comval kingking gold-copper report

KING-KING COPPER-GOLD PROJECT MINDANAO, PHILIPPINES

TECHNICAL REPORT

PURSUANT TO NATIONAL INSTRUMENT 43-101 OF THE CANADIAN SECURITIES ADMINISTRATORS

Prepared For

RATEL GOLD LIMITED

and

RUSSELL MINING AND MINERALS, INC.

Prepared By

INDEPENDENT MINING CONSULTANTS, INC.

Michael G. Hester, FAusIMM Vice President and Principal Mining Engineer

Independent Mining Consultants, Inc.

Donald F. Earnest, P.G. President

Resource Evaluation, Inc

John G. Aronson President

AATA International, Inc.

October 12, 2010


King-king Copper-Gold Project i Mindanao, Philippines October 2010

Technical Report / Form 43-101F1

Table of Contents 1.0 Summary . . . . . . . . . 1

1.1 General . . . . . . . . 1 1.2 Geology . . . . . . . . 2 1.3 Exploration 2 1.4 Mineral Resource . . . . . . . 3 1.5 Mineral Processing and Recovery to Saleable Product. . . 10 1.6 Environmental and Permitting . . . . . 11 1.7 Conclusions and Recommendations . . . . . 12

2.0 Introduction and Terms of Reference . . . . . . 14 3.0 Reliance on Other Experts. . . . . . . . 16 4.0 Property Description and Location . . . . . . 18

4.1 Property Location . . . . . . . 18 4.2 Land Area and Mining Claim Description . . . . 19 4.3 Agreements and Encumbrances . . . . . 23 4.4 Other Mineral and Mining Activities outside the Property Boundaries 24 4.5 Environmental Obligations . . . . . . 24 4.6 Permit Status . . . . . . . . 25

5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography . 28 5.1 Access . . . . . . . . . 28 5.2 Climate . . . . . . . . 28 5.3 Local Resources . . . . . . . 28 5.4 Infrastructure . . . . . . . . 29 5.5 Physiography . . . . . . . . 30 5.6 Mining Surface Rights and Mining Personnel 31

6.0 History . . . . . . . . . 31 7.0 Geologic Setting . . . . . . . . 34

7.1 Regional Geology . . . . . . . 34 7.2 Local Geology . . . . . . . . 36

8.0 Deposit Types . . . . . . . . . 51 9.0 Mineralization . . . . . . . . . 52

9.1 General . . . . . . . . 52 9.2 Oxide Zone . . . . . . . . 52 9.3 Mixed Zone . . . . . . . . 53 9.4 Sulfide Zone . . . . . . . . 54 9.4 Microthermometry . . . . . . . 54

10.0 Exploration . . . . . . . . . 55 11.0 Drilling . . . . . . . . . 56 12.0 Sampling Method and Approach. . . . . . . 60

12.1 General . . . . . . . . 60 12.2 Mitsubishi Metal Mining Corp . . . . . 61 12.3 Benguet Corporation . . . . . . . 61 12.4 Echo Bay Mines Ltd. (King-king Mines Inc) . . . . 62


King-king Copper-Gold Project ii Mindanao, Philippines October 2010


Table of Contents (Continued) 13.0 Sample Preparation, Analyses and Security . . . . . 63

13.1 Mitsubishi Drilling Program . . . . . . 63 13.2 Benguet Drilling Programs . . . . . . 63 13.3 Echo Bay Drilling Programs . . . . . . 64 13.4 IMC/REI Opinion of Sample Preparation, Security and

Analytical Procedures . . . . . . 68 14.0 Data Verification . . . . . . . . 69

14.1 Comparison of Assays with Original Assay Certificates . . 69 14.2 Echo Bay Re-Assays of Benguet Samples . . . . 78 14.3 RMMI Check Assays . . . . . . . 87 14.4 Conclusions and Recommendations . . . . . 88

15.0 Adjacent Properties . . . . . . . . 91 16.0 Mineral Processing and Metallurgical Testing . . . . 92

16.1 Metallurgical Samples . . . . . . 93 16.2 Grinding . . . . . . . . 98 16.3 Flotation Area . . . . . . . . 99 16.4 Analytical Procedures for Process Testing . . . . 104

17.0 Mineral Reserves and Mineral Resource Estimates . . . . 106 17.1 Mineral Resource . . . . . . . 106 17.2 Mineral Reserve . . . . . . . 109 17.3 Description of the Block Model . . . . . 111 17.4 Resource Classification . . . . . . 123 17.5 Bulk Density . . . . . . . . 127 17.6 Impact of Various Drilling Campaigns . . . . 128

18.0 Other Relevant Data and Information . . . . . . 130 18.1 Review of 1997 Kilborn SNC Lavalin Feasibility Report. . . 130 18.2 Conservative Mineral Resource Calculation . . . . 134 18.3 Environment and Socioeconomic Issues. . . 134

19.0 Interpretation and Conclusions . . . . . . 162 20.0 Recommendations . . . . . . . . 163 21.0 References . . . . . . . . . 167 22.0 Date and Signature Page . . . . . . . 170 23.0 Additional Requirements for Technical Reports on Development Properties 171

23.1 Mining Operations . . . . . . . 171 23.2 Recoverability . . . . . . . . 172 23.3 Markets . . . . . . . . 175 23.4 Project Approach. . . . . . . . 177 23.5 Taxes and Other Payments. . . . . . . 179 23.6 Capital and Operating Costs, Economic Analysis. . . . 180

24.0 Certificates of Qualified Persons. . . . . . . 181 25.0 Figures . . . . . . . . . 185 Appendix 1. Head Assay Analysis Log . . . . . . 204 Appendix 2. Pertinent Legal Documents . . . . . . 207 Appendix 3. Environmental . . . . . . . . 220 Appendix 4. Relevant Samples . . . . . . . 275


King-king Copper-Gold Project iii Mindanao, Philippines October 2010


List of Tables

1-1 Mineral Resource . . . . . . . . 4 1-2 Economic Parameters for King-king . . . . . . 6 1-3 Proposed Mine and Plant Production Schedule . . . . 8 4-1 King-king Permits . . . . . . . . 27 11-1 Drilling by Campaign . . . . . . . . 56 11-2 Drilling History by Company . . . . . . . 56 14-1 Comparison of Drillhole Database with Assay Certificates – Echo Bay Drilling 73 14-2 Comparison of Drillhole Database with Geologic Logs – Benguet Drilling . 75 14-3 Changes to Database since 2009 Due Diligence Review . . . 76 14-4 RMMI Check Assays versus Original Assays – Total Copper . . 89 14-5 RMMI Check Assays versus Original Assays – Gold . . . 90 16-1 Sulfide Ore Sample Details . . . . . . . 93 16-2 1S Composite Sample Description . . . . . . 94 16-3 2S Composite Sample Description . . . . . . 94 16-4 Head Grade Assays of Sulfide Ore Composites . . . . 94 16-5 Mineralogy of Sulfide Ore Composite Samples . . . . 95 16-6 Oxide Ore Sample Details . . . . . . . 96 16-7 Oxide Composite Sample Description . . . . . 97 16-8 Head Grade Assays of Oxide Ore Composite . . . . . 97 16-9 Mineralogy of Oxide Ore Composite . . . . . . 97 16-10 History of Grinding Tests . . . . . . . 99 16-11 Oxide Flotation Results for New Reagents . . . . . 101 16-12 Concentrate Impurities in Lakefield Study . . . . . 102 16-13 Flotation Design Criteria . . . . . . . 103 16-14 History of Flotation/Leaching Tests . . . . . . 103 16-15 Head Assay Analysis Log . . . . . . . 105 17-1 King-king Mineral Resource . . . . . . . 106 17-2 Economic Parameters for King-king . . . . . . 109 17-3 King-king Lithology for Resource Modeling . . . . . 112 17-4 General Ore Type Criteria . . . . . . . 112 17-5 Specific Gravity Measurements by Rock Type . . . . 128 17-6 Comparison of Various Drilling Campaigns for Copper . . . 129 18-1 Parameters and Resource Estimates for 1997 Kilborn Study and 2010 Study 130 20-1 Proposed Drill Holes . . . . . . . . 164 20-2 Additional Drilling and Study Cost 166 23-1 Proposed Mine and Plant Production Schedule . . . . 173


King-king Copper-Gold Project iv Mindanao, Philippines October 2010


List of Figures

1-1 Final Pit . . . . . . . . . 9 1-2 Conceptual Process Flow Diagram . . . . . . 11 4-1 Project Location . . . . . . . . 18 4-2 Mining Tenement Location . . . . . . . 20 4-3 Major Deposit Areas with Respect to Tenement Boundary . . . 22 5-1 Physiography . . . . . . . . . 30 7-1 Regional Geology . . . . . . . . 35 7-2 Local Geology . . . . . . . . . 37 7-3 Commonly Referenced Deposit Areas . . . . . 38 7-4 District Alteration . . . . . . . . 45 7-5 Mineral Prospect Areas . . . . . . . 50 9-1 Mineral Zones from the Block Model . . . . . 53 11-1 Drillhole Locations by Campaign . . . . . . 57 11-2 EB-27 Collar . . . . . . . . . 59 14-1 Echo Bay Re-assay of Benguet Samples – Total Copper . . . 81 14-2 Echo Bay Re-assay of Benguet Samples – Total Copper – Log Base 10 . 82 14-3 %Half Relative Deviation vs Mean – Echo Bay Re-assays of Benguet Copper 83 14-4 %Half Relative Deviation vs Mean – Echo Bay Re-assays of Benguet Gold 83 14-5 Echo Bay Re-assay of Benguet Samples – Gold . . . . 84 14-6 Echo Bay Re-assay of Benguet Samples – Gold – Log Base 10 . . 85 14-7 Echo Bay Re-assay of Benguet Samples – Soluble Copper . . . 86 14-8 Total Copper – RMMI Check Assay vs Original Assays . . . 89 14-9 HRD% vs Mean Copper Grade for RMMI Check Assays . . . 89 14-10 Gold – RMMI Check Assays vs Original Assays . . . . 90 14-11 HRD% vs Mean Gold Grades for RMMI Check Assays . . . 90 16-1 Process Flow Diagram . . . . . . . 92 17-1 Resource Cone . . . . . . . . 110 17-2 Model Lithology – 325 Bench . . . . . . 113 17-3 Model Lithology on Section 10,300 . . . . . . 114 17-4 Structural Zones with GT Data . . . . . . 115 17-5 Box Plot of Total Copper by Rock Type – 15m Composites . . . 186 17-6 Box Plot of Soluble Copper by Rock Type – 15m Composites . . 187 17-7 Box Plot of Gold by Rock Type – 15m Composits . . . . 188 17-8 Probability Plot of Total Copper by Rock Type – 15m Composites . . 189 17-9 Probability Plot of Soluble Copper by Rock Type – 15m Composites. . 190 17-10 Probability Plot of Gold by Rock Type – 15m Composites . . . 191 17-11 Box Plot of Total Copper by Structural Zone – 15m Composites . . 192 17-12 Box Plot of Soluble Copper by Structural Zone – 15m Composites . . 193 17-13 Box Plot of Gold by Structural Zone – 15m Composites . . . 194 17-14 Probability Plot of Total Copper by Structural Zone – 15m Composites . 195 17-15 Probability Plot of Soluble Copper by Structural Zone – 15m Composites . 196 17-16 Probability Plot of Gold by Structural Zone – 15m Composites . . 197 17-17 Box Plot of Total Copper by Oxide/Sulfide Code – 15m Composites . 198


King-king Copper-Gold Project v Mindanao, Philippines October 2010


List of Figures (Continued) 17-18 Box Plot of Soluble Copper by Oxide/Sulfide Code – 15m Composites . 199 17-19 Box Plot of Gold by Oxide/Sulfide Code – 15m Composites . . 200 17-20 Probability Plot of Total Copper by Oxide/Sulfide Code – 15m Composites 201 17-21 Probability Plot of Soluble Copper by Oxide/Sulfide Code – 15m Composites 202 17-22 Probability Plot of Gold by Oxide/Sulfide Code – 15m Composites . . 203 17-23 Total Copper Variograms. Host Rocks in Sulfide Zone . . . 118 17-24 Total Copper Variograms. Intrusive Rocks in Sulfide Zone . . . 119 17-25 Copper Grades on Section 10,300 . . . . . . 121 17-26 Gold Grades on Section 10,300 . . . . . . 122 17-27 Resource Classification for Total Copper . . . . . 124 17-28 Resource Classification for Gold . . . . . . 125 17-29 Cross Section 10350 Showing Resource Classification . . . 126 17-30 Specific Gravity versus Ascu/Tcu Ratio . . . . . 127 18-1 Permitting Roadmap for the King-king Project . . . . 139 18-2 Illegal Small-Scale Mining at the King-king Site . . . . 141 18-3 View of Pantukan, Excessive Siltation in the King-king River . . 142 18-4 The King-king River in the Lowlands as It Enters the Davao Gulf . . 144 18-5 The King-king River in the Lowlands . . . . . 145 18-6 The King-king River in the Low Mountains . . . . . 145 18-7 The King-king River in the High Mountains Surrounding the Project Site . 146 18-8 The King-king Project Site (View 1) . . . . . . 147 18-9 The King-king Project Site (View 2) . . . . . . 147 18-10 The King-king Project Site – Showing Eroded Area . . . . 150 18-11 Illegal Small Miners’ Living Quarters and Processing Facilities . . 150 20-1 Proposed Holes . . . . . . . . 165 23-1 Final Pit Design . . . . . . . . 174 23-2 Copper Supply, Mt Contained Copper (from BHP-Billiton) . . . 176 23-3 Copper Prices and Inventories (from Freeport McMoRan) . . . 176


King-king Copper-Gold Project 1 Mindanao, Philippines October 2010


1.0 Summary 1.1 General This Technical Report presents a mineral resource estimate for the King-king Copper-Gold Project in eastern Compostela Valley, Mindanao, Philippines. King-king has been extensively drilled, sampled, and delineated and constitutes a significant copper-gold deposit. This document summarizes the resource tonnage, grade, and classification and other pertinent information consistent with NI 43-101. This report contains an initial life of mine plan which utilizes the resource established herein by Independent Mining Consultants, Inc. (IMC). The King-king Project is not currently an operating property and there has not been any commercial scale production from the property. This document follows the format of Form 43-101F1 for Technical Reports in Canada and JORC Code guidelines for Public Reports in Australia. The mineral resource estimate was prepared for Ratel Gold Limited (Ratel) and Russell Mining and Minerals, Inc, (RMMI). The King-king Copper-Gold Project is held in a Mineral Production Sharing Agreement (MPSA#009-92-XI, approved by the government May 27, 1992 and amended December 11, 2002) by The Philippine Government, NADECOR (Nationwide Development Corporation), and Benguet Corporation. The MPSA grants the parties to the MPSA the exclusive right to explore, develop and exploit minerals within the area comprising the King-king deposit. The deposit size depicted in Figure 1-1 below is 2.5 square kilometers and the area of the Mineral Property in the MPSA is 15.5 square kilometers (see Figure 4-2). There is a memorandum of understanding (MOU) between NADECOR and St. Augustine Mines Ltd., a subsidiary of Russell Mining and Minerals, Inc. (RMMI), that provides for formation of a Joint Venture (JV) once Benguet Corporation is eliminated from the MPSA. Under the MOU, RMMI retains the exclusive right to develop the project through itself or an associated entity. Ratel and RMMI have agreed to complete a Share Exchange Agreement wherein Ratel will gain 100 percent control of SAML and RMMI will be compensated in Ratel equity. This work was completed by three companies, Independent Mining Consultants (IMC), AATA International, Inc. (AATA) and Resource Evaluation Inc. (REI). Their responsibilities and the qualified persons are listed in Section 2.0 (Introduction). The King-king Copper/Gold Project is located approximately 92 road kilometers from Davao City, Mindanao, Philippines. King-king is a gold-rich porphyry copper deposit spatially related to significant epithermal vein systems that can be potentially exploited by open pit mining methods to produce economic concentrations of gold and copper. Most of the mineralization is amenable to flotation and to gravity concentration to produce two concentrates: 1) a copper-gold concentrate and 2) a gold concentrate. The porphyry deposit is spatially related to significant epithermal vein systems which with further exploration could prove to host economically important precious metal mineralization.




1.2 Geology

The King-king Deposit is a porphyry copper-gold deposit hosted by hornblende biotite diorite porphyritic rocks that intrude interbedded sediments, submarine volcanic rocks, and volcanoclastic sediments. The intrusive rocks are believed to be Miocene in age, while the the wall rocks are Cretaceous to early Tertiary. Copper and gold mineralization occurs at or near the apex of the composite diorite intrusive complex within the intrusive rocks and extending well into the surrounding wall rocks.

The majority of the sulfide copper mineralization in the King-king deposit consists of chalcopyrite and bornite, with lesser amounts of chalcocite, digenite, and covellite. Rapid regional uplift and erosion likely caused the nearly complete removal of a classical leached cap and prevented the development of typically thick oxide and supergene enriched zones found in other major porphyry deposits. Copper mineralization in the oxide zone includes malachite, chrysocolla, cuprite, and tenorite. Gold is relatively abundant in the oxide zone, as evidenced by widespread gold panning and small-scale mining activities on the oxidized slopes above the main King-king zone. Gold occurs in the sulfide zone of the deposit in free form in close association with bornite and as exsolution intergrowths in other sulfides, particularly chalcopyrite. Native gold is occasionally observed on fractures and in quartz veinlets.

The King-king deposit is pyrite-poor, averaging less than one percent by volume for the entire deposit. This is reflected by the relative absence of a pyrite halo that is commonly developed around many porphyry copper deposits.

For process development purposes, two types of mineralization are considered: sulfide and oxide (which includes mixed oxide-sulfide material).

1.3 Exploration Exploration of the King-king deposit has spanned a few decades, and represents the efforts of numerous companies and individuals. A wide variety of techniques have been employed, including:

1) Surface mapping and sampling 2) Drilling (primarily diamond core) 3) Adit and raise sampling 4) Geochemistry (soil, stream, and down-hole) 5) Development of cross sections, long sections, and plan maps 6) Physical and computer-generated three-dimensional modeling.

A significant portion of past work focused on drilling to explore, define and confirm the economic potential of the property.




The interpretation of the exploration work done to date is that the King-king deposit is a significant copper-gold porphyry system with the potential to become an economic project. The drilling done to date has also been used to develop an NI 43-101 compliant mineral resource for the deposit, as presented in Section 1.4 and 17. All of the exploration data collection, including the drilling data, is historic data compiled by previous property owners. Ratel and its contractors were not involved in the compilation of this data. The only work conducted by Ratel and its contractors is the interpretation of the mapping and drilling data to develop the current mineral resource. Future drilling will focus on geotechnical diamond drilling to obtain core samples for pit wall stability analysis, final slope angle definition and hydrology-pore pressure studies, and hydrogeological studies. Additional diamond drilling will collect samples for metallurgy testing, in-fill certain areas of the deposit for confirmation of gold assays generated by the earlier Benguet drilling, and to better define certain lithologic contacts. 1.4 Mineral Resource A major task of IMC is the establishment of a mineral resource including tonnage, ore grade, and classification. The mineral resource was developed based on historic drilling that was completed by three companies from 1972 – 1997 (Mitsubishi Corporation, Benguet Corporation and Echo Bay Mining. The assay information was on electronic files. These files were checked and corrected by hand comparison to assay certificates and printed scanned paper logs, and an electronic data base for assembly of a block model was produced. An important aspect of IMC’s mandate is to verify the validity of drill and assay data. As part of this project, 100 core samples for independent check assay analysis were recovered from the core drilled by Benguet and Echo Bay that is currently stored at the core shed located in Pantukan City, Compostela Valley. The results of those assays confirm the presence of gold and copper. IMC and REI hold the opinion that these recent check assays provide sufficient confidence that the data generated and compiled by Benguet and Echo Bay are valid for the estimation of measured and indicated mineral resources. The King-king Copper/Gold deposit is currently envisioned to be mined using large scale open pit mining methods to produce ore to a flotation concentrator. Initial estimates of mining, process, and overhead costs were applied along with initial estimates of process and mining recovery to establish an estimate of mineral resources that have reasonable expectation of economic extraction. Table 1-1 summarizes the mineral resources at the King-king Copper/Gold Project as determined by IMC.




Table 1-1. King-king Mineral Resource 10/4/2010Ore Ore Eq Cu Tot Cu Sol Cu Gold Eq AuType Ktonnes (%) (%) (%) (g/t) (g/t)

Measured Mineral ResourceOxide 40,879 0.855 0.444 0.266 0.575 1.196Sulfide 66,402 0.536 0.269 0.037 0.445 0.894Total 107,281 0.658 0.336 0.124 0.495 1.009

Indicated Mineral ResourceOxide 120,443 0.654 0.349 0.210 0.428 0.916Sulfide 563,800 0.454 0.253 0.032 0.335 0.757Total 684,243 0.489 0.270 0.063 0.351 0.785

Measured/Indicated Mineral ResourceOxide 161,322 0.705 0.373 0.224 0.465 0.987Sulfide 630,202 0.463 0.255 0.033 0.347 0.771Total 791,524 0.512 0.279 0.072 0.371 0.815

Inferred Mineral ResourceOxide 31,915 0.541 0.288 0.167 0.353 0.756Sulfide 93,548 0.394 0.219 0.025 0.292 0.657Total 125,463 0.431 0.237 0.061 0.308 0.682

Notes:Eq Cu (oxide) = Total Copper + 0.715 x Gold, Cutoff = 0.27% Eq CuEq Cu (sulfide) = Total Copper + 0.600 x Gold, Cutoff = 0.23% Eq CuAlternatively, as Equivalent Gold:Eq Au (Oxide) = Gold + 1.399 x Total Copper, Cutoff = 0.37 g/t Eq AuEq Au (Sulfide) = Gold + 1.668 x Total Copper, Cutoff = 0.38 g/t Eq AuTotal Material in Cone Shell 1,429,845 KtonnesWaste:Ore Ratio 0.81 (Inferred as Waste)Waste:Ore Ratio 0.56 (Inferred as Ore)

Measured and indicated mineral resource amounts to 791.5 million tonnes at 0.512% copper equivalent, 0.279% total copper, 0.072% soluble copper, and 0.371 g/t gold. Inferred mineral resource is an additional 125.5 million tonnes at 0.431% copper equivalent, 0.237% total copper, 0.061% soluble copper, and 0.308 g/t gold. The measured and indicated mineral resource consists of 4.9 billion pounds of contained copper and 9.4 million troy ounces of contained gold. The last column of the table also shows that with metal grades defined in terms of equivalent gold, instead of equivalent copper, the equivalent gold grade of the measured and indicated mineral resource is 0.815 g/t gold equivalent (0.99 g/t for the oxide resource and 0.77 g/t for the sulfide resource). Based on current market conditions, Independent Mining Consultants, Inc. (IMC) would classify the King-king deposit as a copper-gold co-product deposit. The historical precedence is to rank the minerals in a deposit in order of economic significance, which is generally defined in terms of gross revenue. Based on the measured and indicated mineral resource for King-king and the October 1, 2010 closing spot prices of $3.68 per pound




copper and $1320 per ounce gold, and preliminary estimates of plant recovery and smelter payable amounts (Table 1-2), about 60% of the potential revenue is due to copper and 40% due to gold. Since the gold contribution is more than 25% of total revenue, gold is classified as a co-product, instead of a by-product. At the $1320 gold price the copper price would have to drop to about $2.50 per pound for gold to be the predominant revenue driver. The resources are contained within a floating cone pit shell and are compliant with the “reasonable prospects for economic extraction” clauses of Canada’s NI 43-101 regulations and also Australia’s JORC code. The cone shell is based on a copper price of US$ 1.75 per pound and a gold price of US$ 660 per troy ounce. For $1.75 copper and $660 gold, copper equivalent grades are defined as: Eq Cu (Oxide Ores) = Total Copper + 0.715 x Gold Eq Cu (Sulfide Ores) = Total Copper + 0.600 x Gold And breakeven copper equivalent cutoff grades are 0.27% and 0.23% for oxide and sulfide respectively. Table 1-2 summarizes the economic parameters used. Only measured and indicated resource blocks were allowed to contribute to the development of the floating cone shell used for the resource tabulation; inferred blocks were treated as waste to develop the cone shell. There is no guaranty that any of the mineral resource will be converted to mineral reserve. There is also no guaranty that inferred mineral resource will be upgraded to measured or indicated mineral resource or mineral reserves. IMC has also developed a preliminary mining production schedule (i.e. production forecast) for the King-king Project. Seven mining phases were designed to do the scheduling. The phases include haulage roads and adequate working room for large mining equipment. Figure 1-1 shows the final pit design. The final pit design was based on the economic parameters shown above, including commodity prices of $1.75 per pound copper and $660 per ounce gold. Only measured and indicated mineral resource was allowed to contribute to the design.




Table 1-2. Economic Parameters for King-king$1.75 Cu / $660 Au

Parameter Units Oxide/Mix SulfideCopper Price Per Pound (US$) 1.750 1.750Gold Price Per Troy Ounce (US$) 660 660Base Mining Cost Per Tonne Material (US$) 1.100 1.100Mine Replacement Capital Per Tonne (US$) 0.150 0.150Lift Cost Per Bench Below 250 (US$) 0.015 0.015Process Cost Per Ore Tonne (US$) 4.200 4.200G&A Cost Per Ore Tonne (US$) 0.600 0.600Process Recovery of Copper (Average) (%) 74.3% 85.9%Process Recovery of Gold (Average) (%) 83.4% 80.9%Smelting/Refining Payable for Copper (%) 96.4% 96.4%Smelting/Refining Payable for Gold (%) 95.0% 95.0%SRF Cost Per Pound Copper (US$) 0.260 0.260NSR Royalty (%) 3.0% 3.0%NSR Factor for Total Copper (US$) 22.822 26.385NSR Factor for Gold (US$) 16.308 15.819Gold Factor for Copper Equivalent (none) 0.715 0.600Total Copper Equivalent Cutoff Grades Breakeven (without lift) (%Cu) 0.27 0.23 Internal (%Cu) 0.21 0.18Copper Factor for Gold Equivalent (none) 1.399 1.668Gold Equivalent Cutoff Grades Breakeven (without lift) (g/t) 0.37 0.38 Internal (g/t) 0.29 0.30

Table 1-3 shows the mine production schedule. Ore production varies by year because it is based on 8766 plant hours per year with an oxide/mixed ore processing rate of 48,300 ktpy (0.1815 hrs/kt) and a sulfide processing rate of 36,500 ktonnes per year (0.2402 hrs/kt). Ore mined during preproduction and Year 1 amounts to 36,800 ktonnes or about 80% of nominal plant capacity. The copper equivalent cutoff grade varies by year to balance the mine and plant production rates. Preproduction stripping requirements are minimal at 12.7 million tonnes. Total material is scheduled at 51.2 million tonnes for Year 1. Years 2 through 16 total material requirements are about 72 million tonnes per year. This schedule results in 812.5 million ore tonnes at 0.275% total copper, 0.367 g/t gold and 0.506% copper equivalent. This is measured and indicated resource only, inferred resource is considered waste. Total material is 1.46 billion tonnes.




The table also shows that between a potential low-grade cutoff grade of 0.2% copper equivalent and the operating cutoff grade for each year there is the potential to stockpile 49.7 million ore tonnes at 0.160% copper and 0.132 g/t gold. The table also shows a proposed plant production schedule. Year 1 is shown as the ore mined during preproduction and Year 1 and Years 22 and 23 include the low grade. Including the low grade, total plant production amounts to 862.2 million ore tonnes at 0.268% total copper, 0.354 g/t gold, and 0.491% copper equivalent. Total plant production is about 9% more ore tonnes than the measured/indicated mineral resource. The mineral resource was tabulated at breakeven cutoff grades of 0.27% Eq Cu for oxide and 0.23% Eq Cu for sulfide. Operating cutoff grades for the production schedule were allowed to go down to 0.21% Eq Cu (internal cutoff) for oxide/mixed material and 0.20% Eq Cu for sulfide.



Table 1-3. Proposed Mine and Plant Production ScheduleMine Production Schedule Low Grade Stockpile Proposed Plant Schedule

Mining Cu Eq Ore Cu Eq Tot Cu Sol Cu Gold Ore Cu Eq Tot Cu Sol Cu Gold Waste Total Waste: Ore Cu Eq Tot Cu Sol Cu Gold Hours/ PlantYear Cutoff (%) Ktonnes (%) (%) (%) (g/t) Ktonnes (%) (%) (%) (g/t) Ktonnes Tonnes Ore Ktonnes (%) (%) (%) (g/t) Ktonne HoursPP 0.32 4,830 0.642 0.492 0.275 0.212 2,363 0.263 0.166 0.101 0.135 5,500 12,693 0.761 0.32 31,970 0.791 0.466 0.299 0.459 1,427 0.282 0.203 0.060 0.120 17,841 51,238 0.53 36,800 0.771 0.469 0.296 0.427 0.1897 6,9792 0.36 43,874 0.875 0.412 0.226 0.676 9,871 0.295 0.228 0.138 0.097 17,750 71,495 0.33 43,874 0.875 0.412 0.226 0.676 0.1998 8,7663 0.30 42,410 0.802 0.392 0.154 0.623 2,743 0.258 0.161 0.088 0.141 26,847 72,000 0.59 42,410 0.802 0.392 0.154 0.623 0.2067 8,7664 0.26 42,700 0.556 0.227 0.082 0.492 6,353 0.233 0.116 0.037 0.176 22,947 72,000 0.47 42,700 0.556 0.227 0.082 0.492 0.2053 8,7665 0.26 39,190 0.568 0.256 0.058 0.490 6,956 0.231 0.135 0.034 0.156 25,854 72,000 0.56 39,190 0.568 0.256 0.058 0.490 0.2237 8,7676 0.25 40,490 0.483 0.332 0.094 0.241 5,416 0.227 0.172 0.048 0.086 26,094 72,000 0.57 40,490 0.483 0.332 0.094 0.241 0.2165 8,7667 0.23 36,740 0.457 0.323 0.033 0.223 2,624 0.216 0.153 0.013 0.105 32,636 72,000 0.83 36,740 0.457 0.323 0.033 0.223 0.2386 8,7668 0.20 37,300 0.506 0.326 0.050 0.297 34,700 72,000 0.93 37,300 0.506 0.326 0.050 0.297 0.2350 8,7669 0.20 37,670 0.497 0.304 0.048 0.318 34,330 72,000 0.91 37,670 0.497 0.304 0.048 0.318 0.2327 8,76610 0.20 37,770 0.444 0.300 0.043 0.235 34,230 72,000 0.91 37,770 0.444 0.300 0.043 0.235 0.2321 8,76611 0.24 36,880 0.438 0.274 0.033 0.270 3,896 0.223 0.148 0.016 0.123 31,224 72,000 0.77 36,880 0.438 0.274 0.033 0.270 0.2377 8,76612 0.24 36,630 0.436 0.245 0.029 0.317 3,252 0.222 0.137 0.012 0.142 32,118 72,000 0.81 36,630 0.436 0.245 0.029 0.317 0.2393 8,76613 0.24 36,590 0.446 0.227 0.029 0.364 2,586 0.222 0.124 0.015 0.163 32,824 72,000 0.84 36,590 0.446 0.227 0.029 0.364 0.2396 8,76714 0.24 36,510 0.468 0.227 0.029 0.401 2,215 0.222 0.113 0.015 0.182 33,275 72,000 0.86 36,510 0.468 0.227 0.029 0.401 0.2401 8,76615 0.20 36,590 0.432 0.205 0.029 0.378 35,410 72,000 0.97 36,590 0.432 0.205 0.029 0.378 0.2396 8,76716 0.20 36,690 0.419 0.210 0.032 0.348 35,310 72,000 0.96 36,690 0.419 0.210 0.032 0.348 0.2389 8,76517 0.20 36,510 0.349 0.185 0.031 0.273 30,991 67,501 0.85 36,510 0.349 0.185 0.031 0.273 0.2401 8,76618 0.20 36,500 0.373 0.205 0.033 0.280 25,321 61,821 0.69 36,500 0.373 0.205 0.033 0.280 0.2402 8,76719 0.20 36,500 0.385 0.206 0.031 0.299 19,668 56,168 0.54 36,500 0.385 0.206 0.031 0.299 0.2402 8,76720 0.20 36,500 0.408 0.217 0.027 0.318 14,994 51,494 0.41 36,500 0.408 0.217 0.027 0.318 0.2402 8,76721 0.20 36,500 0.393 0.189 0.025 0.340 15,293 51,793 0.42 36,500 0.393 0.189 0.025 0.340 0.2402 8,76722 0.20 15,112 0.458 0.244 0.038 0.357 8,458 23,570 0.56 39,058 0.327 0.193 0.050 0.219 0.2244 8,76623 25,756 0.245 0.160 0.058 0.132 0.2145 5,524

TOTAL 812,456 0.506 0.275 0.069 0.367 49,702 0.245 0.160 0.058 0.132 593,615 1,455,773 0.69 862,158 0.491 0.268 0.068 0.354 0.2280 196,597



Figure 1-1. Final Pit




1.5 Mineral Processing and Recovery to Saleable Product The ore is planned to be delivered to the primary crusher next to the final pit perimeter and then crushed ore conveyed approximately 3.6 overland kilometers to the mill located in the low lands at approximately 200 meter elevation. Process tailing would be pipeline conveyed to a tailing management facility starting at an estimated 40 meters above sea level and also located in the lowlands. The process plant will grind the ore utilizing a SAG mill followed by three balls mill to reduce the ore for copper flotation to an estimated P80 150 microns. The majority of the gold is expected to be recovered with the copper in the concentrate. There will be some gold recovered by gravity concentrator circuits as shown in Figure 1-2, a conceptual process flow diagram. Additional ore throughput is expected in the early years of production because the grinding circuit is designed at the higher bond work index of 16 kWh/tonne, which is for the sulfide zone ore. The early years of production (1-6) will experience softer ore due to the higher amount of oxide and mixed zone ore treated (bond work index of 12). There is significant upside potential in that time period to process higher tonnages and the downstream processes (screens, pumps, pipes, float cells, thickeners, etc.,) will be sized to accommodate 25% higher throughput. The flow sheet was based on sequential flotation circuits (sulfide copper first) for producing copper concentrates containing gold from copper sulfide minerals (chalcopyrite and bornite) and from copper oxide minerals (malachite principally). The copper sulfide mineral flotation circuit was designed based on the feasibility level testing performed in 1997 at the Lakefield, Ontario research facility. Copper oxide mineral flotation circuit design was based on RMMI interpretation of the results from commercial mine reports and research reports on other projects and mines utilizing typical reagents and flow sheets developed for oxide mineral flotation. The Lakefield studies indicated 85% of the total copper in the sulfide zone ore would report to the final copper concentrate. The sulfide ores tested contained between 3 and 15 percent acid soluble copper. The actual copper sulfide mineral recoveries would have been significantly higher than 85% when factoring in the acid soluble portion that would have had low recovery. In this study sulfide copper was defined as copper in sulfide minerals and from a data base assay point of view it was total copper minus soluble copper. RMMI research on flotation of malachite (predominant copper oxide mineral at King-king) at commercial mines, recent feasibility studies and other reported copper oxide flotation studies showed that 72 to 90 percent of malachite and chrysocolla are recovered in flotation. Most of the results fall in the 75% recovery range. Soluble copper (copper oxide minerals) flotation recoveries used in this resource estimate ranged mostly from the high 50’s percent to the mid 60’s percent recovery depending on the soluble copper head grade. Therefore, conservative estimates for recovery of soluble copper by flotation were assumed at this level of study.




Primary Crushing SAG Mill Ball Mills

Gold Gravity Circuit

Sulfide Flotation

Oxide Flotation

Cleaner Flotation

Concentrate Dewatering

at Port

Concentrate Stored at Port

until Shipped to Smelter

Legend:Ore Concentrate Tailing Gold

EW Type Gold Circuit

Gold Dore Shipped to

Refinery

Land Tailing Management

System

Intensive Cyanide Leach


Figure 1-2. Conceptual Process Flow Diagram

The copper-gold concentrate grade is expected to range from 29 to 33% copper and 13 to 71 grams per tonne gold and average 31% copper and 35 grams per tonne gold. The concentrate grades were estimated by final concentrate results reported in the 1997 Lakefield studies combined with the 2009 King-king Project mine plan and from final concentrate grades reported for results from commercial mine reports and research reports on other projects and mines utilizing typical reagents and flow sheets developed for copper oxide mineral flotation. 1.6 Environmental and Permitting Based on the known information provided to date, AATA International, Inc (AATA). (Environmental Consultants, See Section 2.0) sees no environmental issues that would prevent the permitting of the proposed operations. Although AATA currently does not see any permitting issues that would prevent the operation of the proposed King-king Copper/Gold Project, AATA cannot predict all the concerns or issues the permitting agencies may have with the proposed project during the permitting process, nor can AATA control how long the agencies will take to issue the necessary permits. At this time, quantification of all the environmental impacts of the proposed facilities and operations is not possible. A better understanding of these will be developed during the permitting process.




1.7 Conclusions and Recommendations The results of this study indicate that the King-king Project has the potential to become an economic producer of copper and gold. However, more information will be required to move the project forward. IMC and REI recommend an initial drill program of about 16 diamond drill holes that will add confidence, and additional resources, particularly gold resources, to the King-king Gold-Copper Deposit. In additional to geology and assay information, these holes will provide information for a broad range of topics at King-king such as metallurgy, acid rock characteristics, geotechnical issues, including slope stability, etc. Following the recommended development work and studies, including metallurgical work, a definitive project plan will be developed by the owner. This will include the definitive studies for plant location, mine design, infrastructure, and construction plan. This will result in a sufficient data for economic evaluation to bankable standards, concluding in a Bankable Feasibility Study (BFS) within approximately 24 months. A new topographic survey of the mine, valueless rock storage, plant, and tailings storage areas will also be required. The last survey was conducted in 1997. Significant artisanal mining activity and also natural erosion have impacted the surface topography. Process testing on new core should address the following items: Optimum primary grinding size for various ore zones and lithology types Geo-statistical analysis of grinding and flotation Copper oxide mineral response to flotation with recently developed and

commercialized oxide flotation reagents and flow sheets A thorough study of regrind product size Optimized cleaner flotation reagent schemes and flow sheet for ore variations Evaluate centrifugal gravity and flash flotation recovery of gold from the primary

grinding circuit and from tailing streams in flotation Evaluate concentrate processing by hydrometallurgical methods to recover gold and

copper at site Rheology studies on tailing for settler design and tailing dam design Settling and filtration studies on concentrates for dewatering purposes

Benguet gold assays were not used in the current mineral resource estimate. Work done by Echo Bay, and confirmed by IMC, shows the Benguet gold assays are biased high by about 10%. There were however about 1493 Echo Bay re-assays of Benguet samples that were available for the current resource estimate. IMC recommends an initial re-assaying of a about 200 Benguet drill hole pulps and their corresponding remaining half of core for total copper and gold. The purpose is to determine if the bias observed in the Benguet gold assays was due to sample preparation or the analytical work (or both). Based on the outcome of




this, additional Benguet pulps and/or core will be assayed to supplement the existing database and improve the confidence of mineral resource and mineral reserve estimates. The proposed budget for the additional drilling, analysis of the drill results and above mentioned studies is: $3.4 million USD. Ratel plans to implement the drill program during the fourth quarter of 2010.




2.0 Introduction and Terms of Reference Ratel Gold Limited and Russell Mining and Minerals, Inc. requested the development of a mineral resource estimate and Technical Report for the King-king Copper-Gold Project from the following team of consulting firms:

Person / Company

Summarized Responsibility

Donald Earnest Geology and History Resource Evaluation, Inc. (REI)

John Aronson Environmental, Permitting AATA International (AATA) Michael G. Hester Resources and Report Assembly Independent Mining Consultants, Inc. (IMC)

The mineral resource estimate is compliant with Canadian National Instrument 43-101 (NI 43-101). The above group worked together as a team and each provided a qualified person for this Technical Report under the definitions of NI 43-101. Michael Hester acted as the primary author of the Technical Report. The King-king Copper-Gold Project is a porphyry sulfide deposit that is potentially amenable to large scale open pit mining. The project is located in southeastern Mindanao of the Philippines. This work was started in May of 2010 and this final Technical Report was completed in September 2010. Historic drill data was obtained from electronic drill logs and electronic drill hole data bases, as well as, paper assay certificates that were on file under the control of RMMI. IMC personnel transferred and keypunched the drill hole information into computer files for use in the generation of the computer based block model and mineral resource estimate. The King-king Copper-Gold Project has also been referred to historically as the King-king Copper Gold Porphyry Project. The drilling for the project was conducted between 1969 and 1997 by a few different companies, including: Echo Bay, Benguet Corporation and Mitsubishi Corporation. A number of historic reports have been prepared that were of value as background in the development of this report. Those reports are listed in the reference section of this Technical Report.




Don Earnest visited the property on June 4 - 7, 2010 in the company of SAMI management. Don Earnest visited the core shed to review the condition of the drill core, confirm lithology and alteration of the core and select core sample intervals for assay verification purposes. Don Earnest and SAMI management reviewed the core, toured the property, and visited potential mining infrastructure sites. This report is in metric units. Tonnes are metric tons of 2204.6 pounds (lbs). Ktonnes means 1000 metric tons. Precious metal grades for gold and silver are presented in grams or troy ounces per tonne and the abbreviation koz is 1000 troy ounces. Metal grades for copper are in percent by weight. Quantities of copper are often expressed in pounds (lbs) since prices are typically quoted in lbs on world markets.




3.0 Reliance on Other Experts This Technical Report was assembled by the team of consultants as outlined in Section 2.0. Each was responsible for specific chapters in this report. Final assembly of the report was accomplished by Michael Hester of Independent Mining Consultants, Inc. who also acted as the primary author of the Technical Report. The chapter responsibilities are summarized below:

Qualified Person Donald Earnest, Resource Evaluation, Inc Sections 5 through 13

Section Responsibilities

John Aronson, AATA International, Inc. Section 18.3 Michael Hester, Independent Mining Consultants, Inc. Sections 1, 2, 3, 4, 14, 15, 16, 17, 18, 19, 20, 23 Independent Mining Consultants, Inc, and the consultants listed above have not verified or audited the property ownership as outlined in Section 4.0. The authors have relied on the opinion of Land Council to Ratel as evidenced in the letter provided by Ramon Adviento, land expert in the Philippines (his office is in Davao City, Mindanao) regarding the land status in a letter to RMMI dated August 10, 2010 (Appendix 2, Exhibit 3). According to the letter NADECOR has been granted the mineral rights by the government of the Republic of the Philippines. Ratel, through its equity in SAML, will have the right to continue exploration and development of the property once their Joint Venture agreement with NADECOR is finalized. Where possible, the authors have confirmed information provided by SAMI or previous authors by comparison against other data sources or by field observation. AATA has reviewed the environmental situation of the property as can be determined from existing reports and tertiary data available. IMC has assumed that any operating permit and reclamation requirements are properly accounted for in the information provided by AATA, RMMI and Ratel and that any potential future operations will not be prejudiced by environmental, permitting, or related constraints. IMC has not audited the process plant or tailing design information presented in this document. The developed concepts concerning these are typical for the industry. The testing data presented in Section 16 is historic in nature; most of it was developed for the Echo Bay study. The primary author has no reason to doubt its validity. AATA currently does not see any permitting issues that would prevent the operation of the proposed King-king Copper/Gold Mine, but AATA cannot predict all the concerns or issues the permitting agencies may have with the proposed project during the permitting process, nor can AATA control how long the agencies will actually take to eventually issue the necessary permits. At this time, quantification of all the environmental impacts of the




proposed facilities and operations is not possible. A better understanding of these will be developed during the permitting process.




4.0 Property Description and Location 4.1 Property Location The King-king Project is centered at approximate geographical coordinates 7°11’31”N Latitude and 125°58’40”E Longitude on the Philippine Island of Mindanao. Figure 4-1 shows the location. The project site is located at Sitio Gumayan, Barangay King-king, Municipality of Pantukan, Province of Compostela Valley, in Mindanao.

Figure 4-1. Project Location




4.2 Land Area and Mining Claim Description The King-king tenement has a total land area of 1,548 hectares and is shown in Figure 4-1. All mineral resources within the Republic of the Philippines are owned by the State and, unless otherwise closed, withdrawn or claimed, are open to exploration by way of mining claims, leases or agreements with the Philippine government. The King-king deposit is located within the boundaries of the King-king MPSA (Mineral Production Sharing Agreement No. 009-92-XI), which was approved by the government on May 27, 1992 for an initial term of 25 years and covers approximately 1,656 hectares. The MPSA was amended on December 11, 2002 to bring it in line with Republic Act No. 7942, otherwise known as “The Philippine Mining Act of 1995.” The MPSA is in favor of NADECOR as Claim Owner-Leaseholder and Benguet as Operator. It grants to NADECOR (owners) and Benguet the exclusive right to explore, develop, mine and operate minerals within the tenement area, including surface access to exercise such rights. Production from the MPSA is subject to a government share (royalty) comprised of an excise tax, which is payable in addition to other prescribed taxes and fees. The King-king MPSA is a conversion of mining leases covering 184 mining claims that are owned by NADECOR. Benguet would obtain a 50 percent earn-in through funding of 100 percent of the development and construction of the mine under an Operating Agreement dated August 21, 1981 and amended December 11, 2002.

Subsequently, Echo Bay Mines Inc. (EBMI), TVI Pacific (TVI) and King-king Mines, Inc. (KMI) entered into option agreements executed on October 25, 1995 with Benguet whereby Benguet granted KMI the option to purchase within 24 months or up to October 25, 1997, Benguet's interest in the agreement, and the NADECOR royalty, the government share, and the right of Benguet to buy back a 20 percent (20%) interest in KMI.

After drilling the property, EBMI and TVI opted not to exercise the option that expired on October 25, 1997. The property then reverted to original ownership.

On August 29, 2008 NADECOR terminated its Operating Agreement with Benguet Corporation under the terms of the agreement due to the failure to execute on work plans for six consecutive years. On May 26, 2008 and again on December 10, 2009, NADECOR filed a motion with the Secretary of the DENR to remove Benguet from the MPSA as Operator for their continued failure to implement the exploration and work program. The DENR in a November 23, 2009 order declared NADECOR the sole operator on the MPSA for the term of a renewed two year exploration period. The order was primarily based on a detailed report completed September 30, 2009 by the Region 11 MGB which reviewed in detail the work accomplished on the King-king tenement area. The November order was substantiated in January 2009 when the Secretary of the DENR issued a finding sustaining the Order after a Request for Reconsideration was submitted by Benguet rebutting the November Order. On April 29, 2010, the Office of the President issued a Final and Executory Order Sustaining the November Order.




Figure 4-2. Mining Tenement Boundary




A negotiated settlement heads of terms agreement was reached between Benguet and Strato International Holdings, Ltd., of which RMMI has 50 percent ownership and NADECOR has 50 percent ownership, in July 2010 wherein Benguet would transfer their interest, if any, in the Operating Agreement, MPSA, and surrounding claims to Strato in exchange for a cash payment of $25 million USD, scheduled in several payments over 7 years and the surrender of approximately 49% of the outstanding secured debt of Benguet, which has been secured under contract by Strato. The surrender of the debt, under the agreement, provides for a credit to the settlement payments of approximately $8 million USD. This agreement is currently in the due diligence phase prior to final agreement. .

NADECOR and Russell Mining and Minerals Inc. (RMMI) signed an exclusive Letter of Intent in April 2010 and an amended agreement in July 2010 to develop the project under a JV arrangement. Under the agreement, RMMI will undertake the exploration and work programs, feasibility studies and baseline studies for preparing an EIA, DMPF and a bankable feasibility report as well as the funding of such efforts. In return for such funding, RMMI would earn in a 60% interest in the planned JV. In March of 2010 the aforementioned LOI was replaced with a Memorandum of Understanding between NADECOR and St. Augustine Mining Ltd. (SAML), a subsidiary of RMMI, which provided for the terms of the LOI as well as emplacing a Preferred Share Investment Agreement wherein SAML could invest up to $30 million USD prior to the acquiring of clear title to the MPSA and conclusion of a Joint Venture Agreement. RMMI retains the right to assign the development of the King-king project to an affiliated entity under the MOU.

Ratel Gold Limited (Ratel) and RMMI have agreed to complete a Share Exchange Agreement wherein Ratel will gain 100 percent control of SAML and RMMI will be compensated in Ratel equity. Additionally, as part of the transaction, Ratel will acquire RMMI’s 50 percent ownership of Strato.

Fees relative to the King-king mineral property and the Operator, NADECOR, have been paid. The mining occupation fees for King-king MPSA No. 009-92-XI were paid by NADECOR on February 9, 2010 for the period of May 27, 2008 – May 26, 2010, see exhibit 1 in Appendix 2. The fees for 2011 are due in February 2011. The performance bond for the approved exploration and environmental work programs for the next two years beginning May 2010 for the MPSA was paid on June 11, 2010; see Exhibit 2, also in Appendix 2. All land and mineral exploration fees are in order for the King-king MPSA in regards to the current property Operator and claim owner NADECOR.

A qualified person expert opinion letter is attached (Exhibit 3, Appendix 2) regarding the claims and land status. There are no other private entities or corporations, other than NADECOR, with a claim of possession over the said tenement area. This is evidenced from the fact there are no records of taxes being paid to Compostela Valley Province on this land by others. MPSA 009-92-XI awarded to NADECOR on May 27, 1992, defines the ownership of the surface rights covering the lands within the 1,656 hectares rests with the government of the Republic of the Philippines. NADECOR and the government have sole control over this land and its development into a mineral producing mine and mill. RMMI and NADECOR have an agreement to develop the property together. Based on this




discussion, it appears that Benguet does not have any back-in rights to the property, once a final agreement, as described above, is reached.

With respect to the tenement boundaries, the known King-king mineralized areas are located on the south side of the tenement, as shown in Figure 4-3. This figure also shows some commonly referenced deposit area names. There has not been any commercial scale development of the deposit, so there are not any significant waste deposits or tailings ponds on the property. Small scale mining, however, has resulted in numerous small pits, waste deposits, spent ore piles, and plants within the tenement area. These are shown in several photographs in Section 18. Benguet developed some underground workings for sampling and testing the King-king ores. These are limited in scale and occur in the main deposit area in the south. Several buildings from Echo Bay’s tenure in 1997 remain at the project site, but these are in disrepair. These buildings are located in the south east area of known mineralization and are approximately 50 meters outside the currently designed open pit perimeter. The King-king River is the major geographical feature of the mineral property area. It transects the currently designed open pit approximately 100 meters from the western open pit perimeter.

Figure 4-3. Major Deposit Areas With Respect to Tenement Boundary




4.3 Agreements and Encumbrances Owners of mining claims for land to be mined are permitted royalties in accord with their operating agreement. The Memorandum of Understanding between NADECOR and SAML provides that NADECOR fund their agreed upon portion of project costs and retain 40% ownership, after Bankable Feasibility or to take a 3.5% royalty subject to a sliding scale based on the price of copper, and adjusted annually to the commodity price index.

The Philippines Government takes an excise tax on metallic minerals. This excise tax is set by Section 151 (A) (3) of Republic Act (RA) No. 8424 or the National Internal Revenue Code of 1997 (1997 Tax Code), as amended by RA No. 9337 effective July 1, 2005. The Code states that excise tax on metallic minerals would be “…based on the actual market value of the gross output thereof at the time of removal,…in agreement with the following schedule (for the King-king Gold-Copper Project): Gold and copper, two percent (2%).”

To calculate the tax base, no deductions are allowed for mining, milling, refining, transporting, handling, marketing and other expenses. If the minerals are sold or consigned overseas, costs of sea freight and insurance are deductible. The King-king mineral property is accessed via the Buko-buko sa Anay-Lawaan dirt road. Along this road outside the mineral property are 19 landowners that NADECOR has various rights of way agreements with. Renewal of these rights of way is not a hindrance to the status of MPSA 009-92-XI as covered by law. The aforementioned Exhibit 3 describes in detail the law surrounding this matter. In summary, the mining rights holder will not be prevented from access to the mineral property and conducting mining operations as long as property damaged as a consequence of such access and mining operations is satisfactorily compensated for. Again, as in the work programs mentioned above, a bond must be posted with the regional Mines and Geosciences Bureau to guarantee the compensation. There is an annual mining occupation fee of about 200 Philippine Pesos per hectare per year that is paid to the province. RMMI through its subsidiary, St. Augustine Mining Ltd. (SAML), has an option earn-in 60% equity interest in the King-king project Joint Venture. This earn-in is defined by a Memorandum of Understanding (MOU) signed in April 2010 by RMMI, SAML and NADECOR. RMMI paid $400,000 to NADECOR for exclusivity to enter into the MOU in November 2009. SAML will pay NADECOR an additional $7.1 Million in two phased payments toward the earn-in. The entire $7.5 Million gives SAML 6% earn-in. SAML has committed to spend $43.5 Million dollars toward completion of a Bankable Feasibility Study for the project. Completion of the study earns SAML 45% earn-in of the total project. SAML has made an additional commitment to spend a minimum of $32 Million or a calculated amount based on planned tonnage throughput, as determined in the planned feasibility study, in development capital. The calculated premium expenditure will be 0.457 X Planned Tonnage (Estimated at 100,000 tpd) X 1000 or 5% of Capital Cost, whichever is less. These expenditures earn SAML the additional 9% needed for a 60% total earn-in. Any over allocated variance between the amount spent toward BFS and the amount committed




pays NADECOR first and the balance will be credited toward the development capital commitment at 50%. Ratel Gold Limited (Ratel) and RMMI have agreed to complete a Share Exchange Agreement wherein Ratel will gain 100 percent control of SAML and RMMI will be compensated in Ratel equity. Additionally, as part of the transaction, Ratel will acquire RMMI’s 50 percent ownership of Strato. 4.4 Other Mineral and Mining Activities outside the Property Boundaries There are small scale gold mining operations in the adjacent mining tenements next to the King-king tenements. These tenements are called the SARC claims and the PMC claims. Nadecor is in the process of acquiring these claims for use as possible sites for King-king facilities. There are no existing tailing ponds or waste deposits of note outside (or inside) the King-king Mineral Property Area. The most notable feature from small scale mining in the King-king and adjacent tenements is the sediment deposition visible along the King-king River banks. The King-king River is the most notable natural feature outside the property area. 4.5 Environmental Obligations

Mineral Production Sharing Agreements (MPSA) are decided or entered into on the stipulation that the mining activities are managed in a technically, financially, socially, culturally and environmentally conscientious method. The King-king Gold-Copper Project has an approved MPSA that was most recently amended in 2002 as already mentioned above.

The Department of Environment and Natural Resources (DENR) requires an Environmental Compliance Certificate (ECC) for any mining activity except when an exploration permit has been issued or through the exploration period of an MPSA. The ECC is issued by the DENR based on an Environmental Impact Assessment (EIA) process, in which an Environmental Impact Statement (EIS) is prepared by the contractor in agreement with procedures under the ECC system. A completed biological profile of the proposed mining area is required as part of these procedures.

NADECOR/Ratel will also complete an International Social and Environmental Impact Assessment (I-SEIA), based on IFC Performance Standards (PS), the Equator Principles (EP), and other international guidelines. The IFC PS and EP form the de facto standards applied to many major operations seeking investments and guarantees from multilateral, bilateral and commercial financial institutions worldwide. The I-SEIA will serve as a complementary document to the National EIS to be presented to the Government of the Philippines for project approval.




The Environmental Compliance Certificate is required for mining properties with an area of 1,548 hectares or more and, a project which includes open-pit mining, processing facilities, coal fired power plants, land based tailing management systems, well fields, port facilities for storing and loading concentrates and off-loading coal, infrastructure and other support facilities.

Once the ECC is approved, NADECOR/Ratel will be required to submit for approval of an Environmental Protection and Enhancement Program (EPEP) for the life of the mine. Once the plan is approved, it will have to be implemented. Annual updates to this plan are required.

Once the ECC is approved, NADECOR/Ratel will also be required to apply for approval of a Social Development and Management Plan (SDMP) for the life of the mine. Once the plan is approved, it will have to be executed.

NADECOR/Ratel is required to create a Mine Environment Executive Office within their organization which collects the assets needed to put into operation the environmental management programs and to handle the contractor’s environmental concerns. Any mining practice not in agreement with anti-pollution laws and regulations will be required to be remedied; and, failure to do so is also a case for the suspension of mining operations if there is impending hazard to the environment.

Development of a modern large-scale mining operation at King-king will improve the current baseline environmental and social conditions within and outside the mineral property area. More than two decades of illegal small-scale miner activity has environmentally degraded the mineral property area and downstream areas along the King-king River, particularly with regards to sediments and E coli bacteria counts. Mine development will lead to gradual cessation of small mining activities over a few years and subsequent departure of the small miners and associated people, thus reducing E coli counts. Mine development will bring sediment control structures to the streams and the King-king River in the mine area that will much reduce downstream sediment flow in the waterways. Development will increase employment, income and taxes in the municipality that will lead to improvements in social conditions in the municipality and surrounding areas. See Section 18.3 for more details.

4.6 Permit Status The MPSA document and the approved Work Plans (exploration and environmental) allow work to be carried out that is necessary to obtain an approved DMPF (Declaration of Mine Project Feasibility) and a ECC (Environmental Compliance Certificate), which allow the future development of the mine. This work would include work proposed for the property, i.e. to drill, sample, transport, survey, baseline studies, etc.

In the Philippine Constitution, minerals and mineral lands belong to the country. Private individuals can embark on exploration, development and utilization of the mineral resources under four modes of mineral agreements with the government: Mineral Production Sharing




Agreement (MPSA), Co-Production, Joint Venture and Financial or Technical Assistance Agreement (FTAA). The first three modes of agreement are available only to Filipino citizens or corporations where at least 60 per cent of the capital is owned by Filipinos. The last mode is available to 100 per cent foreign owned corporations.

The Philippine Mining Act of 1995 is the chief law governing mineral lands in the Philippines. In its transitory provisions, existing mining rights (i.e. leases and MPSA’s) issued under prior mining laws shall remain valid, shall not be impaired and shall be recognized by the government. The MPSA covering the King-king project falls under this provision of the mining law, having been issued in 1992 and amended in 2002.

The Mineral Production Sharing Agreement (MPSA) has been the most common form in use. The features of this method are as follows:

The contractor has the exclusive right to conduct exploration, development and operation in the contract area.

The MPSA has a term of 25 years, renewable for another 25 years. The contractor is required to carry out activities according to an approved work

program (NADECOR/RMMI have an approved work plan and are executing it) and commit expenditure for the environment, the community and the development of geo-sciences

The financial requirement includes the payment of occupation fees (PhP100/hectare) and excise tax at 2 per cent of gross revenue. Prior to forming an MOU with RMMI, NADECOR was granted one of the major critical agreements, permits, licenses and certificates vital in its mining operations. This was the Mineral Production Sharing Agreement No. 009-92-XI, which was approved by the government on May 27, 1992 (MPSA) 095-97-V, and amended on December 11, 2002. NADECOR/RMMI have entered into agreements to acquire/control adjacent claims surrounding the King-king claims for the purpose of managing the valueless rock from mining operations to protect the environment. They also have gained control of 4,415 hectares of unclaimed land in the lowlands west of King-king for development of a tailing management facility.

Other primary Permits of note required for operating the mine and process facilities are listed in the table below. Many additional permits are required to bring the mine to production. See Section 18.3 for more details.




Table 4-1 King-king Permits

Permit Date Issued / Submitted Term

Environmental Compliance Certificate After EIS Annual renewal Environmental Protection and Enhancement Program After ECC approved Permit to Construct Tailings Pond After design Permit to Operate Tailings Pond After construction Permit to Operate Power Plant After construction Permit to Operate Oil – Water Separator After construction Permit to Operate a Waste Disposal Facility (Landfill) Use for Industrial Water – National Water Resources Board 1 Year Wells for drinking Water – National Water Resources Board 1 Year Permit to Cut Trees Monthly renewal




5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography 5.1 Access The project area is approximately 35 aerial kilometers east-northeast of Davao City, and some 1,000 aerial km southeast of Manila. Locally, it is about 10 aerial km northeast of the Municipality of Pantukan, Province of Compostela Valley. Pantukan is about 92km by road from Davao City via the well paved Tagum City–Mati National Road. From Pantukan town proper, the project can be reached through the 18km Buko-buko sa Anay-Lawaan dirt road which as of the date of this report can be negotiated in 35-45 minutes using motorcycles or approximately three hours via conventional four-wheel drive vehicles. 5.2 Climate The climate is tropical (Type I-B) with no pronounced wet and dry seasons. Maximum rainfall usually comes between the months of June and December. Daytime temperatures range from 18 to 35 degrees Celsius and the daily average is about 27oC (81oF). Rainfall ranges from 2,000 to 3,200 millimeters per year within the mountains and 1,800 to 2,000 millimeters per year along the coastal plain. Normal precipitation is 2,100mm per year and the average daily relative humidity is 81%. Typhoons are extremely rare but torrential rains and subsequent flash floods are not uncommon. There are no climatic conditions that should cause the project great operational difficulty. The greatest climatic issue will be managing storm waters that will result from excessive rainfall at intermittent times during the life of the project. However, this is a common operating issue at many tropical mine sites and should be manageable with proper controls and planning. 5.3 Local Resources The local unemployment is approximately 7% and underemployment is 22%. In 2009 the local Pantukan Municipal government sent a letter to the Department of Environmental and Natural Resources requesting the King-king Project be developed as swiftly as possible. The local community is favorable to the project. Primary employment in the region is on plantations growing bananas or coconuts. Secondary jobs exist for a limited number of workers in the several small scale mines in the mountains northeast of Pantukan City.




According to the National Statistics Office of the Philippines, the 2007 populations of communities near the King-king Project were as follows: Population Pantukan Municipality 69,656 Magnaga 7,743 Napnapan 9,983 King-king 21,444 Davao City 1,366,153 5.4 Infrastructure Some of the basic infrastructure is in-place for exploration and development of the King-king deposit. A paved highway from Davao City runs 10 kilometers southwest of the project. The project mine area in the 250- to 950-meter elevation range can be reached via the previously mentioned 18km Buko-buko sa Anay-Lawaan dirt road, and with minor improvements it can be made passable by large four-wheel drive vehicles such as drilling rigs and supply, fuel and water trucks. Planned low-land facilities, including the tailings area, mill site, port facility, and power plant location can be accessed via local area roads. Water for exploration has been taken from low pressure artesian wells, including two wells developed from exploration diamond drill holes located on the southern side of the deposit or from nearby small surface drainage that runs through the southern and northern ends of the project area. Potential sources for water for mining and processing include wells planned to be situated in the alluvium deposits located southwest of the mineral area, or the King-king River. Power availability is currently too limited in Mindanao to assume that grid-supplied power will be available for operation of King-king. Construction of a 120 MW coal fired power plant is envisioned for the project. Anticipated concentrate volumes and requirements for coal import necessitate the construction of a dedicated port facility. The only port facility in the Pantuken area consists of a concrete barge landing ramp, which should be available to handle barges from the existing deep water port facilities at Davao and Tagum for transport of inbound materials for construction and early mine operation. Currently there is a drill core storage facility in Pantukan (approximately 1,000 square meters). Expansion of this facility onto nearby grounds or complete relocation to another area in Pantukan City is possible. Several buildings from Echo Bay’s tenure in 1997 remain at the project site, but these are in disrepair.




5.5 Physiography The coastal plain extends a length of 6 kilometers from Davao Gulf to the base of the mountains where the King-king project is located. The majority of the population lives along the coastal plain with significantly lower population densities in the mountains. Figure 5-1 below shows the topography of the local area. The topography in the immediate project area is steep and rugged with elevations ranging from 260-950 meters above mean sea level (AMSL) and averaging 800 meters AMSL. The porphyry copper-gold mineralization outcrops between 400 m and 700 m elevations. The terrain gradually transitions through moderately rugged to rolling moving westward toward the coastline. The dominant drainage pattern in the area is dendritic. The property itself is drained by the Casagumayan and Lumanggang creeks, tributaries of the King-king River which enters the Davao Gulf at Pantukan. The project area is covered generally by sparse tropical rainforest mostly left over from past commercial logging operations. Old growth trees are mostly gone, and large areas of the previously timbered slopes have been cleared, cultivated and planted with corn and other crops by local mountain tribes and lowland settlers. In the foothills toward Davao Gulf, what used to be forest-covered slopes are now dominated by cogon grass. Vegetables and fruit-bearing trees are grown in some places but these are limited and concentrated in localized flat or rolling terrain.

Figure 5-1. Physiography

King-king Mineral Property Area




5.6 Mining Surface Rights and Mining Personnel The approved 1992 MPSA, amended in 2002, that NADECOR is a party to as the tenement holder and as the operator, gives NADECOR exclusive right to develop the surface and underground mineral resources at King-king. Operations and maintenance staffing would be sourced from Pantukan and neighboring municipalities, the province of Compostela Valley, from the island of Mindanao, from the Philippines and from outside of the Philippines. The municipality of Pantukan is home to 60,000 people and approximately 22% are underemployed in this area and in the province. There is a large craft trained work force to draw from in the Davao area. The population of Davao is 1.4 million people. Thus, there is a sizable work force to draw from near the mine site. 6.0 History The project history can be briefly summarized as follows; 1966-1968 NADECOR discovers the King-king mineralization anomaly; 1969-1972 Mitsubishi Mining Corporation drilled 54 surface diamond drill

holes; 1981 NADECOR entered into an operating agreement with Benguet

Corporation (Benguet); 1981-1991 Litigation regarding ownership did not allow any activity

within the project. In 1991 all legal issues were resolved in favor of NADECOR ownership of mineral claims;

1991-1994 Benguet drilled 69 diamond core holes and 25 reverse circulation (RC) holes in addition to completing extensive surface and underground exploration. An in-house feasibility study was completed;

1992 The Mineral Production Sharing Agreement (MPSA) was signed between NADECOR, Benguet and the Philippine Government;

1995-1997 Echo Bay Mines, Inc. drilled approximately 128 holes (52,718 meters). All Echo Bay data were acquired by Kinross Gold, which waived its option to proceed with the King-king project;

2005 NADECOR and Benguet applied for a conversion of the MPSA into a Financial Technical Assistance Agreement (FTAA) covering the porphyry area of the project;

2008 NADECOR terminated the Operating Agreement and applied to the government to have Benguet removed from the MPSA and became sole owner of the King-king project;




2009 NADECOR and RMMI reach an agreement to work together to develop the project, with RMMI undertaking extensive analysis to update the project information and mine plan;

2010 Jan 15, the Department of Environmental and Natural Resources (DENR) order for NADECOR to undertake the work program and Benguet to hand over possession in order to allow for immediate resumption of operations.

From 1969 to 1972, Mitsubishi Mining Corporation undertook initial exploration of the deposit, completing 54 surface diamond drill holes for a total of 13,031 meters of drilling. These initial holes all were drilled within the confines of the present resource outline. The Mitsubishi drilling was only assayed for total copper and acid soluble copper. None of the core from this drilling is known to exist.

Benguet Corporation (Benguet) signed an Operating Agreement with Nationwide Development Corporation (NADECOR) on August 21, 1981 for the exploration and development of the King-king property. However, the validity of the Operating Agreement was contested by some members of NADECOR's board which resulted in a lengthy court litigation that ended in November 1991 with the final decision of the Philippine Supreme Court upholding Benguet's rights under the aforesaid Operating Agreement. Exploration work was conducted from August 1990 by NADECOR while awaiting the court’s decision on the abovementioned litigation. As soon as the Supreme Court upheld the Operating Agreement, Benguet took over the exploration work from NADECOR. From 1991 until 1994, Benguet completed 69 diamond core holes (19,247m), 25 reverse circulation holes (4,926m), 326m of confirmatory adits and underground raises, 2,500 hectares of geological mapping, and the collection of 2,172 surface rock samples. The Benguet drilling was concentrated in the Lumanggang and Casagumayan areas in the central and west areas of the current known deposit. Benguet produced an in-house "pre-definitive" feasibility study in March 1994.

From 1995-1997 King-king Mines Inc. (KMI), an Echo Bay Mines, Inc. company, entered into an option agreement with Benguet and NADECOR to develop the King-king Project. KMI drilling amounted to 128 core holes and 52,718m of drilling. Kilborn International, Inc. (Kilborn) was retained by KMI to complete a plus or minus 20 percent capital and operating cost estimate for the King-king Project, the scope of which was based on several specific items and on Kilborn's interpretation of Echo Bay Mines' generic requirements for what was termed by Echo Bay to be a Level l Study. The scope included those activities necessary for evaluation of equipment, processes, environmental and regulatory considerations, and economic factors sufficient to confirm a technically viable and cost effective facility. Several other consulting groups provided services for the project. DCCD Engineering of Manila, under subcontract to Kilborn, provided capital cost estimates for port facilities, local labor rates, and local costs for services and consumables. Knight Piesold Ltd. (Knight Piesold), under contract with KMI, provided costs for the various tailings dam and waste rock storage alternatives, as well as closure costs. Fluor Daniel, under contract with KMI, completed the mine planning and mine cost estimate portions of the report.




In mid-1997, KMI’s “Level I” study estimated a total mineral resource of 1,040 million tonnes containing 0.306% Cu and 0.41grams Au per tonne for the King-king deposit. This resource included a “mineable reserve” of 403 million tonnes @ 0.332% Cu and 0.488g/t Au. The authors emphasize that neither the KMI “Level 1” mineral resource estimate or the “mineable reserve” estimate is compliant with current Canada NI 43-101 guidelines. These estimates are included in this Technical Report only because they are an important part of the project history. The property then reverted to original ownership. In 1998, Benguet completed a revised mineral resource estimate that was based on all available exploration drilling data and on a 0.20%TCu cut-off grade. This estimate, which the authors of this report emphasize is not compliant with current NI 43-101 guidelines, totaled 749 million tonnes containing 0.387% Cu and 0.433g/t Au. All Echo Bay data was subsequently acquired by Kinross Gold (Kinross) through its merger with Echo Bay in 2002. Kinross subsequently waived its option to proceed with the project. Kinross provided all the available data in its archives to RMMI. Early in 2010, NADECOR terminated its Operating Agreement with Benguet. NADECOR is the sole claim owner and operator of the King-king Project. Subsequently, NADECOR and Russell Mining and Minerals Inc. (RMMI) signed an agreement to co-develop the project, with RMMI to undertake extensive analysis to update the project information and mine plan. NADECOR has been ordered to complete an exploration and work program by the DENR as the operator through the exploration phase. NADECOR has submitted a Work Program to DENR and has also initiated arbitration proceedings against Benguet to confirm termination of the Operating Agreement. The Work Programs were approved in May 2010.




7.0 Geological Setting 7.1 Regional Geology The southeastern Mindanao peninsula (comprising the mountainous provinces of Davao Oriental, Compostela Valley and Davao del Norte) is bounded by two parallel subduction systems – the north-south trending East Mindanao trench, which is a segment of the Philippine Trench situated off the east coast of Mindanao, and the north-south trending Davao Trench situated between Samal Island and the east coast of Davao Gulf (Punongbayan and Listanco, 1992; Datuin 1992). Active tectonism is manifested in the frequent low to moderate-intensity earthquakes being felt in the area. The King-king porphyry copper-gold deposit is located on the western flank of the eastern Mindanao Cordillera. So far, it is the most southerly of the NNW-trending groups of porphyry copper and gold deposits that include the now-closed Hijo and Amacan Mines of North Davao Mining Corporation, the old Masara Mines of Apex Mining Company, the Kalamatan Mine of Sabena Mining Company, and the fabulous gold-rush areas of Diwalwal in Monkayo farther north (Burton, 1977; Culala, 1987). All these are part of a 75-km long, NNW-trending mineralized belt that runs across southeastern Mindanao. The development of this belt can probably be attributed to tension relief faulting induced by the Philippine Fault (Philippine Rift Zone). There are other mines and mineral prospects that lie outside the belt but which are still within and evidently related to, the NNW-trending Mindanao segment of the Philippine Rift Zone. These include the Cabadbaran Gold Mine and the Placer Gold Mine of Manila Mining in Agusan del Norte, the Coo Gold Mine of Banahaw Mining in Agusan del Sur, the Siena Gold Mine of Suricon, and, the Asiga porphyry copper prospect, all in Surigao del Norte in northeastern Mindanao. These referenced properties are shown on Figure 4-1, the project location map. The King-king district itself is bounded by two major splays of the Philippines Fault that make it a tectonically-active arm. About 20 km to the east is the main Agusan Valley fault and its branches that obviously controlled the courses of Manat, Agusan and Bitanagan rivers and was probably responsible in the formation of Maragusan Valley, a broad plain believed to be a sediment-filled graben perched high on top of Diwata Range 650 m to 850 m ASL. Several kilometers to the west is a thrust fault running N-S parallel to Davao Gulf with King-king situated on the over-riding side. Figure 7-1 shows the regional geology.




Figure 7-1. Regional Geology




7.2 Local Geology 7.2.1 General The main King-king deposit is a low-pyrite porphyry copper system with locally significant associated gold. It is the largest of several prospects associated with mineralized intrusives disposed along a NE-trending belt measuring some 6km long and 3km wide that have been staked by NADECOR. These intrusives were emplaced in a folded sequence of Cretaceous-Paleocene volcano-sedimentary rocks, apparently along pre-existing NW-trending anticlinal axes. The intrusions probably occurred during the middle- to late-Miocene (Geological Map of the Philippines, Philippine Bureau of Mines, 1963). The axial portions of the anticlines have since been largely eroded, exposing the cupolas of the underlying intrusives. The main King-king deposit, as defined by a 0.20% total copper cut-off, is elongated along a N70°W trend and measures some 1,800 m long and from 250 m to 550 m wide, as shown in Figure 7-2. Figure 7-3 shows the relative location of various areas of the deposit, such as Tiogdan, Casagumayan, Lumanggang, Bacada, and Bibutaan, which are commonly referenced in geologic discussions of King-king. The deposit has an apparent steep NE dip especially in its central sections. On longitudinal section, it appears as an irregularly-shaped body with an undulating bottom. In most sections, though, the bottom of the mineralization has yet to be fully defined. The deposit may be subdivided into two more or less equal segments: 1) the eastern segment underlying Lumanggang, where copper mineralization is in general extremely erratic and where the better gold mineralization occurs in pockets usually associated with localized zones of strong silicification and quartz stockworks; and, 2) the western segment within the Casagumayan and Tiogdan areas which generally carries higher copper and gold values and is more uniformly mineralized. These two segments could either be parts of one and the same body, or of two or more adjoining masses related to separate, although probably genetically-related, intrusives. The deposit is hosted to a large extent by the diorite intrusive complex with which it is genetically related, and partly by the intruded volcanics and sediments. The diorite complex consists of the biotite diorite porphyry and the accompanying hornblende diorite and diorite porphyry which represent the late magmatic differentiates of the former. The biotite diorite porphyry is the most important host intrusive and appears to be the major intrusive underlying the King-king district. Local brecciation accompanied the diorite intrusions into the predominantly volcanics wallrocks resulting in the development of intrusion breccia along the contacts. The overall shape of the diorite complex is elongate, trending northwesterly and measuring 1,800 m along the longer axis and some 400 m across on average in width. The intruded volcanics are composed of pyroclastics (tuff, lithic tuff) and flows (andesites) with intercalated sediments (mostly wackes) which are typically located further away from the deposit. Geologic mapping indicates that the sediments-pyroclastics sequence has a general northwest trend with southwest dips. However, local reversals of dip are common, forming




minor anticlines and synclines along roadcuts and gullies south of the main King-king deposit. Within the ore zone, the sediments have not been identified on surface or in the drill cores, although their presence may be obscured by hydrothermal alteration. Hornfelsic rocks encountered in the ore zone are thought to originally have been sediments but these hornfels may represent volcanic rocks that have been intensely metamorphosed. The intrusion of dioritic rocks continued even after the porphyry copper deposit was emplaced, as evidenced by the presence of post-mineral hornblende diorite porphyry, diorite porphyry and dacite porphyry. These occur as peripheral stocks bounding the Lumanggang and Bacada areas, and as northwest-trending lenticular bodies or dikes flanking the porphyry mineralization. One hornblende diorite porphyry dike measures 5m to 15m wide and is traceable for more than 1,000m along and within the south flank of the deposit. Elongate hornblende diorite stocks bounding the southern and western portions of Bacada also trend northwest.

Figure 7-2. Local Geology




Figure 7-3. Commonly Referenced Deposit Areas 7.2.2 Intrusive Rock Types

7.2.2.1 The Diorite Complex Related to Mineralization

Biotite Diorite Porphyry (BDP)

This is the main intrusive in King-king and the most important host to copper-gold mineralization. Copper mineralization within the biotite diorite porphyry (BDP) consists predominantly of bornite with subordinate chalcopyrite occurring usually as fracture fillings. Bornite appears to increase towards the western half of the orebody from Casagumayan to the Tiogdan area. A number of drillholes intersected BDP dikes below thick volcanic cover indicating that the base portion of the deposit is largely underlain by this intrusive. The BDP is generally brownish, medium- to coarse-grained and is characterized by the presence of primary “book” biotite that accounts for about 10% of the rock’s volume. Type localities are found in Bacada, Casagumayan Creek and in Tiogdan. It is crumbly in the near-surface when not silicified or when lacking well-developed quartz veinlets. Along or near the contact with the volcanic wallrock, the diorite commonly exhibits strong breccia




texture with pebble-size to occasional cobble-size angular xenolithic fragments tightly welded in the rock matrix. These represent fragments of the intruded rocks that were stoped by the magma during intrusion. Petrography of BDP core samples indicates the plagioclase has maximum extinction angles of 13° to 16° (andesine). The copper and gold grades in the BDP average 0.37% and 1.17 g/t respectively.

Intra-mineral Hornblende Diorite Porphyry (IHDP)

The intra-mineral hornblende diorite porphyry (IHDP) occurs as stocks situated in the central part of the Lumanggang and Casagumayan areas of the deposit. It is brownish-gray, medium- to coarse-grained porphyritic with large subhedral plagioclase (andesine) and hornblende phenocrysts occurring in an interlocking feldspathic matrix. In thin section the hornblende phenocrysts are estimated to comprise 10% to 20% of the rock volume. Locally it contains primary biotite comprising some 1% to 3% by volume. Within the Main King-king body, copper and gold grades in the IHDP average 0.37% and 0.44 g/t, respectively.

Intra-mineral Diorite Porphyry (IMDP)

The intra-mineral diorite porphyry (IMDP) is lighter in color, has a relatively finer matrix and more dispersed plagioclase (andesine) and hornblende phenocrysts compared with the IHDP, whose hornblende is more tightly packed. It contains 3% to 5% hornblende which in some cases has been totally altered to secondary biotite, leaving a plagioclase-dominated texture in which the maximum extinction angle of plagioclase in 10 samples examined was 20°. The IMDP locally exhibits a smooth line contact with the IHDP, but in most cases the contacts are gradational. In some instances IHDP clasts occur in the IMDP, making it very difficult to distinguish between the two intrusives. In cases where the contact between the two is not clear, the texture and hornblende content become the basis for identification. Among the mineralized intrusives, the IMDP is the least well mineralized with respect to copper and gold, with grades in the ore zone averaging 0.37% Cu and 0.38 g/t Au respectively.

Intra-Mineral Dacite Porphyry (IDAP)

As intersected in a few drill holes, this appears to be a minor intra-mineral intrusive occurring as a series of dikes with well-defined contacts cutting the BDP. It is generally massive, coarse-grained, and porphyritic with large euhedral to subhedml plagioclase (andesine) phenocrysts as much as 0.5 cm in size and hornblende set in a fine feldspathic matrix. Mineralization is mainly fracture filling with almost equal amounts of bornite and chalcopyrite. Classified as an intra-mineral intrusive, its copper might have been remobilized




from earlier mineralized rocks during its intrusion. Its alteration is basically propylitic, similar to that of the post-mineral dacite porphyry mapped outside of the copper mineralization zone where chlorite, epidote and calcite are the predominant alteration minerals. Where bornite is the predominant mineral, copper grades are generally over 0.2% with occasional values exceeding 1% Cu near contacts with the intruded biotite diorite porphyry.

Intrusion/Hydrothermal Breccia

Drillholes in Lumanggang intersected hydrothermal brecciation (as breccia pipes) that appears to be intra- to late-mineralization in age. As mapped on surface and logged in drill core, the largest hydrothermal breccia appears in plan to be generally elliptical in shape, measuring roughly 40m to 60m in diameter, with the longer axis oriented in a N60°E direction. The fragments are pebble-size to cobble-size, angular, and dominated by volcanics which occasionally carry copper oxides and IHDP fragments. The fragments commonly exhibit effects of rotation with rounded edges rimmed by rock flour. However, tightly welded pebble-size to cobble-size angular to sub-angular fragments have also been observed. Copper grades range from 0.04% to 0.68% Cu, averaging 0.27% Cu. Gold varies from trace amounts to 0.6 g/t, averaging 0.21 g/t. 7.2.2.2 Post-Mineral Intrusives

Diorite Porphyry (DP)

This unit, which occurs west of the ore zone in Lumanggang and extends towards Binutaan, is a northwest-trending stock measuring 60m to 120m wide and about 900m long. Its texture is coarser than the mineralized IMDP. Displaying only weak propylitic alteration, it is essentially barren of sulfide mineralization. It is generally greenish due to chlorite infused in the matrix and locally contains specks of epidote. In thin section, it contains >25% plagioclase and 2% primary quartz. The plagioclase has extinction angles ranging from 9° to 27° (oligoclase to andesine).

Hornblende Diorite Porphyry (HDP)

This greenish-gray unit is megascopically similar to the IHDP except for the essentially propylitic alteration it exhibits and the absence of porphyry copper mineralization. It intruded the western flank of the mineralized diorite and also occurs as lenses or dikes within the general mineralized zone. Its intrusion appears to have been influenced by a pre-existing northwest-trending fracture system, as evidenced by the dike's presence both inside and away from the main King-king body, as well as by the predominantly northwest elongation of its longer axis as mapped east and south of Bacada. It commonly contains specks or disseminations of epidote. In all cases, the copper grade drops drastically to below 0.1% Cu inside of this dike.




The HDP is also distinguished from the DP by the presence of ≥10% hornblende phenocrysts which are minimal (1-2%) in the DP, and by the presence of relatively euhedral plagioclase laths.

Dacite Porphyry (DAP)

This rock is characterized by large (up to 0.5cm) subhedral plagioclase and hornblende phenocrysts set in a fine- to medium-grained feldspathic matrix. Petrography shows medium-sized to large sub-angular to sub-rounded plagioclase with maximum extinction angles of 23° (andesine), and medium-sized to large phenocrystal sub-angular to sub-rounded primary quartz that comprise up to 10% of the rock’s volume. The rock is propylitized, characterized by matrix epidote and chlorite and calcite in microveinlets. 7.2.3 Host Rock Types

Tuff and Andesite

The pre-mineralization volcanic rocks are dominated by a sequence of pyroclastics (tuff and lithic tuff) and andesite flows. The tuff is massive to bedded, fine-grained to aphanitic and is gray to dark-gray where relatively unaltered. Locally it is lithic (as suggested by the presence of relict lithic fragments), and scoriaceous as indicated by the presence of crumbly open spaces observed in some drill core. The andesite flows are either aphanitic or porphyritic, with the latter texture having noticeable medium-sized plagioclase phenocrysts. No intrusive contact has been noted between the tuff and andesite. The volcanics exhibit a general northwest strike with moderate to steep southwest dips, although locally the beds dip north due to folding. Within the main King-king deposit in Casagumayan the northwest strikes and southwest dips are reflected by the tuff layers logged in some drillholes. It is believed that there were only insignificant disruptions. Colors in the tuff vary from greenish to brownish-gray depending on the dominant alteration mineral. Petrography showed that it consists of fine to large intermingled quartz, and feldspar shards (up to 25% by volume). One sample showed plagioclase (andesine) crystals with recorded extinction angles ranging in one sample from 19° to 21°. Sulfide mineralization within the volcanic rocks is usually confined to within the contact zone with the intrusive complex. Copper and gold grades range from 0.06% to 0.84% total Cu (averaging 0.22% total Cu), and; from trace to 0.87 g/t Au, averaging 0.18 g/t Au.

Sedimentary Rocks

The sedimentary rock units generally overlie the volcanic rocks around the main King-king deposit and the surrounding prospect areas. Intercalation of the sedimentary units and the pyroclastics was observed, but in most cases distinctions between individual thin beds are difficult to identify megascopically. The sediments are generally thinly bedded and show




rhythmic bedding characteristics. Individual rock units locally contain greenish to reddish volcanic fragments generally measuring 1mm in diameter, as observed in the graywacke exposed at Diat, Panganason, Mabaros and south of Main King-king deposit. The sedimentary rocks trend generally northwest and dip southwest, although dip reversals to the northeast are common due to localized steep folding, particularly to the south of the Main King-king deposit. Near the Buko-buko checkpoint and along the Maplag - Buko-Buko road, near-vertical dips are exhibited apparently as a result of regional faulting and folding. Some of the clastic rocks identified microscopically consist of arkosic graywacke, feldspathic wacke, lithic wacke, tuffaceous siltstone, and shale. The plagioclase component of these rocks ranges from 12% to 35%. Other common accessory minerals are quartz and hornblende. Pyroxene and biotite are rare. The rock fragments that comprise 10% to 15% of the lithic wacke are andesitic. Exposures of a reddish-maroon mudstone/shale along two portions of the Maplag - Buko-buko road and in the Lahi area are thought to be correlative. 7.2.4 Structures The major faults in the main King-king deposit and immediate vicinities are generally northwest-trending and dip steeply to the northeast. The Soysoy Fault (which is thought to define the south flank of the main deposit) apparently influenced the course of Soysoy Creek. It is traceable for 1.5 km along its strike length, extending northwest beyond King-king River. Several other faults (particularly those traced across Casagumayan and Tiogdan) have been observed inside the deposit which show localized silicification and associated quartz veinlets along the walls. North-northwest-trending faults comprise the other major set of structures mapped in King-king. These faults are commonly observed in the northern part of Tiogdan and outside of the known mineralization. The dominance of the northwest structural component is reflected by the preferred orientation of the post-mineral hornblende diorite porphyry (HDP) dikes, the epithermal quartz stockwork zone in the Casagumayan and Tiogdan “bardown” areas and the elongation of the entire main deposit. The same trend is also expressed by the HDP stocks situated peripheral to the main King-king deposit. It is apparent that these northwest-trending structures played an active part during the emplacement of the mineralized diorite complex and the post-mineral intrusives. The north-norhwest faults, on the other hand, appear to have also influenced to some extent the emplacement of the HDP as indicated by the dikes near Tiogdan. On a district-wide scale, the northwest fabric is also defined by the orientation of the faults and veins and orientation of the longer axes of post-mineral diorite stocks in Binutaan and Diat and the shape and orientation of the biotite diorite and hornblende diorite porphyries in Diat. Folding in the area is evident outside of the main King-king deposit. The fold axes generally trend northwest with localized deviations to the east and west. The folds observed in the




Lahi, Barricade, Buko-buko sa Anay and Maplag areas are generally small but are viewed as part of a much larger northwest-trending regional folding. Recumbent folds which appear to have been developed as a result of regional stresses are noted along portions of the Maplag - Buko-buko road. 7.2.5 Hydrothermal Alteration 7.2.5.1 General Four major and two relatively minor hydrothermal alteration zones have been recognized in and around the main deposit. From the central portion and outward, the major zones are: 1) the K-silicate (potassic) zone, which is further subdivided into K-feldspar and biotite subzones; 2) the quartz-sericite-chlorite (QSC) zone; 3) the sericite-clay-chlorite (SCC) zone; and 4) the propylitic zone, which is further subdivided into epidote and chlorite sub-zones. Important mineralization occurs in the first three major alteration zones. Figure 7-4 illustrates these alteration zones. Locally overprinting the major porphyry alteration zones are epithermal alteration zones represented by: 1) argillic alteration, which includes both an intermediate zone and patches of advanced argillic alteration (AAA), and 2) a quartz-dominated zone that is further subdivided into a quartz stockwork zone and a coincident to later zone of pervasive silicification. The hydrothermal alteration zoning at King-king is typical of other porphyry copper deposits in the Philippines and in other parts of the world. However, King-king is quite different from other Philippine deposits on account of the occurrence of widespread biotite alteration and the presence of a strong and well-developed K-feldspar-rich zone. Moreover, the stockwork-pervasive silicification zone is much more intense than in other deposits. The absence of a typical phyllic (or quartz-sericite-pyrite) alteration zone reflects the very low total pyrite (<1%) content of the deposit. What is regarded as the phyllic zone is characterized by quartz sericite-chlorite (QSC). As in other deposits, King-king is enveloped by a propylitic alteration zone. Epidote is not an exclusive component of the propylitic zone as in most other known porphyry copper systems, but rather is found in all alteration types. However, advanced argillic alteration (which is extensively developed in other deposits such as the Dizon porphyry copper-gold deposit in Zambales) has been observed at King-king only locally in a few faults and structures that are generally outside and bounding the ore zone. The alteration zones are described in greater detail in the following subsections. 7.2.5.2 K-Silicate (Potassic) Alteration Potassic alteration predominates in the mineralized diorites (particularly the biotite diorite porphyry) and the volcanics that are near the intrusive contacts. It consists of quartz-sericite-biotite (±K-feldspar), chlorite+ magnetite ±epidote± pyrite. This zone carries the bulk of the sulfide mineralization in the deposit area. The potassic zone is divided into two sub-zones - –the K-feldspar sub-zone and the biotite sub-zone.




K-Feldspar Sub-Zone

Central to the main body of mineralization and the various alteration zones is the K-feldspar sub-zone. This sub-zone is characterized by the megascopic occurrence of K-feldspar which is observed along fractures lined with quartz veinlets as spots partially rimming the plagioclase and as complete matrix replacement that gives the rock a pinkish hue. In some drill holes the K-feldspar is so intense that it imparts an almost uniform pink coloration to the rock. Clay stain tests conducted on 24 core samples indicated percentages of K-feldspar ranging from 5% to as high as 90%.

Biotite Sub-Zone

Enveloping the K-feldspar sub-zone, the biotite sub-zone is generally characterized by the presence of pervasive and interstitial secondary biotite and sericite occurring as dispersed flakes, shredded disseminations or pigment-like infusions in the matrix, and as partial to complete replacements of hornblende. Chlorite locally occurs partially replacing biotite or altering the plagioclase, while sericite (where pervasive) almost totally replaces the plagioclase. Quartz occurs in the biotite sub-zone as matrix replacement and microveinlets. Magnetite occurs as disseminations, micro-fracture fillings, and locally as small clots intimately associated with chlorite-altered biotite. Epidote is observed as disseminations, fracture fillings and as flakes sometimes attached to chalcopyrite and bornite on the walls of the quartz veinlets and quartz vugs. 7.2.5.3 Quartz-Sericite-Chlorite (QSC) The QSC alteration consists of a quartz, chlorite, sericite, ±pyrite, ±magnetite, ±biotite, ±epidote assemblage. This alteration imparts a generally light greenish gray to greenish color to the affected rocks with local brownish tinge from relict biotite specks and/or disseminations. The alteration zone envelopes to a large extent the K-silicate alteration zone both vertically and laterally. Quartz occurs mainly as replacements and veinlets. Sericite and chlorite are pervasive in the matrix. Pyrite is ubiquitous but generally in minor (<1% by volume) in amount. Chlorite and sericite, with or without associated magnetite, tend to be more abundant along micro-fractures than in the matrix. 7.2.5.4 Sericite-Clay-Chlorite (SCC) This alteration overprints both the K-silicate and QSC alteration types. It appears as a pale greenish white or off-white color and renders the rock crumbly on its surface, particularly in zones with very weak quartz infusion or veinlets. Pyrite is weak or absent. Magnetite occurs as veinlets or as disseminations which are partly or wholly altered to hematite. This zone generally contains relict biotite as brownish patches in the less weathered portions of outcrops. Epidote is commonly observed in the matrix and occasionally in fractures.




Figure 7-4. District Alteration

▲ N




7.2.5.5 Propylitic Alteration This outermost alteration zone is characterized by a predominance of chlorite. There are two propylitic sub-types recognized around the deposit, namely: a) the epidote-rich inner sub-zone, and b) an outer sub-zone that contains little or no epidote. The contact between the two sub-zones is gradational. Calcite is a common component in the propylitic zone, occurring as fine flakes disseminated in the matrix as well as in thin veinlets or fracture fillings. Pyrite occurs sparingly as discrete grains and occasional fracture fillings. Quartz in this zone generally occurs as micro-stringers occasionally intermingled with microcrystalline calcite. Chlorite commonly occurs as micro-veinlets or fracture fillings. Epidote occurs either dispersed or disseminated in the matrix, interspersed with quartz veinlets or superimposed on the plagioclase. 7.2.5.6 Argillic Alteration This alteration overprints the other alteration types but is apparently limited to the Bacada area and the area just southeast of Bacada. It is believed to be related to a later epithermal event superimposed over the porphyry system. It includes both the intermediate and advanced argillic alteration assemblages (AAA). The intermediate argillic zone envelopes Bacada and is in turn locally overprinted by patches of advanced argillic alteration along portions of the Bacada road (Matting area) going to Lumanggang. In general the AAA zone is local in occurrence compared to the intermediate argillic alteration and is given only minor importance in the larger King-king alteration scenario. The zone is characterized by chalky-white, leached out materials and strong kaolinite alteration. The kaolinite occurs as microveinlets together with fine-grained disseminated pyrite. Whitish 0.3 cm wide quartz veinlets have also been noted locally. In south Bacada along the road to Biasong, a ± 1m-wide, massive irregular silicified zone with chalcedonic clasts has been mapped that exhibits AAA characteristics. Stain tests of two samples from the Matting area in Bacada indicated the clay is comprised of illite and kaolinite. However, alunite, one of the typical clay minerals found in a typical AAA, has not been identified, although the argillized zone in the ridges of Lumanggang appears to be supergene. Here it is restricted to selvages in and along the walls of northwest-trending fault planes and other fractures, and these seem to taper downward and persist no deeper than 5m or so. The silicified outcrops in Lumanggang look leached and occasionally are pitted. Although pyrite has not been observed, the existing boxwork structure (pits and vugs) indicate that it has been completely leached. 7.2.5.7 Quartz-dominated Alteration Quartz related to alteration occurs in distinct N40°W-trending bands within the copper deposit in the Casagumayan and Tiogdan areas, which as a zone measures 800m long and 75m across on average. It overprints all other alteration zones and is believed to be related to




later epithermal events superimposed across the porphyry system. This alteration is divided into two sub-types: 1) the quartz stockwork zone, characterized by well-developed, densely interlacing quartz veinlets in which the earlier alteration mineral assemblages and much of the sulfide mineralization have been more or less preserved, and: 2) a zone of pervasive silicification that is texture-destructive, obliterating most of the secondary biotite and leaving only remains of the feldspars, mafic minerals, and original sulfide mineralization. With some exceptions, the quartz stockwork zone generally contains elevated gold values compared to the surrounding zones, averaging more than 1.0 g/t. On surface in the Casagumayan and Tiogdan bardown areas it occurs as a N40°W-trending band measuring from 25m to 140m wide and about 800 m long that has been well-exposed by the small-scale miners working in the area. This zone dips steeply to the northeast as defined in a number of drill holes. A more limited stockwork zone has also been identified around DDH-52 in the Lumanggang area as an irregularly-shaped pipe-like zone measuring some 200 m x 75 m. As in the Casagumayan area, this zone also contains generally elevated gold values. Microthermometry analysis of samples taken from quartz stockwork outcrops and drill cores yielded a homogenization temperature averaging 253°C, well within the epithermal range. The zone of pervasive silicification, on the other hand, is quite restricted in occurrence, as shown by intersections in a number of drill holes. This zone is characterized by extreme pervasive quartz replacement (>50% by volume) which appears to have largely destroyed the original copper and gold mineralization in the replaced rocks. The zone is commonly transitional with the quartz stockwork zone, suggesting that it is an advanced form of the stockwork. Grades in the pervasive silica alteration range from 0.02% to 0.17% total copper and 0.02 g/t to 0.19 g/t gold. 7.2.6 Potential Exploration Targets 7.2.6.1 General Drilling completed to date has not fully delineated the boundaries of mineralization in the King-king deposit. Mineralization at Lumanggang is open to the north, west, and south. Drill hole EB-89, located 300 meters west of the nearest hole, intersected 264 meters of mineralization that at a 0.20% copper cut-off averages 0.430% copper and 0.198 g/t gold. All of the holes on the north side of Lumanggang intersected significant mineralization, and holes to the south also revealed good grades of gold and copper, It is believed that the Lumanggang and Bacada zones almost certainly connect at depth. The Casagumayan zone is open to the north and at depth in several areas and there is potential for additional high grade gold mineralization along the footwall of the stockwork zone. Similarly, the Tiogdan area is open at depth as well as to the west across the King-king River. Figure 7-5 shows the place names referenced in this section. In addition to King-king, three gold camps are present on the NADECOR property - Panganason, Diat, and Binutaan. All of the camps are characterized by extensive artisanal mining consisting of numerous active tunnels, surface cuts and placer mining supported by




numerous small ball and rod mills, small CIP plants and on-site mercury amalgamation. Based on their reconnaissance and detailed geological mapping, Benguet geologists recommended all three of the areas for further exploration. Shortly before suspending exploration, Echo Bay drilled a few scout holes in these areas. 7.2.6.2 Panganason Panganason, the largest gold camp within the NADECOR property boundary, lies about 1.5km northeast of the main King-king deposit. At least two major veins hosted by sedimentary rocks and biotite diorite porphyry were originally mapped on the NADECOR claims that extended farther eastward into the adjacent Pantukan Minerals Corp (PMC) claims. The veins range in width from 0.50m to 0.95m and are usually composed of quartz with localized MnO2 wads and clayey components. From its underground mapping work inside NADECOR ground in 2003, Benguet estimated an underground resource of 62,000 tonnes averaging 7.70g/t Au, using a 5.0g/t Au cut-off. The authors emphasize that this is not an NI 43-101 compliant estimate. 7.2.6.3 Diat Diat is situated less than one km north of Panganason. Copper and gold mineralization at Diat occurs in and around a diorite porphyry believed to be part of the main King-king copper porphyry deposit. Several 0.1 to 1.0m-wide gold-bearing quartz-calcite veins were mapped within the NADECOR property limits. The veins are hosted by sedimentary rocks, andesite and biotite diorite porphyry. Based on its 2003 mapping, Benguet estimated a small underground resource of 2,000 tonnes at an average grade of 9.38g/t Au. This estimated resource (which the authors emphasize is not NI 43-101 - compliant) extends eastward and outside of NADECOR’s tenement into the Boringot gold camp, which is part of PMC’s property. Echo Bay drilled a single scout hole to a depth of 683m at Diat. The hole intersected altered and mineralized diorite porphyry with significant thicknesses of visible copper mineralization and anomalous gold values. 7.2.6.4 Binutaan The Binutaan area is located approximately one km north of the main King-king deposit. Like at Diat, copper and gold mineralization occurs in and around a diorite porphyry body which is part of the main King-king copper porphyry deposit. Two mineralization styles have been recognized and require drilling to evaluate - a low sulfidation epithermal vein system, and porphyry Cu-Au mineralization like that found in the main Kng-king deposit.

Low-Sulfidation Epithermal Vein System

The intrusive-related epithermal veins are hosted by the King-king diorite porphyry suite and volcano-sedimentary sequence and trend west-northwest to north-northwest. Vein mineralogy is typical of quartz-base metal mineralization, consisting of crushed and gougy




vein material that is predominantly quartz and silicified BDP fragments with 10-20% sulfides. In places, breccia textures are recognizable. The quartz is light grey in color, medium to coarsely crystalline, and vuggy. The sulfides consist of pyrite (±arsenopyrite), galena, sphalerite and chalcopyrite, occurring as clusters and disseminations and local infilled breccias. At higher elevations, an oxide zone is developed that contains chrysocolla, malachite and manganese-iron oxides infilling fractures and vugs. Benguet’s detailed geological mapping in 1999 disclosed eleven major veins and splays which were exploited by local miners via artisanal tunnels. Vein widths vary from <0.15m to 2.0m and average 0.64 m. Strike lengths range from 70m to 835m. Assays ranged from <1.0 to 58g/t Au, 2.1 to 350 g/t Ag and 0.003 to 5.38% Cu. In contrast to the free-milling gold mineralization at Panganason, the ore at Binutaan is refractory in nature, based on the experiences of local small-scale gold recovery plant operators, Gold recoveries in mini-CIP plants are normally not more than 65%, usually at 90-hour contact time. The refractory nature of the Binutaan gold mineralization may be attributed to gold encapsulation in the relatively high amounts of chalcopyrite and the possible presence of arsenical pyrite, including arsenopyrite. To realize a respectable profit margin, artisanal miners/ operators must feed their CIP plants with mineralization that is >20 g/t Au, giving CIP plant operators better metal recoveries.

Porphyry Cu-Au System

The porphyry copper-gold mineralization at Binutaan is centered on an ovoid-shaped biotite diorite porphyry measuring 625m x 350m as mapped in plan, occurring mainly in the potassic-altered and fractured carapace of the high-level diorite intrusion. Quartz veining is characteristically finely crystalline, crustiform banded to saccharoidal with trace pyrite, chalcopyrite, chalcocite and probably specularite.




Figure 7-5. Mineral Prospect Areas




8 Deposit Types In general terms, the King-king gold-copper deposit is consistent in type and form with other copper-gold porphyry sulfide deposits of the Philippines. The following discussion summarizes these consistencies, as well as a few notable variations with other classic porphyry-type deposits:

1) The King-king gold-copper deposit is associated with stock-size mineralized intrusives situated along a north-east-trending belt measuring some 6km long and 3km wide. These intrusives were emplaced in a folded sequence of Cretaceous-Paleocene volcano-sedimentary rocks apparently along pre-existing northwest-trending anticlinal axes;

2) Four major and two relatively minor hydrothermal alteration zones have been recognized in and around the main deposit. From the central portion and outward, the major zones are: 1) the K-silicate (potassic) zone, which is further subdivided into K-feldspar and biotite subzones; 2) quartz-sericite-chlorite (QSC); 3) sericite-clay-chlorite (SCC); and 4) the propylitic zone, which is subdivided into epidote and chlorite sub-zones. Important mineralization occurs in the first three major alteration zones;

3) The majority of the known sulfide mineralization at King-king consists of chalcopyrite. Bornite-rich sulfide ore is less abundant. Gold occurs both free and in association with copper sulfides. Oxide mineralization is present in the upper part of the deposit and grades into sulfide mineralization below. Copper mineralization includes malachite, chrysocolla, cuprite, chalcopyrite, chalcocite, bornite and covellite;

4) With some exceptions, the quartz stockwork zone generally contains elevated gold

values averaging more than 1.0 g/t compared with the surrounding zones;

5) King-king is quite different from other deposits in the Philippines on account of the occurrence of widespread biotite alteration and the presence of a strong and well-developed K-feldspar-rich zone. Moreover, the stockwork-pervasive silicification zone is much more intense than in other deposits. The absence of a typical phyllic (or quartz-sericite-pyrite) alteration zone is attributed to the very low total pyrite (<1%) content of the deposit.




9 Mineralization

9.1 General

Gold and copper mineralization in the King-king deposit is hosted primarily by an elongate, dike-like N60°W-striking diorite intrusive complex consisting predominantly of plagioclase-rich hornblende diorite and biotite diorite porphyries, and later magmatic differentiates. Among the intrusives, the most favorable host rock appears to be the biotite diorite porphyry, followed by intra-mineral hornblende diorite porphyry and intra-mineral diorite porphyry. In the intruded volcano-sedimentary rocks, tuff appears to be the most favorable host, especially near or along contacts with the intrusives. Mineralization at King-king occurs as fracture fillings and to a lesser extent as disseminations in the diorite porphyries and adjacent wallrocks. Better gold and copper grades appear to occur where there was intimate mixing of different rock types, such as along contact zones or where several intra-mineral dikes or intrusives cut the earlier lithologies.

The majority of the mineralization in the King-king deposit is hypogene (sulfide). Rapid regional uplift and erosion likely caused the nearly complete removal of a classical leached cap and prevented the development of typically thick oxide and supergene enriched zones found in other porphyry deposits. For process development purposes, two types of mineralization are considered: sulfide and oxide (which includes mixed oxide-sulfide material). Figure 9-1 shows an example of the oxide, mixed, and sulfide interpretations as represented in the block model.

9.2 Oxide Zone

In general, the depth of oxidation is greatest under ridge tops (reaching 150 m in thickness), and thins progressively to the valley bottoms where oxidation may only extend to a depth of a few meters due to active erosion. The transition between oxidized ore and sulfide ore is usually quite abrupt and mixed zones are seldom more than a few tens of meters thick. The Lumanggang area contains the greatest thickness of surface oxidation. In the oxide and mixed oxide-sulfide (mixed) zones, partially oxidized chalcopyrite and bornite are occasionally found along with tenorite, malachite, chrysocolla, cuprite and other copper oxide minerals, together with the iron oxides, hematite, jarosite and goethite. On account of their bright colors and usual association with the more visible, ridge-forming, highly silicified outcrops and quartz stockworks, past impressions of the relative abundance of malachite and chrysocolla in the deposit may have been exaggerated because these silicified outcrops are generally found only in limited areas within the oxidized cap of the deposit. Gold is relatively abundant in the oxide zone, as evidenced by widespread gold panning and small-scale mining activities on the oxidized slopes of Casagumayan and Tiogdan. Some of




the gold particles examined in the possession of the small-scale miners were found to be attached to quartz and/or blebs of magnetite. According to old-timers who pioneered gold panning at King-king, coarser gold particles were more abundant in the original soil horizon that existed over the deposit. Gold particles panned along the creeks typically range up to 2mm in diameter.

Figure 9-1. Mineral Zones from the Block Model

9.3 Mixed Zone The mixed zone consists of the oxide minerals described in the previous section, partially oxidized chalcopyrite and bornite, and limited supergene mineralization. Chalcopyrite and bornite are partially to completely replaced by secondary chalcocite and covellite, with covellite almost always rimming bornite (Benguet Geological Report on Phase 1 Exploration of the King-king Copper Porphyry Gold Project, 1995; Benguet Feasibility Report, 1994; Lakefield Research Ltd. Mineralogical Studies, 1996; King-king Mines Inc., King-king Project, Level I Feasibility Study, 1997).




9.4 Sulfide Zone

Hypogene copper mineralization consists predominantly of chalcopyrite with overall lesser amounts of bornite and primary chalcocite, the latter occurring as fracture fillings in the areas of the deposit that are distinctly more bornite-rich. Bornite-rich areas include the biotite diorite porphyry, where bornite partially replaces chalcopyrite and occurs in amounts roughly equal to or greater than chalcopyrite.

Lesser sulfide minerals include molybdenite, which commonly occurs as fracture coatings and in quartz veins. There appears to be a higher grade molybdenite-bearing shell along the fringes the copper-gold mineralization. Digenite, covellite, tetrahedrite, galena, and sphalerite have been observed in trace amounts in petrographic studies.

Gold occurs in the sulfide zone of the deposit in free form in close association with bornite and as exsolution intergrowths in other sulfides, particularly chalcopyrite. Native gold is occasionally observed on fractures and in quartz veinlets.

The King-king deposit is characteristically pyrite-poor (<1% by volume for the entire deposit). This is reflected by the relative absence of a pyrite halo that is commonly developed around most porphyry copper deposits. The low pyrite content of the deposit to some extent may have contributed to the deposit’s lack of a classic leach cap and supergene enrichment zone, as there was probably not enough pyrite present to generate sufficient acid to form these zones.

9.5 Microthermometry Benguet conducted microthermometry of fluid inclusions in numerous quartz samples from drill core and outcrops which indicated essentially high temperatures of homogenization (above 400°C) for the mineralizing fluids. Occasional daughter minerals believed to be halite were noted in some samples. The high temperatures of homogenization and the high salinity of the fluids (as implied by the presence of halite (NaCl) daughter minerals) are typical of porphyry copper systems. Statistical analysis of 151 homogenization readings showed three thermal populations - one with a mean temperature of 848°C; a second with a mean temperature of 475° C, and a third population at 253°C. While the first two populations are typical of porphyry copper systems, the third points to a possible epithermal regime, or perhaps an infusion of meteoric water, both of which imply emplacement of certain mineralization at a shallower depths. The lower temperature range was determined from samples taken mostly from the quartz stockwork outcrops in the gold panning areas and the stockworks intersected in drill holes.




10 Exploration Exploration of the King-king deposit has spanned a few decades, and represents the efforts of numerous companies and individuals. A wide variety of techniques have been employed, including:

7) Surface mapping and sampling 8) Drilling (primarily diamond core) 9) Adit and raise sampling 10) Geochemistry (soil, stream, and down-hole) 11) Development of cross sections, long sections, and plan maps 12) Physical and computer-generated three-dimensional modeling.

A significant portion of past work focused on drilling to explore, define and confirm the economic potential of the property. Section 11.0 (Drilling) includes a summary table (Table 11-1) and description of documented drilling completed to date on the King-king deposit. Section 6.0 (History) also summarizes much of the work done in the past by previous workers. The interpretation of the exploration work done to date is that the King-king deposit is a significant copper-gold porphyry system with the potential to become an economic project. The drilling done to date has also been used to develop an NI 43-101 compliant mineral resource for the deposit, as presented in Section 17. All of the exploration data collection, including the drilling data, is historic data compiled by previous property owners. Ratel and its contractors were not involved in the compilation of this data. The only work conducted by Ratel and its contractors is the interpretation of the mapping and drilling data to develop the current mineral resource. Geologic cross sections were developed by RMMI personnel and reviewed by Don Earnest of REI. The mineral resource model and mineral resource were developed by REI and IMC, independent contractors to Ratel. Future drilling will focus on geotechnical diamond drilling to obtain core samples for pit wall stability analysis, final slope angle definition and hydrology-pore pressure studies, and hydrogeological studies. Additional diamond drilling will collect samples for metallurgy testing, in-fill certain areas of the deposit for confirmation of gold assays generated by the earlier Benguet drilling, and to better define certain lithologic contacts.




11 Drilling As summarized in Section 6.0 – History, three companies completed drilling campaigns on the King-king property - Mitsubishi Metal Mining Corp. (Mitsubishi), Benguet Corporation (Benguet), and Echo Bay Mines Ltd. (Echo Bay). The drillhole database provided to IMC consisted of 276 holes drilled by these companies, which represented 89,922 meters of drilling. Table 11-1 shows the drilling by campaign (RC = Reverse Circulation). Figure 11-1 shows the drillholes by drilling campaign. Table 11-1. Drilling by Campaign Campaign Description No. of Holes Meters No. of Intervals Mitsubishi Core Holes 54 13,031 4,352 Benguet Core Holes 69 19,247 6,412 Benguet RC Holes 25 4,926 4,456 Echo Bay Core Holes 128 52,718 18,440 TOTAL DRILLING 276 89,922 33,660 Table 11-2 shows details of the drilling by hole series and drill hole type – diamond core holes (DDH), and reverse circulation holes (RCH).

Table 11-2 Drilling History by Company

54 DDH Holes Mitsubishi 1972 DDH 1-54 23 DDH Holes Benguet 1991-1994 BC 1-23 38 DDH Holes Benguet 1991-1994 BN 1-31(A&B) 3 DDH Holes Benguet 1991-1994 NH 1-3 5 DDH Holes Benguet 1991-1994 PQ 1-5 10 RCH Holes Benguet 1991-1994 BNR 1-9 13 RCH Holes Benguet 1991-1994 M-Series Holes 2 RCH Holes Benguet 1991-1994 PQ-Series Holes

128 DDH Holes Echo Bay 1996-1997 EB 1-126 The core holes were nominally sampled on 3m down-hole intervals, though a portion of the early Echo Bay holes were sampled on 2m intervals. The Benguet RC holes were sampled on 1m intervals. Of the 33,600 intervals, 33,466 were assayed for total copper, 33,323 for soluble copper, and 29,192 for gold. Gold assays were not done for the Mitsubishi drilling. Soluble copper assays were done for almost every interval for which total copper was done.



Figure 11-1. Drillhole Locations by Campaign




Most of the Echo Bay holes and a significant number of the Benguet core holes are angle holes oriented southwest to intersect structures oriented northwest with a northeast dip. However, locally, actual orientation of mineralization of porphyry systems is complex and the relationship between true mineral thickness and sample intercept thickness is unknown.

It is the opinion of IMC that the drilling done to date is sufficient to develop an NI 43-101 compliant mineral resource for the King-king deposit.

Based on the structural zones developed by IMC to control block grade estimation (see Section 17.3.6), the area represented by the drill hole samples is approximately 1,695,000 square meters, or about 170 hectares. The 400m bench is a central bench in the deposit. It contains 192 15m composites assayed for copper and 108 composites with acceptable gold assays. Dividing the sampled area of 1,695,000 m2 by the number of composites and taking the square root provides a semi-quantitative measure of average sample spacing in plan view. This results in average sample spacings of 94m for copper and 125m for gold. Drill Hole Collar Location Check During the June 5, 2010 site visit, Don Earnest attempted to locate 21 randomly-selected drill hole collars in the field. Because of dense vegetation overgrowth and sloughing of cut banks at drill sites, only six hole collars were located. Two of the holes found contain steel casing with valves and are currently in use as water wells - NH-1 (a Benguet hole drilled in the early 1990’s) and EB-3, an Echo Bay hole drilled in 1995. The collars for two Echo Bay holes (EB-27 and EB-121) were found and both have small (0.3m) roughly circular concrete pads surrounding open PVC pipe collar casing (see Figure 11-2). Of the remaining two holes, an open hole collar (no concrete pad) for M31-2R (an RC twin hole of the earlier Mitsubishi DDH-31B) was found, as was the collar of the Benguet hole NH-4, which contained a cylindrical concrete plug. In the opinion of the author (D. Earnest), the fact that the majority of the drill hole collars selected for field checks were not locatable in the field is not a material issue. In the case of each of the 21 randomly selected holes, it was clearly evident that a drill site had been constructed. The likelihood that any of the holes selected were not drilled is remote.




Figure 11-2 EB-27 Collar




12 Sampling Method and Approach 12.1 General As briefly described in Section 11, three companies completed drilling campaigns on the King-king property - Mitsubishi Metal Mining Corp. (Mitsubishi), Benguet Corporation (Benguet), and Echo Bay Mines Ltd. (Echo Bay). All sampling data used for this resource update are derived from only diamond drill core or RC drill hole cuttings generated by these three companies - no surface grab samples or samples from underground openings were included. In general the sample intervals in the core holes was nominally 3m in length, though a portion of the early Echo Bay holes were sampled on 2m intervals. The Benguet RC holes were sampled on 1m intervals. Regarding the consideration of rock type, or other geologic controls on the sampling interval, there was generally no attempt to break sample intervals at geologic contacts or to separate out perceived high grade zones by any of the three companies. Core was split longitudinally by Benguet and Echo Bay on site with the resulting half-core sent to off-site sample preparation laboratories. RC samples generated by both of these companies were bagged and sent to off-site labs as well. Other than sample length, the sampling methods and approach used by Mitsubishi are unknown. On June 6 and 7, the author (Don Earnest of REI) closely examined the core from 23 holes during the course of collecting 100 core samples for check assay analysis (see Section 14.3) from core currently stored at the facility near Pantukan City, Compostela Valley. The core from the Benguet and Echo Bay drilling campaigns was found to be in generally good condition, especially considering that the core has been transported between different storage facilities a number of times over the past 20 years. Drilling run blocks were found to be in place in most of the boxes examined and/or sampled, with sample breaks in most cases noted in black marker on the wooden box dividers. With a few exceptions (where it appeared that a box had been dropped or dumped at some point during handling/transport), the core was found to be in correct order in the boxes, with the continuity between the remaining half pieces generally good. It was noted during the collection of the check sampling of the core that the solid core pieces of many of the rock types intersected have a general tendency to shatter when struck with a hammer, with some lithologies worse than others. Future core drilling programs should incorporate diamond saws for splitting the core for analysis in lieu of using conventional hydraulic knife-blade-type core splitters. A number of the wooden boxes were found to have moderate termite damage. These boxes (and others like them not examined) should be replaced and the core carefully transferred to new boxes under the supervision of a geologist. Though core recoveries were measured and recorded for Benguet and Echo Bay drilling, these data were not included in the digital database provided to IMC for this study. Other than possible effects of sample recovery on grade, neither IMC or REI know of any factors that could materially impact the accuracy and reliability of the sample results. Due to a bias in the Benguet gold assays which is discussed later in this section, these assays were not used




for the IMC resource estimate, but were replaced with the Echo Bay re-assays where available. Appendix 4 includes a list of relevant samples for King-king drilling. 12.2 Mitsubishi Metal Mining Corp From 1969 to 1972, Mitsubishi drilled 54 core holes totaling 13,031 meters. Core was split (splitting method unknown) on three meter intervals and subsequently assayed. Sample preparation and analytical procedures used are unknown. Assay results for total copper and acid soluble copper for the Mitsubishi holes are present in the drill hole database provided by Benguet. Gold reportedly was not assayed. To the knowledge of REI and IMC there are no drill logs, drill core, or assay certificates available from the Mitsubishi drilling that could be used to document any of the assay results. 12.3 Benguet Corporation From 1992 to 1994, Benguet drilled 69 core holes totaling 19,247 meters, and 25 reverse circulation drill holes totaling 4,926 meters. Core samples were split and assayed on three meter intervals and reverse circulation holes were sampled and assayed on one meter intervals. Most of the core was HQ (63.5mm) and NQ (47.60mm) diameter. Four holes were PQ diameter (85mm). After splitting at the site using a conventional knife-blade core splitter, the core was placed in sample bags and sent to the sample preparation laboratory in Davao City, where pulps were prepared for shipment to separate analytical facilities. Assaying was done by two Benguet in-house labs at Dizon and Balatoc and by McPhar Labs in Manila. In 1997 an initial check assay program by Echo Bay of 460 pulps obtained from Benguet indicated that the quality of the Benguet copper assaying was within industry standards, but a systematic bias in the Benguet gold assays was noted, particularly in grades near the average for the deposit. Approximately 10,000 splits of pulps from all of the core holes were subsequently obtained by Echo Bay from Benguet in 1997. Of these, 22 of the more critical holes were re-assayed by lnchcape Testing in Manila to further evaluate assay quality. Results of this work show that total copper assaying error was within acceptable industry standards of error, acid soluble copper assays were biased low and the gold assays were biased high compared to the 1997 re-assays. Check assay samples were taken for the current study in June 2010 from the remaining half of split core from eight Benguet drill holes currently stored at the core shed near Pantukan. Results for these check samples (which were prepared and analyzed by Independent Assay Laboratories Ltd. (IALL) in Wangara, Western Australia) confirm that the original Benguet results for total copper and acid soluble copper are within industry standards of error compared to the recent re-assay work by IALL, while the original Benguet gold assays were biased high compared to the re-assaying. See Section 14 - Data Validation for details of the June 2101 check assay sampling study.




12.4 Echo Bay Mines Ltd. (King-king Mines Inc) On November 2, 1995, Echo Bay (through its Philippine company, King-king Mines Inc.) collared its first hole on the deposit. The current database contains the results of 128 Echo Bay core holes totaling 52,718 meters. Most of the core was split on three meter intervals, with a few of the early holes in suspected high grade gold areas split on two meter intervals. All of the holes with road access were collared PQ (85mm-diameter) core size to obtain as large a sample of the oxide zone as possible. Drill holes were reduced to HQ (63.50mm- diameter) size upon reaching sulfide ore or at the limit of the ability of the drill to penetrate with PQ tools. A few holes were further reduced to NQ (47.60mm-diameter/ core size in order to case off bad ground. Nineteen of the holes were mobilized and supported by helicopter and were drilled using HQ size core barrels. Core was transported as soon as possible to a centrally located logging area on site for inventory and geotechnical logging and then transported to a facility in Davao City for geologic logging. Core was divided in half with a conventional knife-blade core splitter in Davao City and a sample prepared producing a 150 gram pulp for shipping to the Inchcape Testing Lab in Manila. The pulps were assayed for gold, total copper, acid soluble copper and molybdenum. Check assay samples were taken for this study in June 2010 from the other half of split Echo Bay core currently stored at the core shed near Pantukan City. Results of this sampling confirm the Echo Bay results of 1997 for total copper and gold are within acceptable industry standards of error. However, Echo Bay acid soluble coppers were found to be biased high compared to the recent re-assay work, perhaps due to Inchcape’s use of a more aggressive acid soluble copper analytical method. See Section 14 - Data Validation for details of the June 2101 check assay sampling study.




13 Sample Preparation, Analyses and Security Estimates of mineralized tonnage and grade at King-king Gold-Copper have historically been based upon assays derived from drilled intercepts. Approximately 33,660 samples were taken over the course of the project and processed by four separate analytical laboratories - Benguet’s in-house labs at Dizon and Balatoc, McPhar Labs in Manila and Inchcape Labs in Manila. The sample preparation was not completed by the issuers or any of their contractors. It was done by the companies previously working on the project. 13.1 Mitsubishi Drilling Programs Sample preparation and analysis procedures for the Mitsubishi drilling program of 1969-1972 were not available for review. The sample chain of custody and security procedures used by Mitsubishi are unknown. 13.2 Benguet Drilling Programs Sample preparation and analysis procedures for the Benguet drilling programs are described in the reference titled “Benguet Sample & Assay Procedure.” Core samples were collected on 3m intervals and split at the site, placed in sample bags, and sent to the company’s sample preparation laboratory in Davao City. There the samples were dried and crushed to a nominal 1/8 inch size. This was split down to about 500 grams that was then pulverized to 150 mesh. The pulp was then divided into two 250- to 300-gram samples, one for analysis and one for reserve. The pulps were then shipped to Benguet’s in-house analytical labs at either Balatoc or Dizon for analysis. Total copper analysis was done on a 0.5-gram sample. Three-acid digestion was used (perchloric, nitric, and hydrochloric acids) prior to analysis by atomic absorption (AAS). Soluble copper analysis was done on a 1.0-gram sample. Digestion was with 5% sulfuric acid at room temperature for two hours, with solution stirring every 15 minutes. As with total copper, final analysis was done by AAS. Based on the documentation provided to IMC, it appears that the Benguet laboratories also performed gold analysis by solution methods rather than by fire assay. The gold analyses were based on 10.0-gram samples. Nitric acid was first added under low heat to decompose sulfides. Potassium chlorate was then added, followed by hydrochloric acid, which formed aqua regia and dissolved the gold. Additional HCL was added to dissolve salts that may have formed, and MIBK (methyl isobutyl ketone) was added to collect the gold. Final gold analysis was by AAS. In light of Benguet’s gold analytical procedures, Echo Bay’s decision to re-assay Benguet samples for gold is not surprising.




The specific sample chain of custody and security procedures employed by Benguet are not known, although it is likely that the samples were continually under Benguet company control, given that the samples were prepared as well as analyzed in company laboratories. 13.3 Echo Bay Drilling Programs 13.3.1 Core Splitting and Sample Preparation Core was transported as soon as possible to a centrally located logging area on site for inventory and geotechnical logging. The geotechnical logging was carried out by trained technicians following procedures recommended by Knight-Piesold (J. Haile, 1995). Core was then transported daily to the Davao office warehouse for detailed geologic logging. The entire core was photographed prior to splitting and the photographs were transferred to a CD-ROM format for ease of storage and access. Core splitting was done by trained technicians using conventional hydraulic knife-blade splitters. One half of the core was placed in permanent storage in a secure, enclosed warehouse. The remainder of each sampled interval was transported daily to a sample preparation facility located in Davao City that was independently operated by Inchcape Testing. The entire sample was crushed to minus one-tenth inch using a jaw crusher. A sample weighing approximately one kilogram was then split from the crushed material using a riffle splitter. This entire split was pulverized using a large capacity disk pulverizer. The pulps were reduced in size to a nominal 90 percent passing through a minus 200 mesh screen. A pulp split weighing approximately 150 grams from each sample was then shipped to the Inchcape Testing laboratory in Manila by air freight. The remainder of the pulp and the coarse reject were returned to King-king Mines Inc. for secure, permanent storage in an enclosed warehouse. Gold assaying was done by fire assay with an atomic absorption finish on fifty-gram charges. Total copper and molybdenum were assayed using a total digestion followed by atomic absorption technique. A weak acid, room temperature digestion followed by atomic absorption analysis was used for acid soluble copper analysis. 13.3.2 Assay Quality Control/Quality Assurance The Quality Assurance/Quality Control (QA/QC) program used by King-king Mines Inc (KMI) was designed by Ken Lovstrom, a consulting geochemist, together with KMI staff early in 1996 and was fully implemented in the second quarter of 1996. To provide the highest degree of assurance for assay data, KMI used three reputable independent assay laboratories. The primary lab was Inchcape Testing Services located in Manila. The secondary check laboratory was Cone Geochemical located in Denver, Colorado. Chemex Labs Ltd. of Vancouver was used for limited check assaying and for round robin assays of control samples. Echo Bay’s chain of custody and security procedures were not documented




in writing, but it is highly likely that rigid procedures were followed, based on the authors’ first-hand experience with other Echo Bay projects that were overseen by Ken Lovstrom. 13.3.2.1 Assay Reliability The reliability of numerical data is measured by precision and accuracy. Precision is the degree of reproducibility, regardless of accuracy. Accuracy is the degree of closeness to a true and generally unknown value. The limit of detection is another important term because assay labs define a detection limit as "that point at which precision is plus or minus 100 percent." Therefore by definition all assay values for concentrations larger than the limit of detection (LOD) will have greater precision. The next step in providing quality assurance for any analytical program is the quantification of results. The limit of quantification (LOQ) is the point that 95 percent of the samples fall within plus or minus 10 percent and assumes that one in every twenty samples falls outside this range. The limit of quantification varies with the concentration, detection limit and precision factor for the process and assumes a homogenous sample. This is a critical assumption and each lab produces this qualifying statement quickly. The Limit of Quantification for Inchcape Testing was 0.5 ppm gold, for Chemex was 0.6 ppm gold, and for Cone was 0.1 ppm gold. The large discrepancy between LOQ for Cone versus both of the other labs was a function of the final separation technique used by Cone. Detection limits and LOQ's for copper are very low relative to copper grades of economic interest and are not critical to the quality control program. For gold, precision decreases from 95 percent within plus or minus 10 percent to 95 percent within plus or minus 100 percent below 0.5 ppm. This does not mean that data below this threshold is unquantifiable. The following table, provided by lnchcape Testing, defines the precision curve for all data. This curve was the accepted tolerance limit to which data generated by the assay labs should be held. Concentration (ppm gold)

Tolerance

0.005 ±100% 0.050 ±50% 0.100 ±25% 0.500 ±10% Analytical accuracy and precision are dependent on the techniques used:

• Fire Assay • Atomic Absorption

A variety of other factors including technique, detection limits, sampling, sample preparation, extraction, homogenization, reagent purity, instrumentation and professionalism all contribute to the integrity of analytical data. These factors can have an accumulated effect




on assay data. The presence of coarse gold alone can alter an assay value plus or minus 17 percent at the 0.5 ppm concentration level, significantly violating the assumption of “homogeneity” incorporated into the tolerance values listed above. This was nearly double the tolerance for a homogenous sample at the same concentration. A variance in gold assays of plus or minus 11 percent and copper assays of plus or minus 7 percent are accepted as within industry standards due to the nature of the analyses used by KMI. Figure 14-4 in the next section shows an example of tolerance, or precision, versus grade for gold, and that in general, for gold, actual precision is not as good as the table above based on theoretical “homogenous” samples. Accuracy was established by using control samples. These control samples are used to check for laboratory assay "batch busts", data entry errors, or other analytical problems. Running means for control samples having concentrations above, below, and at the limit of quantification are compared with accepted true values for those samples as established by a round robin test. Precision was established by comparing assay pairs and was expressed as percent running standard deviation. Variance was defined by the ratio of the running mean and standard deviation. 13.3.2.2 Quality Control Protocol The intent of this QA/QC program was to monitor assays on a per batch basis using control samples, duplicates, blanks, replicates and umpire laboratories to insure assay integrity. KMI monitors seven different types of samples to detect the precision and accuracy of assays provided by the various assay laboratories.

• Bulk pulp control samples • Bulk reject control sample • Duplicate core sample • River sand sample • Second laboratory check sample • Lab duplicate sample • Certified standards

Bulk Pulp Control Samples "A” During 1996 KMI used six different bulk pulp control samples, KM 1 through 6. Control samples KM 1 through 3 were submitted randomly in oxidized zones, and KM 4 through 6 were used in sulfide zones. All were designated by the letter “A" immediately following the hole and sample number and are easily identifiable on assay sheets. Forty kilograms of split core from the project were composited to obtain a desired grade for copper and gold. Bondar-Clegg in Reno, Nevada pulverized and mixed the bulk samples and generated 75 gram pulp packets. Ten of each of the pulp packets were assayed by Cone Geochemical in Denver, Colorado to establish initial concentration ranges for gold and copper. Subsequently




each control sample has been resubmitted to Cone, Inchcape, and Chemex for round robin assaying to determine the "true" values for each sample. A bulk pulp control sample was submitted at a frequency of one per every twenty samples. Assays are reviewed against the accepted year to date means and global means as established by the round robin analysis for gold and copper. Assays that fall outside these criteria are re-assayed along with the five preceding and five following drill samples in that batch. After the re-assay returns it will be placed in the database as an original assay. Bulk Reject Control Samples "B" The bulk rock control sample used in this program was identified by the letter "B" immediately following the sample number. The material for this sample was a composite, oxide, coarse reject from drill hole EB-7, with known gold and copper values. Ten samples were initially submitted to Cone for analysis to set assay ranges for gold and copper. A bulk reject was submitted one per day per hole and was specifically designed to check sample preparation. Any assays that fall above or below two standard deviations are re-assayed along with the five preceding and five following drill samples in that batch. Duplicate Core Samples "C” For every fortieth sample, the second half of the split core was used completely for assay. The purpose of this sample was to check the core splitting and sampling procedures for quality and bias. River Sand Samples "D” This blank control sample was generated by the Inchcape Testing sample prep facility. A sample of ordinary river sand was run through the crushing and pulverizing equipment after each sample. Every tenth sample was submitted for assay. The purpose of this sample was to check the sample preparation procedures for cleanliness and cross contamination. Second Lab Check Samples "E" Each month, duplicate pulps of 5 percent of the assays received are re-submitted to a second lab. The selection of these samples was random and not biased toward a particular range of concentrations for either gold or copper. Cone Geochemical in Denver was chosen as the second lab. The purpose of this sample was to provide an outside lab check of the primary lab. Lab Duplicate Samples "F" Inchcape Testing re-assays one sample in ten as an internal check. This re-assay was reported on the final sheet of each assay report. This data was tracked by King-king Mines Inc. personnel and was given the letter "F" to distinguish it from the various other check samples.




Certified Standards "G" Inchcape Testing uses internally several certified standards including Canmet and Gannett standards for copper and gold. King-king Mines Inc, staff monitors and evaluates these assay results. Several standards are included in each batch of samples fired. 13.4 IMC/REI Opinions of Sample Preparation, Security and Analytical Procedures It is the opinion of IMC that the Echo Bay sample preparation, security, and analytical procedures are adequate for the nature of mineralization being tested, namely a bulk, relatively low grade base metal deposit that includes precious metals. It is also the opinion of IMC and REI that the Echo Bay QA/QC program exceeded industry standards at that time and also exceeds current standards in place at most companies. Also the principal authors worked with Ken Lovstrom (now deceased) on other Echo Bay projects and have high regard for his work. The Benguet sample preparation and analytical procedures, as described in information provided to IMC, also appear appropriate. The total copper and soluble copper analysis methods are also appropriate. The Benguet gold analysis method, however, is complex, and not commonly used. As will be discussed in the next section of this report, there appears to be a bias with regard to the Benguet gold assays. Total copper results, however, appear to be in line with Echo Bay results.




14 Data Verification IMC performed the following data verifications on the King-king sampling database:

• A significant portion of the assays in the database were compared with assay certificates and geologic logs,

• For the 1997 Feasibility Study, Echo Bay re-assayed a significant number of Benguet samples for copper and gold. IMC did comparisons of the Echo Bay and Benguet assays for these sample intervals,

• Don Earnest of REI pulled 100 samples from Benguet and Echo Bay existing core to be assayed for copper and gold for comparison with original assays.

The following sections include the details of the various studies. 14.1 Comparisons of Assays with Original Assay Certificates 14.1.1 Echo Bay Assays IMC originally selected 14 Echo Bay drillholes to compare assays in the database with original assay certificates. These holes were: EB-2 EB-7 EB-8 EB-21 EB-26 EB-35 EB-68 EB-86 EB-88 EB-92 EB-95 EB-105 EB-115 EB-121 These were a somewhat random selection of holes, though there was a bias toward selecting more of the higher grade holes. The first 14 entries of Table 14-1 show the results of comparing the holes with assay certificates for total copper, soluble copper, and gold. For each mineral, in each hole, the total number of assays, the number verifiable on available certificates, and the number of errors are shown. Also, the differences in the database and certificates are explained under the “Description of Errors” column. The left number is what was in the database versus the certificate value on the right. Three of the 14 holes, EB-7, EB-8, and EB-68 did not have all the assay certificates available, though the data compared well with the certificates that were available. Other than EB-115 most of the denoted errors are minor in nature except for a gold assay in EB-2 and a total copper assay in EB-92 which were off by an order of magnitude. EB-115 however contained three total copper assays and one gold assay with order of magnitude errors.




Due to the results of EB-115, and also the three holes with incomplete assay certificate coverage, IMC selected seven additional Echo Bay holes to audit: EB-9 EB-116 EB-119 EB-124 EB-11 EB-89 EB-63 The result of the audit of these holes is also shown on Table 14-1. Certificate data was incomplete for EB-9 and EB-11. Results for EB-116 were relatively poor, similar to EB-115, which indicated the possibility of a significant lapse in the data entry/verification for a portion of the Echo Bay data. IMC then audited EB-113, EB-114, EB-117 and EB-118 to bracket the problem holes. Table 14-1 shows that holes EB-113, EB-114, and EB-117 are fine. Certificate data was only available for the first 31 records of EB-118 and none of the assays compared with the database. The first 33 (not 31) assays in EB-118 were the same as EB-117, indicating a portion of EB-117 was copied over the EB-118 data. A review of the cross sections indicated the certificate data compared well with surrounding holes (and what was originally in the database did not). Also, the data in the lower portion of EB-118, the portion not covered by the certificates, looks reasonable compared to surrounding holes. IMC then checked EB-120, EB-122, EB-123, EB-125, and EB-126, which represent all the Echo Bay drilling after EB-118, plus three additional holes EB-43, EB-53, and EB-77. The latter three were chosen because no other holes from the 40’s, 50’s, or 70’s series had been selected. These holes checked reasonably well. Overall 33 of the 128 Echo Bay holes were audited which is about 26% of the holes. The bottom of Table 14-1 shows this amounted to 4,961 data records of a total of 18,427 Echo Bay records (27%). Certificate entries were available for 84% of the total copper assays, 82% of the soluble copper assays, and 89% of the gold assays. The overall error rate was about 1%. The overall error rate is acceptable though IMC would expect it to be about half that in a verified database. The fact that these errors clustered in three holes probably drilled about the same time indicates a lapse in the data entry procedures for a brief period near the end of the Echo Bay drilling program. IMC corrected the known errors, replacing the database values with certificate values. 14.1.2 Benguet Assays There were not any assay certificates available to IMC for the Benguet holes. There were however, image files from old Benguet drill logs that also included assay values for total copper, soluble copper, and gold. Minimally, this allowed verification that there was not any tampering with, or errors introduced into the database since the Benguet tenure.




IMC selected 14 Benguet holes for review: BC-5 BC-11 BC-16 BC-21 BN-18 BN-20 BN-25B BNR-2 BNR-7 BNR-10 M25-3R NH-1 PQ-3 PQ-5 Table 14-2 shows the results of the comparison in the same format as the Echo Bay data comparison. BNR-2, BNR-10, M25-3R and the upper portion of BNR-7 were sampled by reverse circulation drilling. Assays were done on 1m intervals. On the logs averages over three meter intervals were recorded. IMC averaged the database values to do the comparison. Results of the comparison were good. The bottom of the table shows an error rate of 1.2% for total copper, 0.6% for soluble copper, and 1.8% for gold. This is a bit high, but it can be seen that only about three of the assays amounted to order of magnitude errors (a gold assay in BN-18 and BNR-2 and a soluble copper assay in BNR-7). IMC did not change any values in the database due to this comparison. Since the check was against data in logs, not assay certificates, there is no way of knowing which value is the correct one. Also, as noted above, most of the differences are minor. 14.1.3 Mitsubishi Assays To IMC’s knowledge there are not any available assay certificates for the Mitsubishi data. Only total copper and soluble copper were assayed for those samples. 14.1.4 Other Data Checks IMC did a listing of data records with soluble copper greater than or equal to total copper and reviewed these against certificates when available. A cluster of these in EB-59 showed that what was recorded in the database as soluble copper assays were actually gold assays for 18 records. These were replaced with the correct values from the assay certificates. A listing of records with total copper equal to gold showed a cluster of records in BNR-4 where the gold assays in the database were actually total copper assays. The errant gold assays were replaced with values from the logs. It was also discovered that several assays were represented in the database as either 0.98 or 0.99 that original certificates indicated were actually 0.098 or 0.099. These were about 10 Echo Bay assays and occurred in total copper, soluble copper and gold. IMC reviewed all 0.98 and 0.99 assays in the database because of this error. It is not certain how, or when, this error was introduced.




Due to the IMC database checks about 132 data records were changed compared with the database used for the 2009 due diligence review. Table 14-3 shows the assays with values in red the ones changed. Note that -9 is the IMC code for “no-assay”.



Table 14-1. Comparison of Drillhole Database With Assay Certificates - Echo Bay DrillingNo. of No. in No. of

Hole ID Analysis Assays Certs % Errors % Description of Errors - Comparisons are database/certificatesTot Cu 167 167 100% 0 0.0%

EB-2 Sol Cu 167 167 100% 1 0.6% 0.108 vs 0.109Gold 167 167 100% 1 0.6% 1.169 vs 0.116

Tot Cu 151 37 25% 1 2.7% 0.393 vs 0.392 Most certificates not availableEB-7 Sol Cu 151 17 11% 0 0.0% Most certificates not available

Gold 151 151 100% 0 0.0%Tot Cu 230 65 28% 1 1.5% 0.269 vs 0.270 Most certificates not available

EB-8 Sol Cu 230 25 11% 0 0.0% Most certificates not availableGold 230 65 28% 0 0.0% Most certificates not available

Tot Cu 206 204 99% 0 0.0%EB-21 Sol Cu 206 206 100% 0 0.0%

Gold 206 206 100% 0 0.0%Tot Cu 150 150 100% 2 1.3% 0.325 vs 0.235, 0.265 vs 0.263

EB-26 Sol Cu 150 150 100% 0 0.0%Gold 150 150 100% 0 0.0%

Tot Cu 101 101 100% 1 1.0% 0.244 vs 0.224EB-35 Sol Cu 101 101 100% 0 0.0%

Gold 101 101 100% 0 0.0%Tot Cu 125 36 29% 0 0.0% Most certificates not available


Tot Cu 156 156 100% 0 0.0%EB-86 Sol Cu 156 156 100% 0 0.0%

Gold 156 156 100% 0 0.0%Tot Cu 194 194 100% 0 0.0%

EB-88 Sol Cu 194 194 100% 0 0.0%Gold 194 194 100% 0 0.0%

Tot Cu 183 183 100% 1 0.5% 0.606 vs 0.048EB-92 Sol Cu 183 156 85% 0 0.0%

Gold 183 156 85% 0 0.0%Tot Cu 166 166 100% 0 0.0%

EB-95 Sol Cu 166 166 100% 0 0.0%Gold 166 166 100% 0 0.0%

Tot Cu 117 117 100% 0 0.0%EB-105 Sol Cu 117 117 100% 0 0.0%

Gold 117 117 100% 0 0.0%Tot Cu 179 179 100% 5 2.8% 0.503 vs 0.603, 1.270 vs 0.270, 0.247 vs 0.242, 0.990 vs 0.099, 0.980 vs 0.098

EB-115 Sol Cu 179 179 100% 3 1.7% 0.194 vs 0.144, 0.024 vs 0.026, 0.050 vs 0.030Gold 179 179 100% 3 1.7% 0.496 vs 0.446, 0.980 vs 0.098, 0.742 vs 0.792

Tot Cu 135 135 100% 0 0.0%EB-121 Sol Cu 135 135 100% 0 0.0%

Gold 135 135 100% 0 0.0%Tot Cu 230 28 12% 0 0.0% Most certificates not available


Tot Cu 155 155 100% 1 0.6% 0.419 vs 0.491EB-116 Sol Cu 155 155 100% 6 3.9% 0.147 vs 0.142, 0.398 vs 0.396, 0.003 vs 0.083, 1.784 vs 0.784, 0.074 vs 0.073, 0.049 vs 0.040

Gold 155 155 100% 7 4.5% 0.043vs0.047, 0.082vs0.032, 0.033vs0.037, 0.827vs0.822, 0.891vs0.691, 2.328vs2.228, 0.459vs2.459



Table 14-1 (Continued). Comparison of Drillhole Database With Assay Certificates - Echo Bay Drilling Tot Cu 112 112 100% 0 0.0%

EB-119 Sol Cu 112 112 100% 0 0.0% Gold 112 112 100% 0 0.0%

Tot Cu 133 133 100% 0 0.0% EB-124 Sol Cu 133 133 100% 0 0.0%

Gold 133 133 100% 0 0.0% Tot Cu 162 11 7% 0 0.0% Most certificates not available

EB-11 Sol Cu 162 11 7% 0 0.0% Most certificates not available Gold 162 33 20% 0 0.0% Most certificates not available

Tot Cu 171 171 100% 0 0.0% EB-89 Sol Cu 171 171 100% 0 0.0%

Gold 171 171 100% 0 0.0% Tot Cu 108 108 100% 0 0.0%

EB-63 Sol Cu 108 108 100% 0 0.0% Gold 108 108 100% 0 0.0%

Tot Cu 134 134 100% 0 0.0% EB-113 Sol Cu 134 134 100% 0 0.0%

Gold 134 134 100% 0 0.0% Tot Cu 141 141 100% 0 0.0%

EB-114 Sol Cu 141 141 100% 0 0.0% Gold 141 141 100% 0 0.0%

Tot Cu 134 134 100% 0 0.0% EB-117 Sol Cu 134 134 100% 0 0.0%

Gold 134 134 100% 0 0.0% Tot Cu 100 31 31% 31 100.0% These were ALL wrong, according to the certificate. The first 33 records (tcu, scu, and au) were

EB-118 Sol Cu 100 31 31% 31 100.0% exactly the same as were entered for EB-117. The top of EB-118 is significantly higher grade than Gold 100 31 31% 31 100.0% what was in the database and appears more correct compared to surrounding holes.

Tot Cu 172 172 100% 0 0.0% EB-120 Sol Cu 172 172 100% 0 0.0%

Gold 172 172 100% 0 0.0% Tot Cu 199 199 100% 0 0.0%

EB-122 Sol Cu 199 199 100% 0 0.0% Gold 199 199 100% 0 0.0%

Tot Cu 150 150 100% 0 0.0% EB-123 Sol Cu 150 150 100% 0 0.0%

Gold 150 150 100% 0 0.0% Tot Cu 133 133 100% 0 0.0%

EB-125 Sol Cu 133 133 100% 0 0.0% Gold 133 133 100% 0 0.0%

Tot Cu 7 7 100% 0 0.0% EB-126 Sol Cu 7 7 100% 0 0.0%

Gold 7 7 100% 0 0.0% Tot Cu 165 165 100% 0 0.0%

EB-43 Sol Cu 165 165 100% 0 0.0% Gold 165 165 100% 0 0.0%

Tot Cu 161 161 100% 1 0.6% 2.58 vs 0.345, 2.58 was on the certificate but was designated as a control sample. EB-53 Sol Cu 161 161 100% 0 0.0%

Gold 161 161 100% 0 0.0% Tot Cu 134 134 100% 1 0.7% 0.395 vs 0.500

EB-77 Sol Cu 134 134 100% 1 0.7% 0.048 vs 0.524 Gold 134 134 100% 0 0.0%

Tot Cu 4961 4169 84% 45 1.1% TOTAL Sol Cu 4961 4084 82% 42 1.0%

Gold 4961 4425 89% 42 0.9%



Table 14-2. Comparison of Drillhole Database With Geologic Logs - Benguet DrillingTot Cu 118 116 98% 0 0.0%

BC-5 Sol Cu 118 116 98% 1 0.9% 0.013 vs 0.011Gold 118 116 98% 0 0.0%

Tot Cu 67 67 100% 0 0.0%BC-11 Sol Cu 67 67 100% 0 0.0%

Gold 67 67 100% 0 0.0%Tot Cu 112 111 99% 1 0.9% 0.582 vs 0.583

BC-16 Sol Cu 112 111 99% 0 0.0%Gold 112 111 99% 1 0.9% 0.070 vs 0.080

Tot Cu 59 55 93% 1 1.8% 0.251 vs 0.261BC-21 Sol Cu 59 55 93% 0 0.0%

Gold 59 55 93% 0 0.0%Tot Cu 115 115 100% 2 1.7% 0.560 vs 0.500, 1.500 vs 1.520

BN-18 Sol Cu 115 115 100% 0 0.0%Gold 115 115 100% 1 0.9% 0.020 vs 1.200

Tot Cu 56 56 100% 0 0.0%BN-20 Sol Cu 56 56 100% 0 0.0%

Gold 56 56 100% 0 0.0%Tot Cu 102 102 100% 2 2.0% 0.650 vs 0.630, 0.730 vs 0.770

BN-25B Sol Cu 102 102 100% 0 0.0%Gold 102 102 100% 1 1.0% 0.700 vs 0.800

Tot Cu 222 222 100% 3 1.4% 0.127 vs 0.11, 0.16 vs 0.11, 0.15 vs 0.45 (log entries were average of 3 intervals)BNR-2 Sol Cu 222 222 100% 3 1.4% 0.144 vs 0.16, 0.20 vs 0.25, 0.008 vs 0.16

Gold 222 222 100% 8 3.6% 1.36vs1.48, 0.287vs0.26, 0.267vs0.25, 0.227vs0.26, 0.117vs0.01, 0.243vs0.23, 0.267vs0.33, 0.37vs0.31Tot Cu 247 247 100% 5 2.0% 0.087 vs 0.11, 0.243 vs 0.30, 0.157 vs 0.21, 0.415 vs 0.28, 0.213 vs 0.34

BNR-7 Sol Cu 247 247 100% 3 1.2% 0.087 vs 0.008, 0.26 vs 0.28, 0.035 vs 0.02 (Intervals on logs were average of 3 assays)Gold 247 247 100% 8 3.2% 0.17vs0.29, 0.273vs0.40, 0.233vs0.21, 0.24vs0.50, 0.55vs0.43, 0.41vs0.55, 0.58vs0.43, 1.10vs0.69

Tot Cu 161 161 100% 0 0.0% Intervals on the log were 3m intervals that were an average of 3 assay intervalsBNR-10 Sol Cu 161 161 100% 0 0.0%

Gold 161 161 100% 0 0.0%Tot Cu 228 228 100% 1 0.4% 0.59 vs 0.69, intervals on the log were an average of 3 assay intervals

M25-3R Sol Cu 228 228 100% 0 0.0%Gold 228 228 100% 0 0.0%

Tot Cu 140 140 100% 0 0.0%NH-1 Sol Cu 140 140 100% 0 0.0%

Gold 140 140 100% 1 0.7% 0.560 vs 0.580Tot Cu 108 108 100% 2 1.9% 0.750 vs 0.740, 0.050 vs 0.060

PQ-3 Sol Cu 66 66 100% 0 0.0%Gold 108 108 100% 8 7.4% 0.20vs0.42, 1.96vs1.98, 2.18vs2.24, 0.86vs0.88, 1.56vs1.63, 1.16vs1.18, 0.10vs0.11, 0.06vs0.05

Tot Cu 132 132 100% 6 4.5% 0.22 vs 0.23, 0.22 vs 0.21, 0.24 vs 0.25, 0.78 vs 0.77, 0.30 vs 0.31PQ-5 Sol Cu 132 132 100% 3 2.3% 0.40 vs 0.39, 0.07 vs 0.08, 0.16 vs 0.17

Gold 132 132 100% 5 3.8% 0.38 vs 0.39, 0.144 vs 0.140, 0.34 vs 0.30, 0.50 vs 0.48, 0.36 vs 0.33Tot Cu 1867 1860 100% 23 1.2%

TOTAL Sol Cu 1825 1818 100% 10 0.6%Gold 1867 1860 100% 33 1.8%




Table 14-3. Changes to Database Since 2009 Due Diligence Reviewhole_id from to length imc_samp tcu2009 tcu scu2009 scu au2009 au

BNR-4 101.6 102.6 1 103 0.250 0.250 0.020 0.020 0.250 0.170BNR-4 102.6 103.6 1 104 0.130 0.130 0.020 0.020 0.130 0.170BNR-4 103.6 104.6 1 105 0.200 0.200 0.030 0.030 0.200 0.170BNR-4 104.6 105.6 1 106 0.180 0.180 0.020 0.020 0.180 0.280BNR-4 105.6 106.6 1 107 0.190 0.190 0.020 0.020 0.190 0.280BNR-4 106.6 107.6 1 108 0.270 0.270 0.020 0.020 0.270 0.280BNR-4 107.6 108.6 1 109 0.230 0.230 0.060 0.060 0.230 0.150BNR-4 108.6 109.6 1 110 0.220 0.220 0.020 0.020 0.220 0.150BNR-4 109.6 110.6 1 111 0.200 0.200 0.010 0.010 0.200 0.150BNR-4 110.6 111.6 1 112 0.180 0.180 0.010 0.010 0.180 0.170BNR-4 111.6 112.6 1 113 0.180 0.180 0.010 0.010 0.180 0.170BNR-4 112.6 113.6 1 114 0.210 0.210 0.020 0.020 0.210 0.170BNR-4 113.6 114.6 1 115 0.250 0.250 0.010 0.010 0.250 0.070BNR-4 114.6 115.6 1 116 0.240 0.240 0.030 0.030 0.240 0.070BNR-4 115.6 116.6 1 117 0.100 0.100 0.004 0.004 0.100 0.070BNR-4 116.6 117.6 1 118 0.170 0.170 0.030 0.030 0.170 0.190BNR-4 117.6 118.6 1 119 0.150 0.150 0.020 0.020 0.150 0.190BNR-4 118.6 119.6 1 120 0.160 0.160 0.004 0.004 0.160 0.190BNR-4 119.6 120.6 1 121 0.640 0.640 0.010 0.010 0.640 0.130BNR-4 120.6 121.6 1 122 0.280 0.280 0.020 0.020 0.280 0.130BNR-4 121.6 122.6 1 123 0.180 0.180 0.060 0.060 0.180 0.130BNR-4 122.6 123.6 1 124 0.180 0.180 0.010 0.010 0.180 0.030BNR-4 123.6 124.6 1 125 0.120 0.120 0.020 0.020 0.120 0.030BNR-4 124.6 125.6 1 126 0.180 0.180 0.020 0.020 0.180 0.030BNR-4 125.6 126.6 1 127 0.180 0.180 0.020 0.020 0.180 0.070BNR-4 126.6 127.6 1 128 0.250 0.250 0.020 0.020 0.250 0.070BNR-4 127.6 128.6 1 129 0.130 0.130 0.030 0.030 0.130 0.070BNR-4 128.6 129.6 1 130 0.220 0.220 0.020 0.020 0.220 0.070BNR-4 129.6 130.6 1 131 0.140 0.140 0.020 0.020 0.140 0.070BNR-4 130.6 131.6 1 132 0.100 0.100 0.010 0.010 0.100 0.070BNR-4 131.6 132.6 1 133 0.180 0.180 0.004 0.004 0.180 0.060BNR-4 132.6 133.6 1 134 0.230 0.230 0.020 0.020 0.230 0.060BNR-4 133.6 134.6 1 135 0.090 0.090 0.004 0.004 0.090 0.060BNR-4 134.6 135.6 1 136 0.180 0.180 0.010 0.010 0.180 0.080BNR-4 135.6 136.6 1 137 0.160 0.160 0.050 0.050 0.160 0.080EB-115 3 6 3 2 0.214 0.214 0.194 0.144 0.045 0.045EB-115 60 63 3 21 0.126 0.126 0.980 0.098 0.069 0.069EB-115 168 171 3 57 0.177 0.177 0.024 0.026 0.049 0.049EB-115 255 258 3 86 0.944 0.944 0.038 0.038 0.496 0.446EB-115 267 270 3 90 0.217 0.217 0.018 0.018 0.980 0.098EB-115 306 309 3 103 0.197 0.197 0.050 0.030 0.136 0.136EB-115 387 390 3 130 0.503 0.603 0.036 0.036 1.407 1.407EB-115 414 417 3 139 1.270 0.270 0.051 0.051 0.542 0.542EB-115 417 420 3 140 0.247 0.242 0.047 0.047 0.288 0.288EB-115 444 447 3 149 0.310 0.310 0.067 0.067 0.742 0.792EB-115 489 492 3 164 0.990 0.099 0.015 0.015 0.510 0.510EB-115 528 531 3 177 0.980 0.098 0.006 0.006 0.528 0.528EB-116 0 3 3 1 0.358 0.358 0.184 0.184 0.990 0.099EB-116 27 30 3 10 0.317 0.317 0.180 0.180 0.043 0.047EB-116 69 72 3 24 0.195 0.195 0.147 0.142 0.012 0.012EB-116 114 117 3 39 0.584 0.584 0.398 0.396 0.073 0.073EB-116 150 153 3 51 0.355 0.355 0.289 0.289 0.082 0.032EB-116 153 156 3 52 0.419 0.491 0.464 0.464 0.065 0.065EB-116 165 168 3 56 0.118 0.118 0.003 0.083 0.018 0.018EB-116 174 177 3 59 0.209 0.209 0.168 0.168 0.033 0.037EB-116 213 216 3 72 1.171 1.171 0.734 0.734 0.827 0.822EB-116 216 219 3 73 0.922 0.922 0.354 0.354 0.891 0.691EB-116 219 222 3 74 1.529 1.529 0.275 0.275 2.328 2.228EB-116 228 231 3 77 1.496 1.496 0.980 0.098 1.928 1.928EB-116 249 252 3 84 1.459 1.459 0.400 0.400 0.459 2.459EB-116 252 255 3 85 1.957 1.957 1.784 0.784 3.561 3.561EB-116 390 393 3 131 0.364 0.364 0.074 0.073 0.445 0.445EB-116 423 426 3 142 0.008 0.008 0.012 0.012 0.990 0.099EB-116 438 441 3 147 0.980 0.098 0.012 0.012 0.109 0.109EB-116 441 444 3 148 0.289 0.289 0.049 0.040 0.459 0.459




Table 14-3 (Continued). Changes to Database Since 2009 Due Diligence Reviewhole_id from to length imc_samp tcu2009 tcu scu2009 scu au2009 au

EB-118 0 3 3 1 0.022 1.577 0.003 1.524 0.055 1.607EB-118 3 6 3 2 0.024 2.087 0.003 2.093 0.023 4.813EB-118 6 9 3 3 0.036 1.438 0.013 1.390 0.075 3.749EB-118 9 12 3 4 0.023 0.307 0.008 0.281 0.019 0.540EB-118 12 15 3 5 0.009 0.313 -9.000 0.320 0.013 0.452EB-118 15 18 3 6 0.018 0.087 0.005 0.070 0.020 0.065EB-118 18 21 3 7 0.028 0.096 0.003 0.060 0.028 0.098EB-118 21 24 3 8 0.013 0.109 0.001 0.036 0.013 0.696EB-118 24 27 3 9 0.005 0.032 0.001 0.011 0.013 1.679EB-118 27 30 3 10 0.009 0.018 -9.000 0.005 0.010 0.327EB-118 30 33 3 11 0.011 0.045 0.001 0.013 0.010 1.864EB-118 33 36 3 12 0.028 0.042 0.001 0.014 0.010 0.939EB-118 36 39 3 13 0.087 0.032 0.001 0.012 0.005 1.268EB-118 39 42 3 14 0.039 0.051 0.013 0.019 0.081 0.109EB-118 42 45 3 15 0.015 0.100 0.008 0.039 0.014 0.155EB-118 45 48 3 16 0.014 0.287 0.001 0.220 0.011 0.478EB-118 48 51 3 17 0.027 0.249 -9.000 0.169 0.037 0.334EB-118 51 54 3 18 0.013 0.487 0.002 0.406 0.015 0.300EB-118 54 57 3 19 0.010 0.753 0.001 0.708 0.011 0.335EB-118 57 60 3 20 0.007 0.903 0.003 0.869 0.003 1.433EB-118 60 63 3 21 0.013 1.414 0.002 1.133 0.014 0.276EB-118 63 66 3 22 0.012 1.439 0.011 1.333 0.025 0.641EB-118 66 69 3 23 0.026 1.311 0.004 1.724 0.060 0.583EB-118 69 72 3 24 0.012 1.408 0.004 1.253 0.034 0.436EB-118 72 75 3 25 0.011 0.941 0.002 0.891 0.026 0.546EB-118 75 78 3 26 0.012 0.690 0.003 0.597 0.015 0.610EB-118 78 81 3 27 0.017 0.540 0.001 0.511 0.015 0.559EB-118 81 84 3 28 0.017 0.389 0.017 0.194 0.014 0.203EB-118 84 87 3 29 0.042 0.369 0.008 0.282 0.082 0.196EB-118 87 90 3 30 0.021 0.360 0.001 0.310 0.025 0.136EB-118 90 93 3 31 0.023 0.540 0.001 0.444 0.218 0.121EB-118 93 96 3 32 0.023 -9.000 0.001 -9.000 0.066 -9.000EB-118 96 99 3 33 0.019 -9.000 0.001 -9.000 0.064 -9.000EB-118 183 186 3 62 0.712 0.712 0.980 0.098 0.861 0.861EB-15 32 34 2 17 0.069 0.069 0.500 0.050 0.065 0.065EB-15 36 38 2 19 0.091 0.091 0.760 0.076 0.279 0.279EB-2 21 24 3 8 0.110 0.110 0.108 0.109 0.038 0.038EB-2 153 156 3 52 0.180 0.180 0.019 0.019 1.169 0.116EB-26 15 18 3 6 0.325 0.235 0.209 0.209 0.251 0.251EB-26 75 78 3 26 0.265 0.263 0.054 0.054 0.653 0.653EB-35 42 45 3 15 0.244 0.224 0.042 0.042 0.496 0.496EB-53 27 30 3 10 2.580 0.345 0.128 0.128 0.481 0.481EB-59 594 597 3 199 0.152 0.152 0.171 0.007 0.171 0.171EB-59 597 600 3 200 0.175 0.175 0.214 0.008 0.214 0.214EB-59 600 603 3 201 0.196 0.196 0.202 0.006 0.202 0.202EB-59 603 606 3 202 0.268 0.268 0.179 0.008 0.179 0.179EB-59 606 609 3 203 0.256 0.256 0.333 0.011 0.333 0.333EB-59 609 612 3 204 0.082 0.082 0.073 0.005 0.073 0.073EB-59 612 615 3 205 0.093 0.093 0.095 0.007 0.095 0.095EB-59 615 618 3 206 0.183 0.183 0.145 0.006 0.145 0.145EB-59 618 621 3 207 0.118 0.118 0.085 0.006 0.085 0.085EB-59 621 624 3 208 0.044 0.044 0.046 0.002 0.046 0.046EB-59 624 627 3 209 0.090 0.090 0.073 0.005 0.073 0.073EB-59 627 630 3 210 0.063 0.063 0.067 0.004 0.067 0.067EB-59 630 633 3 211 0.081 0.081 0.109 0.006 0.109 0.109EB-59 633 636 3 212 0.033 0.033 0.047 0.001 0.047 0.047EB-59 636 639 3 213 0.026 0.026 0.063 0.002 0.063 0.063EB-59 639 642 3 214 0.063 0.063 0.070 0.004 0.070 0.070EB-59 642 645 3 215 0.066 0.066 0.144 0.003 0.144 0.144EB-59 645 646 1 216 0.084 0.084 0.047 0.005 0.047 0.047EB-6 144 147 3 49 0.250 0.250 0.010 0.010 0.980 0.098EB-6 384 386 2 168 0.560 0.560 0.990 0.099 0.387 0.387EB-7 32 34 2 17 0.393 0.392 0.340 0.340 0.233 0.233EB-77 27 30 3 10 0.577 0.577 0.048 0.524 1.566 1.566EB-77 36 39 3 13 0.395 0.500 0.276 0.276 0.684 0.684EB-8 32 34 2 17 0.269 0.270 0.200 0.200 0.180 0.180EB-92 165 168 3 56 0.606 0.048 0.009 0.009 0.033 0.033




14.2 Echo Bay Re-Assays of Benguet Samples 14.2.1 Re-Assayed Holes IMC received assay certificates for the following 22 Benguet holes that were re-assayed during the course of the Echo Bay Feasibility Study: BC-1 BC-2 BC-3 BC-7 BC-10 BC-11 BC-13 BC-14 BC-15 BN-1 BN-4 BN-7 BN-8 BN-18 BN-19 BN-20 BN-26 BN-27 BN-29 BN-30 BN-30B BN-31 The assay data was entered into the database and verified by IMC. The data amounted to about 1171 total copper assays, 1493 gold assays, and 139 soluble copper assays. Most of the assays were on the Benguet pulps, not remaining core samples. 14.2.2 Total Copper Figure 14-1 shows a xy plot and linear regression for the total copper assays. This represents 1159 assay pairs because pairs with an assay less than 0.01% or greater than 3.0% were excluded. The statistics indicate a mean copper grade of 0.239% for the Benguet assays versus 0.237% for Echo Bay. The regression equation (forced through the origin) has a slope of 0.989, very nearly one, which is an excellent result. It can also be seen that the samples generally cluster fairly tightly around the regression line. Figure 14-2 shows another xy plot, this time a plot of base 10 logarithms to show more details at the lower end of the distribution. All 1171 re-assays are included on the plot. The line on the plot is at a slope of 1. Again, it can be seen that there is very good correlation between the original Benguet assays and Echo Bay re-assays for total copper. It can be seen that there is quite a bit of scatter at the low end of the distribution, at an x-axis value of about -1.5, which corresponds to a grade of about 0.03% total copper. It is expected that the assay precision should be low at these low grades. Figure 14-3 shows a plot that represents precision and bias calculations for the data. The x axis is the mean value for each assay pair, i.e. (Benguet Assay + Echo Bay Assay)/2. The y axis is the %HRD (Half Relative Deviation), calculated as (Benguet Assay – Average)/Average and expressed as a percentage. The average %HRD value for all the points is a measure of bias between the data sets. Another statistic is the %HARD (Half Absolute Relative Deviation) which is the absolute value of %HRD, which ignores the sense of the error or relative deviation. %HARD is a measure of assay precision. The bottom of Figure 14-3 shows for all samples the precision estimate is about 7.2%, i.e. any assay should be within +/-7.2% of the true value. As Figure 14-3 also shows, precision is poor for lower grade samples and improves as the grade increases. For samples with a mean copper value




greater than (or equal to) 0.05% copper the precision estimate is 5.7%. The bias estimates shown are -3.5% for all data (Benguet > Echo Bay), but only -1.9% for samples greater than 0.05% total copper. These are considered goo results. According to the assay certificates, the Echo Bay total copper assay was based on four acid digestion (HF, HNO3, HCLO4, and HCL) followed by analysis by atomic absorption. 14.2.3 Gold Figure 14-5 shows a xy plot and linear regression for the gold assays. This represents 1485 assays pairs because pairs with an assay less than 0.01 g/t or greater than 5.0 g/t were excluded. The statistics indicate a mean gold grade of 0.454 g/t gold for Echo Bay versus 0.489 g/t gold for Benguet, an approximate 7.7% difference. The regression equation, forced through the origin, has a slope of 0.914, i.e. Echo Bay gold = 0.914 x Benguet gold, which implies an 8.5% to 9% difference in the assays. The Benguet gold assays are biased high compared with the Echo Bay assays. Figure 14-6 shows another xy plot, this time a plot of base 10 logarithms to show more details of the distribution. It can be seen that for the assays less than -0.75 along the x-axis, which corresponds to about 0.2 g/t gold, there is considerable scatter around the 1:1 line for the assay results. This is fairly typical because assay precision at grades lower than the 0.2 g/t threshold is usually poor for standard fire assays. Above about -0.5 on the x-axis (about 0.3 g/t gold) the assays tend to cluster fairly well around the 1:1 line though it is noticeable that a significant majority of the assays plot below the line (Benguet > Echo Bay). Figure 14-5 shows a plot that represents precision and bias calculations for the data. For all samples the precision estimate is 20.6% that implies that any assay should be within +/-20.6% of the true value. For samples with a mean greater than 0.2 g/t gold the precision estimate is 14.4%. Considering that the check assays are duplicate samples (versus say re-assays of the same pulp) this range of precision is acceptable for gold. Bias estimates by the %HRD calculation are -7.3% (Benguet > Echo Bay) for all samples and -4.0% for samples greater than 0.2 g/t gold. The Echo Bay gold assays were based on a 50g fire assay with an atomic absorption finish. 14.2.4 Soluble Copper Check assays of soluble copper were limited to two holes, BN-1 and BN-18. Figures 14-7 shows a xy plot of Benguet versus Echo Bay soluble copper assays. The line on the graph is at a slope of 1:1 and it can be seen that the Echo Bay assays are always higher than the Benguet assays. The mean grades are 0.381% soluble copper for Echo Bay versus 0.277% for Benguet.




It appears that the Echo Bay soluble copper assay method was more aggressive assay than the method used by Benguet, though two holes is not very diagnostic. Comparisons of the results of block grade estimation with and without Benguet assays, as discussed in Section 17.6, did not indicate this magnitude of difference in soluble copper results. The Echo Bay soluble copper assays are based on sulfuric acid digestion followed by analysis by atomic absorption. The Feasibility Study report describes it as “a weak acid, room temperature digestion”.




Figure 14-1




Figure 14-2




No. of Benguet EB % Precision BiasDescription Samples Cu (%) Cu (%) Diff (%HARD) (%HRD)All Samples 1171 0.241 0.240 -0.32% 7.18% -3.48%Avg Cu >=0.05% 1082 0.258 0.258 0.06% 5.70% -1.89%

Figure 14-3. %Half Rel Deviation vs Mean - Echo Bay Re-Assays of Benguet Copper

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0 0.5 1 1.5 2 2.5

Mean Copper Assay (%)

%H

RD

Cu Re-Assays

No. of Benguet EB % Precision BiasDescription Samples Au (g/t) Au (g/t) Diff (%HARD) (%HRD)All Assays 1493 0.501 0.476 -5.00% 20.59% -7.34%Avg Gold >= 0.2 g/t 887 0.762 0.739 -3.08% 14.41% -4.01%

Figure 14-4. %Half Rel Deviation vs Mean - Echo Bay Re-assays of Benguet Gold

-100.00%

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

Mean Gold Assay

%H

RD

Re-Assays




Figure 14-5




Figure 14-6




Figure 14-7




14.3 RMMI Check Assays D. Earnest (REI) collected a suite of 100 diamond drilled 3-meter intervals on June 5-7, 2010. All samples were obtained from material remaining in the King-king Pantukan core shack, and were considered representative of variations in lithology and grade for samples of the original drilling programs. The intent was to verify the original assay results. The samples included 68 samples from original Echo Bay core and 32 samples from original Benguet core. 14.3.1 Total Copper Figure 14-8 shows an xy plot of original total copper assays on the x axis and the RMMI check assay on the y axis. Original Benguet and Echo Bay samples are distinguished on the graph. Most of the samples cluster relatively closely to the 1:1 line plotted on the graph, though there are five to six significant outliers, and for all of them the check assay was significantly lower than the original assay. Figure 14-9 shows the plot of the mean total copper grade (mean of the original assay and check assay for each pair) on the x axis and %HRD (Half Relative Deviation) on the y axis. Section 14.2.2 defined the terminology used. Table 14-4 shows the relative statistics for the comparison. For all samples the original copper assay averaged 0.468% copper versus 0.424% for the check assay. This is about a 9.5% difference in the means. Results are similar for Echo Bay and Benguet samples with the check assays being 9.7% lower than Echo Bay original samples and 9.4% lower than Benguet original samples. Precision estimates by the HARD calculation are about 10% meaning than any one assay is expected to be within +/-10% of the true value. Bias estimates from the %HRD calculation method are -4.9% for all data (original assay > check assay), -4.5% for Echo Bay original samples and -5.9% for Benguet original samples. These results are not as favorable as those obtained by Echo Bay with their program to re-assay Benguet samples, though assay results were similar for the majority of the 100 samples. The Echo Bay re-assay program showed a lower bias and better precision than the RMMI check assay program. The results may partly be explained by degradation of the samples over time, or possibly that 100 samples do not represent a large enough population. 14.3.2 Gold Figure 14-10 shows an xy plot of original gold assays on the x axis and the RMMI check assay on the y axis. Original Benguet and Echo Bay samples are distinguished on the graph. Most of the samples cluster reasonably close to the 1:1 line plotted on the graph, though there are a few significant outliers. Note there is one Echo Bay sample with an original assay of 14.3 g/t and an RMMI check assay of 6.8 g/t that is not shown. Note also that this single assay can significantly distort mean value calculations with only 100 samples available.




Figure 14-11 shows the plot of the mean gold grade on the x axis and %HRD (Half Relative Deviation) on the y axis. Table 14-5 shows the relative statistics for the comparison. For all samples the original gold assay averaged 0.962 g/t versus 0.801 g/t gold for the check assay. This is about a 16.7% difference in the means. Also, for all data, the precision estimate is 23.0% (any one assay is expected to be within +/-23% of the true value) and the bias estimated by the %HRD calculation is -13.4% (original assay > RMMI check assay. The table also shows significantly different results for Echo Bay and Benguet original samples. For all Echo Bay samples the precision estimate is 19.4%, and goes to 15.2% when samples less than 0.12 g/t gold and the outlier at 14.3 g/t are excluded. The bias for Echo Bay samples is -10.7% (Echo Bay > RMMI) for all samples and goes to a very reasonable -5.5% when the low grade and outlier are excluded. For original Benguet samples the precision estimate is 30.7% and the bias -19.0 (Benguet assay > RMMI assay). Truncating a few low grade samples has minimal impact on the results. As with the Echo Bay re-assay program, the RMMI assays indicate the original Benguet gold assays are biased high. 14.4 Conclusions and Recommendations The results of the comparison of assays in the database to assay certificates indicate that the Echo Bay data were not as clean as expected. However, based on the IMC checks, and subsequent corrections, IMC is of the opinion that the database now correctly reflects original assay results to an acceptable level of accuracy for the current resource determination. The Benguet total copper assays and Echo Bay re-assays compare well and indicate good assay precision for total copper. Based on this, the Benguet total copper assays are acceptable for resource calculation. The Benguet gold assays are biased high compared with the Echo Bay assays, and also the RMMI check assays, and will not be used for the current resource model. However, they will be replaced with Echo Bay re-assays when available. The RMMI check assay program was successful in that it broadly validated previous Benguet and Echo Bay copper assays and Echo Bay gold assays. On average, the check assays tended to be lower than the original assays. This can partially be explained by a few outliers since 100 samples is not a particularly large population. It is also possible that there has been some degradation of the samples over time. It is reported to IMC that pulps and remaining core are available for some portion of the Benguet drilling. IMC recommends an initial re-assaying of a about 200 Benguet drill hole pulps and their corresponding remaining half of core for total copper and gold. The purpose is to determine if the bias observed in the Benguet gold assays was due to sample preparation or the analytical work (or both). Based on the outcome of this, additional Benguet pulps




and/or core should be assayed to supplement the existing database and improve the confidence of mineral resource and mineral reserve estimates.

Table 14-4. RMMI Check Assays versus Original Assays - Total CopperNo. of Original Check % Precision Bias

Description Samples Cu (%) Cu (%) Diff (%HARD) (%HRD)All Data 100 0.468 0.424 -9.54% 9.98% -4.92%Echo Bay Data 68 0.505 0.456 -9.68% 9.72% -4.47%Echo Bay Data 0.2% < Original Cu 58 0.570 0.512 -10.15% 9.40% -5.11%Echo Bay Data Original Cu < 1.5% 64 0.403 0.373 -7.43% 9.59% -4.01%Benguet Data 32 0.389 0.354 -9.14% 10.53% -5.87%Benguet Data 0.2% < Original Cu 26 0.453 0.408 -10.05% 10.57% -7.90%

14-8. Total Copper - RMMI Check Assays vs Original Assays

0.00

0.50

1.00

1.50

2.00

2.50

3.00

0.000 0.500 1.000 1.500 2.000 2.500 3.000

Original Copper

Chk

Cu

Echo BayBenguet

14-9. HRD% vs Mean Copper Grade for RMMI Check Assays

-100.00%

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

0.000 0.500 1.000 1.500 2.000 2.500 3.000

Mean Copper

HR

D% Benguet

Echo Bay




Table 14-5. RMMI Check Assays versus Original Assays - GoldNo. of Original Check % Precision Bias

Description Samples Au (g/t) Au (g/t) Diff (%HARD) (%HRD)All Data 100 0.962 0.801 -16.68% 23.04% -13.37%Echo Bay Data 68 1.101 0.926 -15.89% 19.41% -10.73%Echo Bay Data 0.12 < Original Au < 10 56 1.068 0.997 -6.62% 15.20% -5.46%Benguet Data 32 0.665 0.535 -19.45% 30.74% -18.98%Benguet Data 0.135 < Original Au 29 0.723 0.587 -18.83% 28.93% -15.96%

Figure 14-10. Gold - RMMI Check Assays vs Original Assays

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

0 1 2 3 4 5 6

Original Gold

Che

ck G

old

Echo BayBenguet

Figure 14-11. %HRD vs Mean Gold Grade for RMMI Check Assays

-100.00%

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

60.00%

0.000 1.000 2.000 3.000 4.000 5.000 6.000

Mean Gold Assay

%H

RD Benguet

Echo Bay




15 Adjacent Properties There are currently no active mineral projects that are adjacent to the King-king Gold-Copper Deposit. Section 7.1 listed the major mines and mineral prospects in eastern Mindanao. These are also shown on Figure 4-1. There is significant artisanal mining for gold in the King-king Mineral Property Area and in adjacent mining tenements surrounding the King-king claims. These areas are north and northeast of the King-king Gold-Copper Deposit. Additional details regarding these potential future mineral targets are presented in Section 7.2.6 Potential Exploration Targets.




16 Mineral Processing and Metallurgical Testing This section provides a discussion of the metallurgical test work used as the basis for the conceptual process design. This work focuses on the metallurgy testing performed by Lakefield Research starting in 1996 and completing in 1997 for Echo Bay Mines, the mineral lease holder at the time. This work was chosen because it represented the most detailed flotation investigation performed to date on the sulfide type ore. Other more recent test results at other projects and mines, and commercial applications at mines of a new suite of copper oxide mineral collectors (since 2003) were used to estimate the recovery and grade of copper concentrates produced from mixed ore at King-king. Other earlier flotation studies are also briefly described in tables below. A generalized process flow diagram is presented in Figure 16-1. The nominal design was 108,700 tpd at 92% availability (100,000 tpd), operating seven days per week producing two separate concentrates; one each of copper-gold and gold.

Primary Crushing SAG Mill Ball Mills


Sulfide Flotation

Oxide Flotation

Cleaner Flotation

Concentrate Dewatering

at Port

Concentrate Stored at Port

until Shipped to Smelter

Legend:Ore Concentrate Tailing Gold

EW Type Gold Circuit

Gold Dore Shipped to

Refinery

Land Tailing Management

System

Intensive Cyanide Leach


Figure 16-1 Process Flow Diagram




16.1 Metallurgical Samples Several Echo Bay drill hole intervals were selected for testing representing a wide range of ore zones and ore grades. Samples were broadly broken up into sulfide ore (predominantly sulfide mineralization, 85-97%) and oxide ore (sulfide and oxide mineralization together, approximately 70% Sol Cu). These samples were used for generating composite samples; two sulfide ore composites (1S and 2S), one oxide ore composite; and samples for head grade versus recovery testing and metallurgical mapping test work. 16.1.1 Sulfide Ore Samples

Table 16-1 Sulfide Ore Sample Details

Drill Hole No. (sample ID)

From-To (m) TCu, % Au, g/t Sol Cu, % Lith Code*

Sample Wt., Kg

5 (KKM-001) 252-286 0.48 0.61 0.033 20 93

6 (KKM-004) 100-120 0.34 0.12 0.007 20 100

75 (KKM-004) 135.1-158.75 0.34 0.12 0.007 20, 30 “

6 (KKM-005) 236-273 0.59 1.33 0.023 20 99

9 (KKM-008) 60-80.2 1.30 0.55 0.21 30 100

10 (KKM-011) 124-169.8 0.50 <0.02 0.015 20 100

8 (KKM-012) 336-367.8 0.21 0.26 0.011 30 100

12 (KKM-015) 354-387.55 0.16 0.19 0.005 20 100

13 (KKM-017) 393-425.75 0.27 0.61 0.010 30 100

31 (KKM-019) 174-210.15 0.32 0.69 0.010 20 100

21 (KKM-020) 256-288.2 0.62 1.54 0.025 20 100

31 (KKM-021) 111-148 0.19 0.25 0.009 20 100

31 (KKM-022) 240-274 0.23 0.75 0.009 20 100

70 (KKM-024) 138-170 1.19 1.37 0.029 20 90

30 (KKM-025) 285-319 0.36 0.54 0.031 20, 30 108

37 (KKM-026) 175-213 0.65 1.50 0.059 30 107

53 (KKM-028) 38-69 1.12 4.02 0.064 20 106

43 (KKM-029) 128-166 0.62 0.93 0.040 20 107

46 (KKM-031) 210-249.35 0.35 1.86 0.012 20 100

*First lithology when more than one is listed was the dominant one.




Individual sulfide samples used in the grade versus recovery testing and metallurgy mapping tests are representative of the present day ore body. Sulfide samples have representative TCu, Au and Sol Cu ranges, are distributed throughout the planned open pit and cover the two major sulfide ore lithologies. (See the drill map, Figure 11-1, shown in Section 11.) Therefore, the curves generated from the grade versus recovery results were usable for predicting recoveries of sulfide copper (TCu minus Sol Cu) and gold for the blocks in the new block model. Sulfide ore composite 1S was prepared from the following drill hole intervals:

Table 16-2 1S Composite Sample Description

Drill Hole Interval (m) EB006 100-120 20 EB075 135.1-158.75 20, 30

Lithology Code

EB009 60-80.2 20 EB010 128-169.8 20

Sulfide ore composite 2s was prepared from the following drill hole intervals:

Table 16-3 2S Composite Sample Description

Drill Hole EB005 252-286 20

Interval (m)

EB006 236-273 20 EB020 60-80.2 20

The head analyses of these two composites are illustrated below.

Table 16-4

Head Grade Assays of Sulfide Ore Composites

Element

1S 2S

Cu, % 0.72 0.61 Mo, % 0.013 0.004 Au, g/t 0.44 1.06 Ag, g/t 3.5* 1.27

Sulfur, % 2.00 1.00

Sol Cu, % 0.093 0.023 *Two assays for silver on 1S, 3.0 and 4.0 g/t




Mineralogy of the two composites is shown below.

Table 16-5 Mineralogy of Sulfide Ore Composite Samples

Sample ID

Chalco-pyrite

Bornite Chal-cocite

Covel-lite

Dige-nite

Tetra-hedrite

Mala-chite

Chryso-colla

Cu-prite

Cu

1S major trace minor trace Trace trace 2S major minor trace Trace minor There is one rock type (lithology code 20) represented by the composite samples out of the two major sulfide ore rock types. The samples are concentrated in the central and east side of the pit (5, 6, 8, 10 and 20) with only hole 75 from the western part of the deposit. Overall the sulfide composite samples seem to represent the ore from the first development phases of the pit where the eastern half of the pit is developed first due to its higher grades of copper and gold. Samples are consistent with the need to know how the pay back years will behave.




16.1.2 Oxide Ore Samples

Table 16-6 Oxide Ore Sample Details

Drill Hole No. (sample ID)

From-To (m) TCu, % Au, g/t Sulfur, %

Lith Code* Sample Wt., Kg

7 (KKM-002) 30-60.25 2.03 0.46 0.23 30 119

7 (KKM-003) 12.95-30 0.65 0.28 0.030 30 80

9 (KKM-006) 15-36 0.40 0.36 0.070 30 102

9 (KKM-007) 39-54.3 2.22 0.57 0.63 30 102

12 (KKM-009) 45.4-66.2 1.02 0.80 3.55 20 112

11 (KKM-010) 100-134.9 0.80 1.17 0.020 20 100

13 (KKM-013) 36-60.75 0.23 0.10 0.86 30 108

8 (KKM-014) 108-140 0.58 0.1 0.070 20, 30 100

8 (KKM-014) 82-87.3 0.58 0.1 0.070 20 “

11 (KKM-016) 80-96 0.53 1.37 0.22 30, 20 100

7 (KKM-016) 128-141.3 0.53 1.37 0.22 30 “

14 (KKM-018) 62-97.15 0.70 0.37 0.46 30, 20 100

15 (KKM-023) 0-14 0.35 0.13 0.040 20, 10 100

17 (KKM-023) 0-18 0.35 0.13 0.040 20, 10 “

53,41 (KKM-027) 0-23 0.79 2.48 0.040 30, 20, 10 108

54 (KKM-030) 3-28.35 0.16 0.73 0.13 30 100

28 (KKM-032) 0-30 0.38 0.55 0.020 30, 10 100

56 (KKM-033) 0-36 0.070 0.37 0.010 30, 20 100

18 (KKM-034) 4-30 0.46 1.48 0.020 30 100

50 (KKM-035) 7-33 0.078 0.10 0.20 30 100

*First lithology when more than one is listed was the dominant one. Individual oxide samples used in metallurgy mapping tests are representative of the present day ore body. Oxide samples have representative TCu, Au and Sol Cu ranges, are distributed throughout the planned open pit with an emphasis in the east and central parts of pit, and cover the two major oxide ore lithologies. (See the drill map, Figure 11-1, shown in Section 11.)




An oxide ore composite was prepared from the following drill hole intervals:

Table 16-7 Oxide Composite Sample Description

Drill Hole Interval (m) EB007 30-60.25 30 EB007 13.0-30 30

Lithology Code

EB008 108-140 20, 30 EB008 82-87.5 20 EB011 80-96 30, 20 EB007 128-141.3 30

The head analyses of the oxide composite is illustrated below.

Table 16-8 Head Grade Assays of Oxide Ore Composite

Element

Cu, % 0.84 Mo, % <0.002 Au, g/t 0.61 Ag, g/t 2.5

Sulfur, % 0.29

Sol Cu, % 0.59 Mineralogy of the oxide composite is shown below.

Table 16-9 Mineralogy of Oxide Ore Composite

Sample

ID Chalco-pyrite

Bornite Chal-cocite

Covel-lite

Dige-nite

Tetra-hedrite

Mala-chite

Chryso-colla

Cu-prite

Cu

Oxide Comp

Minor trace trace Trace major trace

The two major rock types (lithology codes 20 and 30) are represented by the composite sample. The samples are concentrated in the central and east side of the pit (holes 7, 8 and 11). Overall the oxide composite sample seems to represent the ore from the first




development phases of the pit where the eastern half of the pit is developed first due to its higher grades of copper and gold. Results of the gold recovery to flotation of the oxide ore were used in the block model development for this resource estimate. Since most of the oxide copper in the Lakefield study was recovered by acid leaching followed by precipitation and flotation of the precipitate these recoveries were not used in this study. Discounted recoveries for similar oxide mineral flotation results with new types of reagents were used instead. More details regarding oxide mineral recovery are explained in the flotation section below. 16.2 Grinding Bond work index measurements were performed for each composite (1S, 2S and oxide composite) The Bond work index (kWh/metric ton) for each composite was determined in standard Bond ball mill closed circuit grindability tests and the results are reported below: 1S 2S

Bond work index (kWh/tonne) 16.1 16.3 12.1 Oxide

Screen size, microns 150 150 150 Product K80, microns 113 150 117 Feed K80, microns 1889 2130 1575

The process facility design basis is 108,700 tons/day (tpd) and includes a 92% plant availability factor (100,000 tpd). This section describes the preliminary grinding circuit and its design basis. Design of Circuit The grinding test results for composite 2S were applied to predict the primary grinding circuit. This was the most conservative value. A significant portion of the early years of production will come from the softer material represented in sample 12.1, thus there is significant upside potential in that time period to process higher tonnages and the downstream processes (screens, pumps, pipes, float cells, thickners, etc. will be sized to accommodate 125,000 tpd, 25% higher throughput). The plant design was based on application of Hogg & Fuerstenau model for SAG mill power estimation and application of Bond’s Law for estimation of conventional ball mill grinding capacity. The design also included some assumptions based on the author’s experience regarding crusher product size and practical product size from the SAG mill. The circuit design was a conventional SABC (with 3 ball mills and 3 crushers).




1) A single SAG mill of 40 ft diameter and 21.0 EGL ft length driven by a 20 MW GMD.

2) Three ball mills each at 27 ft diameter and 39.5 EGL ft length driven by a 18 MW GMD.

3) Three crushers in closed circuit with the SAG oversize, two operating, MP800’s or equivalent.

4) The SAG mill will be outfitted with 70mm (2.9 inch) grates and will discharge onto two double deck super screens with 10 mm screen aperture (0.38 inch) bottom.

Table 16-10: History of Grinding Tests

Test Description

Purpose Performed By

Date # of Tests

Results

Bond Ball Mill Tests

Feasibilty primary grinding study by Echo Bay

Lakefield Research

1997 3 Bond Mill Work Indices: Sulfide Ore Composites: 1S – 16.1, 2S-16.3; Oxide Composite- 12.1 kWh/tonne

Bond Ball Mill Tests

Preliminary Flotation Investigation

Metcon Research

1993 8 Copper recovery was insensitive to particle size in range of 300-100 micron. Concentrate wt. increased with larger particle size and concentrate grade increased with decreased particle size.

Additional future primary grinding geostatistical test work on ore samples representative of the first 5 years of production from lithology codes 20 and 30, plus some intervals from the later years, is recommended to insure the primary grinding circuit is not over or under designed. 16.3 Flotation Area Design values reported here for the sulfide rougher flotation circuit are based on the design factors listed in the report titled “King-king Project Level 1 Feasibility Study April 1997 Volume 3 of 3 Appendix II Design Criteria”. Only the design criteria for sulfide mineral flotation were applied in the current report. Preliminary copper oxide mineral flotation results were developed from other technical reports from recent feasibility reports where copper oxide mineral flotation was applied, from laboratory test results from other projects and mines and from commercial application results at mines. These results were applied to design the copper oxide flotation rougher circuit. The flow sheet developed for King-king was based on sequential flotation circuits (sulfide copper first) for producing copper concentrates containing gold from copper sulfide minerals (chalcopyrite and bornite) and from copper oxide minerals (malachite principally). Copper sulfide mineral flotation circuit was designed based on the Lakefield research performed in 1997. Copper oxide mineral flotation circuit designs were based on RMMI interpretation of the results from commercial mine reports and research reports on other projects utilizing the




new reagents developed in the past seven years for oxide mineral flotation. (Note two commercial operations indicated both sulfide and oxide copper were floated in the same circuit so there may be some capital savings if this proves possible at King-king.) Gravity concentration circuits were added in the primary grinding circuit and on copper oxide mineral flotation rougher tailing to enhance gold recovery. (Copper rougher concentrate regrind and cleaner circuits have not been designed at this time.) The Lakefield test report titled “An Investigation of the Recovery of Copper and Gold from King-king Sulphide Ore Samples” contains the details of the sulfide copper flotation results. The Lakefield study results of sulfide copper head grade versus rougher flotation recovery and the reported losses of copper in the downstream cleaner circuits were used to generate a sulfide copper recovery equation for the block model. Sulfide copper is defined by the assays as TCu minus Sol Cu (acid soluble copper). The equation for sulfide copper recovery is:

Sulfide Cu Rec. = (100-2.5*((TCu-SolCu)*1.6683)^(-0.54)-5)/100 The recovery was capped at 92%

Gold recovery to the final copper concentrate is defined as the percentage of total gold in the head grade that reports to the copper concentrate via the flotation processes. The Lakefield study results of gold head grade versus rougher flotation recovery and the reported losses of copper in the downstream cleaner circuits were used to generate a gold recovery equation for the block model. The equation for gold recovery to the copper concentrates is:

Gold Rec. to Con = 0.011936 * gold g/t ^ 2 + 0.092599 * gold g/t + 0.77111 - 0.09 The recovery was capped at 75%.

A copper recovery equation for Sol Cu to the copper concentrate through oxide flotation was developed by utilizing the Lakefield reported mineralogy of the oxide ore composite shown above in Table 16-9 and reviewing information in the literature for results on copper oxide flotation utilizing the new more efficient reagents (alky hydroxamates) available today (and not in 1997). Results were found for commercial plants and for recent laboratory scale tests. These results are summarized in Table 16-11 below.




Mine Name Ore Type Oxides SulfidesHead Grade

Range, %Dosage Range,

g/tRecovery,

%Con

Grade, % Comments

Minto Mine, Yukon Canada Cu-Au X X3.6% (1.6%

ASCu)1200 95% 45.6

Lab results, reagent on site for when needed, cost reported as $10/kg, ASCu component recovery was 89%

Radio Hill Mine, Australia Cu X X 2.8 - 4.5% 80 - 120 70% 24%Grade unchanged with AM28, Without AM28 recovery is 50 - 60%, commercial application

N.S.W., Australia Cu X 1.40% NR 72% 41% Tailings, Cu-Malachite, Azurite, Lab ResultsQueensland, Australia Cu X 1.5 – 1.8% NR 75% 36% Tailing, Cu-Chrysocolla, Lab results

North Queensland Cu X X NR 30-90 75% 35%Lab Results, early testing on reagent at Ausmelt, Ore, recovery improved from 52% to 75%

Metorex, DRC, Ruashi Cu-Co X X 2.95% Cu NR 75% NRImproved concentrator recovery of copper from 65% to 75%, Commercial Application

Table 16-11 Oxide Flotation Results for New Reagents

Malachite is the predominant copper oxide mineral in the King-king deposit according to the above mentioned mineralogy report in the Lakefield study. Research indicates that malachite recovery varied from 72% to 89% with most of the findings falling in the 75% recovery range. Malachite was the main copper oxide mineral observed in the core samples evaluated in the June 2010 visit to the King-king core building. Due to the fact that no actual test work has been performed on the King-king ore with the new reagents available the Sol Cu recovery was significantly discounted from the observed 75% level. A grade versus recovery equation was developed for Sol Cu with a cap of 70%. Most of the Sol Cu recoveries in the block model were in the 57-65% range when this equation was applied. The equation for Sol Cu recovery to the copper concentrates is:

SolCu Rec. = (73 - 3.5 * (SolCu * 1.6683) ^ ( - 0.54) -3) / 100 The recovery was capped at 70%.

It has also been estimated that some gold recovery by gravity concentration means will be achieved. A significant portion of the gold is recovered by this means in operating porphyry gold and copper-gold deposits throughout the world. It is reported in the geology and mineralogy sections of the 1997 feasibility report and in the geological logs of the core that free gold was observed. Therefore, with the advances made in gravity concentration methods since 1997 there is a good possibility of additional gold recovery by this means. There are significant losses of gold in the cleaner circuit after recovering the gold in the rougher circuit; this suggest there is potential to recover this gold in the cleaner tailing by gravity concentration. Anecdotally, there are approximately 15 illegal miner adits operating in the deposit area and it was observed that gold is recovered by panning ground ore. These observations indicate gravity concentration should improve gold recovery of the overall process. The current design includes two large scale gravity concentrating systems. One circuit would be operating on underflow from the primary grinding circuit cyclone clusters (9 XD70




Knelson units) and another would be operating on the tailing from the copper oxide flotation rougher circuit (9 XD70 Knelson units). The equation for gold recovery from gravity concentration is:

Gravity Gold Rec. = (18-4.5*(gold g/t*1.6683/2)^(-0.54))/100 The recovery was capped at 15%.

The recovery falls off significantly at low grades because it is felt the occurrence of free gold at low gold grades is much lower than at high gold grades. Cleaner circuit studies at Lakefield indicate that a 31% copper concentrate should be achievable due to the presence of minor quantities of bornite (63% Cu) in the ore. Concentrate analysis for impurities for the composite sample in the Lakefield test work is shown in the table below.

Table 16-12 Concentrate Impurities in Lakefield Study

Element Assays, g/t Element Assays, g/t Al 9800 Ag 95.1 La <50 As 580 Loss on Ignition 129000 Cl 42 Mg 2400 Au 51.2 Mn 92 Ba 39 Mo 910 Be <1 Na 3300 Bi <20 Ni 32 Ca 3200 P 200 Cd 26 Pb 1300 Co 32 S 291000 Cr <50 Sb 270 Cu 333000 Se 470 Fe 250000 Sn <20 F 100 Te 270

Hg 2.5 Y <5 Insol 83400 Zn 1500

K 3100 Total 990287

Design flotation times for sulfide copper rougher flotation and the soluble copper rougher flotation circuits are shown in the table below. The 1997 Feasibility Study design criteria were used to estimate the sulfide copper rougher tank flotation cell size. Flotation times for soluble copper rougher flotation were estimated from the report titled “Flotation of mixed copper oxide and sulphide minerals with xanthate and hydroxamate collectors, 2008”.




Table 16-13: Flotation Design Criteria

Type of Flotation

Plant Float Time, min.

Pulp Flow Rate,

m³/min.

m³ Required

Cell Size, m³

No. of Cells

Sulfide Cu Rougher 21 287 6,540 300 24 Soluble Cu Rougher 17 287 5,294 300 18

Table 16-14: History of Flotation/Leaching Tests

Test Description Purpose Performed By

Date # of Tests

Results

Sulfide ore flotation and oxide ore flotation/acid leaching/precipitation/flotation of precipitate

Feasibility level Met Data

Lakefield Labs, Ontario

1997 ~100 Cu and Au recovery on sulfide ore 85% and 78% respectively. Cu and Au recovery on floated/tail leached/sol’n precip/precip floated was 80% for Cu and 70% for Au. Salable concentrate grade produced (27 – 33%Cu).

An investigation of the recovery of Copper and gold from King-king oxide ore samples



1997 29 Additional study of the oxide ore process of float-leach tail-precip Cu with Na2S-float precip. 86% copper recovery and 70% gold recovery if 40C leach temperature utilized.

An investigation into the leaching of copper and precious metals from a sample submitted by Echo Bay Mines



1997 6 Cyanide leaching recovered 73-91% of the gold and 35-43% of the silver. Sulfuric acid leaching in column tests recovered 81% of the copper in 23 days. Recommendation was agitated leach with non-oxidative acid leach for copper followed by cyanide leach of gold.

Continued flotation ore variability test work, mineralogy, and tailing settling test

Feasibility Level Testing


1997 37 Recommend additional work to improve 1S type ore rec. and grade to final con. 2S type ore samples – 88% Cu rec, 34% Cu grade, 78%Au rec, 93g/t Au grade. 1S type ore samples – RoCon: 88% Cu rec, 78%Au recovery; Final Con: 69% Cu rec, 59% Au rec, 26% Cu and 71 g/t Au Con grade

Metallurgical mapping of oxide ore at King-king



1997 24 Final Con results: Cu recovery 57%, Cu grade 33%, Au 49% rec and 53 g/t Au grade. 10% lower recoveries than on composite samples.

Leaching of oxide ore with acid and cyanide



1997 Copper recovery of 85% and gold recovery of 95%

Preliminary flotation investigation of mixed oxide-sulfide and sulfide ore types

Pre-feasibility level testing

Metcon Labs Tuson, Arizona

1993 ~50 Lock cycle test work on the sulfide ore produced 82% Cu and 83% Au rec. to final 2nd cleaner con with 20% Cu and 35 g/t Au. Oxide-sulfide tests indicated the tailing would need to be acid leached to achieve +80% copper recovery.




Some ore has been observed to oxidize rapidly in previous metallurgical test programs. To counter this effect and more closely simulate actual mining and milling operations where the time between mining and milling is often less than 24 hours, freezing or vacuum sealing of future coarse ore rejects selected for met testing should be performed as soon as they are produced at the assay lab and these samples should remain in this condition until execution of laboratory grinding and flotation tests begin on each sample. Investigation of combined rougher flotation of sulfide and soluble copper as well as sequential flotation should be investigated. Combined rougher flotation may decrease capital and operating costs. Process testing on new core should address the following items: Optimum primary grinding size for various ore zones and lithology types Geo-statistical analysis of grinding and flotation Copper oxide mineral response to flotation with recently developed and

commercialized oxide flotation reagents and flow sheets A thorough study of regrind product size Optimized cleaner flotation reagent schemes and flow sheet for ore variations Evaluate centrifugal gravity and flash flotation recovery of gold from the primary



16.4 Analytical Procedures for Process Testing Analytical procedures at the Lakefield Lab in Canada were not provided. The Lakefield Contact details are listed below. SGS Minerals Services, Lakefield PO Box 4300 185 Concession Street Lakefield, Ontario, K0L 2H0 Phone: +1(705) 652-2000

Fax: +1(705) 652-6365

Analytical procedures at the Metcon Lab in Tucson are described below. The Metcon Contact details are listed below.




METCON Research Inc. 7701 N. Business Park Drive Tucson, Arizona 85743, USA Phone: 520-579-8315 FAX: 520-579-8315 E-mail: [email protected]

Two 55 gallon drums containing two separate samples of drill core identified as mixed (MX) and sulfide (SF) weighing approximately 686 lbs and 598 lbs gross weight respectively were delivered to the METCON Research Inc. laboratory facility on 10 May 1993 by common carrier. Each sample/ore type was treated separately and identically as follows.

Samples were stage crushed to minus 1 inch and riffle mixed and split into a 3/4 split portion which was saved and a 1/4 split portion which was stage crushed to minus 10 mesh and riffle mixed and split into 1000 gm test charges for use in the metallurgical test program.

One test charge, as prepared above/ was selected at random, pulverized, and mixed and split by rolling and dipping into three portions. One portion was submitted for duplicate copper, iron, sulfur, gold/ and silver analyses. Another portion was submitted for spectrographic analysis. The third or reject portion was saved. The arithmetic average of the duplicate head assays were reported at 0.520 percent copper, 3.62 percent iron, 0.19 percent sulfur, 0.022 ounce per ton gold and 0.26 ounce per ton silver for the mixed ore type and 0.376 percent copper, 3.70 percent iron, 0.17 percent sulfur, 0.026 ounce per ton gold and 0.07 ounce per ton silver. These analyses were used as the head assay for all flotation tests performed. (See Appendix 1, Head Assay Analysis Log and Report of Spectrographic Analysis for details).

Table 16-15

mailto:[email protected]�




17 Mineral Resources and Mineral Reserves Estimates 17.1 Mineral Resource Table 17-1 shows the mineral resource for the project. Table 17-1. King-king Mineral Resource 10/4/2010

Ore Ore Eq Cu Tot Cu Sol Cu Gold Eq AuType Ktonnes (%) (%) (%) (g/t) (g/t)

Measured Mineral ResourceOxide 40,879 0.855 0.444 0.266 0.575 1.196Sulfide 66,402 0.536 0.269 0.037 0.445 0.894Total 107,281 0.658 0.336 0.124 0.495 1.009

Indicated Mineral ResourceOxide 120,443 0.654 0.349 0.210 0.428 0.916Sulfide 563,800 0.454 0.253 0.032 0.335 0.757Total 684,243 0.489 0.270 0.063 0.351 0.785

Measured/Indicated Mineral ResourceOxide 161,322 0.705 0.373 0.224 0.465 0.987Sulfide 630,202 0.463 0.255 0.033 0.347 0.771Total 791,524 0.512 0.279 0.072 0.371 0.815

Inferred Mineral ResourceOxide 31,915 0.541 0.288 0.167 0.353 0.756Sulfide 93,548 0.394 0.219 0.025 0.292 0.657Total 125,463 0.431 0.237 0.061 0.308 0.682

Notes:Eq Cu (oxide) = Total Copper + 0.715 x Gold, Cutoff = 0.27% Eq CuEq Cu (sulfide) = Total Copper + 0.600 x Gold, Cutoff = 0.23% Eq CuAlternatively, as Equivalent Gold:Eq Au (Oxide) = Gold + 1.399 x Total Copper, Cutoff = 0.37 g/t Eq AuEq Au (Sulfide) = Gold + 1.668 x Total Copper, Cutoff = 0.38 g/t Eq AuTotal Material in Cone Shell 1,429,845 KtonnesWaste:Ore Ratio 0.81 (Inferred as Waste)Waste:Ore Ratio 0.56 (Inferred as Ore)

Measured and indicated mineral resource amounts to 791.5 million tonnes at 0.512% copper equivalent, 0.279% total copper, 0.072% soluble copper, and 0.371 g/t gold. Inferred mineral resource is an additional 125.5 million tonnes at 0.431% copper equivalent, 0.237% total copper, 0.061% soluble copper, and 0.308 g/t gold. The last column of the table also shows that with metal grades defined in terms of equivalent gold, instead of equivalent copper, the equivalent gold grade of the measured and indicated mineral resource is 0.815 g/t gold equivalent (0.99 g/t for the oxide resource and 0.77 g/t for the sulfide resource). The




measured and indicated mineral resource consists of 4.9 billion pounds of contained copper and 9.4 million troy ounces of contained gold. The resources are contained within a floating cone pit shell and are compliant with the “reasonable prospects for economic extraction” clauses of Canada’s NI 43-101 regulations and also Australia’s JORC code. The cone shell is based on a copper price of US$ 1.75 per pound and a gold price of US$ 660 per troy ounce. Table 17-2 shows the cost and recovery parameters used to develop the cone shell. The mining related costs (base mining, mine capital replacement, and additional lift charges) are preliminary IMC estimates. The process cost, G&A cost, SRF cost (smelting, refining, and freight) were provided by Russell personnel. The average plant recoveries for oxide and sulfide copper and gold were calculated by IMC based on recovery versus head grade recovery curves provided by Russell personnel. The bottom of Table 17-2 shows gold factors for copper equivalent calculations and also oxide and sulfide copper equivalent cutoff grades. For $1.75 copper and $660 gold the copper equivalents are defined as: Eq Cu (Oxide Ores) = Total Copper + 0.715 x Gold Eq Cu (Sulfide Ores) = Total Copper + 0.600 x Gold The NSR Factors ($US/t) shown on Table 17-2 for copper and gold represent the NSR (Net Smelter Return) for 1 tonne of 1% copper and 1 tonne of 1 g/t gold respectively: NSR Factor (Oxide Copper) = (1.75-0.26)(0.743)(0.964)(0.97)(22.046)=$22.822 NSR Factor (Oxide Gold) = (660)(0.834)(0.95)(0.97)/31.103 = $16.308 NSR Factor (Sulfide Copper)=(1.75-0.26)(0.859)(0.964)(0.97)(22.046)=$26.385 NSR Factor (Sulfide Gold) = (660)(0.809)(0.95)(0.97)/31.103 = $15.819 The 0.97 term in the above equations account for the 3% royalty. The gold factors shown on Table 17-2 are calculated from the NSR factors as follows: Gold Factor = NSR Factor for Gold / NSR Factor for Copper, so Gold Factor (Oxide Ores) = 16.308 / 22.822 = 0.715 Gold Factor (Sulfide Ores) = 15.819 / 26.385 = 0.600 Equivalent copper cutoff grades are then calculated as: Breakeven Cutoff (Eq Cu)=(Mining+Processing+G&A Costs)/Copper NSR Factor Breakeven Cutoff (Oxides) = (1.10 + 0.15 + 4.20 + 0.60)/22.822 = 0.27% Eq Cu Breakeven Cutoff (Sulfides) = (1.10 + 0.15 + 4.20 + 0.60)/26.385 = 0.23% Eq Cu Internal Cutoff (Eq Cu) = (Processing + G&A Costs) / Copper NSR Factor Internal Cutoff (Oxides) = (4.20 + 0.60) / 22.822 = 0.21% Eq Cu Internal Cutoff (Sulfides) = (4.20 + 0.60) / 26.385 = 0.18% Eq Cu




Internal cutoff grade treats mining costs as sunk costs, i.e. it applies to blocks that have to be removed from the pit. Note also, to perform the analysis in terms of equivalent gold, instead of equivalent copper, the relevant factors are: Copper Factor = NSR Factor for Copper / NSR Factor for Gold Copper Factor (Oxide Ores) = 22.822 / 16.308 = 1.399 Copper Factor (Sulfide Ores) = 26.385 / 15.819 = 1.668 Eq Au (Oxide Ores) = Gold + 1.399 x Total Copper Eq Au (Sulfide Ores) = Gold + 1.668 x Total Copper Using the gold NSR factors for the cutoff grade calculations, instead of the copper NSR factor, results in breakeven gold equivalent cutoff grades of 0.37 g/t and 0.38 g/t equivalent gold for oxide and sulfide ores respectively, and internal cutoff grades of 0.29 and 0.30 g/t equivalent gold respectively for oxide and sulfide ores. Only measured and indicated resource blocks were allowed to contribute to the development of the floating cone shell used for the resource tabulation; inferred blocks were treated as waste to develop the cone shell. Total material in the cone shell is 1.4 billion tonnes. An overall slope angle of 45o was used to develop the cone shell. Figure 17-1 shows the floating cone shell used for the resource calculation. The resource is based on an updated block model developed by IMC and Resource Evaluation Inc. (REI) during June through August 2010. The mineral resource estimate was developed by Michael G. Hester, FAusIMM of IMC, a qualified person. Mr. Hester is independent of the issuer. There is no guaranty that any of the mineral resource will be converted to mineral reserve. There is also no guaranty that inferred mineral resource will be upgraded to measured or indicated mineral resource or mineral reserves. IMC does not know of any environmental, permitting, legal, title, taxation, socio-economic, or marketing issue that may materially impact the mineral resource. There is however, some degree of political risk associated with Mindanao. As of this writing, Foreign Affairs and International Trade Canada warns of ongoing terrorist threats to Westerners and Western interests in the Philippines, particularly in Mindanao. Particular threats cited include bombings and kidnapping. The US Department of State posts similar warnings. It is reported to IMC that political risk assessments will be conducted as part of on-going studies (Section 23.4).




Table 17-2. Economic Parameters for King-king$1.75 Cu / $660 Au

Parameter Units Oxide/Mix SulfideCopper Price Per Pound (US$) 1.750 1.750Gold Price Per Troy Ounce (US$) 660 660Base Mining Cost Per Tonne Material (US$) 1.100 1.100Mine Replacement Capital Per Tonne (US$) 0.150 0.150Lift Cost Per Bench Below 250 (US$) 0.015 0.015Process Cost Per Ore Tonne (US$) 4.200 4.200G&A Cost Per Ore Tonne (US$) 0.600 0.600Process Recovery of Copper (Average) (%) 74.3% 85.9%Process Recovery of Gold (Average) (%) 83.4% 80.9%Smelting/Refining Payable for Copper (%) 96.4% 96.4%Smelting/Refining Payable for Gold (%) 95.0% 95.0%SRF Cost Per Pound Copper (US$) 0.260 0.260NSR Royalty (%) 3.0% 3.0%NSR Factor for Total Copper (US$) 22.822 26.385NSR Factor for Gold (US$) 16.308 15.819Gold Factor for Copper Equivalent (none) 0.715 0.600Total Copper Equivalent Cutoff Grades Breakeven (without lift) (%Cu) 0.27 0.23 Internal (%Cu) 0.21 0.18Copper Factor for Gold Equivalent (none) 1.399 1.668Gold Equivalent Cutoff Grades Breakeven (without lift) (g/t) 0.37 0.38 Internal (g/t) 0.29 0.30

17.2 Mineral Reserve It is not the intent of this Technical Report to report mineral reserves for the King-king Project. A Preliminary Feasibility Study or Feasibility Study is required to determine mineral reserves.




Figure 17-1. Resource Cone




17.3 Description of the Block Model 17.3.1 General The deposit was modeled as 15m by 15m by 15m blocks. The model is not rotated. 17.3.2 Cap Grades, Corrections and Compositing As discussed is Section 11.0, the drillhole database provided to IMC consisted of 276 holes which represented 89,922 meters of drilling. As discussed above, Benguet gold assays were not used, however Echo Bay re-assays of Benguet samples amounted to 1493 assays that were used. Gold assays were capped at 10 g/t, which affected six assays with original values of 44.3, 18.6, 17.3, 14.3, 11.98, and 10.7 g/t. Copper assays were not capped. The highest assay (3m) was 7.2%. The assay database was composited to 15m bench composites for block grade estimation. Based on the bench composites the data available for resource estimation consisted of 88,597m of sample with a total copper assay (5,672 composites with average length 15.6m) and 57,315m of sample with a gold assay (3,607 composites with an average length of 15.9m). Samples with a retained gold assay represent about 64.7% of sample with a copper assay. 17.3.2 Topography The topography used for this project is the same as was used for the Echo Bay study. On cross sections the topography matches the drill hole collars well. Since the Echo Bay study was conducted small scale mining activity has altered the surface and updated topography will be required for more advanced studies. The impact of the small scale mining should not be material at the scale of the large scale open pit mine that is envisioned for King-king. 17.3.4 Lithology Model King-king lithology is quite complex. The original host rocks included sedimentary and volcanic flows that were intruded by multiple intrusive events. For this study the rock types were categorized as shown in Table 17-3. It can be seen that the multiple intrusions were broadly categorized into pre-mineral/syn-mineral intrusions and post mineral intrusions.




Table 17-3. Kinkking Lithology for Resource Modeling

Rock Code Description 10 Overburden 20 Host Rocks 30 Pre-mineral / Syn-mineral Intrusions 40 Post Mineral Intrusions 50 Breccias

A cross sectional interpretation of lithology was developed by RMMI personnel. REI personnel developed the interpretation on bench level maps from the sectional data. This was then digitized, checked, and incorporated into the block model. The Benguet core drilling generally recorded a depth of overburden. This was often only a few meters, up to about 15m in some areas. IMC used this data to develop a surface to represent depth of overburden and used it to code overburden in the model. The original lithology codes in the drillhole data base (actually 15m bench composites) were reconciled against the model geology. If the lithology code in the composites was not reasonable given the new interpretation it was changed to match the code of the block it was located in. Figures 17-2 and 17-3 show an example level map and cross section of model lithology. 17.3.5 Ore Types IMC developed ore type or oxide/sulfide domains in the drilling database and block model. Table 17-4 shows how the ore type codes were initially assigned to the 15m drillhole composites based on the ratio of soluble copper to total copper grades. Table 17-4. General Ore Type Criteria

Ore Type Name Description 1 “Leached” Not used; reserved for low grade in oxide/mixed zone. 2 Oxide Soluble copper / total copper > 0.40 3 Mixed 0.20 < soluble copper / total copper < 0.40 4 Primary Soluble copper / total copper < 0.20

The codes for oxide, mixed, and primary ore types were first assigned to 15m composites based on these criteria. The assignments were then reviewed on a hole by hole basis on data listings and also on cross sections to develop a reasonable interpretation of the top of primary mineralization in each hole. An interpretation of the top of primary was then developed from the drilling data and represented as a triangulated surface. Model blocks below the surface were coded as primary and blocks above the surface as oxide. Once the block grade estimates were completed (Section 17.3.9) the oxide zone was further segregated into oxide and mixed blocks based on




the soluble copper to total copper ratio of the block. Blocks below the top of primary surface retained the primary coding though there are some areas where the soluble copper to total copper ratio is higher than would normally be expected for primary mineralization, i.e. there are local zones in the primary that might be considered as “mixed” based on the criteria of Table 17-4.

Figure 17-2. Model Lithology – 325 Bench




Figure 17-3. Model Lithology on Section 10,300

17.3.6 “Structural” Zones IMC also developed five “structural” zones for the model. These were actually based on review of grade thickness maps of copper and gold mineralization rather than any identifiable structures. Figure 17-4 shows the grade thickness map for copper with the zones. Zone 20 is slightly anomalous; it is characterized as relatively low in copper grade, but also relatively high in gold grade compared to the other zones. The outer boundary of the zones represents an approximate 100m boundary outside of the drilling. Block grades were not estimated outside the shown boundaries. These zones also appear to correspond to historic regional names that were used to describe the deposit as follows: Zone Regional Name

10 Tiogdan 20 Casagumayan 30, 40 Lumanggang 50 Bacada




Figure 17-4 17.3.7 Basic Statistics of Drillhole Composites Due to the relatively large number of figures referenced in this section, they are located at the end of this report in Section 25.0. Figures 17-5 through 17-7 present box plots of total copper, soluble copper, and gold respectively for 15m composites by rock type. Descriptive statistics for each population are also shown along the bottom of the plots. Graphically, the plots show the representation of the population minimum and maximum, the 25 and 75 percentiles (bottom and top of the light gray boxes), median (middle of light gray box), and mean (middle of dark gray box). The dark gray box represents a +95% confidence interval of the mean, based on classical statistics. Figures 17-8 through 17-10 present probability plots of total copper, soluble copper, and gold by rock type respectively. For total copper, Figure 17-5 and 17-7 show, as expected, that the post mineral intrusives are significantly lower in grade than the other rock types. It can also be seen that the box plots and probability plots indicate relatively similarity in the other rock units. Figures 17-6 and




17-9 for soluble copper again show relatively low grades for the post mineral intrusion and, as expected, higher soluble copper grade in the overburden. For gold, Figures 17-7 and 17-10 indicate slightly elevated values in the pre-mineral intrusions. The probability plot for gold has a significant kink just above the 50 percentile point for gold for the post mineral intrusions. This appears to be a mixed population. Though depleted in copper, there are portions of the post mineral intrusion that contain gold. Figures 17-11 through 17-13 present box plots of total copper, soluble copper, and gold respectively by the structural zones. Figures 17-14 through 17-16 show probability plots by zone for total copper, soluble copper, and gold. Figures 17-10 and 17-12 show, for total copper, that zones 30 and 40, the central portions of the orebody, have higher copper grades than zones 10, 20, and 50. It can also be seen that the holes IMC excluded from the structural zones are very low in grade. For gold, Figures 17-13 and 17-16, it can be seen that Zones 10 and 20, on the west side of the orebody, are higher in gold grade than the other zones. There is definite zoning in the deposit, with higher gold values occurring in different locations than the higher copper values. Figures 17-17 through 17-19 present box plots of total copper, soluble copper, and gold respectively by oxide/sulfide domains. Figures 17-20 through 17-22 show the probability plots by oxide/sulfide domain. Figures 17-17 and 17-20 show slightly elevated total copper grades in the oxide zone. Figures 17-19 and 17-22 show gold grades are somewhat independent of the domain. There are kinks in the probability plots for the oxide and mixed gold just above the 50 percentile point which might indicate dual populations of gold mineralization. 17.3.8 Variograms A variogram analysis of total copper was done for host rocks and pre-mineral intrusive rocks to establish search orientations for block grade estimation. First, about 60 direction variograms were calculated to search the entire sphere in about 22.5 degree increments. These were examined to find longest range, highest clarity, variograms that might be considered to define the primary direction. Given a candidate, or candidates, for a primary direction a series of eight variograms were calculated to search the plane perpendicular to the primary direction, to look for the best secondary axis direction. Figure 17-23 shows variograms for total copper for host rocks. The variograms represent the primary and secondary direction as interpreted by IMC. The primary direction has an azimuth of 300o and an upward plunge of 65o, or alternatively an azimuth of 120o with a downward plunge of 65o. The secondary direction has an azimuth of 300o with a downward plunge of 25o. The ranges of the two variograms are about 659m and 513m respectively Figure 17-24 shows variograms for total copper for pre-mineral intrusive rocks. The variograms represent the primary, secondary, and tertiary directions as interpreted by IMC. The primary direction is at an azimuth of 45o with a downward plunge of 45o. The secondary




axis has an azimuth of 280o and downward plunge of 30o. The ranges of the three variograms are 410m, 346m, and 207m respectively. All variograms were calculated by the pairwise relative method. It is also considered that the directions are reasonable given the geology and perceived orientation of mineralization as observed on sections. 17.3.9 Block Grade Estimation General Block grades of total copper, soluble copper, and gold were estimated by inverse distance with a power weight of 3 (ID3). This was done to prevent over-smoothing of block grades. Search radii were typically 200m in the primary and secondary axes directions and 50m in the tertiary direction. For all estimations a maximum of 12 and a minimum of one composite were used and a maximum of three composites per hole were allowed. Post mineral intrusive rocks were considered a separate population for grade estimation and only post intrusive composites were used to estimate post intrusive blocks. Host rocks, pre-mineral intrusive rocks and the breccias were considered a single population for block grade estimation. Though the pre-mineral intrusive rocks are slightly higher grade than host rocks, an analysis of the boundary indicated the boundary was of no-significance for total copper and only of slight significance for gold. Also, overburden blocks were not estimated. This represents a very small amount of material as it generally occurs as only a thin veneer at the surface. The structural boundary was used as an outer boundary for grade estimation. Blocks not coded as one of the five zones were not estimated and composites outside the zones were not used. The boundaries between respective zones were not used as hard boundaries however. Composites in Zone 20 could be used for Zone 10 blocks, etc. Note that the ID3 estimation will tend to honor the data pretty closely regardless of boundaries. The oxide/sulfide domain boundary was used as a hard boundary for total and soluble copper, but not for gold.



Figure 17-23. Total Copper Variograms. Host Rocks in Sulfide Zone



Figure 17-24. Total Copper Variograms. Intrusive Rocks in Sulfide Zone




Copper For total and soluble copper the oxide/sulfide boundary was used as a hard boundary; i.e. sulfide domain blocks were only estimated with sulfide domain composites and oxide/mixed domain blocks were only estimated with oxide/mixed composites. The oxide/mixed boundary was not a hard boundary however. Actually, the oxide/mixed block designations were done after grade estimation based on soluble copper to total copper block grades. A flat, circular search of 200m by 200m by 50m vertical was used for the estimation of total copper and soluble copper grades in the oxide/mixed domain. Based on the variogram analysis of total copper for host rocks in the sulfide zone, the primary axis appears to be orientated with an azimuth of 120o (S60oE) and a plunge of 65o and the secondary axis is oriented with an azimuth of 300o (N60oW) with a plunge of 25o. The tertiary axis is oriented N30oE with no plunge. Note that this alignment is consistent with the NW-SE trend in the area. In GSLIB convention the rotation angles are 120o,-65o,0o, representing rotation of major axis, plunge of major axis, and rotation of secondary axis, etc. For pre-mineral intrusive rocks in the sulfide the variogram analysis indicates a primary axis orientation of N45oE with a plunge of 45o. The secondary axis is orientated about N80oW with a plunge of about 30o. The GSLIB convention angles are 45o, -45o, 45o. Due to the relatively small size and complex orientations of the post mineral intrusive rocks the search radius was opened up to 200m by 200m by 200m to match post mineral intrusive composites to blocks. The Mitsubishi, Benguet, and Echo Bay total and soluble copper assays were used for block grade estimation. Soluble copper was estimated with the same search parameters as total copper in all cases. Figure 17-25 shows an example of the block grade estimations on a cross section. Gold Gold was estimated with the same search orientations as sulfide zone copper for host and pre-mineral intrusive rocks. The oxide/sulfide surface was not considered as a hard boundary for gold. The search orientations for gold in the oxide zone were also orientated according to directions established for primary copper. Benguet gold assays were not used, except for the sample intervals that were re-assayed by Echo Bay. Figure 17-26 shows an example of block grade estimations on a cross section.



Figure 17-25. Copper Grades on Section 10,300



Figure 17-26. Gold Grades on Section 10,300




17.4 Resource Classification The number of composites and the average distance to the composites were stored in the block model and used for resource classification. This was done for both the total copper and gold grade estimation. The following procedure was then used to establish the resource classification for each: All blocks with a grade estimate were set to inferred resource. The following blocks were then upgraded to indicated resource. Blocks estimated with 10, 11, or 12 composites and average distance < 150m Blocks estimated with 7, 8, or 9 composites and average distance < 125m Blocks estimated with 4, 5, or 6 composites and average distance < 100m The following blocks were then upgraded to measured resource. Blocks estimated with 7 or more composites and average distance < 75m Note that the block grade estimation limited the number of composites to three per hole, thus 4+ composites indicates a minimum of two holes, 7+ composites a minimum of three holes, and 10+ composites a minimum of four holes. This procedure was done independently for total copper and gold. The final block classification was taken as the lower confidence of the two classifications; i.e. as an example, if the classification of a block was measured based on total copper and indicated based on gold the final classification was indicated resource. Though copper and gold grade estimates were done by inverse distance, IMC also did an ordinary kriging estimate for total copper and gold to obtain a relative kriging standard deviation to assist in establishing the resource classification. Figure 17-27 show a cross tabulation of blocks by number of composites and average distance for total copper. The cells of the figure show the number of blocks in the cell and also the average kriging standard deviation for the blocks. Measured blocks generally correspond to a relative kriging standard deviation less than 0.45 and indicated blocks less than 0.73. The standard deviations are relative because they were calculated with a variogram with the sill normalized to 1 and a nugget value of 0.15. Figure 17-28 shows a similar cross tabulation for gold. Figure 17-29 shows the resource classification on a cross section.




Figure 17-27. Resource Classification for Total Copper




Figure 17-28. Resource Classification for Gold



Figure 17-29. Cross Section 10350 Showing Resource Classification




17.5 Bulk Density A specific gravity measurement, by the water immersion method, was performed on the 100 core samples selected for the RMMI check assay program described in Section 14. Figure 17-30 shows an xy plot of the specific gravity measurement versus soluble copper to total copper ratio by the various rock types. It can be seen that specific gravities are lower for the samples with a soluble copper to total copper ratio greater than about 40%, which would also correspond to oxide/mixed ore types. Table 17-5 shows basic statistics of the data by rock type and also by higher versus lower soluble copper to total copper ratio. The values shown on Table 17-5 were incorporated into the model as dry bulk densities without additional adjustments. Oxide and mixed blocks were assigned bulk density values of 2.41 t/m3 and 2.36 t/m3 for host rocks and intrusive rocks respectively. Primary (sulfide) blocks were assigned bulk densities of 2.54 t/m3 and 2.47 t/m3 for host and intrusive rocks respectively. Breccia blocks were assigned a bulk density of 2.47 t/m3. IMC assigned overburden blocks a bulk density of 2.0 t/m3. The Echo Bay study was based on bulk densities of 2.69 t/m3 for oxide and 2.76 t/m3 for sulfide, which are considerably higher than the new measurements. The report says these were measurements done by Lakefield using picnometer readings of the metallurgical samples. It did not say how many measurements were done. This is effectively the specific gravity of a ground pulp, which is of interest for ore processing design, but would generally not be considered an appropriate measurement method for ore reserve calculations because small fractures and voids are removed.

Figure 17-25. Specific Gravity Vs Ascu/Tcu Ratio by Rock Type

2.00

2.10

2.20

2.30

2.40

2.50

2.60

2.70

2.80

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Ascu/Tcu (%)

SG

Host RocksIntrusivesBreccia

Figure 17-30. Specific Gravity versus Ascu/Tcu Ratio




Table 17-5. Specific Gravity Measurements by Rock TypeCode Description Number Mean Std Dev Min Max

20 Host Rocks 49 2.52 0.109 2.24 2.7020 Ascu/Tcu < 40% 40 2.54 0.100 2.27 2.7020 Ascu/Tcu > 40% 9 2.41 0.088 2.24 2.5130 Intrusives 45 2.45 0.105 2.19 2.5730 Ascu/Tcu < 40% 37 2.47 0.086 2.25 2.5730 Ascu/Tcu > 40% 8 2.36 0.135 2.19 2.5550 Breccia 6 2.47 0.068 2.39 2.56

ALL All Rock Types 100 2.48 0.109 2.19 2.70 17.6 Impact of Various Drilling Campaigns IMC reviewed the various drilling campaigns to determine the data that was appropriate for use in resource modeling. In particular the Echo Bay study indicated that the Benguet gold assays were biased high compared with the Echo Bay results. First, IMC tested the various drilling campaigns for total and soluble copper. Table 17-6 summarizes the results. Case 1 shows an ore tonnage and copper grades for the new resource model developed using all available copper assays. The tabulation is inside a pit design IMC developed for an August 2009 due diligence review of the project. The tabulations are at 0.2% total copper cutoff grades and include only measured and indicated resource blocks. This model resulted in 435.6 million tonnes at 0.358% total copper and 0.105% soluble copper. Case 2 shows the results of removing the Benguet core holes from the estimation. Ore tonnes and total copper results are very similar to Case 1. The soluble copper grade increased 4.8% to 0.110%. This implies the Benguet core soluble copper grades tended to be lower than Echo Bay results (since removing them increased the grade), but IMC deemed the difference is not significant. Cases 3 and 4 show the results of removing the Benguet RC data and Mitsubishi data respectively. The differences with Case 1 are not significant. From this IMC concluded that all the copper data was acceptable for the grade estimations. For the 2009 due diligence review IMC did a similar analysis for gold, which was not repeated for this current study. The analysis showed that excluding gold assays for Benguet core holes decreased the gold grade 9.7%. The Benguet core data is higher than Echo Bay data for gold since removing it caused a significant reduction in grade. From this 2009 analysis, IMC determined that the Benguet gold assays would not be used for resource modeling. As noted previously, Benguet samples re-assayed for gold by Echo Bay were used. Recall that the Mitsubishi drilling did not have any gold assays.




Table 17-6. Comparison of Various Drilling Campaigns for CopperOre Tot Cu Sol Cu

Case Description Ktonnes (%) (%)

1 All Drilling Campaigns 435,620 0.358 0.105

2 Excluding Benguet Core Holes 430,765 0.360 0.110%Difference Versus Case 1 -1.1% 0.6% 4.8%

3 Excluding Benguet RC Holes 435,609 0.360 0.106%Difference Versus Case 1 0.0% 0.6% 1.0%

4 Excluding Mitsubishi Holes 435,978 0.356 0.105%Difference Versus Case 1 0.1% -0.6% 0.0%

Note: Tabulation at 0.2% total copper cutoff inside pit designed forAugust 2009 Due Diligence Review. Only measured andindicated resource blocks.




18 Other Relevant Data and Information 18.1 Review of 1997 Kilborn SNC Lavalin Feasibility Report The King-king Project Level I Feasibility Study, April 1997

report was commissioned by Echo Bay for the purpose of a consolidated review of the feasibility of the King-king project post exploration development work to that point in time. A summary review of the critical points relevant to the evaluation and planning for further development of the project is summarized in this section. The following areas of interest in this regard: parameters and resource estimates, geology, mining and resource, processing, commodity prices and operating costs, tailing management, infrastructure and environmental protection.

Table 18-1 Parameters and Resource Estimates for 1997 Kilborn Study and 2010 Technical

Report Parameters & Resource Estimates for King-king

$0.90 Cu / $375 Au $1.75 Cu / $660 AuParameter Units Oxide/Mix Sulfide Oxide/Mix SulfideCopper Price Per Pound (US$) 0.900 0.900 1.750 1.750Gold Price Per Troy Ounce (US$) 375 375 660 660Base Mining Cost Per Tonne Material (US$) 0.750 0.750 1.100 1.100Mine Replacement Capital Per Tonne (US$) 0.100 0.100 0.150 0.150Lift Cost Per Bench Below 250 (US$) 0.000 0.000 0.015 0.015Process Cost Per Ore Tonne (US$) 3.990 2.800 4.200 4.200G&A Cost Per Ore Tonne (US$) 0.248 0.337 0.600 0.600Process Recovery of Copper (Average) (%) 80.0% 85.0% 74.3% 85.9%Process Recovery of Gold (Average) (%) 70.0% 70.0% 83.4% 80.9%Smelting/Refining Payable for Copper (%) 96.3% 96.3% 96.4% 96.4%

Smelting/Refining Payable for Gold (%) 97.5% 97.5% 95.0% 95.0%SRF Cost Per Pound Copper (US$) 0.291 0.291 0.260 0.260NSR Royalty (%) 4.5% 4.5% 3.0% 3.0%Oxide/Sulfide Ore

kTonnes kTonnes 87,600 310,500 161,323 630,199% Cu % 0.477 0.303 0.373 0.255g/t Au g/t 0.738 0.453 0.465 0.347

Total OrekTonnes kTonnes% Cu %g/t Au g/tStrip Ratio Unitless

WastekTonnes Tonnes

398,1000.3410.5161.12

791,5220.2790.3710.806

446,700 638,324

1997 2010




18.1.1 Geology Review of the 1997 study revealed that a 3D geological model had been initiated in 1997, but not completed. For this Technical Report the data base for the Echo Bay drill holes was updated with lithology codes. The previous geologic coding was simplified for this update. Also the Benguet drill hole data base was updated with the new simplified geologic codes. Existing Benguet Corporation geologic cross sections were studied and refined and then digitized into cross sections for a new 3D geologic model. Level maps were next prepared and checked against the cross sections. Particular attention was paid to post mineral intrusions that contained no mineral values. Then the geologic model was assembled and tested for fit. The new geologic model was used for assembling the new block model developed in August 2010 by Independent Mining Consultants. Future refinement to this model will be made by new drilling for purposes of geotechnical, hydrology and geologic interpretation of selected lithologic contacts. Also the existing core logs will be examined for structural geology, recording the x,y and z coordinates for these contacts. Structural boundaries will be added the geologic model based on these interpretations. The block model will be updated with this new information in 2011. 18.1.2 Mining and Resources The resource estimate in the 1997 study was 398.1 million tonnes of ore grading 0.341% copper and 0.516 g/t gold. The strip ratio was 1.12 for the life of mine. Specific gravities assigned to the oxide and sulfide ore were 2.69 and 2.76, respectively. Mining life was estimated at 16 years.

Currently, the compliant resource to JORC and NI 43-101 standards is 792 million tonnes of ore grading 0.279% copper and 0.371 g/t gold. The strip ratio (based on the resource cone shell) is 0.81 for the life of mine. Bulk densities assigned to the oxide and sulfide blocks were variable based on the relationships indicated by the recent density tests on 100 core samples. Oxide and mixed blocks were assigned bulk density values of 2.41 t/m3 and 2.36 t/m3 for host rocks and intrusive rocks respectively. Primary (sulfide) blocks were assigned bulk densities of 2.54 t/m3 and 2.47 t/m3 for host and intrusive rocks respectively. Breccia blocks were assigned a bulk density of 2.47 t/m3. IMC assigned overburden blocks a bulk density of 2.0 t/m3. Mine and milling life are estimated at 23 years.

18.1.3 Commodity Prices and Operating Costs

The most significant changes since 1997 affecting the resource estimate have been the copper and gold pricing. In 1997 $0.90/lb copper and $375/oz gold were used to develop the resource. Metal prices of $1.75/lb copper and $660/oz gold were used to develop the




resource today. Current metal prices as of August 31, 2010 were $3.33/lb copper and $1,248/oz gold (Kitco).

Operating costs in 2010 have escalated from those used in 1997 in some cases, such as reagent and fuel costs. Decreases have been seen in smelting and refining, (smelting was $95/tonne then and $80/tonne today, refining was $0.095/lb then and $0.080/lb today).

The basic mining practices remain the same today as then, though the sizes of individual pieces of equipment have increased. Mining is by open pit methods in both cases, utilizing: drilling blasting, loading and hauling. Valueless Rock Management Areas, such as PAG and NAG have not been defined exactly at this stage but initial evaluations place them closer to the pit limits than in the 1997 study. 18.1.4 Processing The 1997 plans were to place the primary crushing and SAG milling near the open pit with pipeline transport of SAG mill undersize from the open pit to the process site approximately 2.8 aerial kilometers. There were two processing streams in the 1997 study requiring separation of oxide type ore from sulfide ore at the shovel face. There was an oxide ore mill and a sulfide ore mill. The sulfide mill utilized standard crushing, grinding and copper sulfide flotation techniques commercially used at other mines to produce a copper concentrate; plant processing rate would be 35,000 tpd ore. The oxide circuit was not as standard as the sulfide circuit. It was crush, grind, sulfide flotation producing a concentrate, acid leach of tailing, precipitate the copper in solution with iron and re-float the precipitate producing a concentrate; processing 47,500 tpd. Each circuit produced its own concentrate for sale or treatment at a copper smelter. The oxide circuit was planned to be converted to a sulfide circuit after depletion of the oxide material.

Preliminary investigations for the currently planned mine suggest a different approach is more typical today and more cost efficient from both a capital and operating cost perspective compared to the 1997 two mill processing scheme. Commercially applied copper oxide mineral flotation reagents and flow sheets appear applicable at King-king due to the copper oxide mineralogy (major mineral is malachite). This processing scheme should allow application of a sequential flotation flow sheet as described above in the section on metallurgy. The process would be crushing, grinding, gravity concentration for additional gold recovery and sulfide flotation, oxide flotation on the sulfide tailing, combined cleaner flotation of the rougher concentrates producing a copper-gold concentrate for smelting and refining. Gravity concentrator circuits have been added, in the past 10 years, to several mining operations processing porphyry ore bodies like King-king and showed significant improvements in gold recovery. Gold recovery is expected to improve, with application of gravity concentrators in the grinding and flotation circuits at King-king, from70% in the 1997 report to 80% today. Gravity gold concentrates would be treated on site by hydrometallurgical means and a gold/silver Dore shipped out for refining. Processing rate is expected to be 100,000 tpd.




Location of the processing plant down in the rolling lowland hills to the southwest of the open pit was recommended in 1997 and it is still thought as the best location today for seismic conditions, capital cost and access to transport large mill equipment. It is felt that the 1997 plan of pipeline transport of SAG mill undersize from the open pit to the process site approximately 2.8 aerial kilometers away is not practical and an overland conveyor from the primary crushers at the open pit is practical and a commercially proven method at several mines. 18.1.5 Tailings In the 1997 study subsea tailings disposal was given serious consideration. At this time it is expected that a subsea tailings disposal alternative may generate serious opposition to the project.

Similarly to the 1997 study, it is believed today that a land based tailings management system located west-southwest of the process plant is the best approach for seismic, capital cost and environmental and social reasons. The current design thinking for embankment construction of the Tailings Storage Facility (TSF) is to use local minable materials near the tailing facility as opposed to the original plan of trucking waste from the mine (some 5.3 aerial kilometers away) as the 1997 report recommended.

Re-use of water from the tailing system in 1997 was not planned. Current planning is to use this water. The re-use of tailings water could significantly reduce or eliminate most of the make-up water needed, except during drier periods.

18.1.6 Environmental In the 1997 study, potentially acid generating (PAG) valueless rock was seen as an important environmental concern. It was recommended in 1997 that control of the PAG rock would be achieved by damming the King-king River with non-acid generating valueless rock; and, then submerging the PAG rock in the resultantly-formed lake to prevent any acid from being generated. Though this same method may be a viable option today, a current preferred alternative is to locate the waste on condemned ground (i.e., an area outside of the ore-producing zone) near, but outside of, the ultimate pit limits. It would be further planned to perform concurrent reclamation of the valueless rock pile to prevent acid generation; divert clean water from the Valueless Rock Management Area (VRMA); and, to re-use any run-off effluent in the process, or to treat and release any effluents from the final pit perimeter and VRMA.

The 1997 report suggested using water for the process and mine from the water dammed up on the King-king River. Considering the VRMA alternative described above, well-water from the alluvium south-west of the mine, and near the mill site, is the preferred alternative for fresh water for process water make up purposes.




18.2 Conservative Mineral Resource Calculation It is the opinion of IMC that the stated mineral resource is a conservative estimate. The decision to not use the Benguet gold assays for the current mineral resource estimate is a conservative factor in the estimate, because the mineral resource classification for each block was based on the least confident of the copper or gold classification. Because of this, there are areas of the deposit that are reasonably well drilled, but are classified as inferred resource due to lack of reliable gold assays in the vicinity. The implication is that there are inferred resources with identified copper and gold mineralization that should be relatively simple to convert to indicated resources with additional drilling or possibly additional re-assaying of Benguet samples. In addition, significant portions of the indicated resource should be upgraded to measured category with relatively little additional sampling. The decision to base the resource cone on only measured and indicated resource blocks is also a conservative factor in the mineral resource estimate. IMC generally permits inferred resource blocks to also be used in the determination of the cone shell to define a mineral resource. Using only the measured and indicated resource blocks means that the King-king measured and indicated mineral resource should also be compliant with the “mineralized material” designation under US reporting rules. The commodity prices of $1.75 per copper and $660 per ounce gold used to develop the resource cone shell are also conservative. As of this writing the three year backward averages are about $2.90 for copper and $940 for gold. 18.3 Environment and Socioeconomic Issues The King-King Project will be designed and operated by Ratel Gold Limited to comply with Philippine regulatory requirements with respect to environmental and social/local community standards. This will include the preparation of an “Environmental Impact Study” (EIS) for the project, as required by Philippine law. In addition, Ratel has voluntarily committed to conformance with commonly accepted international environmental, social, health and safety standards in the construction, operation and closure of the King-King Project. These latter standards are primarily guidelines and Performance Standards (PS) of the International Finance Corporation (IFC), a unit of the World Bank; and, the Equator Principles (EP), which are voluntary international guidelines adopted by many commercial banks and other international lending agencies known as Equator Principles Financial Institutions (EPFI). The IFC PS and EP form the de facto standards applied to many major operations seeking investments and guarantees from multilateral, bilateral and commercial financial institutions worldwide. This Ratel commitment will also include the preparation of an International Social and Environmental Impact Assessment (I-SEIA), based on IFC PS and other international




guidelines. This will serve as a complementary document to the National EIS to be presented to the Government of the Philippines for project approval. 18.3.1 Philippine Regulatory Overview

Development of the King-King Project will require compliance with numerous national and Philippine environmental laws, as well as local requirements. Philippine environmental laws regulate emissions and discharges of waste into the environment; and, also specify how an operator conducts a mining operation. Environmental laws are promulgated and administered at the national level. Environmental regulation and enforcement of the mining industry is mainly performed by bureaus within the Department of Environment and Natural Resources (DENR). Within DENR, the Mines and Geoscience Bureau (MGB) and the Environmental Management Bureau (EMB) possess the most authority in regulating the mining industry. At the local level, the three most important agencies and local governmental units that the King-King Project will need to satisfy are various barangay captains, the Pantukan mayor's office, and the Pantukan Municipal Planning and Development Department. [A barangay is the smallest administrative division in the Philippines; and, is the native Filipino term for a village, district or ward.] An important, but unquantifiable, aspect of the project permitting will be the social acceptability during the Environmental Impact Assessment (EIA) process, which provides for the development of the Environmental Impact Study (EIS) for the project. All large-scale mine developments in the Philippines are required to secure an Environmental Compliance Certificate (ECC). The ECC is required before numerous other authorizations are granted. The ECC is issued after completion of the EIA process. The EIA process consists of the preparation of an EIS for public review and comment, and for documenting social acceptability. To complete the EIA process, and before ECC issuance, local government and non-governmental units must endorse the project as being in the best interest of the community while balancing environmental impact. In many cases, the EMB will require written project endorsement from these various groups. After submission of the EIS, it is typically 6 to 12 months before an ECC is issued for large-scale development projects. Once the EIS document is finalized, but prior to the ECC being issued, the project proponent is also required to submit an Environmental Risk Assessment; an Environmental Protection and Enhancement Program; and, a Community Relations Program. The Philippine environmental and social/community-related laws and regulations applicable to the King-King Project are listed and discussed in Appendix 3.

18.3.2 International Environmental and Social Guidelines

There are a number of international standards and guidelines that will also be employed by Ratel in the design, operation and closure of the King-King Project. These international




guidelines and standards include the following: IFC’s Performance Standards (IFC PS) on Social and Environmental Sustainability (April 2006), including IFC PS Guidance Notes (July 2007); IFC’s General Environmental, Health, and Safety Guidelines (April 2007); IFC’s Environmental, Health, and Safety Guidelines for Mining (December 2007); IFC’s Policy on Disclosure of Information (April 2006); the World Bank’s Anti-Corruption Strategy (2008); the Voluntary Principles on Security and Human Rights (2000); and, the Equator Principles (2006). These standards and guidelines are listed and discussed in Appendix 3. In summary, these international guidelines and standards provide a project owner with: guidelines for conducting an SEIA study; a set of specific environmental quality standards, including both “end of pipe” discharge limits and acceptable ambient levels for various parameters; extensive operating management practices (known as “good international industry practices” or GIIP); standards of performance for the construction, operation and closure of a mine project standards; and, a system for formal documentation for environmental and social studies, programs and practices. Ratel is committed to voluntary conformance with these international guidelines and standards for the King-King project.

18.3.3 Ratel Commitments and Policies

The following statements, commitments and policies from Ratel have been conveyed to the authors of this Technical Report; and, are included here to publically acknowledge these commitments in relation to the King-king Project. Ratel Gold Limited stated that the company believes that environmental, community and safety concerns are vital cornerstones in the development of any project. To ensure that these matters receive the utmost attention throughout the life-cycle of company projects, Ratel works with internationally-recognized experts in the fields of environmental assessment and management; stakeholder engagement; social and community development; as well as, world-class specialists in water quality, air quality, waste management, hydrogeology, soils, geochemistry, ecology, biodiversity issues and archaeology/cultural issues. Ratel predominantly identifies and selects projects based on a cost effective, sustainable and environmentally acceptable method of mining. Ratel stated that the company believes that they are successful not only when their economic goals are achieved, but also when their projects are developed and operated under the principles of sustainability, i.e. - meeting the needs and aspirations of the present generation without compromising the opportunity of future generations to fulfill their needs and aspirations. Ratel has a strong commitment to sound environmental practices and community involvement in its projects; to that end, the Company has strong, formal policies on these matters as presented below.




18.3.4 Ratel Environmental Policy

“Ratel believes that, while production and costs are certainly critical to the well being of the Company, these considerations must never take precedence over protection of the environment in which we operate, and for the safety & health of the workplace environment for our employees. As responsible corporate citizens, it is our commitment to: minimize detrimental impacts to the environment from our operations; provide a safe and healthy workplace environment for our employees; and, be a positive contributor to the social & economic environment for the local people where we operate. To achieve these Policy objectives, Ratel will: • Assess, and address in decision-making, the potential environmental impacts associated

with a project over its full life cycle --- including pre-development, construction, operation, closure and post-closure.

• Identify, assess, measure and manage environmental risks, and rigorously apply accepted safeguards, at every stage of a project’s life cycle, including operational products.

• Comply with applicable governmental environmental laws and regulations; and in jurisdictions where such are absent or inadequate, apply good international industry practices to avoid, minimize, mitigate or remediate environmental impacts.

• Communicate the importance of these environmental protection measures to our employees, contractors, suppliers, investors, partners and other relevant stakeholders.

• Review the effectiveness of environmental protection and management programs, and act on the results, to achieve continual improvement in the Company’s environmental performance.

• Use resources efficiently; and, promote new, safe, efficient technology in the Company’s operations.”

18.3.5 Ratel Policy on Social & Community Affairs and Stakeholder Engagement

“Communities are of paramount importance to Ratel’s operations, as they are most often our first point of contact. They are also a vital source of employees for our workforce. In keeping with the philosophies of accepted sustainable development practices, we pay close attention to a community’s economic, social and environmental needs and expectations. Respect for the communities in which we operate is demonstrated through our efforts to build strong and long-term relationships with governments, suppliers, local partners, neighbors and employees. To promote a positive community environment, Ratel will: • Responsibly and ethically manage our relationships with the stakeholders in the projects

that we develop; and, in the local communities in which we operate. • Recognize that communities and the environment are inter-dependent; and, be

accountable for the effects and potential consequences our actions have on both.




• Value cultural heritage; respect the traditional rights of indigenous peoples; and, acknowledge and accommodate cultural differences, preferences, and lifestyles.

• Promote open, honest communication with people in the communities where we operate; and, consider their perceptions, opinions and concerns in our decision-making throughout the life cycle of our operations.

• Advance the sustainable development of host communities by forming local partnerships and improving economic benefits.

• Advocate the responsible use and management of our products and by-products throughout the life of the project.

• Support community-based projects that have a positive effect and are sustainable. • Review our social performance in the communities and communicate our progress to

local stakeholders and people.”

18.3.6 Permitting Road Map for the King-King Project

Ratel recognizes that the permitting effort for the King-King Project will be the most important undertaking for developing the future mine. Ratel has devoted considerable time and effort in research and confirmation of the required company and governmental stages in this process. The results of this process are summarized in the “Permitting Roadmap” diagram below.



Figure 18–1. Permitting Roadmap for the King-king Project




Along with the assistance from the Philippines Department of Environment and Natural Resources, and Filipino and international consultants, this Roadmap will guide Ratel to the successful permitting of the King-King Project. The Roadmap provides for the protection of the environment and socioeconomic fabric of the area for the life of the mine, and after its closure.

18.3.7 Project Description

The King-King copper-gold project is envisioned as a large-scale, open-pit mine, with downstream processing of the ore producing copper concentrates containing gold for sale to copper smelters; or, possibly further on-site processing to cathode copper, and production of gold concentrates requiring offsite refining. All valueless rock management areas from the mining operations will be managed with environmentally acceptable methods. At the end of mining, the project area will be reclaimed and left in an environmentally stable condition suitable for other economically sustainable uses. More detailed descriptions of the potential operations and processes were provided in Section 1.3, 1.4, 23.1 and elsewhere in this Technical Report. There have been previous exploration and other activities focused on the potential development of the mineral deposit at King-King, at least since the early 1970s, when explorational drilling took place by Mitsubishi Mining Corporation. In the early 1980s, the Benguet Corporation formed a partnership with the Nationwide Development Corporation (NADECOR) to explore and develop this property. In 1995-1997, Echo Bay Mines conducted a number of exploration and environmental studies under an option agreement with Benguet/NADECOR, but subsequently did not pursue development. See Sections 4 and 6 of this Report for more details on this project site history. There has also been a significant amount of illegal small-scale mining activity on the King-King site and general area over the last 20 years or more. This activity has resulted in substantial removal of vegetation and resultant serious erosion of mountainsides. This has caused subsequent heavy siltation of the local King-King River, including out to the Davao Gulf, where an extensive sediment delta has formed (see the photographs below). These matters are discussed in more detail below in the project environmental setting section.




Figure 18-2. Illegal Small-Scale Mining at the King-King site; Substantial Erosion of

Mountainsides




Figure 18-3. View of Pantukan, Excessive Siltation in the King-King River and

Sediment Deposition at the River Mouth are Significant Impacts from the Illegal Small- Scale Mining at the Project Site

18.3.8 Environmental and Social/Community Work Programs

The initial phase in the governmental approval process for the King-King project will involve conducting environmental and social/community work programs, along with other feasibility studies. The data and information from these studies will support development of the required Declaration of Mining Project Feasibility (DMPF) document for submittal to Philippines Department of Environment and Natural Resources/Mines and Geosciences Bureau. The work programs will be comprised of aerial surveys; water monitor well drilling; and, baseline environmental and socio-economic studies. The aerial surveys will provide Ratel with more precise mapping information to assist in the specific siting of facilities; and, provide regional overviews of environmental and community conditions and infrastructure. Data from monitor wells will be used to determine the background water quality; to study the groundwater storage and conductivity of the project area; and, to understand the pore pressure in the projected open mine walls.




Environmental and socio-economic baseline studies will be used to document the current environmental and social conditions at the proposed mine and operational sites, and the general area. This will be particularly important for this project as there has been previous, and currently on-going, significant illegal small-scale mining at the site, which has resulted in significant environmental impacts and degradation of vegetation and stream water quality in the area. These baseline studies will also provide Ratel with critical data and other information for developing specific environmental and socio-economic management practices to be employed at the mine. Other data collection or testing work may potentially need to be performed as other feasibility studies progress. It is estimated that it will take approximately 22 months for completion of these studies.

18.3.9 Description of the Existing Environment

History The project site has had three distinct periods of land use; pre-logging (before 1975), logging (1975 to 1985), and small-scale mining (1985 to present). Before 1975, the project area consisted of original old growth tropical forest and the principal land use was subsistence agriculture. Commercial logging commenced in the mid-seventies and resulted in the elimination of the original ecosystem, loss of top soil, and siltation. Subsistence agriculture increased within the area due to the removal of the old growth forest, population pressures, and worsening economic conditions. The practice of slash and burn farming has limited the re-growth of second growth forests and the re-establishment of the original and/or similar ecosystems. Small-scale mining activity began during the later part of the eighties and has caused extensive siltation to the King-King drainage and has impacted the marine environment. Based on previous studies, mercury is present within the sediments of the King-King drainage and has been identified in some of the aquatic fauna.

Land Environment The King-King project is located on the island of Mindanao, Republic of the Philippines, in the Pantukan municipality, which is generally characterized as mountainous with rugged terrain and steep slopes. The flat lands that dominate the coastal zone are relatively small. The dominant topography of the area is the criss-crossing mountain ranges between the coastal and mountain barangays, and the very rugged terrain east of Araibo towards its boundary at Banaybanay. This topography covers around 90% of the municipality. (Refer to Sections 4 of this Report for a map showing the location of the King-King Project and the mining concession area; and, Section 4 and 5 for more detailed information on the physical environment setting for the project.)




The topography in the project area is steep and rugged with elevations ranging from 260m to 950m, and averaging 800m, above mean sea level. The porphyry copper-gold mineralization outcrops between 400m and 700m elevations. The terrain gradually becomes moderately rugged to rolling westward toward the Davao Gulf. The King-King River drainage system is characterized as a moderate to steep-sided incised valley. The present landscape of the general area consists mainly of residual old growth forest, slash and burn ground cover, agricultural plots, bedrock exposures from small-scale mining and secondary growth vegetation. It has been largely denuded of primary forests due to past commercial logging, subsequent slash and burn farming, and finally small-scale mining. Vegetables and fruit-bearing trees are grown in some places, but these are limited and concentrated in localized flat or rolling terrain. Illegal logging activities supply the timber requirements of small-scale miners in the area and vicinity. The photographs below show the typical topographic landscape in the King-King area.

Figure 18-4. The King-King River in the Lowlands as It Enters the Davao Gulf




Figure 18-5 & 6. The King-King River in the Lowlands (Background)

and in the Low Mountains (Foreground)




Figure 18-7. The King-King River (in Foreground) and the High Mountains

Surrounding the King-King Project Site (Noted by the Eroded Mountain Area in Background)




Figure 18-8 & 9. The King-King Project Site (Top and Bottom); Note

Extensive Illegal Small-Scale Mining and Severe Erosion; Also Note Living Quarters and Processing Shacks




Geotectonic maps of Mindanao show several faults at the southern part of the active Philippine Fault, which occur close to Pantukan. An intersection of two fault splays is within Pantukan, one of which is the Mati Fault, which is a potential source of strong earthquakes. This zone may be considered a seismic gap, though there are presently no recorded earthquakes for the project area. The Bureau of Mines in Davao City has noted in publications that the municipality of Pantukan is rich in mineral deposits such as copper, gold and silver. This has been evidenced by the migration of thousands of small-scale panning activities into these areas. The climate in the Project area can be described as humid tropical, with a reported average annual rainfall of about 2100mm. King-King is located south of the normal typhoon path and, therefore, does not experience pronounced wet and dry seasons. Temperatures reportedly range between 18 and 35°C.

Water Environment The King-King River is the principal drainage within the project area. The length of the watershed is nearly 20km, with the headwaters located upstream of the project area. Tributaries of the King-King consist of the Casagumayan, Turnanggan, Binutaan, Maboros, Tiogdan and Buko Buko perennial creeks. Dendritic to trellis drainage systems transect the current exploration area. Draining from the project area are the upper tributaries of the King-King River, which are the Mabaros and Binutaan creeks. Another prominent creek within the Company’s exploration area is Diat Creek, also a tributary of the King-King River. These watercourses flow southwestward to the Davao Gulf. Within the project area, the King-King River waterway has undergone significant sedimentation from the activities of the illegal and legal small-scale mining. The average slope of the King-King River watershed is 0.058 meter per meter, with steeper gradients in the upper portions of the watershed. In the upper watershed, the King-King River is controlled by the existing topography; and, in the lower watershed, the river can be characterized as meandering. The small-scale mining activity within the project area has significantly changed the erosive conditions and sedimentation rates of the lower watershed. Consequently, the lower watershed is in a dynamic condition. A significant impact to surface water quality is the bacteriological impact from improper sewage disposal by the local residents. Reports on sediment sampling also indicate the presence of high copper (Cu), manganese (Mn), zinc (Zn), and iron (Fe) values. Mercury (Hg) has been visually identified by placer mining operators in the sediments at the mouth of the King-King River. Within the small-scale mining area, there are reported elevated mercury values within the aquatic life. There are two ground water regimes within the project area, an alluvial aquifer along the coastal plain and a bedrock, fracture-controlled aquifer within the mountains. The alluvial aquifer supplies most of the drinking water for the residents of the area. The ground water aquifer is used by residents from flowing springs and artesian bore holes. Ground water quality is generally good within the mountains. The ground water quality within the alluvial aquifer is adequate and is directly impacted by the number of people within a specific area. Improper sewage disposal has directly impacted portions of this aquifer.




The King-King operations plan could potentially entail usage of a large amount of water. Water consumption and rights could become a significant permitting issue. There is a reported large fishery within the Davao Gulf. It is primarily a shallow water multi-species fishery; and, a significant percentage of the local residents depend on this fishery for their daily diet. No deep water fishery has been identified in the eastern portion of the Davao Gulf.

Socioeconomic Environment Due to unavailability of governmental demographic data for the specific project site parcel, the municipality data in which the project is located is presented in this part of this Technical Report. Documentation of the population numbers currently on the project site, in the town of Pantukan, and in the municipality will be an important initial phase of the planned Ratel social baseline studies for this project. Pantukan, a Cebuano speaking municipality, has the third largest population among the municipalities of Compostela Valley (1995 census) with a population of 56,780. Population increased by 10,480 from its last census of 1990, thus having an annual average growth rate of 7.14%. The project site is inhabited by local small-scale miners (operating illegally), and subsistence farmers. There are no ancestral groups recognized as indigenous people under Philippine law known to be located within the project boundaries. This will need to be confirmed during the baseline studies. The population is not evenly distributed among the barangays. The three barangays of King-King, Napnapan, and Magnaga are occupied by 55% of the population. Understandably, these are the barangays with existing small-scale mining activities.




Figure 18-10 & 11. The King-King Project Site (Eroded Area, Top) with

Illegal Small-Scale Miners’ Living Quarters and Processing Facilities (Bottom) Settlements are likewise situated where the livelihood sources of the town are located. The majority of the population is living in the coastal and lowland agricultural areas of the municipality. The upland farmers are practically clustered in the rolling rich valleys of




Tagugpo, Las Arenas and Araibo. The miners on the land are closely settled right at the mining areas of the town. The unemployment rate of 12.55% in the municipality is relatively high compared to provincial, regional and national averages, which are 6.3% unemployment and 15.5% underemployment for Compostela Valley.

18.3.10 Environmental and Socio-Economic Baseline Study

Ratel will develop a detailed “Environmental and Socio-Economic Baseline Study Plan” for the King-King project. The purpose of the baseline study will be to characterize the current physical, chemical, biological and social conditions in the project area. Data and information gathered from this study will be used in the development of the Philippine EIS and the international SEIA process; to assess the potential impacts to the environment and social conditions from proposed mine and operational activities; and, to develop avoidance and/or mitigation measures to minimize these potential impacts. The baseline study is intended to be flexible, in order to respond to changing field conditions, changes in project layout and processes, and other requirements. As noted above, Ratel has voluntarily committed to conformance with generally-accepted international standards in conducting this social and environmental baseline study. As a result, the baseline study will conform to the Performance Standards of the International Finance Corporation and the standards of the Equator Principles (these standards were also discussed above). The baseline study will also comply with all relevant Philippine laws, regulations and standards; and, the Environmental and Social Policies of Ratel. An international team led by AATA International, Inc. (AATA), headquartered in Denver, Colorado, USA, will conduct the baseline social and environmental study on behalf of Ratel. AATA will be assisted in performing the baseline study by Philippine consultancies and experts specializing in environmental & social baseline studies and impact assessments. The study will be conducted under the supervision of AATA to ensure that the study meets all international good practice standards and Philippine requirements, with respect to scope, quality assurance/quality control (QA/QC), and documentation. The “Environmental and Socio-Economic Baseline Study Plan” for the King-King project will include a comprehensive “Terms of Reference” or “Scope” for the over-all baseline study, as well as, specific individual “Work Packages” for each disciple to be studied. These Work Packages, which will be developed by AATA and Ratel, will provide details on the scope and methodologies that will encompass the following areas of study: Work Package #1 – Meteorology and Air Quality Work Package #2 – Geology, Soils, Sediments, and Natural Hazards (including

Geotechnical, Seismic, Landslides, and Volcanic) Work Package #3 – Surface Water Hydrology and Quality Work Package #4 – Groundwater Hydrology and Quality Work Package #5 - Acid Rock Drainage and Advanced Geochemical Management Program




Work Package #6 – Visual and Aesthetics Analysis, Noise, and Traffic Surveys Work Package #7 – Terrestrial Ecology – Vegetation, Wildlife, Threatened & Endangered

Species, Protected Areas Work Package #8 – Aquatic Ecology – Fishes, Benthos, Plankton and Periphyton Work Package #9 – Social and Economic Conditions, Public Consultation and Outreach Work Package #10 – Archaeological and Cultural Resources Work Package #11 – Biodiversity Offsets Work Package #12 – Air Quality Work Package #14 – Erosion Control Work Package #15 – Water Management As noted above, the results of the over-all environmental baseline studies will be included in the Philippine EIS and the international SEIA reports; and, will assist Ratel in assessing the potential impacts to the environment and social conditions from the proposed mine and operational activities; and, to develop avoidance and/or mitigation measures to minimize the potential impacts. In accordance with IFC Performance Standards and the Equator Principles, formal individual documents (which include detailed work instructions) covering all aspects of Environmental Management will also be developed by AATA and Ratel for the King-King project (see below for similar plans on social matters). These will include the following, as applicable: • Environmental Management System Framework (EMS) • Occupational Health and Safety Plan (OHSP) • Environmental Protection Plan (EPP) • Erosion and Sediment Control Plan (ESCP) • Environmental Monitoring Plan (EMonP) • Emergency Response Plan (ERP) • Hazardous Materials Management Plan (HMMP) • Waste Management Plan (WMP) • Site Water Management Plan (SWMP) • Reclamation and Closure Plan (RCP) • Biodiversity Management Plan (BMP)

18.3.11 Social Development and Management Program (SDMP)

A first, significant step by Ratel in the development of the “Environmental and Socio-Economic Baseline Study Plan” will be the implementation of a “Social Development and Management Program” (SDMP) to provide initial guidance in this important aspect of the King-King project. The SDMP is outlined here to provide the Government of the Philippines, regulatory bodies, local communities, NGOs and other interested parties with a view of the disciplined approach that Ratel will follow with regards to social development and management of the King-King project area. This plan will initially focus on the small scale (illegal) mining community that has arisen in the area, and on the local communities which bear the brunt of the impacts from these activities, especially water quality impacts to the river, and the estuarine and near-shore environments.




The assessment of the local situation will be carefully conducted, to insure proper identification, selection, and implementation of effective social management alternatives. In the case of the King-king project, it is reported that there are perhaps up to 800-1,000 illegal small-scale miners working in the area immediately on, or adjacent to, the Ratel property/mining concession. A preliminary assessment of the current situation will be conducted to identify the principal social elements and stakeholders; to evaluate how the small-scale miners are organized; and, to document how the current economic system of the area is organized. Stakeholder identification and mapping will be a critical function of this social analysis. This socio-economic evaluation will be utilized as a component of the baseline study to document the social conditions related to small-scale mining in the project area prior to Ratel developmental and mining activities. This initial baseline socio-economic evaluation will also be used as a basis for developing management practices, including the following considerations:

1) Management of the current situation, legal restrictions and identification of available options.

2) Implementation of key health and safety measures to protect the population. 3) Transition of small-scale miners to direct employment opportunities. 4) Training and technology transfer, to prepare small-scale miners for employment. 5) Provision of cooperative or centralized mine management, central retort(s),

processing, marketing, sales. 6) Voluntary and/or involuntary resettlement alternatives. 7) Prohibition of illegal mining activities. 8) Creation of alternative sustainable options for replacing illegal mining activities.

Based on the results of the over-all social baseline studies, and in accordance with IFC Performance Standards and the Equator Principles, formal reports and assessments covering all aspects of Social and Community Management will be developed by Ratel. These will include the following, as applicable: Resettlement Action Plan; Indigenous Peoples Plan; Community Development Plan; Cultural Resource Management Plan; and, Public Consultation and Disclosure Plan. Russell Mining and Minerals Inc. has stated that the company has a strong commitment to being a good corporate neighbor, and will demonstrate its commitment to the people of the area, region, and the country through these formal plans, programs and practices. The information presented in this section is a compilation of the projected baseline study to be conducted, the permitting requirements to be fulfilled, and the development of environmental and social management plans for the King-King project. Additional operating information and environmental data will be collected in support of Feasibility Study and may change the subsequent approach to permitting. The environmental goals of the Feasibility Study are to:




• Identify permitting and public consultation requirements. • Complete environmental studies and identify assumptions in relation to operating plan

cases. • Identify areas lacking in environmental information and the significance of these areas

for planning purposes. • Identify environmental related costs of permitting, compliance and management to within

plus or minus 20 percent accuracy.

18.3.12 Identification of Potential Environmental Impacts

There are two phases of environmental and socio-economics impacts that are of initial interest for this project. There are the potential impacts associated with the exploration program; and, the very preliminary estimated impacts from the potential future operation of the mine and processing facilities. Assessments of these impacts are very preliminary at this point, because the studies that will be conducted to more clearly define these are part of the work program plan described in this current report.

18.3.12.1 Land impacts

Off-site a. Exploration Work Program

b.

: No additional off-site surface disturbances are expected because the off-site property access roads already exist. This access would be used and it is not planned to make new ones. No off-property storage areas are planned. Future mine and processing facilities

: There would be multiple new access roads that enter the property at various locations to facilitate reaching the various mining facilities, for example, the open pit and mine maintenance facilities, the ore processing facilities, the tailings management area, overland pipeline and conveyor systems, etc. There would likely be a port facility in Pantukan, so off-mineral property surface would be disturbed in its development. Depending upon the best designs found in the future feasibility studies, there could be off mineral property surface disturbed for pipeline and conveyor routes, process and tailings management facilities, and infrastructure.

Planned baseline environmental studies, and ore/non-ore material characterization and management studies, will identify the potential surface disturbance areas in detail. On the Mineral Property Surface disturbance on the mineral property would include: • Drilling - Planned Hydrological drilling of 2,600 meters of RC drilling for monitoring

wells • Living quarters and office areas previously utilized would need to be cleared of

vegetation to enable the rebuilding/replacement of these facilities. • Drill rig supply lay down and repair areas would be near the living quarters and would

need to be cleared of vegetation requiring minimal, if any, new disturbance.




There would be two phases of land disturbances as follows. a. Exploration Work Program

: A few existing overgrown access and drill roads would be cleared to reach the sites to place monitoring wells. Roads would be sloped to let storm water run off the surface; and, culverts would be installed as needed to ensure proper control during any rain events. Soil disturbed in ground preparation for the main work program camp sites would be consolidated into a growth media stockpile for later use in concurrent reclamation during mining activities or during closure.

b. Future mine and processing facilities

: There would be multiple new access roads across the mineral property to facilitate reaching the various mining facilities, for example, the open pit and mine maintenance facilities, the ore processing facilities, the tailings management area, overland pipeline and conveyor systems, etc. There would be large surface disturbances for the open pit and non-ore material management area. Depending upon the best designs found in the future feasibility studies, there could be mineral property surface disturbed for: pipeline and conveyor routes; process and tailings management facilities; and, infrastructure (power and water line corridors, for instance).

Planned baseline environmental studies, and ore/non-ore material characterization and management studies, will identify the potential surface disturbance areas in detail. 18.3.12.2 Potential Hydrology and Water Quality Impacts Generation of Acid Mine Drainage a. Exploration Work Program

: None is expected


: There are 3 mine facilities that are expected at this early stage of analysis that would potentially be acid generating. These are the walls of the open pit mine; the non-ore material management facility; and, the low grade ore storage facility. The non-ore material and low grade storage facilities would probably utilize compacted soil liners with very low permeability. The preliminary expected quality of the drainage from these three facilities is poor with low pH in the range of 3.5-5.5 and elevated levels of iron and copper sulfates. The volume of drainage is expected to range from 100 to 500 m3/hr, increasing as the size of these facilities grows over the life of the mine. (Tailings from the processing facility would not be considered potentially acid generating because the management methods being considered, at this early stage, for tailings disposal are expected to prevent acid generation.)

Planned baseline environmental studies, and ore/non-ore material characterization and management studies, will identify the potential acid generating drainages in detail. Tailings disposal studies will confirm that the potential proposed methods to be used would be non-acid generating and conform to good international industry practice.




Siltation of Surface Waters a. Exploration Work Program

: The rehabilitated existing roads and new drill pads for the monitoring wells would have potential for sediment surface run off and erosion during rainfall. Measures will be taken to prevent this.


: There are several potential areas for siltation and pollution of surface waters by the future mine facilities, if appropriate run-off collection ditch designs and sediment control structures are not incorporated in the mine design. Possible problem areas could be mine roads, access roads along pipelines, power lines and conveyor routes, erosion at non-ore material management and low grade ore storage facilities, growth media stockpiles and open pit walls. Measures will be taken to prevent this.

Planned baseline environmental studies, and ore/non-ore material characterization and management studies, will identify the potential areas for siltation and pollution of surface waters in detail. Changes in Hydrology a. Exploration Work Program

b.

: No changes in hydrology are expected as a result of these activities. Future mine and processing facilities

: Potential locations of all mine facilities could potentially change the current natural drainage systems that are very near these facilities. It is probable that late in the mine life, the King-King River course may need to be diverted. Ground water availability could be temporarily affected due to draw down from water supply wells, though recharge rates appear quite high for the on and off mineral property areas where these wells might be located. Good water management practices will be employed; and, this will result in positive changes to the local water quality by eliminating some of the current water quality problems caused by the illegal small-scale mining operations on the mineral property (including high siltation rates, possible mercury and other metals contamination, poor water quality from uncontrolled/untreated sanitary wastes, etc.).

Planned baseline environmental studies and water management studies will identify the potential changes in hydrology on and off the mineral property in detail. This work would include a baseline of the current watershed and primary tributary courses to determine the natural course prior to small-scale mining (legal and illegal) activities. It is apparent that the current small-scale mining activity on and off the mineral property has significantly impacted the water course, the hydrological regime, and water quality; and, has caused significant sedimentation in the King-King River and downstream delta.

18.3.12.3 Potential Ecological Impacts

a. Exploration Work Program: There are no expected long term effects to the local ecology during exploration, as the natural form of the land should not be altered.




Envisioned activities only include brush clearing and surface development of the existing roads, drill pads and camp site.


: There would be potentially several impacts on the local ecological systems near the mining facilities (whether on or off the mineral property). Large acreages of land would be affected by the mine operation, particularly by the open pit, non-ore material and low grade ore management facilities and tailing management facility.

There are several planned environmental baseline studies that will identify potential impacts to the on and off mineral property ecosystems; some of these have been mentioned above and others are listed below: • Soils • Wildlife • Flora and Fauna • Special Status Species • Air Quality

18.3.12.4 Potential Socioeconomic Impacts

a. Exploration Work Program

: Efforts would be made to avoid locating drill pads or aerial survey ground markers, as much as practical, on areas where small miners and farmers work or live. Therefore, impacts would probably be eliminated in most cases or of very short duration in others. For example, the typical time at a drill pad would be less than 15 days.


: There would be socioeconomic impacts due to mine development and operation to the local and nearby indigenous/ethnic communities, particularly in Pantukan. For the most part, the impacts would be positive because of the direct and indirect employment opportunities, increases in the local government revenue from taxes, and subsequent improvements in government supported programs in Pantukan. Improvement in local medical facilities would be likely; these would be supported by both the mining company and the government. These are but a few of the improvements that would likely occur due to the mine development and operation.

Some negative impacts may potentially occur. Subsistence farming in the mine facility areas would be eliminated. Small-scale mining activities inside (illegal) and outside the mineral property would be reduced. Temporary disruptions could occur in the normal community life during the construction phase due to the influx of construction tradesmen for 2 years. Planned baseline socio-economic and indigenous peoples studies will identify and describe the potential socio-economic effects in detail.




18.3.12.5 Environmental Management and Mitigation Measures

The following is a discussion of the preliminarily estimated mitigation measures to be employed at the King-King project, including estimated total costs to ensure effective protection of the environment and adjoining areas from the exploration activities. These mitigation measures and costs will be further refined as a result of the proposed baseline and feasibility studies for the King-King project.

Progressive Rehabilitation/Restoration of Areas Rehabilitation at the King-King project will be directed towards meeting stakeholder, legislative, and corporate requirements. Rehabilitation at the King-King Project will consist of concurrent rehabilitation as much as practical, which is the process of returning disturbed land to a predetermined post-mining land use even while mining operations are on-going. The post-mining land use will be established through consultation of all impacted stakeholders during the EIS process. Rehabilitation will be conducted concurrently within the existing operating plan, where possible, to minimize closure costs and environmental impacts associated with mining in a wet tropical environment. Concurrent rehabilitation allows for effective control of erosion, reduces siltation, and allows mine site personnel to modify and improve the program from on-going experience. Short term objectives consist of meeting operational requirements, such as stabilizing disturbed land to control erosion and siltation. The long term objectives of the rehabilitation program will consist of: • Protecting the environment from the potential impacts of mining activities • Gaining regulatory acceptance and the release of any financial guarantees • Stabilizing all land forms created and/or effected during mining • Returning the area to an established post mining land use • Rehabilitation and closure being maintenance free and self sustaining • Closure being completed within 2 years of the succession of mining Completion criteria will be established for the tailings storage facility (TSF), the valueless rock management areas (VRMA), open pit workings, and other ancillary facilities as the project baseline and feasibility studies are conducted. To prevent or reduce erosion and siltation, progressive rehabilitation/restoration of areas subject to exploration and related activities will be conducted by reforestation or by undertaking civil structure programs such as rip rap, retaining walls, etc. a. Exploration Work Program

: The drill pad sumps will be filled in after completion of work activities. Native plants and grasses would be planted to prevent erosion and restore the land to its former state. The camp site would continue to be used through mine development, so there would be no reclamation of these facilities during this work program duration.





: Planned baseline environmental studies, ore/non-ore material and management studies, and reclamation studies will determine good international industry practices to employ for progressive rehabilitation/restoration of areas affected by potential future mining activities. As these baseline studies progress, additional studies may need to be added to more fully address avoidance and mitigation of environmental impacts.

Management of Stockpiles Stockpiles of excavated and removed earth will be managed to prevent dust and siltation problems (e.g., revegetation of disposal areas) and reduce the impact of topographical changes. a. Exploration Work Program

: Any significant stockpiles of growth media material would be preserved until reused for reclamation. These piles would be contoured to reduce erosion and ditches placed around them to divert water from rain away from the stockpile. If the stockpiles will be maintained for the long term, then native plants and grasses would be planted on them.


: Planned baseline environmental reclamation studies will determine good international industry practices to employ for management and re-use of stockpiles of excavated and removed earth generated during mine development and future mine operation.

The cost of the study for the management of stockpiles was included in the section above.

Maintenance of Roads to Minimize Dust a. Exploration Work Program

: A watering truck will be utilized as needed to wet down drill roads to minimize dust. These are small drill roads and normal rainfall may prove to be adequate for controlling dust.


: Very large open pit mine roads will be developed. A large scale watering truck will be used to depress dust. A smaller watering truck will be used on other dirt access roads as needed.

Planned baseline environmental air quality studies will determine good international industry practices to employ for dust control and estimate potential particulate emissions (PM10).

Handling of Toxic and Hazardous Materials The handling of toxic and hazardous materials, if any, will be included in an Emergency Response Program.




a. Exploration Work Program

: No hazardous materials will be used during this program. Earthen containments will be properly designed to hold 110% of the of the storage volume for diesel/gas and lubricants. Incorporated in the containment will be a drainage system to allow for removal of water that may accumulate after a storm event.


: There could potentially be a number of toxic and hazardous materials that will be used in the future mine operation, including:

• Sulfuric acid for copper oxide leaching • Analytical laboratory reagents • Explosives

Planned baseline environmental water pollution studies will determine good international industry practices for handling toxic and hazardous materials identified in the feasibility studies. Emergency response plans will be developed based on the study findings. Accommodation of Other Economic Activities on the Project Area a. Exploration Work Program

: Small-scale miners would be allowed to continue to operate while exploration, environmental and socioeconomic programs are in progress on the project area. Small-scale farming would also be allowed to continue on the project area. These activities could continue until full scale mine development begins.


: Planned baseline socioeconomic and indigenous peoples studies will identify the potential economic effects and describe the methods to avoid or mitigate them. As these baseline studies progress, additional studies may need to be undertaken to more fully address avoidance and mitigation of socioeconomic and indigenous peoples impacts.

Alternative Plans if Special Habitat of Flora and Fauna are Affected a. Exploration Work Program

: A threatened and endangered species survey was conducted in the project area in January 1997. A total of five threatened or endangered flora species and one faunal species were found at that time. The conservation of the floral species can be accomplished by transference to protected areas and maintenance in a reclamation nursery. Additional studies will be conducted, as part of the baseline study program, to determine if these species are still in the project area.

b. Future mine and processing facilities: Planned baseline flora and fauna, and special status species, studies will identify the potential impacts and methods for avoidance and mitigation of those impacts to plants and wildlife. As these baseline studies progress, additional studies may need to be undertaken to more fully address avoidance and mitigation of flora and fauna impacts.




Socioeconomic Mitigating Measures a. Exploration Work Program

: No impacts would be expected, so no mitigation measures are planned at this time. All regional and local safety regulations will be adhered to. Personal protective gear will be provided and utilization enforced.

b. Future mine and processing facilities: In the case of the King-King project, it is reported that there are small-scale miners working in the area immediately on (illegal), or adjacent to (perhaps legal), the property/mining concession. A fast-track preliminary assessment of the current situation will be conducted: to identify the principal social elements and stakeholders; to evaluate how the small-scale miners are organized; and, to document how the current local economic system is organized. The socio-economic evaluation will be utilized as a baseline condition that will be documented in detail prior to the proponent activities.




19 Interpretation and Conclusions This study has developed an updated measured and indicated mineral resource for the King-king deposit that amounts to 791.5 million ore tonnes at 0.28% total copper and 0.37 g/t gold. This amounts to 4.9 billion contained pounds of copper and 9.4 million contained ounces of gold. A conservative estimate of inferred mineral resource amounts to 125.5 million tonnes at 0.24% copper and 0.31 g/t gold. The results of the resource estimate indicate that the King-king Copper-Gold project has the potential to become an economic producer of copper-gold and gold concentrates for shipment to a copper smelter/refiner and a gold refinery if planned feasibility studies confirm projected mine and mill designs are practical and economical. There is potential to add resource tonnage to the King-king deposit as there are significant quantities of inferred resource, particularly at depth, to the north and west of the presently defined open pit, where drilling has not found the limits of the mineralization. The additions could be in the range of 100’s of millions of tons. Based on the known information provided to date, AATA sees no environmental issues that would prevent the permitting of the proposed operations. After review of the laws of the Philippines and the planned project, this project should apply generally under the MINING ACT OF 1995, however, several other laws and regulations may apply; these are listed in Appendix 3 of the above listed section 18.3- Environmental. Although AATA currently does not see any permitting issues that would prevent the operation of the proposed King-king Gold-Copper Mine, AATA cannot predict all the concerns or issues the permitting agencies may have with the proposed project during the permitting process, nor can AATA control how long the agencies will take to issue the necessary permits. At this time, quantification of all the environmental impacts of the proposed facilities and operations is not possible. A better understanding of these will be developed during the permitting process. There is potential to increase metal recoveries, particularly for precious metals, with newer technologies introduced to processing in recent years. Gravity concentration methods and non-cyanide leaching of gold and silver from copper sulfides, pyrite and arsenopyrite concentrates are a few processes of merit to investigate. It is also reported to IMC that production of a separate molybdenum concentrate may also be practical given the levels of molybdenum in the ore and the demand for molybdenum, though the current drilling database does not include molybdenum assays. Molybdenum assays were included on most of the Echo Bay assay certificates and this data could be added to the database. The goal of this study was to develop an NI 43-101 compliant mineral resource for the project. The study has met that goal.




20 Recommendations The results of this study indicate that the King-king Project has the potential to become an economic producer of copper and gold. However, more information will be required to move the project forward to a prefeasibility study. IMC recommends an initial re-assaying of a about 200 Benguet drill hole pulps and their corresponding remaining half of core for total copper and gold. The purpose is to determine if the bias observed in the Benguet gold assays was due to sample preparation or the analytical work (or both). Based on the outcome of this, additional Benguet pulps and/or core will be assayed to supplement the existing database and improve the confidence of mineral resource and mineral reserve estimates. IMC and REI recommend an initial drill program of 16 diamond drill holes (6900 m of drilling) that will provide the following:

• Increased confidence in the current Indicated resource estimate in areas where current drill hole spacing is wider than average;

• Additional gold data in areas where drilling currently consists mostly of pre-Echo

Bay holes that do not have reliable gold assays. This should also upgrade some inferred resource inside the current design pit to Indicated resource;

• Better definition of lithology contacts and interpretations in certain areas of the

deposit. IMC and REI emphasize that the 16 drill holes are not designed to address issues related to metallurgy or process testwork, acid rock characteristics, geotechnical issues (including slope stability), or other technical questions. Though not particularly designed for these purposes, these holes will provide information for a broad range of topics at King-king such as metallurgy, acid rock characteristics, and some geotechnical issues, etc. Table 20-1 and Figure 20-1 show the details of this proposed drilling program. Acid rock characterization studies are planned on the available core and core from new drilling. A new topographic survey of the mine, VRMA’s, plant, and tailings storage areas will also be required. The last survey was conducted in 1997. Significant artisanal mining activity and also natural erosion have impacted the surface topography. Process testing on new core should address the following items: Optimum primary grinding size for various ore zones and lithology types Geo-statistical analysis of grinding and flotation




Copper oxide mineral response to flotation with recently developed and commercialized oxide flotation reagents and flow sheets

A thorough study of regrind product size Optimized cleaner flotation reagent schemes and flow sheet for ore variations Evaluate centrifugal gravity and flash flotation recovery of gold from the primary



The additional drilling should apply a highly accurate down hole survey method such as a Maxi-bore unit. Geotechnical data should be logged along with the geologic logging process. Some geotechnical testing will also be required on the new core. Some hydrogeological testing of the finished core holes will be required. A Quality Assurance/Quality Control program will also have to be established for the new drilling. The proposed budget for the additional drilling, analysis of the drill results and above mentioned studies is: $3.4 million USD (See Table 20-2 for details). Ratel currently plans to implement the drill program during the fourth quarter of 2010. Table 20-1. Proposed Drill HolesHole No. Cross Section Northing Easting Elevation Azimuth Dip Depth (m)

1 10150 794,974 608,306 520 196˚ -73˚ 5002 10250 795,329 608,361 610 205˚ -78˚ 5003 10650 795,127 607,826 600 184˚ -71˚ 5004 10750 795,217 607,769 610 205˚ -65˚ 6005 10800 795,519 607,843 550 190˚ -79˚ 4506 11000 795,550 607,654 430 188˚ -64˚ 6007 11100 795,578 607,561 405 188˚ -60˚ 5008 11250 795,560 607,367 370 205˚ -55˚ 3009 11700 795,611 606,895 460 205˚ -56˚ 50010 12000 795,644 606,577 320 192˚ -68˚ 40011 11500 795,715 607,161 400 205˚ -70˚ 30012 10450 795,302 608,128 740 205˚ -66˚ 65013 10700 795,051 607,736 560 205˚ -70˚ 35014 10900 795,038 607,510 600 205˚ -70˚ 30015 11200 795,227 607,266 505 205˚ -75˚ 30016 12100 795,555 606,427 250 205˚ -70˚ 150

TOTAL 6900



Figure 20-1. Proposed Holes



Table 20-2. Additional Drilling and Study Cost Description Number Units Cost per Unit Cost, USD Mobilization and Demob 2 each USD45,000 90,000 Confirmation Drilling 6,900 meters USD76 524,400 Engineering Drilling 2,700 meters USD76 205,200 Hydrology Drilling, DDH 1,980 meters USD76 150,480 Hydrology Drilling, RCH 800 meters USD32 25,600 Drilling Supplies 1 lot each USD486,000 486,000 Drilling Geologists/Techs 1 lot each USD106,150 106,150 Sample Prep and Assaying 3,767 each USD35 131,845 Metallurgical Studies 1 lot each USD735,000 735,000 Pit Slope Studies 1 lot each USD271,000 271,000 Acid Rock Drainage 1 lot each USD468,000 468,000 Geology Studies 1 lot each USD150,000 150,000 Satellite and Ground Surveys 1 lot each USD75,000 75,000

Total 3,418,675




21 References

Feasibility Reports

King-king Project Level I Feasibility Study Volume 1 of 3 - Technical Description, April 1997, Prepared by: Kilborn International, Inc / 5775 DTC Boulevard, Suite 200 / Englewood, Colorado 80111-3227 for King-king Mines Inc. King-king Project Level I Feasibility Study Volume 2 of 3 Appendix I – Project Maps and Drawings, April 1997, Prepared by: Kilborn International, Inc / 5775 DTC Boulevard, Suite 200 / Englewood, Colorado 80111-3227 for King-king Mines Inc. King-king Project Level I Feasibility Study Volume 3 of 3 Appendix 2 – Design Criteria, April 1997, Prepared by: Kilborn International, Inc / 5775 DTC Boulevard, Suite 200 / Englewood, Colorado 80111-3227 for King-king Mines Inc. Updated Pre-Definitive Feasibility Study for King-king Copper – Gold Project, March 1994, by Benguet Independent Review of Data relating to the King-king Copper – Gold Project, December 2007, Prepared by: SRK Consulting (Australasia) Pty Ltd (Reg’d No ABN 56 074 271 720) for Benguet Corporation and Nationwide Development Corporation

Geology

Geological report on the Phase I exploration of the King-king porphyry copper-gold Project, 1992, by Benguet Corporation (Tejada, F. A. C, and Malihan, T.) Report on the result of the 11 DDH of the phase II-B drilling in King-king Project, 1995, Malihan, T. D. Benguet Sample & Assay Procedure and Results/Comparison of Benguet Re-assay Certificates and Submittals, December 1996, Malihan, T. D. Final Report on King-king Project, Pantukan, Davao del Norte, Philippines, Cities Service Minerals Co. – Internal Report, 1977, C. K. Burton The Exploration and Geology of the Hijo Gold Prospect, Mabini, Davao del Norte: Gold 1987 in the Philippines Setting, August 1987, Culala, L. R.




Note: Mineralogy Studies are reported in the Lakefield Research Ltd. Metallurgical reports shown below under Metallurgy references. Progress reports 1, 2, 4 and 5 contain mineralogy studies in their appendices.

Metallurgy

Benguet Corporation King-king Project preliminary flotation investigation of mixed oxide-sulfide and sulfide ore types, December 1993, by: METCON Research Inc., Tucson, Arizona for Benguet Corporation Benguet Corporation King-king Project Column Leach Study Acid Cure Test Series Interim Report, December 1993, by: METCON Research Inc., Tucson, Arizona for Benguet Corporation Benguet Corporation King-king Project Column Leach Study Acid Cure Test Series Interim Report, January 1994, by: METCON Research Inc., Tucson, Arizona for Benguet Corporation An investigation of the recovery of copper and gold from King-king sulfide ore samples submitted by Echo Bay Management Corporation, Progress Report No. 1, April 2, 1997, Lakefield Research Limited, Lakefield, Ontario An investigation of the recovery of copper and gold from King-king oxide ore samples submitted by Echo Bay Mines, Progress Report No. 2, March 31, 1997, Lakefield Research Limited, Lakefield, Ontario An investigation of the leaching of copper and precious metals from King-king ore samples submitted by Echo Bay Mines, Progress Report No. 3, April 10, 1997, Lakefield Research Limited, Lakefield, Ontario An investigation of the recovery of copper and gold from King-king sulfide ore samples submitted by Echo Bay Mines, Progress Report No. 4, July 30, 1997, Lakefield Research Limited, Lakefield, Ontario An investigation of the recovery of copper and gold from King-king oxide ore samples submitted by Echo Bay Mines, Progress Report No. 5, July 10, 1997, Lakefield Research Limited, Lakefield, Ontario An investigation of the recovery of copper and gold from King-king sulfide ore samples submitted by Echo Bay Mines, Progress Report No. 6, August 10, 1997, Lakefield Research Limited, Lakefield, Ontario Mined products made Responsibly - Clean Processing - Base Metal Tailing, International Mining October 2006, John Chadwick




Amended Technical Report for Kamoto Copper Company, Kolwezi, Katanga Province, Democratic Republic of the Congo, June 23, 2006, by: McIntosh RSV LLC Flotation of mixed copper oxide and sulfide minerals with xanthate and hydroxamate collectors, September 2008, by: K. Lee a, D. Archibald b, J. McLean c, M.A. Reuter , Ausmelt Limited, AMML, West Gosford, NSW, Australia, Minto Explorations Ltd., Whitehorse, YT, Canada , Ausmelt Limited, Dandenong, Victoria, Australia The Application of Ausmelt’s AM28 Alkyl Hydroxamate Flotation Reagent to Fox resources’ West Whundo Copper Ore at Radio Hill, Western Australia, October 2006, K. Lee, G. Sheldon, J. Bygrave and L. Mann, Ninth Mill Operator’s Conference, Fremantle, WA, 19-21 March 2007 AM2 – a hydroxamate flotation collector reagent for oxides and oxidized mineral systems, June 2005, By Dr Terry C Hughes, Ausmelt Chemicals Pty Ltd., Australian Journal of Mining July/August 2005 – Flotation Technical Paper

Social and Environmental

Environmental Work Program for King-king Copper-Gold Porphyry Mineral Property, Pantukan, Compostela Valley (Eastern Mindanao), February 2010, by Russell Mining and Minerals, Inc. / NADECOR for Republic of the Philippines Department of Environment and Natural Resources Mines and Geoscience Bureau, North Avenue, Diliman, Quezon City Plan to Address Small-Scale Illegal Mining in the King-king Mineral, Pantukan, Compostela Valley (Eastern Mindanao), February 2010, by RMMI / NADECOR for Republic of the Philippines Department of Environment and Natural Resources Mines and Geoscience Bureau, North Avenue, Diliman, Quezon City The environmental appendix contains the list of Philippine laws and regulations which may be applicable to the King-King project; and, a list and discussion of international environmental and social guidelines & standards that may be employed at the King-King project.




22 Date and Signature Page Signed this 12th day of October, 2010 “Michael G. Hester” Michael G. Hester, FAusIMM Vice President and Principal Mining Engineer Independent Mining Consultants, Inc. “Donald F. Earnest” Donald F. Earnest, P.G. President Resource Evaluation, Inc. “John G. Aronson” John G. Aronson President AATA International, Inc.




23 Additional Requirements for Technical Reports on Development Properties 23.1 Mining Operations The mining operation will be open pit, bulk, mining conducted with mining shovels in the 40 cubic meter class or larger and trucks in the 200 metric tonne class or larger. The ore production rate is expected to be 100,000 metric tonnes per day (36.5 million tonnes per year) or higher. IMC has also developed a preliminary mining production schedule (i.e. production forecast) for the King-king Project). Seven mining phases were designed to do the scheduling. The phases include haulage roads and adequate working room for large mining equipment. Figure 23-1 shows the final pit design. The final pit design was based on economic parameters used for the mineral resource estimation (Table 17-2), including commodity prices of $1.75 per pound copper and $660 per ounce gold. Only measured and indicated mineral resource was allowed to contribute to the design. Table 23-1 shows the mine production schedule. Ore production varies by year because it is based on 8766 plant hours per year with an oxide/mixed ore processing rate of 48,300 ktpy (0.1815 hrs/kt) and a sulfide processing rate of 36,500 ktonnes per year (0.2402 hrs/kt). Ore mined during preproduction and Year 1 amounts to 36,800 ktonnes or about 80% of nominal plant capacity. The copper equivalent cutoff grade varies by year to balance the mine and plant production rates. Preproduction stripping requirements are minimal at 12.7 million tonnes. Total material is scheduled at 51.2 million tonnes for Year 1. Years 2 through 16 total material requirements are about 72 million tonnes per year. This schedule results in 812.5 million ore tonnes at 0.275% total copper, 0.367 g/t gold and 0.506% copper equivalent. This is measured and indicated resource only, inferred resource is considered waste. Total material is 1.46 billion tonnes. The table also shows that between a potential low-grade cutoff grade of 0.2% copper equivalent and the operating cutoff grade for each year there is the potential to stockpile 49.7 million ore tonnes at 0.160% copper and 0.132 g/t gold. The table also shows a proposed plant production schedule. Year 1 is shown as the ore mined during preproduction and Year 1 and Years 22 and 23 include the low grade. Including the low grade, total plant production amounts to 862.2 million ore tonnes at 0.268% total copper, 0.354 g/t gold, and 0.491% copper equivalent. Total plant production is about 9% more ore tonnes than the measured/indicated mineral resource. The mineral resource was tabulated at breakeven cutoff grades of 0.27% Eq Cu for oxide and 0.23% Eq Cu for sulfide. Operating cutoff grades for the production schedule




were allowed to go down to 0.21% Eq Cu (internal cutoff) for oxide/mixed material and 0.20% Eq Cu for sulfide. 23.2 Recoverability Section 16.3 presented preliminary head grade versus recovery equations for sulfide copper, oxide copper, and gold. By applying the equations to the various grade increments contained in the 2009 design pit developed by IMC, IMC estimated average copper and gold recoveries of 74% and 83% respectively in the oxide zone and 86% and 81% for the sulfide zone. These are the values presented on Table 17-2 and used for development of the mineral resource. They are, however, preliminary estimates.



Table 23-1. Proposed Mine and Plant Production ScheduleMine Production Schedule Low Grade Stockpile Proposed Plant Schedule

Mining Cu Eq Ore Cu Eq Tot Cu Sol Cu Gold Ore Cu Eq Tot Cu Sol Cu Gold Waste Total Waste: Ore Cu Eq Tot Cu Sol Cu Gold Hours/ PlantYear Cutoff (%) Ktonnes (%) (%) (%) (g/t) Ktonnes (%) (%) (%) (g/t) Ktonnes Tonnes Ore Ktonnes (%) (%) (%) (g/t) Ktonne HoursPP 0.32 4,830 0.642 0.492 0.275 0.212 2,363 0.263 0.166 0.101 0.135 5,500 12,693 0.761 0.32 31,970 0.791 0.466 0.299 0.459 1,427 0.282 0.203 0.060 0.120 17,841 51,238 0.53 36,800 0.771 0.469 0.296 0.427 0.1897 6,9792 0.36 43,874 0.875 0.412 0.226 0.676 9,871 0.295 0.228 0.138 0.097 17,750 71,495 0.33 43,874 0.875 0.412 0.226 0.676 0.1998 8,7663 0.30 42,410 0.802 0.392 0.154 0.623 2,743 0.258 0.161 0.088 0.141 26,847 72,000 0.59 42,410 0.802 0.392 0.154 0.623 0.2067 8,7664 0.26 42,700 0.556 0.227 0.082 0.492 6,353 0.233 0.116 0.037 0.176 22,947 72,000 0.47 42,700 0.556 0.227 0.082 0.492 0.2053 8,7665 0.26 39,190 0.568 0.256 0.058 0.490 6,956 0.231 0.135 0.034 0.156 25,854 72,000 0.56 39,190 0.568 0.256 0.058 0.490 0.2237 8,7676 0.25 40,490 0.483 0.332 0.094 0.241 5,416 0.227 0.172 0.048 0.086 26,094 72,000 0.57 40,490 0.483 0.332 0.094 0.241 0.2165 8,7667 0.23 36,740 0.457 0.323 0.033 0.223 2,624 0.216 0.153 0.013 0.105 32,636 72,000 0.83 36,740 0.457 0.323 0.033 0.223 0.2386 8,7668 0.20 37,300 0.506 0.326 0.050 0.297 34,700 72,000 0.93 37,300 0.506 0.326 0.050 0.297 0.2350 8,7669 0.20 37,670 0.497 0.304 0.048 0.318 34,330 72,000 0.91 37,670 0.497 0.304 0.048 0.318 0.2327 8,766

10 0.20 37,770 0.444 0.300 0.043 0.235 34,230 72,000 0.91 37,770 0.444 0.300 0.043 0.235 0.2321 8,76611 0.24 36,880 0.438 0.274 0.033 0.270 3,896 0.223 0.148 0.016 0.123 31,224 72,000 0.77 36,880 0.438 0.274 0.033 0.270 0.2377 8,76612 0.24 36,630 0.436 0.245 0.029 0.317 3,252 0.222 0.137 0.012 0.142 32,118 72,000 0.81 36,630 0.436 0.245 0.029 0.317 0.2393 8,76613 0.24 36,590 0.446 0.227 0.029 0.364 2,586 0.222 0.124 0.015 0.163 32,824 72,000 0.84 36,590 0.446 0.227 0.029 0.364 0.2396 8,76714 0.24 36,510 0.468 0.227 0.029 0.401 2,215 0.222 0.113 0.015 0.182 33,275 72,000 0.86 36,510 0.468 0.227 0.029 0.401 0.2401 8,76615 0.20 36,590 0.432 0.205 0.029 0.378 35,410 72,000 0.97 36,590 0.432 0.205 0.029 0.378 0.2396 8,76716 0.20 36,690 0.419 0.210 0.032 0.348 35,310 72,000 0.96 36,690 0.419 0.210 0.032 0.348 0.2389 8,76517 0.20 36,510 0.349 0.185 0.031 0.273 30,991 67,501 0.85 36,510 0.349 0.185 0.031 0.273 0.2401 8,76618 0.20 36,500 0.373 0.205 0.033 0.280 25,321 61,821 0.69 36,500 0.373 0.205 0.033 0.280 0.2402 8,76719 0.20 36,500 0.385 0.206 0.031 0.299 19,668 56,168 0.54 36,500 0.385 0.206 0.031 0.299 0.2402 8,76720 0.20 36,500 0.408 0.217 0.027 0.318 14,994 51,494 0.41 36,500 0.408 0.217 0.027 0.318 0.2402 8,76721 0.20 36,500 0.393 0.189 0.025 0.340 15,293 51,793 0.42 36,500 0.393 0.189 0.025 0.340 0.2402 8,76722 0.20 15,112 0.458 0.244 0.038 0.357 8,458 23,570 0.56 39,058 0.327 0.193 0.050 0.219 0.2244 8,76623 25,756 0.245 0.160 0.058 0.132 0.2145 5,524

TOTAL 812,456 0.506 0.275 0.069 0.367 49,702 0.245 0.160 0.058 0.132 593,615 1,455,773 0.69 862,158 0.491 0.268 0.068 0.354 0.2280 196,597



Figure 23-1. Final Pit Design




23.3 Markets The products will be a fairly conventional copper-gold concentrate that should be readily marketable on world markets. There are several smelting/refining facilities in east Asia, particularly in Japan, Indonesia, China, and India. Some of the free gold might be collected in a gold concentrate that can be shipped directly to various gold refiners. The King-king economic analysis will be based on the conservative copper and gold prices, According to BHP Billiton, the copper supply is expected to open up in the future. Figure 23-2 below illustrates the global copper supply breakdown, 2008 to 2020 from BHP Billiton’s presentation dated September of 2009. While the supply of copper is expected to decline in the future, copper prices have experienced a significant increase from the lows of early 2009. The slope of the price chart below indicates a substantial copper price upside since January of 2009 (see Figure 23-3). This chart was generated by Freeport-McMoran for a Basic Materials Conference in June of 2010 and is currently published in Freeport’s web-site.




Figure 23-3. Copper Supply, Mt Contained Copper (from BHP-Billiton)

Figure 23-3. Copper Prices and Inventories (from Freeport-McMoRan)




23.4 Project Approach This section describes the execution plan for advancing the King-king Copper-Gold Project from the current Resource Estimate Technical Report stage to the feasibility stage (+/- 15% capital and operating cost estimate). A preliminary Master Project Schedule is in place. It will require refinement as engineering and social and environmental contracts are awarded and detail schedules are agreed to with each sub consultant. It is expected these contracts will be awarded within three weeks or sooner of project funding Social (SDMP) and environmental (EPEP) work will begin with several baseline studies occurring in series and parallel. Most of these studies and reports will be short in duration, 2-5 months. But, the ARD characterization of VR (valueless rock) and tailing, and regional ground and surface water studies will take upwards to 16 months. Flow charts of these studies are shown below. SDMP to EIS Flow Sheet

The SDMP will also assess the current political conditions in the affected area, assess the affects the project could have on political matters and vice versa it would assess effects to the project from them as hazards, risks and opportunities. An example of an important current political condition is the King-king project is supported at the municipal (Pantukan), provincial (Compostela Valley) and federal government levels.




EPEP to EIS Flow Sheet

The 2010 resource estimate suggests that a 100,000 tpd concentrator is a probable design level to start with. Preliminary metallurgy, mining, processing and economics studies will define optimum mining and processing levels. From these study results the next steps in the development will be decided. Assuming the information generated recommends proceeding to the mine feasibility stage more accurate studies will follow for metallurgy, mining and processing. As in the social and environmental studies some of these studies will occur in series and some in parallel. Mine Feasibility Flow Sheet




Finally the Project Feasibility Report culminates in an economic analysis to determine project feasibility from a combined engineering, social and environmental point of view. It is currently estimated that the project will be at the Mine Feasibility Report stage in 13 months from funding and the EIS submittal will occur in 17 months from funding. 23.5 Taxes and Other Payments

Owners of mining claims for land to be mined are permitted royalties in accord with their operating agreement. The agreement between NADECOR and RMMI allows NADECOR the option of either funding and retaining a 40% interest in the project or retaining a 3.5% royalty, subject to a sliding scale based on the price of copper, and adjusted annually to the commodity price index.

The Philippines Government takes an excise tax on metallic minerals. This excise tax is set by Section 151 (A) (3) of Republic Act (RA) No. 8424 or the National Internal Revenue Code of 1997 (1997 Tax Code), as amended by RA No. 9337 effective July 1, 2005. The Code states that excise tax on metallic minerals would be “…based on the actual market value of the gross output thereof at the time of removal,…in agreement with the following schedule (for the King-king Gold-Copper Project): Gold and copper, two percent (2%).”

To calculate the tax base, no deductions are allowed for mining, milling, refining, transporting, handling, marketing and other expenses. If the minerals are sold or consigned overseas, costs of sea freight and insurance are deductible. In addition, the Philippines Government collects the value-added tax (VAT) as a form of sales tax. It is a tax on consumptions levied on the sale, barter, and exchange or lease of goods or services in the Philippines and on importation of goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services. The value-added tax rate in Philippines is twelve percent (12%) of the gross selling price of the goods or properties sold, bartered or exchanged or gross receipts derived from the sale or exchange of services, including the use or lease of the properties. Furthermore, corporations are required to file BIR Form 1702, annual income tax return. Income tax is a tax on corporate income specified in Tax Code of 1997, as amended, less the deductions and/or exemptions authorized for such type of income, by the Tax Code or other special laws. Effective January 1, 2009, corporate income tax rate in Philippines for domestic corporations is 30% of net taxable income from all sources.




23.6 Capital and Operating Costs, Economic Analysis It is not the intent of this study to develop capital and operating cost estimates or economic analyses. This will be done during upcoming preliminary feasibility studies or feasibility studies. The operating costs presented in Section 17, particularly Table 17-2, are preliminary estimates to determine the portion of the King-king deposit that might be amenable to economic extraction, and thus qualify to be stated as a mineral resource. It is the opinion of IMC that the estimates are consistent with industry standards, but they are not based on detailed engineering.




24 Certificates of Qualified Persons Attached are the certificates of the Qualified Persons.




CERTIFICATE OF QUALIFIED PERSON As an author of this report on certain mineral properties of Ratel Gold Limited in the Republic of the Philippines, I Michael G. Hester, do hereby certify that: • I am employed by the consulting firm of Independent Mining Consultants, Inc. in the

capacity of Vice President and Principal Mining Engineer. The office of Independent Mining Consultants, Inc. is located at 3650 E Gas Road, Tucson, Arizona, 85714, USA.

• This certificate applies to the Technical Report title “King-king Copper-Gold Project – Mindanao, Philippines – Technical Report”, dated October 12, 2010.

• I hold the following academic qualifications: B.S. Mining Engineering, University of Arizona, 1979 M.S. Mining Engineering, University of Arizona, 1982

• I am a Fellow of The Australasian Institute of Mining and Metallurgy (AusIMM, #221108), a professional society as defined by NI 43-101. As well, I am a member in good standing for other technical associations and societies including: Society of Mining, Metallurgy and Exploration, Inc. (SME Member #1423200), and The Canadian Institute of Mining, Metallurgy and Petroleum (CIM Member #100809).

• I have practiced my profession as a mining engineer continually since my graduation in 1979, about 31 years.

• I am familiar with NI 43-101 and by reason of education, experience, and professional registration I fulfill the requirements of a Qualified Person as defined in NI 43-101. I am a founding partner, Vice President, and Principal Mining Engineer for Independent Mining Consultants, Inc. (IMC), a position I have held since 1983. I have also been employed as an Adjunct Lecturer at the University of Arizona (1997-1998) where I taught classes in mine planning and mine economic analysis. I was employed as a staff engineer for Pincock, Allen & Holt, Inc. from 1979 to 1983.

• I am the primary author and am responsible for portions of Section 1, Sections 2-4, 14-20 (except 18.3), and 23 of the Technical Report.

• I have not visited the King-king property. I also not had any previous involvement with the project.

• I am independent of the issuers for which this report is required, other than providing consulting services.

• I have read NI 43-101 and the Technical Report has been prepared in compliance with NI 43-101.

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

• I consent to the filing of this report with any Canadian stock exchange or securities regulatory authority, and any publication by them of the report.

Dated this 12th day of October, 2010 ”Michael G. Hester” Michael G. Hester, FAusIMM




CERTIFICATE OF QUALIFIED PERSON As an author of this report on certain mineral properties of Ratel Gold Limited in the Republic of the Philippines I, Donald F. Earnest, P.G. do hereby certify that:

• I am a Mining Geologist and President of Resource Evaluation Inc., residing at 11830 N.

Joi Drive, Tucson, Arizona 85737 USA. • This certificate applies to the Technical Report title “King-king Copper-Gold Project –

Mindanao, Philippines – Technical Report”, dated October 12, 2010. • I am a graduate with a Bachelor of Science, Geology degree from The Ohio State

University, 1973. • I am a Registered Professional Geologist (P.G.) in the States of Arizona (#36976) and

Idaho (#746), and a member of the Society of Mining Engineers (SME). • I have 37 years experience in mining and exploration geology, mineral resource and

mineral reserve estimation, mine management, and consulting, which includes more than five years related to porphyry-style deposits.

• 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 and professional registration (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.

• I am responsible for preparation of all of Sections 5, 6, 7, 8, 9, 10, 11, 12, 13 and portions of Sections 1, 19, and 20 of the report titled, “King-king Copper-Gold Project – Mindanao, Philippines – Technical Report”, dated October 12, 2010.

• I visited the King-king project site on June 4 through June 7, 2010. • I have not had prior involvement with the King-king Copper-Gold Project that is the

subject of the Technical Report. • I have read NI 43-101 and fully believe that this report has been written in complete

compliance with that Instrument. • I am not aware of any material fact or material change with respect to the subject matter

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

• I am independent of Russell Mining and Minerals Inc., applying all of the tests in Section 1.4 of National Instrument 43-101.

• I consent to the filing of this Technical Report with any Canadian stock exchange or securities regulatory authority, and any publication by them of this report.

Dated this 12th day of October, 2010 ”Donald F. Earnest” Donald F. Earnest, P.G.




CERTIFICATE OF QUALIFIED PERSON As an author of this report on certain mineral properties of Ratel Gold Limited in the Republic of the Philippines, I, John G. Aronson, do hereby certify that: • I am employed by the consulting firm of AATA International, Inc., in the position of

President and CEO. The office of AATA International, Inc. is located at 2240 Blake Street, Suite 210, Denver, Colorado,USA, 80205.

• This certificate applies to the Environmental and Social components of the Technical Report title “King-king Copper-Gold Project – Mindanao, Philippines – Technical Report”, dated October 12, 2010.

• I hold the following academic qualifications: B.S. Biological Sciences, Nebraska Wesleyan University, Lincoln, NE 1971 M.S. Zoology, Limnology, Minor Civil Engineering, Univ. Nebraska Lincoln, NE, 1973 Post Graduate Education, Colorado State University, Fort Collins, Colorado, 74-84.

• I am a Certified Senior Ecologist with the Ecological Society of America, and a Certified Fisheries Scientist with the American Fisheries Society. As well, I am a member in good standing for other technical associations and societies including: Society of Mining Engineers (SME), Colorado Mining Association (CMA), Northwest Mining Association (NMA), Society of Environmental Toxicology and Chemistry (SETAC), Phycological Society of America (PSA), American Society of Limnology and Oceanography (ASLO), North American Diatom Symposium (NADS), and many other scientific organizations.

• I have practiced my profession as an environmental scientist continually since my graduation in 1973, approximately 37 years.

• I am familiar with NI 43-101 and by reason of education, experience, and professional registration I fulfill the requirements of a Qualified Person as defined in NI 43-101. I am the founder, President, and Principal In Charge for AATA International, Inc. a position that I have held since 1989. I was employed as President and Director of Riverside Technology Inc. from 1985 to 1989, and as Senior Aquatic Scientist for Environmental Research and Technology, Inc. (ERT) from 1974-1985.

• I am responsible for Sections on Social and Environmental science. • I have not visited the King-king property. I also not had any previous involvement with

the project. • I am independent of the issuers for which this report is required, other than providing

consulting services. • I have read NI 43-101 and this Technical Report has been prepared in compliance with

NI 43-101. • As of the date of this certificate, to the best of my knowledge, information and belief, the

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

• I consent to the filing of this report with any Canadian stock exchange or securities regulatory authority, and any publication by them of the report.

Dated this 12th day of October, 2010 ”John G. Aronson”




25.0 Figures The figures included in this section are referenced from Section 17.3.7 and represent statistical analyses of 15m drillhole composites by rock type, structural zone, and oxide/sulfide domains.



Figure 17-5



Figure 17-6



Figure 17-7



Figure 17-8



Figure 17-9



Figure 17-10



Figure 17-11



Figure 17-12



Figure 17-13



Figure 17-14



Figure 17-15



Figure 17-16



Figure 17-17



Figure 17-18



Figure 17-19



Figure 17-20



Figure 17-21



Figure 17-22




Appendix 1

Head Assay Analysis Log and Report of Spectrographic Analysis




Appendix 2

Pertinent Legal Documents

Exhibit 1. Mining Occupancy Fee Receipt

Exhibit 2. Performance Bond Receipt

Exhibit 3. Land Ownership Certification




Exhibit 1




Exhibit 2




Exhibit 3




Appendix 3. Environmental This Appendix 3 contains the list of Philippine laws and regulations which may be applicable to the King-King project; and, a list and discussion of international environmental and social guidelines & standards that may be employed at the King-King project.




Philippine Laws and Regulations The following is a list of laws and regulations in The Philippines that may be applicable to the development of the King-King Project. Ratel will retain Philippine counsel to guide the company in its commitment to compliance with all applicable legal requirements for the King-King Project. MINING AND RELATED POLICIES I. MINING ACT OF 1995 II. REVISED IRR OF MINING ACT OF 1995 III.AMENDMENTS TO REVISED IRR OF MINING ACT OF 1995

1. DENR ADMINISTRATIVE ORDERS

DENR ADMINISTRATIVE ORDER NO 97-06 Prescribing A Uniform Rate For Area Clearance Fees Of DENR Sectors Other Than The Mines And Geosciences Bureau For Mining Rights Applications DENR ADMINISTRATIVE ORDER NO 97-07 Authorizing The Director Of Mines And Geosciences Bureau To Operationalize The Interim organizational Units DENR ADMINISTRATIVE ORDER NO. 97-10 Standard Costs and Fees For Various Services of the Mines and Geosciences Bureau DENR ADMINISTRATIVE ORDER NO. 97-11 Providing A Line Organization Of The Mines And Geosciences Bureau And For Other Purposes DENR ADMINISTRATIVE ORDER NO. 97 - 30 Small-Scale Mine Safety Rules And Regulations DENR ADMINISTRATIVE ORDER NO. 97-38 Chemical Control Order For Mercury And Mercury Compounds DENR ADMINISTRATIVE ORDER NO. 97-39 Chemical Control Order For Cyanide And Cyanide Compounds DENR ADMINISTRATIVE ORDER NO. 98-67 Guidelines For The Identification, Declaration And Award Of Areas Suitable For Salt Production Section I. Statement of Policy DENR ADMINISTRATIVE ORDER NO. 99-03 Guidelines Governing the Utilization and Disposition of the Sand and Lahar Materials in the Areas Declared as Mineral Reservation Established Under Proclamation No. 66 and Other Lahar-Affected Areas in the Provinces of Pampanga, Tarlac and Zambales




DENR ADMINISTRATIVE ORDER NO. 99-07 Amendment to Item No. 1.0 of DAO No.97-10 re: Standard Costs and Fees for Various Services of the Mines and Geosciences Bureau Relative to Mining Rights DENR ADMINISTRATIVE ORDER NO. 99-08 Amending DENR Administrative Order No. 98-67 DENR ADMINISTRATIVE ORDER NO. 99-09 Adopting Revised Statistical Reporting Forms and Amending Certain Sections of Dao 10, Series of 1994 DENR ADMINISTRATIVE ORDER NO. 99-33 Submission By Subdivision / Housing Project Proponents Of Engineering Structural Ecological Assessment As Additional Requirement For ECC Applications DENR ADMINISTRATIVE ORDER NO. 99-56 Guidelines Establishing The Fiscal Regime Of Financial Or Technical Assistance Agreements DENR ADMINISTRATIVE ORDER NO. 99-57 Amendments To Department Administrative Order No. 96-40 Or The “Revised Implementing Rules And Regulations Of Republic Act No. 7942, Otherwise Known As The ‘Philippine Mining Act Of 1995’” DENR ADMINISTRATIVE ORDER NO. 2000-16 Rates Of Fees For Certain Administrative Services Rendered DENR ADMINISTRATIVE ORDER NO. 2000-25 Implementing Rules and Regulations on Executive Order No. 153 - “Authorizing the Utilization of Offshore Areas Not Covered by Approved Mining Permits and Contracts as Sources of Dredgefill Materials for Government Reclamation Projects and for Other Purposes” DENR ADMINISTRATIVE ORDER NO. 2000-28 Implementing Guidelines on Engineering Geological and Geohazard Assessment as Additional Requirement for ECC Applications covering Subdivision, Housing and other Land Development and Infrastructure Projects DENR ADMINISTRATIVE ORDER NO. 2000-39 Rules and Regulations in the Issuance of Onshore Special Minerals Extraction Permits (SMEP) to Qua1ified Government Entities/Instrumentalities for Government Projects DENR ADMINISTRATIVE ORDER NO. 2000-61 Amendment To Department Administrative Order No. 99-57, Entitled “Amendments To DAO No. 96-40 or The Revised Implementing Rules And Regulations Of Republic Act No. 7942, Otherwise Known As The ‘Philippine Mining Act Of 1995’ DENR ADMINISTRATIVE ORDER NO. 2000-71 Standard Costs And Fees For Various Services Of The Mines And Geosciences Bureau DENR ADMINISTRATIVE ORDER NO. 2000-98 Mine Safety and Health Standards DENR ADMINISTRATIVE ORDER NO. 2000-99 Amendments to Sections 134-136 of DENR Administrative Order No. 96-40, the Revised Implementing Rules and Regulations of Republic Act No. 7942, otherwise known as the “Philippine Mining Act of 1995” DENR ADMINISTRATIVE ORDER NO. 2000-101




Amendments to the Rules and Regulations of the National Pollution Control Commission (1978) Incorporating Permit Regulations Governing Mine Wastes and Mill Tailings Storage Structures\ DENR ADMINISTRATIVE ORDER NO. 2001-17 Guidelines For Delineating / Delimiting Municipal Water DENR ADMINISTRATIVE ORDER NO. 2001-35 Guidelines In The Declaration And Establishment Of Communal Extraction Area For Sand, Gravel, Ordinary Earth And/Or Related Materials In Each Province Or Highly Urbanized Independent Component City For Housing And/Or Other Personal Construction Needs DENR ADMINISTRATIVE ORDER NO. 2002-01 Amending Section 4 (Program Management) of DENR Administrative Order (DAO) No. 2000–102 Entitled “Establishing the National Support Program on Local Environment and Natural Resources Planning And Management (ENRPM)” DENR ADMINISTRATIVE ORDER NO. 2002-04 Rules and Regulation Governing the Issuance of Permits for Treasure Hunting, Shipwreck/ Sunken Vessel Recovery and Disposition of Recovered Treasures/Valuable Cargoes, Including Hoarded Hidden Treasures DENR ADMINISTRATIVE ORDER NO. 2002-07 Establishment of PENRO Office in Ipil, Zamboaga Sibugay Province DENR ADMINISTRATIVE ORDER NO. 2002-08 Strengthening the Coastal Environment Program (CEP) Through the Establishment of the Coastal and Marine Management Office (CMMO) as the National Coordinating Office For All Coastal and Marine Environment Activities DENR ADMINISTRATIVE ORDER NO. 2002-16 DENR-EMB National Environmental User’s Fee of 2002 DENR ADMINISTRATIVE ORDER NO. 2002-17 Defining the Organizational Structure and Major Responsibilities of the Environmental Management Bureau as a line Bureau by virtue of Section 34 of the Philippine Clean Air Act of 1999 (RA 8749) DENR ADMINISTRATIVE ORDER NO. 2002-18 Declaring an Emergency Situation in the Diwalwal Gold Rush Area and Providing the Interim Guidelines to Address the Critical Environment and Social Consequences Therein ADMINISTRATIVE ORDER NO. 2002-34 Amendment of DAO 98-67 To Expand Its Section 7 To Include Reporting Of Salt Production, Sales And Employment DENR ADMINISTRATIVE ORDER NO. 2002-35 Guidelines Governing The Management Of The Diwalwal Mining Areas And Vicinity As Mineral Reservation And Environmentally Critical Area Pursuant To Proclamation No. 297 And For Other Purposes




2. DENR MEMORANDUM CIRCULARS

DENR MEMORANDUM CIRCULAR NO. 97-05 Procedural Guidelines in the Creation of Provincial/City Mining Regulatory Boards DENR MEMORANDUM CIRCULAR NO. 97-06 Issuances Of Free Patents, Mining Concessions, Leases And Certificates Of Stewardship In Areas Covered By The Cagayan Economic Zone Authority (CEZA) DENR MEMORANDUM CIRCULAR NO. 98-02 Interim Guidelines In The Processing Of Mining Applications Consistent With Republic Act No. 8371 DENR MEMORANDUM CIRCULAR NO. 98-03 Guidelines In The Issuance Of Area Status And Clearance Or Consent For Mining Applications DENR MEMORANDUM CIRCULAR NO. 98-11 Moratorium On Approval Of FTAA’s DENR MEMORANDUM CIRCULAR NO. 2000-01 Errata to Some Provisions of the DENR Memorandum Order. No. 99-32 (DMO 99-32) on Policy Guidelines and Standards for Mine Wastes and Mill Tailings Management dated November 24, 1999 DENR MEMORANDUM CIRCULAR NO. 2000-10 List Of Classified Water Bodies In 1999 DENR MEMORANDUM CIRCULAR NO. 2001-09 List Of Classified Water Bodies In 2000 DENR MEMORANDUM CIRCULAR NO.2002-01 Initial Designation Of Airshed For Metro Manila DENR MEMORANDUM CIRCULAR NO. 2002-03 Interim Guidelines for the Designation of an Airshed DENR MEMORANDUM CIRCULAR NO. 2002-04 List of Classified Water Bodies In 2001 DENR MEMORANDUM CIRCULAR NO. 2002-07 Implementation of EO 103 Dividing Region IV Into Region IV-A And Region IV-B and Transferring the Province of Aurora to Region III

3. DENR MEMORANDUM

DENR MEMORANDUM Dated September 17, 2002 Additional Guidelines In The Implementation Of The Mandatory September 15, 1997 Deadline For The Filing Of Mineral Agreement Applications By Holders Of Valid And Existing Mining Claims Of Lease/Quarry Applications And For Other Purposes

4. DENR MEMORANDUM ORDERS

DENR MEMORANDUM ORDER NO. 97-03 Policy In Rationalizing The Diwalwal Gold Rush Mining Operations




DENR MEMORANDUM ORDER NO. 97-07 Guidelines In The Implementation Of The Mandatory September 15, 1997 Deadline For The Filing Of Mineral Agreement Applications By Holders Of Valid And Existing Mining Claims And Lease/Quarry Applications And For Other Purposes DENR MEMORANDUM ORDER NO. 98-01 Moratorium On All Mining And Mining-Related Activities In The Diwalwal Gold Rush Area DENR MEMORANDUM ORDER NO. 98-03 Guidelines in the Issuance of Area Status and Clearance or Consent for Mining Applications DENR MEMORANDUM ORDER NO. 98-06 Moratorium on the Acceptance of All New Applications and the Approval of All Pending Applications for Small-Scale Mining Permits, Quarrying Permits, Mining Contracts/ Agreements, and Corresponding ECCs, in the Municipality of Rodriguez (formerly Montalban), Province of Rizal DENR MEMORANDUM ORDER NO. 98-08 Amending Memorandum Order No. 98-06 Regarding The Moratorium On The Acceptance Of all New Applications For Small Scale Mining Permits, Quarrying Permits, Mining Contracts, Agreements And Corresponding ECC’s In The Municipality Of Rodriguez, Province Of Rizal DENR MEMORANDUM ORDER NO. 98-11 Moratorium On The Acceptance Of All New Application And The Approval Of All Pending Applications For Sand And Gravel Permits Along Lagnas River And Its Tributaries At Sariaya, Quezon DENR MEMORANDUM ORDER NO. 98-19 Interim Authority to Transport Ores Already Extracted and not Included in the Writ of Injunction Issued by the Court of Appeals in CA-G.R. SP No. 47293, Entitled Mt. Diwata Upper Ulip Tribal Association, Et Al., Vs. Monkayo Integrated Small-Scale Miner’s Association (MISSMA) DENR MEMORANDUM ORDER NO. 98-20 Suspending DENR Memorandum Order No. 98-19 and Directing the Enforcement of the Presidential Memorandum of September 23, 1998 for the Stoppage of Illegal Mining Operations in Diwalwal DENR MEMORANDUM ORDER NO. 99-03 Procedural Guidelines in the Processing and Issuance of Special Quarry Permit and Sand and Gravel Permit to Extract Sand and Lahar Materials in the Mineral Reservations Established and Declared Under Proclamation No. 66 and Other Lahar-Affected Areas in the Provinces of Pampanga, Tarlac, and Zambales DENR MEMORANDUM ORDER NO. 99-08 Rationalization of the Mining/Quarrying Operations in Rodriguez and San Mateo, Province of Rizal DENR MEMORANDUM ORDER NO. 99-10 Guidelines in the Determination of Qualified Persons for Mining Applications and Mining Rights DENR MEMORANDUM ORDER NO. 99-11 Amending Section 4d of Memorandum Order No. 99-03 “The Procedural Guidelines in the Processing and Issuance of Special Quarry Permit and Sand and Gravel Permit to Extract Sand and Lahar Materials in the Mineral Reservation Established and Declared under Proclamation No. 66 and Other Lahar-Affected Areas in the Provinces of Pampanga, Tarlac and Zambales DENR MEMORANDUM ORDER NO. 99-16 Special Task Force On Priority Programs And Economic Affairs Action Plan For The Rehabilitation, Development, Protection And Maintenance Of The Marikina Watershed Reservation And The Marikina-Wawa River Basin; The Creation Of Task Force Marikina Watershed Development Center And Providing Funds For The Purpose




DENR MEMORANDUM ORDER NO. 99-26 Amending Certain Provisions Of Memorandum Order No. 96-04 Re: Publication And Submission To The UP Law Center Of Rules And Regulations Adopted By The Department DENR MEMORANDUM ORDER NO. 99-32 Policy Guidelines and Standards for Mine Wastes and Mill Tailings Management DENR MEMORANDUM ORDER NO. 99-34 Clarificatory Guidelines In The Implementation Of DENR Administrative Order No. 96-40 Or “Revised Implementing Rules And Regulations Of Republic Act No. 7942 Otherwise Known As The ‘Philippine Mining Act Of 1995’ “ DENR MEMORANDUM ORDER NO. 2000-01 Compliance With The Transitory Provision Of DMO No. 99-10 DENR MEMORAMDUM ORDER NO. 2000-03 Final Extension Of Deadline For Compliance With The Transitory Provision Of DENR Memorandum Order No. 99-10 And For Other Related Purposes DENR MEMORANDUM ORDER NO. 2002-09 Coverage of Administrative Order No. 2002-18 and the Diwalwal Gold Rush Area in Mt. Diwata, Monkayo, Compostela Valley Province DENR MEMORANDUM ORDER NO. 2002-11 Guidelines In The Collection And Allocation Of Share Of The Natural Resources Development Corporation And Service Fee Of Service Contractors In Connection With The Diwalwal Direct State Development Project

5. DENR SPECIAL ORDERS

DENR SPECIAL ORDER NO. 98-83 Amendment To Special Order No. 96-874 Dated September 4, 1996 Designating Atty. Danilo D. Luna As Chief, MAB Secretariat and Additional Members To The MAB Secretariat As Legal Officers And Technical Support DENR SPECIAL ORDER NO. 99-378 Creation of a Task Force to Inspect the Area Covered by the Small Scale Mining Permit of Mati Small Scale Miners Association in Connection with their Application for a Timber Cutting Permit DENR SPECIAL ORDER NO. 99-461 Amendment To Special Orders 97-218 And 98-83 Reconstituting The Secretariat Support Of The Mines Adjudication Board (MAB) DENR SPECIAL ORDER NO. 99-473 Redefining the Functions/Assignments of DENR Senior Officials DENR SPECIAL ORDER NO. 99-942 Designation Of Personnel To The DENR Geohazards Assessment Team DENR SPECIAL ORDER NO. 99-983 Amendment To DENR Special Order No. 98-02 Amending Special Order No. 96-1101, Further Amending Special Order No. 95 1585 Creating The Regional Panel Of Arbitrators DENR SPECIAL ORDER NO. 99-984




Amending Special Order No. 99 473 Re: Redefining The Functions/Assignments Of DENR Senior Officials DENR SPECIAL ORDER NO. 99-1495 Reassignment of Regional Directors and OIC-Regional Directors of the Mines and Geosciences Bureau DENR SPECIAL ORDER NO. 2000-915 Creation of a Team to Conduct Reconnaissance Survey and Assessment of Priority Sites in Connection with the MGB and ERDB Joint Research Project on Rehabilitation of Mining-Affected Lands DENR SPECIAL ORDER NO. 2000-961 Amending Department Order No. 98-1096, Series of 1998 Re:Creation of the Compostela Valley Provincial Mining Regulatory Board Pursuant to R.A. 7076 and R.A. 7942 and Their Implementing Rules and Regulation DENR SPECIAL ORDER NO. 2002-619 Diwalwal Technical Working Group DENR SPECIAL ORDER NO. 2002-638 Designating Horacio C. Ramos, Director, Mines & Geosciences Bureau, as Project Director of the Diwalwal Direct State Development Project DENR SPECIAL ORDER NO. 2002- 660 Creation of A Special Team to Evaluate the Social and Environmental Implication and Sustainability of the Pebble Picking Activities in Brgy. Caruan, Pasuquin, Ilocos Norte

6. MGB MEMORANDUM ORDER

MGB MEMORANDUM ORDER NO. 97-02 Procedural Guidelines For The Withdrawal Of Mining Applications And Relinquishment Of Areas Covered By Approved Mining Rights

7. MGB MEMORANDA

MGB MEMORANDUM dated September 11, 1997 Clarification on DENR Memorandum Order No. 97-07 MGB MEMORANDUM dated September 22, 1997 Application Fee For Request Of Certification For Environmental Management And Community Relations Record (CEMCRR) dated MGB MEMORANDUM Transmitting And Further Clarifying MGB Memorandum Order NO. 97-02 MGB MEMORANDUM dated October 7, 1998 Clarifying Additional Documents To Be Submitted In Connection With The Approval Of The IRR Of The Indigenous Peoples Right Act to support of mining applications MGB MEMORANDUM dated November 10, 1998 Transmitting NCIP Administrative Order No. 3 Providing Supplemental Guidelines in the Issuance of NCIP Certification and Free and Prior Informed Consent in Connection with Application for Lease, permit, License and Order Forms of Concessions in Ancestral Domains MGB MEMORANDUM dated February 3, 2000




Extension Of Compliance With And Other Clarifications To DENR Memorandum Order No. 99-10 MGB MEMORANDUM dated February 28, 2000 Clarification On Section 12 Of DAO No. 99- 57 Re: Maximum Areas For Large-Scale Quarry Operations MGB MEMORANDUM dated April 13, 2000 Amendment Fee MGB MEMORANDUM dated May 5, 2000 Conversion Fee Of Mineral Agreement Application To Exploration Permit Application

8. MGB MEMORANDUM CIRCULARS

MGB MEMORANDUM CIRCULAR NO. 97-24 Delegation Of Authority On Deputation/ Arrest/ Confiscations MGB MEMORANDUM CIRCULAR NO. 98-01 Delegation Of Authority On The Cancellation Of Mining Applications MGB MEMORANDUM CIRCULAR NO. 98-25 Acceptance, Processing and Evaluation of Mining Applications Over Mineral Reservation Areas MGB MEMORANDUM CIRCULAR NO. 2000-33 Guidelines and Outline/Checklist for the Preparation of an Engineering Geological and Geohazard Assessment Report (EGGAR) as per DAO No. 2000-28 MGB MEMORANDUM CIRCULAR NO. 2000-38 Guidelines in the Denial of Mining Applications pursuant to DENR Memorandum Orders No. 99-10 and 2000-03

9. MGB SPECIAL ORDERS

MGB SPECIAL ORDER NO. 4190 Creation of the Diwalwal Feasibility Study and Management Group in the Mines and Geosciences Bureau (MGB) to Provide Technical Assistance to the Over-All Diwalwal Technical Working Group Created Under the Department of Environment and Natural Resources (DENR) MGB SPECIAL ORDER NO. 2002-4196 Creation of the Program Steering Committee and Teams for the MGB-CO Greening Program IV. OTHER RELEVANT POLICIES AND DECISIONS

1. EXECUTIVE ORDERS

EXECUTIVE ORDER NO. 45 Prescribing Time Periods For Issuance of Housing Related Certifications, Clearances and Permits, and Imposing Sanctions For Failure To Observe the Same EXECUTIVE ORDER NO. 96 Creating the Atlas Commission and Defining Its Powers and Functions




EXECUTIVE ORDER NO. 98 Directing All Government Agencies, Instrumentalities, Local Government Units, And Government Owned And/Or Controlled Corporations (GOCCs) To Include The Taxpayer Identification Number (TIN) As Part Of The Essential Requirements In All Applications For A Government Permit, License, Clearance, Official Paper Or Document EXECUTIVE ORDER NO. 153 Authorizing The Utilization Of Offshore Areas Not Covered By Approved Mining Permits And Contracts As Sources Of Dredgefill Materials For Government Reclamation Projects And For Other Purposes EXECUTIVE ORDER NO. 109 Streamlining the Rules and Procedures on the Review and Approval of All Contracts of Departments, Bureaus, Offices and Agencies of the Government, Including Government-Owned or Controlled Corporations and Their Subsidiaries EXECUTIVE ORDER NO. 200 Authorizing The Issuance Of Onshore Special Minerals Extraction Permits To Qualified Government Entities / Instrumentalities For Government Projects EXECUTIVE ORDER NO. 406 Institutionalizing The Philippine Economic-Environmental And Natural Resources Accounting System & Creating Units Within The Organizational Structure Of The Dept. Of Environment & Natural Resources (DENR) , National Economic And Development Authority (NEDA), and National Statistical Coordination Board (NSCB)

2. MALACAÑANG MEMORANDUM ORDER

MEMORANDUM ORDER NO. 460 Providing For The Creation Of A Task Force On Mt. Diwalwal

3. PROCLAMATION ORDERS

PROCLAMATION ORDER NO. 66 Declaring the Lahar Affected Rivers and Embankment Areas in the Provinces of Pampanga, Tarlac and Zambales as Environmentally Critical Areas and as Mineral Reservation Under the Direct Supervision and Control of the Department of Environment and Natural Resources PROCLAMATION NO. 72 Establishing Safety And Exclusion Zones For Offshore Natural Gas Wells, Flowlines, Platform, Pipelines, Loading Buoy And Other Related Facilities For The Malampaya Deep Water Gas-To-Power Project Over Certain Waters And Submerged Lands Adjacent To, Batangas, Mindoro And Palawan Rules and Operating Guidelines To Implement And Enforce The Safety And Exclusion Zones Established Under Proclamation No. 72, Series Of 2001 PROCLAMATION NO. 183 Revoking Proclamation No. 66, Series Of 1999, Declaring the Lahar-Affected Rivers and Embankment Areas in the Provinces of Pampanga, Tarlac and Zambales as Environmentally Critical Areas and as Mineral Reservation Under the Direct Supervision and Control of the Department of Environment and Natural Resources PROCLAMATION NO. 297 Excluding A Certain Area From The Operation Of Proclamation No. 369 Dated February 27, 1931, And Declaring The Same As Mineral Reservation And As Environmentally Critical Area




PROCLAMATION NO. 1250 Exclusion Of Mineral Resource-Rich Areas Of Cagraray Island, Albay From The Bicol Region Tourism Master Plan

4. REPUBLIC ACT

REPUBLIC ACT NO. 7076 An Act Creating A People’s Small-Scale Mining Program And For Other Purposes REPUBLIC ACT NO. 8371 An Act To Recognize, Protect And Promote The Rights Of Indigenous Cultural Communities/ Indigenous Peoples, Creating A National Commission On Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating Funds Therefore, And For Other Purposes

5. PRESIDENTIAL DECREE

PRESIDENTIAL DECREE NO. 1899 Establishing Small-Scale Mining As A New Dimension In Mineral Development

6. OTHER RELATED POLICIES

DENR-DOT MEMORANDUM CIRCULAR 98-02 Guidelines For Eco-tourism For Development Of The Philippines MEMORANDUM OF AGREEEMENT BY/BETWEEN DENR, RIZAL PROVINCIAL GOVT. AND PNP-RIZAL Memorandum of Agreement by/between DENR, Rizal Provincial Government and PNP-Rizal Relative to DENR Memorandum Order No. 99-08 MEMORANDUM OF AGREEEMENT Memorandum Of Agreement Between DOTC/ DENR/DA/DILG SOCIAL SECURITY SYSTEM CIRCULAR No. 13-A Implementing Rules And Regulations On Processing Of Applications For Retirement Of Underground Mine Workers NCIP ADMINISTRATIVE ORDER NO. 3, Series of 2002 Revised Guidelines For The Issuance Of Certification Precondition And The Free And Prior Informed Consent In Connection With Applications For License, Permit, Agreement Or Concession To Implement And Or Operate Programs/Projects/Plans/Business Or Investments Including Other Similar Or Analogous Activities Or Undertaking That Do Not Involve Issuance Of License, Permit, Agreement Or Concession But Requires The Free And Prior Informed Consent Of ICC/IP Community In Ancestral Domain Areas In Accordance With R.A. 8371

7. MINES ADJUDICATION BOARD RESOLUTIONS

Resolution Approved & Signed: May 22, 1997 Rules on Pleading, Practice and Procedure




Significant Provisions Resolution Approved & Signed: May 6, 1999

8. OTHER ORDERS

Order Lifting the Suspension of the Quarrying Operation of Huang Construction Corporation at Sta. Barbara, Iba, Zambales Covered By ISGP No. III-01-97 Temporary Suspension of Processing of All Mining Applications Covering Offshore Areas Deputizing General Hermogenes E. Ebdane, Jr., Chief, Philippine Natonal Police, and Other Pnp Officers and Personnel He May Designate Under His Command, To Implement the DENR Stoppage Order and Other Instructions/ Issuances on the Diwalwal Gold-Rush Area Stoppage of the Diwalwal Mining Operations




International Standards and Guidelines The following is a discussion of the international standards and guidelines that will also be employed in the design, operation and closure of the King-King Project.

IFC Guidelines, Standards and Policies

IFC Performance Standards The International Finance Corporation (IFC), a unit of the World Bank, updated and consolidated existing policies and guidelines for private sector operations in its “Performance Standards on Social and Environmental Sustainability” (Performance Standards) in April 2006 (2006a). Meeting the requirements of the Performance Standards is generally viewed as meeting good international practice in the context of private sector operations. The eight Performance Standards are as follows: Performance Standard 1: Social and Environmental Assessment and Management System Performance Standard 2: Labor and Working Conditions Performance Standard 3: Pollution Prevention and Abatement Performance Standard 4: Community Health, Safety and Security Performance Standard 5: Land Acquisition and Involuntary Resettlement Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resource

Management Performance Standard 7: Indigenous Peoples Performance Standard 8: Cultural Heritage

The key elements of the Performance Standards are highlighted below. Performance Standard 1: Social and Environmental Assessment and Management Systems This performance standard broadens social considerations from involuntary resettlement, indigenous peoples and cultural property to all relevant social issues. Social considerations and potential positive and negative impacts are to be integrated into a Social and Environmental Impact Assessment (SEIA). It emphasizes the need to identify vulnerable or disadvantaged groups and to provide appropriate engagement of potentially affected communities. Performance Standard 1 also utilizes the recommendations and conclusions from the SEIA to establish Action Plans to be covenanted and implemented through a Social and Environmental Management System. Furthermore, it requires a more comprehensive and on-going engagement with local communities commensurate with the nature and extent of potential impacts, and introduces the concept of Free, Prior and Informed Consultation (FPIC).




It should be note that Ratel is committed to conducting a SEIA for its King-King Project that meets all applicable aspects of this IFC Performance Standard, as well as, the requirements of the Equator Principles (described below). At the end of this section on international standards, Ratel has developed a draft “Table of Contents” for the prospective SEIA for the King-King Project that shows the broad scope and comprehensiveness of such a SEIA study and report. This will be further refined as more preliminary studies are conducted at the project site. Performance Standard 2: Labor and Working Conditions This performance standard is developed around the “Core Labor Standards” defined by the International Labor Organization (ILO). It covers forced labor, child labor, non-discrimination, and freedom of association and collective bargaining. It also addresses any involuntary or compulsory labor, such as, indentured or bonded labor that might be prevalent in certain sectors. Provisions in Performance Standard 2 include human resources policy and grievance mechanisms appropriate to the project sponsors’ size and workforce. It supports workers’ right to organize and bargain collectively in a manner consistent with national law. It requires non-discriminatory practices in employment relationships and addresses large-scale retrenchment and fair treatment of contract labor. This performance standard also deals with occupational health and safety issues, and specifies working conditions and the need to inform workers about terms of employment, such as wages, benefits, and hours of work. Performance Standard 3: Pollution Prevention and Abatement This performance standard raises the principles of the Pollution Prevention and Abatement Handbook (PPAH) to the policy level, explicitly requiring project sponsors to design and operate projects in compliance with the host country regulations and the IFC Environmental, Health and Safety (EHS) Guidelines, whichever is more stringent. In summary, Performance Standard 3: • emphasizes pollution prevention, including issues of waste management, energy

efficiency measures and use of renewable energy sources; • requires quantification and monitoring of significant greenhouse gas (GHG)

emissions (more than 100,000 tons per annum); • expands the current pollution prevention focus on direct project emissions to address

project impacts on ambient conditions, as these impacts have a direct effect on the environment and community health;

• requires sponsors to be prepared for responses to process upsets, accidents and emergency situations; and,

• clarifies an approach to, and provides new guidance on, integrated pest and vector management and persistent organic pollutants (POPs).




Performance Standard 4: Community Health, Safety and Security This performance standard is in recognition of the need to manage the risks that project activities can pose to the public, including public health, public safety and emergency preparedness. It also introduces the human rights dimension associated with security considerations; and, seeks to ensure that sponsors are aware of issues outside of their project boundaries. Performance Standard 4 specifies that an individual at senior-management level should be assigned with the responsibility and authority for the client’s continuing commitment to, and support and improvement of, community health and safety, community engagement on health and safety issues, and security considerations. It specifies the following requirements in a manner appropriate to the size and nature of project activities: • to design, construct, operate, and decommission projects such that risks to public

health and safety are as low as reasonably practicable; • to ensure structural elements are certified or approved by appropriate competent

professionals; • to address public use of project equipment and infrastructure as well as production

and use of hazardous materials including pesticides, emergency plans, and priority health issues in the community; and,

• to inform local communities of potential hazards and assist with their emergency preparedness.

With Performance Standard 4, the Safety of Dams directive [World Bank’s Operational Policy (OP) 4.37] is no longer a freestanding policy of a 15-meter threshold for dam height. Instead, the structural safety of dams is addressed through a risk-based approach to the design, construction and operation of all project equipment and infrastructure. Performance Standard 4 also addresses community health and safety aspects of pesticides, including their transport, storage and application, and community exposure to communicable diseases. The sponsor is required to assess the risks within and outside of the project site that may be posed by its security arrangements. In addition, the sponsor is expected to make reasonable inquiries: to ensure that those providing security are not implicated in past abuses; to train security staff adequately in the use of force (and where applicable, firearms) and appropriate conduct toward workers and the local community; and, to require those providing security to act within the applicable law. The sponsor is also expected not to sanction any use of force except when used for preventive and defensive purposes in proportion to the nature and extent of the threat. A grievance mechanism should allow the affected community to express concerns about the security arrangements and acts of security personnel. For operations employing government personnel for security services, the sponsor should assess the risks arising from such use and communicate its intent to such use to security




personnel. The sponsor should encourage the relevant public authorities to publicly disclose the security arrangements of the facilities, subject to any overriding security concerns. The sponsor is also expected to investigate any credible allegations of unlawful or abusive acts of security personnel, to take action (or urge appropriate parties to take action) to prevent recurrence, and to report unlawful and abusive acts to public authorities when appropriate. Performance Standard 5: Land Acquisition and Involuntary Resettlement This performance standard refers to physical and/or economic displacements that may be associated with the operation. Resettlement is considered involuntary when affected individuals or communities do not have the right to refuse land acquisition that results in displacement. Performance Standard 5 also refers to loss of collectively owned assets. FPIC is required prior to resettlement of Indigenous Peoples. Performance Standard 5 applies to legal landowners with recognizable claims to land as well as informal settlers. For informal settlers, the sponsor is expected to offer opportunities to settle legally in areas where they do not face the risk of eviction. Overall, resettlement should be designed to improve the livelihoods of those affected. Performance Standard 5 requires that project sponsors explore project alternatives to minimize the need for resettlement activities and take the lead in the resettlement process wherever possible. It clarifies that cash compensation can be an acceptable alternative to the normally preferred land-for-land compensation. Cash compensation for lost assets can be appropriate where, for example, livelihoods are not land-based or where active markets exist for land, housing and labor. The sponsor is not required to compensate or assist opportunistic settlers who encroach on the project area after the cut-off date. However, the sponsor is expected to set up a grievance mechanism consistent with Performance Standard 1 to receive and address specific concerns about compensation and relocation that may be raised by displaced persons or members of host communities, including a recourse mechanism designed to resolve disputes in an impartial manner. Performance Standard 6: Biodiversity Conservation and Sustainable Natural Resource Management Performance Standard 6 is designed to combine the principles of the World Bank’s Natural Habitats and Forestry (OP 4.36) Policies and expands the existing Safeguard Policies’ focus on pristine natural habitats to address all levels of biodiversity through an approach consistent with the Convention on Biological Diversity. The sponsor is required to assess the significance of potential adverse impact to biodiversity in the project’s area of influence. The assessment will focus on major threats to biodiversity, which include habitat destruction and introduction of invasive species.




Performance Standard 6 identifies Critical Habitat as a subset of both natural and modified habitat that deserves particular attention. Critical Habitat includes areas with high biodiversity value, including habitat required for the survival of critically endangered or endangered species; areas having special significance for endemic or restricted-range species; sites that are critical for the survival of migratory species; areas supporting globally significant concentrations or numbers of individuals of congregatory species; areas with unique assemblages of species or which are associated with key evolutionary processes or provide key ecosystem services; and areas having biodiversity of significant social, economic or cultural importance to local communities. The IUCN Red List of Threatened Species and national legislation can assist in defining such areas. Performance Standard 6 also identifies mitigation measures to achieve “no net loss” of biodiversity where feasible. These measures may include a combination of activities, such as the post-operation restoration of habitats, offset of losses through the creation of an ecologically comparable area(s) managed for biodiversity, and compensation to direct users of the impacted flora and fauna. Performance Standard 7: Indigenous Peoples This performance standard presupposes that indigenous peoples are often among the most marginalized and vulnerable segments of the population. Information disclosure, consultation and informed participation should be conducted in a culturally appropriate manner. Performance Standard 7 details the process of FPIC with Indigenous Peoples. Project sponsors are required to inform affected Indigenous Peoples and natural-resource-dependent communities of their options, rights and responsibilities vis-à-vis the project and its potential impacts --– and obtain broad community support for the project. The sponsor is required to foster participation of affected Indigenous Peoples in the assessment of relevant project alternatives, planning, and implementation of mitigation and development measures. Performance Standard 7 emphasizes ties to unique natural resources. The sponsor is also expected to seek to identify, through the process of FPIC with affected communities of Indigenous Peoples, opportunities for culturally appropriate development benefits. Indigenous peoples adversely affected by the project, but no longer dependent on natural resources, will be covered in the ESIA process pursuant to Performance Standard 1. Performance Standard 7 moves away from a requirement for a free-standing Indigenous Peoples Plan to a more flexible and broader community development plan with components for indigenous peoples, where appropriate. This approach aims to extend opportunities and benefits to all the affected communities, regardless of whether some are indigenous or not.




Performance Standard 8: Cultural Heritage This Performance Standard is based on the Convention Concerning the Protection of the World Cultural and Natural Heritage (which aims to protect irreplaceable cultural heritage) and, in part, on standards set by the Convention on Biological Diversity. It requires clients to, as a minimum, follow national law and share the benefits of project use (e.g., commercialization) of indigenous peoples or local community knowledge, innovations, and/or practices with the indigenous peoples or local communities. Performance Standard 8 requires the application of internationally recognized practices for the protection, field-based study, and documentation of cultural heritage where international conventions on cultural heritage are not part of host country laws. IFC General EHS Guidelines The IFC General EHS Guidelines, dated April 2007, contain the performance levels and measures that IFC has determined are generally considered to be achievable at reasonable costs by existing technology. The application of these guidelines should be tailored to the hazards and risks established for each project on the basis of the results of the environmental assessment, in which site-specific variables, such as the host country context, assimilative capacity of the environment, and other project-specific factors, are taken into account. For example, the environmental assessment process may provide justification for alternative project-specific standards or requirements, such as project location, processes, or mitigation measures. These General EHS Guidelines are technical reference documents with general and industry-specific examples of Good International Industry Practice (GIIP). These general guidelines are designed to be utilized in conjunction with relevant industry-sector EHS guidelines. The General EHS Guidelines are organized as follows: • Environmental • Air Emissions and Ambient Air Quality • Energy Conservation • Wastewater and Ambient Water Quality • Water Conservation • Hazardous Materials Management • Waste Management • Noise • Contaminated Land • Occupational Health and Safety • General Facility Design and Operation • Communication and Training • Physical Hazards • Chemical Hazards • Biological Hazards




• Radiological Hazards • Personal Protective Equipment • Special Hazard Environments • Monitoring • Community Health and Safety • Water Quality and Availability • Structural Safety and Project Infrastructure • Life and Fire Safety • Traffic Safety • Transport of Hazardous Materials • Disease Prevention • Emergency Preparedness and Response • Construction and Decommissioning • Community Health and Safety Effective management incorporates EHS issues into corporate- and facility-level business processes in an organized, hierarchal approach. This involves: • identifying EHS project hazards and associated risks as early as possible in the

facility development or project cycle; • utilizing EHS professionals with the experience, competence, and training necessary

to assess and manage EHS impacts and risks, and carry out specialized environmental management functions; and,

• understanding the likelihood and magnitude of EHS risks based on: - the nature of the project activities, - the potential consequences to workers, communities, or the environment if

hazards are not adequately managed; - prioritizing risk management strategies with the objective of achieving an

overall reduction of risk to human health and the environment; - favoring strategies that eliminate the cause of the hazard at its source; - incorporating engineering and management controls to reduce or minimize the

possibility and magnitude of undesired consequences when impact avoidance is not feasible;

- preparing workers and nearby communities to respond to accidents, including providing technical and financial resources to effectively and safely control such events, and restoring workplace and community environments to a safe and healthy condition; and,

- improving EHS performance through a combination of ongoing monitoring of facility performance and effective accountability.

The specific EHS Guidelines for Mining, to be utilized in conjunction with the General EHS Guidelines, are described in the following section.




IFC EHS Guidelines for Mining The IFC EHS Guidelines for Mining, dated December 2007, provide for inclusion of results from the SEIA process. Although some specific performance standards are provided, these levels and measures can be adjusted and customized for each particular project. The EHS Guidelines for Mining include the following topics: • Industry-Specific Impacts • Environmental • Water use and quality • Wastes • Hazardous materials • Land use and biodiversity • Air quality • Noise and vibrations • Energy use • Visual impacts • Occupational Health and Safety • General workplace health and safety • Hazardous substances • Use of explosives • Electrical safety and isolation • Physical hazards • Ionizing radiation • Fitness for work • Travel and remote site health • Thermal stress • Noise and vibration • Specific hazards in underground mining • Community Health and Safety • Tailings dam safety • Water storage dams • Land subsidence • Emergency preparedness and response • Communicable diseases • Specific vector control and prevention strategies • Mine Closure and Post-Closure • Financial feasibility • Chemical integrity • Ecological habitat integrity • Performance Indicators and Monitoring • Emissions and effluent guidelines • Environmental monitoring • Occupational Health and Safety Performance




• Occupational health and safety guidelines • Accident and fatality rates • Occupational health and safety monitoring Certain aspects of the IFC EHS Mining Guidelines are described in further detail below. Performance Indicators and Monitoring The following discusses certain performance indicators and monitoring noted in the IFC General EHS Guidelines and the IFC EHS Guidelines for Mining. Monitoring of direct and indirect indicators of emissions, effluents and resource use is typically project-specific; and, therefore, specific monitoring conditions will be incorporated into the King-King design and operation, as applicable. Monitoring will be conducted by trained individuals implementing appropriate monitoring procedures, utilizing properly calibrated and maintained equipment. The monitoring records will be frequently reviewed, updated and maintained; and will be compared with the applicable standards to ensure adequate measures are promptly performed when necessary to minimize adverse impacts to the environment and humans. These guidelines act as a powerful tool to avoid mistakes, reduce development cost and improve project sustainability. These guidelines are intended to provide a standard against which the Project’s performance will be monitored. Ratel is committed to conformance with these guidelines, in addition to compliance with applicable local and national laws. Air Quality Air emissions will be designed not to exceed the relevant ambient air quality guidelines and standards by applying national legislated standards or the current World Health Organization (WHO) Air Quality Guidelines (2006a). Ambient air quality is to be monitored at the Project boundary and/or off-site, at locations to be determined by scientific modeling. The current WHO Air Quality Guidelines are provided in the Table below.




WHO Ambient Air Quality Guidelines

Parameter Averaging Period

Guideline Value

(µg/m3)

Particulate Matter (PM) 2.5 annual mean 10 24-hour mean 25

PM10 annual mean 20 24-hour mean 50

Ozone (O3) 8-hour maximum 100

Nitrogen dioxide (NO2) annual mean 40 1-hour mean 200

Sulfur dioxide (SO2) 24-hour mean 20

10-minute mean 500 The air quality of the workplace will follow the time-weighted average threshold limit values (e.g., eight hours per day, 40 hours per week) of the American Conference of Governmental Industrial Hygienists (ACGIH). Water Use and Quality Water used for drinking will meet the local and national standards or, in their absence, WHO Guidelines for Drinking Water Quality (2006b). WHO provides microbial and chemical water quality targets to protect the health of humans. The Table below lists and describes the waterborne pathogens (WHO, 2006b). However, only a portion of the waterborne pathogens listed may be present at the Project area. Per WHO Guidelines for Drinking Water Quality, all water directly intended for drinking must not have E. coli or thermo-tolerant coliform bacteria detected in any 100-milliliter sample (2006b).

WHO-Waterborne Pathogens and their Significance in Water Supplies

Pathogen Health Significance

Persistence in Water Supplies

Resistance to Chlorine

Relative Infectivity

Important Animal Source

BACTERIA Burkholderia pseudomallei Low May multiply Low Low No

Campylobacter jejuni, C. coli High Moderate Low Moderate Yes

Escherichia coli – Pathogenic High Moderate Low Low Yes

E. coli – Enterohaemorrhagic High Moderate Low High Yes

Legionella spp. High Multiply Low Moderate No




Pathogen Health Significance

Persistence in Water Supplies

Resistance to Chlorine

Relative Infectivity

Important Animal Source

Non-tuberculous mycobacteria Low Multiply High Low No

Pseudomonas aeruginosa Moderate May multiply Moderate Low No

Salmonella typhi High Moderate Low Low No Other salmonellae High May multiply Low Low Yes Shigella spp. High Short Low Moderate No Vibrio cholerae High Short Low Low No Yersinia enterocolitica High Long Low Low Yes

VIRUSES Adenoviruses High Long Moderate High No Enteroviruses High Long Moderate High No Hepatitis A virus High Long Moderate High No Hepatitis E virus High Long Moderate High Potentially Noroviruses and sapoviruses High Long Moderate High Potentially

Rotaviruses High Long Moderate High No PROTOZOA Acanthamoeba spp. High Long High High No Cryptosporidium parvum High Long High High Yes

Cyclospora cayetanensis High Long High High No

Entamoeba histolytica High Moderate High High No Giardia intestinalis High Moderate High High Yes Naegleria fowleri High May multiply High High No Toxoplasma gondii High Long High High Yes HELMINTHS Dracunculus medinensis High Moderate Moderate High No

Schistosoma spp. High Short Moderate High Yes The Chemical Abstracts Service has more than 36 million registered chemicals (Chemical Abstracts Service, 2007). As such, parameters or chemicals specific to the Project operations as well as the Project environment will be selected for monitoring. WHO utilizes six categories to identify the sources of chemical constituents (2006b): • Naturally occurring; • Industrial sources and human dwellings; • Agricultural activities; • Water treatment or materials in contact with drinking water; • Pesticides used in water for public health; and, • Cyanobacteria.




Drinking-water guidelines are provided in the following two Tables based on the WHO Guidelines for Drinking Water Quality (2006b).

WHO Drinking Water Guideline Values Significant to Health

Chemical Guideline Value NATURALLY OCCURRING Arsenic 0.01 milligrams per liter (mg//L) Barium 0.7 mg/L Boron 0.5 mg/L Chromium (total) 0.05 mg/L Fluoride 1.5 mg/L Manganese 0.4 mg/L Molybdenum 0.07 mg/L Selenium 0.01 mg/L Uranium 0.015 mg/L INDUSTRIAL SOURCES AND HUMAN DWELLINGS Benzene 10 micrograms per liter (μg/L) Cadmium 0.003 mg/L Carbon tetrachloride 4 μg/L Cyanide 0.07 mg/L Di(2-ethylhexyl)phthalate 8 μg/L Dichlorobenzene, 1,2- 1,000 μg/L Dichlorobenzene, 1,4- 300 μg/L Dichloroethane, 1,2- 30 μg/L Dichloroethene, 1,2- 50 μg/L Dichloromethane 20 μg/L Dioxane, 1,4- 50 μg/L Edetic acid (EDTA) 600 μg/L Ethylbenzene 300 μg/L Hexachlorobutadiene 0.6 μg/L Mercury (inorganic) 0.006 mg/L Nitrilotriacetic acid (NTA) 200 μg/L Pentachlorophenol 9 μg/L Styrene 20 μg/L Tetrachloroethene 40 μg/L Toluene 700 μg/L Trichloroethene 20 μg/L Xylenes 500 μg/L AGRICULTURAL ACTIVITIES Nitrate 50 mg/L (short-term exposure)




Chemical Guideline Value

Nitrite 3 mg/L (short-term exposure)

0.2 mg/L (long-term exposure) Alachlor 20 μg/L Aldicarb 10 μg/L Aldrin and dieldrin 0.03 μg/L Atrazine 2 μg/L Carbofuran 7 μg/L Chlordane 0.2 μg/L Chlorotoluron 30 μg/L Cyanazine 0.6 μg/L 2,4-dichlorophenoxyacetic acid (2-4-D) 30 μg/L 2,4-DB 90 μg/L 1,2-Dibromo-3-chloropropane 1 μg/L 1,2-Dibromoethane 0.4 μg/L 1,2-Dichloropropane (1,2-DCP) 40 μg/L 1,3-Dichloropropene 20 μg/L Dichlorprop 100 μg/L Dimethoate 6 μg/L Endrin 0.6 μg/L Fenoprop 9 μg/L Isoproturon 9 μg/L Lindane 2 μg/L MCPA 2 μg/L Mecoprop 10 μg/L Methoxychlor 20 μg/L Metolachlor 10 μg/L Molinate 6 μg/L Pendimethalin 20 μg/L Simazine 2 μg/L 2,4,5-T 9 μg/L Terbuthylazine 7 μg/L Trifluralin 20 μg/L WATER TREATMENT Acrylamide 0.5 μg/L Antimony 20 μg/L Benzo[a]pyrene 0.7 μg/L Bromate 10 μg/L Bromodichloromethane 60 μg/L Bromoform 100 μg/L Chlorate 700 μg/L




Chemical Guideline Value

Chlorine1 5 mg/L Chlorite 700 μg/L Chloroform 300 μg/L Copper 2,000 μg/L Cyanogen chloride 70 μg/L Dibromoacetonitrile 70 μg/L Dibromochloromethane 100 μg/L Dichloroacetate 50 μg/L Dichloroacetonitrile 20 μg/L Epichlorohydrin 0.4 μg/L Lead 10 μg/L Monochloramine 3 mg/L Monochloroacetate 20 μg/L Nickel 70 μg/L Trichloroacetate 200 μg/L Trichlorophenol, 2,4,6- 200 μg/L Trihalomethanes See note below.2 Vinyl chloride 0.3 μg/L PESTICIDES USED IN WATER FOR PUBLIC HEALTH Chlorpyrifos 30 μg/L DDT and metabolites 1 μg/L Permethrin 300 μg/L Pyriproxyfen 300 μg/L CYANOTOXIN Microcystin-LR 1 μg/L

1 For effective disinfection, a concentration of free chlorine of ≥ 0.5 mg/L after at least 30 minutes at pH < 8 standard units should be residual. 2 The sum of the ratio of the concentration of each to its respective guideline value should not exceed 1.




WHO Acceptable Consumer Drinking Water Guideline Values (Not Significant to

Health)

Chemical Guideline Value Aluminum 0.2 mg/L

Ammonia 35 mg/L (taste) 1.5 mg/L (odor)

Chloride 250 mg/L Color 15 true color units (TCUs) Hydrogen sulfide 0.05 to 0.1 mg/L Iron 0.3 mg/L pH 6.5 to 9.5 standard units Silver 0.1 mg/L Sodium 200 mg/L Sulfate 250 mg/L Taste and odor Not observable Temperature Cooler Total hardness 100 to 300 mg/L Total dissolved solids 1,200 mg/L

Turbidity

5 nephelometric turbidity units (NTUs) (appearance) 0.1 NTU (effective

disinfection) Zinc 3 mg/L

Wastewater quality will be managed by collecting and treating liquid effluent. Liquid effluent includes storm water, process effluents, drainage (from the active mine, disposal sites for overburden, valueless rock, etc.), surface runoff from paved or unpaved areas, and sanitary wastewater. In addition to the mining effluent guidelines, guidelines exist for accidental discharge and prevention of groundwater pollution. The IFC EHS Guidelines for Mining contain limitations for such parameters as pH, five-day BOD, oil and grease, TSS, and temperature. The Table below displays the IFC Liquid Effluent Guidelines, which summarize the maximum contaminant concentrations in liquid effluent under normal operating conditions.




IFC EHS Mining Effluent Guidelines

Parameter1 Guideline Value

TSS 50 mg//L pH 6 to 9 standard units Chemical oxygen demand 150 mg/L Five-day BOD 50 mg/L Oil and grease 10 mg/L Arsenic 0.1 mg/L Cadmium 0.05 mg/L Chromium, hexavalent 0.1 mg/L Copper 0.3 mg/L Cyanide 1 mg/L Cyanide free 0.1 mg/L Cyanide WAD 0.5 mg/L Iron 2.0 mg/L Lead 0.2 mg/L Mercury 0.002 mg/L Nickel 0.5 mg/L Phenols 0.5 mg/L Zinc 0.5 mg/L Temperature2 < 3 degrees Celsius (ºC) differential

1 Metal concentration represents total metals. 2 Effluent temperatures should not result in an increase of more than 3ºC of the ambient temperature at the edge of the scientifically established mixing zone which accounts for ambient water quality, receiving water use, and assimilative capacity among other considerations.

Waste Waste management will be planned, designed and implemented such that geotechnical risks and environmental impacts are addressed throughout the life of the mine. Wastes may include valueless rock, tailings, workshop scrap, household waste, non-process related industrial waste, and waste oils and chemicals. Solid waste disposal will be performed in an environmentally secure manner. Recycling or reclaiming material will be encouraged, and, if not practical, the waste will be disposed in an environmentally acceptable manner that complies with local laws and regulations. Valueless Rock Management Areas (VRMA) for materials with high potential for generating acid leachate from oxidation or percolating water will be engineered to




minimize inflow of clean water to them; and, to collect and re-use and/or treat out-flow water from these facilities. Solvents and other hazardous materials will not be disposed of in a manner likely to result in soil, surface water, or groundwater contamination. Illumination The following Table shows the minimum average illumination limits for travel paths and work areas of the Project area.

IFC Mining EHS Standards for Minimum Average Illumination for Designated Mine Locations and Activities

Location/Activity Minimum Average Illumination (Lux)

Emergency lighting 5 Walkways and passages 5 - 10 Dynamic locations (production and development areas) 5 - 50

Areas with occasional and simple manual tasks 50 - 100

Workstations and areas with medium to high precision manual tasks

150 - 400

IFC General EHS Noise Guidelines

Receptor

One-Hour LAeq (dBA)

Day (07:00 to

22:00)

Night (22:00 to

07:00)

Residential, institutional, educational 55 45

Industrial, commercial 70 70




WHO Noise Level Guidelines

Specific Environment Laeq (dBA) a

Time Base

(hours)

LAmax fast

(dBA) b

Indoor dwelling and school class room 30 to 35 variable variable

Outdoor living area 50 to 55 16 --

Industrial, commercial shopping and traffic areas, indoors and outdoors

70 24 110

Source: WHO, 1999 a LAeq (dBA) = long-term A-weighted sound pressure level equivalent b LAmax fast (dBA) = maximum A-weighted sound pressure level at the “fast” meter setting

IFC General EHS Noise Limits for Various Working Environments

Location/Activity Eight-Hour LAeq (dBA)

LAmax fast (dBA)

Heavy industry (no need for oral communication) 85 110 Light industry (decreasing need for oral communication) 50 to 65 110

Open offices, control rooms, service counters, or similar 45 to 50 --

Individual offices (no noise disturbance) 40 to 45 -- Classrooms, lecture halls 35 to 40 -- Hospitals 30 to 35 40

Workers will utilize hearing protection capable of reducing sound levels at the ear to at least 85 dBA when:

• exposed to a sound pressure level above 85 dBA more than eight hours per day; • exposed to an instantaneous peak sound pressure level of more than 140 C-

weighted sound pressure level (dBC); and, • the average maximum sound pressure level is equal to or more than 110 dBA.

Large equipment may be equipped with soundproof cabs. Workers exposed to high noise levels will have periodic hearing assessments.




Vibration Typically, blasting activities produce the most significant vibrations at a mine. Vibrations may be minimized by: utilizing mechanical ripping instead of explosives; developing a blast design based on the results from a blasting-surfaces survey and a drill-hole survey; utilizing specific blasting pans, correct charging procedures and blast ratios; utilizing delayed/micro-delayed or electronic detonators, and specific in-situ blasting tests; implementing good vibration and overpressure control; and, adequately designing the foundations of vibrating equipment. Vibration threshold limit values are provided by the ACGIH. Exposure levels will be monitored and recorded on a daily basis. Occupational Health and Safety Monitoring As part of an established occupational health and safety program, monitoring will be performed by accredited professionals (e.g., certified industrial hygienists, registered occupational hygienists, certified safety professionals). These accredited professionals will design, implement, monitor, and audit health and safety throughout the workplace. Proper occupational health and safety records will be maintained throughout the life of the Project. Emergency Preparedness and Response An Emergency Response Plan will be established in accordance with the United Nations Environment Program (UNEP) Awareness and Preparedness for Emergencies at the Local Level (APPEL) for Mining (2001). Workers, as well as community emergency response personnel, will be trained to apply the Emergency Response Plan. IFC’s Disclosure of Information Policy IFC adopted its current Policy on Disclosure of Information in April 2006 (2006b). The policy stipulates public consultation and disclosure requirements (including timing) for projects requesting IFC funding. Ratel has voluntarily committed to following this policy for the King-King Project.

World Bank Policies

Anti-Corruption Strategy The World Bank states that corruption undermines development by distorting laws and weakening the institutional foundation on which economic growth depends. Therefore, the World Bank has identified corruption as one of the greatest obstacles to the Bank’s mission and purpose, which is: • to promote open and competitive markets in developing countries; • to support companies and other private sector partners;




• to generate productive jobs and deliver basic services; and, • to create opportunity for people to escape poverty and improve their lives. Ratel will be supportive of this World Bank Policy at its King-King Project in The Philippines. The World Bank’s anticorruption policy comprises five key elements: • increasing political accountability; • strengthening civil society participation; • creating a competitive private sector; • establishing institutional restraints on power; and, • improving private sector management. Increasing Political Accountability Political accountability is defined as the constraints placed on the behavior of public officials by organizations and constituencies that are able to apply sanctions. This largely depends on the effectiveness of the sanctions and the monitoring of public officials by accountability institutions. Sanctions can be more effective by: maintaining political competition that exposes corruption and holds candidates accountable; establishing a well-designed mechanism for political party financing; promoting the transparency of political activities through free and vibrant media; as well as establishing and enforcing rules and legal instruments to deter corrupt behavior. Strengthening Civil Society Participation Civil society is composed of, but not limited to, citizens groups, NGOs, trade unions, business associations, think tanks, academia, religious organizations and the media. Civil society mediates between the state and the public with a stake in good governance. When adhering to high standards of accountability, transparency and democratic management, civil society effectively: increases public awareness, adds pressure to politicians, and incorporates the various sectors which may otherwise lack representation. Creating a Competitive Private Sector Broad-based economic development is supported by a fair, competitive, honest and transparent private sector. However, a few powerful economic interests can, at times, strongly influence the decisions and policies of the state. Economic policy liberalization, enhanced competition, regulatory reform, good corporate governance, transnational cooperation, and the promotion of business associations, trade unions, and concerned parties may be utilized to balance economic interests.




Establishing Institutional Restraints on Power The state, in particular, may be institutionally restrained from committing abuses by the separation of powers (e.g., executive, legislative, judicial) and the establishment of checks and balances among these powers. Several components need be established to create an institutionally restrained state. A system of rules is fundamental to a functioning society. As such, an independent, competent, and clean judicial system is necessary to avoid corruption. Once established, this judicial system upholds the daily rule of law. Anti-corruption laws then deter corruption and prosecute corruptors. In addition, corruption is deterred through predictable, transparent, and accountable government decision-making as well as audits by government-supported organizations with a core of strong, independent, and credible professionals in the judicial, prosecutorial, and police arms of the state. By enforcing the anti-corruption laws, the principle of justice is instilled amongst society. Improving Private Sector Management Another anti-corruption strategy is to reform the internal management of public resources and administration to minimize or eliminate the incentive and opportunities for corruption. Public sector finance and management reform requires: • the institution of meritocratic systems for appointment, promotion, and performance

evaluation that promote adequate pay and regularize benefits; • enhanced transparency and accountability with respect to budget management, taxes,

and customs; • sectoral-service-delivery policy reforms; and, • service delivery decentralization held accountable through pre-established systems of

financial management and auditing.

Equator Principles

The Equator Principles are voluntary international guidelines adopted by the Equator Principles Financial Institutions (EPFI)1

1 EP Financial Institutions include: ABN AMRO Bank, N.W., Banco Bradesco, Banco do Brasil, Banca Intesa, Banco Itau BBA, Bank of America, BMO Financial Group, Barclays plc, BBVA, BES Group, Caja Navarra, Calyon, COBC, Citigroup Inc., Credit Suisse Group, Dexia Group, Dresdner Bank, EKF, FMO, HBOS, HSBC Group, HVB Group, ING Group, JPMorgan Chase, KBC, Manulife, MCC, Mizuho Corporate Bank, Nedbank Group, Rabobank Group, Royal Bank of Canada, Scotiabank, Standard Cahrtered Bank, The Royal Bank of Scotland, Unibanco, Wells Fargo, WestLB AG, Westpac Banking Corporation

. These include many financial institutions involved in project finance in the extractive sector around the world. The Equator Principles are intended to help investors manage environmental and social risks, which may be associated with international project financing. In general, the Equator Principles are derived from the IFC/World Bank requirements, particularly IFC’s Performance Standards. Some of the conditions of the Equator Principles are as follows:




• The project risk must be categorized following the environmental and social

screening criteria of IFC. • An Environmental Assessment must be completed for all Category A and Category B

projects. • The Environmental Assessment report must address compliance with applicable host

country laws, regulations, and permits required by the project; and, at least reference the guidelines and safeguard policies applicable under the World Bank and IFC PPAH guidelines.

• Where appropriate, an Environmental Management Plan must be prepared to address mitigation, action plans, monitoring, management of risk and schedules.

• Where appropriate, public consultation must be conducted to make the Environmental Assessment (or its summary) available to the public for a reasonable period.

Therefore, investors who adopt the voluntary Equator Principles are making a commitment to promote environmental stewardship and socially responsible development. At the same time, investors believe that following the Equator Principles will help reduce the financial and reputational risk of the projects they wish to finance. Ratel is committed to employing the Equator Principles into the design, operation and closure of its King-King Project in The Philippines. The Equator Principles are described as follows: Principle 1 - Review and Categorization

: EPFI will, as part of its internal social and environmental review and due diligence, categorize the project based on potential impacts and risks in accordance with the environmental and social screening criteria of IFC.

Principle 2 - Social and Environmental Assessment

: For a project assessed as being a Category A (with potential significant adverse social or environmental impacts that are diverse, irreversible, or unprecedented), or Category B (with potential limited adverse social or environmental impacts that are fewer in number, generally site-specific, largely reversible and readily addressed through mitigation measures), the borrower is expected to conduct a Social and Environmental Assessment process to address relevant social and environmental impacts and risks, and propose relevant mitigation and management measures.

Principle 3 - Applicable Social and Environmental Standards

: For projects located in non-member countries of the Organization for Economic Cooperation and Development (OECD), as well as OECD countries not designated as high-income, the ESIA will refer to the then applicable IFC Performance Standards and applicable industry-specific EHS Guidelines. The ESIA will establish overall compliance with, or justified deviation from, the respective Performance Standards and EHS Guidelines. In addition, the ESIA process will address compliance with relevant host country laws, regulations and permits that pertain to social and environmental matters.




Principle 4 - Action Plans and Management System

: For all Category A and Category B projects located in non-OECD countries, and those located in OECD counties not designated as high-income, the borrower will prepare an Action Plan to address the relevant findings and conclusions of the ESIA, and describe and prioritize the actions necessary to implement mitigation measures, corrective actions, and monitoring measures. The borrower will build on, maintain or establish a Social and Environmental Management System that addresses the management of these impacts, risks, and corrective actions required to comply with applicable host country social and environmental laws and regulations, and requirements of the applicable IFC Performance Standards and EHS Guidelines.

Principle 5 - Consultation and Disclosure

: For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as high-income, the government, borrower, or third-party expert will consult with project-affected communities in a structured and culturally appropriate manner. For projects with significant adverse impacts on affected communities, the process will ensure their free, prior, and informed consultation and facilitate their informed participation as a means to establish whether a project has adequately incorporated the affected communities’ concerns. This requires that the ESIA documentation and Action Plans, or non-technical summaries thereof, be accessible to the public for a reasonable minimum period in the relevant local language and in a culturally appropriate manner. The borrower will record and address the process and results of the consultation, including agreements. For projects with adverse social and environmental impacts, disclosure should occur early in the ESIA process and, in any event, before project construction commences, and on an ongoing basis.

Principle 6 - Grievance Mechanism: For all Category A and, as appropriate, Category B projects located in non-OECD countries, and those located in OECD countries not designated as high-income, the borrower will, scaled to the risks and adverse impacts of the project, establish a grievance mechanism as part of the management system to ensure that consultation, disclosure and community engagement continues throughout construction and operation of the project. The borrower will inform the affected communities about the mechanism in the course of its community engagement process and ensure that the mechanism addresses concerns promptly and transparently, in a culturally appropriate manner, and is readily accessible to all segments of the affected communities. Principle 7 - Independent Review

: For all Category A and, as appropriate, Category B projects, an independent social or environmental expert not directly associated with the borrower will review the ESIA, Action Plans and consultation process documentation in order to assist EPFI's due diligence and assess compliance with the Equator Principles.

Principle 8 - Covenants: For Category A and B projects, the borrower will covenant in financing documentation: (a) compliance with all relevant host country social and environmental laws, regulations and permits in all material respects; (b) compliance with the Action Plans, where applicable, during the construction and operation of the project




in all material respects; and (c) delivery on at least an annual basis of periodic reports that are prepared by in-house staff or third party experts and that (i) document compliance with the Action Plans, where applicable, and (ii) provide representation of compliance with relevant local, state and host country social and environmental laws, regulations and permits; and (d) decommissionment of the facilities, where applicable and appropriate, in accordance with an agreed decommissioning plan. Principle 9 - Independent Monitoring and Reporting

: For all Category A and, as appropriate, Category B projects, EPFI will require appointment of an independent environmental and/or social expert, or require that the borrower retain qualified and experienced external experts to verify its monitoring information that would be shared with EPFI.

Principle 10 - EPFI Reporting

: Relating to EPFI’s own reporting commitments under the Equator Principles, each EPFI adopting the Equator Principles commits to report publicly at least annually about its implementation processes and experience of the Equator Principles, taking into account appropriate confidentiality considerations.

Voluntary Principles on Security and Human Rights

The Voluntary Principles on Security and Human Rights were developed to “guide companies in monitoring the safety and security of their operations within an operating framework that ensures respect for human rights and fundamental freedoms.” These voluntary principles were developed by the governments of the United States, the United Kingdom, Norway and the Netherlands, plus companies operating in the extractive and energy sectors and non-governmental organizations, all with an interest in human rights and corporate social responsibility. The criteria for participation were finalized in 2007. Ratel will maintain its own security staff to provide security for the King-King Project site, its activities and workers. The potential sensitivities associated with the possible presence of informal land users within the Project boundaries, and potential for land-use conflicts, indicate the need to consider and adhere to good international practices on security and human rights. This includes a commitment by Ratel to follow the “Voluntary Principles on Security and Human Rights.” The Voluntary Principles recognize that governments have primary responsibility to promote and protect human rights and that all parties to a conflict are obliged to observe applicable international humanitarian law. Applicable international standards include the United Nations Code of Conduct for Law Enforcement Officials and the United Nations Basic Principles on the Use of Force and Firearms by Law Enforcement Officials. The Voluntary Principles regarding security and human rights in the extractive sector fall into three categories: risk assessment, relations with public security, and relations with private security, as detailed below.




Risk Assessment Accurate and effective risk assessments should consider the following factors: Identification of security risks

. Security risks can result from political, economic, civil or social factors. Moreover, certain personnel and assets may be at greater risk than others. Identification of security risks allows a company to take measures to minimize risk and to assess whether company actions may heighten risk.

Potential for violence

. Depending on the environment, violence can be widespread or limited to particular regions, and it can develop with little or no warning. Civil society, home and host government representatives, and other sources should be consulted to identify risks presented by the potential for violence. Risk assessments should examine patterns of violence in areas of company operations for educational, predictive, and preventative purposes.

Human rights records

. Risk assessments should consider the available human rights records of public security forces, paramilitaries, local and national law enforcement, as well as the reputation of private security. Awareness of past abuses and allegations can help companies to avoid recurrences as well as to promote accountability. Also, identification of the capability of the above entities to respond to situations of violence in a lawful manner (i.e., consistent with applicable international standards) allows companies to develop appropriate measures in operating environments.

Rule of law

. Risk assessments should consider the local prosecuting authority and judiciary's capacity to hold accountable those responsible for human rights abuses and for those responsible for violations of international humanitarian law in a manner that respects the rights of the accused.

Conflict analysis

. Identification of and understanding the root causes and nature of local conflicts, as well as the level of adherence to human rights and international humanitarian law standards by key actors, can be instructive for the development of strategies for managing relations between the company, local communities, company employees and their unions, and host governments. Risk assessments should also consider the potential for future conflicts.

Equipment transfers

. Where companies provide equipment (including lethal and non-lethal equipment) to public or private security, they should consider the risk of such transfers, any relevant export licensing requirements, and the feasibility of measures to mitigate foreseeable negative consequences, including adequate controls to prevent misappropriation or diversion of equipment which may lead to human rights abuses. In making risk assessments, companies should consider any relevant past incidents involving previous equipment transfers.




Interactions between Companies and Public Security In an effort to reduce the risk of abuses and to promote respect for human rights generally, the following Voluntary Principles can guide relationships between companies and public security regarding security provided to companies: Security Arrangements • Companies should consult regularly with host governments and local communities

about the impact of their security arrangements on those communities. • Companies should communicate their policies regarding ethical conduct and human

rights to public security providers, and express their desire that security be provided in a manner consistent with those policies by personnel with adequate and effective training.

• Companies should encourage host governments to permit making security arrangements transparent and accessible to the public, subject to any overriding safety and security concerns.

Deployment and Conduct The primary role of public security should be to maintain the rule of law, including safeguarding human rights and deterring acts that threaten company personnel and facilities. The type and number of public security forces deployed should be competent, appropriate and proportional to the threat. Equipment imports and exports should comply with all applicable law and regulations. Companies that provide equipment to public security should take all appropriate and lawful measures to mitigate any foreseeable negative consequences, including human rights abuses and violations of international humanitarian law. Companies should use their influence to promote the following principles with public security: (a) individuals credibly implicated in human rights abuses should not provide security services for companies; (b) force should be used only when strictly necessary and to an extent proportional to the threat; and (c) the rights of individuals should not be violated while exercising the right to exercise freedom of association and peaceful assembly, the right to engage in collective bargaining, or other related rights of company employees as recognized by the Universal Declaration of Human Rights and the ILO’s Declaration on Fundamental Principles and Rights at Work. In cases where physical force is used by public security, such incidents should be reported to the appropriate authorities and to the company. Where force is used, medical aid should be provided to injured persons, including to offenders.




Consultation and Advice Companies should hold structured meetings with public security on a regular basis to discuss security, human rights and related work-place safety issues. Companies should also consult regularly with other companies, host and home governments, and civil society to discuss security and human rights. Where companies operating in the same region have common concerns, they should consider collectively raising those concerns with the host and home governments. In their consultations with host governments, companies should take all appropriate measures to promote observance of applicable international law enforcement principles, particularly those reflected in the United Nations Code of Conduct for Law Enforcement Officials and the United Nations Basic Principles on the Use of Force and Firearms. Companies should support efforts by governments, civil society and multilateral institutions to provide human rights training and education for public security as well as their efforts to strengthen state institutions to ensure accountability and respect for human rights. Responses to Human Rights Abuses • Companies should record and report any credible allegations of human rights abuses

by public security in their areas of operation to appropriate host government authorities. Where appropriate, companies should urge investigation and that action be taken to prevent any recurrence.

• Companies should actively monitor the status of investigations and press for their proper resolution.

• Companies should, to the extent reasonable, monitor the use of equipment provided by the company and to investigate properly situations in which such equipment is used in an inappropriate manner.

Every effort should be made to ensure that information used as the basis for allegations of human rights abuses is credible and based on reliable evidence. The security and safety of sources should be protected. Additional or more accurate information that may alter previous allegations should be made available as appropriate to concerned parties. Interactions between Companies and Private Security Where host governments are unable or unwilling to provide adequate security to protect a Company’s personnel or assets, it may be necessary to engage private security providers as a complement to public security. In this context, private security may have to coordinate with state forces, (law enforcement, in particular) to carry weapons and to consider the defensive local use of force. Given the risks associated with such activities, the following Voluntary Principles can guide private security conduct.




• Private security should observe the policies of the contracting company regarding:

ethical conduct and human rights; the law and professional standards of the country in which they operate; emerging best practices developed by industry, civil society and governments; and promote the observance of international humanitarian law.

• Private security should maintain high levels of technical and professional proficiency, particularly with regard to the local use of force and firearms.

• Private security should act in a lawful manner. They should exercise restraint and caution in a manner consistent with applicable international guidelines regarding the local use of force, including the United Nations Principles on the Use of Force and Firearms by Law Enforcement Officials and the United Nations Code of Conduct for Law Enforcement Officials, as well as with emerging best practices developed by companies, civil society, and governments.

• Private security should have policies regarding appropriate conduct and local use of force (e.g., rules of engagement). Practice under these policies should be capable of being monitored by companies or, where appropriate, by independent third parties. Such monitoring should encompass: detailed investigations into allegations of abusive or unlawful acts; the availability of disciplinary measures sufficient to prevent and deter; and procedures for reporting allegations to relevant local law enforcement authorities when appropriate.

All allegations of human rights abuses by private security should be recorded. Credible allegations should be properly investigated. In those cases where allegations against private security providers are forwarded to the relevant law enforcement authorities, companies should actively monitor the status of investigations and press for their proper resolution. Consistent with their function, private security should provide only preventative and defensive services and should not engage in activities exclusively the responsibility of state military or law enforcement authorities. Companies should designate services, technology and equipment capable of offensive and defensive purposes as being for defensive use only. Private security should: (a) not employ individuals credibly implicated in human rights abuses to provide security services; (b) use force only when strictly necessary and to an extent proportional to the threat; and (c) not violate the rights of individuals while exercising the right to exercise freedom of association and peaceful assembly, to engage in collective bargaining, or other related rights of company employees as recognized by the Universal Declaration of Human Rights and ILO’s Declaration on Fundamental Principles and Rights at Work. In cases where physical force is used, private security should properly investigate and report the incident to the company. Private security should refer the matter to local authorities and/or take disciplinary action where appropriate. Where force is used, medical aid should be provided to injured persons, including offenders.




Private security should maintain the confidentiality of information obtained as a result of its position as security provider, except where to do so would jeopardize the principles contained herein. To minimize the risk that private security exceeds the authority as providers of security, and to promote respect for human rights generally, the following additional Voluntary Principles and guidelines have been developed: • Where appropriate, companies should include the principles outlined above as

contractual provisions in agreements with private security providers and ensure that private security personnel are adequately trained to respect the rights of employees and the local community. To the extent practicable, agreements between companies and private security should require investigation of unlawful or abusive behavior and appropriate disciplinary action. Agreements should also permit termination of the relationship by companies where there is credible evidence of unlawful or abusive behavior by private security personnel.

• Companies should consult and monitor private security providers to ensure they fulfill their obligation to provide security in a manner consistent with the principles outlined above. Where appropriate, companies should seek to employ private security providers that are representative of the local population.

International SEIA/SEMMP

Ratel is committed to conducting an international SEIA/SEMMP for its King-King Project that meets all applicable aspects of this IFC Performance Standard, as well as, the requirements of the Equator Principles. Ratel has developed a draft “Table of Contents” (TOC) for the prospective King-King Project that shows the broad scope and comprehensiveness of such an SEIA/SEMMP study and report. This draft TOC is included below.




King-King Project Republic of the Philippines

Preliminary Recommended Report Structure

International Social & Environmental Impact Assessment (SEIA) &

Social and Environmental Management and Monitoring Plan (SEMMP)

with Key Figures, Tables, and Appendices




Executive Summary 1.0 Introduction

1.1 Background 1.2 Methodology 1.3 General Structure 1.4 Contributors to the I-SEIA

2.0 Project Description

2.1 Overview 2.2 Property Description and Ownership

2.2.1 Mineral Rights, Contracts, and Easements 2.2.2 Land Clearing Assumptions

2.3 Project Geology 2.3.1 Regional and Local Geology 2.3.2 Mineralization 2.3.3 Exploration 2.3.4 Resource Modeling 2.3.5 Resource Statement 2.3.6 Reserve Estimate

2.4 Metallurgy 2.4.1 Testwork

2.5 Regional Infrastructure 2.6 Local Infrastructure

2.6.1 Electric Power 2.6.2 Roads and Transportation 2.6.3 Schools/Education Facilities 2.6.4 Medical/Hospital Facilities 2.6.5 Water Supplies 2.6.6 Other

2.7 Mine Design 2.7.1 Design Summary 2.7.2 Mine Operations

2.8 Project Infrastructure 2.8.1 Support Infrastructure

2.8.1.1 Electric Power 2.8.1.2 Roads 2.8.1.3 Administration Building 2.8.1.4 Plant Warehouse and Maintenance Building 2.8.1.5 Camp Facilities 2.8.1.6 Mine Truck Shop and Maintenance Building 2.8.1.7 Construction Laydown Area 2.8.1.8 Reagent Storage Building 2.8.1.9 Fueling Stations 2.8.1.10 Guardhouse for Explosive Storage 2.8.1.11 Explosive Storage 2.8.1.12 Water Supplies 2.8.1.13 Water Diversions 2.8.1.14 Sewage Treatment 2.8.1.15 Solid Waste Disposal 2.8.1.16 Topsoil Management Facilities 2.8.1.17 Merchantable and non-merchantable timber stockpiles 2.8.1.18 Ancillary Facilities 2.8.1.19 Safety and Fire Protection 2.8.1.20 Security




2.8.2 Operational Infrastructure 2.8.2.1 Open Pit 2.8.2.2 Overburden/Valueless Rock Storage 2.8.2.3 Ore Stockpiles 2.8.2.4 Processing Facilities 2.8.2.5 Tailings Management Facility

2.9 Open Pit

2.9.1 Location 2.9.2 Design 2.9.3 VRMA and Water Management

2.10 Overburden/Valueless Rock Storage

2.10.1 Location 2.10.2 Design 2.10.3 Storage Capacity 2.10.4 Management

2.11 Ore Stockpiles

2.11.1 Location 2.11.2 Design 2.11.3 Storage Capacity 2.11.4 Management

2.12 Processing Facilities

2.12.1 Location 2.12.2 Design 2.12.3 Capacity 2.12.4 Management

2.13 Tailings Disposal and Management

2.13.1 Tailings Management Facility (TMF) Site Location 2.13.2 TMF Design 2.13.3 Storage Capacity 2.13.4 TMF Water Management

2.14 Site Water Management

2.14.1 Site Water Management Analysis Methodology 2.15 Management Practices 2.16 Owner’s Implementation Plan for Social and Environmental Matters 2.17 Mine Reclamation and Closure Plan

Tables • Primary Production Parameters • Estimated Project Footprint • Mineral Resources • Metallurgical Process Design Summary • Project Schedule Figures • Location Map




• Area of Land Clearing • Project Area Geology Map • Project Area Geologic Cross-Sections • Infrastructure and Facility Layout • Infrastructure and Facility Layout at Project Completion • Process Flow Sheet • TMF Structure Design • Valueless Rock Storage Design 3.0 Area of Influence

3.1 Affected Area 3.2 Affected Public

Figures • Map of Potentially Affected Area • Landowners within Project Boundaries • Potentially Affected People in the Local Area of Influence 4.0 Regulatory Framework

4.1 Introduction 4.2 Republic of the Philippines Legal and Institutional Framework

4.2.1 Background 4.2.1.1 Government Overview 4.2.1.2 Constitution 4.2.1.3 Key Laws and Regulations Related to Mining 4.2.1.4 Environmental Laws, Policies, Programs and EIA Process

4.2.2 Laws and Regulations by Key Issues and Project Activities 4.2.2.1 Public Consultation 4.2.2.2 Indigenous Peoples 4.2.2.3 Forest Clearing 4.2.2.4 Earth Moving 4.2.2.5 River Diversion and Sedimentation 4.2.2.6 Road Building 4.2.2.7 Water 4.2.2.8 Air Quality 4.2.2.9 Explosives 4.2.2.10 Toxic and Hazardous Substances and Wastes 4.2.2.11 Conventional Waste Disposal 4.2.2.12 Noise 4.2.2.13 Transportation and Shipping 4.2.2.14 Worker Health and Safety 4.2.2.15 Biodiversity

4.3 International Performance Standards and Principles

4.3.1 IFC Standards, Guidelines and Policies 4.3.1.1 IFC Performance Standards 4.3.1.2 IFC General EHS Guidelines 4.3.1.3 IFC EHS Guidelines for Mining 4.3.1.4 IFC’s Disclosure of Information Policy 4.3.1.5 IFC Performance Indicators and Monitoring

4.3.2 World Bank Policies




4.3.2.1 Anti-Corruption Strategy 4.3.3 Equator Principles 4.3.4 Voluntary Principles on Security and Human Rights

4.3.4.1 Risk Assessment 4.3.4.2 Interactions between Companies and Public Security 4.3.4.3 Security Arrangements 4.3.4.4 Deployment and Conduct 4.3.4.5 Consultation and Advice 4.3.4.6 Responses to Human Rights Abuses 4.3.4.7 Interactions between Companies and Private Security

Tables • Republic of the Philippines Government and Regulatory Agencies • Republic of the Philippines Environmental Laws • Republic of the Philippines Environmental Standards • World Health Organization (WHO) Ambient Air Quality Guidelines • WHO Waterborne Pathogens and their Significance in Water Supplies • WHO Drinking Water Guideline Values • IFC EHS Mining Effluent Guidelines • IFC Mining EHS Standards for Illumination • IFC and WHO Noise Guidelines • Guidelines for Ground Vibrations and Mine Blasting Figures • Republic of the Philippines Administrative Units • Republic of the Philippines Permitting and EIA Process Schematic 5.0 Social and Cultural Baseline Conditions

5.1 Background 5.2 Areas of Influence 5.3 Indigenous Communities

5.3.1 Demographics 5.3.2 Governance Structures 5.3.3 Use of the Natural Resources 5.3.4 Sacred Places 5.3.5 Economic Activities 5.3.6 Vulnerable Groups

5.4 Social Infrastructure and Services

5.4.1 Housing 5.4.2 Transportation 5.4.3 Education 5.4.4 Health 5.4.5 Potable Water & Sewerage Facilities 5.4.6 Electricity 5.4.7 Solid Waste Removal & Disposal 5.4.8 Communications

5.5 Regional and National Context




5.6 Consultation and Needs Assessments 5.6.1 Background 5.6.2 Public Consultation 5.6.3 Surveys and Needs Assessments

5.7 Archaeological Resources

5.7.1 Site History 5.7.2 Literature Survey 5.7.3 Pedestrian Survey 5.7.4 Management Plan

Tables • Regional Demographic Summary • Predominant Indigenous Groups in the Area of Influence • Natural Food Sources: Fish, Game and Plant Species • Natural Resources Used for Handicrafts and Shelter • Sacred Places • Traffic Load near Project Area • Social and Educational Infrastructure in the Local Area • Key Issues Raised During Public Consultation Meetings • Positive and Negative Project Expectations of Local People Figures • Location Map of Indigenous Peoples 6.0 Environmental Baseline Conditions

6.1 Physical Conditions 6.1.1 Geology and Mineral Resources

6.1.1.1 Project Geology 6.1.1.2 Mineral Resources

6.1.2 Topography and Geomorphology 6.1.3 Seismicity 6.1.4 Soils 6.1.5 Sediment 6.1.6 Meteorology and Air Quality

6.1.6.1 Meteorology 6.1.6.2 Air Quality

6.1.7 Surface Water Hydrology 6.1.7.1 Project Area Fluvial Geomorphology 6.1.7.2 Stream Gaging

6.1.8 Groundwater 6.1.8.1 Groundwater Hydrology 6.1.8.2 Numerical (or Conceptual) Groundwater Flow Model

6.2 Chemical Conditions

6.2.1 Soil Chemistry 6.2.2 Sediment Chemistry 6.2.3 Air Quality 6.2.4 Water Quality

6.2.4.1 Surface Water Quality 6.2.4.2 Water Quality Associated with Acid Rock Drainage (ARD) 6.2.4.3 Groundwater Quality




6.3 Biological Conditions

6.3.1. Terrestrial Ecology 6.3.2 Aquatic Ecology 6.3.3 Threatened and Endangered Species

Tables • Seismic Hazard Analysis • Soil Particle Size Analysis and Organic Contents • Sediment Particle Size Analysis and Organic Content • Monthly Average Climate Data • Rainfall Frequency Analysis • Monthly Evaporation Data • PM10 Measurements • Streamflow Measurements • Aquifer Hydraulic Parameters in the Project Area • Soil Chemistry Analysis Results • Sediment Chemistry Analysis Results • Summary of International and Republic of the Philippines Water Quality Standards • Surface Water Quality Results • Groundwater Quality Results • Flora Species in the Project Area • Fauna Species in the Project Area • Periphyton Sampling Results • Benthic Macroinvertebrate Sampling Results • IUCN Conservation Status of Flora and Fauna Figures • Project Area Geology Map • Representative Stratigraphic Column • Project Area Topographic Map • Regional Seismic Hazard Map • Soil and Sediment Sampling Locations • Meteorological Stations Map • Average Monthly Rainfall • Monthly Wind Roses • Air Quality Sampling Locations • Rivers and Streams in the Project Area • Stream Gaging and Surface Water and Groundwater Sampling Locations • Conceptual Geologic and Hydrogeologic Models • Hydrographs for Selected Boreholes or Wells • Potentiometric Surface Map • Pit Rock Sample Analytical Results • Vegetation Communities in the Project Area • Major Fauna Habitat Types in the Project Area • Fish and Aquatic Biological Sampling Locations




7.0 Alternatives – Identification, Analysis, and Selection 7.1 General Project Configuration and Infrastructure

7.1.1 Power Lines 7.1.2 Access Roads 7.1.3 Support Facilities

7.1.3.1 Design Change Based on Republic of the Philippines EIA or International SEIA Process 7.1.3.2 Effects on Impacts 7.1.3.3 Net Results of Design Change

7.1.4 Conveyor System and Processing Plant 7.2 Tailings Management Facility (TMF)

7.2.1 Siting Location 7.2.2 TMF Design Alternatives

7.2.2.1 Design Change Based on Republic of the Philippines EIA or International SEIA Process

7.2.2.2 Design Concepts of Preferred Alternative 7.2.2.3 Effects of Design Change on Impacts

7.3 Valueless Rock Management Areas (VRMA)

7.3.1 Siting Location 7.3.2 Design Alternatives

7.3.2.1 Design Change Based on Republic of the Philippines EIA or International SEIA Process

7.3.2.2 Design Concepts of Preferred Alternative 7.3.2.3 Effects of Design Change on Impacts

7.4 Ore Stockpiles

7.4.1 Siting Location 7.4.2 Design Alternatives

7.4.2.1 Design Change Based on Republic of the Philippines EIA or International SEIA Process 7.4.2.2 Design Concepts of Preferred Alternative 7.4.2.3 Effects of Design Change on Impacts

7.5 Reclamation and Mine Pit Closure 7.6 Operational and Management Alternatives 7.7 Water Treatment Alternatives

7.7.1 Acid Rock Drainage (ARD) Treatment Alternatives 7.7.1.1 ARD Treatment Design Basis 7.7.1.2 Cost Estimation Basis 7.7.1.3 Analysis of Alternatives

7.7.2 TMF Treatment Alternatives 7.8 Sediment Control Alternatives

7.8.1 Design Change Based on Republic of the Philippines EIA or International SEIA Process

7.8.2 Effects on Impacts 7.8.3 Net Results of Design Change

7.9 No Action Alternative

Tables • Tailings Management Facility Location Evaluation




• Valueless Rock Management Areas Impact Comparisons • ARD Treatment Alternative Comparisons Figures • Major Infrastructure Alternatives • Tailings Management Facility Location Alternatives • TMF Design Alternatives • Valueless Rock Management Area Alternatives • Mine Pit and Valueless Rock Management Areas (VRMA)Cross-Section at Closure • ARD Treatment Alternatives • TMF Treatment Alternatives • Sediment Control Alternatives • Typical Sedimentation Pond Schematic 8.0 Evaluation of Potential Impacts

8.1 Introduction 8.2 Socioeconomic Impacts

8.2.1 Introduction 8.2.2 Description of Impacts

8.2.2.1 Physical and/or Economic Relocation 8.2.2.2 Pressure on Natural Resources 8.2.2.3 Basic Infrastructure and Services 8.2.2.4 Community and Public Health Challenges 8.2.2.5 Crime and Security Problems 8.2.2.6 Changes in Settlement Patterns 8.2.2.7 Traditional Cultures, Languages and Customs 8.2.2.8 Ethnic, Cultural and Social Tensions 8.2.2.9 Unemployment and Economic Contraction 8.2.2.10 Landscape Quality

8.3 Environmental Impacts

8.3.1 Topography, Land Disturbance, and Soils 8.3.2 Air Quality

8.3.2.1 Source Inventory 8.3.2.2 Air Impacts 8.3.2.3 Secondary Air Impacts

8.3.3 Impacts to Surface Water Hydrology & Quality 8.3.3.1 Construction 8.3.3.2 Operations 8.3.3.3 Impacts of Reclamation and Closure

8.3.4 Groundwater Hydrology and Quality 8.3.4.1 Groundwater Hydrology 8.3.4.2 Groundwater Quality

8.3.5 Terrestrial Ecology 8.3.5.1 Flora 8.3.5.2 Fauna

8.3.6 Aquatic Ecology 8.3.7 Impacts to Threatened, Endangered, Sensitive, and Endemic Species

8.3.7.1 Flora 8.3.7.2 Fauna

8.3.8 Other Potential Impacts 8.3.8.1 Noise and Vibration




8.3.8.2 Light and Illumination 8.4 Regional, Cumulative, and Induced Impacts

8.4.1 Introduction 8.4.2 Methodology 8.4.3 Social Impacts

8.4.3.1 Existing Conditions 8.4.3.2 Potential Cumulative Impacts

8.4.4 Water Quality 8.4.4.1 Existing Conditions 8.4.4.2 Potential Cumulative Impacts

8.4.5 Groundwater Hydrology 8.4.5.1 Existing Conditions 8.4.5.2 Potential Cumulative Impacts

8.4.6 Traffic Impacts in the Region 8.4.6.1 Existing Conditions 8.4.6.2 Potential Cumulative Impacts

8.4.7 Biodiversity Impacts 8.4.7.1 Existing Conditions 8.4.7.2 Potential Cumulative Impacts

8.4.8 Summary of Impacts Tables • Socioeconomic Impact Matrix • Anticipated Cumulative Traffic Load in Local Area • Estimated Project Footprint • Estimated Emissions and Greenhouse Gas Emissions from Operations • Ambient Air Quality Impacts Compared to Applicable Standards • 24-hour Design Storm Rainfall Depths • Mine Pit Discharge, Receiving Water Quality and Relevant Standards • TMF Discharge, Receiving Water Quality and Relevant Standards • Species List of Aquatic Receptors • Distances from Local Villages to Estimated Cone of Depression • Approximate Affected and Unaffected Areas of Forest Types • Loss of Aquatic Habitat Associated with Project Infrastructure • Endangered or Vulnerable Species Potentially Found in Project Area • World Bank Noise Guidelines • Guidelines for Ground Vibrations and Airblast for Mine Blasting • Impact Assessments Matrix Figures • Stream Diversion, Groundwater Discharge, and Changes to Local Streams • Predicted Migration of Acid Rock Drainage at Valueless Rock Management Area • Post-Mining Conceptual Groundwater Flow Schematic • Potentiometric Surface Map at the End of Mining Operations 9.0 Proposed Preventative and Mitigative Measures

9.1 Introduction 9.2 Socioeconomic Mitigation Measures




9.3 Air Quality 9.4 Water Quality

9.4.1 Site Water Management 9.4.1.1 Management Practices 9.4.1.2 Design Approach 9.4.1.3 Water Management Design

9.4.2 Point Source Discharges 9.4.2.1 TMF Effluent 9.4.2.2 PAG Rock Stockpiles 9.4.2.3 Sewage Treatment and Disposal

9.4.3 Non-Point Source Discharges 9.4.4 Accidents and Spills of Mine Reagents or Process Solutions

9.5 Reclamation and Re-Vegetation

9.5.1 General 9.5.2 Reclamation Planning Strategy 9.5.3 Reclamation and Closure Approach 9.5.4 Tailings Management Facility

9.5.4.1 Tailings Impoundment Closure and Reclamation Plan 9.5.4.2 Tailings Embankment Closure and Reclamation Plan

9.5.5 Open Pit 9.5.5.1 Pit Closure and Reclamation Plan

9.5.6 Valueless Rock Management Areas 9.5.6.1 Valueless Rock Management Areas Closure and Reclamation Plan

9.5.7 Sediment Control Ponds 9.5.7.1 Sediment Control Pond Closure and Reclamation Plan

9.5.8 Roadways 9.5.8.1 Roadway Closure and Reclamation Plan

9.5.9 Reclamation and Closure Plan Implementation 9.5.10 Progressive Reclamation 9.5.11 Forest Clearing and Re-Vegetation Plan

9.5.11.1 Clearing 9.5.11.2 Stabilization of Slopes 9.5.11.3 Re-Vegetation of Slopes 9.5.11.4 Re-Forestation 9.5.11.5 Costs

9.5.12 Post-Closure Monitoring 9.5.12.1 Timeframes 9.5.12.2 Reporting 9.5.12.3 Closure Monitoring Objectives 9.5.12.4 Reclamation Period Monitoring 9.5.12.5 Abandonment Period Monitoring

9.6 Erosion and Sediment Control

9.6.1 Pre-Construction Phase 9.6.2 Construction Phase 9.6.3 Operation Phase 9.6.4 Reclamation Phase

9.7 Protection of Flora and Fauna

9.7.1 Inventories of Biodiversity 9.7.1.1 Updating the Baseline - Standardized Inventory Methodology 9.7.1.2 Impacts Targeted 9.7.1.3 Costs

9.7.2 Monitoring Biodiversity Issues- Biodiversity Management Plan




9.7.2.1 Impacts Targeted 9.7.2.2 Costs

9.7.3 Specific Mitigation Strategy for Each Biological Component 9.7.3.1 Mammals and Reptiles 9.7.3.2 Birds 9.7.3.3 Fish 9.7.3.4 Amphibians 9.7.3.5 Reptiles 9.7.3.6 Others 9.7.3.7 Strategy for Sensitive Species

9.8 Waste Treatment, Storage, and Disposal

9.8.1 Waste Minimization 9.8.2 Waste Treatment and Disposal Facilities

9.8.2.1 Liquid Wastes 9.8.2.2 Solid Waste 9.8.2.3 Hazardous Wastes

9.9 Occupational Health and Safety Measures

9.9.1 Republic of the Philippines Health and Safety Regulations 9.9.2 Ratel Company Policy 9.9.3 General Safety Features 9.9.4 Employee Training 9.9.5 Workplace Noise 9.9.6 General Health Features

9.10 Hazard Prevention and Emergency Response

9.10.1 Preventative Maintenance 9.10.2 Fire, Rescue, and Emergency Support 9.10.3 Accident Prevention, Control and Countermeasures 9.10.4 Hazardous Material Handling

Tables • Socioeconomic Impact Matrix with Actions, Impacts and Proposed Preventive and/or Mitigative Measures

• Summary Matrix of Impacts and Mitigation Strategies • Matrix of Impacts and Mitigation Strategies for Flora and Fauna Figures • Sediment Control Management Plan • General Water Management Plan and Project Water Balance Flow Sheet • Reclaimed Facilities at Closure Site Plan • Cross Section of Ultimate Tailings Embankment Dam at Closure 10.0 Projected Net Social and Environmental Impacts 11.0 References




Appendix 1: Social Information 1.1 Republic of the Philippines Regulations/Laws 1.2 Traffic Survey 1.3 Minutes of Public Hearings 1.4 Implementation Plan Appendix 2: Physical Information 2.1 Well Sampling Logs 2.2 Stream Discharge Logs Appendix 3: Chemical Information 3.1 Chain-of-Custody Forms 3.2 Surface Water and Groundwater Quality, Air Quality, Soil, and Sediment Analysis Results Appendix 4: Biological Information 4.1 Flora Biodiversity of the Local Area 4.2 Fauna Biodiversity Inventory of the Local Area 4.3 Ichthyofauna Inventory of the Local Area 4.4 Vegetation Photolog Appendix 5: Social and Environmental Management and Monitoring Program (SEMMP) 5.1 Social and Environmental Management System (SEMS) 5.2 Public Consultation and Disclosure Plan (PCDP) 5.3 Community Development Plan (CDP) 5.4 Resettlement Action Plan (RAP) 5.5 Land Acquisition Action Plan (LAAP) 5.6 Artisanal & small-Scale Mining Plan (ASMP) 5.7 Cultural Resources Management Plan (CRMP) 5.8 Environmental Protection Plan (EPP) 5.9 Environmental Management and Monitoring Plan (EMMP) 5.10 Storm Water Management Plan (SWMP) 5.11 Erosion and Sediment Control Plan (ESCP) 5.12 Biodiversity Management Plan (BMP) 5.13 Waste Management Plan (WMP) 5.14 Hazardous Materials Management Plan (HMMP) 5.15 Occupational Health and Safety Plan (OHSP) 5.16 Emergency Response Plan (ERP) 5.17 Reclamation and Closure Plan (RCP)




Abbreviations ARD Acid Rock Drainage BMP Biodiversity Management Plan CDP Community Development Plan CRMP Cultural Resources Management Plan EPP Environmental Protection Plan ERP Emergency Response Plan EMMP Environmental Management and Monitoring Plan ESCP Erosion and Sediment Control Plan HMMP Hazardous Materials Management Plan I-SEIA International Social and Environmental Impact Assessment IFC International Finance Corporation OHSP Occupational Health and Safety Plan PAG Potentially Acid Generating PCDP Public Consultation and Disclosure Plan RAP Resettlement Action Plan RCP Reclamation and Closure Plan SEMS Social and Environmental Management System SWMP Storm Water Management Plan TMF Tailings Management Facility WBG World Bank Group VRMA Valueless Rock Management Area WHO World Health Organization WMP Waste Management Plan




Appendix 4. Relevant Samples

The following represent samples from the drilling database with a length of 15m or greater of

total copper greater than or equal to 0.4% or gold greater than or equal to 0.4 g/t.




Significant Mineralized Intercepts - Intercepts with 15m or Greater Length and Total Copper > 0.4% or Gold > 0.4 g/tGold Assay of -9 Represents No Acceptable Assay

HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeBC-1 3 27 24 419 795,653 606,819 0.252 0.114 4.334 Benguet Core Host OxideBC-1 60 87 27 364 795,635 606,812 0.305 0.194 1.152 Benguet Core Pre-Intrus OxideBC-1 309 327 18 133 795,559 606,783 0.270 0.060 0.848 Benguet Core Pre-Intrus MixedBC-1 333 357 24 108 795,551 606,780 0.213 0.039 0.630 Benguet Core Host SulfideBC-10 3 27 24 257 795,542 606,528 0.437 0.175 0.994 Benguet Core Pre-Intrus OxideBC-10 30 54 24 232 795,533 606,524 0.288 0.040 0.837 Benguet Core Host SulfideBC-11 30 45 15 462 795,693 607,066 0.399 0.147 0.596 Benguet Core Host MixedBC-11 96 147 51 388 795,657 607,050 0.459 0.327 0.943 Benguet Core Pre-Intrus OxideBC-13 12 27 15 449 795,369 607,197 0.120 0.069 0.603 Benguet Core Pre-Intrus OxideBC-13 96 129 33 362 795,340 607,184 0.151 0.078 1.532 Benguet Core Pre-Intrus OxideBC-14 39 57 18 321 795,562 607,321 0.303 0.055 0.926 Benguet Core Pre-Intrus MixedBC-14 63 84 21 297 795,553 607,317 0.204 0.037 0.551 Benguet Core Pre-Intrus MixedBC-16 12 33 21 409 795,479 607,517 0.754 0.246 -9.000 Benguet Core Pre-Intrus MixedBC-16 36 54 18 387 795,472 607,514 0.616 0.147 -9.000 Benguet Core Pre-Intrus MixedBC-16 141 159 18 288 795,441 607,498 0.611 0.065 -9.000 Benguet Core Pre-Intrus SulfideBC-17 0 15 15 499 795,259 607,513 0.600 0.470 -9.000 Benguet Core Host OxideBC-17 18 69 51 466 795,245 607,506 0.621 0.488 -9.000 Benguet Core Pre-Intrus OxideBC-17 120 135 15 389 795,214 607,491 0.715 0.078 -9.000 Benguet Core Pre-Intrus SulfideBC-17 147 171 24 361 795,203 607,485 0.526 0.056 -9.000 Benguet Core Pre-Intrus SulfideBC-17 183 210 27 326 795,189 607,478 0.711 0.156 -9.000 Benguet Core Pre-Intrus MixedBC-17 234 252 18 284 795,172 607,470 1.061 0.078 -9.000 Benguet Core Pre-Intrus SulfideBC-18 54 75 21 388 795,328 607,518 0.598 0.055 -9.000 Benguet Core Host SulfideBC-18 192 219 27 255 795,285 607,497 0.605 0.090 -9.000 Benguet Core Breccia SulfideBC-19 219 234 15 254 795,417 607,583 0.595 0.059 -9.000 Benguet Core Pre-Intrus SulfideBC-2 123 147 24 264 795,532 606,725 0.252 0.041 0.777 Benguet Core Pre-Intrus SulfideBC-2 150 174 24 239 795,525 606,721 0.222 0.033 0.984 Benguet Core Pre-Intrus SulfideBC-2 186 231 45 194 795,513 606,715 0.366 0.027 0.937 Benguet Core Pre-Intrus SulfideBC-2 243 258 15 154 795,502 606,710 0.335 0.046 0.777 Benguet Core Pre-Intrus SulfideBC-20 15 42 27 167 795,288 607,451 0.587 0.486 -9.000 Benguet Core Pre-Intrus OxideBC-20 57 84 27 128 795,283 607,438 0.638 0.547 -9.000 Benguet Core Pre-Intrus OxideBC-20 99 144 45 80 795,276 607,422 0.601 0.165 -9.000 Benguet Core Pre-Intrus SulfideBC-21 66 81 15 425 795,249 607,554 0.611 0.302 -9.000 Benguet Core Host OxideBC-21 84 108 24 404 795,242 607,551 0.694 0.082 -9.000 Benguet Core Host SulfideBC-21 111 126 15 383 795,235 607,547 0.623 0.126 -9.000 Benguet Core Host SulfideBC-23 0 84 84 449 795,310 607,427 0.875 0.743 -9.000 Benguet Core Pre-Intrus OxideBC-23 87 102 15 399 795,294 607,419 0.664 0.620 -9.000 Benguet Core Pre-Intrus OxideBC-3 3 18 15 478 795,510 606,867 0.272 0.190 0.909 Benguet Core Host OxideBC-3 66 87 21 416 795,489 606,857 0.122 0.050 0.588 Benguet Core Host MixedBC-7 30 57 27 303 795,491 607,119 0.203 0.051 1.201 Benguet Core Pre-Intrus MixedBC-7 60 87 27 275 795,481 607,119 0.202 0.038 1.167 Benguet Core Pre-Intrus SulfideBN-12 84 99 15 388 795,321 607,556 0.432 0.036 -9.000 Benguet Core Host SulfideBN-14 48 66 18 543 795,037 607,662 0.945 0.117 -9.000 Benguet Core Host SulfideBN-14 189 210 21 400 795,037 607,662 0.547 0.023 -9.000 Benguet Core Host SulfideBN-16 42 57 15 590 795,215 607,824 0.824 0.364 -9.000 Benguet Core Pre-Intrus OxideBN-16 69 84 15 563 795,215 607,824 0.924 0.064 -9.000 Benguet Core Pre-Intrus SulfideBN-16 90 240 150 474 795,215 607,824 0.782 0.047 -9.000 Benguet Core Pre-Intrus SulfideBN-16 243 258 15 389 795,215 607,824 0.662 0.050 -9.000 Benguet Core Pre-Intrus SulfideBN-17 57 75 18 536 795,023 607,508 0.563 0.352 -9.000 Benguet Core Host OxideBN-18 6 51 45 426 795,373 607,473 0.823 0.618 0.349 Benguet Core Pre-Intrus OxideBN-18 54 99 45 378 795,373 607,473 0.652 0.123 0.308 Benguet Core Breccia SulfideBN-18 111 171 60 314 795,373 607,473 0.873 0.061 0.591 Benguet Core Pre-Intrus SulfideBN-18 174 252 78 242 795,373 607,473 0.854 0.088 0.841 Benguet Core Breccia SulfideBN-18 264 342 78 152 795,373 607,473 0.657 0.079 1.622 Benguet Core Pre-Intrus SulfideBN-18A 0 30 30 442 795,375 607,461 0.491 0.335 -9.000 Benguet Core Post Intrus OxideBN-18A 33 51 18 422 795,385 607,447 0.540 0.338 -9.000 Benguet Core Host OxideBN-19 48 213 165 503 795,063 607,422 0.765 0.606 1.052 Benguet Core Host OxideBN-19 216 246 30 426 795,000 607,405 0.322 0.060 1.194 Benguet Core Host SulfideBN-19 264 302 38 386 794,968 607,397 0.231 0.018 1.520 Benguet Core Host SulfideBN-19A 15 69 54 575 795,118 607,436 0.842 0.766 -9.000 Benguet Core Host Oxide





HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeBN-19A 72 93 21 544 795,094 607,426 0.576 0.434 -9.000 Benguet Core Host OxideBN-20 72 93 21 436 795,681 606,964 0.504 0.081 1.054 Benguet Core Pre-Intrus SulfideBN-20A 81 108 27 432 795,656 606,956 0.503 0.387 -9.000 Benguet Core Pre-Intrus OxideBN-21 48 66 18 501 795,201 607,579 0.570 0.425 -9.000 Benguet Core Host OxideBN-21 78 108 30 465 795,201 607,579 0.655 0.558 -9.000 Benguet Core Host OxideBN-22 204 240 36 392 795,118 607,544 0.535 0.069 -9.000 Benguet Core Host SulfideBN-23 0 18 18 495 795,312 607,368 0.507 0.355 -9.000 Benguet Core Pre-Intrus OxideBN-23B 30 48 18 468 795,327 607,345 0.510 0.427 -9.000 Benguet Core Pre-Intrus OxideBN-24 189 234 45 342 795,338 607,750 0.645 0.026 -9.000 Benguet Core Host SulfideBN-25 0 30 30 534 795,202 607,342 0.769 0.732 -9.000 Benguet Core Host OxideBN-25 39 57 18 501 795,202 607,342 0.572 0.522 -9.000 Benguet Core Host OxideBN-25 66 81 15 475 795,202 607,342 0.542 0.518 -9.000 Benguet Core Host OxideBN-25 87 114 27 448 795,202 607,342 0.456 0.416 -9.000 Benguet Core Host OxideBN-25 117 138 21 421 795,202 607,342 0.744 0.250 -9.000 Benguet Core Host MixedBN-25B 0 30 30 543 795,205 607,339 0.605 0.501 -9.000 Benguet Core Host OxideBN-25B 96 126 30 470 795,225 607,281 0.810 0.712 -9.000 Benguet Core Pre-Intrus OxideBN-25B 138 165 27 439 795,234 607,256 0.536 0.461 -9.000 Benguet Core Host OxideBN-28A 0 36 36 552 795,201 607,385 0.747 0.665 -9.000 Benguet Core Host OxideBN-29 186 201 15 272 795,785 606,893 0.370 0.054 1.259 Benguet Core Pre-Intrus SulfideBN-29 204 231 27 248 795,785 606,893 0.242 0.019 1.176 Benguet Core Pre-Intrus SulfideBN-29 321 348 27 131 795,785 606,893 0.196 0.014 0.679 Benguet Core Pre-Intrus SulfideBN-30 6 21 15 291 795,621 606,645 0.732 0.400 1.668 Benguet Core Pre-Intrus OxideBN-30 36 69 33 252 795,621 606,645 0.446 0.032 1.242 Benguet Core Pre-Intrus SulfideBN-30 72 156 84 190 795,621 606,645 0.439 0.062 1.664 Benguet Core Pre-Intrus SulfideBN-30 159 174 15 138 795,621 606,645 0.186 0.028 0.672 Benguet Core Pre-Intrus SulfideBN-30 177 195 18 118 795,621 606,645 0.143 0.022 0.804 Benguet Core Pre-Intrus SulfideBN-30B 12 27 15 290 795,629 606,661 0.422 0.106 0.851 Benguet Core Pre-Intrus SulfideBN-30B 45 93 48 252 795,642 606,689 0.727 0.041 1.283 Benguet Core Pre-Intrus SulfideBN-4 18 36 18 628 795,443 607,962 0.545 0.322 0.311 Benguet Core Host OxideBN-7 87 102 15 649 795,296 608,059 1.240 0.292 0.045 Benguet Core Host MixedNH-3 117 135 18 292 794,589 607,992 0.550 0.033 -9.000 Benguet Core Pre-Intrus SulfideNH-3 279 297 18 130 794,589 607,992 0.723 0.029 -9.000 Benguet Core Breccia SulfidePQ-1 3 21 18 637 795,173 607,847 0.703 0.678 -9.000 Benguet Core Pre-Intrus OxidePQ-1 27 75 48 598 795,173 607,847 0.762 0.281 -9.000 Benguet Core Pre-Intrus MixedPQ-1 147 174 27 489 795,173 607,847 0.636 -9.000 -9.000 Benguet Core Pre-Intrus oxsulf?PQ-1 180 198 18 460 795,173 607,847 0.548 -9.000 -9.000 Benguet Core Pre-Intrus oxsulf?PQ-3 75 180 105 525 795,028 608,175 0.864 0.269 -9.000 Benguet Core Pre-Intrus SulfidePQ-4 306 321 15 428 795,341 608,106 0.480 0.052 -9.000 Benguet Core Pre-Intrus SulfidePQ-5 99 117 18 575 795,217 608,205 0.573 0.235 -9.000 Benguet Core Breccia SulfidePQ-5 258 276 18 416 795,217 608,205 0.588 0.020 -9.000 Benguet Core Pre-Intrus SulfideM15-11R 0 21.5 21.5 611 795,260 607,803 0.919 0.853 -9.000 Benguet RC Pre-Intrus OxideM15-11R 74.5 92.5 18 538 795,260 607,803 0.994 0.248 -9.000 Benguet RC Pre-Intrus MixedM25-3R 153.5 177.5 24 582 795,262 608,129 0.952 0.843 -9.000 Benguet RC Host OxideM25-3R 186.5 212.5 26 548 795,262 608,129 1.113 0.447 -9.000 Benguet RC Host SulfideM25-3R 213.5 228.5 15 526 795,262 608,129 0.849 0.097 -9.000 Benguet RC Host SulfideM27-10R 0 30.5 30.5 548 795,224 607,394 1.109 0.859 -9.000 Benguet RC Host OxideM27-10R 31.5 64.5 33 515 795,224 607,394 0.753 0.722 -9.000 Benguet RC Host OxideM27-10R 65.5 84.5 19 488 795,224 607,394 0.594 0.543 -9.000 Benguet RC Host OxideM39-4R 147.5 162.5 15 558 795,348 607,998 0.562 0.137 -9.000 Benguet RC Host SulfideM50-12R 104.5 173.5 69 516 795,074 608,171 1.845 0.244 -9.000 Benguet RC Pre-Intrus SulfideM52-7R 0.5 73.5 73 604 794,918 608,120 1.417 1.285 -9.000 Benguet RC Pre-Intrus OxidePQ1-8R 27.6 53.6 26 609 795,172 607,846 0.988 0.346 -9.000 Benguet RC Pre-Intrus SulfidePQ3-13R 98.5 115 16.5 546 795,029 608,173 0.743 0.512 -9.000 Benguet RC Pre-Intrus OxideEB-100 282 297 15 120 795,664 606,737 0.496 0.173 0.447 EchoBay Core Host MixedEB-100 345 378 33 59 795,627 606,726 0.376 0.103 1.269 EchoBay Core Pre-Intrus MixedEB-100 381 402 21 34 795,611 606,722 0.200 0.044 0.692 EchoBay Core Pre-Intrus MixedEB-100 423 438 15 2 795,590 606,716 0.110 0.018 0.557 EchoBay Core Pre-Intrus SulfideEB-101 39 63 24 545 795,147 607,651 1.712 0.869 0.362 EchoBay Core Host OxideEB-102 21 51 30 337 795,629 607,215 0.375 0.053 0.557 EchoBay Core Host SulfideEB-102 69 87 18 298 795,615 607,208 0.182 0.039 0.691 EchoBay Core Pre-Intrus Sulfide





HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeEB-103 171 189 18 369 795,686 606,922 0.530 0.155 1.066 EchoBay Core Pre-Intrus MixedEB-103 210 228 18 339 795,665 606,912 0.364 0.077 0.833 EchoBay Core Pre-Intrus MixedEB-104 0 42 42 345 795,507 607,185 0.281 0.179 0.891 EchoBay Core Pre-Intrus OxideEB-105 21 69 48 551 795,178 607,709 0.820 0.378 0.195 EchoBay Core Host OxideEB-107 474 489 15 -116 795,688 606,564 0.337 0.061 0.954 EchoBay Core Pre-Intrus SulfideEB-109 33 60 27 520 795,190 607,604 0.604 0.525 0.100 EchoBay Core Host OxideEB-109 102 123 21 458 795,169 607,594 0.534 0.395 0.083 EchoBay Core Host OxideEB-11 66 124 58 535 794,892 608,059 0.723 0.668 0.725 EchoBay Core Host OxideEB-11 126 170 44 485 794,877 608,052 0.590 0.479 0.135 EchoBay Core Host OxideEB-11 172 190 18 454 794,868 608,048 0.655 0.074 0.207 EchoBay Core Host SulfideEB-110 135 165 30 509 795,056 608,153 0.637 0.383 0.143 EchoBay Core Pre-Intrus OxideEB-110 177 225 48 460 795,041 608,147 0.597 0.090 1.655 EchoBay Core Pre-Intrus SulfideEB-112 30 138 108 472 795,189 607,473 0.564 0.487 0.505 EchoBay Core Pre-Intrus OxideEB-112 144 207 63 387 795,161 607,459 0.510 0.180 1.696 EchoBay Core Host SulfideEB-112 210 261 51 330 795,142 607,451 0.320 0.045 1.573 EchoBay Core Host SulfideEB-114 21 69 48 517 795,188 607,472 0.929 0.850 0.432 EchoBay Core Pre-Intrus OxideEB-114 90 189 99 445 795,133 607,446 0.538 0.416 1.392 EchoBay Core Host OxideEB-115 432 474 42 228 795,337 607,930 0.308 0.049 0.719 EchoBay Core Pre-Intrus MixedEB-115 477 492 15 199 795,328 607,924 0.164 0.022 0.765 EchoBay Core Pre-Intrus SulfideEB-116 189 291 102 522 795,003 608,131 1.187 0.398 1.431 EchoBay Core Pre-Intrus OxideEB-116 375 393 18 413 794,916 608,094 0.407 0.070 0.708 EchoBay Core Pre-Intrus SulfideEB-118 0 15 15 623 794,919 608,064 1.144 1.122 2.232 EchoBay Core Ovburden OxideEB-118 51 81 30 578 794,885 608,048 0.989 0.943 0.572 EchoBay Core Pre-Intrus OxideEB-118 108 132 24 537 794,854 608,033 0.571 0.383 0.477 EchoBay Core Host OxideEB-118 135 255 120 480 794,810 608,012 0.657 0.128 1.008 EchoBay Core Host SulfideEB-119 9 30 21 538 795,193 607,535 0.625 0.487 0.135 EchoBay Core Host OxideEB-119 48 99 51 487 795,176 607,529 0.598 0.513 0.247 EchoBay Core Host OxideEB-119 108 132 24 443 795,161 607,524 0.571 0.383 0.477 EchoBay Core Pre-Intrus OxideEB-119 135 303 168 349 795,131 607,513 0.708 0.121 1.214 EchoBay Core Host SulfideEB-12 44 60 16 498 795,306 607,733 1.210 0.563 0.166 EchoBay Core Host OxideEB-12 147 177 30 395 795,272 607,717 0.658 0.063 0.465 EchoBay Core Host SulfideEB-12 270 297 27 280 795,236 607,700 0.586 0.052 0.635 EchoBay Core Host SulfideEB-121 33 54 21 634 794,990 608,116 0.845 0.779 1.335 EchoBay Core Pre-Intrus OxideEB-121 72 171 99 561 794,967 608,102 1.395 0.911 1.346 EchoBay Core Pre-Intrus OxideEB-122 234 249 15 451 795,543 608,085 0.686 0.028 0.040 EchoBay Core Pre-Intrus SulfideEB-122 441 465 24 250 795,487 608,049 0.640 0.031 0.341 EchoBay Core Host SulfideEB-122 474 504 30 216 795,478 608,044 0.733 0.036 0.928 EchoBay Core Host SulfideEB-123 225 267 42 182 795,664 606,702 0.401 0.111 0.662 EchoBay Core Pre-Intrus MixedEB-123 270 333 63 139 795,631 606,687 0.324 0.059 1.225 EchoBay Core Pre-Intrus SulfideEB-123 336 387 51 94 795,596 606,670 0.234 0.052 0.905 EchoBay Core Pre-Intrus MixedEB-124 33 75 42 515 795,168 607,522 0.616 0.530 0.449 EchoBay Core Host OxideEB-124 78 195 117 453 795,120 607,496 0.836 0.583 1.155 EchoBay Core Host OxideEB-125 84 129 45 536 794,875 608,086 0.458 0.375 0.945 EchoBay Core Pre-Intrus OxideEB-125 135 153 18 504 794,857 608,092 0.635 0.573 0.165 EchoBay Core Pre-Intrus OxideEB-13 414 429 15 246 795,211 607,789 0.316 0.028 0.686 EchoBay Core Pre-Intrus SulfideEB-14 0 28 28 565 794,930 608,232 1.779 0.527 0.213 EchoBay Core Host MixedEB-15 146 161 15 586 795,179 608,130 0.550 0.310 0.378 EchoBay Core Host OxideEB-17 330 345 15 327 795,309 607,862 0.464 0.037 0.561 EchoBay Core Pre-Intrus SulfideEB-17 363 381 18 295 795,300 607,857 0.517 0.020 0.608 EchoBay Core Pre-Intrus SulfideEB-17 399 456 57 242 795,285 607,849 0.377 0.043 0.947 EchoBay Core Pre-Intrus SulfideEB-18 0 18 18 485 795,329 607,353 0.459 0.411 1.866 EchoBay Core Pre-Intrus OxideEB-18 22 68 46 451 795,319 607,348 0.329 0.295 1.095 EchoBay Core Pre-Intrus OxideEB-18 70 92 22 416 795,310 607,343 0.241 0.061 1.078 EchoBay Core Pre-Intrus SulfideEB-18 104 156 52 369 795,298 607,335 0.119 0.033 0.975 EchoBay Core Pre-Intrus MixedEB-18 228 244 16 268 795,271 607,320 0.249 0.064 0.782 EchoBay Core Host MixedEB-20 74 94 20 562 795,134 607,784 0.563 0.472 0.291 EchoBay Core Host OxideEB-21 82 98 16 447 795,098 608,269 1.717 0.205 0.954 EchoBay Core Host SulfideEB-21 134 216 82 367 795,109 608,242 0.720 0.114 1.146 EchoBay Core Pre-Intrus SulfideEB-21 224 270 46 299 795,118 608,220 0.664 0.063 1.273 EchoBay Core Host SulfideEB-21 272 334 62 246 795,125 608,204 0.474 0.091 1.363 EchoBay Core Pre-Intrus Sulfide





HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeEB-22 309 324 15 130 795,312 607,533 0.331 0.068 0.665 EchoBay Core Pre-Intrus MixedEB-23 87 102 15 572 795,171 607,930 0.638 0.446 0.151 EchoBay Core Host OxideEB-24 159 186 27 322 794,844 608,308 0.496 0.102 0.270 EchoBay Core Pre-Intrus MixedEB-24 210 228 18 278 794,830 608,301 0.524 0.067 0.263 EchoBay Core Post Intrus SulfideEB-24 270 294.6 24.6 218 794,811 608,292 0.521 0.072 0.268 EchoBay Core Pre-Intrus SulfideEB-26 0 15 15 373 795,530 607,427 0.614 0.586 0.749 EchoBay Core Ovburden OxideEB-26 90 111 21 286 795,501 607,414 0.319 0.068 0.756 EchoBay Core Pre-Intrus SulfideEB-27 264 291 27 482 795,323 608,068 0.711 0.069 0.467 EchoBay Core Host SulfideEB-28 24 72 48 448 795,309 607,444 0.517 0.460 0.386 EchoBay Core Pre-Intrus OxideEB-28 75 174 99 374 795,289 607,434 0.512 0.192 0.739 EchoBay Core Host MixedEB-28 216 240 24 276 795,261 607,420 0.293 0.050 0.778 EchoBay Core Host SulfideEB-32 279 351 72 384 795,222 608,157 0.782 0.196 0.814 EchoBay Core Pre-Intrus MixedEB-32 363 378 15 331 795,208 608,149 0.413 0.041 0.706 EchoBay Core Pre-Intrus SulfideEB-33 243 270 27 310 795,014 608,195 0.264 0.047 0.603 EchoBay Core Pre-Intrus SulfideEB-34 348 384 36 395 795,413 608,117 0.722 0.154 0.193 EchoBay Core Host MixedEB-34 483 498 15 277 795,378 608,097 0.436 0.083 0.630 EchoBay Core Pre-Intrus SulfideEB-35 0 27 27 356 795,537 607,299 0.417 0.359 0.843 EchoBay Core Pre-Intrus OxideEB-35 30 57 27 328 795,527 607,294 0.264 0.049 1.081 EchoBay Core Host SulfideEB-35 66 81 15 300 795,518 607,290 0.159 0.030 0.626 EchoBay Core Host SulfideEB-37 153 213.7 60.7 147 795,617 606,540 0.606 0.144 1.137 EchoBay Core Pre-Intrus MixedEB-39 276 324 48 366 795,104 608,196 1.028 0.137 1.812 EchoBay Core Breccia SulfideEB-39 357 390 33 297 795,082 608,186 0.352 0.041 0.958 EchoBay Core Breccia SulfideEB-39 393 420 27 266 795,071 608,181 0.257 0.048 0.578 EchoBay Core Host SulfideEB-40 90 108 18 660 795,299 608,073 0.499 0.379 0.205 EchoBay Core Host OxideEB-40 111 126 15 642 795,293 608,070 0.856 0.562 0.115 EchoBay Core Host OxideEB-40 132 156 24 618 795,285 608,067 0.658 0.286 0.089 EchoBay Core Host OxideEB-40 174 210 36 573 795,270 608,060 0.928 0.424 0.348 EchoBay Core Host OxideEB-41 0 36 36 363 795,503 607,251 0.266 0.230 0.924 EchoBay Core Pre-Intrus OxideEB-42 15 30 15 452 795,530 607,760 0.642 0.206 0.102 EchoBay Core Host MixedEB-43 0 21 21 445 795,356 607,448 0.375 0.319 0.479 EchoBay Core Pre-Intrus OxideEB-43 27 186 159 354 795,327 607,434 0.578 0.219 0.694 EchoBay Core Breccia MixedEB-43 189 237 48 253 795,297 607,419 0.466 0.121 1.345 EchoBay Core Pre-Intrus MixedEB-43 240 291 51 203 795,283 607,411 0.287 0.089 0.775 EchoBay Core Pre-Intrus MixedEB-44 102 123 21 448 795,048 608,404 0.863 0.062 0.068 EchoBay Core Host SulfideEB-47 39 84 45 591 795,222 608,249 0.679 0.608 0.274 EchoBay Core Pre-Intrus OxideEB-47 99 114 15 549 795,236 608,255 0.544 0.051 0.139 EchoBay Core Host SulfideEB-49 0 21 21 326 795,441 607,039 0.278 0.241 0.849 EchoBay Core Ovburden OxideEB-49 45 81 36 276 795,424 607,032 0.269 0.076 0.676 EchoBay Core Host MixedEB-5 21 39 18 460 795,286 607,634 0.790 0.589 0.067 EchoBay Core Host OxideEB-5 363 381 18 134 795,197 607,587 0.387 0.064 0.651 EchoBay Core Breccia SulfideEB-5 391 407 16 108 795,191 607,583 0.396 0.086 0.871 EchoBay Core Host SulfideEB-52 57 96 39 463 795,179 608,318 0.796 0.161 0.366 EchoBay Core Host MixedEB-53 0 129 129 272 795,595 606,663 0.729 0.424 2.204 EchoBay Core Pre-Intrus MixedEB-53 132 171 39 190 795,568 606,650 0.373 0.151 0.792 EchoBay Core Pre-Intrus OxideEB-54 12 39 27 376 795,474 607,395 0.211 0.171 0.599 EchoBay Core Pre-Intrus OxideEB-54 51 78 27 339 795,462 607,390 0.318 0.090 0.586 EchoBay Core Pre-Intrus OxideEB-54 117 138 21 280 795,444 607,381 0.139 0.039 0.730 EchoBay Core Pre-Intrus SulfideEB-55 105 123 18 535 795,203 608,240 0.609 0.235 0.338 EchoBay Core Pre-Intrus OxideEB-55 222 237 15 419 795,203 608,237 0.599 0.136 0.161 EchoBay Core Breccia MixedEB-55 321 351 30 313 795,203 608,233 0.551 0.058 0.627 EchoBay Core Pre-Intrus SulfideEB-56 210 225 15 220 795,513 606,978 0.281 0.020 2.498 EchoBay Core Host SulfideEB-59 327 342 15 399 795,231 607,922 0.438 0.034 0.398 EchoBay Core Pre-Intrus SulfideEB-59 390 423 33 331 795,211 607,911 0.504 0.032 0.761 EchoBay Core Pre-Intrus SulfideEB-59 435 456 21 293 795,200 607,905 0.391 0.073 0.724 EchoBay Core Pre-Intrus SulfideEB-59 486 507 21 245 795,187 607,898 0.162 0.022 0.564 EchoBay Core Pre-Intrus SulfideEB-6 238 254 16 334 795,339 607,735 0.559 0.039 0.368 EchoBay Core Host SulfideEB-6 284 304 20 288 795,326 607,728 0.533 0.037 0.346 EchoBay Core Host SulfideEB-6 340 376 36 227 795,308 607,720 0.569 0.051 0.415 EchoBay Core Host SulfideEB-60 177 195 18 360 795,111 608,309 0.592 0.114 0.529 EchoBay Core Host MixedEB-60 324 342 18 220 795,072 608,287 0.462 0.068 0.770 EchoBay Core Pre-Intrus Sulfide





HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeEB-60 405 447 42 132 795,048 608,265 0.353 0.025 0.988 EchoBay Core Host SulfideEB-63 0 198 198 233 795,615 606,669 0.624 0.263 2.267 EchoBay Core Pre-Intrus MixedEB-64 21 39 18 677 795,262 608,050 0.810 0.327 0.063 EchoBay Core Host OxideEB-65 186 204 18 467 795,541 607,976 2.053 0.117 0.164 EchoBay Core Pre-Intrus SulfideEB-66 231 246 15 237 795,556 606,869 0.273 0.036 0.822 EchoBay Core Host SulfideEB-66 381 417 36 107 795,541 606,776 0.171 0.036 0.632 EchoBay Core Host SulfideEB-68 0 27 27 387 795,351 607,110 0.189 0.178 0.963 EchoBay Core Host OxideEB-68 33 51 18 360 795,343 607,106 0.093 0.054 1.004 EchoBay Core Breccia oxsulf?EB-68 117 177 60 260 795,313 607,092 0.321 0.052 1.172 EchoBay Core Host SulfideEB-69 234 252 18 72 795,577 606,475 0.271 0.069 0.580 EchoBay Core Pre-Intrus MixedEB-69 315 330 15 -4 795,557 606,467 0.320 0.087 0.475 EchoBay Core Host MixedEB-7 0 32 32 637 795,006 608,175 0.636 0.603 0.151 EchoBay Core Pre-Intrus OxideEB-7 34 146 112 568 794,984 608,163 2.714 1.060 1.462 EchoBay Core Pre-Intrus OxideEB-7 158 204 46 482 794,957 608,150 0.534 0.080 0.831 EchoBay Core Pre-Intrus SulfideEB-7 212 248 36 436 794,942 608,143 0.318 0.035 0.727 EchoBay Core Pre-Intrus SulfideEB-70 309 327 18 251 795,174 608,349 0.419 0.033 0.492 EchoBay Core Host SulfideEB-71 84 147 63 296 795,496 606,694 0.382 0.152 0.892 EchoBay Core Pre-Intrus OxideEB-75 0 72 72 364 795,355 607,112 0.210 0.185 2.243 EchoBay Core Pre-Intrus OxideEB-77 192 213 21 183 795,561 606,727 0.232 0.057 0.973 EchoBay Core Pre-Intrus MixedEB-77 225 246 21 150 795,561 606,727 0.279 0.035 1.621 EchoBay Core Pre-Intrus SulfideEB-77 249 321 72 100 795,561 606,727 0.270 0.029 1.286 EchoBay Core Pre-Intrus SulfideEB-78 0 63 63 398 795,637 607,070 0.262 0.235 0.876 EchoBay Core Pre-Intrus OxideEB-8 120 140 20 556 795,011 608,061 0.702 0.599 0.125 EchoBay Core Pre-Intrus OxideEB-80 144 180 36 103 795,546 606,405 0.560 0.154 1.484 EchoBay Core Pre-Intrus MixedEB-81 258 273 15 452 795,314 608,204 0.578 0.058 0.337 EchoBay Core Host SulfideEB-83 0 36 36 456 795,391 607,352 0.141 0.122 0.800 EchoBay Core Pre-Intrus OxideEB-83 84 108 24 379 795,379 607,346 0.116 0.039 0.669 EchoBay Core Pre-Intrus oxsulf?EB-83 111 126 15 357 795,376 607,345 0.195 0.036 0.870 EchoBay Core Pre-Intrus SulfideEB-84 0 15 15 488 795,325 607,359 0.438 0.415 1.556 EchoBay Core Pre-Intrus OxideEB-84 21 51 30 466 795,314 607,345 0.409 0.388 1.334 EchoBay Core Pre-Intrus OxideEB-84 66 159 93 404 795,285 607,312 0.179 0.109 1.454 EchoBay Core Pre-Intrus OxideEB-84 162 204 42 346 795,259 607,281 0.295 0.056 1.076 EchoBay Core Host SulfideEB-84 210 258 48 304 795,240 607,259 0.250 0.063 0.842 EchoBay Core Host MixedEB-86 0 21 21 420 795,644 607,069 0.402 0.316 1.143 EchoBay Core Host OxideEB-86 24 72 48 391 795,635 607,046 0.351 0.325 1.811 EchoBay Core Pre-Intrus OxideEB-86 384 411 27 112 795,570 606,846 0.157 0.051 1.078 EchoBay Core Pre-Intrus MixedEB-86 432 456 24 75 795,560 606,819 0.151 0.030 0.673 EchoBay Core Pre-Intrus MixedEB-87 0 51 51 403 795,433 607,235 0.190 0.164 2.292 EchoBay Core Pre-Intrus OxideEB-88 36 57 21 658 795,392 608,011 0.556 0.467 0.477 EchoBay Core Pre-Intrus OxideEB-88 66 84 18 631 795,383 608,007 0.466 0.384 0.544 EchoBay Core Post Intrus OxideEB-88 126 156 30 569 795,363 607,997 0.852 0.468 0.204 EchoBay Core Host OxideEB-88 174 195 21 528 795,350 607,991 0.589 0.048 0.151 EchoBay Core Host SulfideEB-88 198 252 54 489 795,338 607,986 0.671 0.101 0.466 EchoBay Core Host SulfideEB-88 255 324 69 429 795,318 607,978 0.957 0.116 1.357 EchoBay Core Host SulfideEB-88 456 510 54 245 795,262 607,957 0.289 0.043 0.859 EchoBay Core Pre-Intrus SulfideEB-89 246 279 33 361 794,577 608,512 0.545 0.045 0.261 EchoBay Core Pre-Intrus SulfideEB-89 288 306 18 326 794,577 608,511 0.586 0.036 0.213 EchoBay Core Pre-Intrus SulfideEB-89 312 336 24 299 794,577 608,510 0.789 0.057 0.281 EchoBay Core Host SulfideEB-9 36 80 44 585 795,246 607,829 1.421 0.571 0.351 EchoBay Core Pre-Intrus OxideEB-9 108 196 88 496 795,219 607,816 0.689 0.061 0.438 EchoBay Core Pre-Intrus SulfideEB-90 231 267 36 105 795,648 606,587 0.411 0.095 1.029 EchoBay Core Host MixedEB-90 270 288 18 77 795,639 606,583 0.265 0.079 0.854 EchoBay Core Pre-Intrus MixedEB-92 348 363 15 354 795,403 608,027 0.660 0.059 0.307 EchoBay Core Pre-Intrus SulfideEB-92 441 456 15 267 795,375 608,013 0.367 0.026 0.494 EchoBay Core Pre-Intrus SulfideEB-92 459 480 21 247 795,368 608,009 0.437 0.038 0.714 EchoBay Core Pre-Intrus SulfideEB-92 504 528 24 203 795,354 608,002 0.234 0.017 0.625 EchoBay Core Pre-Intrus SulfideEB-93 0 36 36 452 795,353 607,231 0.284 0.235 0.752 EchoBay Core Pre-Intrus OxideEB-93 51 69 18 412 795,341 607,226 0.154 0.155 1.054 EchoBay Core Pre-Intrus OxideEB-93 72 159 87 360 795,324 607,221 0.179 0.107 1.750 EchoBay Core Pre-Intrus OxideEB-95 0 39 39 476 795,298 607,444 0.826 0.754 0.348 EchoBay Core Breccia Oxide





HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeEB-95 51 87 36 438 795,269 607,431 0.573 0.493 0.369 EchoBay Core Breccia OxideEB-95 102 174 72 385 795,229 607,413 0.384 0.235 1.031 EchoBay Core Host OxideEB-95 186 222 36 332 795,192 607,398 0.105 0.058 0.854 EchoBay Core Host OxideEB-96 33 51 18 347 795,575 607,101 0.183 0.110 0.663 EchoBay Core Pre-Intrus OxideEB-97 33 54 21 383 795,630 607,379 0.755 0.279 0.179 EchoBay Core Host MixedEB-98 0 45 45 340 795,512 607,188 0.234 0.145 1.178 EchoBay Core Pre-Intrus OxideEB-98 63 90 27 290 795,496 607,180 0.253 0.023 2.168 EchoBay Core Pre-Intrus SulfideEB-99 0 120 120 423 795,323 607,217 0.323 0.302 1.625 EchoBay Core Breccia OxideEB-99 141 171 30 350 795,268 607,191 0.419 0.172 1.134 EchoBay Core Host OxideEB-99 174 192 18 329 795,252 607,184 0.462 0.127 0.599 EchoBay Core Host MixedEB-99 198 216 18 311 795,238 607,177 0.195 0.049 0.675 EchoBay Core Host MixedEB-99 225 246 21 289 795,221 607,169 0.402 0.078 0.751 EchoBay Core Host MixedDDH-10 9 36 27 642 795,256 608,241 0.554 0.386 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-10 45 63 18 611 795,256 608,241 0.503 0.443 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-10 87 108 21 567 795,256 608,241 0.779 0.664 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-10 114 138 24 539 795,256 608,241 0.764 0.045 -9.000 Mitsubishi Core Host SulfideDDH-11 45 66 21 524 795,159 607,385 0.547 0.414 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-11 69 84.7 15.7 503 795,159 607,385 0.641 0.482 -9.000 Mitsubishi Core Host OxideDDH-12A 96 114.8 18.8 610 795,266 607,993 0.735 0.026 -9.000 Mitsubishi Core Host SulfideDDH-15 3 33 30 604 795,266 607,802 0.908 0.808 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-15 39 84 45 561 795,266 607,802 1.291 0.393 -9.000 Mitsubishi Core Pre-Intrus MixedDDH-20 15 33 18 312 795,468 607,083 0.470 0.027 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-21 21 36 15 459 795,300 607,636 0.698 0.266 -9.000 Mitsubishi Core Host OxideDDH-22 0 129 129 582 794,945 608,166 2.292 1.218 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-22 156 174 18 482 794,945 608,166 0.620 0.038 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-23 24 39 15 639 795,286 608,229 0.698 0.372 -9.000 Mitsubishi Core Host OxideDDH-25 195 276 81 512 795,262 608,131 0.766 0.064 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-27 3 33 30 548 795,227 607,391 0.688 0.607 -9.000 Mitsubishi Core Host OxideDDH-27 54 93 39 493 795,227 607,391 0.838 0.615 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-28 177 192 15 459 795,123 608,188 0.776 0.114 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-28 210 240 30 419 795,123 608,188 0.757 0.065 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-28 243 258 15 393 795,123 608,188 0.888 0.042 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-29 294 345 51 371 795,254 607,906 0.668 0.065 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-3 60 78 18 488 795,059 607,795 0.588 0.037 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-3 84 123 39 453 795,059 607,795 0.588 0.028 -9.000 Mitsubishi Core Host SulfideDDH-30 51 102 51 614 795,053 608,109 0.811 0.788 -9.000 Mitsubishi Core Host OxideDDH-30 171 189 18 511 795,053 608,109 0.510 0.482 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-30 231 249 18 451 795,053 608,109 0.605 0.097 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-31B 231 246 15 524 795,337 608,117 0.682 0.028 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-31B 309 342 33 437 795,337 608,117 0.680 0.119 -9.000 Mitsubishi Core Pre-Intrus MixedDDH-33 0 18 18 592 794,925 608,024 1.022 0.920 -9.000 Mitsubishi Core Host OxideDDH-36 27 42 15 633 795,200 607,994 0.470 0.396 -9.000 Mitsubishi Core Host OxideDDH-37 144 159 15 525 795,222 608,212 0.722 0.260 -9.000 Mitsubishi Core Pre-Intrus MixedDDH-37 249 270 21 417 795,222 608,212 0.836 0.184 -9.000 Mitsubishi Core Host MixedDDH-38 0 15 15 649 794,957 608,094 0.986 0.980 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-38 27 51 24 617 794,957 608,094 1.532 1.510 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-38 54 75 21 592 794,957 608,094 1.837 1.667 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-39 162 180 18 542 795,350 608,000 0.570 0.050 -9.000 Mitsubishi Core Host SulfideDDH-39 195 225 30 503 795,350 608,000 0.747 0.040 -9.000 Mitsubishi Core Host SulfideDDH-39 270 291 21 433 795,350 608,000 0.804 0.054 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-4 0 150.4 150.4 569 794,938 608,147 2.348 1.468 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-40 126 156 30 501 795,155 607,796 0.957 0.130 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-41 87 102 15 498 794,867 608,093 0.670 0.586 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-42 0 108 108 598 794,938 608,174 1.776 1.359 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-47 0 84 84 607 794,923 608,157 1.627 1.440 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-48 63 78 15 539 795,219 607,768 1.290 0.218 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-48 96 117 21 503 795,219 607,768 0.694 0.080 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-48 234 252 18 366 795,219 607,768 0.555 0.028 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-49 36 57 21 606 795,037 608,194 0.776 0.713 -9.000 Mitsubishi Core Pre-Intrus Oxide





HoleId From To Length Elev North East Tot Cu Sol Cu Gold Company Type Lithology OretypeDDH-49 66 183 117 530 795,037 608,214 1.058 0.387 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-5 3 18 15 640 795,037 608,182 0.556 0.326 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-5 24 39 15 619 795,037 608,182 0.576 0.354 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-5 78 174 96 524 795,037 608,182 0.988 0.291 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-50 78 99 21 564 795,076 608,172 0.640 0.527 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-50 102 204 102 500 795,076 608,172 1.516 0.104 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-51 0 213 213 544 794,987 608,177 1.504 0.627 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-52 3 114 111 578 794,912 608,126 1.454 1.205 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-53 42 57 15 589 795,216 607,825 0.714 0.336 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-53 69 87 18 561 795,216 607,825 0.820 0.038 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-53 90 180.3 90.3 504 795,216 607,825 0.863 0.026 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-54 24 108 84 583 795,173 607,842 0.828 0.100 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-54 111 156 45 515 795,173 607,842 0.901 0.033 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-54 162 180 18 478 795,173 607,842 0.512 0.018 -9.000 Mitsubishi Core Pre-Intrus SulfideDDH-6 18 36 18 527 794,352 607,951 0.965 0.713 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-9 3 114 111 447 795,263 607,478 0.950 0.655 -9.000 Mitsubishi Core Pre-Intrus OxideDDH-9 123 153.15 30.15 368 795,263 607,478 0.702 0.089 -9.000 Mitsubishi Core Pre-Intrus Sulfide

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