amayapampa gold property - listed...

Amayapampa Gold Property For LionGold Corp. Ltd 713009

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Table 17.2 Sizing Pre-tanks and leach

Item Unit Value

1 General Information

Head Grades:

Au ore

Oxides g/t 2.3

Sulfides g/t 2.4

Estimated average g/t 2.4

Nominal capacity of plant tpd 1500

Availability % 92%

Throughput rate tpd 67.93

Dry Bulk Density Ore t/m3 2.79

Pulp density 1.406

Solids by weight % 45%

2 Leach Tanks

Calculations

Pulp flow: gpm 434.96

m3/min 1.65

m3 / h 98.79

Leaching time required hr 30

Required volume m3 2964

Selected Tank: Diam. m 8.5

Height m 7.9

Tank Volume m3 453.39

Number of Tanks (theoretical) 6.54

Freeboard m 0.60

Gross Volume of Tank m3 2964

Net Volume m3 2519.2

3 Tank Dimensions:

Total volume of leaching m3 2964

Number of tanks (practical) 7 (1 Leach, 6 CIL) 7

Free / Volume tank m3 423

Tanks (Dia x H) Dimensions (for design) m 9 x 8

Tank capacity m3 508.7

Estimated Power Tank HP 40

The Stage 1 flowsheet is shown in Figure 17.2.



Figure 17.2 Amayapampa 1500 tpd Stage 1 flowsheet



Plant power supply will be supplied from the existing substation at Catavi. A new dedicated 24 km long, 69kV power line is to be constructed from Catavi to a new sub-station on site. Site distribution will be by aerial 6.6 kV lines and fed directly at that voltage to the ball mill and at 400/231 volts elsewhere via 4 MCC’s.

Total plant power demand for Stage 1 is estimated to be 3,800 kVA plus 800 kVA for surface infrastructure and mine facilities

17.2.2 Stage 1 process plant layout

The proposed plant layout for Stage 1 is shown in Figure 17.3.

Note that careful consideration was given to the Stage 1 layout to make it fit with the future Stage 2 layout. The overall site layout showing also the water dam and TSF is shown in Figure 17.4.



Figure 17.3 Plant Layout for Stage 1



Figure 17.4 Overall Site Layout – (Not to Scale)

Water

Dam

Process

Plant

Final Pit

Design

Amayapampa

Town

Stage 2

Future Plant

Camp



As well as the ROM pad and part of the comminution circuit, The Stage 1 CIL and carbon stripping / gold recovery circuit will be utilized in Stage 2. Stage 1 services will also be re-utilized.

17.2.3 Stage 2 process flowsheet

At the time of preparing this updated report the main focus has been on the Stage 1 process plant design. As has previously been described the key assumption is that the original gravity / flotation – concentrate leach process will be retained for the Stage 2 sulphide ore, with the main changes being i) revisions to the gravity concentration equipment in favour of centrifugal devices rather than the in-line pressure jigs, ii) utilization of the Stage 1 CIL circuit (albeit over-sized, for Stage 2), and iii) appropriate scaling of equipment sizing to match the higher throughput rate

The following description is taken from the 2010 FS in which the original 2.7 Mtpa process plant design was carried out by Fraser Osborn of Townsville, based on the Gekko process flowsheet development and process design criteria. The key likely differences in the updated 1.5 Mtpa Stage 2 currently contemplated are noted.

The processing plant for Stage 2 of the Project is designed to incorporate three-stage, closed circuit crushing (although a SAG milling alternative has been investigated; refer Section 13.2.1 and the OMC report). Run-of-mine (ROM) ore will be fed by direct truck dump or by front-end loader (FEL), to a primary jaw-crusher via a variable frequency vibrating grizzly feeder. The undersize from the grizzly feeder and the discharge from the jaw crusher will be conveyed to the primary screen, a double deck-vibrating screen, where the oversize from both decks will report to the secondary cone crusher for further size reduction. The screen undersize together with the secondary crusher product will be conveyed to the secondary screen, also a double-deck vibrating screen, where the oversize from both decks reports to the tertiary cone crusher. The bottom deck undersize will be conveyed to the crushed ore reclaim stockpile. The cone crusher product is returned by conveyor to the secondary vibrating screen feed conveyor.

The grinding circuit will be fed by conveyor from the crushed ore reclaim stockpile. The grinding circuit will consist of a ball mill discharging into the mill sump which will provide a slurry feed to two pumps. The first and much larger pump, will feed the classifying cyclones in a conventional closed circuit where the cyclone overflow feeds the rougher flotation circuit. A second smaller pump provides feed via a magnetic screen separator to the gravity concentration circuit to immediately remove the coarse (free) gold from the grinding circuit. The gravity concentration circuit originally proposed consisted of two rougher Gekko In-Line Pressure Jigs (IPJ) in series, with the concentrate from these units being pump fed to a single smaller IPJ cleaner. Cleaner concentrate is upgraded in Gekko centrifugal spinners (ISP) before being fed to the In-Line Leach Reactor (ILR). Tails from both the rougher and cleaner IPJ’s feed a Falcon centrifugal concentrator with the concentrate from this unit also passing to the ILR. Tails from the Falcon return to the ball mill discharge sump whereas tails from the ISP are directed to the flotation concentrate regrind mill feed. The grinding circuit is designed for a grind of 80% of the cyclone overflow solids passing 150 micron. In the 1.5 Mtpa Stage 2 plant, the IPJ’s will likely be replaced by Knelson centrifugal concentrators in rougher – cleaner configuration. The superior recoveries from the centrifugal devices should mean that the Falcon concentrator in scavenging mode will no longer be required. The ILR will be retained.

In the ILR high cyanide and oxygen concentrations are used to leach the coarse gold. After leaching the pregnant leach liquor is separated from the solids using counter current decantation and the gold is then electrowon from the liquor. The gold-laden cathodes from electrowinning will be calcined and the resulting product will be refined to produce doré bullion. The solid tail from the ILR is then pumped to the regrind mill.

The cyclone overflow from the grinding circuit will report to the flotation circuit comprising six rougher cells and five cleaner cells with cleaner tails returning to the fourth rougher cell. Rougher flotation tailings are pumped to the flotation tailings thickener prior to deposition in the TSF. Flotation cleaner concentrate along with the ISP tail from the gravity circuit are directed to the regrind mill for a grind of 80% passing 106 micron. The reground concentrate is then pumped to the leach feed thickener. The possibility of not regrinding the flotation concentrate should be evaluated in light of some of the concerns expressed by the QP in Section 13 about over-grinding and creation of increased surface area of sulphide cyanocides.



Thickened slurry from the leach feed thickener is pumped to the agitated leach tank where lime slurry is added to raise the pH and sodium cyanide solution to leach the gold. Slurry from the leach tank gravitates to the six stage CIL circuit with gold being simultaneously dissolved then adsorbed onto activated carbon. Periodically activated carbon loaded with gold will be removed from the first CIL tank and the gold will be stripped from the loaded carbon using the pressurized Zadra system and recovered from solution by electrowinning. The loaded carbon will be acid washed before being stripped. The stripped carbon will be thermally reactivated and returned to the CIL circuit. This gold recovery circuit has been described in the Stage 1 section as it will be re-utilized from Stage 1.

The gold-laden cathodes from electrowinning will be calcined and the resulting product will be refined to produce doré bullion.

The tailings from the CIL circuit will be thickened and cyanide in the thickener overflow recycled to the head of the leach circuit with the underflow being pumped to a cyanide destruction and detoxification tank. It is noted by the QP, that a small process modification is required in order to achieve the cyanide recycle and water conservation measures associated with the post-leach thickening and also meet detoxification performance standards. The thickener underflow will require dilution to no more than 45% solids for acceptable mass transfer rates to occur in the detoxification circuit. This means that the detoxified CIL tailings will then need to be either pumped to the flotation tailing thickener, or if desired to be kept separate for process water chemistry reasons, pumped to an additional small thickener with the overflow used as dilution water for detox feed. Then the underflow is pumped to the tailings storage facility, (TSF).

The benefits of recycling cyanide and reducing subsequent detoxification sodium metabisulphite consumption, as well as reducing water usage with thickened tailings, are considerable and this modification enables these benefits to be retained as well as achieving the desired detoxification efficiency. The process flowsheet is shown in Figure 17.5.

17.2.4 Stage 2 process plant layout

The original Stage 2 plant layout is shown in Fig 17.6. Although in the period since the 2010 FS some alternative locations have been evaluated, this one remains the preferred site in terms of relief, proximity to the pit, and distance from the town of Amayapampa. With this in mind the Stage 1 layout previously presented, was designed to dovetail as closely as possible with this Stage 2 ultimate layout.



Figure 17.5 Process flow sheet



Figure 17.6 Process site plan Stage 2

Multiple terrace levels assist in reducing the total amount of bulk earthworks required for the site. They also assist in reducing the conveyor lengths and the height of some structures.



18 Project infrastructure

18.1 Road Access

The general road accessibility has been referred to in section 5.1. There exist several options for access to site, both having a common initial route form La Paz via Oruro to Unica. Both were traversed during the June 2013 site visit

From Unica there is a choice of route:

A southern route from Uncia to Lagunillas;

Uncia to Chayanta then northerly through Entre Rios or

Uncia to Chayanta then through Pullukiri from the south.

The route from Uncia to Chayanta is being upgraded and is expected to be paved in the coming months. Chayanta is seven km as the crow flies from the Project, but accessed by a very winding road either via Entre Rios or Pullukiri. The preferred route is via Pullukiri and work has commenced and is anticipated to be completed in early 2014.

18.2 Tailings storage facility

The Stage 1 tails dam wall was to be located approximately north 7954370 and east 775400. This is approximately north / north-west of the processing plant and south west of the existing camp.

In reviewing the site layout during the QP’s 2013 site visit it was decided that this site, perched above the town, was not a good location. An alternative location for the TSF and the raw water dam are shown on the site layout in Figure 17.4. This remains at concept level only and more detailed design is currently in progress with bids solicited from global engineering companies with tailings dam design experience. The scope includes an initial desktop evaluation, followed by field work and geotechnical investigations and finally the detailed design up to the point of being able to issue construction drawings / specifications etc.

It is anticipated that the site selected will have adequate total capacity to be expanded for Stage 2 tailings tonnage

18.3 Water dam

In a similar fashion to the tailings storage, the original primary water dam site at Entre Rios has been discarded in favour of using only the secondary dam closer to the Project and is also shown in Figure17.4, downstream of the proposed tailings storage facility.

The tailings dam scope referred to above also includes an assessment of the site hydrology and hydraulics pertaining to the project water requirements, leading to appropriate volume calculations, confirmation of the site characteristics and detailed design. During the engineering design phase of the dams a water catchment study will be conducted. Further options may be considered as a result, including re-instating the primary dam concept at Entre Rios.

For day to day to day plant water requirements, an HDPE lined water dam will be provided to the southwest of the site at approximately RL 4123.00. The size of the dam is approximately 30 metres x 65 metres with a capacity of 2 megalitres. Access roads around the dam will be provided with suitable embankments.

18.4 Power supply

Within the 2010 FS, power supply details are provided in the Fraser Osborn study and some of the key aspects of the original proposal are summarized below.



The power supply for the Project will be via a transmission line from the nearby Catavi substation at Cuardo Siglo XX which is located approximately 24 km to the north-west at Llallagua. The power will be transmitted to site by a dedicated and purpose-built transmission line operating at 69kV 50Hz AC.

For the original 2.7 Mtpa project the firm capacity of the incoming transmission line was estimated to be fifteen (15) MVA, capable of delivering this power level with less than a 10% voltage fluctuation between no load and full load. The expected operational load for the plant was approximately 13.5 MVA at a 0.8 power factor.

However for the purposes of the Stage 1 development, a revised power supply scheme has been developed comprising 24km of 69 kV line from Catavi and a reducing substation at Amayapampa. EPCM CONSULT has been engaged to design and construct the power supply. Line sizes etc have been chosen to handle the maximum of 12MVA now estimated for the 1.5 Mtpa Stage 2 but switchgear etc that can be readily modularised and expanded later will be for a 5 MVA load initially.

Power to the outlying facilities will be delivered via shielded 11kV transmission lines. These locations are the RWS and Wirquicocha adit drainage water recovery system. Skid mounted kiosk substations with integral transformers and starters will be installed at each location.

Due to the expected infrequency of use the return water pumps from the tailings dam will be diesel powered and locally operated.

Control, monitoring and communications to the outlying sites will be provided via fibre optics that will be installed in the earth wire, utilizing Optical Ground Wires (OPGW).

The electrical power and control system will be designed and installed to comply with the relevant Bolivian Standards, where available. In addition the site electrical standards and design assumptions take into account site specific environmental factors such as temperatures, altitude effects (4,100 m), moderate seismicity, and extreme lightning risk.

Table 18.1 summarizes the cost estimate for the power supply as developed by EPCM CONSULT.

Table 18.1 Summary of Power Supply Cost Estimate

TOTAL COST ESTIMATES FOR THE 69 KV POWER LINE AND THE SUB STATION

Item Description US$

1 Materials for Sub station 501,000

2 Materials for 69 kV power line 981,370

3 Sub-station construction costs 250,608

4 69 kV power line construction costs 548,205

5 General construction costs and temporary facilities 156,630

TOTAL 2,437,813

The Stage One 69kV to 6.6kV 5MVA transformer has been ordered from a manufacturer in Argentina.



19 Market studies and contracts

The marketing of gold is simple and it is not necessary to put a sales contract in place at this time. A confidential quote from a European refinery had been received to refine Amayapampa gold doré, and although not current has been used in financial modelling. Any new quote is not expected to be materially different given the simplicity of gold marketing.

19.1 Contracts

There are a limited number of contracts in place for the Project.

The 2010 FS had contemplated the possibility that Fraser Osborn who completed the FS design and capital costing for this report, would form a joint venture with SERPETBOL of Bolivia for the detailed design and construction of the Project under an Engineering Procurement Construction Management (EPCM) contract. SERPETBOL has been the major civil engineering contractor for the San Cristobal, San Vicente and San Bartolome Projects, so is well qualified for this work. Fraser Osborn has extensive experience in the construction of mineral processing plants.

As part of the current phased approach to the Project, LGC has engaged EPCM CONSULT to develop a conceptual study and cost estimate for Stage 1, as previously described in Section 17. At the time of writing this report meetings have also been held and a bid document issued to certain international companies to solicit bids for the detailed design and construction of Stage 1.

As mentioned in Section 18, MNV has also engaged EPCM CONSULT from Bolivia to design and construct the power line for Amayapampa and this contract has now been finalized under the auspices of LGC. This group will also negotiate the electricity contract for the Project on behalf of LGC.

A contract with a Bolivian earthworks contractor has also been entered into and works commenced to upgrade the access road via Pullukiri to the mine site.

Commercial discussions were also ongoing for the provision of medical services, and security of the site.



20 Environmental studies, permitting and social or community impact

20.1 Permitting

Permitting a mining project in Bolivia requires registration of the proposed action through completion of a form referred to as the Ficha Ambiental (“FA”), to initiate the environmental approval process and determine the level of submission required.

In the case of Amayapampa an integrated Environmental Impact Evaluation Study, EEIA is required, and was submitted in June 1997 following which a favourable DIA was granted in May 1998. This VGC Environmental Licence expired in 2007.

Based on updated documents submitted in 2006 an updated DIA, (Licencia Ambiental Actualizada) based on a 2,300 tpd operation was granted in July 2007. Following an exchange of letters between MNV and the Vice Ministry of Environment on 1 March 2010, the Project commenced operating under this licence on 1 April 2010.

During 2011 applications were submitted and approvals granted pertaining to i) a water treatment plant for the Wirquicocha acid mine drainage and ii) exploration activities related to trenching and drilling programs for the proposed pit, plant area and potential tailings and water dam locations.

Currently a further update to the Environmental Licence has been prepared for the present phased approach to the Project of a 0.55 Mtpa Stage 1 followed by the 1.5 Mtpa Stage 2 in order to seek a final DIA. This update has been lodged with the relevant Government authorities and also includes information on the recent ownership changes, improved measures regarding the acid mine drainage treatment, and progress on the Social Licence issues (see 20.3) which has facilitated access to revised tailings and water dam locations.

Statutory annual environmental reports have also been prepared and submitted to the relevant authorities.

LGC believes that here is a reasonable expectation based on an analysis of the relevant statutes that this update will be accepted and that a new DIA (DIA actualizada) will be granted without any requirement for a new EEIA to be prepared.

20.2 Environmental Studies

An environmental audit was prepared by Terra Matrix and submitted as required by the Bolivian government in 1997 for existing and previous mining operations. Based on the data presented in the Terra Matrix audit, significant contamination has occurred in the Project area as a result of historic mining and is discussed in Section 4.5.

The environmental issues have been addressed in the FS and a short comment on the main issues is inserted below.

There is no baseline air quality data available for the Project area. MNV has commenced collecting air-quality samples from eight sites around the immediate Project area, as well as from the village of Amayapampa and no specific emission sources which could degrade air quality were identified. Air-quality monitoring will then continue throughout the life of the Project. Dust from blasting will be an issue to be dealt with, particularly for the village of Amayapampa.

Surface waters are impacted by acid-rock drainage (ARD) which are due to historic mining activities in the area and/or natural exposures of sulphide-rich bedrock. One of the major sources of contamination in the local rivers is from the village of Amayapampa itself where 1,500 people live without a septic system. Hence the water in the Rio Khullko is heavily contaminated with coliforms and E. coli bacteria and regardless of any ARD, and is not potable. However, this river is one of the main water sources for washing clothes by the village.



Noise levels in the town of Amayapampa, to the west of the main Project area, will increase during construction and the initial operation of the Project. This issue as well as flyrock will have to be carefully managed. The treatment plant and waste dump are to be located to the east of the open pit and the pit area will shield the village from noise. Prevailing winds are from the north and south.

The nearest other communities to the Project are Pasuta Pampa and Pullukiri which are both a little more than two km from the site. Pasuta Pampa can view the Project site but as it is to the south and most of the mining and construction activity will be north and east of the peak of the hill to be mined, Pasuta Pampa should be in a noise shadow for most of the life of the Project. Pullukiri is in a separate valley to the Project to the south-east and will hear no equipment noise, only the occasional blasting noise. The remaining four communities are well shielded by reasonably extreme topography.

There will be a visual impact due to the mining of a hill so that the topographical characteristics of the area will be altered. It is intended to mitigate this by rehabilitating in a progressive fashion and it is anticipated that reclamation of the Project with eucalypt species will enhance the long term visual impact of the mine operation.

Within the plant design all plant terraces are assumed to be non-contaminated and run off will be diverted away from plant areas to nominated collection dams.

Spill-prevention measures and contingency plans for containing accidental spills and for preventing uncontrolled discharges will be developed as required by Bolivian law and to meet applicable North American and/or World Bank standards. Protection measures will be provided in the processing-facility area to ensure that any spills will be contained, collected, and introduced back into the process stream or safely disposed, as appropriate. Safeguards for operating the processing facility at Amayapampa will be provided to ensure adequate environmental protection. The discharge-response strategy will include a list of local and government contacts to be notified, depending upon the nature, extent or potential hazards of the spill, should one occur.

A geochemical-testing program has been carried out to evaluate the potential for ARD generation from waste rock and tailings. The results of this work indicate that most of the waste rock and tailings will have a low-to-moderate risk of generating long-term ARD based on their low sulphur content. However, there was some heterogeneity in the tailings material and hence the potential for localized generation of ARD exists. On the basis of tailings liquid analysis it was concluded that the water quality associated with the leached tailings does not meet all the Bolivian discharge standards. This prospect has been addressed in the design of the TSF, which minimizes potential seepage losses from the tailings and includes a collection seepage pond.

Reclamation will be an integral component of the Project. The emphasis of the reclamation program will be to return the area to the traditional land uses of livestock grazing and agriculture to the extent feasible. Interim stabilization and temporary or permanent reclamation measures are designed to prevent, control or mitigate potentially adverse mining-related effects to human health, safety, or the environment. The closure plan estimates that the total surface disturbance associated with the development of the Project is expected to be approximately 137 hectares (ha), of which 29 ha is the open pit void. The plan calls for the surface of the tailings impoundment to be contoured and graded to a natural undulating topography after being covered with a benign material (waste rock) and then topsoil to promote revegetation at the end of mining operations. Revegetation will be done primarily with eucalypts grown from seed collected from trees in the local area. Tree planting has already begun at Amayapampa. All surface disturbances, with the exception of the open pit, will be reclaimed or stabilized to reduce the potential of erosion. Once reclamation is completed, fixed facilities, including the water reservoir and permanent structures deemed useable, will be transferred to the local communities.

20.3 Social Licence and Community Relations

The main focus of activity since the 2010 FS has been on obtaining the Social Licence which under the current Bolivian law is a pre-requisite for a positive DIA.



RGL and now LGC have recognised that ‘indigenous rights’ are a central component of Bolivia’s current governance approach. This approach demands a voice for indigenous communities, and also their ‘approval’ of proposed activities through achievement of a social licence to operate between company and community.

The indigenous system in Bolivia for social organisation known as the Ayllu with subsidiary cabildos and villages has been described in Section 4.4. Building on the platform of the two social licences obtained by MNV in 2011 and 2012, LGC continues to develop its Stakeholder Engagement Strategy, focussing strongly on direct engagement with the villages and cabildos in each Ayllu.



21 Capital and operating costs

21.1 Capital cost estimates

The estimated capital costs for construction and sustaining the operations at Amayapampa over the life of the mine are presented in Table 21.1 below. Stage one costs were supplied by LionGold and based on an order of magnitude estimate prepared by Fraser Osborn and supplemented by local cost estimates detailed by EPCM Consultores S.R.L.discussed in section 17.2. The Stage two costs have been based on those used in 2011 adjusted for Bolivian inflation and US Export Index to 2013.Therefore the level of accuracy is now -20%+25% due to the approach taken on applying inflation.

Original estimates are based on the use of new equipment and expressed in United States dollars. Where firm quotes have not been received, a contingency factor of 15% has been used. These capital costs are inclusive of the two stage approach now planned.

Table 21.1 Capital cost summary (US$M)

Stage 1 ($ M) Stage 2 ($ M)

Processing Plant Directs 16.4 48.0

Indirects (incl contingency) 10.6 29.0

Water/TSF/Power Supply 7.1 21.1

Other 3.3 1.5

Deferred Mining 30.7

Total 37.4 130.3

The mining equipment capital expenditure for Stage 2 is shown in Table 21.2. The capital figures align with the current mine schedule and economic evaluation.



Table 21.2 Mine equipment fleet with Caterpillar equipment for Stage 2

Equipment Equipment Model Units

Unit Cost ($’000,s)

Excluding IVA Tax

Plus Shipping

Total Cost

($’000’s)

Caterpillar - Excavator 385CLME 3 1,082 3,246

Caterpillar – Water Truck 773F 1 1,290 1,290

Caterpillar - Truck 773F 17 1,043 17,732

Caterpillar - Loader 990H 1 1,601 1,601

Caterpillar - Grader 140M 1 311 311

Caterpillar - Dozer D8T 4 648 2,590

Atlas Copco Drill ROC D7-11 4 556 2,225

Lube Truck Volvo Cab Chassis Model BM 260-6x4R. Lube

tanks, etc built and fitted by Roghur SA of La Paz.

1 166

88 254

ANFO Mixing Truck Volvo Cab Chassis Model BM 260-6x4R. ANFO

body built by AAMCOR LLC of Salt Lake City, Utah.

1

166

124

4

295

Hansa Lighting Plants LTN6L 4 77 77

4WD Wagon Nissan Patrol SGL 1 46 46

4WD Trayback Nissan Patrol Pickup 4 150 150

4WD Double Cabin Nissan Frontier Double Cab 12 348 348

26 Seater Bus Nissan W41 2 100 100

Trailer Dual Axle 1 5 5

Workshop Tools First Fill 1 16 16

Forklift Manitou MSi 25T 1 62 62

Telehandler Caterpillar TH407 1 110 110

Maintenance Spares First Fill 1 129 129

Magazine Compound and

AN Storage Shed Supplied by Fenexa 1 55 55

Atlas Copco Mobile

Compressor/Generator

Compressor XAS 97 Dd + Generator 230/400 v

12 KvA 1 44 44

Surveying Equipment Kolida KS585R Total Station and Kolida DL-202 Electronic Level (2)

3 10

3 49

Total 30,734

The process plant capital expenditure is shown in Table 21.3. Total start-up capital expenditure required in the process area is $103,990,000, reflecting both Stages 1 and 2.



Table 21.3 Process Capital Cost Summary

Item Notes Stage 1 ($’000) Stage 2 ($’000)

DIRECTS

General 2,649 2,475

Crushing including stockpile 2,080 5,409

Grinding and classification and reclaim 1,627 9,019

Gravity Plant 408 2,276

Flotation circuit 5,215

Pre-Leach Thickening, CIL Circuit, Post-Leach Thickening

Sized for Stage 2; residual costs for

modifications, tie-ins etc

2,284 1,165

Gold room 885 1,116

Reagents 292 1,446

Detox ,Tails Thickening and disposal System 345 1,557

Services and Buildings 675 9,778

Electrics (HV and MCC’s) 1,425 4,465

Spares 500 1,553

Installation/erection etc 3,220 (Incl in each area)

Sub Total Price 45,474

Raw Water Supply and site investigations 2,532

Total 16,390 48,006

INDIRECTS

EPCM etc 5,434 11,067

First Fill 250 2,346

Mob Equipment 750 3,548

Lab Equipment 930

Operator Training, vendor representation and test work 700 1,416

Other

Total 7,134 19,307

CONTINGENCY 15% 3,435 3,435

GRAND TOTAL 26,959 77,030

The basis of the processing plant capital cost estimate is as follows:

The Stage 1 estimate was supplied by LGC and is based firstly on an order of magnitude estimate prepared by Fraser Osborn, supplemented by local cost estimate details contained within the EPCM CONSULT report referenced in Section 17.

The 2010 FS capital cost estimate was based on process engineering by Gekko Systems for a 2.7 Mtpa plant and then basic engineering and standard cost estimation processes by Fraser Osborn. This estimate has been revised / updated as follows to reflect the change of capacity and the prior expenditure in Stage 1 and re-use of some equipment from that initial stage:-

Section by section the Fraser Osborn direct capital costs were scaled from 2.7 Mtpa to 1.5 Mtpa using a conservative scaling factor of 0.6.

These costs were escalated applying appropriate Bolivian and global construction industry escalation factors.

As noted in Table 21.3, allowance was made for Stage 1 expenditure that was sized for re-use in Stage 2.



However given the work since 2010 and the confirmatory work still outstanding on the Stage 2 flowsheet, AMC recommends a more substantial revision of this capital cost estimate.

On-site infrastructure capital costs are summarised in Table 21.4.

Table 21.4 On-site Infrastructure capital costs (US$M)

Stage 1

($ M)

Stage 2

($ M)

Power Supply 2.500 (Included in stage 2 est)

Water and TSF 4.610 13.760

Plant / Infrastructure Sustaining Capital 7.300

Other 3.300 1.500

Total 10.410 22.560

Note the water dam and TSF costs for stage 2 were based on the 2010 Worley Parson report (escalated).Although this study has been supplanted by revisions to dam locations, and costs will be revised in line with the work recently commissioned for these new sites, the cost estimates have been retained for the purposes of this update, pending the site investigations and preliminary design etc. AMC considers this to be a conservative approach and appropriate to there being some work in-progress in these areas.

Note AMC considers that in view of there still being some residual uncertainty with respect to the final flowsheet, the contingency allowance has been increased from 10% to 15%.

Indirect costs have similarly been adapted from the 2010 FS Fraser Osborn estimate.

EPCM costs, and first fill costs have been treated in the same way as the direct costs whereas the estimates for mobile equipment, laboratory equipment and operator training / technical assistance have been regarded as fixed costs and therefore subject to escalation only and adjustment for any Stage 1 expenditure

21.2 Operating cost estimates

21.2.1 Mining costs

The mining costs were originally based on first principal calculations in the 2010 FS. These costs have been updated based on inflation figures between 2011 and 2013. Table 21.5 shows the breakdown of the life of mine average mining costs per tonne of material mined. As part of the AMC review these costs have increased based only on the inflation. This mining cost has been used in the economic evaluation of the Project.

Bolivia is served by the largest Caterpillar dealer in the world, Finning of Canada, with offices in La Paz and Santa Cruz. Finning has offered a consignment stock deal for spare parts and tyres and a maintenance and training contract. Finning has a significant maintenance presence at the 45,000 tonne per day San Cristobal mine further south in the Department of Potosi.



Table 21.5 Life of mine average mining cost

Item $ / tonne material mined

Fuel $0.96

Labour $0.09

Maintenance $0.70

Blasting $0.38

Administration & Overheads $0.29

Grade Control $0.09

Contingency $0.00

Total $2.51

Estimated average operating costs for the total Project are presented in Table 21.7 below.

21.2.2 Processing costs

Process operating and maintenance costs for Stage 1 were supplied by LGC. These are based on first principles estimates for labour and consumables and budget quotes for major reagents for “spot supply” ie long-term contracts not factored in.

Process operating and maintenance costs for Stage 2 had been estimated by Gekko systems as explained below.

The consumption of major reagents is based on results of metallurgical testwork carried out at Gekko Systems and earlier work by RDi and Hazen Research. Consumption of other reagents was established from data obtained from other similar projects. Quotations for the supply of reagents were obtained by MNV from Bolivian vendors. Labour costs and fringe benefits were developed by consulting published area wage scales and salary rates for similar Bolivian projects, and from salaries being paid to existing employees of MNV. Based on the components of normal fringe benefits in Bolivia, an average rate of 30.66%, rounded to 31%, of basic pay was used.

For the purposes of this update AMC has escalated labour costs; maintenance materials are factored as 3% of direct installed costs. In addition, an allowance of $895,000 per annum for years one and two, and then year four and five has been included in the financial model for expatriate technical support for Stage 1 and Stage 2 commissioning/ optimisation etc.

The reagent consumptions previously estimated have been retained, with the exception of sodium metabisulphite for cyanide destruction. This appeared low and has been recalculated by AMC from the process mass balance. Major reagent supply costs have been revised in line with mid-2013 long-term supply costs for Peru/Bolivia based on the QP’s experience of other recent projects in the area.

Power costs were based on an estimated average power draw to all electrical motors. A cost of $0.056 per kilowatt-hour was used, based upon advice from MNV’s electrical power consultant in Bolivia, EPCM CONSULT.

No contingency allowance was included in any of the operating-cost estimates. The process operating costs are summarized in Table 21.6 for Stage 2.



Table 21.6 Plant operating cost breakdown – Stage 2

Category Item Annual Cost ($’000) Unit Cost $/t milled

Processing labour

Management & Technical

Maintenance

Operations

Laboratory

176

351

451

187

Total Fixed Costs p.a. 1,165

Maintenance (semi fixed) Maintenance Spares (3% of direct

capital cost) 1,440

Total Fixed and Semi-fixed costs

2,605

Variable Unit Costs

Rehandle ROM FEL 0.17

Assaying Consumables 0.03

Consumables

Grinding Media

Sodium Cyanide

SMBS

Lime

Other

1.50

4.05

0.45

0.24

1.50

Electrical Power Electricity 1.27

Total Variable Costs 13,830 9.22

Total 16,435 10.95

The operating cost estimates were based on an AU$/US$ exchange rate of 0.85 and a BO$/US$ exchange rate of 0.14.

21.2.3 Overall operating costs

Estimated average operating costs for the total Project are presented in Table 21.7 below.

Table 21.7 Operating cost summary

Area Cost Per Tonne Milled ($/t)

Mining $16.36

Processing Facilities $12.21

Reclamation $0.07

G&A $1.88

Total $30.52



22 Economic analysis

22.1 Economic analysis and mine life

AMC updated the cash flow model to conduct an economic analysis of the Project including a sensitivity analysis. Project construction capital cost estimates including pre-production costs, ongoing capital costs, mine closure costs, royalties and capital depreciation have been included in the projections of Project cash flow. These have been discussed earlier in the section. Table 22.1 below shows the results of this analysis. No allowance for inflation has been included in the cash flow modelling, and the base case gold price used was $1,300 per ounce.

Table 22.1 Financial summary

Item Parameter / Result

Life of Mine 9 years

Total Mill Throughput 9.14 Mt

Total Gold Produced 616 koz

Total Waste Mined 50.4 Mt

Initial Project Capital Cost US$ 36 M

On-Going Capital Costs US$ 132 M

Life-of-Mine Operating Costs US$ 280 M

Base Case Gold Price Assumption US$ 1,300/oz

Discount Rate Pre-Tax Base Case

7.0% NPV US$ 143 M

10.0% NPV US$ 110 M

12.0% NPV US$ 91 M

IRR 38%

Payback @ 10% Discount rate 6 years

Discount Rate Post-Tax Base Case

7.0% NPV US$ 77 M

10.0% NPV US$ 54 M

12.0% NPV US$ 42 M

IRR 24%

Payback @ 10% Discount rate 7 years

Sensitivity of the Project has been evaluated to determine its robustness. Several variables were tested to determine where the risk is most present. Based on these results the Project is most sensitive to the gold price, recovery and grade. A fall of 10% in any of these variables brings the Project to a reduced NPV of $72-80 M (pre-tax) and IRR of 29-31%. Table 22.2 below shows the results of the sensitivity analysis at 10% discount rate while Figure 22.1 shows the sensitivities graphically. Please note that gold price and recovery are behind the gold grade curve in Figure 22.1.



Table 22.2 Cash flow modelling and sensitivity analysis

Sensitivity

(Base Case in Bold) Value

Pre-Tax NPV @ 10%

Discount Rate

(US$ 000’s)

IRR (%)

Gold Price ($/oz) $1,300 109.6 38%

$1,400 139.0 45%

$1,200 80.2 31%

Gold Grade (g/t) 2.39 109.6 38%

+ 10% 2.63 147.7 47%

- 10% 2.15 71.5 29%

Mining Operating Costs ($/Tonne Ore Mined) 2.51 109.6 38%

+10% $2.76 101.3 36%

–10% $2.26 117.8 40%

Recovery (average) 88% 109.6 38%

+10% 96% 147.7 47%

-10% 79% 71.5 29%

Process Operating Costs ($/Tonne Ore Processed) 12.21 109.6 38%

+10% $13.43 103.5 37%

-10% $10.99 115.8 40%

Capital Costs ($M) $168 109.6 38%

+10% $184 97.7 33%

-10% $151 121.5 44%



Figure 22.1 Sensitivity analysis at 10% discount rate

A comparison of gold prices above and below the base case of US$1,300/oz together with discount rates above and below the base case of 10% is shown in Table 22.3.



Table 22.3 Range of gold price and discount rate

Gold $/oz Discount Rate Pre Tax NPV ($M) IRR

$1,200 7.00% 108 31%

$1,300 7.00% 143 38%

$1,400 7.00% 179 45%

$1,200 10% 80 31%

$1,300 10% 110 38%

$1,400 10% 139 45%

$1,200 12% 65 31%

$1,300 12% 91 38%

$1,400 12% 118 45%

As an indication of the Project sensitivity to a combination of factors, possible ‘best’ case and ‘worst’ case scenarios have been estimated, as shown in Table 22.4 below.

Table 22.4 Possible ‘Best’ and ‘Worst’ Case Scenarios

Scenario After-Tax DCF @ 10% Discount Rate ($M)

Possible Best Case

(Gold Price +10%, Gold Grade +10%, Recovery +10%, OPEX -10%, CAPEX -10%)

262.2

Possible Worst Case

(Gold Price -10%, Gold Grade -10%, Recovery -10%, OPEX +10%, CAPEX +10%)

-20.1

The two tables which follow, are summaries of the cash flow projection run by AMC which demonstrates the physicals, revenue, operating costs, capital costs over time, other costs and the financial results by year. Table 22.5 is on a pre-tax basis and Table 22.6 is on a post-tax basis.



Table 22.5 Cash flow summary pre-tax

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total

Physicals

Total Movement (Mined) Mt 1.0 1.5 1.9 7.9 15.1 15.0 10.4 5.4 1.3 - 59.5

Mill Feed (Total) Mt 0.250 0.550 0.550 1.000 1.500 1.500 1.500 1.500 0.788 - 9.138

Au (Head Grade) g/t 3.01 2.48 2.27 2.64 2.29 2.17 2.20 2.32 2.97 - 2.39

Recovered Metal (Total) koz 21.1 38.1 34.8 74.7 96.5 91.9 93.3 98.5 67.0 - 615.9

Plant Gold Inventory koz 0.9 1.0 0.9 1.9 2.4 2.3 2.3 2.5 1.7 - 15.7

Gold Poured koz 20.2 38.1 34.9 73.7 96.0 92.0 93.3 98.3 69.5 - 615.9

Gold Shipped koz 20.2 38.1 34.9 73.7 96.0 92.0 93.3 98.3 69.5 - 615.9

Revenue

Revenue Au M$ 26.2 49.5 45.4 95.8 124.8 119.7 121.3 127.9 90.3 - 800.7

Capital Costs

Plant & Infrastructure Direct Capital Expenditure M$ 26.1- - - 24.0- 24.0- - - - - - - 74.2-

Plant Indirect Capital M$ - - - 29.0- - - - - - - - 29.0-

Plant Sustaining Capital M$ - 2.6- 5.1- 2.2- 6.6- 2.4- 2.6- 2.7- - - - 24.2-

Mining Equipment Capital Expenditure M$ 0.7- - 2.1- 15.5- 9.5- 3.7- - - - - - 31.5-

Other Direct Capital M$ 8.8- - - - - - - - - - - 8.8-

Residual Capital Return M$ - - - - - - 0.3 1.1 1.1 0.7 - 3.2

Total Capital Cost M$ 35.7- 2.6- 7.2- 70.7- 40.1- 6.1- 2.3- 1.6- 1.1 0.7 - 164.4-

Operating Cash Costs

Mining M$ 0.0 4.9 7.2 9.5 12.8 29.0 31.3 28.0 21.7 5.0 - 149.5

Processing M$ - 7.8 7.8 6.9 12.7 17.3 16.4 16.4 16.4 9.9 - 111.6

General & Administration M$ 0.0 0.5 1.0 1.0 1.9 2.8 2.8 2.8 2.8 1.5 - 17.2

Reclamation M$ 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.1 - 0.6

Total Operating Cash Cost M$ 0.0- 13.2- 16.1- 17.4- 27.5- 49.2- 50.6- 47.4- 41.0- 16.4- - 278.9-

Other Cash Costs

Concentrate Charges M$ - - - - - - - - - - - -

Transport M$ - 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 - 0.9

Au Refining M$ - 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.0 - 0.4

Total Concentrate Charges M$ - 0.0- 0.1- 0.1- 0.2- 0.2- 0.2- 0.2- 0.2- 0.1- - 1.3-

Taxes and Royalties

Royalty

Government Au Royalty M$ - 1.8 3.5 3.2 6.7 8.7 8.4 8.5 8.9 6.3 - 56.0

Vista Au Royalty M$ - 0.9 1.7 1.6 3.4 4.4 4.2 4.2 4.5 3.2 - 28.0

$1Mpa based on Vista Gold Royalty Lump Sum Payments M$ - 1.0 1.0 1.0 - - - - - - - 3.0

Total Royalty Payment M$ - 3.8- 6.2- 5.8- 10.1- 13.1- 12.6- 12.7- 13.4- 9.5- - 87.1-

Tax Depreciation

US Inflation index - 1.00 1.02 1.04 1.06 1.08 1.10 1.13 1.15 1.17 1.20 1.22 -

Capital Additions M$nom 35.7- 2.7- 7.5- 75.0- 43.4- 6.7- 2.6- 1.8- 1.3 0.9 - 173.2-

Capital cost - opening balance M$nom - 35.7- 37.3- 42.1- 109.4- 133.1- 108.9- 79.9- 49.4- 16.6- - 612.4-

Capital additions M$nom 35.7- 2.7- 7.5- 75.0- 43.4- 6.7- 2.6- 1.8- 1.3 0.9 - 173.2-

Capital Value at Year End M$nom 35.7- 38.4- 44.9- 117.1- 152.8- 139.8- 111.5- 81.7- 48.1- 15.7- - 785.6-

Depreciation M$nom 0.0 1.0 2.8 7.7 19.6 30.9 31.6 32.4 31.5 15.7 - 173.2

Written Dow n Value M$nom 35.7- 37.3- 42.1- 109.4- 133.1- 108.9- 79.9- 49.4- 16.6- - - 612.4-

Accumulated depreciation M$nom 0.0 1.0 3.8 11.6 31.2 62.1 93.7 126.1 157.6 173.2 173.2 -

Depreciation (real) M$ 0.0 1.0 2.7 7.3 18.1 28.0 28.1 28.2 26.9 13.1 - 153.4

Corporate Tax

Profit (before tax) M$ 0.0- 8.2 24.5 14.9 39.9 34.2 28.2 32.8 46.3 51.2 - 280.1

Corporate tax rate % 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Gross tax payable M$ - - - - - - - - - - - -

Cumulative tax M$ - - - - - - - - - - - -

Tax payable M$ - - - - - - - - - - - -

Cashflow

Revenue M$ - 26.2 49.5 45.4 95.8 124.8 119.7 121.3 127.9 90.3 - 800.7

Capital Cost M$ 35.7- 2.6- 7.2- 70.7- 40.1- 6.1- 2.3- 1.6- 1.1 0.7 - 164.4-

Operating Cost M$ 0.0- 13.2- 16.1- 17.5- 27.7- 49.4- 50.8- 47.6- 41.3- 16.6- - 280.2-

Taxes and Royalties M$ - 3.8- 6.2- 5.8- 10.1- 13.1- 12.6- 12.7- 13.4- 9.5- - 87.1-

Free Cashflow M$ 35.7- 6.6 19.9 48.6- 18.0 56.1 54.0 59.4 74.3 65.0 - 269.0

Discount factors 0.91 0.83 0.75 0.68 0.62 0.56 0.51 0.47 0.42 0.39 0.35

Discounted Free Cashflow M$ 32.4- 5.4 15.0 33.2- 11.2 31.7 27.7 27.7 31.5 25.1 - 109.6

NPV surplus @ 10% M$ 109.6

IRR % 38%



Table 22.6 Cash flow summary post-tax

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total

Physicals

Total Movement (Mined) Mt 1.0 1.5 1.9 7.9 15.1 15.0 10.4 5.4 1.3 - 59.5

Mill Feed (Total) Mt 0.250 0.550 0.550 1.000 1.500 1.500 1.500 1.500 0.788 - 9.138

Au (Head Grade) g/t 3.01 2.48 2.27 2.64 2.29 2.17 2.20 2.32 2.97 - 2.39

Recovered Metal (Total) koz 21.1 38.1 34.8 74.7 96.5 91.9 93.3 98.5 67.0 - 615.9

Plant Gold Inventory koz 0.9 1.0 0.9 1.9 2.4 2.3 2.3 2.5 1.7 - 15.7

Gold Poured koz 20.2 38.1 34.9 73.7 96.0 92.0 93.3 98.3 69.5 - 615.9

Gold Shipped koz 20.2 38.1 34.9 73.7 96.0 92.0 93.3 98.3 69.5 - 615.9

Revenue

Revenue Au M$ 26.2 49.5 45.4 95.8 124.8 119.7 121.3 127.9 90.3 - 800.7

Capital Costs

Plant & Infrastructure Direct Capital Expenditure M$ 26.1- - - 24.0- 24.0- - - - - - - 74.2-

Plant Indirect Capital M$ - - - 29.0- - - - - - - - 29.0-

Plant Sustaining Capital M$ - 2.6- 5.1- 2.2- 6.6- 2.4- 2.6- 2.7- - - - 24.2-

Mining Equipment Capital Expenditure M$ 0.7- - 2.1- 15.5- 9.5- 3.7- - - - - - 31.5-

Other Direct Capital M$ 8.8- - - - - - - - - - - 8.8-

Residual Capital Return M$ - - - - - - 0.3 1.1 1.1 0.7 - 3.2

Total Capital Cost M$ 35.7- 2.6- 7.2- 70.7- 40.1- 6.1- 2.3- 1.6- 1.1 0.7 - 164.4-

Operating Cash Costs

Mining M$ 0.0 4.9 7.2 9.5 12.8 29.0 31.3 28.0 21.7 5.0 - 149.5

Processing M$ - 7.8 7.8 6.9 12.7 17.3 16.4 16.4 16.4 9.9 - 111.6

General & Administration M$ 0.0 0.5 1.0 1.0 1.9 2.8 2.8 2.8 2.8 1.5 - 17.2

Reclamation M$ 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.1 - 0.6

Total Operating Cash Cost M$ 0.0- 13.2- 16.1- 17.4- 27.5- 49.2- 50.6- 47.4- 41.0- 16.4- - 278.9-

Other Cash Costs

Concentrate Charges M$ - - - - - - - - - - - -

Transport M$ - 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 - 0.9

Au Refining M$ - 0.0 0.0 0.0 0.0 0.1 0.1 0.1 0.1 0.0 - 0.4

Total Concentrate Charges M$ - 0.0- 0.1- 0.1- 0.2- 0.2- 0.2- 0.2- 0.2- 0.1- - 1.3-

Taxes and Royalties

Royalty

Government Au Royalty M$ - 1.8 3.5 3.2 6.7 8.7 8.4 8.5 8.9 6.3 - 56.0

Vista Au Royalty M$ - 0.9 1.7 1.6 3.4 4.4 4.2 4.2 4.5 3.2 - 28.0

$1Mpa based on Vista Gold Royalty Lump Sum Payments M$ - 1.0 1.0 1.0 - - - - - - - 3.0

Total Royalty Payment M$ - 3.8- 6.2- 5.8- 10.1- 13.1- 12.6- 12.7- 13.4- 9.5- - 87.1-

Tax Depreciation

US Inflation index - 1.00 1.02 1.04 1.06 1.08 1.10 1.13 1.15 1.17 1.20 1.22 -

Capital Additions M$nom 35.7- 2.7- 7.5- 75.0- 43.4- 6.7- 2.6- 1.8- 1.3 0.9 - 173.2-

Capital cost - opening balance M$nom - 35.7- 37.3- 42.1- 109.4- 133.1- 108.9- 79.9- 49.4- 16.6- - 612.4-

Capital additions M$nom 35.7- 2.7- 7.5- 75.0- 43.4- 6.7- 2.6- 1.8- 1.3 0.9 - 173.2-

Capital Value at Year End M$nom 35.7- 38.4- 44.9- 117.1- 152.8- 139.8- 111.5- 81.7- 48.1- 15.7- - 785.6-

Depreciation M$nom 0.0 1.0 2.8 7.7 19.6 30.9 31.6 32.4 31.5 15.7 - 173.2

Written Dow n Value M$nom 35.7- 37.3- 42.1- 109.4- 133.1- 108.9- 79.9- 49.4- 16.6- - - 612.4-

Accumulated depreciation M$nom 0.0 1.0 3.8 11.6 31.2 62.1 93.7 126.1 157.6 173.2 173.2 -

Depreciation (real) M$ 0.0 1.0 2.7 7.3 18.1 28.0 28.1 28.2 26.9 13.1 - 153.4

Corporate Tax

Profit (before tax) M$ 0.0- 8.2 24.5 14.9 39.9 34.2 28.2 32.8 46.3 51.2 - 280.1

Corporate tax rate % 38% 38% 38% 38% 38% 38% 38% 38% 38% 38% 38%

Gross tax payable M$ 0.0- 3.1 9.2 5.6 15.0 12.8 10.6 12.3 17.4 19.2 - 105.0

Cumulative tax M$ 0.0- 3.1 12.3 17.8 32.8 45.6 56.2 68.5 85.8 105.0 105.0 532.2

Tax payable M$ - 3.1 9.2 5.6 15.0 12.8 10.6 12.3 17.4 19.2 - 105.0

Cashflow

Revenue M$ - 26.2 49.5 45.4 95.8 124.8 119.7 121.3 127.9 90.3 - 800.7

Capital Cost M$ 35.7- 2.6- 7.2- 70.7- 40.1- 6.1- 2.3- 1.6- 1.1 0.7 - 164.4-

Operating Cost M$ 0.0- 13.2- 16.1- 17.5- 27.7- 49.4- 50.8- 47.6- 41.3- 16.6- - 280.2-

Taxes and Royalties M$ - 6.8- 15.4- 11.3- 25.0- 25.9- 23.1- 25.0- 30.8- 28.7- - 192.1-

Free Cashflow M$ 35.7- 3.5 10.7 54.2- 3.0 43.3 43.4 47.1 56.9 45.8 - 164.0

Discount factors 0.91 0.83 0.75 0.68 0.62 0.56 0.51 0.47 0.42 0.39 0.35

Discounted Free Cashflow M$ 32.4- 2.9 8.1 37.0- 1.9 24.4 22.3 22.0 24.1 17.7 - 53.9

NPV surplus @ 10% M$ 53.9

IRR % 24%



22.2 Taxes

Under the Bolivian tax system there are a number of taxes that apply to a mining project, which are summarized below.

Corporate Income Tax is assessed on net profit adjusted for tax purposes which is generally similar to the net profit determined in accordance with generally accepted accounting purposes at a rate of 25%. The standard depreciation method established by the tax law is the straight line method over the useful life of the assets as laid down in the tax regulations.

An Additional Mining Corporate Tax is calculated on the net profit adjusted for tax purposes in accordance with generally accepted accounting purposes at a rate of 12.5%. This tax is calculated on the same basis as the Corporate Tax. The norm establishes for this tax to be paid in monthly advances (payments) to the Bolivian Tax authorities

Value Added Tax at a rate of 13%, is paid on all local purchases of goods and services, except for labour directly hired by the company, as well as on the import of goods. Value Added Tax paid on purchases can be recovered either as tax credit when sales are made in Bolivia or through tax credit certificates when the production is exported.

There are two royalties applicable to the Project. A royalty is to be paid to VGC on the production which at a gold price over $750 is 3.5% and is capped at 720,000 ounces of production. In addition there is a state royalty on gold. This varies depending on whether exported or sold in country and has a gold price escalator. In project optimization and economics, the maximum of 7% has been assumed.



23 Adjacent properties

Amayapampa lies in a significant metallogenic sub-province in Bolivia. There are a number of other significant mines or fields in the district shown in Figure 23.1 and described below. Where possible an excerpt from a web site is cited otherwise a brief statement is made as provided originally by RGL for the previous report.

Figure 23.1 Nearby mines in the Amayapampa region

Siglo XX, (Twentieth Century)

The Siglo XX tin mine lies only 20 km away between the major towns of Llallagua and Uncia. Siglo XX is arguably the largest vein-type tin deposit in the world, with a significant underground mine being operated now by cooperatives and a former large alluvial deposit being dredged in the past. The tailings from the mine are being reworked and a +14,000,000 tonne stockpile of “sink and float” tailings is being studied by the Bolivian state mining company, Comibol. Total production from Siglo XX and nearby operations is estimated at one million tonnes of tin.

Capa Circa

This gold deposit is located ten km to the south of Amayapampa. It once formed part of the Vista holdings in the area before being procured by a local group to be mined by a cooperative. MNV holds the Consolidada III concession, which surrounds the Capa Circa Gold Project.



Achachucan

The Achachucani Gold Project (formerly known as the Pederson Project) is located in the central west side of Bolivia, approximately 360 km south of La Paz, and 50 kilometres south-west of Amayapampa. This property comprises approximately 78 square kilometres within 13 contiguous concessions. The claims contain a near surface, structurally controlled, sediment hosted gold deposit. The property has a historical resource estimate of 51.6 million tonnes grading 1.4 g Au/t containing 2.3 million ounces of gold which was completed by Orvana Minerals Corporation and BHP in 1999. This historical resource estimate was not prepared in accordance with currently accepted guidelines for the preparation of mineral resources and mineral reserves, does not comply with NI 43-101 and should not be relied upon. Approximately 20% to 25% of an historical resource is reported to be contained within oxidized material which potentially could be heap leached.

In a press release of 19 December 2012, Castillian Resources Corporation stated that they had entered into an assignment agreement with South American Tin Limited ("SAT") whereby Castillian will assign its option to acquire a 100% interest in the Achachucani Gold Project, to SAT. SAT is a private, Australian-based mining company, which through its Bolivia subsidiary, has a number of tin projects north of Potosi centred at the historic Siglo XX Mine in Llallagua.

Others

The high grade gold-antimony vein system at Cebedillas nearby to Capa Circa.

The Pucro tin mine five km to the north of Amayapampa. This mine was worked to a depth of approximately 200 m below surface.

Colquechaca, approximately 35 km to the south-east of Amayapampa hosts a major base metals deposit.



24 Other relevant data and information

There is no other information considered relevant and not covered in the earlier sections.



25 Interpretation and conclusions

Based on the site visits and review of the available data the following are the conclusions regarding the Project.

The Amayapampa deposit was a producer over a long period of time and has been explored in phases over the past seventeen years by a number of companies. The data collected since 1995 forms the basis of the Mineral Resource estimate and feasibility study.

25.1 Geology and exploration

The QP is of the opinion that exploration data collection has been done according to normal industry practices and issues of quality raised with the historical data has been addressed, as far as practical The data has been audited at various times as part of different studies, but suffers from a lack of continuous ownership.

In addition the sample preparation, analytical, and security procedures were adequate to provide drillhole assay data acceptable for geological modelling and reliable resource estimation. Although there was an unbroken chain of custody from the site to the ALS analytical laboratory, the same procedures were not used for SGS where initial analytical work was conducted. However, sufficient reference materials were used to control analytical processes, appropriate analytical procedures were used that take rock matrices into account and provide acceptable levels of precision and sufficient checking work was done to demonstrate that the data are unbiased.

The data on which the Mineral Resources are based is from both reverse circulation and diamond drill holes, in addition to channel sampling from surface trenches and samples from underground cross cuts. The drilling is of adequate spacing for the Mineral Resource classifications used in this estimate. Assaying has been conducted by independent assay laboratories with samples delivered to the laboratories by company personnel. The assaying QA/QC practices have been of a high standard.

The block model has gone through several iterations and this estimate carried out by AMC both respects the style of mineralization and also removes the volumes postulated to have been mined out in a spatial sense and not just volumetric as had been done previously. This has removed some of the risk in the Project. However mining through voids in the pit floor will have to be carefully managed.

A multifaceted drilling program was planned to be implemented in 2011 and was commenced but curtailed by RGL. A program to infill and explore with the new model is to be formulated. A rough estimate of this program is included in the recommendations.

25.2 Mining

The mine planning work completed is supported by a robust process with inputs and parameters updated for this report. Costing data accuracy is lower than previous work, however application of inflation and export rate increases have been applied to account for the time between quotes. Capital equipment quotes were checked against the AMC database to ensure there were no material inconsistencies.

The key outstanding area is the geotechnical investigation which upon further work will provide greater accuracy for pit slope angles. The ability to achieve the mine design is underpinned by the geotechnical information available. The geotechnical information provided is still not at a true Feasibility Study level. Sensitivity of increasing and decreasing the overall slope angles does provide both opportunity and risk to the project. Although not seen to have an impact that would cause the Project not to proceed, a reduction in slope angles will increase strip ratio and mining cost. Alternatively if the wall angles could be steepened there is upside opportunity to reduce costs.

Geotechnical investigation will provide the basis for further iterations of the mine design and schedule to be undertaken in future updates of studies.



The mining mobile equipment selected for the Project will provide the desired production rates and ore selectivity. The supporting ancillary fleet appears adequate for the size of this operation. All pit designs have been updated to suit the planned equipment.

The Probable Mineral Reserves are stated as 9.1 Mt at 2.4 g/t Au for a total of 701 koz Au. There is potential to add to this to the north of the deposit and perhaps at depth, in addition to upgrading the Inferred Resources, within the pit volume.

25.3 Metallurgy and processing:

Although the testwork has been somewhat fragmented over time with a lack of consistency in overall approach,

and some further work is still required, the QP nevertheless believes that the following conclusions can be

reached:

Gekko had concluded in 2010 that a gravity-CIL process flowsheet was optimal for oxides whereas, mainly for reasons of cyanide consumption, a gravity / flotation – concentrate leach process was preferred for sulphides. Given the preponderance of sulphides in the ore reserve the latter process was selected for the original 2.7 Mtpa process flowsheet.

These conclusions are supported by the subsequent leaching testwork, although it is recovery issues rather than cyanide consumption that would indicate the flotation – concentrate leach process as being preferred for sulphide ore.

Although the Amayapampa ore recovery is relatively insensitive to oxidation state and process flowsheet (compared to normal experience of similar gold ores), nevertheless the optimal overall project process route choices are:

Gravity-CIL for the oxide and transition ores of Stage 1 —

Gravity / flotation – concentrate leach for the sulphide ore of Stage 2, now to be treated, being —lower tonnage higher grade as a consequence of resource modelling revisions, at 1.5 Mtpa.

In both cases gold recoveries in the mid to high 80%’s can be expected and recovery algorithms have been developed to model the recovery dependence on head grade.

A consequence of the phased approach now being adopted is that the Stage 1 pit is predominantly in oxides and transition ore whereas Stage 2 is mainly in sulphide material. This allows the Stage 1 flowsheet to be a simple gravity CIL circuit and the original gravity – flotation / leach circuit applies only to Stage 2 sulphide ore for which such a flowsheet is better suited. Moreover it is possible to re-utilize the Stage 1 CIL and gold adsorption circuit sized for whole ore in the Stage 2 circuit sized for a flotation concentrate, so some capital efficiencies are achieved despite the change in flowsheet.

25.4 Infrastructure and other

The Stage 1 power supply construction and installation contract (with adequate consideration for future Stage 2

requirements) has been awarded and the cost of $2.5M is included in the financial model.

New locations have been selected for tailings storage and water dam facilities and it is recommended that site

investigation work and detailed design proceed as a priority. It is understood some firm proposals are awaited.

MNV has spent considerable effort addressing the issues which will lead to gaining a social licence. This is complex and agreements are either in place or are being worked on in this regard. The feasibility study completed by RGL met its objective subject to some items which are to be further addressed in the detailed design stage.



26 Recommendations

This section itemises the recommendations from the work carried out in 2013 and is discussed under the main headings

26.1 Mineral Resource

It is concluded that the resource estimate has no fatal flaws, and the new approach used in 2013 with tighter controls to the mineralization has given an estimate closer to reality. This model should be updated with new drilling as recommended below, for a cost of $10,000.

The drill program mentioned in Section 25 is tabulated below in Table 26.1. The recommendation is to look in more detail at the evaluation requirements and priorities, but an order of magnitude estimate is shown below. Drilling metres for geotechnical work in regard to pit wall investigation and site work for the water dams and TSF are also included. The estimated costs include assaying where applicable and logging, supervision and support. As there will be a blend of RC and diamond drilling, the estimate is a melded cost.

Table 26.1 Drilling Programs and Costs

Type / Area No. Drillholes Total Metres (m) Estimated cost ($k)

Delineation “In Pit” upgrading Inferred Mineral Resource 22 5,350 750

Delineation of Inferred Mineral Resource “Out of Pit” 11 1,955 270

Total Mineral Resource evaluation 33 7,305 1,020

Geotechnical drilling 2,200 300

26.2 Mining

The following recommendations are made with respect to mining activities, which are seen as a continuum of progressing the Project and have not been costed separately.

The level of geotechnical investigation completed is at a scoping or Pre-feasibility level of accuracy. The ore body will be mined as an open pit in two stages. Stage 1 will result in a pit 110m deep, the second and final phase 210m deep. (Note the surface reduces with the mining of the initial phase) An overall slope angle of 40 degrees has been adopted, however further work is required to determine final pit face angles and it has been proposed that geological conditions will be assessed through further drilling and during the initial phase of mining.

Further geotechnical investigation is recommended to determine if these design parameters are competent, and is incorporated in Table 26.1 above. Upon completion of additional geotechnical investigation AMC recommends that optimizations, pit designs, and schedules are updated.

The cut-off grades were reviewed based on the change in processing costs and base case gold price for the three ore types. It was found that the cut-off grades used for the three ore types are reasonable. The stage designs are practical and have incorporated the minimum accesses required for the intended mining equipment. Adjustments in the next stages of studies may be further required to match desired ore required for plant throughput.

The production drill size considered for this project of 104mm diameter could be increased. Investigation in to larger size diameter could provide an increase in broken stocks and may reduce drill and blasting costs.

Stage 2 currently includes the purchase of mining equipment. Due to Stage 2 only lasting for seven years, including stripping, optimal cost value may not be achieved for capital expenditure. Future studies for this project may provide an opportunity to investigate alternative purchase methods or financing to optimise the cost to the Project. However if future drilling of the deposit increases pit inventories and mine life the capital expenditure for mining equipment should still be considered as an optimal solution.



Vertical advance rates are considered reasonable for the schedule. However mining through existing underground workings may have short term impacts on production rates. Access issues will be raised on a bench by bench basis, probe drilling will extend bench turnaround time, and blasting quality and associated digging rates will be impacted by limited drill access to certain areas. The next stages of studies conducted for the Project would require further iterations to capture these impacts. The next level of detailed study should focus on the best balance between mining rates, delivery of ore to the plant, and mining dilution in association with project value.

26.3 Metallurgy and Processing

If sample volumes permit, the 2013 Stage 1 program should be consolidated and completed at the Plenge laboratories in Lima in order to confirm sensitivity of recovery to grind size for all samples and conduct some additional diagnostic and optimization tests, e.g. diagnostic leaching on CIL residues and the usual cyanide leach conditions optimization. Estimated cost $30,000.

In view of some of the ambiguities of the previous testwork, a first two years production composite plus some variability samples for the Stage 2 sulphide ore should be tested to confirm the metallurgical parameters expected for the Stage 2 flowsheet. Estimated cost $50,000.

It is recognised that Stage 1 will provide excellent opportunities to gain first-hand knowledge of the orebody and its metallurgical characteristics; hence some of the previous recommendations for further laboratory work are not considered worthwhile, subject to the two recommendations above being accepted.

26.4 Other

Regarding the Stage 2 process plant capital cost, it is recognised that the given the phased approach with Stage 1 equipment re-utilisation and associated tie-ins etc., the capacity revisions, and some of the confirmatory process engineering still required for Stage 2, the estimate requires a more fundamental revision than the scaling / escalation process adopted for this update. The scope of this report is not a total re-work; however once the flowsheet has been confirmed the major equipment items need requoting, and local cost inputs currently being developed / refined through e.g. EPCM CONSULTS for Stage 1 should be incorporated. A cost estimate for this exercise is in the range of $300,000 to $500,000, depending on exact scope and the local and overseas content of the study.

New locations have been selected for tailings storage and water dam facilities and AMC recommends that site investigation work and preliminary design proceed as a priority. It is understood that some firm proposals are awaited, and the estimate for such work would be of the order of $500,000.



27 References

AMC Mining Consultants (Canada) Ltd. (2011) Amayapampa Gold Project, Bulstillo Province, Bolivia, South America Technical Report for Republic Gold Limited, 14 January 2011. Prepared in accordance with the requirements of National Instrument 43-101, “Standards of Disclosure for Mineral Project”, of the Canadian Securities Administrators

Craig B. Byington, (1996), An Integrated Structural Analysis and identification of Ore Controls at the Amayapampa Project, Amayapampa, Bolivia. Consulting Geologist for Alan Moran, Granges (US), Inc., Denver, Colorado, USA

EPCM Consultores (October 2013), Ingeniera Conceptual “Amayapampa Gold Project”, Capacidad 1500tpd, Conceptual engineering for a Stage 1 plant

Fraser Osborn, (June 2010), Amayapampa Gold Project Feasibility Study, unpublished report for RGL.

Fuerza Aerea Boliviana - Servicio Nacional de Aerofotogrametria, (2009), Technical report of Aerophotogrametric Flight

Gekko Systems Pty Ltd, (July 9, 2010), Laboratory Testwork Report, Amayapampa Project – Phase 2

Gekko Systems Pty Ltd, (April 29, 2010), Laboratory Testwork Report, Amayapampa – CIL test on Oxide and Sulphide ores

Gekko Systems Pty Ltd, (April 9, 2010), Laboratory Testwork Report, Amayapampa Project, Leach Diagnostic Testwork, LAMA-D head sample

Gekko Systems Pty Ltd, (November 10, 2009), Laboratory Testwork Report, Amayapampa Project, 4 x Oxide samples & 5 x Sulphide samples

Gekko Systems Pty Ltd, (October 5, 2006), Republic Gold – Bolivia Amayapampa Test Work Report, Gravity Concentration and Intensive Cyanidation Testwork Report

Geomodelling Ltd, Kerrin Allwood (July 2010), Technical Report on 2010 Resource Estimate, Amayapampa Gold Project, Bolivia, unpublished report for RGL

GR Technical Services Ltd, (August 2005), Amayapampa Project Feasibility Study Update Technical Report, unpublished report for Luzon Minerals Ltd

H.A. Simons Ltd., (July 1997), (now AMEC Ltd), Feasibility Study, Amayapampa, Bolivia, prepared for Vista Gold Corp

Hazen Research (September 19, 1996) letter report to Dan Blakeman, MinCorp Engineers and Constructors, regarding “Transmittal of Test Data for Amayapampa Project Studies HRI Project 8909”

McMillan, R.H. (1996): Turbidite-hosted Au Veins, in Selected British Columbia Mineral Deposit Profiles, Volume 2 - Metallic Deposits, Lefebure, D.V. and Hõy, T, Editors, British Columbia Ministry of Employment and Investment, Open File 1996-13, pages 59-62

Mine Resources Associates Inc. (1996), Old Reserves Estimate for the Amayapampa Deposit. Granges USA Inc.

Mineral Resource Development, Inc., (May 20, 1997), Vista Gold, Metallurgical Testing of Ore Samples from Amayapampa, Bolivia, Report No. 1.



Mineral Resource Development, Inc., (December 17, 1997), Vista Gold, Metallurgical Testing of Ore Samples from Amayapampa, Bolivia, Report No. 2.

Mineral Resource Development, Inc., (November 14, 1997), Vista Gold, Metallurgical Testing of Ore Samples from Amayapampa, Bolivia, Report No. 3.

Mineral Resource Development, Inc., (September 1, 1999), Vista Gold, Metallurgical Testing of Ore Samples from Amayapampa, Bolivia, Report No. 4.

Mineral Resource Development, Inc., (January 12, 2000), Leaching of Gravity Samples from Amayapampa Ore, Bolivia, Report No. 5.

Mineral Resource Development, Inc., (January 14, 2000), Vat Leach Testing of Ore Samples from Amayapampa, Bolivia, Report No. 6.

Mineral Resource Development, Inc., (January 14, 2000), Metallurgical Testing of Oxide Samples from Amayapampa, Bolivia, Report No. 7.

Mineral Resource Development Inc., (June 28, 2004) Cyanide Destruction Testing of Amayapampa Leach Residue

Moran, Allan, (1997a) Amayapampa Check Assays – Pulps (Da Capo Resurces) unpublished memorandum to file for Vista

Moran, Allan, (1997b) Amayapampa Check Assays – Pulps (Vista) unpublished memorandum to file for Vista

Orway Mineral Consultants, (OMC) 2011 Amayapampa Gold Project Comminution Circuit Design, January 2011

Quintanilla, Soria and Nishizawa, Abogados, (2010), Sr Eduardo Quintanilla, legal opinion on the Amayapampa concessions, Bolivian mining law and Bolivian Pension law

Quintanilla, Soria and Nishizawa, Abogados, (2013), Sr Eduardo Quintanilla, legal opinion on the Amayapampa Mining Concessions, letter of 29 May 2013

Quintanilla, Soria and Nishizawa (2013). Letter report entitled “Report on Minerva Nueva Vista S.A. Tenemanents” for LionGold Corporation Limited dated September 30, 2013 provided to AMC by LionGold’s legal counsel, Holding Redlich, via email on October 1, 2013. File name “LGCCh15 TenRep. V12Final.docx”

Pincock Allen and Holt, (1996), Preliminary Evaluation of the Feasibility of Da Capo Resources Ltd. Amayapampa and Capa Circa Gold Projects, Bolivia. Da Capo Resources

Roscoe Postle Associates Inc, Brady et al, (February 2004), Technical Report on the Amayapampa Project, Bolivia, prepared for Luzon Minerals Ltd.

Solid Geology, Steve King, (2010), Geological Review of the Amayapampa Project, Eastern Altiplano, Municipality of Chayanta, Bustillo Province, Bolivia

Republic Gold Limited & Minera Nueva Vista SA, John Kelly Paul Pyke, Nebojsa Zurkic, (August 2010), Technical Report on the Amayapampa Gold Project Feasibility Study, unpublished document, with contributions from many consultants, (mainly those above)

Vista Gold Corp, (February 2000), Amayapampa Project Feasibility Study, Bolivia, in house study

Worley Parsons, (July 2010), Raw Water Supply Dams – Conceptual Design of Primary and Secondary Dams Amayapampa Gold Project, unpublished report for RGL



Worley Parsons, (July 2010) Tailings Storage Facility – Preliminary Design Amayapampa Gold Project, unpublished report for RGL.



28 Qualified Persons’ Certificates

J Morton Shannon P. Geo AMC Mining Consultants (Canada) Limited, Suite 202, 200 Granville Street, Vancouver, British Columbia V6C 1S4, Canada Telephone: +1 604 669 0044 Fax: +1 604 669 1120 Email:[email protected] 1. I, John Morton Shannon, P.Geo, do hereby certify that I am Principal Geologist and Group Manager Geology for AMC Mining Consultants (Canada) Limited, Suite 202, 200 Granville Street, Vancouver, British Columbia V6C 1S4.

2. I graduated with a BA Mod Nat. Sci. in Geology from Trinity College Dublin, Ireland in 1971.

3. I am a registered member of the Association of Professional Engineers and Geoscientists of British Columbia, and the Association of Professional Geoscientists of Ontario, and a member of the Canadian Institute of Mining, Metallurgy and Petroleum

4. I have practiced my profession continuously since 1971, and have been involved in mineral exploration and mine geology for a total of 42 years since my graduation from university. This has involved working in Ireland, Zambia, Canada, and Papua New Guinea. My experience is principally in base metals and gold.

5. I have read the definition of “Qualified Person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43- 101) and past relevant work experience, I fulfill the requirements to be a “Qualified Person” for the purposes of NI 43-101.

6. I am responsible for the preparation of Sections 2-10, 23, 24 and parts of Sections 1, 25-26 of the Technical Report “Amayapampa Gold Project, Feasibility Study Update, Bustillo Province, Bolivia, South America, Technical Report for LionGold Corp. Ltd”, with an effective date of 31 October 2013.

7. I have visited the Amayapampa Gold Property from 12-13 November 2010.

8. I have prior involvement with the property that is the subject of the Technical Report, as I was responsible for items in the 2010 FS Technical Report which has an effective date of 14 January 2011.

9. I am independent of the issuer applying all of the tests in section 1.5 of National Instrument 43-101.

10. I have read National Instrument 43-101 and Form 43-101F1, and the Technical Report has been prepared in compliance with that instrument and form.

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

Dated this 15 January 2014

Original signed and sealed by

John Morton Shannon, P.Geo



Rodney L. Webster AMC Mining Consultants Pty Ltd, Level 19, 114 William Street, Melbourne, Victoria, 3000, Australia. Telephone: +61 3 8601 3300 Fax: +61 3 8601 3399 Email:[email protected]

1. I, Rodney L. Webster, BappSc, MAusIMM, do hereby certify that I am Principal Geologist, of AMC Mining Consultants Pty Ltd., Level 19, 114 William Street, Melbourne, Victoria, 3000, Australia.

2. I graduated with a BSc in Geology from the Royal Melbourne Institute of Technology, Melbourne, Victoria, Australia in 1979.

3. I am a Member of The Australasian Institute of Mining and Metallurgy.

4. I have worked as a geologist for a total of 30 years since my graduation from university.

5. My relevant work experience for the purpose of the Technical Report is:

6 years as Principal Geologist specializing in mineral resource estimation for AMC Consultants Pty Ltd.

2 years as Principal Consultant specializing coal evaluation for GeoConsult Pty Ltd.

11 years as Principal and Senior Geologist for North Limited specialising in Mineral Resource estimation.

6. I have read the definition of “qualified person” set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for the preparation of Sections 11,12,and 14 and parts of Sections 1, 25-26, of the Technical Report titled ““Amayapampa Gold Project, Feasibility Study Update, Bustillo Province, Bolivia, South America, Technical Report for LionGold Corp. Ltd”, with an effective date of 31 October 2013.

8. I have not visited the Amayapampa Gold Project.

9. I have prior involvement with the property that is the subject of the Technical Report, as I was responsible for items in the 2010 FS Technical Report which has an effective date of14 January 2011.






Rodney L. Webster, MAusIMM (CP), MAIG



Colin H. Sprott

AMC Mining Consultants Pty Ltd, Level 19, 114 William Street, Melbourne, Victoria, 3000, Australia. Telephone: +61 3 8601 3300 Fax: +61 3 8601 3399 Email: [email protected]

1. I, Colin H. Sprott, MSc (Min Ec), BEng, MAusIMM, do hereby certify that I am Principal Mining Engineer, of AMC Mining Consultants Pty Ltd., Level 19, 114 William Street, Melbourne, Victoria, 3000, Australia.

2. I graduated with a BEng in Geological Engineering from the Royal Melbourne Institute of Technology, Melbourne, Victoria, Australia in 1995.

3. I am a Member of The Australasian Institute of Mining and Metallurgy.

4. I have worked as a mining engineer for a total of 18 years since my graduation from university.

5. My relevant work experience for the purpose of the Technical Report is:

3 year as Senior Mining Engineer at KCGM

6 years in Production and Planning roles with Rio Tinto Iron ore operations

5 years undertaking technical studies with AMC and Rio Tinto

6. I have read the definition of “qualified person” set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I am responsible for the preparation of Sections 15 and 16 and parts of Sections 1, 21, 22, 25 and 26 of the Technical Report titled “Amayapampa Gold Project, Feasibility Study Update, Bustillo Province, Bolivia, South America, Technical Report for LionGold Corp. Ltd”, with an effective date of 31 October 2013.

8. I have not visited the Amayapampa Gold Property.







Colin H. Sprott, MAusIMM (CP)



A Riles

AMC Mining Consultants (Canada) Limited 8 Winbourne Street Gorokan NSW 2263, Australia

Telephone: +61 2 4393 9964 Email: [email protected] or [email protected]

1. I, Alan Riles, BMet (Class 1), Grad Dipl Prof Management, do hereby certify that I am Principal Metallurgical Consultant of Riles Integrated Resource Management Ltd, of 8 Winbourne Street, Gorokan, NSW 2263, Australia.

2. I graduated with a BMet (Class 1) in Metallurgy from the Sheffield University, UK in 1974.

3. I am a Member of the Australian Institute of Geoscientists.

4. I have worked as a metallurgist for a total of 39 years since my graduation from university.

5. My relevant experience for the purposes of the Technical Report is:

Over 35 years of experience as a resources industry metallurgist in both operating and project environments

7 years consulting experience in gold and base metals projects, including feasibility study management and 43-101 report preparation

Previous experience in Bolivia in 1998-99 on gold projects

6. I have read the definition of “Qualified Person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “Qualified Person” for the purposes of NI 43-101.

7. I am responsible for the preparation of Sections 13, 17-22, and parts of Sections 1, 25-26 of the Technical Report “Amayapampa Gold Project, Feasibility Study Update, Bustillo Province, Bolivia, South America, Technical Report for LionGold Corp. Ltd”, with an effective date of 31 October 2013.

8. I have visited the Amayapampa Gold Property from 27-29 June 2013.







Alan Riles MAIG.

amcconsultants.com

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