Chukaru Peki Cu-Au deposit, Serbia Discovery History, Geology and Ore Types Vertrees M. Canby, Dejan I. Koželj, and Leon Z. Naftali Contacts Freeport-McMoRan Exploration Corporation Vertrees_canby@fmi.com Dejan_kozelj@fmi.com Leon_naftali@fmi.com

Abstract The concealed Chukaru Peki Cu-Au deposit in eastern Serbia was discovered in early 2012, when a third attempt at the final hole of a phased greenfields drilling program intersected Cu-Au mineralization of the Upper Zone high-sulfidation mineralization at approximately 520m depth and, at greater depth, the low-grade peripheral porphyry-style mineralization of the underlying Lower Zone. This initial discovery occurred after a nearly eleven-year program of exploration by geologists and other staff of Freeport-McMoRan Exploration (FMEC) throughout Serbia which they had initiated through Phelps Dodge Exploration (PD) in late 2001. The program continued through Freeport McMoRan Copper and Gold’s acquisition of Phelps Dodge Corporation in 2007. Reservoir Minerals had explored during 2006-2007 on the west side of the district, in a zone of gold mineralization initially drilled by Eurasian Minerals during 2005. The current exploration program at Chukaru Peki and on the surrounding exploration licenses in the Timok magmatic complex is operated through Rakita d.o.o., the Serbian company representing the Timok joint venture, currently a 55%-45% joint venture between FMEC and Reservoir Minerals Inc. (formerly Reservoir Capital Corporation and Reservoir Capital BVI). Rakita was established by an earn-in agreement concluded in March 2010 and a subsequent joint-venture agreement in 2015. The Timok joint venture resulted in expansion of the land package and targets originally explored separately by FMEC and RM, with the Chukaru Peki deposit located in an area that had been controlled and partially explored by PD during 2005-2009, and subsequently by Rakita from 2010 up to present. The Chukaru Peki deposit contains adjacent high-sulfidation and porphyry components, both of which contain significant Cu-Au mineralization. The linked deposits and their distinctive Cu-Au signatures are characteristic of districts of similar age and tectonic setting throughout the Upper Cretaceous ‘adakitic’ magmatic belt which extends from Romania to the Black Sea coast of Bulgaria. Chukaru Peki shows strong similarity to the nearby Bor cluster of high-sulfidation deposits and the underlying Bor River porphyry deposit, with notable differences including post-ore concealment, a peripheral intermediate-sulfidation Au-polymetallic system, and evidence for Miocene subaerial exposure and oxidation. Notably from an exploration perspective, both deposits have comparatively narrow alteration envelopes relative to their

metal endowments, by comparison with other hydrothermal cells even within the same district. Despite over 80km drilled to date, Chukaru Peki is still at an early stage of exploration due to the large thickness of pre- and post-mineral cover, and the difficulty in resolving mineralization except by deep drilling. An initial Inferred resource announced by Reservoir Minerals (RM) in early 2014 for the Upper Zone portion of the deposit contains 65.3 Mt @ 2.6% Cu and 1.5 g/t Au (new release dated January 27 2014). Portions of the Chukaru Peki deposit currently remain open-ended at depth and laterally. Strategic factors important to discovery were long-term commitment to an area of high metal endowment, willingness to explore in a country that was still in transition from years of conflict to a market-oriented democracy, and implementation of various deal structures that gained time, or expanded target areas, to help sustain management support. The latter allowed the exploration team adequate time to apply key concepts and tools – namely, application of improved geophysical methods, confirmation of intra-ore ages of some of the district’s volcanism, and increasing consideration of deep porphyry-type targets – all of which were evolving in parallel with field work in the district. For example, FMEC’s geophysical and geological team had applied CSAMT (a deep resistivity method) elsewhere and its familiarity with the method was critical to improve mapping beneath conductive post-mineral sediments, if not to directly detect the ore itself. Better isotopic ages on rocks and ores in the district gave further confidence that ‘ore clasts’ entrained in some volcanic units might lead back to partially-dismembered, undiscovered deposits, concealed by post-ore volcanic rocks which might appear identical to the host-rocks themselves. The discovery of concealed, very high-grade porphyry mineralization in the early 2000s at both Oyu Tolgoi and Pebble East made the search for a deeply-concealed yet high-grade porphyry target at Chukaru Peki appear reasonable. Finally, recognition that an intermediate-sulfidation Au-polymetallic vein/replacement system located west of Chukaru Peki at Corridor Zone was relatively unique in the district, suggested it might be some distal component of a porphyry deposit. Introduction The Chukaru Peki (‘Peki’s Hill’) deposit of eastern Serbia, located about 155km southeast of Belgrade, is the most recently-discovered of the roughly fifteen mineralized centers currently known within the Timok magmatic complex (TMC). The TMC is a lens-shaped, extensional rift-like basin roughly 100 by 20km in size which is filled by Upper Cretaceous volcanic, intrusive, and sedimentary rocks. Except for the sediment-hosted gold deposits recently discovered by Avala Resources at Bigar Hill, Korkan etc. on the west side of the complex, the mineral deposits of the TMC in order of total metal endowment and previous production comprise porphyry, high-sulfidation, skarn, and polymetallic vein/replacement Cu-Au deposits, all of which are related to magmatism of the TMC. Six of these deposits have been significant producers since about 1900, including from north to south the Majdanpek porphyry cluster and surrounding Tenka polymetallic-Au-Ag deposits, Choka Marin high-sulfidation Zn-Pb-Cu-Au-Ag deposit, Lipa high-sulfidation Cu-Au deposit, Cementation (Cerovo) supergene-enriched porphyry deposit, Veliki Krivelj porphyry Cu-(Au) deposit, and the Bor cluster of high-sulfidation and porphyry Cu-

Au deposits. Production continues up to the present from Majdanpek, Bor, Veliki Krivelj, and intermittently at Cerovo. The Chukaru Peki deposit is within the Brestovac-Metovnica exploration permit, about 6 km from Bor, where as of late 2014 a 400ktpa (concentrate) flash-smelter and acid capture-plant were in the final phases of construction. This report is an interim update on the currently-understood geology and discovery history of Chukaru Peki.

Fig. 1: Location of the Chukaru Peki deposit, approximately 155km southeast of Belgrade and 6km south of Bor, eastern Serbia

The TMC has one of the larger aggregate copper-gold endowments (22 Mt Cu and 1000t Au) in the Tethyan Belt, with the Bor-Majdanpek mining complex having historical production variably estimated at about 5.5 million tonnes Cu and 150 tonnes Au, 400t Ag. Combined resources and reserves stated by RTB Bor (Rudarska-Topionicarska Basen Bor, Serbia’s state copper mining company www.rtbbor.rs) contain an aggregate of approximately 2.5 billion tonnes containing approximately 10.5 million tonnes Cu and 11.7 million ounces Au, as calculated by RTB Bor and using the Serbian resource-classification system. The largest known deposits to date are at Bor (approximately 7Mt Cu) and Majdanpek (approximately 6 Mt Cu) . While the largest areas of hydrothermal alteration and metal occurrences exist in the western TMC, roughly 90% of the recognized Cu metal endowment and 80% of the district’s Au are contained along the eastern third of the TMC, in association with the early Phase 1 volcanism (Fig. 2b). Regional Geologic Setting Chukaru Peki is in the eastern TMC, a northern branch of broader Tethyan metallogenic belt. The Tethyan belt formed during the closure of the Tethyan Ocean during collision of the African and European plates. The TMC developed on a basement of crystalline low-grade Paleozoic metamorphic rocks and intrusions of the Serbo-Macedonian massif, and unconformably-overlying Mesozoic sedimentary rocks dominated by platform carbonates of Jurassic to Cretaceous age. The complex has likely rotated clockwise to its current roughly north-northwest orientation during later tectonic events. At about 81-88Ma (Zimmerman et al., 2008), the TMC opened and filled with coeval magmatic and sedimentary rocks, with intermittent mineralization events. Volcanism generally started with emplacement of a

coarser-textured hornblende-biotite andesite (‘Phase 1 andesite’) on the east side of the district, and evolved over time to a finer-grained, pyroxene-bearing (‘Phase 2’) basaltic andesite in the less productive western side of the district, outside of the Chukaru Peki area. Recent age-dating and compilations of previous data (Zimmerman et al., 2008) indicate that mineralization occurred intermittently with volcanism, a critical factor in assessing the exploration significant of the widespread ‘ore clasts’ that are entrained in the volcanic units. Much of the district was covered by post-mineral Upper Cretaceous sedimentary and locally volcaniclastic rocks, and then subjected to late Cretaceous compression, resulting in shortening and thrust- or high-angle reverse faulting both within and immediately outside the TMC. At Chukaru Peki, between the close of Upper Cretaceous compression and the onset of Miocene subsidence and sedimentation, the post-mineral Upper Cretaceous sedimentary rocks were locally removed and the underlying mineral system was exposed above the Miocene water table. A relatively deep (locally >160m) partial to locally complete oxidation profile developed in a portion of the high-sulfidation part of the deposit. Miocene sedimentation then concealed this oxidized exposure at the deposit’s upper eastern fringe, which also represents its shallowest known subcrop at about 250m below current surface. However, the initial discovery was made roughly 900m to the west of this area, where alteration and weak mineralization around the Upper Zone start about 500m below surface.

1 Fig. 2a, left: Location of the TMC relative to other Upper Cretaceous magmatic fields in the Balkan Penninsula. Adapted from Zimmerman et al. (2010) and from Sutphin et al. (2013) Fig. 2b, right: Simplified geology of the TMC, with Rakita’s exploration licenses. Dashed line represents the approximate boundary between Phase 1 (eastern) and Phase 2 (western) volcanic rocks of the TMC

Structural Setting The north-northwest oriented TMC coincides with a change to northerly strike of the northwest-trending belt of Upper Cretaceous magmatic and sedimentary rocks as traced from the Bulgarian border westward into Serbia. The complex has been subjected to three general structural phases: 1) initial north-northwest oriented normal faulting associated with opening of the TMC and volcanism, sedimentation and mineralization; 2) compression, roughly normal to the current north-northwest orientation of the TMC; and: 3) subsidence and normal faulting during the Miocene. Major faults and most geologic units strike parallel to the north-northwest elongation of the TMC. In the Bor and Chukaru Peki area, major structures include the Bor fault, a major west-dipping high-angle reverse fault which displaces the Bor deposits upward and eastward by at least several hundred meters into their current position adjacent or above the post-ore Bor clastic unit; and the ‘Bor 2’ fault, of similar strike and dip, which lies east of the deposit, is concealed by Miocene sediments and is defined by drilling in the Chukaru Peki area. Other parallel north-northwest faults concealed beneath Miocene sediments are indicated by geophysical surveys. The presence of andesites in both the eastern and western blocks of the Bor 2 fault and the lack of marker units preclude determination of its movement direction, but like the Bor fault to the north, it forms the eastern faulted contact of the Chukaru Peki deposit with unmineralized rocks. Chukaru Peki is located roughly at the widest point in the TMC. A poorly-expressed, speculative east-west to east-northeast zone of cross-structures, approximately 2.5km in width in the deposit area, extends from the southern margin of the deposit to the northern limit of Miocene rocks in the deposit area. While no major fault offsets are evident, a large east-west oriented dacitic dike crops out immediately west of the deposit, an intermediate composition subvolcanic plug cuts the andesites east of the deposit along this trend, and the Bor River makes a distinct turn to a westerly orientation from northwest within this zone. In the immediate Chukaru Peki area, an east-west paleo-valley is eroded into the Bor clastic unit near the currently-defined southwestern margin of the deposit, along this trend. Geophysical data indicate that the northern margin of the Miocene depositional basin is a east-northeast zone of low resistivity, probably a basin-margin fault zone. The major Bor 2 fault (Fig. 3), which bounds the eastern margin of the Chukaru Peki system, likely terminates northward into this zone, suggesting that the east-northeast structure indicated by resistivity is a reactivated, initially Upper Cretaceous-aged fault. Finally, very limited and widely-spaced drilling in the Lower Zone and deep parts of the Upper Zone suggest a southward-decreasing gradient in Cu-Au grades across a roughly east-west boundary in the Lower Zone mineralization. Collectively these features suggest that an east-west structural zone influences the TMC in this area. The intersection of this zone with the regional north-northwest faults may have localized the Chukaru Peki deposit. In the deposit area, the Upper Cretaceous volcanic and sedimentary rocks form a north-striking monocline that dips roughly 30°-45° west, bound by the Bor 2 fault on the east. Several north-striking, high-angle reverse faults occur on the west side of this monocline, including a new

thrust fault recognized in detailed mapping of the Bor clastic unit (Vasic, 2015). The tilting of the Upper Cretaceous units to their current orientation likely occurred in the late Cretaceous, as the overlying Miocene units show only minor (0-15°) tilting and are deposited on an erosional surface of the deformed Upper Cretaceous rocks. The Miocene units in the deposit area are bound on the south by a major north-northeast-striking normal fault. Structural controls and measurable fault displacements within the deposit are difficult to identify due to lack of exposure and lack of traceable marker units. Tectonic breccia is widespread, particularly in the altered rocks below and around the margins of the Upper Zone, and most lithologic and alteration contacts within the deposit are sheared or brecciated. A north to north-northeast striking fault (East Boundary Fault) exists on the east margin of the Upper Zone. Using the distribution of mineralization and higher-grade zones as one proxy for structure, the axis of the Upper Zone including its high-grade massive sulfide body likely follows a north-northwest structure, parallel to the main regional grain. The Lower Zone is emplaced against unaltered andesites along the Bor 2 fault to the east, but remains open-ended to the north, has a northward plunge, and based on limited current data, has a roughly east-west striking southern boundary, possible along the east-west structural zone mentioned previously. The post-mineral marl contains abundant calcite veining developed along numerous internal folds and fractures, likely due to bedding-plane shearing in this unit during post-ore compression. Deposit Geology The Chukaru Peki deposit as now defined has two components: the Upper Zone high-sulfidation deposit, characterized by advanced argillic alteration and abundant breccia, veinlet, and massive pyrite-covellite-(enargite); and the deeper, northwest-plunging Lower Zone porphyry-type mineralization characterized by quartz stockwork with potassic or sericite-chlorite alteration, chalcopyrite and minor bornite as copper minerals, and low primary pyrite contents. A second area of lower-grade high-sulfidation Au-Cu mineralization, characterized by enargite>covellite+chalcocite and lacking the high-grade massive sulfide mineralization of the Upper Zone deposit, is intersected by widely-spaced drill holes near the southeast margin of the deposit and is loosely termed the East Zone. Fracture-controlled oxidation in the volcanic rocks extends to about 410m below surface in this area, roughly 160m below the Miocene paleo-surface. The deposits are hosted by a thick (>1.7km) sequence of porphyritic andesitic lava and breccia comprised of two main units, and two phases of intermediate-composition intrusions. The andesites are overlain by a post-ore Upper Cretaceous marl (calcareous mudstone), and a sandstone-conglomerate sequence (Bor clasitc unit) consisting of a lower arkosic, micaceous sandstone and an upper coarser sandstone to conglomerate. Pebbles in the conglomerate consist of metamorphic rocks from the margins of the TMC, lesser andesite clasts, and occasional fragments of the underlying marl. The Bor clastic unit is conformably deposited on the underlying marl. After compressional deformation and erosion, post-mineral Miocene sediments were deposited in local basins bound by northeast and north-northeast faults. The

Miocene sediments consist generally of a lower, locally calcareous mudstone sequence and an upper conglomerate sequence containing abundant volcanic fragments. The Miocene sediments contain plant fossils, carbonaceous layers, and thin coals locally. The carbonaceous and clayey layers of the Miocene sediments may be the source of current-channeling in electrical geophysical surveys, reducing their depth of penetration. The Miocene clastic rocks also contain alluvial magnetite concentrations that may be reflected in magnetic surveys. Zeolite alteration of the Miocene sediments is widespread.

Fig. 3 Simplified geologic map of the Chukaru Peki deposit area, with key drill holes highlighted The andesitic rocks at Chukaru Peki consist of two units of hornblende-biotite-plagioclase andesite (termed the Upper and Lower Andesites), and at least two phases of intermediate-composition intrusions including a feldspar-phyric porphyry and an equigranular diorite (Matt Wetzel, personal communication, 2015). No pre-Cretaceous basement rocks have been intersected yet to the drilled depths of 2.2km. The Upper Andesite consists of epiclastic sediments and fragmental andesites characterized by large and abundant phenocrysts of plagioclase, biotite and most distinctively, of hornblende. The unit ranges in thickness from just a few meters over the center of the Upper Zone deposit, to tens or hundreds of meters elsewhere, and is ostensibly similar to the unaltered andesites in the eastern footwall of the Bor 2 fault. In the deposit area, the Upper Andesite is chloritic to locally argillically altered and weakly anomalous in Cu and Au in the Chukaru Peki area, but is relatively fresh compared to most altered portions of the Lower Andesite. In places it appears to be conformably deposited on the Lower Andesite but elsewhere has tectonic contacts with the Lower Andesite, and almost invariably has tectonic contacts with the underlying Upper Zone mineralization.

The Lower Andesite is the main host rock and is a finer-grained, plagioclase-hornblende-biotite andesite with massive, flow-laminated, or breccia texture. Breccia textures ranges from those containing a single andesitic component (likely flow- or dome-margin breccia), to mixtures of various textural types and with local grading or fluidization fabric suggestion intrusive or phreatic origin. Mineralization and Alteration: Upper Zone At a 0.55% Cu cutoff, the Chukaru Peki Upper Zone is a roughly north-northwest striking, northward-plunging body about 350m by 260m in plan view, which contains an upper massive sulfide portion (>50% total sulfides) underlain by breccia, veinlet and disseminated mineralization with lower grades. The plunge length is roughly 450m, remaining partially open-ended to the north. In plan view (Fig. 3), the deposit overlaps the inferred southern margin of the Lower Zone. The high-grade massive sulfide portion of the Upper Zone occurs as a gently south-dipping ‘cap’ at the apex of its shallower southern portion. Mineralization consists of early, commonly fine-grained, colloform, porous pyrite containing minor covellite, which is brecciated and cemented and veined by later covellite with lesser pyrite. Enargite accounts for roughly 5-15% of the overall Cu in the Upper Zone deposit, and though it is somewhat erratically distributed, in general occurs in the deeper and marginal portions, whereas the upper high-grade massive sulfide is notably covellite-dominant. Traces of colusite (Cu₁₃13V(As,Sb,Sn)₃S₁₆ (Pacevski, A., 2014) are present in the ore, while traces of sphalerite and galena are generally observed near the deposit’s margins. Native sulfur occurs sparsely both in the ore as intergrowths with sulfides, and in late-stage pods and veinlets around the deposit’s margins. Alunite occurs in contemporaneous intergrowths with covellite as vein and breccia filling, but more commonly as disseminations and replacement of phenocrysts. Megascopically-visible barite is rare. Alteration of the Lower Andesite unit in and around the Upper Zone deposit, based on logging, SWIR measurements, and limited petrography, consists of an outer zone of chlorite-clay-anhydrite-pyrite (>2% vol.) extending out to the lateral limits of drilling, an interior zone of argillic alteration (kaolinite+dickite), and an alunite-bearing advanced argillic zone (defined by the outer limit of alunite), which coincides closely with the Upper Zone deposit and rarely extends more than a few meters outside of the 0.55% Cu shell. Vuggy silica is present only locally and always within the Upper Zone. In general silicification increases in intensity downward within the deposit. Much of the mineralization below the massive sulfide occurs in quartz-alunite-pyrite rock cut by veinlets, breccia fillings, and patchy disseminations of pyrite, covellite, and sparse enargite. The origin of the massive sulfide body is still under study (M. Wetzel, personal communication), but textures suggest it results from both open-space filling and metasomatic replacement. Its most enigmatic feature is the upper contact with the overlying weakly chlorite-(clay) altered Upper Andesites. A narrow (1-3m) zone of strong clay alteration at this contact invariably shows post-mineral brecciation but also generally preserves a thin zone of gradational alteration and weak mineralization, including a narrow breccia composed of strongly altered, variably pyritized, and weakly mineralized volcanic fragments.

Upper Zone geochemistry matches its relatively simple Cu-Fe-As-S mineralogy mentioned above. The deposit contains low Ag, Pb and Zn values and traces of Sn (generally tens of ppm), Bi (generally tens of ppm), and Tl (a few ppm, to tens of ppm). Petrography, logging and XRF measurements indicate that ostensibly-pure pyrite may contain up to several weight % Cu. Despite numerous gold assays in the 10-30g/t range from the Upper Zone, no coarse visible gold has been found during logging nor was seen in early petrographic studies, nor identified in screened fire assays. Preliminary gold-deportment studies that suggest a significant amount of gold in the Upper Zone is contained in pyrite. This is similar to the Chelopech high-sulfidation deposit in Bulgaria, perhaps the closest analogue (Wolfe et al., 2012). Mineralization and Alteration: Lower Zone The Lower Zone consists of porphyry-type mineralization containing primary chalcopyrite-pyrite-(molybdenite-bornite) mineralization associated with quartz+magnetite-hematite-anhydrite veining and replacement, widespread sericite-chlorite alteration, local secondary biotite, and limited areas of secondary K-feldspar. Quartz veinlets are dominantly of A- and B-types. Mineralization is hosted in the Lower Andesites and in the two phases of intrusive rocks mentioned previously, which to date appear volumetrically minor and may be difficult to distinguish from the host porphyritic andesites where strongly altered. Based on assays and ongoing visual logging, Lower Zone mineralization has been intersected by 14 deep drill holes over an area of approximately 1.5km long (east-west) by 500m wide (north-south); its shallowest portion reaches approximately 750m below surface in the southeastern part of the deposit in drill hole FMTC1340, and the top of the zone is deepest in the currently-drilled northwestern extent, starting at about 1500m depth in drill hole TC140054/54a. Strong mineralization extends locally down to the current limit of drilling at 2.2km. The down-plunge portions of the Upper Zone have not yet been fully explored in areas where it may converge with the Lower Zone. Drilling is inadequate to establish resources, but drill results to date range from 395m of 0.3% Cu and 0.09g/t Au in the lower part of discovery hole 10bis2 near the currently-inferred southern margin, to 705.8m of 0.91% Cu and 0.26g/t Au (from 1498m down-hole) in drill hole TC140054a, at the system’s northwestern portion. The highest-grade portions of the Lower Zone are characterized by strong silicification or quartz stockwork veining, magnetite, and low pyrite: chalcopyrite ratios (commonly <1:1), but so far contain only small amounts of bornite. The higher-grade zones occur in chlorite-sericite as well as potassic-altered rock. The southern and eastern portions of the Lower Zone have been extensively overprinted by argillic and locally advanced argillic alteration, to form an assemblage of covellite-digenite-pyrite accompanied by quartz-clay+sericite+alunite alteration. In addition to alteration of the gangue and primary sulfide minerals, the overprint mineralization commonly has higher overall pyrite contents, slightly higher Cu grades, and lower Au:Cu ratios relative to adjacent primary Lower Zone mineralization. The vertical range of overprint is at least 800m locally, reaching a depth of approximately 1650m below surface in drill hole FMTC1219. Textures and partially-replaced residual patches of primary sulfides indicate much of the covellite-digenite mineralization replaces primary disseminated and veinlet copper sulfides, but locally,

particularly east of the base of the Upper Zone, the overprint contains veinlet- and breccia-fill textures and intense quartz-alunite alteration similar to that in the lower parts of the Upper Zone. The overprint is interpreted as the deep structurally-controlled equivalent of Upper Zone mineralization.

Fig. 4: Textures of Lower Zone porphyry-type mineralization in HQ core. Top: Overprinted mineralization from FMTC-14 at 1128 shows relict A-veins within intensely clay-altered andesite(?), containing high-grade covellite-digenite-pyrite mineralization Bottom: Primary Lower Zone mineralization from 908m in FMTC-28, with quartz stockwork-magnetite/specularite-sericite-K-feldspar mineralization containing chalcopyrite, traces of bornite, and low pyrite: chalcopyrite ratios History and Discovery Recent archaeological excavations in Serbia indicate that the Vinča culture carried out the world’s oldest-known copper smelting at Belovode, west of the Timok district, around 7000 years ago (Radivojevic et al., 2010), but the source of their copper ores remains uncertain. The Romans reportedly produced gold from the outcropping, oxidized, gold-bearing high-sulfidation mineralization at Tilva Rosh (‘Red Hill’) which prior to modern mining stood as a small hill above the concealed Bor high-sulfidation Cu-Au deposits. Similar small excavations are common on the oxidized gold-bearing lithocaps throughout the Balkans. The first major modern discovery in the TMC was under leadership of renowned Serbian industrialist and humanitarian Georgi Weifert, whose crews led by Felix Hofmann found the concealed, rich Choka Dulkan copper deposit adjacent to Tilva Rosh, reportedly near the end of

an otherwise fruitless campaign of exploratory tunnel-driving in 1902. This led to major development of the Bor district and was followed by discovery of many other adjacent high-sulfidation and porphyry deposits, as well as the concealed Bor River porphyry in 1976. Intensive and nearly continuous exploration in the TMC by private and subsequent Yugoslav state-run exploration groups focused outcropping copper-gold deposits and alteration zones. Little attention was paid to concealed targets, and as a result despite its location some 6km from the Bor mines, no historic mining took place at Chukaru Peki, and only two exploration holes (CP-B1, B2; Fig. 3) were drilled about 650m southwest of the deposit, reportedly on a gravity anomaly. Neither hole penetrated the post-mineral Bor clastic unit to maximum depths of about 650m. However, exploration and possibly minor production was carried out on an intermediate-sulfidation Au-base-metal occurrence near Brestovac village, located some 2-3km west of Chukaru Peki, which likely represents the far western edge of the Chukaru Peki system. This is now termed the Corridor Zone. Modern exploration in the TMC focused almost exclusively on copper, while bulk-minable gold mineralization was not recognized as a potential target until resurgence of exploration in the early 2000s, culminating in Avala Resource’s discovery of the Bigar Hill, Korkan, and other deposits of this newly-recognized gold province. PD (acquired by Freeport McMoRan Copper and Gold in 2007) had conducted exploration for copper and gold in the Balkans since 1996, first visited the Bor district and other prospects in September 2001, and established its first local company, South Danube Metals (SDM), in 2003. SDM acquired the Brestovac-Metovnica exploration license, covering the area of the still-unrecognized Chukaru Peki deposit, and in 2005 began intensive exploration, including rock-chip sampling and mapping of limited outcrops, examination of ‘ore clasts’ within volcanic units, and most importantly did deep IP/R surveys attempting to penetrate Miocene sedimentary cover rocks along extension of Bor-Majdanpek trend, in the area of the ‘Miocene Basin.’ It was recognized that Miocene and other cover rocks were likely far too thick to consider open-pit targets. Weak and dubious IP anomalies were detected by the 2005 work, and it was appeared that conductive Miocene overburden was strongly influencing the responses. Nonetheless in 2005 PD/SDM drilled its highest-priority IP-resistivity targets, ignoring one shallow IP target which was attributed to a known buried power cable - but which overlies the Chukaru Peki deposit, at about 500m depth. Drill hole PDBC-3, located in the southern Miocene Basin intersected 3m of ~1% Cu, 0.5g/t Au, 200ppm Mo, but considering the extremely weak alteration in the surrounding rocks, it is still debated whether this interval represents a vein or a large transported ‘ore fragment.’ Hole PDBC-2 at the extreme north end of the Miocene basin intersected approximately 100m of tectonized andesite with weak chlorite-clay alteration containing 1-2% pyrite along with very weak, geochemically-anomalous Zn-Pb-(Cu, Au) values, apparently in the host Lower Andesite unit. The hole passed into relatively fresh rock at final depth of 430m. The bottom of PDBC-2 is only 500m northwest and about 700m above the well-mineralized intercept in the northernmost hole at Chukaru Peki (Fig. 3; FMTC1332, with 289m 0.91% Cu and 0.17g/t Au, starting at 1136m), but the weak alteration and low anomalous metal values in this hole may nonetheless be part of the edge of the Chukaru Peki system. Core from this interval was pulled and re-examined by FMEC staff during a target-selection meeting in autumn 2011, when the location for discovery hole 10bis2, along with two other sites on the Brestovac license (mostly geophysical targets), was selected.

In 2007, SDM drilled another four holes totaling 1804m in Miocene Basin, again targeting concealed mineralization. Drill hole PDBC-07-04 in the southern Miocene Basin hit weak pyritic alteration but without anomalous metals, while other holes were barren and devoid of alteration. During 2008-2009, FM farmed out its Serbian and Macedonian projects to Euromax Resources, who drilled three shallow holes on the Brestovac-Metovnica license totaling 1,039.4m, with no resulting intercepts. In July 2005, Eurasian Minerals reported their drill intersection of 2.95m of 25.83g/t Au, with adjacent Zn-(Cu, Au) intervals, in drill hole BN-1 in an area of historic Au(?) workings near Brestovac village, west of Chukaru Peki, now termed the Corridor Zone gold prospect (press release dated July 8, 2005). In 2006 Eurasian sold its Serbian properties to Reservoir Capital Corp. (now RM) who continued to drill at Corridor Zone and reported further encouraging intercepts. In 2010, after Euromax had relinquished its option, FMEC and RM established the Timok earn-in agreement, and FMEC’s and RM’s licenses in the TMC area were re-issued to Rakita d.o.o., a project-dedicated Serbian joint-venture company controlled by RM at the time. FMEC continued to fully fund exploration work and earned-in to a 55% in Rakita during 2012. During the earn-in period, FMEC teams completed CSAMT surveys on the Miocene Basin to penetrate conductive overburden, and on selected targets elsewhere. CSAMT had not previously been applied. The Rakita JV also explored the Yanko Cu-Au porphyry/skarn and Ogashu Kucaina intermediate-sulfidation Au targets, intersecting interesting but relatively low-grade and deep mineralization at both during 2011. These lower-grade intercepts helped to sustain interest in the district. In autumn 2011 and in preparation for the last stage of the year’s drill program, three drill holes were selected in the Miocene Basin area south of Bor, based on combined CSAMT, magnetics, geologic projections of the Bor fault and other geologic results, including re-examination of PD’s 2006 drill hole PDBC-06-2 mentioned above. Data generated by Rakita and previously by RM in the Corridor Zone and Ogashu Kucaina intermediate-sulfidation gold-polymetallic occurrences, and also the ore-clast occurrences west of Chukaru Peki, were reviewed and discussed. In addition to the weak alteration seen in PDBC-06-02, the deep CSAMT resistivity response along CSAMT Line 80 was recognized to have arguable similarities to porphyry systems elsewhere, and the third drill site of the program was selected along this profile.

Fig. 5: ‘Ore clasts’ of various types from various points near Chukaru Peki. Left: massive sulfide fragments in porphyritic andesite in the Brestovac road-metal quarry along Brestovac creek; upper right: oxidized ore fragment in andesitic fragmental rocks on the east bank of Brestovac creek. Lower right: ore fragment in a roadcut south of Chukaru Peki (photo D.Kozelj). Starting in fall 2011 Rakita drilled the three planned holes totaling 1,735.4m in the Miocene Basin. The first two hit long intervals of fresh andesite in the east block of the Bor 2 fault. The third hole was initially lost due to difficult ground conditions at the top of the andesite sequence. A re-attempt of the hole intersected weak clay-pyrite alteration followed by increasing quartz-alunite-pyrite alteration with local covellite mineralization, but the hole was again lost. The third attempt was the successful hole 10bis2 which eventually intersected 266m of 1.08% Cu and 0.28g/t Au starting at 598m in the Upper Zone, and continued drilling into early 2012 to intersect the Lower Zone, including 395m of 0.3% Cu and 0.09g/t Au, starting at 1469m. Accelerating exploration and evaluation work since 2012 has continued to expand and generally improve the Upper and Lower zones. Conclusions The concealed Chukaru Peki deposit is a typical paired high-sulfidation and porphyry Cu-Au system, similar in most characteristics to the nearby Bor and Bor River deposits and other analogues worldwide. Continuing exploration will define its ultimate size and economic value. With the benefit of perfect hindsight, the deposit’s existence could be reasonably predicted by simple extension of the productive ‘brownfields’ portion of the TMC into a covered area, supported by the local evidence including ore clasts, a significant distal epithermal vein/breccia system, and indications of a crossing structural grain. In reality, impediments to discovery were significant: the thick, conductive post-mineral cover increased the target hurdle size and

necessary grade, while reducing the usefulness of geophysics and other targeting tools. Despite recognition that alteration halos around the district’s large deposits could be narrow, negative early drilling results appeared to eliminate large swaths from prospectivity - and in fact several of the early ‘barren’ holes were quite close to the eventual discovery, if considered outside of geologic context and under ‘normal’ porphyry-copper greenfield exploration grid-drilling assumptions. Predictions of maximum expected grade and tonnage based only on ranges from analogues within the district, could have significantly under-valued the target’s potential. These obstacles were overcome by long-term management support, involvement of partners at key points in critical roles, and a superb local exploration team. Collectively these cleared the path for the critical four phases of drilling required to eventually discover Chukaru Peki. Acknowledgements This summary is dedicated to the memory of William V. Smart, formerly of Phelps Dodge Exploration, whose exploration vision initially brought PD into the Balkans in the 1990s; and to the late Slobodan Jankovic, Serbia’s renowned metallogenist. While Mr. Smart never visited Serbia, he knew, travelled with, and greatly admired Professor Jankovic. References BRGM publication BRGM/RC-51448-FR Eurasian Minerals news release July 8 2005 http://www.eurasianminerals.com/i/pdf/2005-07-08_NR.pdf Eurasian Minerals news release Oct. 30 2006 http://www.eurasianminerals.com/i/pdf/2006-10-30_NR.pdf Pacevski, A., Microscopic and SEM-EDS studies of 10 samples from drill-holes FMTC1341, 1344, 1348, and FmTX1224; Belgrade, Feb. 2014 Sutphin, D.M., Hammarstrom, J.M., Drew, L.J., Large, D.E., Berger, B.R., Dicken, C.L, and DeMarr, M.W.; Porphyry Copper Assessment of Europe, Exclusive of the Fennoscandian Shield; USGS, Reston, VA. USA, July 2013. Radivojevic, M., Rehren, T., Boric, D., Pernicka, E., Sljivar, D., Brauns, M.; On the origins of extractive metallurgy: new evidence from Europe. Journal of Archaelogical Science, vol. 37, 2775-2787, 2010. Reservoir Minerals Inc., new release, dated January 27 2014 Rudarska-Topionicarska Basen Bor, website www.rtbbor.rs

Vasic, V; Sedimentological Analysis of Bor clastites exposed west from the Chukaru Peki Deposit, Belgrade, September 2015. Internal Rakita company report. Yankovic, S.P., Ore Deposits of Serbia (Yugoslavia): Regional metallogenic settings, environments of deposition, and types. Belgrade, 1990. Wolfe, B., Fellows, G., Barker, C., Barnes, J.F.H., and Meik, S.S.; Preliminary Economic Assessment Report for the Chelopech Pyrite Recovery Project, Bulgaria; Dundee Precious Metals, Sept. 7 2012. Zimmerman, A., Stein, H.J., Hannah, J.I., Kozelj, D.I., Bogdanov, K., Berza, T., 2008, Tectonic configuration of the Apuseni-Banat-Timo-Srednogorie belt, Balkans-South Carpathians, constrained by high precision Re-Os molybdenite ages, Mineralium Deposita, vol. 43 p. 1-21, 2008.