the proponent from securing other government permits and clearances as required by other laws. The ECC of a project not implemented within five years from its date of issuance is deemed expired. The reckoning date of project implementation is the date of groundbreaking, based on the proponent‟s work plan as submitted to the EMB.

25.5.2.3 Other Philippine Legislation

Apart from the ECC, additional permits/clearances, and compliances are likely to be required under other legislation and regulations. These include (but are not limited to):

Pollution Control Law (1976) (Republic Act (RA) 3931): prohibits disposal into any of the water, air and/or land resources of the Philippines any organic or inorganic matter or any substance in gaseous or liquid form that shall cause pollution. The National Pollution Control Commission has authority to issue permits required to discharge any industrial wastes and other wastes.

Water Code (1976) (PD 1067): Control and management of use of water, including change in point or nature of diversion, amount of appropriation, period of use; lowering or raising the level of the water of a lake, river or marsh, or draining the same; trans-basin diversion; and dumping of mine tailings or wastes into a river or a waterway.


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Clean Water Act (2003) (9275): Control and management of water quality in all water bodies, primarily relating to the abatement and control of pollution from land based sources. Permits to discharge are regulated under DAO 2004-25 and DAO 2003-39.

Clean Air Act (1998) (RA 8749): Control and management of mobile and stationary sources of air pollution. DAO 2004-26 requires companies to obtain a Permit to Operate for sources that emit various air pollutants.

Ecological Solid Waste Management Act (2000) (RA 9003): Control, transfer, transport, processing and disposal of solid waste in the country.

Toxic Substances and Hazardous and Nuclear Wastes Control Act (1990) (RA 6969): Control and management of import, manufacture, process, distribution, use, transport, treatment, and disposal of toxic substances and hazardous and nuclear wastes in the country.

Sanitation Code of the Philippines

Labor Code of the Philippines including occupational safety and health standards for all mining activities

Building Code of the Philippines

Electrical and Mechanical Installation Code

Solid Waste Management System

Special Land Use Permit – for temporary use of state-owned lands

Foreshore Lease Agreement - It may also cover marshy lands or lands covered w/ water bordering upon the shores or banks of navigable lakes or rivers for commercial, industrial or other productive purposes other than agriculture.

Permit to Operate Private Port

Local Business Permits

Indigenous People‟s Rights Act (IPRA) - socio-cultural, economic impacts and benefits on indigenous people for and in consideration of the issuance of Free, Prior and Informed Consent (FPIC)

RA 8974 – An Act to facilitate the acquisition of right-of-way or site for National Government Infrastructure Projects – for resettlement of displaced families

In addition, there are environmental and social responsibilities provided for under the Mining Act 1995 (RA 7942) and DAO 1996-40, as shown below:

Environmental Work Program (EnWP) – socio-environmental programs are at least 10% of the estimated exploration cost

Initial expenditures for environment-related infrastructures – at least 10% of the estimated project development cost

Mine Rehabilitation Fund (MRF) Rehabilitation Cash Fund (RCF) – 10% of Environmental Protection and Enhancement Program (EPEP) cost or PhP 5 million, whichever is lower; to be used for the progressive rehabilitation measures


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Mine Rehabilitation Fund (MRF) Monitoring Trust Fund (MTF) - Replenishable amount of PhP 150,000; to be used by the Multi-partite Monitoring Team (MMT)

Environmental Trust Fund (ETF) - Replenishable amount of at least PhP 150,000; to be used for compensation for damages outside of those caused by mine waste and tailings.

Mine Waste and Tailings Reserve Fund (MWTRF) – PhP 0.05 for every ton of mine waste and PhP 0.10 for tailings; for compensation for damages as a result of mine waste and mill tailings.

Polluter Pays Principle – PhP 50/MT of materials disposed in unauthorised areas.

Final Mine Rehabilitation/ Decommissioning Plan (FMRDP) - Cost variable but must include an environmental plan and a social plan plus the cost of a ten year maintenance and monitoring period.

Social Development Provisions include:

Just Compensation to Landowners - Variable; depending on status of land.

Social Development and Management Program (SDMP) - At least 90% of 1% of annual direct mining and milling costs (DMMC); for the implementation of sustainable community development projects/programs for the host and neighbouring communities.

Royalty to Indigenous Peoples (IP) - At least 1% of gross revenue.

Social Plan as part of FMR/DP - Variable; meant to minimise the mine‟s economic impact to the host and neighbouring communities and to mine employees and their dependents

25.6 Taxes and Dues

Under the Philippine taxation laws, the project will be subject to the following taxes and dues:

Table 25-2: Philippine Fiscal Statutes for Mineral Products

Nature Rate

1 MPSA Obligations

Occupation Fee PhP 75.00 / ha / year

Mine Waste Fees PhP 0.05 / WMT

Environmental Fund 5 % of Mine and Mill Cost [We allot this figure to ensure proper management of environment; this is not a requirement of the gov't]

Social Development Management Program Fund

1% of Direct Mining and Milling Cost (DMMC)

2 Business Taxes and Fees

Excise Tax 2% of Gross Output

Royalty to Claim Owner 4% Net Value of Sales [For one affected underlying claimowner. This royalty can be bought out after one year from the start of mining operations]

Royalty Tax (Indigenous Peoples) 1% of Gross Output

Provincial Extraction Fee PhP 25.00 / WMT


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Nature Rate

Foreshore Lease Maintenance PhP 10,000 / year

Real estate Tax, building PhP 6.00 / sqm on commercial buiding

PhP 2.60 / sqm on Class A building

PhP 2.30 / sqm on Class B building

Business Tax on Exporters PhP 22,500.00 for annual Gross Sales of >=PhP 75M but <PhP 100M

PhP 200.00 for every PhP1 M or over the PhP 100M

Export permits, etc PhP 5,000 / shipment

Customs and processing PhP 1.00 / WMT ore shipped

3 Insurances

Buildings, fire 0.003% of appraised value

Equipment 0.0225% of appraised value

4 Corporate IncomeTax 30% of taxable income

Mindoro may avail of fiscal and non-fiscal incentives granted under the Omnibus Investment Code of 1987.

These incentives are availed through tax exemptions in the form of Income Tax Holiday (ITH); exemption from taxes and duties on imported spare parts; and exemption from wharfage dues, and export tax, duty, impost and fees; tax credit on raw materials and supplies; and additional deductions from taxable income for labor expense and necessary and major infrastructure works. Non-fiscal incentives may also be availed of through employment of foreign nationals; simplified customs importation procedures and importation of consigned equipment for a period of 10 years.

In addition to these incentives, the Mining Act also grants incentives for pollution control devices; income tax carry forward of losses; income tax accelerated depreciation on fixed assets; and investment guarantees, such as, investment repatriation, earnings remittance, freedom from expropriation and requisition of investment and confidentiality of information.

If the tenement will be converted to a Financial and Technical Assistance Agreement (FTAA), an additional incentive, in the form of a tax holiday on national taxes, is granted from the start of the construction and development period up to the end of the cost recovery period, but not to exceed five years from the start of commercial operation. After the recovery period, paying these taxes will start, including an additional government share based on negotiated scheme.

25.7 Capital Cost Summary

The capital cost estimates for the three Agata Nickel Project flowsheet options are presented in Table 25-3. In addition to the phased capital expenditure from Year 1 to 3, deferred capital is required for expansions of the residue storage facility, as shown in Table 25-4.

The project costs are presented in July 2010 US dollar (US$) values. Where applicable, the following foreign exchange rates are used in developing these estimates:

USD 1.0 = AUD 1.136


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USD 1.0 = PHP 45.00 USD 1.0 = Euro 0.69

Table 25-3: Capital Cost Estimates for the Agata Processing Options



Ore Preparation 34.23 43.73 15.96

Leach Section 175.28 226.57 72.17

Refinery/Products Section 161.56 208.87 13.10

Sulphuric Acid 105.81 134.95 99.32

Power Plant 77.42 98.16 45.50

Other Major Process Packages 46.30 61.44 47.47

Services and Utilities 39.26 49.34 22.05

Process Plant Infrastructure 154.75 215.15 129.70

General Infrastructure 33.40 40.83 28.49

Other Direct Cost 9.56 12.51 4.83

Total Direct Cost 837.56 1 091.54 478.60

EPCM 103.53 135.83 52.82

Other Construction Services 78.64 107.64 38.22

Total Indirect Cost 182.17 243.47 91.04

Direct + Indirect Cost 1019.73 1 335.01 569.63

Contingency 305.92 400.50 170.89

Total Project Cost 1325.65 1 735.51 740.52

Project Cost, US$/annual lb Ni 21.94 18.73 23.49

Table 25-4: Residue Storage Facility Deferred Capital Costs

Description Deferred Capital Cost (Million US$)




RSF Expansion – Phase 43 17.86 29.59 -

Total Deferred Cost4 53.57 88.77 27.99

1 Base Case and Option 1 Phase 2 expansion – Year 8, Option 2 – Year 10

2 Base Case and Option 1 Phase 3 expansion – Year 12, Option 2 – Year 15

3 Base Case and Option 1 Phase 3 expansion – Year 16

4 Estimates are based on this study‟s costing and foreign exchange (2

nd quarter 2010)


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The capital cost estimates are developed using the factored estimating techniques. Where applicable, an equipment scale-up/down and cost escalation is applied. Two factored estimating approaches are used in the study estimates: the model driven approach, which is applied to the direct costs and the approach that factors the facility cost from the total equipment cost, which is applied to the project indirect costs.

The accuracy of the capital cost estimates are quoted as ±30-35%.

25.7.1 Scope of the Capital Cost Estimate

The scope of the Agata Nickel Project direct costs estimate includes the capital for the following:

process plant including ore preparation, leach plant section and products section

major process packages such as the sulphuric acid plant, acid storage facility, limestone and lime plants and reagents preparation

utilities and services including water supply and treatment, power plant, power and air supply, plant control system and mobile equipment

process plant infrastructure including site development, process plant buildings, port facility, residue storage facility and unloading and storage facilities at the process plant

general infrastructure including roads, workforce accommodation and communications facilities.

The indirect cost includes the following costs:

EPCM and vendor supervision

construction facilities

construction camp and operating expenses

mobile equipment operating costs

first fills

spares

other construction services

contingency.

25.7.2 Basis of the Capital Cost Estimates

The process plant costs for the three Agata options (with the exception of the refinery area for the Base Case and Option 1) were developed from similar nickel projects and locations compiled in the Ausenco Vector and BWHC databases. The applicable data were adjusted for flow or equipment capacity and currency movements. The refinery area of the Base Case and Option 1 were costed separately by Canopean Pty Ltd.

The sulphuric acid plant cost was based on a recent pricing from a western supplier for a nickel laterite project in the Philippines. Other major packages such as the power plant and auxiliary boilers, the limestone and lime plant were all based on a recent vendor quotation for a similar nickel project.


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The residue storage facility cost was developed from a costing calculation done for a nickel project in Northern Philippines.

The infrastructure costs were based on a nickel project in the Surigao area that has recently begun construction.

The indirect costs were prepared on the basis of a project management team being retained to perform the services of engineering, procurement of major equipment and management of construction.

A contingency of 35% has been applied to direct costs. The contingency reflects the state of development of the project, and allows a margin for changes to the process and equipment selection and sizing where specific design criteria are not yet available.

25.7.3 Capital Estimate Exclusions

The following items have not been included in the capital estimate developed for the Project:

Owner‟s costs

mining related capital costs – which are assumed to be included in contract mining rates

duties and taxes for equipment

technology fees/project support - no provision has been made for technology fees

EPCM assistance following introduction of feed to the plant, during commissioning and ramp up

a fully detailed estimate of working capital to include items such as work in progress, and sales contracts.

25.8 Operating Cost Summary

Operating costs have been developed for the first three years of operation based on the projected project ramp-up. Year 3 is considered to represent full nameplate production. Annualised nickel grades are based on the mine production schedule.

Tables 25-5, 25-6 and 25-7 detail the operating cost data for the Base Case, Option 1 and Option 2 respectively. Costs are presented in August 2010 United States dollar (US$) values. For Year 3 onwards (full nameplate capacity), the project operating costs are US$ 148.9 million per annum or US$ 2.47 per pound of nickel (excluding cobalt credits). The main operating cost items were sulphur, mining and haulage, and plant maintenance (in order). Operating costs (per pound of nickel) are higher in Years 1 and 2 of production due to lower metal production during project ramp-up, particularly Year 1 of the project.


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Table 25-5: Base Case Operating Cost Estimate

Base Case Operating Costs in US$

million/year

Year 1 Year 2 Year 3


Labour 14.5 14.4 13.8









Table 25-6: Operating Cost Estimate for Option 1 (Larger HPAL Autoclave)


million/year



Labour 14.6 14.7 14.0










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Table 25-7: Operating Cost Estimate for Option 2 (Atmospheric Leach)


million/year



Labour 12.9 12.8 12.1








* Assumes a cobalt price of US$18/lb (12-month low) and 80% payable for cobalt contained in mixed hydroxides.

The accuracy of the operating cost estimates is considered to be at ±30-35%.

Option 2 generates more power from acid plant surplus steam than the project requires. Approximately 190 000 MWh per year of power is available for export to the grid. Mindanao is experiencing a power crisis and power costs are high, with long term costs forecast to be PhP 12–15/kWh. After applying a credit of PhP 12/kWh (US$266.67/MWh) for power exported to the grid, the Option 2 operating cost reduces to US$1.34/lb nickel for Year 3 onwards.

25.8.1 Basis of the Agata Nickel Project Operating Cost Estimates

The operating cost estimates for the three Agata Nickel Project options are based on the process mass and energy balances (Appendix 1.3) which have been developed using the process design criteria (Appendix 1.2) and overall process flowsheet (Appendix 1.4).

The significant exchange rates used in the development of this estimate are:

USD 1.0 = AUD 1.136 USD 1.0 = PHP 45.00 USD 1.0 = Euro 0.69

Operating costs were developed for six areas:

mining and haulage

labour

consumables

maintenance materials

contract expenses

administration and general expenses.


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The key inputs to the operating cost development were as follows:

mining and haulage costs of US$8.50 per wet tonne of ore, developed by Mindoro

manning levels were evaluated for each project area and labour rates at different salary levels, including on-costs, were sourced from a database of Philippine based HR consultant‟s data

reagent and consumables quantities were based on the process mass and energy balances and unit pricing was sourced from both budget pricing or from data for recent projects

the costs of maintenance consumables, which are replacement parts necessary to maintain equipment, were estimated using historical ratios for similar scale plants based on the installed equipment costs

contract expenses were estimated for a range of services provided to the project on a contract basis, including: product transport and insurance, contract maintenance, periodic metallurgical testing and consultants fees in areas such as safety and training

administration and general expenses were estimated for a range of miscellaneous expenses associated with providing services to the project, including: insurances, safety equipment and training, medical costs, community relations, vehicle operating costs, environmental costs, human relations costs, telecommunications costs, business travel, Manila and Butuan City office costs.

25.8.2 Estimate exclusions

There are a number of costs that have been excluded from the operating cost estimate for the scoping study. These are outlined below:

sustaining capital costs

some government charges

royalties

marketing costs

corporate consultancies

duties, customs or other imposts.

25.9 Economic Analysis

The study did not address certain economic parameters, such as Net Present Values or Internal Rates of Return which will be evaluated in a more advanced economic assessment that includes the DSO stage of the project, currently underway.

25.10 Payback

The study did not address certain economic parameters, such as Net Present Values or Internal Rates of Return, which will be evaluated in a more advanced economic assessment that includes the DSO stage of the project, currently underway.


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25.11 Mine Life

Currently identified resources will support a mine life of six years for the Base Case or Option 2, and are not considered sufficient to warrant commencement of production.

The current NI 43-101 resource contains sufficient ore to support a minimum 6-year mine life (in addition to mining carried out under a Direct Shipping Ore scenario). It will be necessary to convert the regional Exploration Target to sufficient mineral resources to support an economic project life.

As disclosed in the Company's press release of January 11, 2010, the potential quantity and grade of the Exploration Target is conceptual in nature; there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource, and there is no guarantee that these resources, if delineated, will be economic or sufficient to support a commercial mining operation.

26. ILLUSTRATIONS

Relevant maps, figures, photos or graphs were inserted in the appropriate sections of this report.

BWHC Projects Design BasisUSVC‐00008‐DB‐B0701_Rev C

Rev Description By Check Appr PE Date

A Issued for Comment BRW 29/05/2010B General Update BRW 10/06/2010C Issued for Scoping Study JR BRW 24/08/2010

Boyd Willis Hydromet Consulting

MRL GOLD PHILS, INC.

AGATA NICKEL PROJECT

SCOPING STUDY

PROJECT DESIGN BASIS


MRL GOLD PHILS, INC.AGATA NICKEL PROJECT:‐ SCOPING STUDY

DESIGN CRITERIA SOURCE CODES

The following codes are used to reference the criteria.

CODE SOURCE OF INFORMATION, DATA A Data provided by the ClientB Standard Industry PracticeC Vendor originated dataD Testwork, Consultants dataE From process calculationsF Engineering Handbook data, Regulatory Standards and CodesG Boyd Willis Hydromet Consulting databaseX Not available. To be provided by Client, testwork, others

USVC-00008-DB-B0701 Agata Nickel Project Design Basis_Rev C.xls



Description Units Data Code Rev'n

SITE & GENERAL

Project

Type of operation Process Plant and open cut lateritic Nickel /Cobalt mine A

Access to Site

Mine Site & Process Plant A CA

By road from Surigao City or Butuan City A

TopographyA C

Soil CoverA C

A

Elevations

Process Plant, above mean sea level m 60‐100 A CExploration camp, above mean sea level m 50 A CAccommodation village, above mean sea level m 180 A CRaw water storage tanks, above mean sea level m 80 A CRiver water pumps, above mean sea level m 85 A C

Water Supply

Main source Tubay (Kalinawan) River D CBasis of data Coffey Report (E63511‐1) DDistance from Tubay (Kalinawan) River to Process Plant km 14 DDepth of riverAverage m 4 (at pump station) DDry periods m by others XIn flood m by others X

Design low flow return period y by others XEstimated mean flow L/s 22,800 DEstimated max flow L/s by others X

The plant site consists of weathered calc‐schist with a thin soil covering on hill slopes. Mine soil cover is generally limonite overlying saprolite. When wet, soils are sticky.

By air from Manila (via Butuan City or Surigao City)By sea from Batangas, Cebu, Jakarta or Singapore, etc.

Within the resource area, steep to very steep slopes are incised bygullies and ravines while the central portion is characterised bybroad ridges dissected in the west section by a matured valleyformation exhibiting gentle to moderate slopes. Elevations rangefrom 200 to 320m asl extending similar topographic expressionsgoing to the south. In the northern expanse, it abruptly changes torugged terrain having a very steep slope. Nickeliferous laterite iswidespread on the ridges stretching from the central part going tothe south. The proposed plant site sits on a gently sloping (5%‐10%)valley near the coast of Lawigan, which steepens to about 15‐20%towards the coast. It is underlain by medium strength, moderatelyto highly fractured calc‐schist.

Page 3 of 11 USVC-00008-DB-B0701 Agata Nickel Project Design Basis_Rev C.xls




LOCATION & METEOROLOGY

Project Location

Country Philippines ACapital of country Manila AIsland Mindanao AProvince Agusan del Norte AMunicipality Tubay A CNearest major town Cabadbaran City ALocation description F C

Project Area Location

Process Plant A C

Approx Co‐ordinates of Process Plant N 9° 19 m A CE 125° 30 m A C

Distance and direction from Manila 770 km Southeast ALocal significant town Cabadbaran City APopulation Cabadbaran City 55,000 F C

Agusan del Norte 314,000 F C

Climate

Philippine classification Type II F CClimate Typically tropical with monsoonal variations FWet season November ‐February FDry season March‐October F

Ambient Temperature

Wet season Mean max °C 30 AMean min °C 22.5 X

Dry season Mean max °C 31 AMean min °C 25 A

Highest daily maximum °C 37.5 F CLowsest daily minimum °C 18.2 F C

Wind

Annual average velocity m/s 1 F CHighest recorded velocity m/s 60 F C

Humidity

Annual average relative humidity % 84 F CAnnual range of relative humidity max 88 F C

min 82 F C

The process plant is proposed to be located in a valley near the coast of Brgy. Lawigan, Tubay, approximately 770 aerial km south ofManila.

Agusan del Norte is located in the northeastern part of Mindanao, itis bounded on the north by Butuan Bay and Surigao del Norte; eastby Surigao del Sur; west by Misamis Oriental; and south andsouthwest by Agusan del Sur. Agusan del Norte occupies a total landarea of 2,503.9 sq. kilometres.





LOCATION & METEOROLOGY

Rainfall

Base data Butuan City Data (1981‐2006) DAnnual rainfall, maximum mm/y 2 779 DAnnual rainfall, average mm/y 2 040 DAnnual rainfall, minimum mm/y 1 241 DNumber of years y 20 APeak daily rainfall mm 564.7 F CExceedance probability (AEP) % tba ADaily maximum rainfall mm tba DExceedance probability (AEP), design % tba ADaily maximum rainfall, design mm tba AExceedance probability (AEP) % tba ADaily maximum rainfall mm tba A

Wettest months November‐February AWet month average rainfall mm/month 256.3 ALeast rainfall in months March‐October ADry month average rainfall mm/month 141.2 A

AIntensity, Duration, Frequency (IDF) data Refer to Civil Design Criteria XDesign rain storm recurrence interval y 1 in 2 XDesign rain storm duration hours 4 XStorm Intensity for design conditions mm/h tba X

Evaporation

Evaporation rate mm/y tba X





TECHNICAL CRITERIA

Units & Standard Conditions G

Units are metric.Unless otherwise noted, all actual gas volumes, densities and pressures will be based on actual site elevation.All gas volumes are to be quoted under Normal conditionsNormal conditions when referred to are 0°C and 101.3 kPa.All solution concentration and pH values reported in this specification are at 25°C.

NB: All pressures quoted are absolute unless otherwise noted as gauge (g).

Design Life

Process Plant y 20 AInfrastructure y 20 A

Equipment Selection

PumpsSlurry pumps Horizontal, centrifugal or positive displacement GWater pumps Horizontal, centrifugal, multistage GProcess solution pumps (continuous duty) ANSI B73 GProcess solution pumps (intermittent duty) Suitable for duty GSump pumps Vertical shaft GReagent pumps Centrifugal, positive displacement or peristaltic G

Tanks

G

Design basis (as a guide)Flammable and combustible liquids, and small AS1692 GLarge, low pressure API 650 GFRP AS2634 G

Design temperature °C Max operating temp GDesign pressure kPa To suit process duty GDesign vacuum kPa To suit process duty GFreeboard, equivalent to lesser of

Working volume % 10 GWorking level to top of tank mm 500 GWorking level to top of agitated tank mm 750 GWorking level to top of tank with foaming mm 2000 G

Raw water tanks Circular, flat‐bottomed GFire water tanks Circular, flat‐bottomed GProcess water tanks Circular, flat‐bottomed GPotable water tanks Circular, flat‐bottomed, covered GProcess liquor/slurry tanks To suit process duty GRetention Time Based on Discharge Volumetric Flow G

Pressure Equipment

Design Basis (as a guide) General AS1200 GVessels AS1210 GPiping ANSI B31.3 GFlanges ANSI B16.5 G

All tanks are to be designed to the specific criteria required by the seismic design criteria. Agitated tank H:D ratios are to be designed to suit the agitator requirements.





TECHNICAL CRITERIA

Guidelines for Design Allowances

G

Design Basis Steady state material balance flows G

Equipment

G

Major process equipment % 15 GGeneral pumps % 15 GReagent pumps % 50 ‐ 200 GThickener underflow pumps % 50 GSeal and gland water system % 250% above min requirement GBulk solids handling equipment % 33 GRiver water pumps % 20 GSediment pond pumps % 100 GTanks ‐ for process reactions As required by residence time, based on steady state flow GTanks ‐ for surge capacity As required by residence time, based on steady state flow GPressure vessels Autoclave % 0 G

Splash vessels % 15 GFlash tanks % 15 G

Pump HoppersSizing basis 20 seconds of pump capacity G

Pump HeadNPSH allowance m 1 G

BundingFor storage of corrosive substances AS 3780 GFor storage of toxic substances AS/NZS 4452 GFor storage of flammable and combustible liquids AS 1940 G

RedundancyCritical equipment such as pumps to be provided with standby unit G

Materials of Construction

Design basisG

Utilities and Services

ElectricalMain power source From steam turbine generators G

Steam supply from acid plant export steam GSteam supplemented as required by auxiliary boiler G

Fuel used for auxiliary boiler Fuel Oil GRemote power users Local generators or power transmission lines G

Site distribution Primary 13.8 kV GMedium 4.16 kV G

Materials of construction for equipment are specified in the individual areas.

The following design allowances apply except where otherwise noted in the Process Design Criteria.

Continuous operating equipment and piping is sized with the following capacity allowances over and above the steadystate material balance flows to provide the capacity required to control the processes. These guidelines are notabsolute and may be amended when required.





TECHNICAL CRITERIA

Electrical ReticulationMotor voltage <350kW Volts AC/Hz 460/60Hz BMotor voltage ≥350kW Volts AC/Hz 4.16kV/60Hz BLighting & Misc. Volts AC/Hz 220/60Hz BControl supplies (Primary Distribution Switchboard) Volts DC 110 GControl supplies (motors) Volts DC 24 G

Water SourcesOre Preparation water Sea water GProcess water Filtered raw water GFire water Filtered raw water GGland seal water Filtered raw water GFlocculant make up water Filtered raw water GPotable water Filtered, chlorinated and UV treated GAgitator seal water / barrier fluid Demineralised water GBoiler feed water Demineralised water GCooling water Filtered raw water G

Pressure max/min kPa 350/200 XTemperatures Supply/Return °C 30/40 X

Limestone slurry Sea water GLime slurry Filtered raw water GMetals refinery (downstream of iron removal) Demineralised water G

Applicable Standards

Units of Measurement

G

Philippine StandardsGG

Other Acceptable Standards

ANSI American National Standards Institute GISO International Standards Organisation GIEC International Electrotechnical Commission GAS Standards Australia G

Other national standards institutions G

Industry StandardsG

API American Petroleum Institute for line pipe, oil storage tanks ,etc GNFPA National Fire Protection Association ‐ for fire protection measures GCEMA Conveyor Equipment Manufacturers Association GTEMA Tubular Exchanger Manufacturers Association for heat exchangers GAWWA American Water Works Association for water storage tanks and facilities GNACE National Association of Corrosion Engineers G

World Bank Standards

The Philippines issues relevant standards applicable to the Philippines. In many cases they are standards issued by other national or international standards institutions. Applicable Philippines Standards shall be complied with, except in those cases where the endorsed standard has been amended, then the latest amendment shall apply.

Where there are no existing applicable Philippines standards, the following organisations shall apply in order of precedence or as agreed.

Where applicable, Standards and Codes of Practice, issued by the following organisations shall be used.

Unless otherwise noted all units of measurement shall comply with AS/ISO 1000, 1998, "The International System ofUnits (SI) and its Application"





OPERATING SCHEDULES

Operating Schedules

MineDays per year days 365 FShifts per day shifts 3 DHours per shift h 8 DOperating utilisation (for interface reasons) h/y 3200 A C

Ore PreparationDays per year days 365 FShifts per day shifts 3 GHours per shift h 8 G Operating hours per year h/y 7 500 B

Leach PlantDays per year days 365 FShifts per day shifts 3 GHours per shift h 8 G Operating hours per year h/y 7 500 B

Metals PlantDays per year days 365 FShifts per day shifts 3 GHours per shift h 8 G Operating hours per year h/y 7 500 B

InfrastructureDays per year days 365 FShifts per day shifts 3 AHours per shift h 8 AOperating hours per yearPower supply h/y 8 760 GDomestic / potable water h/y 8 760 GOther h/y 7 500 A





ENVIRONMENTAL

Discharge Water Quality (Ocean Outfall) Standards

Classification of affected marine waters SC (Coastal Water as defined by DAO 35) DTotal suspended solids mg/L 100 FSurfactants mg/L 15 FPetroleum oil mg/L 1 FDissolved Oxygen mg/L 5 FBiological Oxygen Demand (BOD) mg/L 100 FTotal Coliform MPN/100 mL 10 000 FpH range 6.0 ‐ 9.0 FTemperature Increase °C < 3 F

MetalsArsenic mg/L 0.04 FCadmium mg/L 0.01 FChromium (hexavalent) mg/L 0.1 FLead mg/L 0.1 FCopper mg/L 0.04 FIron (dissolved) mg/L 2 FNickel mg/L 0.3 FZinc mg/L 1.5 FManganese mg/L 2 FMagnesium mg/L not specified ATotal dissolved solids mg/L not specified A

Surface Marine Water (ambient)

Total suspended solids mg/L (max increase) 30 FpH 6.0 ‐ 8.5 FMetals Chromium (hexavalent) mg/L 0.1 F

Copper mg/L 0.05 F

Air Quality

Sulphur dioxide, SO2 1 hour average µg/Nm3 180 F 1 year average µg/Nm3 80 F

Sulphur trioxide, SO3 1 hour average µg/Nm3 200 F 1 year average µg/Nm3 60 F

Hydrogen sulphide, H2S 1 hour average µg/Nm3 100 F 1 year average µg/Nm3 100 F

Nitrogen dioxide, NO2 1 hour average µg/Nm3 260 F 24 hour average µg/Nm3 150 F

Fine particles 1 hour average µg/Nm3 230 F 1 year average µg/Nm3 90 F

Ammonia 1 hour average µg/Nm3 200 F

Sulphuric Acid 1 hour average mg/Nm3 0.3 F

Nitric Acid 1 hour average mg/Nm3 0.4 F





ENVIRONMENTAL

Noise

Classification Industrial FLimit (at project boundary) dBa 70 F

Environmental Standards and Guidelines

F

D

D

D

D

D

D

D

DENR Administrative Order No. 34 ‐ Series of 1990

Where there is likely to be any possible impact on the environment, the following Standards, Guidelines or Codes ofPractice shall be a minimum requirement.

DENR Administrative Order No. 2000‐81. Republic Act No. 8749 Philippine Clean Air Act of 1999.

World Bank Group

Revised Water Usage And Classification/Water Quality Criteria Amending Section Nos. 68 And 69, Chapter III Of The 1978 NPCC Rules And Regulations

DENR Administrative Order No.35 ‐ Series of 1990Revised Effluent Regulations of 1990, Revising and Amending the Effluent Regulations of 1982

Environmental, Health, and Safety General Guidelines

Environmental, Health and Safety Guidelines for Mining

World Bank GroupEnvironmental, Health, and Safety Guidelines for Ports, Harbours, and Terminals

World Bank Group

World Bank Group

Environmental, Health, and Safety Guidelines Base Metal Smelting and Refining


Rev By Check Appr PE Date Doc No.: USVC-00008-CR-B9002A LMV MLS BRW MDS 03/09/10

Project No: USVC-00008-00

Rev No.: A

Client : MRL Gold Phils, Inc.

AGATA NICKEL SCOPING STUDY

DescriptionIssued for Scoping Study

CAPITAL COST ESTIMATE (Base Case: HPAL-AL-DSX-EW)

USVC-00008-CR-B9002AGATA NICKEL SCOPING STUDY(Base Case: HPAL-AL-DSX-EW)

CAPITAL COST SUMMARY

DESCRIPTION AGATA NICKEL PROJECT OOM CAPITAL COST

US$

PROCESS PLANT AREA 151 - ORE PREPARATION (LIMONITE) $18,267,000AREA 152 - ORE PREPARATION (SAPROLITE) $15,961,000AREA 210 - HIGH PRESSURE ACID LEACHING $91,392,000AREA 220 - ATMOSPHERIC LEACHING $10,622,000AREA 230 - SAPROLITE NEUTRALISATION $4,054,000AREA 240 - CCD $51,528,000AREA 250 - STG 1 Fe/Al REMOVAL $7,643,000AREA 260 - STG 2 Fe/Al REMOVAL $6,629,000AREA 270 - FINAL NEUTRALISATION $3,413,000AREA 310 - CMN DSX $74,139,000AREA 320 - Ni - EW $87,420,000

SUBTOTAL PROCESS PLANT $371,068,000

MAJOR PROCESS PACKAGESAREA 410 - SULPHUR HANDLING $1,901,000AREA 420 - SULPHURIC ACID PLANT $105,805,000AREA 420 - SULPHURIC ACID STORAGE AND DISTRIBUTION $18,179,000AREA 430 - LIMESTONE SLURRY PLANT $3,324,000AREA 440 - LIME SLURRY PLANT $21,758,000AREA 450 - FLOCCULANT AND COAGULANT PREPARATION $1,133,000

SUBTOTAL MAJOR PROCESS PACKAGES $152,101,000

WATER SERVICES AND UTILITIESAREA 510 - WATER SUPPLY $22,322,000AREA 520 - PLANT AIR SUPPLY $2,782,000AREA 530 - POWER DISTRIBUTION $3,435,000AREA 540 - POWER STATION AND AUXILIARY BOILERS $77,419,000AREA 550 - PLANT DCS $3,824,000AREA 560 - MOBILE EQUIPMENT $6,900,000

SUBTOTAL WATER SERVICES AND UTILITIES $116,682,000

PROCESS PLANT INFRASTRUCTUREAREA 611 - SITE DEVELOPMENT (BULK EARTHWORKS) $14,238,000AREA 612 - SITE DEVELOPMENT (SEDIMENTATION POND) $2,188,000AREA 613 - SITE DEVELOPMENT (PLANT ROADS AND UPGRADES) $3,712,000AREA 620 - SITE BUILDINGS $7,689,000AREA 630 - PROCESS PLANT BUILDINGS $6,029,000AREA 640 - UNLOADING FACILITIES $9,485,000AREA 650 - PORT FACILITIES $44,962,000AREA 660 - PIPERACKS $30,733,000AREA 670 - RESIDUE STORAGE FACILITY $35,714,000

SUBTOTAL PROCESS PLANT INFRASTRUCTURE $154,749,000

GENERAL INFRASTRUCTUREAREA 710 - ROADS OFF-SITE $12,651,000AREA 720 - VILLAGE BLDGS- ACCOM INCL.MESSING, RECREATION ETC $10,069,000AREA 730 - VILLAGE SERVICES $8,607,000AREA 740 - AIRSTRIP $0AREA 750 - ELECTRONIC DATA SERVICES $1,615,000AREA 760- SECURITY- BUILDING, FENCING, PLANT & VILLAGE $460,000

SUBTOTAL GENERAL INFRASTRUCTURE $33,403,000

Scaffolding and Cranage $9,558,000TOTAL DIRECT COSTS $837,561,000

INDIRECT COSTSEPCM $103,529,000Temporary Construction Facilities $8,155,000Construction Camp including services $7,093,000Construction Camp and Catering $10,957,000Survey, Geotech, Soil Testing $865,000HSE and Medical Services $635,000Warehouse Operations $1,197,000Project Security $1,053,000Roads and Buildings Maintenance $699,000Spares $18,509,000Precommissioning $2,036,000Commissioning Assistance $3,085,000First Fill $16,312,000Vendor Representatives $3,417,000Maintenance Procedures $1,542,000Equipment Insurances $3,085,000Contractor Mobilisation/Demobilisation $0Project Mgt and QA services $0Contractor Overheads and Profits $0Construction Mobile Eqpt and operating cost (Fuel, Tyres ect) $0 SUBTOTAL INDIRECT COSTS $182,169,000

TOTAL DIRECT PLUS INDIRECT COSTS $1,019,730,000

PROJECT COSTS Contingency, 30% $305,919,000Escalation $0Duties $0Owners Costs $0

SUBTOTAL PROJECT COSTS $305,919,000

TOTAL PROJECT COST (US$) $1,325,649,000TOTAL PROJECT COST (US$ / lb Ni) $21.94TOTAL PROJECT COST (US$ / DT) $483DEFERRED CAPITAL COST (US$) $53,571,000

USVC-00008-CR-B9002 Agata Nickel Proj Capex (Base Case)_Rev A.xls



Rev No.: A

Client : MRL Gold Phils, Inc.



CAPITAL COST ESTIMATE (Option 1: HPAL-AL-DSX-EW Large AC)

USVC-00008-CR-B9003AGATA NICKEL SCOPING STUDY(Option 1: HPAL-AL-DSX-EW Large AC)



US$

PROCESS PLANT AREA 151 - ORE PREPARATION (LIMONITE) $23,287,000AREA 152 - ORE PREPARATION (SAPROLITE) $20,439,000AREA 210 - HIGH PRESSURE ACID LEACHING $116,785,000AREA 220 - ATMOSPHERIC LEACHING $13,728,000AREA 230 - SAPROLITE NEUTRALISATION $5,248,000AREA 240 - CCD $69,107,000AREA 250 - STG 1 Fe/Al REMOVAL $9,218,000AREA 260 - STG 2 Fe/Al REMOVAL $8,076,000AREA 270 - FINAL NEUTRALISATION $4,403,000AREA 310 - CMN DSX $95,840,000AREA 320 - Ni - EW $113,034,000


MAJOR PROCESS PACKAGESAREA 410 - SULPHUR HANDLING $2,425,000AREA 420 - SULPHURIC ACID PLANT $134,946,000AREA 420 - SULPHURIC ACID STORAGE AND DISTRIBUTION $23,261,000AREA 430 - LIMESTONE SLURRY PLANT $4,303,000AREA 440 - LIME SLURRY PLANT $28,133,000AREA 450 - FLOCCULANT AND COAGULANT PREPARATION $3,320,000








Scaffolding and Cranage $12,512,000TOTAL DIRECT COSTS $1,091,540,000

INDIRECT COSTSEPCM $135,825,000Temporary Construction Facilities $10,699,000Construction Camp including services $9,305,000Construction Camp and Catering $17,586,000Survey, Geotech, Soil Testing $1,135,000HSE and Medical Services $834,000Warehouse Operations $1,571,000Project Security $1,382,000Roads and Buildings Maintenance $917,000Spares $24,230,000Precommissioning $2,665,000Commissioning Assistance $4,038,000First Fill $22,742,000Vendor Representatives $4,483,000Maintenance Procedures $2,019,000Equipment Insurances $4,038,000Contractor Mobilisation/Demobilisation $0Project Mgt and QA services $0Contractor Overheads and Profits $0Construction Mobile Eqpt and operating cost (Fuel, Tyres ect) $0 SUBTOTAL INDIRECT COSTS $243,469,000

TOTAL DIRECT PLUS INDIRECT COSTS $1,335,010,000

PROJECT COSTS Contingency, 30% $400,503,000Escalation $0Duties $0Owners Costs $0


TOTAL PROJECT COST (US$) $1,735,513,000TOTAL PROJECT COST (US$ / lb Ni) $18.73TOTAL PROJECT COST (US$ / DT) $269DEFERRED CAPITAL COST (US$) $88,770,000

USVC-00008-CR-B9003 Agata Nickel Proj Capex (Option 1)_Rev A.xls



Rev No.: A

Client : MRL Gold Phils, Inc



CAPITAL COST ESTIMATE (Option 2: AL-MHP)

USVC-00008-CR-B9004AGATA NICKEL SCOPING STUDY(Option 2: AL-MHP)



US$

PROCESS PLANT AREA 150 - ORE PREPARATION (Saprolite) $15,961,000AREA 210 - ATMOSPHERIC LEACHING $11,125,000AREA 220 - SAPROLITE NEUTRALISATION $2,678,000AREA 230 - CCD $41,685,000AREA 240 - STG 1 Fe/Al REMOVAL $5,862,000AREA 250 - STG 2 Fe/Al REMOVAL $5,106,000AREA 260 - FINAL NEUTRALISATION $5,715,000AREA 310 - MHP STG 1 $8,812,000AREA 320 - MHP STG 2 $4,291,000


MAJOR PROCESS PACKAGESAREA 410 - SULPHUR HANDLING $1,785,000AREA 420 - SULPHURIC ACID PLANT $99,323,000AREA 420 - SULPHURIC ACID STORAGE $15,915,000AREA 430 - LIMESTONE SLURRY PLANT $2,750,000AREA 440 - LIME SLURRY PLANT $25,017,000AREA 450 - FLOCCULANT AND COAGULANT PREPARATION $901,000AREA 460 - MAGNESIA SLURRY PLANT $1,101,000








Scaffolding and Cranage $4,830,000TOTAL DIRECT COSTS $478,596,000

INDIRECT COSTSEPCM $52,817,000Temporary Construction Facilities $4,160,000Construction Camp including services $3,618,000Construction Camp and Catering $7,879,000Survey, Geotech, Soil Testing $441,000HSE and Medical Services $324,000Warehouse Operations $611,000Project Security $537,000Roads and Buildings Maintenance $357,000Spares $6,236,000Precommissioning $1,029,000Commissioning Assistance $1,559,000First Fill $7,388,000Vendor Representatives $1,743,000Maintenance Procedures $779,000Equipment Insurances $1,559,000Contractor Mobilisation/Demobilisation $0Project Mgt and QA services $0Contractor Overheads and Profits $0Construction Mobile Eqpt and operating cost (Fuel, Tyres ect) $0 SUBTOTAL INDIRECT COSTS $91,037,000

TOTAL DIRECT PLUS INDIRECT COSTS $569,633,000

PROJECT COSTS

Contingency, 30% $170,890,000Escalation $0Duties $0Owners Costs $0


TOTAL PROJECT COST (US$) $740,523,000TOTAL PROJECT COST (US$ / lb Ni) $23.49TOTAL PROJECT COST (US$ / DT) $516DEFERRED CAPITAL COST (US$) $27,994,000

USVC-00008-CR-B9004 Agata Nickel Proj Capex (Option 2)_Rev A.xls

Appendix 3 Operating Cost Estimates

Operating Cost Estimate: Base Case

Operating Cost Estimate: Option 1

Operating Cost Estimate: Option 2

BWHC Operating Cost EstimateUSVC‐00008‐CR‐B9005_Rev A


A Issued for Scoping Study BRW 8/09/2010




SCOPING STUDY

OPERATING COST ESTIMATE

BASE CASE


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: OPERATING COST SUMMARYRev: Rev A

Year 1 Year 2 Year 3 + Year 1 Year 2 Year 3 +US$ '000's US$ '000's US$ '000's US$/lb Ni US$/lb Ni US$/lb Ni

19,295 28,943 32,156 0.53 0.53 0.53

14,473 14,449 13,827 0.40 0.27 0.23

Processing 35,314 51,763 57,016 0.974 0.952 0.944Services & Utilities 9,589 9,007 6,504 0.265 0.166 0.108

Sub Total Reagents & Consumables 44,903 60,770 63,520 1.24 1.12 1.05

Maintenance Materials 22,860 22,860 22,860 0.63 0.42 0.38

Contract ExpensesProcessing 5,957 5,957 5,891 0.164 0.110 0.098Product Transport 2,121 3,181 3,535 0.059 0.059 0.059Admin & General 2,727 2,711 2,627 0.075 0.050 0.043

Sub Total Contract Expenses 10,805 11,848 12,053 0.30 0.22 0.20

Admin & General Expenses 4,514 4,514 4,514 0.12 0.08 0.07

Contingency 0% 0 0 0 0.00 0.00 0.00

116,850 143,384 148,930

7,125 5,805 5,435

Cobalt Revenue lb/annum 2,192,000 3,288,000 3,653,000 Co Price, US$/lb 18.00(US $) 39,456,000 59,184,000 65,754,000 Co % Payable 80%payable 31,564,800 47,347,200 52,603,200credit /lb Ni 0.87 0.87 0.87

Opex including Co credit, US$/lb Ni 2.35 1.77 1.59

2.47

Cost Centre

Consumables

PROJECT OPERATING COST (US $)

PROJECT OPERATING COST (US $/t Ni)

Mining & Haulage

2.643.22

Labour

USVC-00008-CR-B9005 Agata Nickel Proj Opex (Base Case)_Rev A Page 2 of 22


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: PRODUCTION SUMMARYRev: Rev A

Production Data:- Unit Year 1 Year 2 Year 3+

Feed Tonnage - ROM Limonite Ore wt/a 1,194,000 1,791,000 1,990,000

dt/a 784,000 1,177,000 1,307,000

- HPAL Feed dt/a 783,000 1,174,000 1,304,000

- ROM Saprolite Ore wt/a 1,076,000 1,614,000 1,793,000

dt/a 861,000 1,291,000 1,435,000

- AL/SPN Feed dt/a 861,000 1,291,000 1,435,000

Nickel Production t/a 16,400 24,700 27,400

lb/a 36,247,000 54,370,000 60,411,000

Cobalt Sulphide Production wt/a 1,800 2,700 2,960

dt/a 1,500 2,300 2,560

Contained Cobalt Production t/a 990 1,490 1,660

lb/a 2,192,000 3,288,000 3,653,000



CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: INPUT DATARev: Rev A

Unit Year 1 Year 2 Year 3+

LIMONITEROM Ore - Wet t/h 159.18 238.78 265.31

- Dry t/h 104.58 156.88 174.31Beneficiated Ore - Dry t/h 104.33 156.50 173.89

SAPROLITEROM Ore - Wet t/h 143.46 215.19 239.097


PRODUCTSNickel t/h 2.19 3.29 3.653Cobalt Sulphide -Wet t/h 0.24 0.36 0.395

-Dry t/h 0.20 0.31 0.341Contained Co t/h 0.13 0.20 0.221


Overall Sulphuric Acid Consumption t/h 90.8 136.1 151.3

Consumption Data:-

Production Data:-

p pSuphuric Acid to CMN t/h 0.2 0.3 6.44Suphuric Acid to Demin Water Plant t/h 0.0 0.0 0.22Suphuric Acid to HPAL t/h 32.9 49.3 54.8Suphuric Acid to AL t/h 53.9 80.9 89.8

Flocculant - Ore Preparation kg/h 30.4 45.6 50.7Flocculant - CCD kg/h 62.3 93.4 104Flocculant - Neutralisation kg/h 1.19 1.78 1.98Flocculant - Sulphide Precip. kg/h 2.04 3.06 3.40Coagulant kg/h 0.0 0.0 0.0

Overall Limestone Consumption t/h 18.52 27.78 30.87Limestone to Lime Kiln t/h 10.97 16.45 18.28Limestone to Limestone Slurry Plant t/h 7.55 11.33 12.59Lime (ex kiln) t/h 6.51 9.77 10.86

60% Na2S kg/h 371.92 557.88 619.8799% TEA kg/h 33.12 49.68 55.2033% HCl kg/h 364.16 546.24 606.93Sodium Polyphoshate kg/h 11.52 17.28 19.20Sodium Metabisulphite kg/h 70.16 105.24 116.93Versatic 10 kg/h 11.76 17.64 19.60Shellsol D70 Diluent kg/h 19.44 29.16 32.40Caustic Soda (NaOH) kg/h 38.96 58.44 64.93Iron Dust kg/h 0.58 0.88 0.97EDTA kg/h 3.168 4.752 5.28Potassium Permanganate kg/h 0.056 0.084 0.09





CMN Clarifier Flocculant kg/h 1.184 1.776 1.97Dowex IX Resin (Zinc IX) kg/h 0.064 0.096 0.11DIL 150 Diluent kg/h 0.576 0.864 0.96Alamine 336 Extractant kg/h 1.104 1.656 1.84ITD kg/h 0.128 0.192 0.21Activated Carbon kg/h 7.02 10.54 11.71Anthracite kg/h 1.224 1.836 2.04Garnet kg/h 1.224 1.836 2.04Clay (Crud Treatment) kg/h 1.20 1.80 2.00Barium Hydroxide kg/h 9.104 13.656 15.17Diatomaceous Earth kg/h 12.744 19.116 21.24Boric Acid kg/h 2.568 3.852 4.28SLS kg/h 0.013 0.019 0.02Na2SO4 kg/h 0.000 0.000 0.00CoS 1T Product Bags #/y 888 1332 1480Filter Press Cloths (Large) #/h 0.004 0.006 0.01Filter Press Cloths (Small) #/h 0.005 0.007 0.01Anodes #/h 0.070 0.106 0.12Ti Starter Sheets #/h 0.069 0.104 0.122 Tonne Pallets (export) #/y 8220 12330 13700Bags/Frames #/h 0.069 0.104 0.12

Consumption Data:-

Caustic Soda (NaOH) for Water Treatment t/h 0.003 0.004 0.005Sulphur - Sulphuric Acid Plant t/h 29.46 44.18 49.09

- TOTAL t/h 29.46 44.18 49.09Raw Water t/h 328.14 492.21 547Filtered Water t/h 303.5 455.3 506RO Water t/h 0.0 0.0 0Demin Water t/h 71.3 106.9 119BFW t/h 136.2 204.2 227Potable Water t/h 2.4 3.6 4

Cooling Water Circulation t/h 11893 11893 11893

Power generated from SAP surplus steam MW 20.4 30.6 34.0MWhrs 153,000 229,500 255,000

Auxiliary Boiler Steam Demand t/h 18.1




Cost Basis Unit Cost Freight Cost Total Cost

Ore Mining & .Haulage US$ / wet tonne - - 8.50Heavy Fuel Oil US$ / tonne 450.00 20.00 470.00Diesel US$ / Litre 0.65 - 0.65Ball Mill Balls - Ore Preparation US$ / tonne - - 1850.00

- Limestone US$ / tonne - - 1850.00- Lime Slaking US$ / tonne - - 1850.00

Ball Mill Liners - Ore Preparation US$ / tonne 5800.00 90.00 5890.00- Limestone US$ / tonne 5800.00 90.00 5890.00- Lime Slaking US$ / tonne 5800.00 90.00 5890.00

Mill Lubricants US$ / tonne 6000.00 20.00 6020.00Limestone US$ / tonne 1.55 1.17 2.72Flocculants - Ore Preparation US$ / tonne 4400.00 29.04 4429.04

- CCD US$ / tonne 4400.00 29.04 4429.04- Neutralisation US$ / tonne 4400.00 29.04 4429.04

60% Na2S US$ / tonne 525.0099% TEA US$ / tonne 1800.0033% HCl US$ / tonne 213.33Sodium Polyphoshate US$ / tonne 720.00 29.04 749.04Sodium Metabisulphite US$ / tonne 384.00

S$ /

Cost Data

Versatic 10 US$ / tonne 4400.00 29.04 4429.04Shellsol D70 Diluent US$ / tonne 968.00 20.24 988.24Iron Dust US$ / tonne 576.40 14.96 591.36EDTA US$ / tonne 5033.60 23.76 5057.36Potassium Permanganate US$ / tonne 3500.00CMN Clarifier Flocculant US$ / tonne 4400.00 29.04 4429.04Dowex IX Resin (Zinc IX) US$ / tonne 8000.00 14.96 8014.96DIL 150 Diluent US$ / tonne 1012.00 29.04 1041.04Alamine 336 Extractant US$ / tonne 7920.00 29.04 7949.04ITD US$ / tonne 3080.00 29.04 3109.04Activated Carbon US$ / tonne 2997.00 149.60 3146.60Anthracite US$ / tonne 1600.00 161.92 1761.92Garnet US$ / tonne 350.00 74.80 424.80Clay (Crud Treatment) US$ / tonne 176.00 14.96 190.96CoS 1T Product Bulk Bags US$ ea 13.20 0.66 13.86Filter Press Cloths (Large) US$ ea 11792.00 589.60 12381.60Filter Press Cloths (Small) US$ ea 3330.80 166.32 3497.12

Barium Hydroxide US$ / tonne 830.00Filter Aid / Diatomaceous Earth US$ / tonne 366.67Boric Acid US$ / tonne 1300.00 44.00 1344.00SLS US$ / tonne 3036.00 14.96 3050.96Na2SO4 US$ / tonne 484.00 14.96 498.96Anodes US$ ea 968.00 48.40 1016.40Ti Starter Sheets US$ ea 2684.00 134.64 2818.642 Tonne Pallets (export) US$ ea 29.92 0.88 30.80Bags/Frames US$ ea 748.00 37.84 785.84





Caustic Soda (solid) US$ / tonne 432.00Sulphuric Acid US$ / tonne 88.00 20.00 108.00Ethylene Glycol US$ / tonne 1700.00 18.00 1718.00Shipping Containers US$ / unit 2900.00 2000.00 4900.00Coagulant US$ / tonne 3600.00 60.00 3660.00Sulphur US$ / tonne 35.00 40.00 75.00Hydrated lime US$ / tonne 255.56Dust Suppressant US$ / tonne 3250.00 140.00 3390.00Catalyst US$ / Litre 4.70 4.70Deposition inhibitor US$ / tonne 2700.00 140.00 2840.00Tri-sodium phosphate US$ / tonne 8000.00 140.00 8140.00Hydrazine hydrate US$ / tonne 8500.0 140.00 8640.00Biocide US$ / tonne 15.0 20.00 35.00Alum US$ / tonne 270.0 20.00 290.00Sodium Hypochlorite US$ / tonne 180 20.00 200.00Sodium Bisulphite US$ / tonne 800 20.00 820.00Antiscalant US$ / tonne 6520.00 20.00 6540.00

Cost Data

ESTIMATING PARAMETERS

Exchange Rates

Total 8,760 1.14$ AUD/USDMine 7,008 45$ PHP/USDPlant 7,500 0.69$ EUR/USD

Year 1 60%Year 2 90%Year 3+ 100%

Ramp Up

Operating Schedule Hours / year

% of Full Production


BWHC Operating Cost Estimate

USVC‐00008‐CR‐B9005_Rev ACLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: PROJECT POWER SUMMARYRev: Rev A

Area Sub Area Description MCR, kW Absorbed, kW Connected, kW Operating Factor,%

Annual Operating

HoursMWHrs/yr

150 Ore Preparation151 Ore Preparation (Limonite) 1528 1222 1735 100% 7500 9,168152 Ore Preparation (Saprolite) 3176 2541 3336 100% 7500 19,058

200 Leaching210 High Pressure Acid Leaching 2596 2077 3866 100% 7500 15,576220 Atmospheric Leaching 516 412 616 100% 7500 3,094230 Saprolite Neutralisation 376 301 456 100% 7500 2,257240 CCD 1079 863 1469 100% 7500 6,475250 Stage 1 Fe/Al Removal 333 266 453 100% 7500 1,996260 Stage 2 Fe/Al Removal 272 218 392 100% 7500 1,634270 Final Neutralisation 1,113 891 1263 100% 7500 6,681

300 Nickel Recovery310 CMN DSX 2,541 2033 2716 100% 7500 15,248320 Ni-EW 17,505 14004 17505 100% 7500 105,032

400 Major Packagaes

DESIGN POWER

400 Major Packagaes410 Sulphur Handling 0 0 100% 7500 0420 Sulphuric Acid Plant 9183 9183 10100 100% 7500 68,875

Sulphuric Acid Storage and Distribution 131 105 131 100% 7500 784430 Limestone Slurry Plant 567 453 642 100% 7500 3,399440 Lime Slurry Plant 964 771 1079 100% 7500 5,782450 Flocculant And Coagulant 385 308 400 100% 7500 2,312

500 Services and Utilities510 Water Services 1,380 1104 1880 100% 7500 8,279520 Plant Air Supply 546 437 546 100% 7500 3,278

600 Plant Infrastructure 300 240 300 100% 8760 2,102700 General Infrastructure 1,000 800 1000 100% 8760 7,008

Power Allowance (Unquantified Loads and Losses) 500 400 500 100% 8760 3,504

45,992 38,630 50,385291,539.9

34.0Plant Annual Power ConsumptionPower Generated from SAP (MW)



CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: REAGENTS & CONSUMABLES SUMMARYRev: Rev A

PROCESS PLANT REAGENTS AND CONSUMABLES

Area Description ItemUS$, FIS Unit Qty Unit Qty Unit Qty Unit Year 1 Year 2 Year 3 +

ORE PREPARATION Ball Mill Balls 1,850 / t 740 t 1109 t 1233 t 1,369 2,052 2,280Ball Mill Liner 5,890 / t 55 t 123 t 137 t 322 726 807Mill Lubricants 6,020 / t 2.7 t 2.7 t 2.7 t 16 16 16Flocculant - Ore Preparation 4,429 / t 228 t 342 t 380 t 1,010 1,515 1,684

PROCESS PLANT Limestone 2.7 / t 56,637 t 84,956 t 94,395 t 154 231 257Flocculant - CCD 4,429 / t 467 t 701 t 779 t 2,069 3,104 3,449Flocculant - Neutralisation 4,429 / t 24.2 t 36.3 t 40.4 t 107 161 179Caustic Soda (49%) 432 / t 21 t 32 t 36 t 9 14 15Containers 4,900 each 127 Units 84 Units 11 Units 622 412 54Coagulant 3,660 / t 0 t 0 t 0 t 0 0 0

CMN Package:60% Na2S 525 / t 2,789 t 4,184 t 4,649 t 1,464 2,197 2,44199% TEA 1,800 / t 248 t 373 t 414 t 447 671 74533% HCl 213 / t 2,731 t 4,097 t 4,552 t 583 874 971Sodium Polyphoshate 749 / t 86 t 130 t 144 t 65 97 108Sodium Metabisulphite 384 / t 526 t 789 t 877 t 202 303 337Versatic 10 4,429 / t 88 t 132 t 147 t 391 586 651Shellsol D70 Diluent 988 / t 146 t 219 t 243 t 144 216 240Caustic Soda (99.5%) 432 / t 292 t 438 t 487 t 126 189 210Iron Dust 591 / t 4 t 7 t 7 t 3 4 4EDTA 5,057 / t 24 t 36 t 40 t 120 180 200Potassium Permanganate 3,500 / t 0 t 1 t 1 t 1 2 2CMN Clarifier Flocculant 4,429 / t 9 t 13 t 15 t 39 59 66Dowex IX Resin (Zinc IX) 8,015 / t 0 t 1 t 1 t 4 6 6DIL 150 Diluent 1,041 / t 4 t 6 t 7 t 4 7 7Alamine 336 Extractant 7,949 / t 8 t 12 t 14 t 66 99 110ITD 3,109 / t 1 t 1 t 2 t 3 4 5Activated Carbon 3,147 / t 53 t 79 t 88 t 166 249 276Anthracite 1,762 / t 9 t 14 t 15 t 16 24 27Garnet 425 / t 9 t 14 t 15 t 4 6 6Clay (Crud Treatment) 191 / t 9 t 14 t 15 t 2 3 3CoS 1T Product Bags 13.86 each 888 Units 1,332 Units 1,480 Units 12 18 21

ANNUAL COSTS (US$'000)Year 1 Cost Year 2 Year 3 +

CoS oduct ags 3 86 eac 888 U ts ,33 U ts , 80 U ts 8Filter Press Cloths (Large) 12,382 each 29 Units 43 Units 48 Units 357 535 594Filter Press Cloths (Small) 3,497 each 36 Units 54 Units 60 Units 126 189 210

Nickel Electrowinning:Barium Hydroxide 830 / t 68 t 102 t 114 t 57 85 94Diatomaceous Earth 367 / t 96 t 143 t 159 t 35 53 58Boric Acid 1,344 / t 19.26 t 29 t 32 t 26 39 43SLS 3,051 / t 0.10 t 0 t 0 t 0 0 0Na2SO4 499 / t 0.00 t 0 t 0 t 0 0 0Anodes 1,016 each 529 Units 793 Units 881 Units 537 806 895Ti Starter Sheets 2,819 each 519 Units 779 Units 865 Units 1,463 2,194 2,4382 Tonne Pallets (export) 31 each 8,220 Units 12,330 Units 13,700 Units 253 380 422Bags/Frames 786 each 519 Units 779 Units 865 Units 408 612 680

SULPHURIC ACID PLANT Hydrated lime 256 / t 5,015 t 7,522 t 8,358 t 1,282 1,922 2,136Sulphur 75.0 / t 220,914 t 331,371 t 368,190 t 16,569 24,853 27,614Filter Aid 367 / t 625.92 t 938.88 t 1,043.21 t 230 344 383Catalyst 4.7 / L 15,447 L 23,171 L 25,745 L 73 109 121Diesel 0.65 / L 354 kL 236 kL 118 kL 230 153 77Sulphuric Acid 108.00 / t 4,492 t 0.0 t 0.0 t 485 0 0

LIMESTONE PLANT Ball Mill Balls 1,850 / t 103 t 154 t 171 t 190 285 317Ball Mill Liner 5,890 / t 7 t 10 t 12 t 41 61 68Mill Lubricants 6,020 / t 0.2 t 0.2 t 0.2 t 1 1 1

LIME SLAKING PLANT Lime (produced on site) 0 / t 48,848 t 73,271 t 81,413 t 0 0 0Limestone 2.72 / t 82,274 t 123,410 t 137,123 t 224 336 373Ball Mill Balls 1,850 / t 4.9 t 7.3 t 8.1 t 9 14 15Ball Mill Liner 5,890 / t 1.0 t 1.5 t 1.6 t 6 9 10Mill Lubricants 6,020 / t 0.1 t 0.1 t 0.1 t 0 0 0Heavy Fuel Oil (Kiln) 470 / t 6,749 t 10,123 t 11,248 t 3,172 4,758 5,286

TOTAL PROCESSING 35,314 51,763 57,016

SVC-00008-CR-B9005 Agata Nickel Proj Opex (Base Case)_Rev A Page 9 of 22






UTILITIES AND INFRASTRUCTURE

WATER SUPPLY & RETICULATION Caustic 432 / t 21.4 t 32.1 t 35.6 t 9 14 15Alum 290 / t 72.8 t 109.3 t 121.4 t 21 32 35Sodium Hypochlorite 200 / t 0.4 t 0.6 t 0.7 t 0 0 0Sodium Bisulphite 820 / t 5.3 t 8.0 t 8.9 t 4 7 7Antiscalant 6,540 / t 5.3 t 8.0 t 8.9 t 35 52 58

Cooling Towers: Biocide 35 / t 71.4 t 71.4 t 71.4 t 2 2 2Tri-sodium phosphate 8,140 / t 3.6 t 3.6 t 3.6 t 29 29 29

POWER STATION Hydrazine hydrate 8,640 / t 8.9 t 12.3 t 12.8 t 77 106 111Tri-sodium phosphate 8,140 / t 25.5 t 35.2 t 36.9 t 207 287 301Deposition Inhibitor 2,840 / t 6.3 t 8.8 t 9.2 t 18 25 26Heavy Fuel Oil 470 / t 15,674 t 14,115 t 8,723 t 7,367 6,634 4,100

LABORATORY Grade Control Assays 3 /assay 10,950 assay 10,950 assay 10,950 assay 33 33 33Metallurgical Assays 3 /assay 35,040 assay 35,040 assay 35,040 assay 105 105 105

ENVIRONMENTAL Environmental Assays 4 /assay 4,380 assay 4,380 assay 4,380 assay 18 18 18

MOBILE EQUIPMENT Fuel (non mining) 0.65 / L 2,559 kL 2,559 kL 2,559 kL 1,663 1,663 1,663

POWER STATION Power Credit (Excess) $ kWh kWh kWh 0 0 0Power Usage (Grid) $ kWh kWh kWh 0 0 0

TOTAL UTILITIES AND INFRASTRUCTURE 9,589 9,007 6,504

SVC-00008-CR-B9005 Agata Nickel Proj Opex (Base Case)_Rev A Page 10 of 22


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: MAINTENANCE EXPENSES SUMMARYRev: Rev A

MAINTENANCE EXPENSES

US$'000s/yr US$/lb Ni

Process Plant AREA 151 - ORE PREPARATION (LIMONITE) 18,267 2.5% 491 0.008AREA 152 - ORE PREPARATION (SAPROLITE) 15,961 2.5% 429 0.007AREA 210 - HIGH PRESSURE ACID LEACHING 91,392 7.0% 6,877 0.114AREA 220 - ATMOSPHERIC LEACHING 10,622 3.0% 343 0.006AREA 230 - SAPROLITE NEUTRALISATION 4,054 3.0% 131 0.002AREA 240 - CCD 51,528 2.5% 1,385 0.023AREA 250 - STG 1 Fe/Al REMOVAL 7,643 3.0% 246 0.004AREA 260 - STG 2 Fe/Al REMOVAL 6,629 2.5% 178 0.003AREA 270 - FINAL NEUTRALISATION 3,413 2.5% 92 0.002AREA 310 - CMN DSX 74,139 3.0% 2,391 0.040AREA 320 - Ni - EW 87,420 2.0% 1,880 0.031

Sub-total Area 200 Process Plant 371,068 14,442 0.24

Process Services AREA 410 - SULPHUR HANDLING AND SULPHURIC ACID STORAGE 1,901 2.0% 41 0.001AREA 420 - SULPHURIC ACID PLANT 105,805 2.3% 2,616 0.043AREA 420 - SULPHURIC ACID STORAGE AND HANDLING 18,179 2.0% 391 0.006AREA 430 - LIMESTONE SLURRY PLANT 3,324 3.0% 107 0.002AREA 440 - LIME SLURRY PLANT 21,758 3.0% 702 0.012AREA 450 - FLOCCULANT AND COAGULANT PREPARATION 1,133 2.0% 24 0.000

Sub-total Area 400 Process Services 152,100 3,881 0.06

Water Services and Utilities AREA 510 - WATER SUPPLY 22,322 2.3% 552 0.009AREA 520 - PLANT AIR SUPPLY 2,782 2.3% 69 0.001AREA 530 - POWER DISTRIBUTION 3,435 1.5% 55 0.001AREA 540 - POWER STATION AND AUXILIARY BOILERS 77,419 2.3% 1,914 0.032AREA 550 - PLANT DCS 3,824 1.5% 62 0.001AREA 560 - MOBILE EQUIPMENT 6,900 4.0% 297 0.005

Sub-total Area 500 Water Services and Utilities 116,682 2,949 0.05

Process Plant Infrastructure AREA 611 - SITE DEVELOPMENT (BULK EARTHWORKS) 14,238 0.1% 15 0.000AREA 612 - SITE DEVELOPMENT (SEDIMENTATION POND) 2,188 0.5% 12 0.000AREA 613 - SITE DEVELOPMENT (PLANT ROADS AND UPGRADES) 3,712 0.5% 20 0.000AREA 620 - SITE BUILDINGS 7,689 0.5% 41 0.001AREA 630 - PROCESS PLANT BUILDINGS 6,029 0.5% 32 0.001AREA 640 - UNLOADING FACILITIES 9,485 1.0% 102 0.002AREA 650 - PORT FACILITIES 44,962 0.5% 242 0.004AREA 660 - PIPERACKS 30,733 0.5% 165 0.003AREA 670 - RESIDUE STORAGE FACILITY 35,714 2.0% 768 0.013

Sub-total Area 600 Process Plant Infrastructure 154,750 1,397 0.02

General Infrastructure AREA 710 - ROADS OFF-SITE 12,651 0.5% 68 0.001AREA 720 - VILLAGE BLDGS- ACCOM INCL.MESSING, RECREATION E 10,069 0.5% 54 0.001AREA 730 - VILLAGE SERVICES 8,607 0.5% 46 0.001AREA 740 - AIRSTRIP 0 0.0% 0 0.000AREA 750 - ELECTRONIC DATA SERVICES 1,615 1.0% 17 0.000AREA 760- SECURITY- BUILDING, FENCING, PLANT & VILLAGE 460 1.0% 5 0.000

Sub-total General Infrastructure 33,402 191 0.00

TOTAL MAINTENANCE EXPENSES 22,860 0.38

DepartmentAnnual Cost

Area Description Installed Cost US$'000s

Factor as % of equip cost


BWHC Operating Cost EstimateCLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9005_Rev APROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: GENERAL EXPENSES SUMMARYRev: Rev A

GENERAL EXPENSES

US$ /unit Qty Unit Year 1 Year 2 Year 3 +

Processing Office and General Supplies 500 /man-yr 143 manyr 72 72 72

Emergency Freight 100,000 /lot 1 lot 100 100 100

Sub-total Process (excl. contingency) 172 172 172

Administration Safety Supplies 150 /man-yr 888 manyr 133 133 133andGeneral Software Licences 24,300 /lot 1 lot 24 24 24

Office & Gen. Supplies 500 /man-yr 146 manyr 73 73 73

Office Rental- Manila office 12,000 $/month 12 month/y 144 144 144- Butuan office 2,500 $/month 12 month/y 30 30 30

Recruitment & Advertising, Non-Citizen 17,280 /man-yr 1 manyr 17 17 17Recruitment & Advertising, Philippines 400 /man-yr 42 manyr 17 17 17Work Permits 55 /man-yr 69 manyr 4 4 4

Government and Commercial Charges 10,000 /lot 1 lot 10 10 10Legal Fees 10,000 /lot 1 lot 10 10 10Audits 10,000 /lot 1 lot 10 10 10

Insurance 0.15% DIRECT CAPEX 838 US$M 0.15 % 1,256 1,256 1,256

ANNUAL COSTS (US$'000)Department Description of expense QuantityCost

Insurance 0.15% DIRECT CAPEX 838 US$M 0.15 % 1,256 1,256 1,256

Telecommunications 750,000 /lot 1 lot 750 750 750Couriers & Postage 50,000 /lot 1 lot 50 50 50

Transport (local employees)

Medical 2,500 /month 12 months 30 30 30

Recreation and Entertaiment 200,000 /lot 1 lot 200 200 200

Community Support - Foundation 500,000 /yr 1 lot 500 500 500

Training Materials - Senior staff 2,500 /man-yr 148 manyr 370 370 370Training Materials - non staff 600 /man-yr 740 manyr 444 444 444Seminars 3,000 /seminar 40 seminars 120 120 120

Business travel - Site/Philippines 750 /trip 50 trips 38 38 38Business travel - Site/international 7,500 /trip 15 trips 113 113 113

Sub-total Administration & General (excl. contingency) 4,343 4,343 4,343

TOTAL GENERAL EXPENSES 4,514 4,514 4,514


BWHC Operating Cost EstimateCLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9005_Rev APROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: CONTRACT EXPENSES SUMMARYRev: Rev A

CONTRACT EXPENSES

Year 1 Year 2 Years 3+

Cost Annual Usage Consmpt'n Consmpt'n Year Year YearsDepartment Description of expense US$ /unit qty unit qty unit qty unit 1 2 3+

ProcessingMetallurgical Testwork 36,000 lot 4 lot/y 4 lot/y 3 lot/y 144 144 108Consulting Services 15,000 trip 5 trips 5 trips 3 trips 75 75 45Laboratory check analyses - Process 5 sample 1,500 samples 1,500 samples 1,500 samples 8 8 8Laboratory Equipment Maintenance contract 15,000 lot 1 lot 1 lot 1 lot 15 15 15Major Maintenance services (e.g. acid plant/power plant) 5,715,000 lot 1 lot 1 lot 1 lot 5,715 5,715 5,715

Sub-total Processing 5,957 5,957 5,891

Product TransportProduct Transport 80 container 822 cont. 1,233 cont. 1,370 cont. 66 99 110Product Transport Insurance (% of product value) 2,500 container 822 cont. 1,233 cont. 1,370 cont. 2,055 3,083 3,425

Sub-total Product Transport 2,121 3,181 3,535

Administration & GeneralOffice/Comms Equipment Maintenance Contract 25 000 lot 1 lot 1 lot 1 lot 25 25 25

ANNUAL COSTS ($,000)

Office/Comms Equipment Maintenance Contract 25,000 lot 1 lot 1 lot 1 lot 25 25 25Laboratory check analyses - Environmental 90 sample 500 samples 500 samples 500 samples 45 45 45Language Training costs - Staff 75 $/man/y 79 man/y 79 man/y 88 man/y 6 6 7Language Training costs - Non Staff 40 $/man/y 738 man/y 735 man/y 737 man/y 30 29 29Camp Operations & Catering contract

Non citizen and senior staff 9.70 cmd 38,690 cmd 36,570 cmd 37,895 cmd 375 355 368Non staff 4.10 cmd 196,100 cmd 197,425 cmd 197,425 cmd 804 809 809Local Philippine crib meal 1.50 meal 195,570 meals/y 194,775 meals/y 195,305 meals/y 293 292 293Mobilisation 10,000 /year 1 lot 1 lot 1 lot 10 10 10Equipment Supply 125,000 /year 1 lot 1 lot 1 lot 125 125 125Coffe Shop, Convenience Store etc, operations 30,000 /year 1 lot 1 lot 1 lot 30 30 30

Expatriate Staff Leave Travel (twice per year) 1,500 trip 408 trips/y 408 trips/y 372 trips/y 612 612 558National Staff Leave Travel (once per year) 600 trip 237 trips/y 237 trips/y 264 trips/y 142 142 158Consulting Services (non-medical) 10,000 trip 18 trips 18 trips 12 trips 180 180 120Consulting Services (medical) 50,000 year 1 year 1 year 1 year 50 50 50

Sub-total Administration & General 2,727 2,711 2,627

TOTAL CONTRACT EXPENSES 10,805 11,848 12,053



CLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9005_Rev APROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: LABOUR RATES SUMMARYRev: Rev A

Type Description of Role Shift JOB CODE TOTAL US$/yr

Non-citizen General Manager Weekly EA1 325,000Non-citizen General Manager Day shift only EA2 325,000Non-citizen General Manager Continuous shift EA3 325,000Non-citizen Area Manager Weekly EB1 190,000Non-citizen Area Manager Day shift only EB2 190,000Non-citizen Area Manager Continuous shift EB3 205,000Non-citizen Department Manager Weekly EC1 165,000Non-citizen Department Manager Day shift only EC2 165,000Non-citizen Department Manager Continuous shift EC3 180,000Non-citizen Superintendent Weekly ED1 150,000Non-citizen Superintendent Day shift only ED2 150,000Non-citizen Superintendent Continuous shift ED3 150,000Non-citizen Chief Engineer Weekly EE1 150,000Non-citizen Chief Engineer Day shift only EE2 150,000Non-citizen Chief Engineer Continuous shift EE3 150,000Non-citizen Senior Engineer Weekly EF1 145,000Non-citizen Senior Engineer Day shift only EF2 145,000Non-citizen Senior Engineer Continuous shift EF3 145,000Non-citizen Engineer Weekly EG1 130,000Non-citizen Engineer Day shift only EG2 130,000Non-citizen Engineer Continuous shift EG3 130,000Non-citizen Foreman Weekly EH1 120,000Non-citizen Foreman Day shift only EH2 120,000Non-citizen Foreman Continuous shift EH3 120,000Non-citizen Senior Tradesman/Trainer, Surveyor Weekly EI1 100,000Non-citizen Senior Tradesman/Trainer, Surveyor Day shift only EI2 100,000Non-citizen Senior Tradesman/Trainer, Surveyor Continuous shift EI3 100,000National General Manager Weekly NA1 108,000National General Manager Day shift only NA2 108,000National General Manager Continuous shift NA3 108,000National Area Manager Weekly NB1 68,000National Area Manager Day shift only NB2 68,000National Area Manager Continuous shift NB3 68,000National Department Manager Weekly NC1 41,000National Department Manager Day shift only NC2 41,000National Department Manager Continuous shift NC3 41,000National Superintendent Weekly ND1 27,000National Superintendent Day shift only ND2 27,000National Superintendent Continuous shift ND3 27,000National Chief Engineer Weekly NE1 27,000National Chief Engineer Day shift only NE2 27,000National Chief Engineer Continuous shift NE3 27,000National Senior Engineer Weekly NF1 20,000National Senior Engineer Day shift only NF2 20,000National Senior Engineer Continuous shift NF3 20,000National Engineer Weekly NG1 8,000National Engineer Day shift only NG2 8,000National Engineer Continuous shift NG3 8,000National Foreman Weekly NH1 6,000National Foreman Day shift only NH2 6,000National Foreman Continuous shift NH3 6,000National Senior Tradesman/Trainer, Surveyor Weekly NI1 7,000National Senior Tradesman/Trainer, Surveyor Day shift only NI2 7,000National Senior Tradesman/Trainer, Surveyor Continuous shift NI3 7,000National Community relations, nurse, safety officer Weekly NJ1 7,000National Community relations, nurse, safety officer Day shift only NJ2 7,000National Community relations, nurse, safety officer Continuous shift NJ3 7,000National Payroll officer Weekly NK1 8,000National Payroll officer Day shift only NK2 8,000National Payroll officer Continuous shift NK3 8,000National Secretary Weekly NL1 6,000National Secretary Day shift only NL2 6,000National Secretary Continuous shift NL3 6,000National Typist/clerk Weekly NM1 6,000National Typist/clerk Day shift only NM2 6,000National Typist/clerk Continuous shift NM3 6,000National Trainee secretarial Weekly NN1 4,000





National Trainee secretarial Day shift only NN2 4,000National Trainee secretarial Continuous shift NN3 4,000National Trainee secretarial Local, continuous shift NN4 4,000National Senior Plant Operator, Eqpt Op, Trades Weekly NR1 6,000National Senior Plant Operator, Eqpt Op, Trades Day shift only NR2 6,000National Senior Plant Operator, Eqpt Op, Trades Continuous shift NR3 6,000National Ctrl Room Operator, Eqpt Op, Trades Weekly NS1 6,000National Ctrl Room Operator, Eqpt Op, Trades Day shift only NS2 6,000National Ctrl Room Operator, Eqpt Op, Trades Continuous shift NS3 6,000National Plant Operator, Eqpt Op, Trades Weekly NT1 5,000National Plant Operator, Eqpt Op, Trades Day shift only NT2 5,000National Plant Operator, Eqpt Op, Trades Continuous shift NT3 5,000National Plant Operator, Eqpt Op, Trades Local, continuous shift NT4 5,000National Plant Operator, Eqpt Op, Trades Local, day shift NT5 5,000National Trainee - Operator or TA. Level 2 Weekly NU1 4,000National Trainee - Operator or TA. Level 2 Day shift only NU2 4,000National Trainee - Operator or TA. Level 2 Continuous shift NU3 4,000National Trainee - Operator or Trade Weekly NV1 3,000National Trainee - Operator or Trade Day shift only NV2 3,000National Trainee - Operator or Trade Continuous shift NV3 3,000National Labourer - Skilled Weekly NW1 3,000National Labourer - Skilled Day shift only NW2 3,000National Labourer - Skilled Continuous shift NW3 3,000National Labourer - Skilled Local, continuous shift NW4 3,000


BWHC

CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00

APPENDIX: CONTRACT EXPENSES SUMMARYRev: Rev A

JobDepartment Description (Yrs) Code

MINING Mine ManagementMine Superintendent (5) ED2

(6) ND2Mining Engineer (0) NG3Geologists (0) NG1Mine Planners (0) NH1

MINING TOTAL PERSONNEL (excl. contingency)

PROCESS OperationsProduction Superintendent (9) EC2

(0) NC2General Foreman - Processing Plant (3) ED2

(0) ND2Chief Metallurgist (5) EE2

(0) NE2Plant Metallurgist (0) NH2

(5) EH2(6) NH2

Research Metallurgist (0) NH2(5) EH2(6) NH2

Process Control Metallurgist (0) NI2

Operating Cost Estimate

USVC‐00008‐CR‐B9005_Rev A


Expat Nat'al Expat Nat'al Expat Nat'al Year Year Year(E) (N) Total (E) (N) Total (E) (N) Total 1 2 3+

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 12 12 12

1 6 7 1 6 7 1 6 7 194 194 194

1 0 1 1 0 1 1 0 1 165 165 1650 1 1 0 1 1 0 1 1 41 41 412 0 2 2 0 2 2 0 2 300 300 3000 2 2 0 2 2 0 2 2 54 54 541 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 27 27 270 3 3 0 3 3 0 3 3 18 18 183 0 3 3 0 3 3 0 3 360 360 3600 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 61 0 1 1 0 1 1 0 1 120 120 1200 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 6 6 28 28 42

Annual Cost US$,000 / year

Process Control Metallurgist (0) NI2(2) EI2(3) EI2(4) EI2

Senior Secretary (0) NL2Technician/Trainees (0) NK2Trainers (20) EI2

Process PlantArea Supervisors (3) EE2

(4) NE2(5) EE2(6) NE2

Shift Supervisors (0) NF3(3) EF3(4) NF3(2) EF3

Graduate Engineers (0) NI3Control Room Operators (0) NS3

(3) ES3(4) NS3

0 4 4 0 4 4 0 6 6 28 28 422 0 2 2 0 2 0 0 0 200 200 01 0 1 1 0 1 1 0 1 100 100 1001 0 1 1 0 1 1 0 1 100 100 1000 1 1 0 1 1 0 1 1 6 6 60 6 6 0 6 6 0 6 6 48 48 482 0 2 2 0 2 2 0 2 200 200 200

2 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 80 80 804 0 4 4 0 4 4 0 4 580 580 5800 0 0 0 0 0 0 6 6 0 0 1204 0 4 4 0 4 0 0 0 580 580 00 5 5 0 5 5 0 5 5 35 35 350 4 4 0 4 4 0 4 4 24 24 244 0 4 4 0 4 4 0 4 400 400 4000 0 0 0 0 0 0 0 0 0 0 0


BWHC




Plant Operators (local, shift) (0) NT4Plant Operators (nationals, shift) (0) NT3Labourers (local, weekly) (0) NW1Labourers (local, shift) (0) NW4Trainees (level 1) (0) NV1Trainees (level 2) (0) NU2

MaintenanceMaintenance Superintendent (8) ED2Senior Secretary (0) NL2Engineers (3) EG2

(4) EG2(5) EG2(0) NG2

Draftsman (0) NJ2General Foreman (3) EE2

(4) NE2Senior Supervisor (6) EH2

(7) NH2Graduate Engineers (0) NI2Maintenance Planner (0) NI2

(4) EI2(5) NI2

Shift Supervisors (0) NF3Tradesmen (0) NR3






0 19 19 0 19 19 0 19 19 95 95 950 54 54 0 54 54 0 54 54 270 270 2700 12 12 0 12 12 0 12 12 36 36 360 52 52 0 52 52 0 52 52 156 156 1560 10 10 0 10 10 0 10 10 30 30 300 2 2 0 2 2 0 2 2 8 8 8

1 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 6 6 61 0 1 1 0 1 1 0 1 130 130 1301 0 1 1 0 1 1 0 1 130 130 1301 0 1 1 0 1 1 0 1 130 130 1300 3 3 0 3 3 0 6 6 24 24 480 2 2 0 2 2 0 2 22 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 03 0 3 3 0 3 3 0 3 360 360 3600 0 0 0 0 0 0 0 0 0 0 00 5 5 0 5 5 0 5 5 35 35 350 2 2 0 2 2 0 2 2 14 14 142 0 2 2 0 2 2 0 2 200 200 2000 0 0 0 0 0 0 0 0 0 0 00 8 8 0 8 8 0 8 8 160 160 1600 66 66 0 66 66 0 66 66 396 396 396Tradesmen (0) NR3

Trades Assistant (0) NV1Crane Driver (0) NS2Trainees (0) NV2Labourers (0) NW1

Analytical ServicesChief Chemist (6) EE2

(7) NE2Chemist (0) NH3Assay Technician (0) NJ3Sample Preparation (0) NW3Sampler (0) NT4Trainee (0) NW1

PROCESS TOTAL PERSONNEL (excl. contingency)

0 66 66 0 66 66 0 66 66 396 396 3960 20 20 0 20 20 0 20 20 60 60 600 3 3 0 3 3 0 3 3 18 18 180 8 8 0 8 8 0 8 8 24 24 240 4 4 0 4 4 0 4 4 12 12 12

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 5 5 0 5 5 0 5 5 30 30 300 8 8 0 8 8 0 8 8 56 56 560 12 12 0 12 12 0 12 12 36 36 360 4 4 0 4 4 0 4 4 20 20 200 5 5 0 5 5 0 5 5 15 15 15

42 337 379 42 337 379 36 348 384 7,273 7,273 6,651


BWHC




UTILITIES & INFRASTRUCTURE

OperationsACID / POWER / STEAM SYSTEMSGeneral Foreman (12) ED2Area Supervisors (5) EE2

(6) NE2Secretary (0) NM1Shift Supervisors (3) EE3

(4) NE3(5) EE3(6) NE3

Operators (0) NT3Control Room Operators (3) ES3

(4) NS3Graduate Engineer (0) NI2Trainees (6) NV3WATER & AIR SYSTEMSOperators (0) NW1

MaintenanceEngineering Manager (10) EB2Maintenance Superintendent (7) ED2






1 0 1 1 0 1 1 0 1 150 150 1501 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 62 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 00 8 8 0 8 8 0 8 8 40 40 404 0 4 4 0 4 4 0 4 400 400 4000 0 0 0 0 0 0 0 0 0 0 00 5 5 0 5 5 0 5 5 35 35 350 0 0 0 0 0 0 0 0 0 0 0

0 4 4 0 4 4 0 4 4 12 12 12

1 0 1 1 0 1 1 0 1 190 190 1901 0 1 1 0 1 1 0 1 150 150 150Maintenance Superintendent (7) ED2

(8) ND2General Foreman (3) EE2

(4) NE2Engineers (3) EG2

(4) NG2Senior Supervisor (5) EH2

(6) NH2Graduate Engineer (0) NI2Mainenance Planner (0) NI2Secretary (0) NM1Shift Supervisors (0) NF3Tradesmen (0) NR3Trades Assistant (0) NV1Labourers (0) NW1

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 130 130 1300 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 120 120 1200 0 0 0 0 0 0 0 0 0 0 00 3 3 0 3 3 0 3 3 21 21 210 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 80 80 800 20 20 0 20 20 0 20 20 120 120 1200 4 4 0 4 4 0 4 4 12 12 120 1 1 0 1 1 0 1 1 3 3 3


BWHC




IT & CommunicationsIT & T Superintendent (5) ED2

(6) ND2Systems Administrators (0) NG3IT Officers (0) NG3Communication Technicians (0) NG3Secretary (0) NM1

TransportationTransport Superintendent (4) ED2

(5) ND2Senior Secretary (0) NL2Product Shipping Officer (0) NH2Port Supervisor (0) NH2Wharf Operators (0) NT2

(0) NT5General Hands (0) NT1General Transport Supervisor (0) NH2Product Supervisor (0) NH2Bus Drivers (0) NT4Drivers (0) NT4Light Vehicle Maintenance (0) NT1Airport Supervisor (0) NH2Airport Operations (0) NT2






1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 32 32 320 4 4 0 4 4 0 4 4 32 32 320 2 2 0 2 2 0 2 2 16 16 160 1 1 0 1 1 0 1 1 6 6 6

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 20 20 200 4 4 0 4 4 0 4 4 20 20 200 16 16 0 16 16 0 16 16 80 80 800 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 12 12 0 12 12 0 12 12 60 60 600 12 12 0 12 12 0 12 12 60 60 600 6 6 0 6 6 0 6 6 30 30 300 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 0Airport Operations (0) NT2

Customs Officer (0) NT2Tug Crew Master (0) NR2Tug Crew Engineer (0) NS2Deck Hands (0) NT1Limestone Haulage Supervisor (0) NH3Heavy Equip (FEL) Maintenance (0) NT3

UTILITIES & TOTAL PERSONNEL (excl. contingency)INFRASTRUCTURE

ADMINISTRATION & GENERAL

General ManagementPresident Director (0) EA2Executive Secretary (0) NJ2General Manager (20) EA2Executive Secretary (0) NJ2Operations Manager (20) EB2

Finance & Admin ManagementFinance & Administration Manager (20) EB2Secretary (0) NJ2

0 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 10 10 100 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 20 20 200 1 1 0 1 1 0 1 1 6 6 60 8 8 0 8 8 0 8 8 40 40 40

17 141 158 17 141 158 17 141 158 3,168 3,168 3,168

0 1 1 0 1 1 0 1 1 325 325 3250 1 1 0 1 1 0 1 1 7 7 71 0 1 1 0 1 1 0 1 325 325 3250 1 1 0 1 1 0 1 1 7 7 71 0 1 1 0 1 1 0 1 190 190 190

1 0 1 1 0 1 1 0 1 190 190 1900 1 1 0 1 1 0 1 1 7 7 7


BWHC




SupplySupply Superintendent (3) ED2

(4) ND2Purchasing Supervisor (0) NI2Store Controller (0) NH2Storemen (local, weekly) (0) NL1Storemen (continuous shift) (0) NL3Senior Storemen (0) NJ2Purchasing Officer (0) NK2Secretary (0) NM1Truck/forklift (0) NS1

AccountingChief Accountant (0) ND2Financial Controller (0) NE2Senior Accountant (0) NG2Cost Accountant (0) NH2Accountant (0) NH2Paymaster (0) NK2Clerk (local, weekly) (0) NM1Clerk (dayshift only) (0) NM2Accounts Payable Clerk (0) NM2Secretary (0) NL1

Office Administration






1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 24 24 240 3 3 0 3 3 0 3 3 21 21 210 8 8 0 8 8 0 8 8 64 64 640 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 24 24 24

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 27 27 270 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 24 24 240 2 2 0 2 2 0 2 2 16 16 160 4 4 0 4 4 0 4 4 24 24 240 4 4 0 4 4 0 4 4 24 24 240 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 12 12 12

Office AdministrationOffice Administrator (0) NH2Data Analyst (0) NK2Reception (0) NN1Junior (0) NN1Travel Coordinator (0) NH2

0 1 1 0 1 1 0 1 1 6 6 60 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 8 8 80 8 8 0 8 8 0 8 8 32 32 320 2 2 0 2 2 0 2 2 12 12 12


BWHC




Contracts AdministrationContracts Administrator (3) EH2Contracts Administrator (0) NH2Secretary (0) NM1

External OfficesGeneral Procurement Officer/Office Mng (0) NI1Secretary (0) NL1Driver (0) NW1Administration Support (0) NM1Assistants (0) NN1

Government & Community RelationsGovernment & Community Relations Ma (0) ND2Community Development Officer (0) NE2Protocol (Agusan del Norte) (0) NK2Protocol (Manila) (0) NK1Government Liason (0) NK1Secretaries (0) NL1

SecuritySecurity Chief (0) ND2Senior Security Officers (0) NK2Security Officers (0) NL3Guards (0) NS3






1 0 1 1 0 1 1 0 1 120 120 1200 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 6

0 2 2 0 2 2 0 2 2 14 14 140 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 12 12 120 2 2 0 2 2 0 2 2 12 12 120 3 3 0 3 3 0 3 3 12 12 12

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 27 27 270 3 3 0 3 3 0 3 3 24 24 240 4 4 0 1 1 0 1 1 32 8 80 1 1 0 1 1 0 1 1 8 8 80 2 2 0 2 2 0 2 2 12 12 12

0 1 1 0 1 1 0 1 1 27 27 270 4 4 0 4 4 0 4 4 32 32 320 12 12 0 12 12 0 12 12 72 72 720 100 100 0 100 100 0 100 100 600 600 600Guards (0) NS3

Secretary (0) NM1

ServicesServices Supervisor (0) ND2Cleaners (0) NW1Drivers (0) NW1General (0) NW1

HR ManagementHuman Resources Manager (0) NC2Senior Secretary (0) NL2

HR PersonnelPersonnel Supervisor (0) ND2Employment Officer (0) NI2Assistant Employment Officer (0) NL2Recruitment (0) NI2

0 100 100 0 100 100 0 100 100 600 600 6000 1 1 0 1 1 0 1 1 6 6 6

0 1 1 0 1 1 0 1 1 27 27 270 20 20 0 20 20 0 20 20 60 60 600 16 16 0 16 16 0 16 16 48 48 480 12 12 0 12 12 0 12 12 36 36 36

0 1 1 0 1 1 0 1 1 41 41 410 1 1 0 1 1 0 1 1 6 6 6

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 7 7 7


BWHC




IR PersonnelIR Manager (0) ND2Assistant (0) NN2

Safety/TrainingSafety/Training Co-ordinator (20) ED2Safety Inspector (0) NI2Safety Induction Officer (0) NI2Safety/Training Officer (0) NI2Secretary (0) NM1Emergency Services Personnel (0) NK3Technical Training Head (20) NH2Teachers (Trades) (0) NI2

(5) EI2(20) EI2

Assistants (0) NN2Trade Instructors (0) NI2Language Instructors (0) NI2Tradesmen (0) NT2General (0) NW1

MedicalMedical Supervisor (0) ND2Paramedic (0) NI2Nurses (0) NJ3






0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 4 4 4

1 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 7 7 70 2 2 0 2 2 0 2 2 14 14 140 1 1 0 1 1 0 1 1 6 6 60 8 8 0 8 8 0 8 8 64 64 641 0 1 1 0 1 1 0 1 6 6 60 10 10 0 10 10 0 10 10 70 70 701 0 1 1 0 1 1 0 1 100 100 1001 0 1 1 0 1 1 0 1 100 100 1000 5 5 0 5 5 0 5 5 20 20 200 4 4 0 4 4 0 4 4 28 28 280 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 10 10 100 2 2 0 2 2 0 2 2 6 6 6

0 2 2 0 2 2 0 2 2 54 54 540 1 1 0 1 1 0 1 1 7 7 70 4 4 0 4 4 0 4 4 28 28 28Nurses (0) NJ3

First Aid (0) NK3Assistants (0) NN4

EnvironmentEnvironmental Manager (0) NC2Environmental Officer (0) NI2Technicians (0) NJ1Environmental Chemist (0) NH2Secretary (0) NM1

ADMINISTRATION TOTAL PERSONNEL (excl. contingency) & GENERAL

SITE TOTAL TOTAL PERSONNEL (excl. contingency)

0 4 4 0 4 4 0 4 4 28 28 280 4 4 0 4 4 0 4 4 32 32 320 4 4 0 4 4 0 4 4 16 16 16

0 1 1 0 1 1 0 1 1 41 41 410 2 2 0 2 2 0 2 2 14 14 140 8 8 0 8 8 0 8 8 56 56 560 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 6

9 333 342 9 330 339 9 330 339 3,838 3,814 3,814

Excl. mining Excl. mining Excl. mining

69 817 886 69 814 883 63 825 888 14,473 14,449 13,827








SCOPING STUDY


OPTION 1 (Large Autoclave)


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: OPERATING COST SUMMARYRev: Rev A


28,109 42,176 46,859 0.51 0.51 0.51

14,625 14,655 14,033 0.26 0.18 0.15







Contingency 0% 0 0 0 0.00 0.00 0.00

158,018 197,585 206,148

6,271 5,227 4,908

Cobalt Revenue lb/annum 3,362,000 5,044,000 5,604,000 Co Price, US$/lb 18.00(US $) 60,516,000 90,792,000 100,872,000 Co % Payable 80%payable 48,412,800 72,633,600 80,697,600credit /lb Ni 0.87 0.87 0.87


2.22

Cost Centre

Consumables

PROJECT OPERATING COST (US $)

PROJECT OPERATING COST (US $/t Ni)

Mining & Haulage

2.372.84

Labour

USVC-00008-CR-B9006 Agata Nickel Proj Opex (Option 1)_Rev A Page 2 of 22


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: PRODUCTION SUMMARYRev: Rev A


Feed Tonnage - ROM Limonite Ore wt/a 1,831,000 2,747,000 3,052,000

dt/a 1,203,000 1,805,000 2,005,000

- HPAL Feed dt/a 1,200,000 1,801,000 2,001,000

- ROM Saprolite Ore wt/a 1,650,000 2,476,000 2,751,000

dt/a 1,320,000 1,981,000 2,201,000

- AL/SPN Feed dt/a 1,320,000 1,981,000 2,201,000


lb/a 55,603,000 83,404,000 92,671,000

Cobalt Sulphide Production wt/a 2,700 4,100 4,540

dt/a 2,400 3,500 3,920

Contained Cobalt Production t/a 1,520 2,290 2,540

lb/a 3,362,000 5,044,000 5,604,000





LIMONITEROM Ore - Wet t/h 244.19 366.28 406.98




PRODUCTSNickel t/h 3.36 5.04 5.604Cobalt Sulphide -Wet t/h 0.36 0.55 0.606

-Dry t/h 0.31 0.47 0.523Contained Co t/h 0.20 0.30 0.339


Overall Sulphuric Acid Consumption t/h 139.2 208.8 232.0

Consumption Data:-

Production Data:-

p pSuphuric Acid to CMN t/h 0.2 0.3 9.88Suphuric Acid to Demin Water Plant t/h 0.0 0.0 0.34Suphuric Acid to HPAL t/h 50.4 75.6 84.0Suphuric Acid to AL t/h 82.7 124.0 137.8

Flocculant - Ore Preparation kg/h 46.7 70.0 77.8Flocculant - CCD kg/h 95.6 143.3 159Flocculant - Neutralisation kg/h 1.82 2.73 3.04Flocculant - Sulphide Precip. kg/h 3.13 4.69 5.22Coagulant kg/h 0.0 0.0 0.0

Overall Limestone Consumption t/h 28.42 42.63 47.37Limestone to Lime Kiln t/h 16.83 25.24 28.05Limestone to Limestone Slurry Plant t/h 11.58 17.38 19.31Lime (ex Kiln) t/h 9.99 14.99 16.65

60% Na2S kg/h 570.53 855.79 950.8899% TEA kg/h 50.81 76.21 84.6833% HCl kg/h 558.62 837.93 931.04Sodium Polyphoshate kg/h 17.67 26.51 29.45Sodium Metabisulphite kg/h 107.63 161.44 179.38Versatic 10 kg/h 18.04 27.06 30.07Shellsol D70 Diluent kg/h 29.82 44.73 49.70Caustic Soda (NaOH) kg/h 59.76 89.65 99.61Iron Dust kg/h 0.90 1.34 1.49EDTA kg/h 4.860 7.290 8.10Potassium Permanganate kg/h 0.09 0.13 0.14





CMN Clarifier Flocculant kg/h 1.816 2.724 3.03Dowex IX Resin (Zinc IX) kg/h 0.098 0.147 0.16DIL 150 Diluent kg/h 0.884 1.325 1.47Alamine 336 Extractant kg/h 1.694 2.540 2.82ITD kg/h 0.196 0.295 0.33Activated Carbon kg/h 10.77 16.16 17.96Anthracite kg/h 1.878 2.816 3.13Garnet kg/h 1.878 2.816 3.13Clay (Crud Treatment) kg/h 1.84 2.76 3.07Barium Hydroxide kg/h 13.966 20.948 23.28Diatomaceous Earth kg/h 19.549 29.324 32.58Boric Acid kg/h 3.939 5.909 6.57SLS kg/h 0.020 0.029 0.03Na2SO4 kg/h 0.000 0.000 0.00CoS 1T Product Bags #/y 1362 2043 2270Filter Press Cloths (Large) #/h 0.006 0.009 0.01Filter Press Cloths (Small) #/h 0.007 0.011 0.01Anodes #/h 0.108 0.162 0.18Ti Starter Sheets #/h 0.106 0.159 0.182 Tonne Pallets (export) #/y 12600 18900 21000Bags/Frames #/h 0 106 0 159 0 18

Consumption Data:-

Bags/Frames #/h 0.106 0.159 0.18

Caustic Soda (NaOH) for Water Treatment t/h 0.004 0.005 0.006Sulphur - Sulphuric Acid Plant t/h 45.18 67.78 75.31

- TOTAL t/h 45.18 67.78 75.31Filtered Water t/h 458.6 688.0 764RO Water t/h 0.0 0.0 0Demin Water t/h 88.5 132.8 148BFW t/h 208.9 313.3 348Potable Water t/h 3.7 5.5 6



Auxiliary Boiler Steam Demand t/h 19.4








Mill Lubricants US$ / tonne 6000.00 20.00 6020.00Limestone US$ / tonne 1.55 1.17 2.72Flocculants - Ore Preparation US$ / tonne 4400.00 29.04 4429.04


60% Na2S US$ / tonne 525.0099% TEA US$ / tonne 1800.0033% HCl US$ / tonne 213.33Sodium Polyphoshate US$ / tonne 720.00 29.04 749.04Sodium Metabisulphite US$ / tonne 384.00

S$ /

Cost Data

Versatic 10 US$ / tonne 4400.00 29.04 4429.04Shellsol D70 Diluent US$ / tonne 968.00 20.24 988.24Iron Dust US$ / tonne 576.40 14.96 591.36EDTA US$ / tonne 5033.60 23.76 5057.36Potassium Permanganate US$ / tonne 3500.00CMN Clarifier Flocculant US$ / tonne 4400.00 29.04 4429.04Dowex IX Resin (Zinc IX) US$ / tonne 8000.00 14.96 8014.96DIL 150 Diluent US$ / tonne 1012.00 29.04 1041.04Alamine 336 Extractant US$ / tonne 7920.00 29.04 7949.04ITD US$ / tonne 3080.00 29.04 3109.04Activated Carbon US$ / tonne 2997.00 149.60 3146.60Anthracite US$ / tonne 1600.00 161.92 1761.92Garnet US$ / tonne 350.00 74.80 424.80Clay (Crud Treatment) US$ / tonne 176.00 14.96 190.96CoS 1T Product Bulk Bags US$ ea 13.20 0.66 13.86Filter Press Cloths (Large) US$ ea 11792.00 589.60 12381.60Filter Press Cloths (Small) US$ ea 3330.80 166.32 3497.12

Barium Hydroxide US$ / tonne 830.00Filter Aid / Diatomaceous Earth US$ / tonne 366.67Boric Acid US$ / tonne 1300.00 44.00 1344.00SLS US$ / tonne 3036.00 14.96 3050.96Na2SO4 US$ / tonne 484.00 14.96 498.96Anodes US$ ea 968.00 48.40 1016.40Ti Starter Sheets US$ ea 2684.00 134.64 2818.642 Tonne Pallets (export) US$ ea 29.92 0.88 30.80Bags/Frames US$ ea 748.00 37.84 785.84





Caustic Soda (solid) US$ / tonne 432.00Sulphuric Acid US$ / tonne 88.00 20.00 108.00Ethylene Glycol US$ / tonne 1700.00 18.00 1718.00Shipping Containers US$ / unit 2900.00 2000.00 4900.00Coagulant US$ / tonne 3600.00 60.00 3660.00Sulphur US$ / tonne 35.00 40.00 75.00Hydrated lime US$ / tonne 255.56Dust Suppressant US$ / tonne 3250.00 140.00 3390.00Catalyst US$ / Litre 4.70 4.70Deposition inhibitor US$ / tonne 2700.00 140.00 2840.00Tri-sodium phosphate US$ / tonne 8000.00 140.00 8140.00Hydrazine hydrate US$ / tonne 8500.0 140.00 8640.00Biocide US$ / tonne 15.0 20.00 35.00Alum US$ / tonne 270.0 20.00 290.00Sodium Hypochlorite US$ / tonne 180 20.00 200.00Sodium Bisulphite US$ / tonne 800 20.00 820.00Antiscalant US$ / tonne 6520.00 20.00 6540.00

Cost Data


Exchange Rates


Year 1 60%Year 2 90%Year 3+ 100%

Ramp Up





USVC‐00008‐CR‐B9006_Rev ACLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: PROJECT POWER SUMMARYRev: Rev A

Area Sub Area Description MCR, kW Absorbed, kW Connected, kW Operating Factor,%

Annual Operating

HoursMWHrs/yr

150 Ore Preparation151 Ore Preparation (Limonite) 2326 1861 2636 100% 7500 13,959152 Ore Preparation (Saprolite) 4857 3886 5057 100% 7500 29,144

200 Leaching210 High Pressure Acid Leaching 3935 3148 5435 100% 7500 23,609220 Atmospheric Leaching 781 625 931 100% 7500 4,689230 Saprolite Neutralisation 577 462 677 100% 7500 3,463240 CCD 1006 804 1456 100% 7500 6,034250 Stage 1 Fe/Al Removal 494 395 644 100% 7500 2,965260 Stage 2 Fe/Al Removal 404 323 554 100% 7500 2,425270 Final Neutralisation 1,700 1360 1950 100% 7500 10,200

300 Nickel Recovery310 CMN DSX 3,898 3119 5198 100% 7500 23,390320 Ni-EW 26,864 21491 26864 100% 7500 161,182

400 Major Packages410 Sulphur Handling 0 0 100% 7500 0

DESIGN POWER


p g420 Sulphuric Acid Plant 13775 13775 15150 100% 7500 103,313

Sulphuric Acid Storage and Distribution 200 160 200 100% 7500 1,203430 Limestone Slurry Plant 881 705 956 100% 7500 5,288440 Lime Slurry Plant 1,491 1192 1606 100% 7500 8,944450 Flocculant And Coagulant 591 473 611 100% 7500 3,546

500 Services and Utilities510 Water Services 2,130 1704 2630 100% 7500 12,783520 Plant Air Supply 601 481 601 100% 7500 3,606

600 Plant Infrastructure 300 240 300 100% 8760 2,102700 General Infrastructure 1,000 800 1000 100% 8760 7,008


68,313 57,406 74,958432,355.7

52.5Plant Annual Power ConsumptionPower Generated from SAP (MW)






ORE PREPARATION Ball Mill Balls 1,850 / t 1134 t 1702 t 1891 t 2,098 3,149 3,498Ball Mill Liner 5,890 / t 84 t 189 t 210 t 493 1,114 1,237Mill Lubricants 6,020 / t 4.2 t 4.2 t 4.2 t 25 25 25Flocculant - Ore Preparation 4,429 / t 350 t 525 t 583 t 1,550 2,325 2,583

PROCESS PLANT Limestone 2.7 / t 86,881 t 130,322 t 144,802 t 237 355 394Flocculant - CCD 4,429 / t 717 t 1,075 t 1,194 t 3,174 4,761 5,290Flocculant - Neutralisation 4,429 / t 37.1 t 55.7 t 61.9 t 164 247 274Caustic Soda (49%) 432 / t 27 t 40 t 44 t 11 17 19Containers 4,900 each 194 Units 129 Units 16 Units 951 632 78Coagulant 3,660 / t 0 t 0 t 0 t 0 0 0

CMN Package:60% Na2S 525 / t 4,279 t 6,418 t 7,132 t 2,246 3,370 3,74499% TEA 1,800 / t 381 t 572 t 635 t 686 1,029 1,14333% HCl 213 / t 4,190 t 6,284 t 6,983 t 894 1,341 1,490Sodium Polyphoshate 749 / t 133 t 199 t 221 t 99 149 165Sodium Metabisulphite 384 / t 807 t 1,211 t 1,345 t 310 465 517Versatic 10 4,429 / t 135 t 203 t 225 t 599 899 999Shellsol D70 Diluent 988 / t 224 t 335 t 373 t 221 332 368Caustic Soda (99.5%) 432 / t 448 t 672 t 747 t 194 290 323Iron Dust 591 / t 7 t 10 t 11 t 4 6 7EDTA 5,057 / t 36 t 55 t 61 t 184 276 307Potassium Permanganate 3,500 / t 1 t 1 t 1 t 2 3 4CMN Clarifier Flocculant 4,429 / t 14 t 20 t 23 t 60 90 101Dowex IX Resin (Zinc IX) 8,015 / t 1 t 1 t 1 t 6 9 10DIL 150 Diluent 1,041 / t 7 t 10 t 11 t 7 10 11Alamine 336 Extractant 7,949 / t 13 t 19 t 21 t 101 151 168ITD 3,109 / t 1 t 2 t 2 t 5 7 8Activated Carbon 3,147 / t 81 t 121 t 135 t 254 381 424Anthracite 1,762 / t 14 t 21 t 23 t 25 37 41Garnet 425 / t 14 t 21 t 23 t 6 9 10Clay (Crud Treatment) 191 / t 14 t 21 t 23 t 3 4 4CoS 1T Product Bags 13.86 each 1,362 Units 2,043 Units 2,270 Units 19 28 31Filter Press Cloths (Large) 12,382 each 44 Units 66 Units 74 Units 547 821 912Filter Press Cloths (Small) 3,497 each 55 Units 83 Units 92 Units 193 290 322

Nickel Electrowinning:B i H d id 830 / t 105 t 157 t 175 t 87 130 145


Barium Hydroxide 830 / t 105 t 157 t 175 t 87 130 145Diatomaceous Earth 367 / t 147 t 220 t 244 t 54 81 90Boric Acid 1,344 / t 29.54 t 44 t 49 t 40 60 66SLS 3,051 / t 0.15 t 0 t 0 t 0 1 1Na2SO4 499 / t 0.00 t 0 t 0 t 0 0 0Anodes 1,016 each 811 Units 1,216 Units 1,351 Units 824 1,236 1,374Ti Starter Sheets 2,819 each 796 Units 1,194 Units 1,327 Units 2,244 3,366 3,7402 Tonne Pallets (export) 31 each 12,600 Units 18,900 Units 21,000 Units 388 582 647Bags/Frames 786 each 796 Units 1,194 Units 1,327 Units 626 938 1,043

SULPHURIC ACID PLANT Hydrated lime 256 / t 7,693 t 11,539 t 12,821 t 1,966 2,949 3,277Sulphur 75.0 / t 338,882 t 508,323 t 564,803 t 25,416 38,124 42,360Filter Aid 367 / t 960.17 t 1,440.25 t 1,600.28 t 352 528 587Catalyst 4.7 / L 23,696 L 35,544 L 39,493 L 111 167 186Diesel 0.65 / L 530 kL 354 kL 177 kL 345 230 115Sulphuric Acid 108.00 / t 6,737 t 0.0 t 0.0 t 728 0 0


LIME SLAKING PLANT Lime (produced on site) 0 / t 74,932 t 112,398 t 124,887 t 0 0 0Limestone 2.72 / t 126,208 t 189,311 t 210,346 t 344 515 573Ball Mill Balls 1,850 / t 7.5 t 11.2 t 12.5 t 14 21 23Ball Mill Liner 5,890 / t 1.5 t 2.2 t 2.5 t 9 13 15Mill Lubricants 6,020 / t 0.1 t 0.1 t 0.1 t 1 1 1Heavy Fuel Oil (Kiln) 470 / t 10,352 t 15,529 t 17,254 t 4,866 7,298 8,109


VC-00008-CR-B9006 Agata Nickel Proj Opex (Option 1)_Rev A









POWER STATION Hydrazine hydrate 8,640 / t 13.3 t 18.4 t 19.3 t 115 159 166Tri-sodium phosphate 8,140 / t 38.2 t 52.8 t 55.4 t 311 430 451Deposition Inhibitor 2,840 / t 9.5 t 13.2 t 13.8 t 27 37 39Heavy Fuel Oil 470 / t 21,317 t 17,839 t 9,350 t 10,019 8,384 4,394






VC-00008-CR-B9006 Agata Nickel Proj Opex (Option 1)_Rev A


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: MAINTENANCE EXPENSES SUMMARYRev: Rev A



Process Plant AREA 151 - ORE PREPARATION (LIMONITE) 23,287 2.5% 626 0.007AREA 152 - ORE PREPARATION (SAPROLITE) 20,439 2.5% 549 0.006AREA 210 - HIGH PRESSURE ACID LEACHING 116,785 7.0% 8,788 0.095AREA 220 - ATMOSPHERIC LEACHING 13,728 3.0% 443 0.005AREA 230 - SAPROLITE NEUTRALISATION 5,248 3.0% 169 0.002AREA 240 - CCD 69,107 2.5% 1,857 0.020AREA 250 - STG 1 Fe/Al REMOVAL 9,218 3.0% 297 0.003AREA 260 - STG 2 Fe/Al REMOVAL 8,076 2.5% 217 0.002AREA 270 - FINAL NEUTRALISATION 4,403 2.5% 118 0.001AREA 310 - CMN DSX 95,840 3.0% 3,091 0.033AREA 320 - Ni - EW 113,034 2.0% 2,430 0.026


Process Services AREA 410 - SULPHUR HANDLING 2,425 2.0% 52 0.001AREA 420 - SULPHURIC ACID PLANT 134,946 2.3% 3,337 0.036AREA 420 - SULPHURIC ACID STORAGE AND DISTRIBUTION 23,261 2.0% 500 0.005AREA 430 - LIMESTONE SLURRY PLANT 4,303 3.0% 139 0.001AREA 440 - LIME SLURRY PLANT 28,133 3.0% 907 0.010AREA 450 - FLOCCULANT AND COAGULANT PREPARATION 3,320 2.0% 71 0.001











Factor as % of equip cost


BWHC Operating Cost EstimateCLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9006_Rev APROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: GENERAL EXPENSES SUMMARYRev: Rev A

GENERAL EXPENSES










Insurance 0.15% DIRECT CAPEX 1,092 US$M 0.15 % 1,637 1,637 1,637



g ,










BWHC Operating Cost EstimateCLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9006_Rev APROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: CONTRACT EXPENSES SUMMARYRev: Rev A

CONTRACT EXPENSES





Product TransportProduct Transport 80 container 1,260 cont. 1,890 cont. 2,100 cont. 101 151 168Product Transport Insurance (% of product value) 2,500 container 1,260 cont. 1,890 cont. 2,100 cont. 3,150 4,725 5,250













Non-citizen General Manager Weekly EA1 325,000Non-citizen General Manager Day shift only EA2 325,000Non-citizen General Manager Continuous shift EA3 325,000Non-citizen Area Manager Weekly EB1 190,000Non-citizen Area Manager Day shift only EB2 190,000Non-citizen Area Manager Continuous shift EB3 205,000Non-citizen Department Manager Weekly EC1 165,000Non-citizen Department Manager Day shift only EC2 165,000Non-citizen Department Manager Continuous shift EC3 180,000Non-citizen Superintendent Weekly ED1 150,000Non-citizen Superintendent Day shift only ED2 150,000Non-citizen Superintendent Continuous shift ED3 150,000Non-citizen Chief Engineer Weekly EE1 150,000Non-citizen Chief Engineer Day shift only EE2 150,000Non-citizen Chief Engineer Continuous shift EE3 150,000Non-citizen Senior Engineer Weekly EF1 145,000Non-citizen Senior Engineer Day shift only EF2 145,000Non-citizen Senior Engineer Continuous shift EF3 145,000Non-citizen Engineer Weekly EG1 130,000Non-citizen Engineer Day shift only EG2 130,000Non-citizen Engineer Continuous shift EG3 130,000Non-citizen Foreman Weekly EH1 120,000Non-citizen Foreman Day shift only EH2 120,000Non-citizen Foreman Continuous shift EH3 120,000Non-citizen Senior Tradesman/Trainer, Surveyor Weekly EI1 100,000Non-citizen Senior Tradesman/Trainer, Surveyor Day shift only EI2 100,000Non-citizen Senior Tradesman/Trainer, Surveyor Continuous shift EI3 100,000National General Manager Weekly NA1 108,000National General Manager Day shift only NA2 108,000National General Manager Continuous shift NA3 108,000National Area Manager Weekly NB1 68,000National Area Manager Day shift only NB2 68,000National Area Manager Continuous shift NB3 68,000National Department Manager Weekly NC1 41,000National Department Manager Day shift only NC2 41,000National Department Manager Continuous shift NC3 41,000National Superintendent Weekly ND1 27,000National Superintendent Day shift only ND2 27,000National Superintendent Continuous shift ND3 27,000National Chief Engineer Weekly NE1 27,000National Chief Engineer Day shift only NE2 27,000National Chief Engineer Continuous shift NE3 27,000National Senior Engineer Weekly NF1 20,000National Senior Engineer Day shift only NF2 20,000National Senior Engineer Continuous shift NF3 20,000National Engineer Weekly NG1 8,000National Engineer Day shift only NG2 8,000National Engineer Continuous shift NG3 8,000National Foreman Weekly NH1 6,000National Foreman Day shift only NH2 6,000National Foreman Continuous shift NH3 6,000National Senior Tradesman/Trainer, Surveyor Weekly NI1 7,000





National Senior Tradesman/Trainer, Surveyor Day shift only NI2 7,000National Senior Tradesman/Trainer, Surveyor Continuous shift NI3 7,000National Community relations, nurse, safety officer Weekly NJ1 7,000National Community relations, nurse, safety officer Day shift only NJ2 7,000National Community relations, nurse, safety officer Continuous shift NJ3 7,000National Payroll officer Weekly NK1 8,000National Payroll officer Day shift only NK2 8,000National Payroll officer Continuous shift NK3 8,000National Secretary Weekly NL1 6,000National Secretary Day shift only NL2 6,000National Secretary Continuous shift NL3 6,000National Typist/clerk Weekly NM1 6,000National Typist/clerk Day shift only NM2 6,000National Typist/clerk Continuous shift NM3 6,000National Trainee secretarial Weekly NN1 4,000National Trainee secretarial Day shift only NN2 4,000National Trainee secretarial Continuous shift NN3 4,000National Trainee secretarial Local, continuous shift NN4 4,000National Senior Plant Operator, Eqpt Op, Trades Weekly NR1 6,000National Senior Plant Operator, Eqpt Op, Trades Day shift only NR2 6,000National Senior Plant Operator, Eqpt Op, Trades Continuous shift NR3 6,000National Ctrl Room Operator, Eqpt Op, Trades Weekly NS1 6,000National Ctrl Room Operator, Eqpt Op, Trades Day shift only NS2 6,000National Ctrl Room Operator, Eqpt Op, Trades Continuous shift NS3 6,000National Plant Operator, Eqpt Op, Trades Weekly NT1 5,000National Plant Operator, Eqpt Op, Trades Day shift only NT2 5,000National Plant Operator, Eqpt Op, Trades Continuous shift NT3 5,000National Plant Operator, Eqpt Op, Trades Local, continuous shift NT4 5,000National Plant Operator, Eqpt Op, Trades Local, day shift NT5 5,000National Trainee - Operator or TA. Level 2 Weekly NU1 4,000National Trainee - Operator or TA. Level 2 Day shift only NU2 4,000National Trainee - Operator or TA. Level 2 Continuous shift NU3 4,000National Trainee - Operator or Trade Weekly NV1 3,000National Trainee - Operator or Trade Day shift only NV2 3,000National Trainee - Operator or Trade Continuous shift NV3 3,000National Labourer - Skilled Weekly NW1 3,000National Labourer - Skilled Day shift only NW2 3,000National Labourer - Skilled Continuous shift NW3 3,000National Labourer - Skilled Local, continuous shift NW4 3,000


BWHC

CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTPROJECT NO: USVC-00008-00APPENDIX: CONTRACT EXPENSES SUMMARYRev: Rev A









(5) EH2(6) NH2


Process Control Metallurgist (0) NI2(2) EI2





1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 12 12 12

1 6 7 1 6 7 1 6 7 194 194 194

1 0 1 1 0 1 1 0 1 165 165 1650 1 1 0 1 1 0 1 1 41 41 412 0 2 2 0 2 2 0 2 300 300 3000 2 2 0 2 2 0 2 2 54 54 541 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 27 27 270 3 3 0 3 3 0 3 3 18 18 183 0 3 3 0 3 3 0 3 360 360 3600 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 61 0 1 1 0 1 1 0 1 120 120 1200 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 6 6 28 28 422 0 2 2 0 2 0 0 0 200 200 0


(2) EI2(3) EI2(4) EI2



(4) NE2(5) EE2(6) NE2



(3) ES3(4) NS3

2 0 2 2 0 2 0 0 0 200 200 01 0 1 1 0 1 1 0 1 100 100 1001 0 1 1 0 1 1 0 1 100 100 1000 1 1 0 1 1 0 1 1 6 6 60 6 6 0 6 6 0 6 6 48 48 482 0 2 2 0 2 2 0 2 200 200 200

2 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 80 80 804 0 4 4 0 4 4 0 4 580 580 5800 0 0 0 0 0 0 6 6 0 0 1204 0 4 4 0 4 0 0 0 580 580 00 5 5 0 5 5 0 5 5 35 35 350 4 4 0 4 4 0 4 4 24 24 244 0 4 4 0 4 4 0 4 400 400 4000 0 0 0 0 0 0 0 0 0 0 0


BWHC



Plant Operators (local, shift) (0) NT4Plant Operators (nationals, shift) (0) NT3Labourers (local, weekly) (0) NW1Labourers (local, shift) (0) NW4Trainees (level 1) (0) NV1Trainees (level 2) (0) NU2


(4) EG2(5) EG2(0) NG2




(4) EI2(5) NI2

Shift Supervisors (0) NF3Tradesmen (0) NR3






0 19 19 0 19 19 0 19 19 95 95 950 54 54 0 54 54 0 54 54 270 270 2700 20 20 0 20 20 0 20 20 60 60 600 60 60 0 60 60 0 60 60 180 180 1800 15 15 0 15 15 0 15 15 45 45 450 5 5 0 5 5 0 5 5 20 20 20

1 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 6 6 61 0 1 1 0 1 1 0 1 130 130 1301 0 1 1 0 1 1 0 1 130 130 1301 0 1 1 0 1 1 0 1 130 130 1300 3 3 0 3 3 0 6 6 24 24 480 2 2 0 2 2 0 2 22 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 03 0 3 3 0 3 3 0 3 360 360 3600 0 0 0 0 0 0 0 0 0 0 00 5 5 0 5 5 0 5 5 35 35 350 2 2 0 2 2 0 2 2 14 14 142 0 2 2 0 2 2 0 2 200 200 2000 0 0 0 0 0 0 0 0 0 0 00 8 8 0 8 8 0 8 8 160 160 1600 68 68 0 68 68 0 68 68 408 408 408( )

Trades Assistant (0) NV1Crane Driver (0) NS2Trainees (0) NV2Labourers (0) NW1




0 22 22 0 22 22 0 22 22 66 66 660 3 3 0 3 3 0 3 3 18 18 180 10 10 0 10 10 0 10 10 30 30 300 8 8 0 8 8 0 8 8 24 24 24

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 5 5 0 5 5 0 5 5 30 30 300 8 8 0 8 8 0 8 8 56 56 560 12 12 0 16 16 0 16 16 36 48 480 4 4 0 8 8 0 8 8 20 40 400 6 6 0 6 6 0 6 6 18 18 18

42 372 414 42 380 422 36 391 427 7,387 7,419 6,797


BWHC






(4) NE3(5) EE3(6) NE3









1 0 1 1 0 1 1 0 1 150 150 1501 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 62 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 00 8 8 0 8 8 0 8 8 40 40 404 0 4 4 0 4 4 0 4 400 400 4000 0 0 0 0 0 0 0 0 0 0 00 8 8 0 8 8 0 8 8 56 56 560 0 0 0 0 0 0 0 0 0 0 0

0 4 4 0 4 4 0 4 4 12 12 12

1 0 1 1 0 1 1 0 1 190 190 1901 0 1 1 0 1 1 0 1 150 150 150p ( )

(8) ND2General Foreman (3) EE2

(4) NE2Engineers (3) EG2

(4) NG2Senior Supervisor (5) EH2

(6) NH2Graduate Engineer (0) NI2Mainenance Planner (0) NI2Secretary (0) NM1Shift Supervisors (0) NF3Tradesmen (0) NR3Trades Assistant (0) NV1Labourers (0) NW1



0 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 130 130 1300 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 120 120 1200 0 0 0 0 0 0 0 0 0 0 00 5 5 0 5 5 0 5 5 35 35 350 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 80 80 800 20 20 0 20 20 0 20 20 120 120 1200 4 4 0 4 4 0 4 4 12 12 120 2 2 0 2 2 0 2 2 6 6 6

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 32 32 320 4 4 0 4 4 0 4 4 32 32 320 2 2 0 2 2 0 2 2 16 16 160 1 1 0 1 1 0 1 1 6 6 6


BWHC





(0) NT5General Hands (0) NT1General Transport Supervisor (0) NH2Product Supervisor (0) NH2Bus Drivers (0) NT4Drivers (0) NT4Light Vehicle Maintenance (0) NT1Airport Supervisor (0) NH2Airport Operations (0) NT2Customs Officer (0) NT2Tug Crew Master (0) NR2Tug Crew Engineer (0) NS2Deck Hands (0) NT1Limestone Haulage Supervisor (0) NH3Heavy Equip (FEL) Maintenance (0) NT3

UTILITIES & TOTAL PERSONNEL (excl. contingency)






1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 20 20 200 4 4 0 4 4 0 4 4 20 20 200 16 16 0 16 16 0 16 16 80 80 800 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 12 12 0 12 12 0 12 12 60 60 600 12 12 0 12 12 0 12 12 60 60 600 6 6 0 6 6 0 6 6 30 30 300 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 10 10 100 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 20 20 200 1 1 0 1 1 0 1 1 6 6 60 8 8 0 10 10 0 10 10 40 50 50

17 147 164 17 149 166 17 149 166 3,206 3,216 3,216 UTILITIES & TOTAL PERSONNEL (excl. contingency)INFRASTRUCTURE




17 147 164 17 149 166 17 149 166 3,206 3,216 3,216

0 1 1 0 1 1 0 1 1 325 325 3250 1 1 0 1 1 0 1 1 7 7 71 0 1 1 0 1 1 0 1 325 325 3250 1 1 0 1 1 0 1 1 7 7 71 0 1 1 0 1 1 0 1 190 190 190

1 0 1 1 0 1 1 0 1 190 190 1900 1 1 0 1 1 0 1 1 7 7 7


BWHC












1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 24 24 240 3 3 0 3 3 0 3 3 21 21 210 8 8 0 8 8 0 8 8 64 64 640 1 1 0 1 1 0 1 1 6 6 60 4 4 0 6 6 0 6 6 24 36 36

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 27 27 270 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 24 24 240 2 2 0 2 2 0 2 2 16 16 160 4 4 0 4 4 0 4 4 24 24 240 4 4 0 4 4 0 4 4 24 24 240 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 12 12 12

Office Administrator (0) NH2Data Analyst (0) NK2Reception (0) NN1Junior (0) NN1Travel Coordinator (0) NH2

Contracts AdministrationContracts Administrator (3) EH2Contracts Administrator (0) NH2Secretary (0) NM1


0 1 1 0 1 1 0 1 1 6 6 60 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 8 8 80 8 8 0 8 8 0 8 8 32 32 320 2 2 0 2 2 0 2 2 12 12 12

1 0 1 1 0 1 1 0 1 120 120 1200 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 6

0 2 2 0 2 2 0 2 2 14 14 140 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 12 12 120 2 2 0 2 2 0 2 2 12 12 120 3 3 0 3 3 0 3 3 12 12 12


BWHC




SecuritySecurity Chief (0) ND2Senior Security Officers (0) NK2Security Officers (0) NL3Guards (0) NS3Secretary (0) NM1








0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 27 27 270 3 3 0 3 3 0 3 3 24 24 240 4 4 0 1 1 0 1 1 32 8 80 1 1 0 1 1 0 1 1 8 8 80 2 2 0 2 2 0 2 2 12 12 12

0 1 1 0 1 1 0 1 1 27 27 270 4 4 0 4 4 0 4 4 32 32 320 12 12 0 12 12 0 12 12 72 72 720 100 100 0 100 100 0 100 100 600 600 6000 1 1 0 1 1 0 1 1 6 6 6

0 1 1 0 1 1 0 1 1 27 27 270 20 20 0 20 20 0 20 20 60 60 600 16 16 0 16 16 0 16 16 48 48 480 12 12 0 12 12 0 12 12 36 36 36

0 1 1 0 1 1 0 1 1 41 41 410 1 1 0 1 1 0 1 1 6 6 6




(5) EI2(20) EI2

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 7 7 7

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 4 4 4

1 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 7 7 70 2 2 0 2 2 0 2 2 14 14 140 1 1 0 1 1 0 1 1 6 6 60 8 8 0 8 8 0 8 8 64 64 641 0 1 1 0 1 1 0 1 6 6 60 10 10 0 10 10 0 10 10 70 70 701 0 1 1 0 1 1 0 1 100 100 1001 0 1 1 0 1 1 0 1 100 100 100


BWHC




MedicalMedical Supervisor (0) ND2Paramedic (0) NI2Nurses (0) NJ3First Aid (0) NK3Assistants (0) NN4

EnvironmentEnvironmental Manager (0) NC2Environmental Officer (0) NI2Technicians (0) NJ1Environmental Chemist (0) NH2Secretary (0) NM1








0 5 5 0 5 5 0 5 5 20 20 200 4 4 0 4 4 0 4 4 28 28 280 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 10 10 100 2 2 0 2 2 0 2 2 6 6 6

0 2 2 0 2 2 0 2 2 54 54 540 1 1 0 1 1 0 1 1 7 7 70 4 4 0 4 4 0 4 4 28 28 280 4 4 0 4 4 0 4 4 32 32 320 4 4 0 4 4 0 4 4 16 16 16

0 1 1 0 1 1 0 1 1 41 41 410 2 2 0 2 2 0 2 2 14 14 140 8 8 0 8 8 0 8 8 56 56 560 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 6

9 333 342 9 332 341 9 332 341 3,838 3,826 3,826


69 858 927 69 867 936 63 878 941 14,625 14,655 14,033








SCOPING STUDY


Option 2 (AL‐MHP)


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: OPERATING COST SUMMARYRev: Rev A


10,668 14,484 15,241 0.48 0.48 0.48

12,861 12,837 12,103 0.58 0.43 0.38





Sub Total Contract Expenses 10 131 11 961 12 211 0 46 0 40 0 39

Cost Centre

Consumables

Mining & Haulage

Labour



Contingency 0% 0 0 0 0.00 0.00 0.00

84,088 100,467 102,585

8,409 7,387 7,174

Cobalt Revenue lb/annum 472,000 641,000 675,000 Co Price, US$/lb 18.00(US $) 8,496,000 11,538,000 12,150,000 Co % Payable 80%payable 6,796,800 9,230,400 9,720,000credit /lb Ni 0.31 0.31 0.31


Power Credit (US $) 29,359,257 44,684,942 50,433,437 Power credit, PhP / kWh 12.00credit /lb Ni 1.33 1.49 1.60 US$ / MWh 266.67

Opex including power credit, US$/lb Ni 2.17 1.55 1.34

3.25PROJECT OPERATING COST (US $)

PROJECT OPERATING COST (US $/t Ni)3.353.80



CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: PRODUCTION SUMMARYRev: Rev A


DSO Tonnage - ROM Ore wt/a - - -

(Limonite) dt/a - - -

- Export Ore dt/a - - -

Feed Tonnage - Saprolite ROM Ore wt/a 1,255,000 1,704,000 1,793,000

(Saprolite) dt/a 1,004,000 1,363,000 1,435,000

- Leach Feed dt/a 1,004,000 1,363,000 1,435,000

Mixed Hydroxide Production wt/a 40,800 55,400 58,310

dt/a 24,500 33,200 34,990


lb/a 22,122,000 30,023,000 31,603,000

Contained Cobalt Production t/a 210 290 310

lb/a 472,000 641,000 675,000



CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: INPUT DATARev: Rev A


LIMONITE DSOROM Ore - Wet t/h 0.00 0.00

- Dry t/h 0.00 0.00Beneficiated Ore - Dry t/h 0.00 0.00



PRODUCTSMixed Hydroxide -Wet t/h 5.44 7.39 7.77

-Dry t/h 3.27 4.43 4.67Contained Nickel t/h 1.34 1.82 1.911Contained Cobalt t/h 0.029 0.039 0.041


Overall Sulphuric Acid Consumption t/h 95.5 129.6 136.4Suphuric Acid to CCD Wash pH Adjust t/h 0.2 0.3 0.01Suphuric Acid to Demin Water Plant t/h 0.0 0.0 0.15Suphuric Acid to HPAL t/h 0 0 0 0 0 0

Consumption Data:-

Production Data:-

Suphuric Acid to HPAL t/h 0.0 0.0 0.0Suphuric Acid to AL t/h 94.3 128.0 134.8Suphuric Acid to Recycle Leach t/h 1.5

Flocculant - Ore Preparation kg/h 20.1 27.3 28.7Flocculant - CCD kg/h 34.2 46.4 48.9Flocculant - Neutralisation kg/h 15.63 21.21 22.33Flocculant - Precip. Area kg/h 3.78 5.13 5.40Coagulant kg/h 0.0 0.0 0.0

Overall Limestone Consumption t/h 21.23 28.81 30.33Limestone to Lime Kiln t/h 16.18 21.96 23.12Limestone to Limestone Slurry Plant t/h 5.05 6.85 7.21Lime (ex kiln) t/h 9.60 13.03 13.71Magnesia t/h 0.96 1.31 1.38MHP 2T Product Bags #/h 2.721 3.693 3.89

Filter Cloths - Belt Filters Replacements/yr 1 2 2- Pressure Filters Replacements/yr 1 2 2

Filter Press Cloths #/h 0.004 0.005 0.006

Caustic Soda (NaOH) for Water Treatment t/h 0.001 0.001 0.001

Sulphur - Sulphuric Acid Plant t/h 31.00 42.07 44.3- TOTAL t/h 31.00 42.07 44.28





Filtered Water t/h 273.4 371.1 390.6RO Water t/h 0.0 0.0 0.0Demin Water t/h 16.9 23.0 24.2BFW t/h 123.7 167.9 176.8Potable Water t/h 2.8 3.8 4.0







Cost Data

Consumption Data:-

Mill Lubricants US$ / tonne 6000.00 20.00 6020.00Limestone US$ / tonne 1.55 1.17 2.72Magnesia US$ / tonne 651.20Flocculants - Ore Preparation US$ / tonne 4400.00 29.04 4429.04


MHP 2T Product Bulk Bags US$ ea - - 22.00Belt Filter Cloth US$ ea 16800.00Pressure Filter Cloths US$ ea 11792.00 589.60 12381.60Filter Press Cloths US$ ea 279.00 10.00 289.00Filter Aid US$ / tonne 366.67Sulphuric Acid US$ / tonne 88.0 20.00 108.00Caustic Soda (solid) US$ / tonne 432.00Ethylene Glycol US$ / tonne 1700.00 18.00 1718.00Shipping Containers US$ / unit 2900.00 2000.00 4900.00Coagulant US$ / tonne 3600.00 60.00 3660.00Sulphur US$ / tonne 35.00 40.00 75.00Hydrated lime US$ / tonne 250.00 18.00 268.00Dust Suppressant US$ / tonne 3250.00 140.00 3390.00Catalyst US$ / Litre 4.70 4.70Deposition inhibitor US$ / tonne 2700.00 140.00 2840.00Tri-sodium phosphate US$ / tonne 8000.00 140.00 8140.00Hydrazine hydrate US$ / tonne 8500.0 140.00 8640.00Biocide US$ / tonne 15.0 20.00 35.00Alum US$ / tonne 270.0 20.00 290.00Sodium Hypochlorite US$ / tonne 180 20.00 200.00Sodium Bisulphite US$ / tonne 800 20.00 820.00Antiscalant US$ / tonne 6520.00 20.00 6540.00





Exchange Rates


Year 1 70%Year 2 95%Year 3+ 100%

Ramp Up





USVC‐00008‐CR‐B9007_Rev ACLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: PROJECT POWER SUMMARYRev: Rev A

Area Sub Area Description MCR, kW Absorbed, kW

Connected, kW

Operating Factor,%

Annual Operating

HoursMWHrs/yr

150 152 Ore Preparation 3176 2541 3276 100% 7500 19,058200 Leaching 0 0 0 0% 0 0

210 Atmospheric Leaching 552 442 652 100% 7500 3,314220 Saprolite Neutralisation 187 150 267 100% 7500 1,123230 CCD 800 640 1190 100% 7500 4,798240 Stage 1 Fe/Al Removal 208 167 328 100% 7500 1,249250 Stage 2 Fe/Al Removal 170 136 290 100% 7500 1,018260 Final Neutralisation 903 723 1053 100% 7500 5,315

300 Nickel Recovery 0 0 0 0% 0 0310 MHP Stg 1 387 310 402 100% 7500 2,323320 MHP Stg 2 168 134 183 100% 7500 1,006

400 Major Packagaes 0 0 0 0% 0 0410 Sulphur Handling 0 0 0 100% 7500 0420 Sulphuric Acid Plant and Storage 8265 8265 9090 100% 7500 61,988

Sulphuric Acid Storage and Distribution 118 94 168 100% 7500 706430 Limestone Slurry Plant 387 309 437 100% 7500 2,319440 Lime Slurry Plant 1,191 953 1241 100% 7500 7,146450 Flocculant And Coagulant 260 208 275 100% 7500 1,561460 MgO Slurry Plant 13 11 21 100% 7500 79

500 Services and Utilities 0 0 0 0% 0 0510 Water Services 690 552 940 100% 7500 4,138520 Plant Air Supply 187 150 187 100% 7500 1,124

600 Plant Infrastructure 250 200 250 100% 8760 1,752700 General Infrastructure 750 600 750 100% 8760 5,256


18,962 16,823 21,299Total - SAP and AL shutdown 10,697 8,558 12,209

127,374.6

DESIGN POWER

Plant Annual Power Consumption (MWh)



CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: REAGENTS & CONSUMABLES SUMMARYRev: Rev A



ORE PREPARATION Ball Mill Balls 1,850 / t 565 t 767 t 807 t 1,045 1,419 1,493Ball Mill Liner 5,890 / t 63 t 85 t 90 t 370 502 528Mill Lubricants 6,020 / t 1.8 t 1.8 t 1.8 t 11 11 11Flocculant - Ore Preparation 4,429 / t 151 t 204 t 215 t 667 905 953

PROCESS PLANT Limestone 2.7 / t 37,853 t 51,371 t 54,075 t 103 140 147Lime 0.0 / t 71,993 t 97,705 t 102,848 t 0 0 0Magnesia 651.2 / t 7,219 t 9,797 t 10,313 t 4,701 6,380 6,716Flocculant - CCD 4,429 / t 257 t 348 t 367 t 1,137 1,543 1,624Flocculant - Neutralisation 4,429 / t 145.6 t 197.6 t 208.0 t 645 875 921Caustic Soda (49%) 432 / t 5 t 7 t 7 t 2 3 3Containers 4,900 each 279 Units 119 Units 20 Units 1,366 585 98Coagulant 3,660 / t 0 t 0 t 0 t 0 0 0

MHP 2T Product Bags 22.00 each 20,409 Units 27,697 Units 29,155 Units 449 609 641Filter Press Cloths 289 each 30 Units 40 Units 42 Units 9 12 12Belt Filter Cloths 16,800 each 1 Units 2 Units 2 Units 17 34 34Pressure Filter Cloths 12,382 each 1 Units 2 Units 2 Units 12 25 25

SULPHURIC ACID PLANT Hydrated lime 268 / t 5,277 t 7,162 t 7,539 t 1,414 1,919 2,020Sulphur 75.0 / t 232,470 t 315,495 t 332,100 t 17,435 23,662 24,908Filter Aid 367 / t 658.67 t 893.90 t 940.95 t 242 328 345Catalyst 4.7 / L 16,250 L 22,054 L 23,215 L 76 104 109Diesel 0.65 / L 318 kL 212 kL 106 kL 207 138 69Sulphuric Acid 108 / t 4,042 t 0.0 t 0.0 t 437 0 0


LIME SLAKING PLANT Lime (produced on site) 0 / t 71,993 t 97,705 t 102,848 t 0 0 0Limestone 2.7 / t 121,380 t 164,730 t 173,400 t 330 448 472


esto e / t ,380 t 6 , 30 t 3, 00 t 330 8Ball Mill Balls 1,850 / t 7.2 t 9.8 t 10.3 t 13 18 19Ball Mill Liner 5,890 / t 1.4 t 2.0 t 2.1 t 8 12 12Mill Lubricants 6,020 / t 0.1 t 0.1 t 0.1 t 1 1 1Heavy Fuel Oil (Kiln) 470 / t 9,946 t 13,499 t 14,209 t 4,675 6,344 6,678





POWER STATION Hydrazine hydrate 8,640 / t 6.5 t 8.8 t 9.3 t 56 76 80Tri-sodium phosphate 8,140 / t 18.6 t 25.3 t 26.6 t 152 206 217Deposition Inhibitor 2,840 / t 4.6 t 6.3 t 6.6 t 13 18 19Heavy Fuel Oil 470 / t 571 t 571 t 571 t 268 268 268






SVC-00008-CR-B9007 Agata Nickel Proj Opex (Option 2)_Rev A Page 8 of 20


CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: MAINTENANCE EXPENSES SUMMARYRev: Rev A



Process Plant AREA 150 - ORE PREPARATION (Saprolite) 15,961 2.5% 429 0.014AREA 210 - ATMOSPHERIC LEACHING 11,125 3.0% 359 0.011AREA 220 - SAPROLITE NEUTRALISATION 2,678 3.0% 86 0.003AREA 230 - CCD 41,685 2.5% 1,120 0.035AREA 240 - STG 1 Fe/Al REMOVAL 5,862 3.0% 189 0.006AREA 250 - STG 2 Fe/Al REMOVAL 5,106 2.5% 137 0.004AREA 260 - FINAL NEUTRALISATION 5,715 2.5% 154 0.005AREA 310 - MHP STG 1 8,812 2.5% 237 0.007AREA 320 - MHP STG 2 4,291 2.5% 115 0.004


Process Services AREA 410 - SULPHUR HANDLING 1,785 2.0% 38 0.001AREA 420 - SULPHURIC ACID PLANT 99,323 2.3% 2,456 0.078AREA 420 - SULPHURIC ACID STORAGE 15,915 2.0% 342 0.011AREA 430 - LIMESTONE SLURRY PLANT 2,750 3.0% 89 0.003AREA 440 - LIME SLURRY PLANT 25,017 3.0% 807 0.026AREA 450 - FLOCCULANT AND COAGULANT PREPARATION 901 2.0% 19 0.001AREA 460 - MAGNESIA SLURRY PLANT 1,101 3.0% 36 0.001











Factor as % of installed cost


BWHC Operating Cost EstimateCLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9007_Rev APROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: GENERAL EXPENSES SUMMARYRev: Rev A

GENERAL EXPENSES










Insurance 0.15% DIRECT CAPEX 479 US$M 0.15 % 718 718 718



g ,










BWHC Operating Cost EstimateCLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9007_Rev APROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: CONTRACT EXPENSES SUMMARYRev: Rev A

CONTRACT EXPENSES





Product TransportProduct Transport 80 container 2,041 cont. 2,770 cont. 2,916 cont. 163 222 233Product Transport Insurance (% of product value) 2,500 container 2,041 cont. 2,770 cont. 2,916 cont. 5,102 6,924 7,289











CLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9007_Rev APROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: LABOUR RATES SUMMARYRev: Rev A


Non-citizen General Manager Weekly EA1 325,000Non-citizen General Manager Day shift only EA2 325,000Non-citizen General Manager Continuous shift EA3 325,000Non-citizen Area Manager Weekly EB1 190,000Non-citizen Area Manager Day shift only EB2 190,000Non-citizen Area Manager Continuous shift EB3 205,000Non-citizen Department Manager Weekly EC1 165,000Non-citizen Department Manager Day shift only EC2 165,000Non-citizen Department Manager Continuous shift EC3 180,000Non-citizen Superintendent Weekly ED1 150,000Non-citizen Superintendent Day shift only ED2 150,000Non-citizen Superintendent Continuous shift ED3 150,000Non-citizen Chief Engineer Weekly EE1 150,000Non-citizen Chief Engineer Day shift only EE2 150,000Non-citizen Chief Engineer Continuous shift EE3 150,000Non-citizen Senior Engineer Weekly EF1 145,000Non-citizen Senior Engineer Day shift only EF2 145,000Non-citizen Senior Engineer Continuous shift EF3 145,000Non-citizen Engineer Weekly EG1 130,000Non-citizen Engineer Day shift only EG2 130,000Non-citizen Engineer Continuous shift EG3 130,000Non-citizen Foreman Weekly EH1 120,000Non-citizen Foreman Day shift only EH2 120,000Non-citizen Foreman Continuous shift EH3 120,000Non-citizen Senior Tradesman/Trainer, Surveyor Weekly EI1 100,000Non-citizen Senior Tradesman/Trainer, Surveyor Day shift only EI2 100,000Non-citizen Senior Tradesman/Trainer, Surveyor Continuous shift EI3 100,000National General Manager Weekly NA1 108,000National General Manager Day shift only NA2 108,000National General Manager Continuous shift NA3 108,000National Area Manager Weekly NB1 68,000National Area Manager Day shift only NB2 68,000National Area Manager Continuous shift NB3 68,000National Department Manager Weekly NC1 41,000National Department Manager Day shift only NC2 41,000National Department Manager Continuous shift NC3 41,000National Superintendent Weekly ND1 27,000National Superintendent Day shift only ND2 27,000National Superintendent Continuous shift ND3 27,000National Chief Engineer Weekly NE1 27,000National Chief Engineer Day shift only NE2 27,000National Chief Engineer Continuous shift NE3 27,000National Senior Engineer Weekly NF1 20,000National Senior Engineer Day shift only NF2 20,000National Senior Engineer Continuous shift NF3 20,000National Engineer Weekly NG1 8,000National Engineer Day shift only NG2 8,000National Engineer Continuous shift NG3 8,000National Foreman Weekly NH1 6,000National Foreman Day shift only NH2 6,000National Foreman Continuous shift NH3 6,000National Senior Tradesman/Trainer, Surveyor Weekly NI1 7,000



CLIENT: MRL GOLD PHILS, INC. USVC‐00008‐CR‐B9007_Rev APROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)APPENDIX: LABOUR RATES SUMMARYRev: Rev A


National Senior Tradesman/Trainer, Surveyor Day shift only NI2 7,000National Senior Tradesman/Trainer, Surveyor Continuous shift NI3 7,000National Community relations, nurse, safety officer Weekly NJ1 7,000National Community relations, nurse, safety officer Day shift only NJ2 7,000National Community relations, nurse, safety officer Continuous shift NJ3 7,000National Payroll officer Weekly NK1 8,000National Payroll officer Day shift only NK2 8,000National Payroll officer Continuous shift NK3 8,000National Secretary Weekly NL1 6,000National Secretary Day shift only NL2 6,000National Secretary Continuous shift NL3 6,000National Typist/clerk Weekly NM1 6,000National Typist/clerk Day shift only NM2 6,000National Typist/clerk Continuous shift NM3 6,000National Trainee secretarial Weekly NN1 4,000National Trainee secretarial Day shift only NN2 4,000National Trainee secretarial Continuous shift NN3 4,000National Trainee secretarial Local, continuous shift NN4 4,000National Senior Plant Operator, Eqpt Op, Trades Weekly NR1 6,000National Senior Plant Operator, Eqpt Op, Trades Day shift only NR2 6,000National Senior Plant Operator, Eqpt Op, Trades Continuous shift NR3 6,000National Ctrl Room Operator, Eqpt Op, Trades Weekly NS1 6,000National Ctrl Room Operator, Eqpt Op, Trades Day shift only NS2 6,000National Ctrl Room Operator, Eqpt Op, Trades Continuous shift NS3 6,000National Plant Operator, Eqpt Op, Trades Weekly NT1 5,000National Plant Operator, Eqpt Op, Trades Day shift only NT2 5,000National Plant Operator, Eqpt Op, Trades Continuous shift NT3 5,000National Plant Operator, Eqpt Op, Trades Local, continuous shift NT4 5,000National Plant Operator, Eqpt Op, Trades Local, day shift NT5 5,000National Trainee - Operator or TA. Level 2 Weekly NU1 4,000National Trainee - Operator or TA. Level 2 Day shift only NU2 4,000National Trainee - Operator or TA. Level 2 Continuous shift NU3 4,000National Trainee - Operator or Trade Weekly NV1 3,000National Trainee - Operator or Trade Day shift only NV2 3,000National Trainee - Operator or Trade Continuous shift NV3 3,000National Labourer - Skilled Weekly NW1 3,000National Labourer - Skilled Day shift only NW2 3,000National Labourer - Skilled Continuous shift NW3 3,000National Labourer - Skilled Local, continuous shift NW4 3,000


BWHC

CLIENT: MRL GOLD PHILS, INC.PROJECT: AGATA NICKEL PROJECTCASE: Option 2 (AL-MHP)

APPENDIX: LABOUR COST SUMMARYRev: Rev A









(5) EH2(6) NH2


Process Control Metallurgist (0) NI2(2) EI2





1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 8 8 80 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 12 12 12

1 5 6 1 5 6 1 5 6 186 186 186

1 0 1 1 0 1 1 0 1 165 165 1650 1 1 0 1 1 0 1 1 41 41 411 0 1 1 0 1 1 0 1 150 150 1500 2 2 0 2 2 0 2 2 54 54 541 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 27 27 270 2 2 0 2 2 0 2 2 12 12 122 0 2 2 0 2 2 0 2 240 240 2400 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 61 0 1 1 0 1 1 0 1 120 120 1200 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 6 6 28 28 422 0 2 2 0 2 0 0 0 200 200 0


(2) EI2(3) EI2(4) EI2



(4) NE2(5) EE2(6) NE2



(3) ES3(4) NS3

Plant Operators (local, shift) (0) NT4Plant Operators (nationals, shift) (0) NT3Labourers (local, weekly) (0) NW1

2 0 2 2 0 2 0 0 0 200 200 01 0 1 1 0 1 1 0 1 100 100 1000 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 32 32 322 0 2 2 0 2 2 0 2 200 200 200

2 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 80 80 804 0 4 4 0 4 4 0 4 580 580 5800 0 0 0 0 0 0 0 0 0 0 04 0 4 4 0 4 0 0 0 580 580 00 3 3 0 3 3 0 3 3 21 21 210 4 4 0 4 4 0 4 4 24 24 244 0 4 4 0 4 4 0 4 400 400 4000 0 0 0 0 0 0 0 0 0 0 00 16 16 0 16 16 0 16 16 80 80 800 25 25 0 25 25 0 25 25 125 125 1250 10 10 0 10 10 0 10 10 30 30 30


BWHC




Labourers (local, shift) (0) NW4Trainees (level 1) (0) NV1Trainees (level 2) (0) NU2


(4) EG2(5) EG2(0) NG2




(4) EI2(5) NI2

Shift Supervisors (0) NF3Tradesmen (0) NR3Trades Assistant (0) NV1Crane Driver (0) NS2Trainees (0) NV2Labourers (0) NW1






0 20 20 0 20 20 0 20 20 60 60 600 8 8 0 8 8 0 8 8 24 24 240 2 2 0 2 2 0 2 2 8 8 8

1 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 6 6 61 0 1 1 0 1 1 0 1 130 130 1301 0 1 1 0 1 1 0 1 130 130 1301 0 1 1 0 1 1 0 1 130 130 1300 2 2 0 2 2 0 6 6 16 16 480 2 2 0 2 2 0 2 22 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 240 240 2400 0 0 0 0 0 0 0 0 0 0 00 3 3 0 3 3 0 3 3 21 21 210 2 2 0 2 2 0 2 2 14 14 142 0 2 2 0 2 2 0 2 200 200 2000 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 80 80 800 44 44 0 44 44 0 44 44 264 264 2640 14 14 0 14 14 0 14 14 42 42 420 3 3 0 3 3 0 3 3 18 18 180 6 6 0 6 6 0 6 6 18 18 180 4 4 0 4 4 0 4 4 12 12 12Labourers (0) NW1




0 4 4 0 4 4 0 4 4 12 12 12

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 3 3 0 3 3 0 3 3 18 18 180 8 8 0 8 8 0 8 8 56 56 560 8 8 0 8 8 0 8 8 24 24 240 4 4 0 4 4 0 4 4 20 20 200 4 4 0 4 4 0 4 4 12 12 12

38 220 258 38 220 258 32 226 258 6,194 6,194 5,460


BWHC







(4) NE3(5) EE3(6) NE3




(8) ND2






1 0 1 1 0 1 1 0 1 150 150 1501 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 62 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 02 0 2 2 0 2 2 0 2 300 300 3000 0 0 0 0 0 0 0 0 0 0 00 8 8 0 8 8 0 8 8 40 40 404 0 4 4 0 4 4 0 4 400 400 4000 0 0 0 0 0 0 0 0 0 0 00 3 3 0 3 3 0 3 3 21 21 210 0 0 0 0 0 0 0 0 0 0 0

0 4 4 0 4 4 0 4 4 12 12 12

1 0 1 1 0 1 1 0 1 190 190 1901 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 0(8) ND2

General Foreman (3) EE2(4) NE2

Engineers (3) EG2(4) NG2

Senior Supervisor (5) EH2(6) NH2

Graduate Engineer (0) NI2Mainenance Planner (0) NI2Secretary (0) NM1Shift Supervisors (0) NF3Tradesmen (0) NR3Trades Assistant (0) NV1Labourers (0) NW1

0 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 130 130 1300 0 0 0 0 0 0 0 0 0 0 01 0 1 1 0 1 1 0 1 120 120 1200 0 0 0 0 0 0 0 0 0 0 00 3 3 0 3 3 0 3 3 21 21 210 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 80 80 800 10 10 0 10 10 0 10 10 60 60 600 4 4 0 4 4 0 4 4 12 12 120 1 1 0 1 1 0 1 1 3 3 3


BWHC








(0) NT5General Hands (0) NT1General Transport Supervisor (0) NH2Product Supervisor (0) NH2Bus Drivers (0) NT4Drivers (0) NT4Light Vehicle Maintenance (0) NT1Airport Supervisor (0) NH2Airport Operations (0) NT2Customs Officer (0) NT2






1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 4 4 0 4 4 0 4 4 32 32 320 4 4 0 4 4 0 4 4 32 32 320 1 1 0 1 1 0 1 1 8 8 80 1 1 0 1 1 0 1 1 6 6 6

1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 20 20 200 4 4 0 4 4 0 4 4 20 20 200 10 10 0 10 10 0 10 10 50 50 500 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 60 8 8 0 8 8 0 8 8 40 40 400 10 10 0 10 10 0 10 10 50 50 500 5 5 0 5 5 0 5 5 25 25 250 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 5 5 5Customs Officer (0) NT2

Tug Crew Master (0) NR2Tug Crew Engineer (0) NS2Deck Hands (0) NT1Limestone Haulage Supervisor (0) NH3Heavy Equip (FEL) Maintenance (0) NT3

UTILITIES & TOTAL PERSONNEL (excl. contingency)INFRASTRUCTURE




0 1 1 0 1 1 0 1 1 5 5 50 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 20 20 200 1 1 0 1 1 0 1 1 6 6 60 6 6 0 6 6 0 6 6 30 30 30

17 112 129 17 112 129 17 112 129 3,006 3,006 3,006

0 1 1 0 1 1 0 1 1 325 325 3250 1 1 0 1 1 0 1 1 7 7 71 0 1 1 0 1 1 0 1 325 325 3250 1 1 0 1 1 0 1 1 7 7 71 0 1 1 0 1 1 0 1 190 190 190

1 0 1 1 0 1 1 0 1 190 190 1900 1 1 0 1 1 0 1 1 7 7 7


BWHC













1 0 1 1 0 1 1 0 1 150 150 1500 0 0 0 0 0 0 0 0 0 0 00 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 2 2 0 2 2 0 2 2 12 12 120 4 4 0 4 4 0 4 4 24 24 240 2 2 0 2 2 0 2 2 14 14 140 3 3 0 3 3 0 3 3 24 24 240 1 1 0 1 1 0 1 1 6 6 60 4 4 0 4 4 0 4 4 24 24 24

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 8 8 80 2 2 0 2 2 0 2 2 12 12 120 3 3 0 3 3 0 3 3 18 18 180 2 2 0 2 2 0 2 2 16 16 160 3 3 0 3 3 0 3 3 18 18 180 3 3 0 3 3 0 3 3 18 18 180 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 12 12 12

Office AdministrationOffice Administrator (0) NH2Data Analyst (0) NK2Reception (0) NN1Junior (0) NN1Travel Coordinator (0) NH2

Contracts AdministrationContracts Administrator (3) EH2

(0) NH2Secretary (0) NM1


0 1 1 0 1 1 0 1 1 6 6 60 2 2 0 2 2 0 2 2 16 16 160 2 2 0 2 2 0 2 2 8 8 80 5 5 0 5 5 0 5 5 20 20 200 1 1 0 1 1 0 1 1 6 6 6

1 0 1 1 0 1 1 0 1 120 120 1200 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 6

0 2 2 0 2 2 0 2 2 14 14 140 2 2 0 2 2 0 2 2 12 12 120 3 3 0 3 3 0 3 3 9 9 90 2 2 0 2 2 0 2 2 12 12 120 2 2 0 2 2 0 2 2 8 8 8


BWHC





SecuritySecurity Chief (0) ND2Senior Security Officers (0) NK2Security Officers (0) NL3Guards (0) NS3Secretary (0) NM1



HR Personnel






0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 27 27 270 2 2 0 2 2 0 2 2 16 16 160 4 4 0 1 1 0 1 1 32 8 80 1 1 0 1 1 0 1 1 8 8 80 2 2 0 2 2 0 2 2 12 12 12

0 1 1 0 1 1 0 1 1 27 27 270 4 4 0 4 4 0 4 4 32 32 320 12 12 0 12 12 0 12 12 72 72 720 80 80 0 80 80 0 80 80 480 480 4800 1 1 0 1 1 0 1 1 6 6 6

0 1 1 0 1 1 0 1 1 27 27 270 15 15 0 15 15 0 15 15 45 45 450 12 12 0 12 12 0 12 12 36 36 360 8 8 0 8 8 0 8 8 24 24 24

0 1 1 0 1 1 0 1 1 41 41 410 1 1 0 1 1 0 1 1 6 6 6



0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 7 7 7

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 4 4 4


BWHC





(5) EI2(20) EI2


MedicalMedical Supervisor (0) ND2Paramedic (0) NI2Nurses (0) NJ3First Aid (0) NK3Assistants (0) NN4

EnvironmentEnvironmental Manager (0) NC2






1 0 1 1 0 1 1 0 1 150 150 1500 1 1 0 1 1 0 1 1 7 7 70 1 1 0 1 1 0 1 1 7 7 70 2 2 0 2 2 0 2 2 14 14 140 1 1 0 1 1 0 1 1 6 6 60 8 8 0 8 8 0 8 8 64 64 641 0 1 1 0 1 1 0 1 6 6 60 6 6 0 6 6 0 6 6 42 42 421 0 1 1 0 1 1 0 1 100 100 1001 0 1 1 0 1 1 0 1 100 100 1000 3 3 0 3 3 0 3 3 12 12 120 3 3 0 3 3 0 3 3 21 21 210 0 0 0 0 0 0 0 0 0 0 00 2 2 0 2 2 0 2 2 10 10 100 2 2 0 2 2 0 2 2 6 6 6

0 1 1 0 1 1 0 1 1 27 27 270 1 1 0 1 1 0 1 1 7 7 70 3 3 0 3 3 0 3 3 21 21 210 4 4 0 4 4 0 4 4 32 32 320 4 4 0 4 4 0 4 4 16 16 16

0 1 1 0 1 1 0 1 1 41 41 41Environmental Manager (0) NC2Environmental Officer (0) NI2Technicians (0) NJ1Environmental Chemist (0) NH2Secretary (0) NM1



0 1 1 0 1 1 0 1 1 41 41 410 2 2 0 2 2 0 2 2 14 14 140 5 5 0 5 5 0 5 5 35 35 350 1 1 0 1 1 0 1 1 6 6 60 1 1 0 1 1 0 1 1 6 6 6

9 271 280 9 268 277 9 268 277 3,475 3,451 3,451


65 608 673 65 605 670 59 611 670 12,861 12,837 12,103


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technical report on the agata nickel project scoping study

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Transcript of technical report on the agata nickel project scoping study