geology and mineral resources of the araguaia nickel ...marc‐antoine audet géologue consultant...

Marc‐Antoine Audet Géologue Consultant Inc., 787 Powell, Town of Mont‐Royal, PQ , Canada, H4P 1E2

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Geology and Mineral Resources of the Araguaia Nickel Project, Brazil NI 43‐101 Technical Report

Marc‐Antoine Audet, P.Geo., Ph.D., Consulting Geologist

James Hogg, MSc, MAIG, Consulting Geologist, Micromine Consulting Services

Owen Mihalop, MCSM, BSc, CEng, MIMMM, Technical Director, Wardell Armstrong International

Horizonte Minerals plc

15 May 2011

Marc‐Antoine Audet Géologue Consultant Inc. 787 Powell

Town of Mont‐Royal, PQ Canada, H4P 1E2

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Table of Contents 1 Summary ........................................................................................................................................... 8

2 Introduction .................................................................................................................................... 11

2.1 Independent Consultants ........................................................................................................ 11

2.2 Units ......................................................................................................................................... 12

3 Reliance on Other Experts .............................................................................................................. 13

4 Property Description and Location ................................................................................................. 14

4.1 Licences and Tenure ................................................................................................................ 17

4.2 Agreements and Encumbrances .............................................................................................. 22

4.3 Environmental Obligations ...................................................................................................... 22

5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ..................................... 24

6 History ............................................................................................................................................ 30

6.1 Brazil Nickel History ................................................................................................................. 30

6.2 Project History ......................................................................................................................... 31

6.2.1 Teck Araguaia Licences ..................................................................................................... 31

6.2.2 Horizonte Minerals Lontra Project ................................................................................... 37

6.2.3 Horizonte Minerals Araguaia Nickel Project (Combined Teck Araguaia and HM Lontra

licences) ........................................................................................................................................ 39

7 Geological Setting ........................................................................................................................... 41

7.1 Regional geology...................................................................................................................... 41

7.2 Project Geology ....................................................................................................................... 43

8 Deposit Type ................................................................................................................................... 46

9 Mineralization ................................................................................................................................. 48

9.1 Teck Licences Targets .............................................................................................................. 48

9.1.1 Physical Criteria ................................................................................................................ 48

9.1.2 Chemical Criteria .............................................................................................................. 52

9.1.3 Facies Distribution ............................................................................................................ 55

9.1.4 Average Mineralized Profiles ............................................................................................ 60

10 Exploration.................................................................................................................................... 71

10.1 Exploration in the Teck Araguaia Licences ............................................................................ 71

10.1.1 Topographic Surveys ...................................................................................................... 71

10.1.2 Surface Exploration and Mapping .................................................................................. 72

10.1.3 Drilling ............................................................................................................................. 72



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10.2 Exploration in the Horizonte Minerals Lontra Licences ........................................................ 80

10.2.1 Topographic Surveys ...................................................................................................... 80

10.2.2 Surface Exploration and Mapping .................................................................................. 80

10.2.3 Drilling ............................................................................................................................. 81

10.3 Exploration in Horizonte Minerals Araguaia Nickel Project (Combined Teck Araguaia and

HM Lontra Licences) ......................................................................................................................... 84

10.3.1 Core Drilling .................................................................................................................... 84

11 Sampling Method and Approach .................................................................................................. 90

11.1 Teck ........................................................................................................................................ 90

11.1.1 Core Sampling ................................................................................................................. 90

11.1.2 Reverse Circulation Drill Sampling .................................................................................. 91

11.1.3 Geological Logging .......................................................................................................... 92

11.1.4 Survey ............................................................................................................................. 92

11.1.5 Bulk Density .................................................................................................................... 93

11.1.6 Auger Sampling ............................................................................................................... 93

11.1.7 Soil Sampling ................................................................................................................... 93

11.2 Horizonte Minerals (Lontra Licences) .................................................................................... 93

11.2.1 Core Sampling ................................................................................................................. 94

11.2.2 Geological Logging .......................................................................................................... 96

11.2.3 Survey ............................................................................................................................. 96

11.2.4 Bulk Density .................................................................................................................... 96

12 Sample Preparation, Assaying, Security ....................................................................................... 98

12.1 Teck Licences ......................................................................................................................... 98

12.1.1 Routine Sample Analysis ................................................................................................. 98

12.1.2 Check Sample Analysis .................................................................................................... 99

12.1.3 Magnetic Susceptibility Analysis .................................................................................. 100

12.1.4 Bulk Density Analysis .................................................................................................... 100

12.2 Horizonte Minerals Lontra Licences .................................................................................... 103

12.2.1 Routine Sample Analysis ............................................................................................... 103

12.2.2 Check Sample Analysis .................................................................................................. 104

12.2.3 Magnetic Susceptibility and Gamma Log Analysis ....................................................... 104

12.2.4 Bulk Density Analysis .................................................................................................... 104

12.3 Security and Chain of Custody ............................................................................................. 105



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12.3.1 Teck ............................................................................................................................... 105

12.3.2 Horizonte Minerals ....................................................................................................... 106

13 QA/QC ......................................................................................................................................... 108

13.1 Teck Licence Data: QA/QC ................................................................................................... 108

13.1.1 Blanks ............................................................................................................................ 108

13.1.2 Standards ...................................................................................................................... 108

13.1.3 Duplicate Assays ........................................................................................................... 112

14 Data Verification ......................................................................................................................... 116

14.1 Teck Araguaia Project Data ................................................................................................. 116

15 Adjacent properties .................................................................................................................... 118

16 Mineral Processing and Metallurgical Testing ............................................................................ 120

17 Mineral Resource and Mineral Reserve Estimates ..................................................................... 121

17.1 Araguaia Project .................................................................................................................. 121

17.1.1 Database Integrity ........................................................................................................ 121

17.1.2 Mining Factor ................................................................................................................ 121

17.1.3 Cut‐off Grades .............................................................................................................. 121

17.1.4 Metallurgical Factors .................................................................................................... 121

17.1.5 Resource Modelling ...................................................................................................... 122

17.1.6 Statistics and Geostatistics ........................................................................................... 123

17.1.7 Unwrinkling and modelling ........................................................................................... 128

17.1.8 Classification ................................................................................................................. 130

17.1.9 Mineral Resources ........................................................................................................ 130

17.1.10 Mineral Reserves ........................................................................................................ 136

18 Other Data and Information ....................................................................................................... 137

19 Interpretation and Conclusions .................................................................................................. 138

19.1 Araguaia Project .................................................................................................................. 138

19.2 Lontra Project ...................................................................................................................... 139

20 Recommendations ...................................................................................................................... 140

21 References .................................................................................................................................. 141

22 Date and Signatures ................................................................................................................... 142

23 Certificate and Consent of Co‐Authors ....................................................................................... 143



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List of Figures

Figure 1: Araguaia Nickel Project Location Map ................................................................................... 15

Figure 2: Araguaia Nickel Project in relation to significant Regional Nickel Deposits .......................... 16

Figure 3: Horizonte Minerals Araguaia Nickel Project Licences Map. .................................................. 18

Figure 4: Forested Areas within the Araguaia Nickel Project ............................................................... 23

Figure 5: Araguaia Regional Climate Chart ........................................................................................... 25

Figure 6: Araguaia Project Regional Infrastructure .............................................................................. 27

Figure 7: View of general project area looking north‐northwest ......................................................... 28

Figure 8: View to the south‐east over Pequizeiro (main zone), large ferricrete plain surrounded by

valleys (fault zones), contact to sediments to the west and east of the plain, photo taken from

elevated position (silicified zone), semi‐dense forest covering the centre zone of Pequizeiro (main).

.............................................................................................................................................................. 29

Figure 9: View over the north part of Pequizeiro (main zone), view to the west, semi dense forest at

the border of mineralized zone, showing current position of 3 drill rigs on current drilling program

(Dec 2010), end of dry season. ............................................................................................................. 29

Figure 10: Araguaia Teck Soil Geochemistry – South Sector ................................................................ 32

Figure 11: Araguaia Teck Soil Geochemistry – Pequizeiro Sector ......................................................... 33

Figure 12: Araguaia Teck Soil Geochemistry – Central Sector .............................................................. 34

Figure 13: Araguaia Teck Soil Geochemistry – North Sector ................................................................ 35

Figure 14: Teck Araguaia Target Map ................................................................................................... 36

Figure 15: Horizonte Minerals Lontra Licences Soil Geochemistry and target map ............................. 38

Figure 16: Horizonte Minerals Araguaia Niquel Combined Target Map ............................................... 40

Figure 17: Regional Geological Setting ................................................................................................. 42

Figure 18: Teck Licences Geology Map ................................................................................................. 44

Figure 19: HM Lontra Licences Geology Map ....................................................................................... 45

Figure 20: Schematic tropical laterite profile (M. Elias, 2001).............................................................. 47

Figure 21: Ternary plot of all drill‐core samples using the ‘Geofacies’ classification, Fe, MgO, SiO2

(n=9,376) ............................................................................................................................................... 54

Figure 22: North Sector: Thickness distribution of limonite (top left), transition (top right), saprolite

(lower left) and all facies (lower right) ................................................................................................. 56

Figure 23: Centre sector: Thickness distribution of limonite (top left), transition (top right), saprolite

(lower left) and all facies (lower right) .................................................................................................. 57

Figure 24: Peguizeiro sector: Thickness distribution of limonite (top left), transition (top right),

saprolite (lower left) and all facies (lower right) .................................................................................. 58

Figure 25: South sector: Thickness distribution of limonite (top left), transition (top right), saprolite

(lower left) and all facies (lower right) .................................................................................................. 59

Figure 26: Araguaia Project: Thickness of mineralised profiles at 1.0%Ni cut‐off grade per sectors ... 68

Figure 27: Araguaia Project: Ni % grade of mineralised profiles at 1.0% Ni cut‐off grades per sectors

.............................................................................................................................................................. 69

Figure 28: Araguaia Project: Ni grade x Thickness of mineralised profiles at 1.0% Ni cut‐off grades per

sectors ................................................................................................................................................... 70

Figure 29: Teck Araguaia Project Airborne Magnetics – Analytical Signal ............................................ 74



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Figure 30: Teck Araguaia Exploration Map ........................................................................................... 75

Figure 31: Teck’s core drilling at the North sector ................................................................................ 76

Figure 32: Teck’s core drilling at the Centre sector .............................................................................. 77

Figure 33: Teck’s core drilling at the Pequizeiro sector ........................................................................ 78

Figure 34: Teck’s core drilling at the South sector ................................................................................ 79

Figure 35: Horizonte Minerals Lontra Exploration Map ....................................................................... 82

Figure 36: Pequizeiro West Drilling completed in the Horizonte Minerals Araguaia Nickel Project .... 85

Figure 37: Pequizeiro Drilling completed in the Horizonte Minerals Araguaia Nickel Project ............. 86

Figure 38: Teck bulk density core sample selection. (Samples wrapped in plastic wrap) .................. 100

Figure 39: Balance ............................................................................................................................... 101

Figure 40: Bulk density sample in cradle ............................................................................................ 101

Figure 41: Teck Araguaia Sample and Data Process Flow Sheet......................................................... 105

Figure 42: Ni% variation for the Standard STD4 ................................................................................. 109





Figure 47: Araguaia Project: Accuracy on duplicates: Ni .................................................................... 113

Figure 48: Araguaia Project: Accuracy on duplicates: Co ................................................................... 113

Figure 49: Araguaia Project: Accuracy on duplicates: Fe2O3 ............................................................. 114

Figure 50: Araguaia Project: Accuracy on duplicates: MgO ................................................................ 114

Figure 51: Araguaia Project: Accuracy on duplicates: Al2O3 .............................................................. 115

Figure 52: Araguaia Project: Accuracy on duplicates: SiO2 ................................................................ 115

Figure 53: Land tenure adjacent to Horizonte minerals holding ........................................................ 119

Figure 54: Characterisation of vertical grade trend for sector North ................................................. 126

Figure 55: Characterisation of vertical grade trend for sector Center ............................................... 126

Figure 56: Characterisation of vertical grade trend for sector Pequizeiro ......................................... 127

Figure 57: Characterisation of vertical grade trend for sector South ................................................. 127

Figure 58:Pequizeiro 3D model versus drillhole data (PCA‐DD‐0291) showing correlation between the

block model estimated grades and drillhole data .............................................................................. 129

Figure 59: Baiao 3D model versus drillhole data (PCA‐DD‐0184) showing correlation between the

block model estimated grades and drillhole data .............................................................................. 129



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List of Tables

Table 1: Inferred Mineral Resource at 1.0% Ni cut‐off grade. † DBD = Dry bulk density ....................... 9

Table 2: Qualified Person; Responsibility ............................................................................................. 12

Table 3: Araguaia and Lontra Nickel Projects Tenement Summary..................................................... 19

Table 4: Araguaia and Lontra Nickel Projects Tenement Coordinates ................................................. 20

Table 5: Major Nickel Projects in Brasil (modified from Owen et al, 2010) .......................................... 30

Table 6: Geological facies descriptions and codes applied to Teck Licences ........................................ 50

Table 7: Geological description of laterite and bedrock facies ............................................................. 51

Table 8: Average composition per facies based on the Teck Diamond Drilling .................................... 52

Table 9: Chemical criteria for assigning Geofacies to samples ............................................................. 53

Table 10: Average thickness of laterite horizons at the Araguaia Project ............................................ 55

Table 11: Thickness of mineralised profiles at various Ni cut‐off grades ............................................. 60

Table 12: Sector North: Mineralised intercepts at a 1.0% Ni cut‐off grade ......................................... 61

Table 13: Sector Centre: Mineralised intersects at a 1.0% Ni cut‐off grade ......................................... 62

Table 14: Sector Pequizeiro: Mineralised intersects at a 1.0% Ni cut‐off grade .................................. 64

Table 15: Sector South: Mineralised intersects at a 1.0% Ni cut‐off grade .......................................... 66

Table 16: Teck’s exploration work at the Araguaia Project .................................................................. 71

Table 17: Exploration work completed by Horizonte Minerals from 2006 to 2009 at Lontra Project . 80

Table 18: Horizonte Minerals Lontra project; Mineral intersects at 1% Ni cut‐of‐grade ..................... 83

Table 19: Araguaia Nickel Project Infill Drilling. Mineralised Intercepts at a 1% Nickel Cut‐off ........... 87

Table 20: Dry and wet bulk densities and moisture content (October 2010), as used in the current

resource and reserve estimates .......................................................................................................... 102

Table 21: Average composition of standards inserted in sample submission series by Teck ............ 109

Table 22: Summary statistics of re‐assay precision on 668 samples submitted to SGS Laboratory ... 112

Table 23: Correlation statistics between elements for the limonite facies at the Araguaia project.

Strong and moderate correlations are highlighted in red and green, respectively ............................ 124

Table 24: Correlation statistics between elements for the transition facies at the Araguaia project.


Table 25: Correlation statistics between elements for the saprolite facies at the Araguaia project.


Table 26: Araguaia Project: Inferred Mineral Resources as of October 2010 .................................... 131

Table 27: Inferred Mineral Resources for the North Sector as of October 2010 ............................... 132

Table 28: Inferred Mineral Resources for the Center Sector as of October 2010 .............................. 133

Table 29: Inferred Mineral Resources for the Pequizeira Sector as of October 2010 ........................ 134

Table 30: Inferred Mineral Resources for the South Sector as of October 2010 ............................... 135

Table 31: Inferred Mineral Resource at 1.0% Ni cut‐off grade. † DBD = Dry bulk density ................. 138



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1 Summary

The Horizonte Minerals plc Araguaia Nickel Project is based on nickel laterite development on the

eastern margin of Para State, Brazil to the north of the town of Conceição do Araguaia. The Project

area comprises 11 Exploration Licences, 4 held by Horizonte Minerals do Brasil Ltda and 7 held by

Teckcominco Brasil S.A (now Araguaia Niquel Mineração Ltda). Both companies are now 100%

owned subsidiaries of Horizonte Minerals plc (Horizonte) after an agreement concluded in August

2010 in which Horizonte Minerals plc acquired Teck Cominco Brasil S.A., a company that owned

100% of the original Teck Araguaia project.

Nickel laterite deposits develop by chemical weathering of peridotites in tropical and sub‐tropical

climatic zones. The laterites within the project area are developed on peridotites contained within

the metasediments of the Couto Magalhães Formation. This formation forms the western part of the

Neo Proterozoic Araguaia Fold Belt, a north‐south orogenic zone along the contact of the Amazon

Craton to the west and the San Francisco Craton to the east. The mafic/ultramafic complexes within

this formation, of which the peridotites are a part, are made up of elongate bodies varying in length

from hundreds of metres to tens of kilometres and can extend up to a kilometre in width. They occur

in thrusts within the metasediments and have been interpreted to represent tectonic remnants of

ophiolites. Several significant nickel laterite deposits occur within this region of Brazil including

Xstrata’s Serra do Tapa/Vale dos Sonhos deposits that are also located within the Araguaia Fold Belt

80km to the north of the project area

Exploration by Teck in the 7 Teckcominco Brasil S.A. licences between 2006 and November 2008

included geological prospecting and stream sediment sampling, airborne geophysical surveys, soil

sampling, RC drilling and diamond drilling. This resulted it the identification and evaluation of 12

nickel laterite targets. These were tested by 489 diamond drill holes totalling over 11,400m. The

principal targets were drilled on 200m x 200m grids. Eight of these targets are of sufficient size and

have sufficient quality data collected to enable the resource estimation reported here.

Exploration by Horizonte in the 4 Horizonte Minerals do Brasil Ltda licences, collectively called the

Lontra Project, from 2007 to 2008 included stream sediment and soil sampling, ground

magnetometry, auger drilling and diamond core drilling. Three principal target areas were identified

on which 63 diamond drill holes totalling 1,300m were completed. WAI considers that the results of

the 2008 drilling programme are very encouraging and demonstrate that the near surface laterite

developments at the Northern and Raimundo zones could potentially contain a sizeable nickel

resource. The targets remain open, and extensions and subsidiary targets at both sites are as yet

untested (Owen et al, 2010).

Mineral resource estimates for the principal laterite targets within the 7 licences held by

Teckcominco Brasil S.A. were calculated under the direction of Consulting Geologist Marc‐Antoine

Audet, P.Geo., Ph.D., who served as Qualified Person responsible for preparing the sections on the

mineral resources for this Technical Report.



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Within the 7 Teckcominco Brasil S.A. licences surface limonite facies of all areas of the concessions

were mapped and reconnaissance‐drilled at a nominal spacing around 200 m. Teck applied a

comprehensive QA/QC program to validate assays results. The program included the insertion of

duplicate samples, blanks and standards at pre‐designed intervals.

Dr Audet reviewed and compiled information on logging, QA/QC, densities, sampling and assays

performed by Teck for the Araguaia project. The Araguaia project’s resource database meets

industry standards and is compatible with the JORC and CIM codes for public reporting.

The mineral resource estimate of Araguaia Nickel Project laterite deposits was based on 489 core

boreholes for a total of 11,404 meters and includes targets within the North, Centre, Pequizeiro and

South Sectors. The model integrates the concept of geological horizons (limonite, transition and

saprolite) to create a 3D block model. Estimation was conducted in unwrinkled space using Inverse

Distance at Power of 2 (ID2) using Gemcom software. Mineral resources for the project are reported

using 1.0% Ni cut‐off values. The Inferred Mineral Resources estimated are reported in Table 1.

Table 1: Inferred Mineral Resource at 1.0% Ni cut‐off grade. † DBD = Dry bulk density

DBD† Tonnage Nickel Ni Co Fe MgO SiO2 Al2O3 Cr2O3

t/m3 (,000) t tonnes % % % % % % %

Araguaia laterite deposits

Limonite 1.34 13,273 162,793 1.23 0.13 35.67 3.41 20.70 9.50 2.55

Transition 1.36 31,110 457,190 1.47 0.06 18.75 13.34 41.04 5.18 1.32

Saprolite 1.47 32,219 412,664 1.28 0.04 12.09 23.42 42.24 3.82 0.85

Total 76,604 1,032,647 1.35 0.06 18.88 15.86 38.02 5.36 1.34

Current planned and budgeted (£1.5M {C$2.3M}) work in progress on the Araguaia Nickel Project

includes:

An 8,000m diamond drilling programme designed to reduce the drill spacing on the Pequizeiro

West, Pequizeiro and Baião targets to 141m x 141m and then on the Pequizeiro and Baião

targets to 100m x 100m. To date a total of 91 holes (2,433.6m) have been completed with assay

results received on the Pequizeiro West and Pequizeiro targets. Intercepts using a 1% nickel cut‐

off for these holes are presented in Table 19. Figures 36 and 37 show the location of these holes.

A NI 43‐101 compliant mineral resource estimate on the Pequizeiro and Baião targets based on

100m x 100m diamond drilling.

Compilation of all the historical exploration data over the entire project and reconnaissance

exploration and mapping over priority targets.

Mineralogical test program on selected samples of the major mineralised facies including optical

microscopy, quantitative evaluation of materials using scanning electron microscopy (QEMSCAN)

analysis, X‐ray diffraction (XRD) analysis and electron microprobe (EMP) analysis



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It is recommended that further evaluation of the Araguaia Nickel Project potential will include:

Environmental baseline study

Preliminary metallurgical process studies to identify the optimum processing route to maximise

the economic return.

Infill drilling in the Lontra Sector suitable for a first mineral resource estimation.

Reduce drill spacing on all significant targets to 141m x 141m prior to selection of targets for

additional 100m x 100m drilling.

Infill drilling on the Pequizeiro and Baião targets if closer spacing than 100m x 100m is required

to raise the resource estimations to an Indicated Mineral Resource category.

Reconnaissance drilling on selected targets from reconnaissance exploration and mapping.

Scoping Study to determine order of magnitude economic parameters

Airborne laser topographical survey (2 metre contours)



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2 Introduction

2.1 Independent Consultants

Micromine Consulting Services (MCS), a division of Micromine Proprietary Limited, is an internationally

recognised, independent geology and mining consultancy with consulting offices in Perth where it

was established in 1986, Beijing where it has operated since 2000 and in the United Kingdom where

it has operated since 2003.

MCS, its directors, employees and associates neither has nor holds:

any rights to subscribe for shares in Horizonte Minerals Plc either now or in the future

any vested interests in any concessions held by Horizonte Minerals Plc

any rights to subscribe to any interests in any of the concessions held by Horizonte Minerals Plc, either now or in the future

any vested interests in either any concessions held by Horizonte Minerals Plc or any adjacent concessions

any right to subscribe to any interests or concessions adjacent to those held by Horizonte Minerals Plc, either now or in the future

Micromine Consulting Services’ only financial interest is the right to charge professional fees at

normal commercial rates, plus normal overhead costs, for work carried out in connection with the

investigations reported here. Payment of professional fees is not dependent either on project

success or project financing.

The mineral resource estimates for the Araguaia project were estimated by Marc‐Antoine Audet

P.Geo., PhD., Geological Consultant. M. Audet served as the Qualified Person responsible for

preparing specific section as tabulated below. In October 2010 Dr. Audet visited the project office

and the licences previously held by Teck and reviewed the data from the Teck licences used in the

resource estimation presented in this report. During the field visit, Dr Audet review and compiled

information on logging, QA/QC, densities, sampling and assays performed by Teck for the Araguaia

project. M. Audet has also reviewed the data from the drilling completed since October 2010 and

calculated the mineralized intercepts from this drilling based on a 1% nickel cut‐off.

The reporting of the exploration work undertaken by Horizonte Minerals in the Lontra Project

licences has been undertaken by Mr. Owen Mihalop during the site visit undertaken by Wardell

Armstrong International (WAI) during the period 21 – 23 January, 2010. WAI inspected exploration

activities relating to mapping, geophysical and geochemical surveys and drilling. The findings of

these reviews are documented in this report.

This report has been prepared to be filed on SEDAR in support of the Mineral Resource estimation by

Dr. Audet in compliance with NI 43‐101



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The responsibilities for the preparation of certain sections of this Technical Report are shown in

Table 2 and, notwithstanding anything else in the Technical Report, none of the authors accept any

responsibility or liability for any sections of the Technical Report that were prepared by the other

party. Where the responsibility for a section is assigned to more than one author indicates that parts

of the section where authored by different persons.

The authors have not carried out due diligence on the Brazilian Mining Code and Regulations and have not verified the commercial, environmental and legal aspects of Horizonte Minerals mineral tenure and surface rights. Horizonte Minerals provided the details on the properties, agreements, obligations and permitting given in section 4 ‘Property description and location’.

Further, the authors have relied upon information from Horizonte Minerals Inc. staff and internal

reports within areas such as previous exploration, infrastructure, environmental and legal matters in

preparing other parts of the report.

Table 2: Qualified Person; Responsibility

Qualified Person Responsibility for Sections

Marc‐Antoine Audet 1, 2, 8, 9, 10.3,12.1.4, 13, 14, 16, 17, 18, 19.1, 20, 22, 23

James Hogg 1, 2–7, 10–12, 15, 18, 19, 20, 21, 22, 23

Owen Mihalop 1, 2, 3, 5, 6, 10, 11, 18, 19.2, 20, 22, 23

2.2 Units

All units of measurement used in this report are metric unless otherwise stated. Tonnages are reported as metric tonnes (“t”), base metal values (nickel and cobalt) are reported in weight percent (“%”) or parts per million (“ppm”) precious metal values in grams per tonne (“g/t”) or parts per million (“ppm”). Other references to geochemical analysis are in parts per million (“ppm”) or parts per billion (“ppb”) as reported by the originating laboratories. Coordinate system for the Araguaia project is the Zone 22 UTM S‐America Datum 1969 (UTMSAD69).



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3 Reliance on Other Experts

The main sources of literature provided to the authors and sourced for the compilation of this report

were the following:

Competent Person’s Report on the Assets of Horizonte Minerals Plc, Brazil, July 2010; M L Owen et al; Independent Competent Persons Report by Wardell Armstrong International Ltd.

Technical Report on the Araguaia Nickel Exploration Project, Para State, Brazil, January 2010; M. Bennell; NI43‐101 report by Lara Exploration Limited



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4 Property Description and Location

The current Araguaia Nickel Project combines the Lontra and Araguaia project licences which until

August 2010 were owned and operated independently by Horizonte Minerals and Teck respectively.

The property is located in the south east of Para State, Brazil, approximately 25km northwest of the

nearest town Conceição de Araguaia and approximately 10km to the west of the roughly north‐

south trending Rio Araguaia. Para State is approximately 2,100 kilometres north of Brasilia (Figure

1).

The project area is centred about the following coordinates:

WGS 84 Latitude 07° 54' 9.0" South; UTM SAD 69 22S 9126200mN

WGS 84 Longitude 49° 26' 1.8" West; UTM SAD 69 22S 672700mE

Carajas mineral province is situated approximately 200 kilometres north of the Araguaia project.

Xstrata’s Serra do Tapa and Vale dos Sonhos nickel laterites are approximately 80 kilometres to the

north (Figure 2).



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Figure 1: Araguaia Nickel Project Location Map



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Figure 2: Araguaia Nickel Project in relation to significant Regional Nickel Deposits



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4.1 Licences and Tenure

The Araguaia Nickel Project is wholly owned by Horizonte Minerals Plc through its Brazilian

subsidiary Araguaia Niquel Mineração Ltda. The exploration licence area extends approximately

40km in a north‐south direction, and 35km in an east‐west direction and cover an approximate

surface area of 730km². The project comprises 7 exploration licences from the previous Araguaia

nickel project owned and operated by Teck and 4 exploration licences from the adjacent Lontra

project discovered, owned and operated by Horizonte Minerals.

As part of the transaction that took place in August 2010 to acquire the Teck Araguaia licences,

Horizonte Minerals Plc took control of 100% of the Lontra exploration licences, previous held in

partnership with a number of Brazilian entities.

Tenement details and location coordinates are presented in Figure 3 and Tables 3 and 4 below.



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Figure 3: Horizonte Minerals Araguaia Nickel Project Licences Map.



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Table 3: Araguaia and Lontra Nickel Projects Tenement Summary.

Procedure Request Holder Area (Ha) Phase Publication

Date Expiration

Date Project Comment

Number

851.025/2006 HM do Brasil Ltda 1,970.48 1st 14/07/2008 14/07/2011 Lontra

851.026/2006 HM do Brasil Ltda 87.99 Application Pending + 3 years Lontra

850.277/2004 HM do Brasil Ltda 10,000.00 2nd 03/02/2006 05/03/2013 Lontra

850.278/2004 HM do Brasil Ltda 10,000.00 2nd 03/02/2006 05/03/2013 Lontra

850.501/2008 TECKCOMINCO BRASIL

S/A/ 2,560.33 1st 16/09/2009 16/09/2012 Araguaia


S/A/ 9,861.32 2nd 17/02/2005 08/09/2012 Araguaia


S/A/ 9,361.30 2nd 17/02/2005 08/09/2012 Araguaia


S/A/ 10,000 2nd 17/02/2005 08/09/2012 Araguaia


S/A/ 9,656.54 2nd 17/02/2005 08/09/2012 Araguaia


S/A/ 9,984.71 2nd Pending + 3 years Araguaia

Exploration report published 07/10/2008


S/A/ 5,690.06 1st 03/09/2010 03/09/2013 Araguaia



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Table 4: Araguaia and Lontra Nickel Projects Tenement Coordinates

Project Procedure Latitude Longitude

Project Procedure

Latitude Longitude Number Number

Lontra 851.025/2006 -07°47'16''038

-49°35'54''900 Lontra 851.026/2006 07°50'41''498

-49°33'13''712

-07°47'16''029

-49°33'11''790

-07°50'41''498

-49°33'03''903

-07°47'00''584

-49°33'11''792

-07°52'16''811

-49°33'03''902

-07°47'00''583

-49°32'59''961

-07°52'16''811

-49°33'13''712

-07°49'32''662

-49°32'59''943

-07°50'41''498

-49°33'13''712

-07°49'32''669

-49°34'28''466

-07°48'56''212

-49°34'28''468

-07°48'56''214

-49°35'54''900

-07°47'16''038

-49°35'54''900



Number Number

Lontra 850.277/2004 -07°48'43''558

-49°27'37''506 Lontra 850.278/2004

-07°48'43''558

-49°27'37''506

-07°48'43''523

-49°33'03''908

-07°54'09''069

-49°27'37''506

-07°43'18''011

-49°33'03''838

-07°54'09''033

-49°33'03''978

-07°43'18''046

-49°27'37''506

-07°48'43''523

-49°33'03''908

-07°48'43''558

-49°27'37''506

-07°48'43''558

-49°27'37''506



Number Number

Araguaia 850.501/2008 -07°57'34''285

-49°30'54''123 Araguaia 850.514/2004

-07°49'52''059

-49°23'01''645

-07°59'56''623

-49°30'54''123

-07°49'52''016

-49°16'59''323

-07°59'56''615

-49°29'09''903

-07°54'54''741

-49°16'59''250

-08°00'01''516

-49°29'09''902

-07°54'54''762

-49°18'45''193

-08°00'01''516

-49°29'13''645

-07°55'23''733

-49°18'45''188

-08°01'42''102

-49°29'13''637

-07°55'23''754

-49°22'08''917

-08°01'42''102

-49°29'13''679

-07°53'18''432

-49°22'08''922

-08°00'01''511

-49°29'13''679

-07°53'18''433

-49°22'28''999

-08°00'01''498

-49°32'29''609

-07°50'22''983

-49°22'29''003

-08°01'42''124

-49°32'29''623

-07°50'22''983

-49°23'01''645

-08°01'42''124

-49°32'29''658

-07°49'52''059

-49°23'01''645

-08°01'06''546

-49°32'29''663

-08°01'06''550

-49°33'37''140

-07°59'46''476

-49°33'37''140



21



Number Number

-07°59'46''476

-49°33'34''730 Araguaia 850.516/2004

-08°04'09''567

-49°21'26''905

-07°59'11''321

-49°33'34''743

-08°04'09''530

-49°26'53''510

-07°59'11''306

-49°32'54''579

-07°58'44''023

-49°26'53''437

-07°58'25''735

-49°32'54''596

-07°58'44''058

-49°21'26''905

-07°58'25''749

-49°33'37''140

-08°04'09''567

-49°21'26''905

-07°57'33''049

-49°33'37''140

-07°57'33''030

-49°29'09''934

-07°57'34''278

-49°29'09''934

-07°57'34''285

-49°30'54''123

Project Procedure Latitude Longitude Project Procedure Latitude Longitude Number Number

Araguaia 850.515/2004 -07°49'52''059

-49°23'01''645 Araguaia 850.682/2007

-08°02'26''221

-49°31'01''661

-07°49'17''881

-49°23'01''645

-08°02'26''217

-49°29'13''634

-07°49'17''880

-49°22'29''004

-08°00'01''516

-49°29'13''645

-07°48'12''778

-49°22'29''006

-08°00'01''499

-49°26'53''473

-07°48'12''777

-49°21'56''366

-08°04'09''823

-49°26'53''432

-07°47'40''226

-49°21'56''367

-08°04'09''813

-49°26'01''628

-07°47'40''224

-49°21'23''729

-08°04'18''559

-49°26'01''627

-07°44'21''662

-49°21'23''741

-08°04'18''564

-49°26'23''258

-07°44'21''620

-49°16'48''959

-08°05'10''739

-49°26'23''248

-07°49'52''014

-49°16'48''878

-08°05'10''740

-49°26'25''316

-07°49'52''059

-49°23'01''645

-08°05'01''091

-49°26'25''318

-08°05'01''117

-49°31'01''661

-08°02'26''221

-49°31'01''661

Project Procedure Latitude Longitude Project Procedure Latitude Longitude Number Number

Araguaia 850.517/2004 -07°53'18''467

-49°22'09''104 Araguaia 850.518/2004

-07°52'16''338

-49°33'03''716

-07°58'43''977

-49°22'09''104

-07°54'01''804

-49°33'03''716

-07°58'43''941

-49°27'35''637

-07°54'01''768

-49°27'35''450

-07°53'38''243

-49°27'35''570

-07°57'33''024

-49°27'35''403

-07°53'38''271

-49°24'31''335

-07°57'33''055

-49°34'59''793

-07°53'18''460

-49°24'31''333

-07°52'16''334

-49°34'59''768

-07°53'18''467

-49°22'09''104

-07°52'16''338

-49°33'03''716



22

4.2 Agreements and Encumbrances

Agreements are in place with local farm landholders that allows access to land and conduct

exploration with the minimum of disturbance.

4.3 Environmental Obligations

The area is not subject to any environmental or native title reserves. There is a proposal to construct

a hydroelectric dam (Barragem Santa Isabel) on the Rio Araguaia. This would inundate some of the

river margins associated with the Pau d’Arco river; however, this may also provide a significant

opportunity as a local source of hydroelectric energy (Owen et al, 2010).

In terms of the Brazilian environmental regulations a permit is required for any exploration activities

that require the cutting of trees of diameter greater than 12 cm. For trees of less than 12 cm in

diameter no permit is required although a policy of minimum disturbance must be adhered to.

Figure 4 shows the forested areas with the project licences



23

Figure 4: Forested Areas within the Araguaia Nickel Project



24

5 Accessibility, Climate, Local Resources, Infrastructure and Physiography

The Araguaia Nickel Project area is located approximately 25kms north of the sealed road that links

the towns of Conceição de Araguaia and Redenção. This road is the main access route from the

major centres of Brasilia, São Paulo and Belo Horizonte to Carajas (Owen et al, 2010). The project

area is cut by the all weather unsealed road which links Conceição de Araguaia with Floresta

approximately 20kms to the northwest of the project.

The project can be reached by air from São Paulo via Palmas, the capital of Tocantins State situated

to the East of Rio Araguaia. From there it is a further 400km drive on mainly sealed highway to the

main Araguaia field office in Conceição de Araguaia. The project area is approximately 45 minutes

drive from the field office in Conceição de Araguaia.

Alternatively regular scheduled flights are available from the airports located at Maraba, Palmas,

Carajas, Conceição and Redenção (Owen et al, 2010).

The climate in the region is tropical and humid with two distinct seasons. Dry season extends from

June to October and the rainy season from November to May. Annual rainfall is approximately

1600mm and the average daily temperature is 25°C, but may be cooler during June and July

(Bennell, 2010).

Typical annual temperature, rainfall and daylight charts are presented in Figure 5 below (reproduced

from www.climate‐charts.com).



25

Figure 5: Araguaia Regional Climate Chart



26

Conceição do Araguaia is the largest population centre in the surrounding area and the city contains

a number of banks, a post office, several basic hospitals, hotels, restaurants and other local

amenities. Araguaina (175km distant) is the nearest major business centre, however most business

activities are conducted through the city of Goiania (1000km distant). Population density within the

project area is sparse and comprised solely of isolated farms.

The project is well served by rough dirt roads navigable in a 4x4 vehicle, numerous farm tracks criss‐

cross the area making access reasonably easy.

Carajas, 200km to the north is the railhead and point of loading of the iron ore to be embarked at

the deepwater port facilities of São Luis. The Araguaia River is being developed as a water transport

route with locks currently under construction at the Tucuruí dam allowing barging between Marabá

and the shipping port of Barcarena on the mouth of the Amazon. There are also plans of building a

spur line from the north‐south railway line currently under construction and linking Goiania with

Belem (Figure 6). This is due for completion in 2015 (Owen et al, 2010).

The area as a whole is well serviced with power. Electricity would be derived from a major dam and

power station at Tucuruí, which is linked into the national grid. The dam lies on the Rio Tocantins,

about 185km north of Marabá. This has 6,000MW of installed capacity and can be expanded to

12,000MW. This energy source supplies power to the region, including Vale’s iron mining complex

at Carajás (230kV lines) and to the major substation at Colinas, 100km east of the project, which

distributes power to and from eight, 500kV lines (Owen et al, 2010). High capacity power lines serve

Conceição however the level of supply is generally inconsistent with frequent drops in power and

outages especially in bad weather. Rural locations are served with a two‐phase power supply.

Mobile phone coverage is reasonable in Conceição but patchy across the project area. There are

adequate Internet links in Conceição, and Internet connection at the HM field camp within the

project area.



27

Figure 6: Araguaia Project Regional Infrastructure



28

The Araguaia area is marked by rolling hills and long sharp strike ridges, with elevations between 300 and 450 m (amsl). Local relief can be more than 100m in the Conceição block (Bennell, 2010). The physiography is typically characterised by valleys separating elevated level plateaus that

represent old erosion surfaces. The targets already outlined are within these plateau regions and as

such are generally level areas. The terrain across the project area as a whole is reasonably level and

gradients via which access to the plateaus is possible are moderate to low.

The original Amazon rain forest has been cleared from most of the area and the land is used for

extensive cattle ranching. Some of the plateaus are used for speciality crops such as pineapple

plantations (Bennell, 2010).

Views of typical relief, vegetation and land use are presented in the following photographs Figures 7

to 9 below.

Figure 7: View of general project area looking north‐northwest



29

Figure 8: View to the south‐east over Pequizeiro (main zone), large ferricrete plain surrounded by valleys (fault zones), contact to sediments to the west and east of the plain, photo taken from elevated position (silicified zone), semi‐dense forest covering the centre zone of Pequizeiro (main).

Figure 9: View over the north part of Pequizeiro (main zone), view to the west, semi dense forest at the border of mineralized zone, showing current position of 3 drill rigs on current drilling program (Dec 2010), end of dry season.



30

6 History

6.1 Brazil Nickel History

Brazil is a major producer of primary products and exporter of iron ore, niobium, manganese,

aluminium, kaolin and tin and is poised to become a major nickel and copper producer with the

development of a number of world class nickel projects (Owen et al, 2010).

The Carajas Mineral province which hosts the Horizonte Minerals Araguaia Nickel Project is a world

class mining province with major iron, nickel, copper and gold deposits. As a result, the region has

excellent infrastructure developed to service the mining activity. The region has typically been

dominated by iron and gold deposits however a major exploration drive during the last 15 years has

led to the discovery and development of a number of nickel laterite projects. As a result a number

of major companies are present including Vale, Anglo American and Xstrata, all of which have

significant nickel projects in the region that are in the advanced exploration or development stage

(Owen et al, 2010).

The Carajas Mineral Province currently plays host to three major nickel projects in the advanced

exploration or development phase (Owen et al, 2010). These major projects include Anglo

American’s Jacare deposit, Vale’s Vermelho and Onca‐Puma projects and Xstrata’s Serra de Tapa

deposit (Figure 2). The Serra de Tapa and neighbouring Vale dos Sonhos projects are located

approximately 70kms to the north of the Araguaia Lontra project (Owen et al, 2010).

A 2010 status summary of these projects is included in Table 5 which lists major Brazilian nickel

projects below (modified from Owen et al, 2010).

Table 5: Major Nickel Projects in Brasil (modified from Owen et al, 2010)

Project Company Tonnes Grade Stage Deposit Type

Barro Alto Anglo Am. 116Mt 1.50% Prod. FeNi

Jacare Anglo Am. 290Mt 1.30% Feas. FeNi

Niquelandia Votorantim 60Mt 1.40% Dev. FeNi

Onca Puma Vale 83Mt 1.70% Dev. FeNi

Serra de Tapa Xstrata 123Mt 1.30% Feas. FeNi

Santa Fe/Ipora Teck 140Mt 1.10% Scoping HPAL

Vermelho Vale 124Mt 1.20% Feas. HPAL



31

6.2 Project History

The following sub‐sections summarise the history of exploration for the relevant project areas.

Details of exploration work pertaining to the development and input to mineral estimations

undertaken as part of this study are described in section 10.

6.2.1 Teck Araguaia Licences

Modern day nickel exploration across the Teck Araguaia licence areas dates back to the 1970’s.

During the period work conducted by CVRD (Docegeo) and Vale led to the discovery of a small

ultramafic intrusive hosted Ni laterite deposit at Serra do Quatipuru (DNPM 850514/2004) (Figure

2).

In the 1990’s Rio Tinto Desenvolvimento Mineral (RTDM) conducted exploration for magmatic nickel

mineralisation associated to ultramafic rocks in the region of Couto Magalhaes (DNPM

850514/2004). Results of this work are unknown.

From 2000 onwards major companies such as CVRD/VALE, Xstrata (Falconbridge) and Teck Cominco

implemented large exploration investments in the Araguaia Belt. This work resulted in the first

discovery of lateritic nickel in 2004 by Falconbridge at its Serra do Tapa project (DNPM 850514/2004;

Figure 2).

This discovery by Falconbridge highlighted the Araguaia Belt as a new prospective grass roots terrain

for nickel laterite in Brazil. Falconbridge was later taken over by Xstrata in 2006, who continued to

explore within the belt and develop the resource at Serra do Tapa to its current size of 80 million

tonnes, grading 1.6% nickel at a cut off of 1.2% nickel (DNPM 850514/2004).

The Teck exploration licences were claimed over mafic/ultramafic bodies mapped in the regional geologic maps (Owen et al, 2010). Teck explored the Araguaia project between 2006 and November 2008 taking the project to

advanced exploration status having completed over 11,400m of drilling in 489 diamond core holes.

During the 3 years managing work within the project Teck completed 5 main stages of exploration

(DNPM 850514/2004):

Geological prospecting and stream sediment sampling

Airborne geophysical surveys

Soil sampling

Reverse circulation drilling

Diamond drilling

Initial stream sediment survey work identified six +300ppm Ni targets at areas known as Oito, Poco,

Jacutinga, Lajeiro, Pequizeiro and Baião. Subsequent airborne geophysics, mapping and soil



32

sampling across the permit areas focused the exploration programme on five key zones referred to

as the Baião, Pequizeiro, Jacutinga, Vila Oito and Oito areas (Figures 10 to 13).

In contrast to the Lontra targets that are long and narrow with a clear N‐S orientation, the Teck

targets, except for Pequizeiro, tend to be large equant shaped bodies. In the case of Pequizeiro, the

zone appears to show a strong structural control and has a NW trend and consists of several narrow

NW orientated bodies. Given the large size and generally equant shape of the soil targets, Teck

opted to test the targets using a 200m x 200m spaced diamond drill programme.

Figure 10: Araguaia Teck Soil Geochemistry – South Sector



33

Figure 11: Araguaia Teck Soil Geochemistry – Pequizeiro Sector



34

Figure 12: Araguaia Teck Soil Geochemistry – Central Sector



35

Figure 13: Araguaia Teck Soil Geochemistry – North Sector

The 5 stages of exploration work resulted in the development of significant targets at Pequizeiro,

Baião, Vila Oito, Vila Oito East and Oito and secondary targets at Pequizeiro W, NW and E and

Jacutinga (Figure 14).



36

In August 2010, Horizonte Minerals Plc took over control of the Araguaia nickel project from Teck.

Figure 14: Teck Araguaia Target Map



37

6.2.2 Horizonte Minerals Lontra Project The following section is modified from Owen et al, 2010.

The Lontra exploration area had previously been claimed for phosphate and then iron ore

exploration, although to our knowledge no exploration was undertaken. While ultramafic bodies are

known in the Araguaia Belt the regional geologic maps indicate that the Lontra area was underlain

by packages of fine to coarse‐grained clastic sediments.

The Lontra nickel prospects represent new discoveries of deeply weathered ultramafic bodies with laterite development containing potentially economic nickel mineralisation. The Lontra deposits were discovered by Horizonte Minerals as a result of a well designed and managed sequential exploration programme, progressing through the stages of:

Stream sediment sampling and soil sampling

Ground magnetometry,

Auger drilling

Diamond core drilling. Soil geochemical data for the Lontra permits are shown in Figure 15. Through this work three principal areas of ophiolite emplacement with associated laterite development have been established, namely:

Northern target;

Raimundo; and

Southern and Morro target. Targets are shown in Figure 16 and brief descriptions of the three main targets discovered and developed by Horizonte Minerals are given below (taken from Owen et al, 2010): Northern Anomaly: The northern zone is a 3km by 1.5km area containing four anomalies, of which the main target is a 1,600m by 250m soil geochemical anomaly. The soil anomaly is over undulating terrain with dark red soils and termite mounds and is truncated to the northeast by wide flat residual lateritic plateaus. To date, 31 diamond drill holes have been completed which indicate the continuity of mineralisation along the main anomaly and the potential for mineralisation beneath the adjacent soil targets; Raimundo Anomaly: 2km to the south of the Northern anomaly the Raimundo anomaly has a core zone of 1,600m by 1,000m which has been the focus of diamond drilling. To date, 31 holes have been drilled that again indicate significant thicknesses of lateritic nickel mineralisation. As with the Northern anomaly, the average thickness of mineralisation varies from 11m to 6m depending on the minimum grade cut‐off; and Southern and Morro Anomaly: This zone gave some of the best results in a shallow auger programme despite the fact that many of the holes had to be abandoned before reaching the target depth due to the presence of silcrete or saprolite. Only one diamond hole has tested the Southern target to date. By August of 2010 no attempt has been made to close off the mineralised bodies at this stage.



38

Figure 15: Horizonte Minerals Lontra Licences Soil Geochemistry and target map



39

6.2.3 Horizonte Minerals Araguaia Nickel Project (Combined Teck Araguaia and HM Lontra licences)

In a transaction that took place in August 2010, Horizonte minerals took control of the Teck Araguaia licences to form a combined project merging the Teck and HM Lontra projects. Subsequent to the acquisition of the Teck Araguaia permits and combined project review by

Horizonte Minerals, 15 targets are identified within the new Araguaia Nickel Project (Figure 16).

Pequizeiro Sector

o Pequizeiro Main

o Pequizeiro North West

o Pequizeiro West

o Pequizeiro East

Baião Sector

o Baião Main

o Baião North

o Baião South

Centre Sector

o Vila Oito Main

o Vila Oito East

o Jacutinga

North Sector

o Oito Main

o Oito West

Lontra Sector

o Northern Target

o Raimundo Target

o Southern and Morro Target

Figure 16 presents exploration and resource targets for the combined HM Araguaia land holding.

Since acquisition of the Teck landholding Horizonte Minerals has advanced development of the

project with the initiation of an 8000m diamond drilling programme commencing in October 2010.

The programme, designed in two phases, will reduce the drill spacing on the Pequizeiro W,

Pequizeiro and Baião targets to 141m x 141m and then on the Pequizeiro and Baião targets to 100m

x 100m. To date 91 holes (2,433.6m) have been completed for which assay data has been received

on the Pequizeiro West and Pequizeiro targets.

This report presents resource estimations for 8 targets within the former Teck project area. The

targets are arranged along an approximate north‐south trend that extends for 27km. The largest

target, Baião, covers an area of approximately 8km2 and has a small satellite zone of mineralisation

of 1km2 in extent. Villa Oito, Oito and Pequizeiro targets cover areas between 4 and 6km2, they also



40

have some 1km2 satellites. Other targets are comprised of 1‐2km2 mineralised zones or collections of

zones of this size.

Figure 16: Horizonte Minerals Araguaia Niquel Combined Target Map



41

7 Geological Setting

7.1 Regional geology

The project lies within the Neo Proterozoic Araguaia Fold Belt. This belt is a large north to south

trending orogenic zone along the contact of the Amazon Craton to the west and the San Francisco

Craton to the east (Figure 17). The Belt is 1000km long and 150km wide, its evolution is believed to

be contemporary with the Brazilian thermal event at the Neo Proterozoic boundary.

Continental sediments of Palaeozoic Parnaiba Basin overlie the eastern edge of the belt; it appears

that the western half of the belt has been thrust over the eastern edge of the Amazon craton. To the

north the belt disappears under Amazonas Basin sediments while to the south Paraná Basin

sediments overly the belt. Structurally the belt is dominated by westward verging folds and thrusts

aligned along a more north to south orientation.

The belt is comprised of metamorphosed and deformed marine‐clastic sediments of the Tocantins

Group and can be split into two halves based on the degree of metamorphism present. The more

highly metamorphosed Estrondo Formation comprises the eastern half of the belt while the western

half displaying lower levels of metamorphism is termed the Couto Magalhães Formation.

The Estrondo Fm is dominated by greenschist to amphibolites facies grade metamorphosed

sediments with occasional banded iron formations, carbonates and exposures of Achaean basement.

Proterozoic granites intrude the eastern belt.

The Couto Magalhães Fm contains weakly metamorphosed, marine pelites with local carbonate,

iron‐rich, and mafic to ultramafic bodies. The mafic/ultramafic complexes are made up of elongate

bodies varying in length from hundreds of metres to tens of kilometres and can extend to a

kilometre in width. They occur in thrusts within the sediment and appear to represent the tectonic

remnants of ophiolite. They are dominated by serpentinised and metamorphosed peridotites,

dunites and pillow basalts with minor basalts, gabbros and pyroxenites (Bennell, 2010).



42

Figure 17: Regional Geological Setting



43

7.2 Project Geology

The local geology has largely been interpreted from airborne geophysical survey data, soil sampling

data and mapping. Various types of metasedimentary cover the vast majority of the licence area.

Large areas of mafic and ultramafic plateau, varying in size from a few hundred square metres to

several square kilometres, have been identified from magnetic data and outcrop. These are

generally capped with a hard iron rich duricrust that is occasionally silicified and are often bounded

by a siliceous breccia. Bodies of pillow lava and other volcanic material also exist. The area is cut by

numerous mafic dykes.

Magnetic surveying also revealed the presence of numerous NW‐SE to N‐S trending lineaments that

are believed to be traces of fault zones. The faults are interpreted as either thrust fronts with an east

to west transport direction or later sub‐vertical faults.

Within the former Teck licences a distinctive lateritic sequence is developed over ultramafic and

mafic rocks within the project area, the same sequence can be recognised at each of the target sites

though the thickness and extent of each facies and the complete sequence itself may vary from

location to location. The sequence can be split into 6 main facies types: soil, ferricrete, limonite,

transition, saprolite and fresh rock as well as numerous sub‐facies.

Within the Lontra area soil, ferricrete and limonite facies are developed. The transition zone is

thinner and contains less distinctive sub facies; limonitic transitions dominate. Saprolite zones are

also not as well developed, a serpentinised sub facies with a distinctive “leopard spot” texture is also

apparent. Sulphides are ubiquitous throughout the profile. Most facies are highly magnetic.

The interpreted project geology is shown in Figures 18 and 19 below.



44

Figure 18: Teck Licences Geology Map



45

Figure 19: HM Lontra Licences Geology Map



46

8 Deposit Type

The nickel deposits of the Araguaia and Lontra Projects are typical examples of Ni‐laterites formed in

a seasonally wet tropical climate on weathered and partially serpentinised peridotite. The nickel in

such deposits is derived from altered olivine, pyroxene and serpentine that constitute the bulk of

tectonically emplaced ultramafic oceanic crust and upper mantle rocks.

Due to its location in a tropical environment these laterite deposits are termed ‘wet’ laterite as

opposed to laterites and palaeo‐laterites found in arid and temperate climates today. The ‘wet’

laterites often show particularly good properties for hydrometallurgical processing.

Laterisation of these serpentinised peridotite bodies occurred during the Tertiary period and the

residual products have been preserved as laterite profiles over plateaus/amphitheatres, elevated

terraces and ridges/spurs.

The process has started with hydration, oxidation, and hydrolysis of minerals in the oxidation zone,

where there was intense circulation of meteoric water (pH been neutral to acid and Eh been neutral

to oxidant). Silicates are in part solubilized, and the soluble substances are carried over to out of the

system, causing the surface lowering. The insoluble substances remain and pass to residually

concentrate. The continuation of this process generates the residual deposits, inside the oxidation

zone, after a long activity time.

The residual concentration process develops when the rock weathering causes leaching of several

substances that compose it and the preservation of other. Non leached substances, which remain in

the weathered rock, have their contents increased, because they concentrate as leaching wastes,

characterizing the residual concentration, which can form deposits with Ni and Co concentration

from ultramafic rocks. Besides, is also common the supergenic concentration, which consists of

nickel leaching out of limonite zone and enriched in the underlying saprolite zones.

Chemical weathering is more active in hot and humid regions, where the action with rain with CO2

and the formation of organic acids by plants and animals represent an effective contribution to rock

attack. The main reactions would be hydration by action of water, oxidation, reactions with carbonic

acid and with other acids, like sulfates, resulting from sulphide decomposition. Therefore, the

formation of lateritic soil is common in regions of tropical and subtropical climates. It consists of a

mixture of iron and aluminum oxides and hydroxides, some silica, manganese oxide and other

impurities, remaining from a process that promotes dissolution and carry over of silica and other

oxides and metal redistribution in the change profile, depending on the formation of insoluble

phases, presence of organic material and co‐precipitation with Fe, Al, and Mn oxides and hydroxides.

The metallurgical process for nickel extraction in the weathering profile varies according to its

chemical composition.

A typical laterite profile contains three distinct horizons (limonite, transition and saprolite). A

schematic tropical laterite profile is shown in Figure 20.

The authors confirm that the geological model described above is adequately addressed to form the

basis on which further investigations and an exploration program can be planned.



47

Figure 20: Schematic tropical laterite profile (M. Elias, 2001)



48

9 Mineralization

9.1 Teck Licences Targets

9.1.1 Physical Criteria

There follows detailed descriptions of the mineralisation within the targets originally identified and

drilled by Teck. These represent that targets for which a resource estimate is presented in this

report.

The facies of the laterite profile are described macroscopically as follows (also summarized in Tables

6 and 7):

Soil Horizon

A dark brown layer rich in humus material constitutes the uppermost soil layer. This layer comprises

occasional ironstones as well as organic material derived from the breakdown of plants and the

networks of fine plant roots. The chemical composition of this layer is characterized by low Ni and

MgO. The soil material forms a thin horizon of generally less than 1 m thickness and is absent in

many places.

Ferricrete Horizon

This facies comprises a hard, cohesive, red to yellow brown material, high in hematite/goethite and

often containing magnetite with occasional chromite. Ferricrete is present as both an

unconsolidated horizon with ubiquitous haematitic pisolites and a cemented goethite rich horizon

containing distinctive worm burrows. Ferricrete is present in virtually all locations with thickness

varying from one to ten metres; commonly two to three metre thick horizons are developed.

Limonite Horizon

The limonite layer follows immediately below the soil or the ferricrete layer, and consists of deeply

weathered material. The upper part of the limonite, sometimes called Red Limonite, is a red‐brown

or more often, chocolate‐brown clayey material with little internal structure although layering has

been observed. The material consists entirely of fine‐grained minerals of silt to clay fractions,

predominantly hydrated iron oxides.

The lower part of the limonite, sometimes called Yellow Limonite, is yellow‐brown to orange

coloured and generally has a more compact appearance than the red limonite. The yellow limonite

rarely contains coarse fragments of weathered material.

Both red and yellow limonite maybe well developed; alternatively only one sub‐type may be present

or occasionally neither.



49

Transitional Horizon

Upper Transition (UT)

Upper Transition facies (UT) is a dark red to brown red, cohesive, soft, plastic, and fictile material,

with fine granulation. It is differentiated from red limonite by the presence of manganese oxide (up

to 2%), whitish gibbsite pockets (up to 5%), and incipient texture. Furthermore, UT can contain up to

15% of disseminated green serpentine, which increases the nickel content in this horizon. The

presence of manganese oxide also considerably increases the cobalt and nickel content.

Green Transition (GT)

This facies is characterized by the association of green material and brown clayish material. The

green material represents from 30 to 70% of the GT facies and the clayish material occurs as

laminations or disseminated. The nickel content is associated to the relative presence of these

materials and, usually, the greener the material the higher the content. GT is usually compact and

plastic. It can also occur in a friable form, but without losing its plastic property.

The clayish material is usually brown, but it can be orange/brown or reddish brown, depending on

the amount of associated goethite and/or hematite. Chlorite, vermiculite, manganese oxide

(asbolane), and talc can also occur disseminated (> 1%). Free silica can be present in the form of

millimetre sized veins or pockets.

Brown Transition (BT)

BT is the most common transition facies and is formed by granules of millimetre or centimetre size

of green to light green serpentine immersed in a brown to reddish brown clayey matrix.

The material is compact and granular and presents incipient texture. The clayey matrix can represent

up to 30% of material and can also occur as laminations. The serpentine granules can form cohesive

aggregates, but the hardness is usually low. Manganese oxide and chlorite can sometimes occur.

Saprolite Horizon

Rocky saprolite (SAP)

Hard saprolite is described as competent dark green to greyish rock of weathered peridotite and

with moderate saprolite alteration, occurring mostly along fractures. Primary olivine and

orthopyroxene exhibit patchy replacement by fine‐grained hydrated iron oxides and amorphous

silica. Granular textures are well preserved and the material consists of cores of angular fresh rock

(20–50%) with successive rims of more and more strongly altered material. Silica boxwork is rarely

seen in the hard saprolite but a bright green garnierite staining can often be seen on fracture planes.

Silicified Saprolite (SIS)

Silicified Saprolite (SIS) is a saprolitic material visually high in silica. The hardness and colour of the



50

material vary according to the silicification intensity, but the material usually presents moderate to

high hardness and whitish brown to reddish brown colour. Sometimes, the texture is still preserved

and the presence of free silica is common.

Bedrock

Bedrock has a dark green to dark brown colour and consists of massive to fractured, varyingly

serpentinised peridotite, whose interface with the weathered profile can be highly irregular with

numerous peaks and troughs. Bedrock is commonly exposed along rivers and creeks and in major

landslides.

Table 6: Geological facies descriptions and codes applied to Teck Licences

ARAGUAIA NICKEL PROJECT LITH CODES

Main Facies Main F‐code Sub Facies Sub‐F code

Soil SOI Red Soil RSOI

Ferricrete FRC Pisolite PF

Limonitic FRC LF

Limonite LIM Red Limonite RLIM

Yellow Limonite YLIM

Transition TRANS

Upper Transition UT

Green Transition GRT

Brown Transition BT

Silicate Green Transition sGT

Saprolite SAP

Saprolite SAP

Saprolite Rock SROC

Silicified Saprolite SIS

Fresh Rock FROCK

Weathered Serpentnite wSER

Serpentinite SER

Weathered Rock WROC

Harzburgite HZB

Gabbro GAB

Dunite DUN

Ultramafic Breccia uBREC

Sediment SED Sediment SED

Marc‐Antoine Audet Géologue Consultant Inc., 787 Powell,

Town of Mont‐Royal, PQ , Canada, H4P 1E2

51

Table 7: Geological description of laterite and bedrock facies

Description

Limonitic Facies

Ferricrete

Horizon rich in goethite. Red to wine‐red to chocolate‐brown solid

mass to disaggregated pisolites.

Red Limonite

Horizon rich in goethite. The horizon is usually dark‐brown showing no

visible structure or banding (texturally amorphous). The horizon can be

loose or compact (cohesive) and may be plastic (malleable).

Yellow Limonite

Horizon rich in goethite and lesser amount of hematite. The horizon is

usually yellow‐orange, sometimes ochre and orange or spotted (dark‐

brown with ochre spots). The horizon can be loose or compact

(cohesive) and may be plastic (malleable). Rare fragments with relict

granular texture. Sub‐horizontal lamination is generally observed. Mn‐

oxyhydroxides present as disseminated, irregular particles up to 0.5

mm in size.

Transitional Facies

Altered harzburgite showing few relic of initial texture, mostly former

pyroxene in a greenish to beige/reddish material that may content

garnierite. The altered material is intermixed with sub‐horizontal

barren brown homogeneous clay layers. These clay layers vary from

less than 5% to more than 60% of the facies.

Saprolitic Facies

Rocky Saprolite

A serpentinized harzburgite (some dunite?) with moderate to extensive

saprolitic alteration. Primary olivine has been replaced by serpentine,

saprolitic chlorite/vermiculite/ nontronite/amorphous silicates and Fe

oxyhydroxides. Patches of fresh orthopyroxene and olivine can be

present. Fractures are filled with Fe oxyhydroxides, talc and/or

amorphous compound.

Silicifed Sap

As above but with increase of visible fine grained silica material, giving

a slight pinkish colour. Facies generally located below an silica cap

Bedrock Bed rock can be of various nature, Harzburgite, Dunite, Pyroxenite and

occasionally Gabbro, Sediments or other rock types in barren areas.



52

9.1.2 Chemical Criteria

A facies distinction by chemical composition has been devised by Consulting Geologist Marc‐Antoine

Audet, P.Geo, Ph.D. based on factor analysis of the assay data. The discrimination is made using

mainly Fe, MgO, SiO2, Al2O3; Ni is also applied (Table 8).

Typical limonite‐facies laterite at the Araguaia project contains 0.76% Ni, 0.107% Co, 2.26% Cr2O3,

less than 2% MgO, 34.5% Fe and 23.59% SiO2.

The underlying saprolite material typically has 0.95% Ni, 0.028% Co, 34.51% MgO and 6.14% Fe.

Table 8: Average composition per facies based on the Teck Diamond Drilling

Facies Nb Ni% Co% Fe% MgO% SiO2% Al2O3% Cr2O3% Weathered Peridotite

Soil

1,386 0.13 0.032 29.20 0.15 25.33 17.77 1.61

Ferricrete

81 0.31 0.080 48.17 0.22 9.16 9.20 2.10

Limonite

2,313 0.76 0.107 34.50 1.90 23.59 10.69 2.26

Transition

1,810 1.09 0.043 16.47 13.45 46.17 4.73 1.11

Saprolite

2,221 0.95 0.028 10.48 25.52 42.71 4.05 0.73

Silicified Saprolite

83 0.43 0.027 8.95 6.09 72.53 2.76 0.49

Bedrock

1,482 0.31 0.014 6.14 34.51 41.50 1.62 0.45 Other Protore

Sediment

2,826 0.04 0.013 8.82 1.57 59.16 15.38 0.15

Qtz vein

86 0.05 0.011 2.50 0.95 93.55 0.55 0.13

Cao Rich

44 0.08 0.011 4.16 17.59 19.31 1.14 0.23

DIKE AL

306 0.14 0.012 5.45 3.59 60.52 15.65 0.07

Diorite

585 0.18 0.014 11.14 4.58 49.15 17.01 0.22

The chemical criteria for assigning geofacies to samples are given in Table 9.


53

Table 9: Chemical criteria for assigning Geofacies to samples

Basic Parameters Exceptions

Facies Code Rock‐code Fe MgO SiO2 Al2O3 Ni Fe/MgO

Soil RSOI, YSOI 55 15<Fe<55 MgO=<0.2 Ni<0.35Ferricrete PF, LF 70 Fe>=45 MgO > 0.1 Ni<0.5 if Al2O3>=9 and Fe>=45 and Fe/MgO>2 Ferricrete

Limonite if 15=<Fe<25 and 5=<MgO<10 and

Fe/MgO>3

Limonite

Red limonite RLIM 100 25=<Fe<45 MgO<10 Ni>0.3 if 15=<Fe<30 and MgO<5 and and SiO2

>50 and Fe/MgO>2

Limonite

Yellow Limonite YLIM 100 25=<Fe<45 MgO<10 Ni>0.3 if Al2O3>=9 and 20=<Fe<45 and

Fe/MgO>2

Limonite

if Fe>25 and Fe/MgO>2 Limonite

Transition

Upper Transition UT 200 15=<Fe<40 5=<MgO<40 if 25=<Fe<40 and MgO>=10 Transition

Green Transition GRT 200 15=<Fe<40 5=<MgO<40 if 8=<Fe<15 and SiO2>=50 and Fe/MgO<=2 Transition

Brown Transition BT 200 15=<Fe<40 5=<MgO<40 if Al2O3>=9 and 8=<Fe<30 and Fe/MgO>2 Transition

Gray Transition GYT 200 15=<Fe<40 5=<MgO<40 if Fe<8 and MgO<20 and 50<SiO2 >= 60 Transition

Rocky Saprolite

Saprolite SAP 300 not coded

Rocky Saprolite SROC 330 5=<Fe<15 15=<MgO<40

Silicified Saprolite SIS 350 Fe<8 MgO<20 SiO2=<60 Ni>0.5

Bedrock

Harzbugite 500 Fe<8 MgO>=25 30<SiO2<50

Dunite 500 Fe<8 MgO>=25 30<SiO2<50

Others

Sediment 600 Fe<15 MgO<3 Al2O3>=7Ni<0.09 if Al2O3>=9 and 8<Fe>=45 and Ni<0.03

and Fe/MgO>2

Sediment

Diorite

800 Al2O3>=9Ni<0.35 if Fe<8 and MgO<20 and SiO2 >= 60 and

Ni<0.03

Sediment

Cao rich 850 Cao >20 If Al2O3 >= 9 and Fe > 8 and Fe/MgO <=2 Diorite

Dike Al 870 Fe<20 MgO<5 Al2O3>12 <= 2

Qtz vein 900 Sio2>90

Other 950



54

All geological samples from the Teck diamond drill holes are plotted in a triangular diagram (Fe, MgO

and SiO2) in Figure 21 with symbols according to their ‘Geofacies’ classification.

It implies that the chemical change in terms of these three major elements, from bedrock to

saprolite and further to Transition, is primarily an increase in Fe and simultaneous decrease in MgO

along with a moderate decrease in SiO2. The continued chemical change from Transition to Limonite

and from bottom to top of the limonite horizon is primarily a further increase in the Fe and a sharp

decrease in MgO.

Figure 21: Ternary plot of all drill‐core samples using the ‘Geofacies’ classification, Fe, MgO, SiO2 (n=9,376)



55

9.1.3 Facies Distribution

The deposits at the Araguaia project are heterogeneous as far as lateritic facies distribution is

concerned (Table 10). The average thickness for the limonite facies range from 6.97m to 11.56m,

while the maximum thickness is less variable, ranging from 24m to 32m. The Saprolite horizon shows

similar average variations while the total thickness is highly variable.

Table 10: Average thickness of laterite horizons at the Araguaia Project

Sector Area Drill hole limonite (m) Transition (m) Saprolite (m)

nb max ave max ave max ave

South Baião 121 23.90 6.97 16.94 4.70 19.25 6.35

Baião South

Pequizeiro Pequizeiro 119 28.94 9.57 22.60 5.64 24.50 7.72

Pequizeiro East

Pequizeiro West

Pequizeiro NW

Center Vila Oito East 161 32.10 9.43 59.15 5.78 59.05 11.28

Vila Oito

Vila Oito West

Jacutinga

North Oito 58 31.30 11.56 25.20 6.25 37.86 9.87

Oito West

Figures 22 to 25 show the thickness distribution for each facies; limonite, transition and saprolite,

for each of the sectors.


56

Figure 22: North Sector: Thickness distribution of limonite (top left), transition (top right), saprolite (lower left) and all facies (lower right)

Marc‐Antoine Audet Géologue Consultant Inc., 787 Powell, Town of Mont‐Royal, PQ, Canada, H4P 1E2

57

Figure 23: Centre sector: Thickness distribution of limonite (top left), transition (top right), saprolite (lower left) and all facies (lower right)


58

Figure 24: Peguizeiro sector: Thickness distribution of limonite (top left), transition (top right), saprolite (lower left) and all facies (lower right)


59

Figure 25: South sector: Thickness distribution of limonite (top left), transition (top right), saprolite (lower left) and all facies (lower right)



60

9.1.4 Average Mineralized Profiles The percent of boreholes with mineralized intervals at various cut‐off grade of nickel are presented

in Table 11. The average thicknesses of mineralized intercepts calculated at 1.0% nickel cut‐off‐

grade for the four main sectors range from 5.12m to 7.55m, with maximum thicknesses varying from

13.08m to 21.30m. Tables 12 to 15 show the mineralised intercepts per borehole estimated using

1.0%Ni cut‐of‐grade for mineralised intercepts ≥2m thick with a maximum of 2.0m of internal

dilution. Figures 26 to 28 suggest that the lateral continuity for the mineralized material is high to

very high in all areas.

Table 11: Thickness of mineralised profiles at various Ni cut‐off grades

Ni cut‐off Sector Drill‐holes Thickness (m)

% Total Intersections % Mean Max.

0.5 North 61 46 75% 12.15 25.76

Centre 119 75 63% 33.20 13.47

Pequizeiro 118 82 69% 11.67 36.88

South 122 98 80% 9.77 26.50

Global 420 301 72% 11.57

0.7 North 61 44 72% 9.10 17.71

Centre 119 72 61% 10.81 25.40

Pequizeiro 118 76 64% 9.63 24.50

South 122 94 77% 7.63 22.48

Global 420 286 68% 8.77

1.0 North 61 41 67% 5.17 13.08

Centre 119 65 55% 7.55 19.18

Pequizeiro 118 70 59% 7.04 21.30

South 122 80 66% 5.12 14.75

Global 420 256 61% 6.27

1.2 North 61 33 54% 3.73 10.67

Center 119 57 48% 5.90 16.28

Pequizeiro 118 57 48% 6.34 18.74

South 122 66 54% 4.05 12.00

Global 420 213 51% 5.10

1.5 North 61 20 33% 3.83 11.27

Centre 119 39 33% 2.47 8.26

Pequizeiro 118 42 36% 4.82 15.28

South 122 41 34% 3.51 9.82

Global 420 142 34% 3.83

2.0 North 61 6 10% 1.75 3.00

Centre 119 15 13% 2.47 7.43

Pequizeiro 118 22 19% 3.58 10.00

South 122 25 20% 2.04 6.12

Global 420 68 16% 2.62



61

Table 12: Sector North: Mineralised intercepts at a 1.0% Ni cut‐off grade

HOLE‐ID Length (m) Density Ni% Co% Fe% MgO% SiO2% Al2O3%

North

PCA‐DD‐0076 5.30 1.36 1.20 0.11 28.69 9.72 29.64 6.52

PCA‐DD‐0078 4.50 1.33 1.43 0.04 21.13 12.47 32.32 10.34

PCA‐DD‐0079 4.35 1.42 1.15 0.03 13.99 22.37 40.19 2.92

PCA‐DD‐0080 3.58 1.33 1.12 0.03 15.51 6.79 53.79 7.63

PCA‐DD‐0081 3.40 1.33 1.37 0.08 32.02 7.38 25.56 7.43

PCA‐DD‐0083 2.90 1.49 1.03 0.03 12.15 24.68 40.08 2.82

PCA‐DD‐0084 3.47 1.33 1.15 0.05 22.83 5.12 40.35 5.78

PCA‐DD‐0085 13.08 1.39 1.37 0.05 17.80 15.11 41.59 4.81

PCA‐DD‐0086 9.50 1.38 1.27 0.07 20.98 15.77 35.19 5.51

PCA‐DD‐0088 11.13 1.37 1.25 0.07 21.73 16.16 32.64 5.84

PCA‐DD‐0358 3.84 1.33 1.14 0.09 35.09 2.05 17.17 14.41

PCA‐DD‐0362 2.34 1.49 1.19 0.03 12.69 22.26 39.13 4.61

PCA‐DD‐0363 2.00 1.33 1.03 0.10 46.83 1.02 10.54 8.41

PCA‐DD‐0364 9.13 1.33 1.21 0.10 36.93 3.92 15.25 12.69

PCA‐DD‐0365 3.30 1.36 1.34 0.07 26.31 11.79 28.56 7.68

PCA‐DD‐0366 7.10 1.37 1.19 0.08 23.44 20.01 27.77 5.23

PCA‐DD‐0367A 13.00 1.33 1.18 0.16 43.11 1.88 13.10 9.18

PCA‐DD‐0368 2.69 1.33 1.17 0.12 42.84 3.13 12.97 9.33

PCA‐DD‐0370 8.36 1.35 1.22 0.09 29.61 14.26 22.65 6.80

PCA‐DD‐0391A 2.74 1.46 2.52 0.02 11.85 9.62 45.07 13.61

PCA‐DD‐0392 4.06 1.33 1.13 0.12 36.29 8.34 19.01 6.89

PCA‐DD‐0394 7.30 1.38 1.15 0.03 10.66 20.09 51.27 3.86

PCA‐DD‐0395 13.70 1.36 1.47 0.04 15.83 11.00 48.84 4.55

PCA‐DD‐0396 3.13 1.45 1.35 0.04 11.97 26.41 38.33 4.20

PCA‐DD‐0398 8.11 1.38 1.80 0.04 17.91 12.32 42.90 6.50

PCA‐DD‐0400 5.13 1.38 1.65 0.07 12.74 15.30 50.91 4.49

PCA‐DD‐0401 6.28 1.41 1.15 0.04 26.33 15.01 27.16 6.48

PCA‐DD‐0403 4.72 1.33 1.33 0.18 41.27 1.41 11.46 10.88

PCA‐DD‐0405 4.19 1.33 1.22 0.06 25.53 13.56 27.69 5.76

PCA‐DD‐0407 8.31 1.33 1.57 0.08 20.86 5.89 41.67 5.96

PCA‐DD‐0435 9.69 1.39 1.19 0.03 17.34 16.33 40.92 4.67

PCA‐DD‐0437 12.67 1.38 1.75 0.05 17.74 14.91 41.59 4.30



62

Table 13: Sector Centre: Mineralised intersects at a 1.0% Ni cut‐off grade


Centre

PCA‐DD‐0057 9.90 1.41 2.33 0.08 18.30 19.64 35.94 2.44

PCA‐DD‐0093 17.28 1.44 1.17 0.04 14.35 28.18 35.04 3.26

PCA‐DD‐0094 19.50 1.47 1.33 0.03 11.12 26.70 40.83 2.79

PCA‐DD‐0096 5.94 1.41 1.17 0.05 21.26 14.32 38.38 3.87

PCA‐DD‐0097 4.88 1.35 1.28 0.06 24.81 11.28 38.04 2.64

PCA‐DD‐0098 2.66 1.49 1.49 0.02 9.09 22.43 46.10 7.89

PCA‐DD‐0102 4.98 1.36 1.10 0.04 15.20 19.37 42.19 4.24

PCA‐DD‐0103 2.95 1.33 1.00 0.04 18.74 18.23 37.44 3.46

PCA‐DD‐0104 14.97 1.34 1.38 0.05 14.70 6.96 50.70 6.89

PCA‐DD‐0105 9.30 1.44 1.33 0.05 16.05 24.95 36.32 2.99

PCA‐DD‐0108 9.45 1.39 1.34 0.05 16.31 13.48 49.77 2.06

PCA‐DD‐0122 3.00 1.33 1.18 0.06 24.87 16.17 29.83 5.02

PCA‐DD‐0129A 11.03 1.43 1.60 0.04 12.04 20.16 45.74 3.83

PCA‐DD‐0242 12.50 1.41 1.52 0.05 14.78 23.00 40.70 1.91

PCA‐DD‐0244 12.50 1.41 1.27 0.04 15.27 9.99 50.46 5.59

PCA‐DD‐0246 7.60 1.55 1.06 0.03 10.53 21.79 46.89 3.73

PCA‐DD‐0247 14.62 1.38 1.40 0.06 19.87 12.09 44.44 2.80

PCA‐DD‐0248 2.40 1.45 1.15 0.02 8.78 20.82 46.69 7.62

PCA‐DD‐0251 6.00 1.40 1.04 0.07 16.00 18.80 41.66 3.45

PCA‐DD‐0254 7.45 1.39 1.48 0.06 16.48 20.09 39.24 2.98

PCA‐DD‐0255A 12.50 1.37 1.29 0.04 18.71 18.92 38.25 3.23

PCA‐DD‐0256 7.33 1.33 2.11 0.35 26.58 4.11 38.80 4.73

PCA‐DD‐0258 8.00 1.43 1.21 0.04 16.09 24.11 36.38 3.65

PCA‐DD‐0259 12.30 1.42 1.27 0.03 11.07 21.84 48.48 3.24

PCA‐DD‐0260 12.33 1.44 2.20 0.03 14.72 19.99 43.58 3.30

PCA‐DD‐0261 6.30 1.37 1.34 0.06 22.19 16.04 34.49 4.51

PCA‐DD‐0264A 5.00 1.33 1.10 0.04 19.91 5.59 45.73 8.81

PCA‐DD‐0266 2.50 1.40 1.37 0.12 24.48 16.53 30.56 4.64

PCA‐DD‐0268 5.60 1.38 1.53 0.05 16.96 19.50 39.13 3.31

PCA‐DD‐0270 16.55 1.45 1.35 0.04 12.85 21.59 43.62 3.10

PCA‐DD‐0271 9.18 1.45 1.37 0.04 13.75 24.87 40.67 1.84

PCA‐DD‐0272 3.89 1.41 1.21 0.04 20.62 20.28 31.18 4.38

PCA‐DD‐0273 15.29 1.45 1.38 0.04 11.26 29.45 39.52 1.74

PCA‐DD‐0276 8.60 1.41 1.18 0.06 22.12 15.23 33.57 5.54

PCA‐DD‐0279 3.20 1.44 1.58 0.17 11.84 24.48 41.10 2.79

PCA‐DD‐0280 4.00 1.49 1.15 0.03 8.41 11.29 42.00 18.54

PCA‐DD‐0331 18.60 1.27 1.22 0.08 19.18 23.81 33.08 3.12

PCA‐DD‐0332 11.22 1.35 1.21 0.04 16.17 7.69 51.04 4.18

PCA‐DD‐0333 14.26 1.40 1.69 0.07 16.70 18.24 42.37 2.15

PCA‐DD‐0334 6.90 1.33 1.15 0.04 24.18 4.84 43.85 4.79



63


Centre (cont)

PCA‐DD‐0336 14.60 1.42 1.46 0.05 13.53 21.22 42.99 2.86

PCA‐DD‐0338 2.75 1.37 1.33 0.05 15.89 19.61 41.22 3.09

PCA‐DD‐0339 6.60 1.33 1.56 0.07 22.67 5.46 49.11 2.64

PCA‐DD‐0340 5.70 1.37 1.25 0.07 21.56 13.06 33.49 8.46

PCA‐DD‐0341 7.72 1.33 1.04 0.06 23.50 4.64 42.86 5.23

PCA‐DD‐0342 6.07 1.35 1.15 0.08 26.03 9.66 36.79 3.86

PCA‐DD‐0345 3.27 1.33 1.05 0.03 18.39 6.09 51.76 3.94

PCA‐DD‐0346 3.83 1.44 1.22 0.04 15.38 23.74 37.99 2.79

PCA‐DD‐0347 16.50 1.43 1.40 0.10 13.33 12.88 50.61 5.18

PCA‐DD‐0348 4.83 1.46 1.20 0.03 13.64 23.64 40.06 3.03

PCA‐DD‐0350 5.87 1.38 1.14 0.06 21.01 11.47 34.66 8.91

PCA‐DD‐0352 9.90 1.41 1.55 0.06 19.85 13.52 37.00 5.83

PCA‐DD‐0353 6.00 1.37 1.19 0.08 23.13 12.26 34.41 5.33

PCA‐DD‐0384 9.60 1.38 1.51 0.11 28.29 14.04 26.38 5.65

PCA‐DD‐0386 20.11 1.40 1.77 0.11 20.42 18.20 34.51 3.60

PCA‐DD‐0387 10.61 1.41 1.69 0.05 21.69 18.02 35.18 2.47

PCA‐DD‐0388 4.88 1.47 1.26 0.03 11.70 28.44 38.94 2.31

PCA‐DD‐0418 7.40 1.36 1.32 0.08 16.24 9.74 46.24 4.98



64

Table 14: Sector Pequizeiro: Mineralised intersects at a 1.0% Ni cut‐off grade


Pequizeiro

PCA‐DD‐0033 7.90 1.38 1.78 0.08 20.19 19.98 31.56 4.63

PCA‐DD‐0035 14.50 1.33 2.32 0.06 18.50 8.54 42.81 5.45

PCA‐DD‐0037 8.70 1.33 1.61 0.05 18.67 9.00 47.84 3.41

PCA‐DD‐0043 5.80 1.33 1.35 0.07 31.69 5.42 29.17 6.71

PCA‐DD‐0044 3.60 1.46 1.25 0.06 16.93 22.41 34.60 3.95

PCA‐DD‐0045 2.50 1.33 1.25 0.06 27.65 11.63 27.49 7.70

PCA‐DD‐0048 8.17 1.36 1.33 0.14 33.77 8.44 21.96 6.46

PCA‐DD‐0049 5.89 1.45 1.28 0.03 12.16 23.05 43.54 2.52

PCA‐DD‐0050 8.01 1.44 1.80 0.04 12.57 21.34 41.55 3.53

PCA‐DD‐0052 19.50 1.45 1.29 0.04 14.37 26.11 37.63 1.71

PCA‐DD‐0053 6.10 1.34 1.31 0.07 31.67 8.63 20.00 9.60

PCA‐DD‐0054 4.20 1.36 1.60 0.08 31.85 6.30 19.36 9.34

PCA‐DD‐0055 2.70 1.36 1.34 0.05 21.63 14.55 33.06 6.84

PCA‐DD‐0130 9.65 1.41 1.17 0.03 17.85 15.56 40.90 5.38

PCA‐DD‐0207 18.11 1.44 1.54 0.04 14.13 20.64 38.60 6.25

PCA‐DD‐0210 8.30 1.34 1.42 0.06 24.38 6.00 35.90 7.34

PCA‐DD‐0212 2.70 1.37 1.39 0.07 19.34 17.23 30.01 10.61

PCA‐DD‐0213 2.20 1.33 1.03 0.09 40.63 2.27 17.03 9.60

PCA‐DD‐0215 9.40 1.44 1.51 0.05 13.38 20.15 39.42 6.94

PCA‐DD‐0216 10.57 1.46 1.90 0.05 11.95 23.53 38.30 5.83

PCA‐DD‐0219 4.50 1.39 1.66 0.04 19.50 16.88 37.47 3.89

PCA‐DD‐0228 12.73 1.45 2.22 0.05 13.85 19.93 42.24 3.44

PCA‐DD‐0229 6.90 1.33 1.21 0.06 23.60 12.62 36.63 4.45

PCA‐DD‐0238 4.00 1.37 1.27 0.09 25.77 3.61 34.50 10.99

PCA‐DD‐0281 5.56 1.36 1.30 0.14 27.36 9.33 22.37 14.80

PCA‐DD‐0285 10.60 1.47 1.20 0.05 12.21 28.76 38.04 2.18

PCA‐DD‐0288 14.63 1.49 1.24 0.03 7.66 35.74 36.85 1.33

PCA‐DD‐0289 21.61 1.43 1.36 0.06 15.13 23.34 36.69 5.05

PCA‐DD‐0290 20.00 1.43 1.73 0.05 13.19 9.35 53.18 4.64

PCA‐DD‐0291 20.50 1.48 2.26 0.03 10.01 17.28 45.00 8.46

PCA‐DD‐0292 10.50 1.34 1.46 0.04 12.92 12.58 52.19 4.81

PCA‐DD‐0294 3.06 1.49 1.95 0.05 12.11 5.36 62.58 3.69

PCA‐DD‐0295 20.10 1.34 1.39 0.06 21.60 5.49 45.17 4.48

PCA‐DD‐0296 9.40 1.45 1.95 0.07 13.87 27.05 35.82 2.38

PCA‐DD‐0297 14.73 1.42 1.67 0.06 14.64 20.74 40.87 3.24

PCA‐DD‐0298 21.30 1.38 1.74 0.07 23.52 15.18 33.22 4.04

PCA‐DD‐0299 20.13 1.44 1.83 0.04 16.40 23.12 35.91 3.10

PCA‐DD‐0300 9.62 1.44 1.22 0.03 10.00 21.56 49.41 3.82

PCA‐DD‐0302 4.60 1.33 1.20 0.09 34.02 9.27 17.00 8.48

PCA‐DD‐0303 6.50 1.41 1.50 0.07 22.26 14.49 26.90 11.55



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Pequizeiro (cont)

PCA‐DD‐0309 6.22 1.39 1.40 0.05 17.04 17.39 30.84 12.01

PCA‐DD‐0312 9.06 1.41 2.08 0.05 17.13 17.12 40.68 3.93

PCA‐DD‐0313 3.83 1.33 1.30 0.04 16.93 8.32 52.14 3.56

PCA‐DD‐0314 9.96 1.35 1.40 0.05 22.75 9.39 37.70 4.25

PCA‐DD‐0316 15.26 1.34 1.33 0.04 20.69 6.97 43.91 4.35

PCA‐DD‐0318 2.00 1.33 1.10 0.04 11.09 12.11 56.57 3.93

PCA‐DD‐0320 9.36 1.33 1.10 0.05 18.85 6.63 48.35 5.52

PCA‐DD‐0322 7.90 1.35 2.01 0.10 17.55 10.73 45.57 4.21

PCA‐DD‐0323 2.24 1.39 1.84 0.14 10.56 17.45 48.75 1.71

PCA‐DD‐0324 3.76 1.37 1.53 0.11 18.51 9.84 45.79 3.91

PCA‐DD‐0325 4.32 1.39 1.02 0.05 15.92 18.36 34.16 9.79

PCA‐DD‐0330 4.10 1.33 1.08 0.09 40.54 3.27 15.09 8.13

PCA‐DD‐0371 3.06 1.54 1.07 0.04 18.66 19.23 31.58 6.10

PCA‐DD‐0373 2.00 1.33 1.26 0.09 33.60 8.97 19.23 7.47

PCA‐DD‐0377 5.70 1.33 1.28 0.07 29.88 7.82 25.18 7.37



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Table 15: Sector South: Mineralised intersects at a 1.0% Ni cut‐off grade


South

PCA‐DD‐0001 13.60 1.46 1.16 0.03 12.25 28.44 36.77 2.52

PCA‐DD‐0004 2.50 1.39 1.26 0.04 17.90 11.66 44.76 3.29

PCA‐DD‐0005 2.90 1.33 1.68 0.16 21.39 9.54 36.19 8.02

PCA‐DD‐0006 2.89 1.49 1.64 0.02 11.07 18.31 46.66 6.53

PCA‐DD‐0007 13.00 1.41 1.92 0.10 21.47 15.62 28.31 7.47

PCA‐DD‐0008A 3.33 1.33 1.97 0.12 28.85 9.18 27.16 7.77

PCA‐DD‐0011 2.28 1.33 1.77 0.05 19.14 8.78 43.38 5.96

PCA‐DD‐0012 5.70 1.33 1.63 0.11 38.02 2.39 16.46 9.38

PCA‐DD‐0013 2.00 1.33 2.10 0.06 34.79 5.95 18.60 7.70

PCA‐DD‐0014 7.70 1.42 1.18 0.03 13.72 20.28 43.07 3.35

PCA‐DD‐0015 5.99 1.36 1.18 0.04 21.72 13.30 35.52 5.23

PCA‐DD‐0016 14.21 1.44 1.26 0.04 14.59 21.99 39.26 3.91

PCA‐DD‐0019 2.45 1.33 1.19 0.07 32.85 4.49 24.43 7.60

PCA‐DD‐0020 14.25 1.42 1.81 0.10 23.81 13.63 29.68 6.50

PCA‐DD‐0023 5.90 1.36 1.07 0.04 22.25 11.45 31.70 9.55

PCA‐DD‐0024 6.24 1.49 1.58 0.02 10.50 17.97 39.61 11.06

PCA‐DD‐0026 4.05 1.33 1.42 0.02 20.33 2.92 31.65 19.30

PCA‐DD‐0028 2.90 1.33 1.06 0.09 38.72 0.51 13.72 13.93

PCA‐DD‐0040 4.17 1.33 1.22 0.06 26.25 11.42 25.90 9.23

PCA‐DD‐0135 2.03 1.33 1.04 0.06 25.15 17.87 25.86 5.81

PCA‐DD‐0144 3.87 1.33 1.53 0.14 39.44 2.27 12.66 9.51

PCA‐DD‐0145 4.20 1.33 1.10 0.11 36.85 4.20 17.66 10.17

PCA‐DD‐0147 2.93 1.33 1.84 0.08 35.94 3.98 18.16 8.98

PCA‐DD‐0149 2.31 1.33 1.13 0.07 38.66 2.99 17.70 9.70

PCA‐DD‐0150 3.73 1.33 1.11 0.06 33.01 3.43 21.97 10.27

PCA‐DD‐0151 6.45 1.35 1.70 0.10 32.31 8.22 18.86 8.40

PCA‐DD‐0152 4.50 1.36 1.74 0.07 31.12 6.75 24.92 7.60

PCA‐DD‐0153 3.61 1.33 1.15 0.09 34.92 7.41 19.22 8.63

PCA‐DD‐0154 4.83 1.49 1.18 0.02 10.23 28.59 37.16 5.64

PCA‐DD‐0156 3.07 1.33 1.25 0.07 32.08 10.20 19.25 8.17

PCA‐DD‐0158 3.45 1.33 1.31 0.10 39.23 1.50 15.64 7.86

PCA‐DD‐0159 2.32 1.36 1.02 0.11 27.45 15.11 22.49 8.54

PCA‐DD‐0160 2.20 1.33 1.17 0.04 20.15 17.17 38.93 3.74

PCA‐DD‐0161 5.63 1.40 1.48 0.12 17.42 19.27 27.95 12.68

PCA‐DD‐0162 19.16 1.35 1.15 0.11 18.04 13.50 45.26 3.76

PCA‐DD‐0167 2.80 1.33 1.12 0.06 31.35 7.68 21.83 10.08

PCA‐DD‐0168 7.19 1.36 1.59 0.07 16.69 10.78 48.47 4.02

PCA‐DD‐0171 3.40 1.33 1.14 0.09 33.75 5.04 21.38 10.02

PCA‐DD‐0172 15.50 1.41 1.36 0.06 14.48 15.70 42.61 7.33

PCA‐DD‐0173 6.00 1.41 1.26 0.03 14.81 22.70 41.10 2.97



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South (cont)

PCA‐DD‐0174 12.10 1.46 1.35 0.06 21.75 16.03 33.94 5.00

PCA‐DD‐0175 15.50 1.39 1.67 0.13 21.26 15.63 33.78 4.76

PCA‐DD‐0176 10.75 1.40 1.58 0.07 19.59 14.78 38.19 4.25

PCA‐DD‐0177 14.98 1.39 1.33 0.06 16.00 15.67 43.72 4.97

PCA‐DD‐0178 4.00 1.37 1.53 0.03 13.48 15.20 44.76 3.45

PCA‐DD‐0179 7.30 1.40 1.59 0.04 14.34 17.93 40.81 4.10

PCA‐DD‐0181 4.50 1.38 1.40 0.09 26.17 15.43 24.31 7.77

PCA‐DD‐0182 5.50 1.41 1.62 0.05 15.38 20.55 38.35 4.10

PCA‐DD‐0183 6.20 1.33 1.46 0.22 42.75 1.71 9.96 9.48

PCA‐DD‐0184 7.86 1.36 1.49 0.07 23.11 14.75 34.60 4.48

PCA‐DD‐0185 5.06 1.49 1.27 0.04 10.63 26.21 43.76 2.16

PCA‐DD‐0186 3.57 1.36 1.12 0.03 17.14 13.82 44.45 4.56

PCA‐DD‐0187 5.69 1.37 1.56 0.07 21.28 8.47 40.39 6.07

PCA‐DD‐0188 3.25 1.33 1.26 0.21 42.79 0.96 10.42 8.54

PCA‐DD‐0189 8.00 1.37 1.77 0.07 20.11 16.06 32.93 6.46

PCA‐DD‐0195 12.00 1.45 1.38 0.05 20.31 16.78 34.08 5.72

PCA‐DD‐0196 7.60 1.41 1.22 0.06 25.29 19.43 26.45 4.90

PCA‐DD‐0198 6.88 1.36 1.53 0.07 29.52 11.01 25.17 5.96

PCA‐DD‐0202 4.00 1.33 1.26 0.03 15.78 9.53 41.35 10.02

PCA‐DD‐0221 9.36 1.47 2.44 0.04 13.33 21.55 38.13 5.76

PCA‐DD‐0223 3.36 1.33 1.15 0.09 34.66 4.43 18.34 10.19

PCA‐DD‐0458 6.00 1.58 1.09 0.06 19.82 19.49 31.91 5.86

PCA‐DD‐0470 14.10 1.35 1.47 0.05 19.31 18.39 30.55 7.23

PCA‐DD‐0480 9.00 1.44 1.19 0.03 12.46 26.39 40.50 2.78

PCA‐DD‐0482 8.86 1.34 2.01 0.05 18.84 12.79 41.21 3.85

PCA‐DD‐0487 4.50 1.33 1.21 0.03 20.40 13.39 33.27 9.01


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Figure 26: Araguaia Project: Thickness of mineralised profiles at 1.0%Ni cut‐off grade per sectors


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Figure 27: Araguaia Project: Ni % grade of mineralised profiles at 1.0% Ni cut‐off grades per sectors


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Figure 28: Araguaia Project: Ni grade x Thickness of mineralised profiles at 1.0% Ni cut‐off grades per sectors



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10 Exploration

The following sections briefly describe the exploration undertaken by Teck and data as used for

input to mineral estimations undertaken as part of this study. Descriptions are also provided on

exploration data collected by Horizonte Minerals not yet included in mineral resource estimation for

completeness and future reporting purposes.

The exploration history is not repeated here, however data collection is presented in chronological

order where possible.

10.1 Exploration in the Teck Araguaia Licences

Teck commenced exploration on the Araguaia project in 2006. Due to the global financial crises and

resulting focus upon core assets, after a three‐year exploration programme in November 2008 Teck

ceased all works on their Araguaia project.

A summary of the data collection work completed by Teck and as used in the resource estimations

reported as part of this study are presented in Table 16 below.

Table 16: Teck’s exploration work at the Araguaia Project

Teck Summary of Exploration 2006 – 2008 (taken from HM database)

Type of Work Number Total (m) Comments

Stream sediment, soil and rock sampling 3572

Auger drill holes 46 627.9 Baião, Oito

RC drill holes 69 1,990.4

Irregularly spaced; Baião, Jacutinga, Lajeiro, Pequizeiro, Poço

Diamond drill holes 489 11,404.45

400m x 80m, 200m x 200m, 100m x 100m spacing

10.1.1 Topographic Surveys

Teck acquired 10m topographical contour data from commissioned ground surveys undertaken by

Prospectors Aerolevantamentos Esistemas Ltda.

This topographical data is used to constrain any mineralisation at the surface, and as an initial

control for planned drillhole elevations.



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10.1.2 Surface Exploration and Mapping

The following is modified from Teck DNPM report DNPM 850.514/2004.

During 2006 and 2007 Teck conducted surface exploration sampling that included in the collection of

78 stream sediment samples and 56 surface rock chip samples across the permit areas. This work

resulted in the identification of 6 stream sediment nickel anomalous target areas namely the Oito

target; the Poco target; Jacutinga target; Lajeiro target (Vila Oito West); Pequizeiro target and the

Baião target.

Following stream sediment target identification, airborne magnetic and radiometric geophysical

surveys were flown across the Araguaia permit areas, comprising of 126, 300m spaced flight lines

and 12 control lines for a total of 2374km’s.

The modelling of this high‐resolution airborne geophysical data delineated several geophysical

anomalies later tested by regular spaced soil geochemical survey. Teck collected a total of 3572 soil

samples (inc. blanks, standards and duplicates) at 400m x 50m centres over 371km of traverses.

From this work 5 nickel in soils anomalous areas were identified at the Baião target; Pequizeiro

target; Jacutinga target; Vila Oito target (Vila Oito West, Vila Oito and Vila Oito East) and Oito target

areas (Oito West and Oito).

The Analytical Signal calculated from airborne magnetic geophysical survey and soil geochemical

grids for the Araguaia project are presented in Figures 29 and 30 below.

10.1.3 Drilling

10.1.3.1 Auger Drilling

Teck completed 46 shallow auger drill holes. Locations of Teck auger drill holes are shown on Figure

30.

10.1.3.2 RC Drilling

1st pass irregular spaced exploratory reverse circulation drilling was undertaken by Teck between

September and November 2006 to test the Ni in soil geochemical and airborne magnetic and

radiometric geophysical anomalies and identified target areas.



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69 RC holes were drilled for a total of 1996 metres testing 5 target areas at Baião, Pequizeiro,

Jacutinga, Vila Oito West and Vila Oito (DNPM 850.514/2004). Positive drill results were returned for

each target tested.

The locations of Teck RC drill holes are shown on Figure 30.

10.1.3.3 Core Drilling

Following positive results from the RC drill programs, 1st phase 400m x 400m spaced diamond drilling

took place at the Baião, Pequizeiro, Jacutinga, Vila Oito West and Vila Oito targets sometime

between April and November 2007.

Where preliminary results from drill core were positive, 2nd phase 200m x 200m spaced diamond

drilling was undertaken.

In November 2008, having completed the 2nd phase 200m x 200m spaced drilling over selected

targets, taking the project to an advanced exploration stage Teck ceased exploration on the project.

Location of Teck diamond drill holes are shown on Figures 31 to 34 and table of significant intercepts

from this work presented in Tables 17 to 20.



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Figure 29: Teck Araguaia Project Airborne Magnetics – Analytical Signal



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Figure 30: Teck Araguaia Exploration Map


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Figure 31: Teck’s core drilling at the North sector


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Figure 32: Teck’s core drilling at the Centre sector


78

Figure 33: Teck’s core drilling at the Pequizeiro sector



79

Figure 34: Teck’s core drilling at the South sector



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10.2 Exploration in the Horizonte Minerals Lontra Licences

Horizonte Minerals commenced exploration on the Lontra project late in 2006.

A summary of the data collection work completed by Horizonte Minerals from 2006 to 2009 is

presented in Table 17 below.

Table 17: Exploration work completed by Horizonte Minerals from 2006 to 2009 at Lontra Project

Horizonte Minerals Summary of Exploration 2006 – 2009

Type of Work Number Total (m) Comments

Stream sediment, soil and rock sampling 2,024 ‐

Auger drill holes 124 921

RC drill holes 0 0

Diamond drill holes 63 1,299.5

400m x 80m, 200m x 200m, 100m x 100m spacing

The following sections 10.2.1 to 10.2.3 are modified from Owen et al, 2010.

10.2.1 Topographic Surveys

The only topographic surveys carried out was a Total Station differential GPS survey on the

completion of the diamond drilling programs on the Northern and Raimundo targets to tie in the

collars of the drillholes. For all other activities a grid using data from the NASA SRTM program was

used and contoured at 10m, 2m and 1m contour intervals depending on the detail of the maps being

generated. The SRTM data is satellite radar data collected by NASA and prepared and made available

on a 90m grid for use in South America.

10.2.2 Surface Exploration and Mapping

Exploration was initiated by HM in late 2006 with a regional low threshold, multi‐element, fine

fraction stream sediment survey. This led to the definition of seven anomalous zones of which three

were considered priority nickel targets. Initial field reconnaissance indicated the presence of

previously unmapped ultramafic lithologies and produced a rock sample, from a laterite gravel pit

being used to obtain road base, with visible garnierite indicating the potential for lateritic nickel.

In 2007, after formalising the JV on the Lontra Project, the stream sediment targets were followed

up by regional (400m x 80m grid) multi‐element soil sampling programmes. HM soil geochemical

survey grids for the Lontra project are shown in Figure 35 below.



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10.2.3 Drilling

10.2.3.1 Auger Drilling

In late 2007, a 124 hole auger drilling programme was initiated to evaluate the principal soil anomalies at Raimundo, Northern Zone and Southern Zone. Exploration success continued in 2007 with a number of mineralised nickel intervals being intersected in the auger drilling. However, the rising water table associated with the on‐set of the rainy season and the limited ability of the auger to penetrate to the saprock zone meant that many holes had to be abandoned above or within the mineralised interval. Figure 35 below shows HM auger drill hole coverage for the Lontra project.

10.2.3.2 RC Drilling

Horizonte Minerals have not conducted any work using reverse circulation drilling methods on the

project.

10.2.3.3 10.2.3.3 Diamond Drilling

In 2008 HM initiated the first of two phases of a diamond drilling programme. In total 63 diamond drill holes were completed totalling 1,299.5m to test the Northern and Raimundo Zone target anomalies. The programme consisted of:

31 holes completed on the Northern anomaly;

31 holes completed on the Raimundo anomaly; and

1 exploratory hole on the Southern anomaly. Within the programme vertical holes were drilled to 15‐25m in depth, ensuring that the saprock‐fresh rock interface was intersected. Drill hole spacing was as follows:

On 400m spaced lines with 80m hole centres (for geological sections and interpretation);

On 200m x 200m centres (for resource potential identification); and

On 100m x 100m centres (in the Raimundo high grade zone for definition of grade variation).

The diamond drilling programme was carried out with the objective of demonstrating the existence of lateritic nickel mineralisation over a significant area, and with the aim of demonstrating the potential of the area to contain a 30Mt lateritic Ni resource with a grade of >1.00 percent Ni. The first phase holes were drilled by drill contractor, Pacheco e Filhos Ltda of Rio Grande do Sul, using a Sullivan diamond drill with conventional drilling techniques. The second phase was drilled by Mariana Drilling, Inc. of Goiania, Goias using a BBS‐10 drill. The holes were drilled with HWT rods resulting in HQ core. High core recoveries were crucial to the reliability of the geochemistry and these were closely monitored, with less than 90 percent recovery being questioned and less than 80 percent not being accepted by HM.



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Holes were drilled through the lateritic profile to fresh rock where, in general, the hole was stopped after 3‐5m of highly competent massive fresh rock in the first phase and at the contact in the second phase. Holes were typically between 15‐25m long, but did reach over 30m in depth.

Diamond drill hole locations are presented in Figure 35 below.

Significant +1% Ni results returned from the 63 hole Horizonte Minerals Lontra project diamond

drilling programmes are summarised in Table 18 below.

Figure 35: Horizonte Minerals Lontra Exploration Map



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Table 18: Horizonte Minerals Lontra project; Mineral intersects at 1% Ni cut‐of‐grade

Horizonte Minerals Lontra Significant Drill Intercepts*

HOLE ID. EAST NORTH RL FROM TO WIDTH Ni ZONE

SECTION m m m %

LON_DDH001 664759 9143999 188.85 9.00 16.00 7.00 1.06 NORTHERN

LON_DDH002 664759 9143999 188.98 11.20 17.30 6.10 1.30 NORTHERN

LON_DDH003 664800 9144000 183.49 6.10 11.10 5.00 1.35 NORTHERN

LON_DDH004 664600 9143600 180.91 6.00 15.70 9.70 1.30 NORTHERN

LON_DDH006 664760 9143600 183.82 4.60 11.55 6.95 1.33 NORTHERN

LON_DDH007 664580 9143200 169.86 6.00 16.50 10.50 1.65 NORTHERN

LON_DDH008 664660 9143200 165.54 3.10 11.00 7.90 1.55 NORTHERN

LON_DDH010 664800 9143200 160.14 2.97 9.00 6.03 1.31 NORTHERN

LON_DDH012 664820 9144400 173.63 4.00 15.04 11.04 1.31 NORTHERN

LON_DDH013 665290 9144800 190.04 5.70 10.70 5.00 1.40 NORTHERN

LON_DDH014 665360 9144800 202.73 20.70 25.90 5.20 1.32 NORTHERN

LON_DDH015 665440 9144800 195.73 21.55 27.30 5.75 1.37 NORTHERN

LON_DDH018 665760 9144400 160.89 13.00 19.00 6.00 1.23 NORTHERN

LON_DDH020 664240 9139900 160.44 8.00 10.00 2.00 1.18 RAIMUNDO

LON_DDH021 664320 9139900 159.63 4.70 7.85 3.15 1.10 RAIMUNDO

LON_DDH022 664400 9139900 158.28 5.00 8.00 3.00 1.17 RAIMUNDO

LON_DDH026 664636 9139900 155.28 6.10 13.77 7.67 1.60 RAIMUNDO

LON_DDH027 665107 9139900 155.32 13.75 20.65 6.90 1.32 RAIMUNDO

LON_DDH028 664255 9140300 168.50 14.00 19.40 5.40 1.03 RAIMUNDO

LON_DDH028 664255 9140300 168.50 18.20 19.40 1.20 1.03 RAIMUNDO

LON_DDH029 664350 9140292 166.58 8.50 18.32 9.82 1.24 RAIMUNDO

LON_DDH032 664443 9139487 168.61 13.00 17.70 4.70 1.15 RAIMUNDO

LON_DDH033 665020 9139500 203.50 18.20 27.06 8.86 1.31 RAIMUNDO

LON_DDH034 665000 9139700 193.01 25.09 27.05 1.96 1.26 RAIMUNDO

LON_DDH039 665066 9139625 179.11 3.83 8.62 4.79 1.47 RAIMUNDO

LON_DDH040 665080 9139800 161.02 7.70 15.73 8.03 1.28 RAIMUNDO

LON_DDH041 664969 9139805 160.37 5.35 19.18 13.83 1.40 RAIMUNDO

LON_DDH042 665070 9140000 150.14 3.87 13.52 9.65 1.35 RAIMUNDO

LON_DDH043 664300 9139544 175.24 10.92 13.78 2.86 1.19 RAIMUNDO

LON_DDH044 664540 9139510 166.06 11.43 16.26 4.83 1.45 RAIMUNDO

LON_DDH045 664400 9139700 179.90 18.00 26.22 8.22 1.53 RAIMUNDO

LON_DDH049 664260 9140100 158.00 10.30 13.34 3.04 1.07 RAIMUNDO

LON_DDH050 664783 9143406 194.08 16.50 20.00 3.50 1.54 NORTHERN

LON_DDH051 664600 9143400 170.91 8.84 17.00 8.16 1.28 NORTHERN

LON_DDH052 664727 9143800 199.27 17.50 22.00 4.50 1.24 NORTHERN

LON_DDH053 664800 9144200 185.16 5.30 9.40 4.10 1.06 NORTHERN

LON_DDH055 665600 9144600 161.33 13.60 21.41 7.81 1.42 NORTHERN

LON_DDH058 664300 9144800 169.97 6.90 13.27 6.37 1.32 NORTHERN

LON_DDH059 664100 9144800 174.62 13.00 22.51 9.51 1.28 NORTHERN

LON_DDH061 664520 9146000 180.17 5.50 11.56 6.06 1.15 NORTHERN

*Significant drill intercepts calculated using a 1% Ni cut off, minimum 2m width and maximum 2m internal dilution



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10.3 Exploration in Horizonte Minerals Araguaia Nickel Project (Combined Teck Araguaia and HM Lontra Licences)

Horizonte Minerals commenced exploration in the Horizonte Minerals Araguaia Nickel Project in

October 2010. The work to date has principally comprised core drilling to infill the previous drilling

completed by Teck on the Pequizeiro West and Pequizeiro targets. An exploration office was

established in Conceição do Araguaia in September 2010 to supervise this work.

10.3.1 Core Drilling

A 8000m drilling programme was designed to infill the previous drilling completed by Teck (200x

200m) on the Pequizeiro West, Pequizeiro and Baião targets. A drilling contract was arranged with

Geosonda Sondagens Geológicas Ltda. The contract is to drill HQ3 core in the infill drilling

programme that is designed to first reduce the drill spacing to 141m x 141m and then further reduce

the drill spacing on the Pequizeiro and Baião targets to 100m x 100m.

To May 2011 91 holes totalling 2433.6m have been completed with reported assay results. Half split

core samples were crushed and pulverised at SGS laboratory in Goiania and the resultant pulps

analysed at SGS laboratory in Belo Horizonte using tetraborate fusion X‐Ray Fluorescence. Full

QA/QC procedures were implemented, including the insertion of standards, duplicates and blanks.

The drilling at Pequizeiro West comprised 17 holes totalling 462.1m in 141m x 141m infill of the

original Teck holes. Figure 36 presents the location of the holes. The mineralised intercepts at a 1%

nickel cut‐off are included in Table 19.

The drilling at Pequizeiro comprises to date 74 holes totalling 1971.5m. This drilling represents the

completed 141m x 141m infill drilling and the start of the 100m x 100m infill drilling. Figure 37

presents the location of the holes. The mineralised intercepts at a 1% nickel cut‐off are included in

Table 19.



85

Figure 36: Pequizeiro West Drilling completed in the Horizonte Minerals Araguaia Nickel Project



86

Figure 37: Pequizeiro Drilling completed in the Horizonte Minerals Araguaia Nickel Project



87

Table 19: Araguaia Nickel Project Infill Drilling. Mineralised Intercepts at a 1% Nickel Cut‐off

ARAGUAIA NIQUEL PROJECT ‐INFILL DRILLING COMPLETED WITH ASSAY RESULTS SINCE OCTOBER 2010 TABLE OF INTERCEPTS ‐ 1% NICKEL CUT‐OFF*

HOLE‐ID EASTINGS NORTHINGS FROM (m) TO (m)

WIDTH (m)

Ni (%)

Co (%) TARGET^

PCA‐DD‐0493 672301 9117101 10.33 26.27 15.94 1.55 18.27 PQW

PCA‐DD‐0494 672100 9117100 10.40 14.76 4.36 1.05 16.52 PQW

PCA‐DD‐0495 671900 9117100 NSI PQW

PCA‐DD‐0496 672300 9116900 NSI PQW

PCA‐DD‐0497 672500 9116901 6.29 13.21 6.92 2.07 15.17 PQW

PCA‐DD‐0498 671900 9117300 NSI PQW

PCA‐DD‐0499 672104 9117291 12.61 16.97 4.36 1.24 9.81 PQW

PCA‐DD‐0500 672103 9116904 9.23 14.03 4.80 1.15 13.94 PQW

PCA‐DD‐0501 672500 9117100 9.84 18.11 8.27 1.38 21.43 PQW

PCA‐DD‐0502 672301 9116700 8.76 19.02 10.26 1.29 22.15 PQW

& 22.44 24.62 2.18 1.07 20.43 PQW

PCA‐DD‐0503 671900 9117500 NSI PQW

PCA‐DD‐0504 672500 9116700 5.86 11.59 5.73 1.07 24.06 PQW

PCA‐DD‐0505 672700 9116700 1.49 3.89 2.40 1.10 24.80 PQW

PCA‐DD‐0506 672300 9117300 21.32 26.05 4.73 1.10 23.31 PQW

PCA‐DD‐0507 672800 9116600 NSI PQW

PCA‐DD‐0508 672689 9116909 NSI PQW

PCA‐DD‐0509 672399 9116601 NSI PQW

PCA‐DD‐0510 674120 9116306 NSI PQ

PCA‐DD‐0511 674300 9116300 NSI PQ

PCA‐DD‐0512 674500 9116300 NSI PQ

PCA‐DD‐0513 674700 9116300 NSI PQ

PCA‐DD‐0514 674300 9116101 2.87 18.64 15.77 1.28 17.52 PQ

PCA‐DD‐0516 674507 9116089 8.33 31.37 23.04 1.77 15.10 PQ

PCA‐DD‐0517 674700 9116100 13.12 33.10 19.98 1.50 12.83 PQ

PCA‐DD‐0518 674300 9115700 4.43 9.15 4.72 1.08 33.09 PQ

PCA‐DD‐0519 674101 9115893 NSI PQ

PCA‐DD‐0520 674300 9115900 3.55 6.51 2.96 1.38 29.46 PQ

PCA‐DD‐0521 674500 9115900 3.35 15.13 11.78 1.67 17.69 PQ

PCA‐DD‐0522 674499 9115695 NSI PQ

PCA‐DD‐0523 674700 9115700 5.09 14.91 9.82 1.13 18.53 PQ

PCA‐DD‐0524 674902 9115705 7.00 17.54 10.54 1.68 12.15 PQ

PCA‐DD‐0525 674700 9115900 9.20 20.22 11.02 1.95 19.96 PQ

PCA‐DD‐0526 674900 9116100 20.90 31.61 10.71 1.54 15.19 PQ

PCA‐DD‐0527 675100 9115700 9.54 20.02 10.48 1.53 19.17 PQ

PCA‐DD‐0528 674900 9115900 13.09 23.45 10.36 2.06 13.02 PQ

PCA‐DD‐0529 675100 9115900 14.96 29.26 14.30 1.93 13.73 PQ

& 32.05 42.94 10.89 1.21 15.75 PQ



88


WIDTH (m)

Ni (%)

Co (%) TARGET^

PCA‐DD‐0530 675300 9115900 7.58 11.23 3.65 1.09 13.06 PQ

& 13.77 22.97 9.20 1.18 16.59 PQ

PCA‐DD‐0531 675500 9115300 NSI PQ

PCA‐DD‐0532 675300 9115700 4.67 21.06 16.39 1.55 15.19 PQ

PCA‐DD‐0533 675305 9115497 2.96 6.52 3.56 1.05 32.86 PQ

PCA‐DD‐0534 675300 9115300 NSI PQ

PCA‐DD‐0535 675504 9115498 1.93 10.92 8.99 1.94 18.75 PQ

PCA‐DD‐0536 675105 9115497 6.05 15.20 9.15 1.39 11.45 PQ

PCA‐DD‐0537 675099 9115300 1.52 22.71 21.19 1.46 13.01 PQ

PCA‐DD‐0538 674700 9115500 NSI PQ

PCA‐DD‐0539 674901 9115500 NSI PQ

PCA‐DD‐0540 674504 9115500 NSI PQ

PCA‐DD‐0541 675700 9115297 NSI PQ

PCA‐DD‐0542 675700 9115500 2.79 18.81 16.02 1.88 15.36 PQ

PCA‐DD‐0543 675500 9115700 3.35 11.02 7.67 1.89 20.20 PQ

PCA‐DD‐0544 675700 9115698 7.49 10.77 3.28 1.37 15.10 PQ

PCA‐DD‐0545 675900 9115300 1.01 6.67 5.66 1.20 15.29 PQ

PCA‐DD‐0546 676097 9115097 NSI PQ

PCA‐DD‐0547 675900 9115500 5.00 27.27 22.27 1.74 11.21 PQ

PCA‐DD‐0548 676100 9115300 11.45 23.29 11.84 1.87 15.97 PQ

PCA‐DD‐0549 675898 9115089 NSI PQ

PCA‐DD‐0550 676100 9115500 NSI PQ

PCA‐DD‐0551 676300 9115300 18.79 25.82 7.03 1.50 32.66 PQ

& 34.55 38.34 3.79 1.27 29.15 PQ

PCA‐DD‐0552 676300 9115100 17.05 26.46 9.41 1.36 12.62 PQ

PCA‐DD‐0553 676500 9115100 12.69 31.67 18.98 1.39 24.48 PQ

PCA‐DD‐0554 676500 9115300 17.87 28.44 10.57 1.88 17.40 PQ

PCA‐DD‐0555 676700 9115100 10.47 23.00 12.53 1.49 11.57 PQ

PCA‐DD‐0556 676700 9114901 NSI PQ

PCA‐DD‐0557 676900 9114900 6.75 10.66 3.91 1.00 15.84 PQ

PCA‐DD‐0558 676701 9115300 11.62 14.32 2.70 1.91 18.09 PQ

& 19.15 21.49 2.34 1.26 16.46 PQ

PCA‐DD‐0559 676900 9115100 2.76 15.01 12.25 1.58 21.36 PQ

& 18.26 21.54 3.28 1.22 10.34 PQ

PCA‐DD‐0560 677100 9114900 5.04 9.51 4.47 1.29 26.37 PQ

PCA‐DD‐0561 677400 9115000 7.97 10.06 2.09 1.09 30.19 PQ

PCA‐DD‐0562 677100 9115100 NSI PQ

PCA‐DD‐0563 676900 9115299 NSI PQ

PCA‐DD‐0564 677498 9114711 NSI PQ

PCA‐DD‐0565 677200 9115000 NSI PQ

PCA‐DD‐0566 677201 9115191 NSI PQ



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WIDTH (m)

Ni (%)

Co (%) TARGET^

PCA‐DD‐0567 677104 9115009 2.03 4.70 2.67 1.12 36.06 PQ

PCA‐DD‐0568 677700 9114700 NSI PQ

PCA‐DD‐0569 676900 9115000 NSI PQ

PCA‐DD‐0570 677000 9115100 4.33 10.77 6.44 1.91 35.07 PQ

PCA‐DD‐0571 677200 9114800 NSI PQ

PCA‐DD‐0572 676800 9115100 9.45 21.45 12.00 1.55 11.48 PQ

PCA‐DD‐0573 676700 9115000 5.71 7.72 2.01 1.68 22.65 PQ

PCA‐DD‐0574 676900 9115200 6.37 9.95 3.58 1.93 10.20 PQ

PCA‐DD‐0575 677300 9114700 NSI PQ

PCA‐DD‐0576 676800 9115300 7.64 17.27 9.63 1.75 19.60 PQ

PCA‐DD‐0577 676700 9115200 14.56 21.93 7.37 1.24 11.10 PQ

PCA‐DD‐0578 676600 9115300 16.00 29.32 13.32 1.72 13.91 PQ

PCA‐DD‐0580 676600 9115100 14.13 28.47 14.34 1.73 16.80 PQ

PCA‐DD‐0581 677300 9114900 NSI PQ

PCA‐DD‐0582 676500 9115200 14.15 26.27 12.12 1.73 13.18 PQ

PCA‐DD‐0583 676402 9115103 10.28 24.87 14.59 1.14 11.60 PQ

PCA‐DD‐0584 676400 9115300 22.31 33.42 11.11 1.69 21.09 PQ

PCA‐DD‐0585 676300 9115200 RESULTS AWAITED PQ

PCA‐DD‐0586 676200 9115300 10.41 29.03 18.62 2.40 18.31 PQ

* Intercepts were calculated using a 1% nickel cut‐off, 2 metre minimum width and 2 metre maximum internal waste.

Weighted averages were calculated using double weighting i.e. individual samples were weighted against both length and bulk density ^ PQW = Pequizeiro West; PQ = Pequizeiro.



90

11 Sampling Method and Approach

Sampling method and approach is reported for Teck exploration data including that which has been

used as inputs to the current resource estimation. Details are also provided for the Horizonte

Minerals exploration data for completeness and in preparation for future resource update studies.

The described sampling methods and procedures used by Teck and by Horizonte Mineral at the

Lontra project were not reviewed by Dr Audet. However, it is Dr Audet’s opinion and as stipulated in

section “Data Verification”, that the Araguaia project’s resource database builds using Teck’s data

meets industry standards and is compatible with the JORC and CIM codes for public reporting.

11.1 Teck

Sample method and approach employed for the Teck Araguaia historical data are taken from

reported techniques employed by Teck whilst exploring the adjacent Lara project during the same

period and cross checked by current Teck personnel and former members of the Araguaia project

exploration team. Information is also sourced from generic Teck nickel exploration PowerPoint

presentations for the period, again cross‐checked by Teck personnel.

11.1.1 Core Sampling

Teck drill core handling and processing involved the following steps:

Core retrieved placed in clearly marked 3m core boxes

Core is secured and transported to camp

Core is photographed

Geological logging

Geotechnical logging

Bulk density measurements taken

Core marked and sampled

Retained core stored in on‐site core storage facility

Teck diamond drilling was HQ size using triple tube methodology. Drill core was retrieved in

maximum 3 metre runs, typically between 20 centimetres and 2 metres depending upon ground

conditions.

At the drill site Teck technicians were responsible for the control of the drilling, stopping of holes,

upkeep of core run records, logging of core recovery, marking of drill core and core boxes and

selection and preservation of bulk density samples (Houle, 2010). Core boxes were built to contain

up to 3 metres of core.



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At the end of each shift drill core was covered with a wooden board, secured with nails and carefully

transported to the core processing facility at base camp within the project for logging and sampling.

Drillcore was photographed and geologically logged and marked by the geologist prior to sampling.

Evidence of only dry core photography exists.

Standard and accepted industry practice was employed for the sampling of drill core. Softer core

sections are halved with a sharp spatula or knife, with harder sections of drill core being cut by an

electric core saw. Sample intervals ranged from less than 1m to a maximum of 1.5m, typically less

than 1m in keeping with geological logging. The wider sample interval lengths were taken within the

same or similar wider lithological units and to compensate for any variations in core recoveries

between runs.

Teck geologists and core handlers marked a reference line on drill core prior to sampling to ensure

sampling consistency and sampling perpendicular to structures and observed fabrics.

Half drill core samples were placed in tagged plastic bags with sample ticket inserted, and sample

number written in permanent marker pen. Bags were secured with cable ties.

Half drill core was retained and stored in the core box for future reference with sample intervals

marked on the core box with the use of metal tags (Bennell, 2010; Houle, 2010).

In total, some 18,712 individual samples were taken and sent for preparation and analysis from the

Teck diamond drill holes comprising of 15,841 from DDH’s and 470 from RC drill holes (figures

include quality control standards and blanks). The remaining 2,401 samples are believed to be from

surface sampling.

11.1.2 Reverse Circulation Drill Sampling

Teck RC sample handling and processing involved the following steps:

1 metre bulk samples collected from cyclone

Samples chipped for geological logging

1 metre bulk samples weighed, sealed and transported to RC receiving area

1 metre samples air dried

1 metre samples riffle spit

Split sample sent for preparation and analysis

Bulk sample stored at Teck on‐site and off‐site storage facilities

One metre bulk RC samples were collected in marked plastic bags from the cyclone and transported

to a RC receiving area on site (Houle, 2010).

Bulk samples were chipped, with chipped 1 metre intervals being stored in compartmentalised RC

wood boxes similar to core boxes for logging and future reference.



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At the RC receiving area 1m samples were laid out on plastic sheets to sun‐dry. Once dry samples

were sent through a Jones riffle splitter where 50 % of bulk 1 meter sample was spilt for dispatch to

the laboratory for preparation and analysis.

The remainder of the 1 meter bulk sample was stored at the RC receiving facility on site or other

Teck storage facility elsewhere. At present part of the Teck RC drill bulk samples are stored in the

HM facility at Conceição do Araguaia, with those held by Teck are in the process of being shipped to

the HM storage facility at Conceição do Araguaia.

11.1.3 Geological Logging

Drill core was photographed and logged prior to sampling. Evidence suggests core was dry

photographed only.

Drill core and RC geological logging intervals were determined by lithology rather than set intervals

and logging recorded using standard practice hardcopy graphical logging sheets to capture pertinent

geological information for each deposit including lithology, facies, and texture.

Geological information recorded as hand written sheets is then transferred to excel

spreadsheets/direct to an AcQuire database.

For geotechnical logging Teck recorded core recovery, RQD and expansion.

Drill core were routinely measured for magnetic susceptibility, using a Terraplus Inc. KT‐9 digital

magnetic susceptibility meter hand held measuring device. Magnetic susceptibility was measured

for all core at 20cm intervals. This information was stored in the database for use in geological

logging and further deposit analysis and interpretation.

11.1.4 Survey

In 2006 Teck commissioned Prospectors Aerolevantamentos Esistemas Ltda to undertake

geophysical surveys across the Araguaia project area and as part of this survey digital 10m

topographical coverage of the project area was acquired. A twin engine Piper Navajo/Chieftain

PA31‐350. Data for the surveys were recorded using an RMS DGR 33A data acquisition system, a

Magnavox/Leica MX 9212 twelve channel GPS receiver (Miranda, 2006)

Teck Drillholes were positioned with handheld GPS and surveyed using DGPS.

No downhole surveys were taken due to the short, vertical nature of the drill holes.



93

11.1.5 Bulk Density

Ten to fifteen cm long bulk density samples were taken from all Teck drill core at intervals of

approximately 1.5 metres. In total, 6,257 bulk density determinations were measured for the Teck

diamond drilling (ref: Section 12).

11.1.6 Auger Sampling

The Teck procedure for sampling the mechanical auger drill involved the mixing of each individual 1

meter down hole sample on a plastic sheet on the ground. The mixed sample was then quartered

and the quarter sample collected for bagging and dispatch to the laboratory for preparation and

analysis.

Bottom of hole auger samples were typically less than 1 meter due to limitations with auger

penetration at depth therefore end of hole samples were often less than a full meter interval.

(Bennell, 2010).

11.1.7 Soil Sampling

Teck soil survey grid density varied from 1st pass new target testing on 100m sites along 400m wide

traverses to 50m spaced sample sites along 200m spaced traverses for detailed follow up.

Where present, Teck sampled the B horizon soil layer typically located approximately 15‐20cms

below the surface or just under the organic rich layer.

Approximately 2kg of whole soil sample was collected at each site.

Duplicate samples were inserted into the sample stream every 20th sample, with the duplicate

collected 1‐2 metres away from the primary sample for that site (DNPM 850.514/850).

11.2 Horizonte Minerals (Lontra Licences)

Sample methodology and approach employed for the Horizonte Minerals exploration data is taken

from procedure summary documents for the Lontra project and site visit process methodology

review and verification by the independent consultant (Wardell Armstrong International).



94

11.2.1 Core Sampling

Horizonte Minerals drill core handling and processing involved the following steps:

Core retrieved placed in clearly marked 3m core boxes and recovery calculated

Core box is tagged, secured and transported to camp

Core is photographed

Geological logging

Bulk density measurements taken

Core marked and sampled

Retained core stored in on‐site core storage facility, now in Conceição de Araguaia

Horizonte Minerals diamond drilling at Lontra obtained HQ diameter core using HWT rods and

conventional drilling operation

On site the HM drill hole core samples were recovered by the drilling contractor from the core

barrel. Core was retrieved in maximum 2 metre runs, typically between 20cm and 1.5 metres

depending upon ground conditions. The core was wrapped in plastic sheet, placed in wooden boxes

and the core recovery calculated. The end of each core run is marked by a wooden block was placed

and nailed into the core box separating one run from the next. Onto this block a punched metal tag

was nailed with the following information;

Depth

Advance

Recovery Core boxes can accommodate up to 3 metres of core. On filling each core box with core a metal plate was attached to the front with the following information punched into the plate.

Drilling Contractor

Project,

Location

Hole ID

Box No.

From

To

The core box is then nailed closed and stored at a safe location within the drilling cordon, until the

end of the shift. During the course of drilling random checks were made on the recorded drill depth

with the actual drill depth. Core boxes were collected and transported to the HM do Brasil field

camp, located centrally within the area, at the end of each day.

At the field camp the external description plates were verified and the core boxes ordered. The core

was then photographed. The boxes were then put on logging benches and the core recovery was

verified.



95

The core was then logged by the project geologist and bulk density sample intervals identified.

Bulk density samples mostly consisted of 10 to 15 cm lengths of the whole core. The rest of the core

was sampled taking half core for analysis. On completion of density measurements, bulk density

samples were returned to the core box for inclusion in routine sampling.

The HM project geologist defines the intervals for geochemical sampling noting the insertion of

QA/QC samples. The sample numbers were then marked on the core boxes using aluminium tape

embossed with the sample number. This tag is placed on the wood divide at the beginning of each

sample.

On completion of marking the core was sampled using the following procedures / guidelines:

The nominal sample length was 1 metre.

Samples breaks were also made at geological contacts defined by the geologist.

Half splits of the core were taken for analysis. The soft material was split using a paint scraper and hard core was cut by HM do Brasil personnel, with a diamond saw.

Samples were sealed in plastic sample bags.

The unique sample number assigned to each sample was written on the sample bag with a permanent marker and a sample number tag placed within the sample bag.

After collection of all the samples the sample bags were ordered and appropriate QA/QC samples inserted in the sequence.

The samples were then double bagged and packaged in lots of approximately 40kg for transportation to the sample preparation facility.

The remaining half core was maintained in the wooden core boxes which were nailed closed and stored in the HM do Brasil core storage area within the project.

The core boxes have since been removed and are now stored in the core storage and logging facility in Conceição de Araguaia. This core is being re‐logged to ensure consistency across the Araguaia Project.

Sample intervals were defined within laterite facies, not across facies boundaries. A nominal sample

length of 1m was used. Relic fragments of unweathered bedrock of less than 10 cm in length within

the saprolite facies were sampled together with the facies in which it occurred. If exceeding 10 cm

the fragment was sampled separately.

Soft sections of core were split lengthwise using a sharp plastic spatula and a standard electric

diamond rock saw for harder sections of core.

The samples were placed in heavy‐duty plastic bags with a number tag, permanent marker pen ID

and sample ticket. Bags sealed and weighed and weights recorded before shipment to the

laboratory. Standards, duplicates and blanks were inserted in the consecutive sample numbering

system.

Split core was then photographed wet for reference.



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11.2.2 Geological Logging

The drill hole cores were logged by HM do Brasil geologists. Sample intervals, recovery, laterite code,

lithology, colour, texture, plasticity, the presence of key minerals, structures, magnetic susceptibility

and amount, type and size of poorly weathered fragments were recorded on a logging sheet, and

accordingly intervals were assigned to the appropriate facies.

During the initial stages of the drilling program, lateritic nickel specialist, Roger Billington was

contracted to consult on the drilling and logging procedures adopted. Following his

recommendations a simple nomenclature system was developed for the laterite facies (Zones). Core

logged up to this point was re‐logged and the simplified nomenclature procedure adopted. In

general, good core recoveries in the mineralised zones were achieved and the samples are

considered representative of the Lontra Project laterite facies.

Drill hole lithological logging was done manually and converted to a digital representation using

Microsoft Excel and then transferred to the company’s Access database by the HM Database

Administrator.

Horizonte Minerals did not undertake geotechnical logging beyond the measure of core recovery.

11.2.3 Survey

Horizonte Minerals contracted qualified surveyors using differential GPS and total station theodolite

for the picking up of diamond drillhole collars. Measurements are recorded to the millimetre with

centimetric accuracy.

Garmin handheld GPS devices are used for field mapping, traverses, planned holes, trenches pits and

surface sampling points. Handheld GPS reports to an approximate 3 ‐ 5 metre accuracy.

Downhole survey measurements were not taken due to the short vertical nature of the drillholes.

11.2.4 Bulk Density

Samples for bulk density determination were selected from all relevant facies types. The samples

were marked with drill‐hole name, interval and laterite facies or rock type.

The selected drillholes are fairly evenly distributed over the sector. For LO‐DDH‐033 onwards,

individual samples of 10 to 15cm in length were selected immediately after the geological logging of

the hole. Samples were picked from intact and coherent core taking care to select ‘representative’

pieces of core from each facies type. Bulk density measurements were done in the field office by

HM do Brazil’s geo‐technician following a standard procedure defined by Roger Billington and

described in section 12.2.4 below.



97

On holes drilled prior to LO‐DDH‐033, 28 half‐core samples were selected for density

determinations. These core samples had their wet and dry density measurements calculated using a

simplified version of the procedure described in section 12.2.4, in which plastic wrap rather than

paraffin wax was used to make the core sample impermeable.

Density core samples were weighed and the volume was determined using a water displacement

method.

In total, to date 90 bulk density determinations have been measured from 34 drillholes for the HM

Lontra drilling.



98

12 Sample Preparation, Assaying, Security

12.1 Teck Licences

Teck Sample preparation, assaying and security is taken from reports on exploration conducted at

the adjacent Lara project during the same period, Teck procedure PowerPoint presentations and

discussion with Teck site personnel.

The described sample preparation procedures used by Teck were not reviewed by Dr Audet.

However, it is Dr Audet’s opinion and as stipulated in section “Data Verification”, that the Araguaia

project’s resource database builds using Teck’s data meets industry standards and is compatible with

the JORC and CIM codes for public reporting.

12.1.1 Routine Sample Analysis

Two sample preparation and analytical procedures are referred to in available documents, wholly

using SGS‐GEOSOL (Teck procedure .ppt) and using in‐house preparation and SGS GEOSOL analytical

facilities (Lara report).

The majority of core samples for routine analysis were shipped to the Teck Santa Fe Project

preparation facility. Teck employed a local trucking company to ship the samples from their project

office in CdA to the Santa Fe facility.

On arrival at the Santa Fe preparation facility 1st pass portable XRF analysis was performed by Teck

personnel to screen samples for chemical analysis using an INNOV‐X portable device.

Samples were dried for 12 hours at 105 degrees Celsius then crushed to achieve 95% passing

through ‐2mm. Every 20th sample was screened to ensure quality. Crushed samples were re‐dried

at 105 degrees Celsius and pulverised to 95% passing 150mm using a ring and puck mill. Again every

20th sample was screened to ensure quality.

Pulps were sent from the Santa Fe preparation facility, via the SGS prep facility at Goiania to SGS

laboratory in Belo Horizonte where they underwent XRF analysis (see analytical package below).

Most of the course rejects and pulps were stored at the Santa Fe facility with a small number

returning to the project office at Araguaia.

Where both preparation and analysis was done off‐site by SGS this was undertaken at the SGS

Goiania pulverizing facility and SGS GEOSOL laboratory in Belo Horizonte.

Sample chain of custody was transferred to SGS at the drying stage. Each sample was dried for 12

hours at 105 degrees Celsius then crushed to achieve 95% passing through ‐2mm. Every 20th sample

was screened to ensure quality.



99

An approximate 300 gram crushed sample was then sent to SGS Goiania facility for pulverisation.

At the SGS Goiania facility, crushed samples were re‐dried at 105 degrees Celcius and pulverised to

95% passing 150mm using a ring and puck mill. Again every 20th sample was screened to ensure

quality. Due to issues arising from vermiculite content size requirements were reduced to 90%

passing through 150mm mesh.

On completion of pulverisation a 30 gram pulp sample was sent to SGS, Belo Horizonte for analysis.

Pulp rejects were returned to the Teck laboratory in Santa Fe (Houle, pers. comms 2011).

Pulp samples underwent analysis by “MXR‐Laterite” package with Borate Fusion and XRF

determinations for NiO, Cu, Co, loss‐on‐ignition (LOI) and major oxides (SiO2, Al2O3, Fe2O3, MgO, CaO,

P2O5, MnO, TiO2 and Cr2O3).

The Borate Fusion method entails the preparation of a homogenous glass disk by the fusion by

calcination at 1000°C of 0.2 to 0.5 g of rock pulp with 7 g of lithium tetraborate/lithium metaborate

(50/50). The loss‐on‐ignition (LOI) at 1000°C was determined separately gravimetrically and was

included in the matrix‐correction calculations, which were performed by the XRF instrument

software. The disk specimen was analyzed by wave‐length dispersive XRF spectrometry. The results

were exported via computer, and data fed to the Laboratory Information Management System with

a secure audit trail. Corrections for dilution and summation with the LOI were made prior to

reporting.

Early stream sediment and surface rock ship samples were sent to SGS‐GEOSOL in Belo Horizonte

minus 200 mesh sample by ICP for 35 elements and Fire Assay for Au (DNPM 850.514/850).

Routine 2kg soil samples collected by Teck within the property were sent to SGS Goiania facility for

drying at 105°, crushing to 95% minus 200 mesh where 350g was taken for pulverisation to 95%

passing through minus 150 mesh.

100g pulp samples were sent to SGS GEOSOL laboratory in Belo Horizonte for lithium tetraborate

digest and XRF analysis for major elements Ni and Co, iron as Fe203, Na2O, K2O and V2O5 (DNPM

850.514/850).

12.1.2 Check Sample Analysis

Where primary analysis had been undertaken at the Teck in‐house facilities, check assays were

conducted on selected samples at SGS GEOSOL in Belo Horizonte (Bennell, 2010).

SGS GEOSOL quality management systems have been certified as complying with international

standards ISO 9001 and ISO 17025.

SGS Geosol quality management systems have been certified as complying with international




100

Where primary analysis was undertaken at SGS GEOSOL check analysis was done at the same

laboratory or at the GDL facility.

12.1.3 Magnetic Susceptibility Analysis

Magnetic susceptibility analysis was performed using a Terraplus Inc. KT‐9 digital magnetic

susceptibility meter hand held measuring device.

Magnetic susceptibility using a Magnetic susceptibility was measured for all core at 20cm intervals.

Readings were taken on average every 20 centimetres on drill core only.

12.1.4 Bulk Density Analysis

Teck bulk density measurements were determined using a water displacement method. Standard

wet weight in air and in water, and dry weight method. Core was wrapped in cling film to prevent

water penetration (Figures 38 to 40). Density was calculated using Archimedes principle.

Figure 38: Teck bulk density core sample selection. (Samples wrapped in plastic wrap)



101

Figure 39: Balance

Figure 40: Bulk density sample in cradle



102

For the purposes of the resource estimation the following screening was undertaken by Dr. Audet on

the Teck bulk density data:

A Geofacies was assigned to each sample based on the geochemical correlation matrix as presented

in Table 9. Bulk density value (wet and dry) and moisture content were then assigned based on

Geofacies (Table 20).

Using the assigned facies, the entire density DB was sorted on facies and global SG dry and SG wet

defined for each facies (see table below). Out of 6,257 specimens only 840 were not used nor had a

facies allocated.

Few modifications were applied to the density DB:

Limonite facies: only specimens showing moisture content greater than 20% were retained

Ferricrete facies: only specimens showing moisture content below 20% were retained

Bedrock facies: only specimens showing moisture content lower than 10% were retained

Rocky Saprolite: only specimens showing moisture content lower than 30% were retained Using the above parameters, the proposed SG dry and SG wet were found acceptable and can be used for Mineral Resource estimations. The project team will continue collecting density measurements from the upcoming drilling program. Table 20: Dry and wet bulk densities and moisture content (October 2010), as used in the current resource and reserve estimates

Facies Nb samples SG dry SG wet Ni% Co% MgO% Fe% SiO2% AL2O3% CR203%

Soil 510 1.71 2.06 0.13 0.04 0.13 27.83 27.56 18.16 1.40

Ferricrete 16 1.95 2.31 0.35 0.10 0.22 48.94 6.99 10.46 2.26

Limonite

684 1.33 1.81 0.91 0.11 2.36 34.38 24.31 9.96 2.14

Transition

1,011 1.33 1.70 1.11 0.04 13.41 16.57 46.09 4.65 1.11

Rocky Saprolite

922 1.49 1.82 0.99 0.03 24.26 10.65 43.34 4.44 0.73

Silicified Sap 27 1.50 1.89 0.53 0.03 5.34 9.35 71.91 3.36 0.53

Bedrock

266 2.32 2.41 0.27 0.01 35.85 5.72 39.93 1.29 0.43

Diorite

305 1.55 1.91 0.21 0.02 3.72 11.60 48.83 17.49 0.25

Sediment

1,490 1.62 1.96 0.04 0.01 1.46 8.59 59.04 16.27 0.13

Cao Rich 14 2.87 2.92 0.06 0.01 17.64 3.53 15.57 0.60 0.20

Dike Al

162 1.73 2.00 0.13 0.01 3.48 5.45 61.15 15.78 0.07

QTZ vein 10 2.18 2.32 0.03 0.01 0.47 1.82 94.26 1.03 0.08

Not allocated

840

Total

6,257



103

12.2 Horizonte Minerals Lontra Licences

12.2.1 Routine Sample Analysis

Horizonte Minerals drill core sample preparation was carried out in Goiania by SGS Geosol

Laboratories. Analyses were carried out by SGS Geosol Laboratories in Belo Horizonte.

The 62 drillholes from the Northern Zone and Raimundo Zone, (LO‐DDH‐001 to LO‐DDH‐062) were

prepared at the SGS Geosol Laboratory sample preparation facility in Goiania using the methodology

denominated as “PREPINT”. The following procedure was used for sample preparation of the half

core samples submitted:

The samples were dried for 12 hours at 60˚C and checked visually for dryness.

The entire sample was crushed to 90% passing 2 mm.

The entire sample was homogenised.

A 1000 g (1kg) sample was riffle split from the crushed sample.

The crusher rejects were returned to the original sample bag, sealed and stored at SGS Geosol

The 1000 g split sample was pulverised to 95% passing 100μm (150#) using a Labtech LM 2000 with 2 rings and puck.

The pulverised sample was split into two parts one used for the preparation of a fused disc for analysis and one packaged for storage.

Pulps were stored at SGS Lakefield.

Following completion of the program, both the crusher reject and pulp samples have been obtained from SGS Geosol and are stored in HM do Brazil’s sample storage facility in Goiania.

Pulp samples for fusion were prepared for all samples from holes LO_DDH‐001 to LO‐DDH062 and

were despatched by courier from the SGS Geosol Laboratory preparation facility in Goiania to their

analytical facility in Belo Horizonte. The method used was the “MXR‐Laterite” package with Borate

Fusion and XRF determinations for NiO, Cu, Co, loss‐on‐ignition (LOI) and major oxides (SiO2, Al2O3,

Fe2O3, MgO, CaO, P2O5, MnO, TiO2 and Cr2O3).

The Borate Fusion method entails the preparation of a homogenous glass disk by the fusion by

calcinations at 1000°C of 0.2 to 0.5 g of rock pulp with 7 g of lithium tetraborate/lithium metaborate

(50/50). The loss‐on‐ignition (LOI) at 1000°C was determined separately gravimetrically and was

included in the matrix‐correction calculations, which were performed by the XRF instrument

software. The disk specimen was analyzed by wave‐length dispersive XRF spectrometry. The results

were exported via computer, and data fed to the Laboratory Information Management System with

a secure audit trail. Corrections for dilution and summation with the LOI were made prior to

reporting.

This method has been fully validated by SGS for the range of samples typically analyzed. Internal

validation by SGS includes the use of certified reference materials, replicates and blanks to calculate

accuracy, precision, linearity, range, and limit of detection, limit of quantification, specificity and

measurement uncertainty.



104

Horizonte Minerals do Brasil introduced additional blanks, duplicates and field standard reference

material.

SGS GEOSOL quality management systems have been certified as complying with international


12.2.2 Check Sample Analysis

Check assays were conducted on selected samples at ALS Chemex laboratory, Vancouver, Canada

using the same method as used by SGS GEOSOL with measurements for Ni, Co, Cu loss‐on‐ignition

(LOI) and major oxides. In addition to the above Pb and Zn were also included in the ALS Chemex

package.

ALS Chemex quality management systems have been certified as complying with international


12.2.3 Magnetic Susceptibility and Gamma Log Analysis

Horizonte Minerals did not perform magnetic susceptibility or gamma log analysis on drill core.

12.2.4 Bulk Density Analysis

Bulk densities factors (BDF) were determined by Horizonte Minerals do Brasil in their facilities in the

Lontra Project camp. 90 representative samples of 10 ‐15 cm lengths of core from each of the major

laterite facies were determined. The samples were selected from 34 drillholes that are well

distributed over the extent of the laterite development in the Northern and Raimundo sectors.

Density was measured using a standard procedure described below:

The wet sample weight was measured in air.

Sample was coated with paraffin and weighed again in air.

The coated sample was placed on a platform suspended from the scale in a bath of water and weighed under water.

The volume of the core sample was calculated.

The wet bulk density was calculated by dividing the weight of the wet sample in grams by its volume in cubic centimetres.

The paraffin was removed and sample was weighed in air.

The sample was dried for 12 hours at ~ 100°C.

The dry sample was weighed in air.

The free moisture content was calculated using the weight of contained water divided by the weight of the wet sample expressed as a percent

The dry bulk density was calculated using the wet bulk density and the free moisture content.



105

12.3 Security and Chain of Custody

12.3.1 Teck

Samples and data collection was handled by Teck personnel on site. Core was covered and RC

samples bagged and tied at the drill site ensuring every care was taken to eliminate contamination

and security breaches in the transfer of core and RC samples from drill site to processing facility.

Transport of samples collected by Teck from site to SGS preparation facilities was always by secure

carrier. Teck hired a local trucking company to transport samples from CdA to Santa Fe. Custody of

samples was handed over the SGS on arrival at the Santa Fe or Goiania preparation labs. Dispatch

sheets were used and signed to confirm dispatch and receipt of sample batches.

Data security was ensured by immediate transfer of hardcopy logs and records to Excel at the

Araguaia site warehouse, and imported through an AcQuire database management system to an

SQL/ORACLE database where data validation and subsequent export to exploration modelling

packages took place.

Hardcopy logs and sample record sheets are retained for reference.

The Teck sample and data process is summarised in the flow chart Figure 41 below.

Figure 41: Teck Araguaia Sample and Data Process Flow Sheet



106

12.3.2 Horizonte Minerals

On site sampling and data collection was handled by Horizonte Minerals personnel. Core boxes

were nailed closed at the drill site ensuring every care was taken to eliminate contamination and

security breaches during the transfer of core from drill site to the field logging / sampling facility. On

receipt, data on the core box labels was verified and the core photographed as a record, prior to any

manipulation of the core boxes.

After collection of the samples, these were accommodated in heavy duty 5 litre plastic bags which

were labelled with a permanent marker on the outside with the sample number and before being

sealed the sample card tag was placed in the bag. All samples were double bagged i.e. placed within

a second heavy duty sample bag, sealed and then accommodated in lots of around 40kg in heavy

duty 100l sacks. These were sown closed and the bags labelled with the company name, batch

number, sack number and sample interval.

Horizonte Minerals personnel were responsible for transport of samples from the field camp to

Xinguara where they were placed with a transporter to Goiania. Samples were collected from the

transporter in Goiania by Horizonte Minerals personnel. Prior to leaving the transporter sample bags

were verified for damage and / or violation. After verification approval, the samples were delivered

directly to the SGS preparation laboratory by Horizonte Minerals personnel. Custody of samples was

handed over the SGS on arrival at the Goiania preparation labs.

The following procedures were in place to ensure sample security:

Daily auditing (advances, drill depth, protocols) of the drilling procedures and

placement of drillhole core into the core trays at the drill site was conducted by

Horizonte Minerals do Brasil personnel.

Core boxes were nailed closed on site and transported to the Horizonte Minerals do

Brasil camp facilities for logging and sampling.

Sampling was conducted by HM do Brasil geologists/geotechnicians.

Samples were packaged in heavy duty sealed plastic bags assigned with unique

samples numbers.

The samples were double bagged and accommodated in groups weighing around

40kg within sealed sacks.

The samples were transported to the Horizonte Minerals do Brasil Goiania office

using a separate baggage compartment within a daily coach service from Xinguara

to Goiania.

Horizonte Minerals do Brasil personnel collected and inspected the transported

samples from the transporter, verifying for any violation of the sacks.

The samples were transported by Horizonte Minerals do Brasil personnel to the SGS

Geosol preparation facility in Goiania.



107

Crusher rejects and duplicate pulps were returned from the SGS Geosol laboratory

to the HM do Brasil storage facility in Goiania where they are stored.

Samples for analysis at SGS Geosol laboratory in Belo Horizonte and the ALS Chemex

laboratory in Vancouver were delivered by recognised courier service contracted by

the laboratory.

All half core is stored in the secure Horizonte Minerals do Brasil core warehouse /

logging facility in Conceição de Araguaia.

Horizonte drill hole logging and sample data collection was performed at the Horizonte field camp by

HM personnel. Data is captured by hardcopy and transferred to Excel at the earliest opportunity.

Data was stored and handled in Excel.

Analytical results are received from SGS in digital format via email, using a pre‐defined Excel file

format.



108

13 QA/QC

13.1 Teck Licence Data: QA/QC

The Teck Araguaia QA/QC program included three control sample types used as Quality Assurance

(QA) controls. The different types of control sample were inserted along the sequential numbers of

the routine samples at pre‐designed intervals.

Control sample types are as follows:

Blanks

Standards

Duplicate assays

13.1.1 Blanks

Five different blank samples type were used as blank material, inserted at an approximate interval of

1 for approximately 15 samples and submitted to SGS Laboratory Belo Horizonte, Brazil. A total of

730 blanks were used by Teck in their exploration program in 2007‐2008, comprising 5% of the total

samples submitted for analysis. Out of the 730 blank samples, 98% returned below detection limit,

2% of them returned 0.02%Ni values and only 1 sample gave 0.09%Ni.

The assay results from blanks are considered to be satisfactory.

13.1.2 Standards

From early 2007, Teck has inserted five different standard materials with various values of Ni into

the assay sample submission series providing blind standard assays in addition to the standards

inserted by SGS Laboratory. Table 21 shows the composition of standards submitted by Teck, and

Figures 42 to 46 show plots of Ni relative to the average values and ±5% and ±10% variation limits.

These standards were inserted at an approximate interval the basis of 1 for approximately 20

samples, frequently on a closer interval, and submitted to SGS Laboratory in Belo Horizonte, Brazil.

All analyses for standard SDT4 and SDT 5 are within ±5% variation relative to the average. Standards

SDT 6, SDT 7 and SDT 8 returned few analyses exceeding ±5% variation but without exceeding ±10%

variation, except one.

Standard analyses are considered to be satisfactory for assay accuracy.



109

Table 21: Average composition of standards inserted in sample submission series by Teck

Standard n Ni%

STD4 111 2.573

STD5 107 1.741

STD6 127 0.295

STD7 228 2.017

STD8 141 1.188

Figure 42: Ni% variation for the Standard STD4



110





111





112

13.1.3 Duplicate Assays

Teck selected 619 samples as duplicate. The re‐assay vs. original data were evaluated graphically by

plotting pairs of first vs. second assays for Ni, Co, Fe2O3, MgO, SiO2 and Al2O3 in correlation plots. The

correlation plots (Figures 47 to 52) show assay pairs along with lines for ±10% variation (solid blue).

In this type of comparison, Al2O3 shows trends similar to Fe2O3, SiO2 and MgO. These comparisons

are less useful for Ni and Co, as Ni, and more specifically Co, has reported values that have a high

proportion of very low values at, or near the detection limit.

The quality assurance criterion for check analyses is that more than 90% of samples assayed by the

check laboratory show less than 10% difference relative to the original assay values.

The comparison between original and repeat assays gives the results for Ni, Co, Fe2O3, MgO, SiO2 and

Al2O3 listed in Table 22.

With the exception of Co, all elements show satisfactory re‐assay precision statistics for the whole

range of data values with assay pairs showing less than 10% absolute difference between first and

second assays. Despite having a very high proportion of low value, Co returned a total of 88% of

samples assayed by the check laboratory with less than 10% difference relative to the original assay

values.

In summary, the duplicate assays are considered to demonstrate that the assays are reproducible

with satisfactory precision.

Table 22: Summary statistics of re‐assay precision on 668 samples submitted to SGS Laboratory

Ni Co Fe2O3 MgO SiO2 Al203

n % n % n % n % n % n %

0–10% Abs. diff. 613 92 53 80 646 97 587 88 661 99 627 9410–15% Abs. diff. 35 5 65 10 13 2 34 5 4 1 25 4

15–20% Abs. diff. 8 1 33 5 5 1 21 3 2 0 7 1

20–100% Abs. diff. 12 2 37 6 3 0 26 4 1 0 9 1

Total 668 66 668 668 668 668



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Figure 47: Araguaia Project: Accuracy on duplicates: Ni

Figure 48: Araguaia Project: Accuracy on duplicates: Co

‐0.50

0.00

0.50

1.00

1.50

2.00

2.50

3.00

0.00 0.50 1.00 1.50 2.00 2.50 3.00

%Ni Duplicate

Ni

Linéaire (10)

Linéaire (‐10)

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

0.00 0.05 0.10 0.15 0.20

%Co Duplicate

Co

Linéaire (10)

Linéaire (‐10)



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Figure 49: Araguaia Project: Accuracy on duplicates: Fe2O3

Figure 50: Araguaia Project: Accuracy on duplicates: MgO

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00

%Fe2O3 Duplicate

Fe2O3

Linéaire (10)

Linéaire (‐10)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

0.00 10.00 20.00 30.00 40.00 50.00

%MgO Duplicate

MgO

Linéaire (10)

Linéaire (‐10)



115

Figure 51: Araguaia Project: Accuracy on duplicates: Al2O3

Figure 52: Araguaia Project: Accuracy on duplicates: SiO2

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

0.00 10.00 20.00 30.00 40.00 50.00

%Al2O3 Duplicate

Al2O3

Linéaire (10)

Linéaire (‐10)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

0.00 10.00 20.00 30.00 40.00 50.00

%SiO2 Duplicate

SiO2

Linéaire (10)

Linéaire (‐10)



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14 Data Verification

14.1 Teck Araguaia Project Data

Consulting geologist Marc‐Antoine Audet, P.Geo, Ph.D. was contracted by Horizonte Minerals Inc in

2010 to conduct a general review of the historical Teck data in the Araguaia project’s exploration

database. The review was performed during the month of October 2010 and was concomitant to a

site visit and with preliminary mineral resource estimations.

The due‐diligence method used by Dr. Audet was based on a standard list of verifications and

validations. The investigative work was intended to, 1) verify the results obtained and judgments

made on the project to date and 2) identify any problems related to data acquisition and to

proposed mitigation measures.

Data verification work included:

Topography versus collar locations

Geological logging

QA/QC procedures and results

Densities

Data entry procedures

Integrity of historical data

Ancillary work included:

Production of sections and plans showing thickness and grade‐thickness of ore

Intercepts at 1.0% nickel cut‐off grade, depth to base of profile for risk areas

Dr Audet reviewed and compiled information on QA/QC performed by Teck and found the data

acceptable (section 13). Data supplied by Teck on densities measurements were also reviewed and

compiled (section 12‐1‐4) by Dr Audet and was found acceptable.

Logging procedures and nomenclatures used by Teck was reviewed. Approximately 3,500m of core

material were relogged by Horizonte’s staff under the writer supervision. Despite some

discrepancies with Teck’s nomenclatures, it was found that the relogging fits well with the assigned

facies defined by the chemical correlation matrix.

Discrepancies were noted at the time of the field visit with survey coordinates for several boreholes,

mainly related to elevations. Since then Horizonte Mineral resurveyed all holes showing

discrepancies and integrated the new finding in a revised database together with a complete audit

trail. Modifications were minor and have no impact on accuracy on the reported Inferred Mineral

Resource.



117

Conclusion

The Araguaia project’s resource database meets industry standards and is compatible with the JORC

and CIM codes for public reporting.



118

15 Adjacent properties

There appears to be significant interest in the region of the current Horizonte Minerals Araguaia

Project demonstrated by the coverage of claims and number of exploration companies active within

the area. Figure 53 shows the landholding in the immediate vicinity of the Horizonte Minerals

Araguaia project licences.

Horizonte Minerals are currently in negotiation with Pan Brazilian Mineracao Ltda with a view to

entering into joint venture on licence 850.421/2004. Situated immediately to the west of HM

Araguaia permits 850.514/2004 and 850.515/2004, this tenement was part of the old Lara project

previously explored by Lara Exploration Limited.

The licences host part of the Vila Oito nickel prospect which extends across from the Horizonte

Minerals licences. Surface geological mapping and drilling shows that the aerial extension of the Vila

Oito saprolite mineralization (within the Lara license) to be approximately 1,500 m (north‐south) by

500 to 800m (eastwest). At a 0.9% Ni cut‐off, the mineralization is interpreted to occur in two

separate zones, separated by a zone of sub‐grade mineralization and is as follows (Bennell, 2010):

Main Zone: a lobate area trending north‐south that includes the ridge trend and the laterite covered zone south and east of the ridge, where the mineralization is dominantly associated with the green MgO‐rich saprolite zone. Mineralization varies in thickness from a few meters to as much as 23 m in thickness. Locally in the vicinity of the ridge, there is evidence for multiple stacked zones of mineralization down to almost 40 m depth.

North East Zone: a smaller zone in the northeast, located below the extensive laterite ferricrete hard cap surface and where mineralization is approximately 7 to 10 m thick and where the upper parts of the mineralized zones are dominated by yellow‐ochre limonite bands with low MgO contents (<3%). The basal parts of the intervals are green saprolite as in the main zone.

The authors have been unable to verify the information stated in section 15. The information is not necessarily indicative of the mineralisation on the property that is the subject of the technical report. The authors are unaware of significant developments within other immediately adjacent properties.



119

Figure 53: Land tenure adjacent to Horizonte minerals holding



120

16 Mineral Processing and Metallurgical Testing

Not applicable.



121

17 Mineral Resource and Mineral Reserve Estimates

17.1 Araguaia Project The Mineral Resource estimates for the Araguaia project were conducted under the direction of

consulting geologist Marc‐Antoine Audet, P.Geo., Ph.D during the months of November and

December 2010.

Mineral resource estimates were derived using available historical data supplied by Horizonte

Minerals. Mineral resource estimates were based on a total of 489 drill‐holes comprising a total of

11,404 analyses and conducted in unwrinkled space using Inverse distance at Power of 2 (ID2)

interpolation process from a 3D computer block models.

Resource models were based on accurately surveyed drill‐hole data applied to a detailed digital

topographic map and integrates the mineralized horizons (limonite, transition and saprolite) from

drill data with the terrain data in the creation of 3D block models.

Procedures and results are reported in this document. The resources have been estimated and

classified according to the CIM definitions as referred to by National Instrument 43‐101 in Canada.

17.1.1 Database Integrity The resource modelling was carried out using Gemcom software (GEMS) and data stored in a GEMS

database. GEMS uses the Microsoft (MS) Jet database engine.

Drilling, surveying and assay data were managed in a comprehensive AcQuire and then using

Microsoft Access database which provides a number of built‐in data validation features. Assay

results from SGS Laboratory in Belo Horizonte were delivered electronically in a pre‐defined

Microsoft Excel format and imported directly into the AcQuire database and automatically linked

with the appropriate sample drill‐holes and sample intervals. Upon verification, the drill‐hole,

survey and assay data were extracted and merged into the GEMS database. The structure and

content of the original Teck’s database was reviewed and adapted in October 2010 by Dr. Audet.

17.1.2 Mining Factor No mining factor was applied to block models for the Mineral Resource estimation.

17.1.3 Cutoff Grades The Araguaia resource estimates have been reported using 1.0% nickel cut‐off grade.

17.1.4 Metallurgical Factors No metallurgical factor was used in the resource estimates.



122

17.1.5 Resource Modelling

Mineral Resources were estimated using block estimation with Inverse Distance at the power of 2

(ID2) methodologies on 25 × 25 × 2 m blocks. A geochemical correlation matrix was defined in order

to assign a ‘GeoFacies’ to each individual sample in the database (Table 9). Bulk density values (wet

and dry) and moisture content were assigned based on facies (ref: Chap 12).

Three‐dimensional models for all sectors of the Araguaia Project were created using available

surveyed historical holes. All models integrate the concept of geological horizons (limonite,

transition and saprolite) to create a 3D block model. For each deposit, a surface geological

constraining envelop was generated using borehole data as well as information from geological

mapping.

17.1.5.1 Horizons A ‘horizon code’ system has been introduced to interpret geological succession of laterite facies,

with all lithologies categorised into five major groups (below).

• 100 – Limonite • 200 – Transition

300 ‐ Saprolite • 500 – Bedrock

600‐ Waste

These horizons represent consecutive sub‐horizontal layers.

17.1.5.2 Compositing The distribution characteristics of sample intervals were analysed, and a nominal compositing

interval of 1.0 m was found to be appropriate for all facies. The nominal sampling interval was 1.0m

with some occasions where sampling was performed on smaller interval.

A total of 31 % of all samples has a length shorter than 1 m. The compositing length was set at a

nominal 1.0 m but was adjusted to make all intervals down drill‐holes of equal length.

17.1.5.3 Block Coding The rock type block model was constructed by filling blocks of 25 × 25 × 2 m dimension between the

surface topography and horizon surfaces on a priority basis, leading to the unique assignment of

each model block with primary horizon codes. The 50% ‘in‐out’ coding rule was applied such that a

minimum volume of 50% was required to assign a horizon code to the block model prototype.



123

17.1.6 Statistics and Geostatistics

17.1.6.1 Chemical Correlations Basic statistical correlation parameters were derived for several elements for the three main facies; Limonite, Transition and Saprolite (Tables 23 to 25). Strong and moderate correlations are highlighted in red and green, respectively.

17.1.6.1.1 Limonite horizon: Ni shows no strong correlations, but moderate correlations with Mg and Al

Co is strongly correlated with Mn and moderately correlated with Fe and Si

Fe is strongly correlated with Si while been moderately to weakly correlated with Mg, Cr, Ca,

K and Mn

Mg is weakly to moderately correlated with Si, Al and P

Al is strongly correlated with Ti, and moderately correlated with K and P.

17.1.6.1.2 Transition horizon: Ni is moderately correlated with Co, Fe, Si

Co has a moderate correlations with Cr, Ca, Mn, Fe and Si

Fe is moderately correlated with Si, Cr, Mg, Ca and Mn

Mg is weakly to moderately correlated with Si, Al, Ca, Mn, Ti and P

Al is moderately correlated with Ti, and weakly to moderately correlated with K and P

17.1.6.1.3 Saprolite horizon: Ni shows weak correlations with almost all elements, there are moderate correlations with

Fe and Co.

Co has a moderate correlations with Fe,Cr, Ca and Mn

Fe is moderately correlated with Mg, Cr, Ca and Mn

Mg is moderately correlated with Si, Al and Ti, while it is weakly correlated with Ca, K, P and

Mn

Al is strongly correlated with Ti, and moderately correlated with Cr.

There is a very strong correlation between P and Na



124

Table 23: Correlation statistics between elements for the limonite facies at the Araguaia project. Strong and moderate correlations are highlighted in red and green, respectively

Limonite

Element Ni Co Fe Mg Si Al Cr Ca Na K P Mn Ti

Ni 1.00 0.22 0.03 0.48 ‐0.04 ‐0.42 0.16 0.05 ‐0.07 ‐0.23 ‐0.29 0.05 ‐0.27

Co 0.22 1.00 0.41 ‐0.15 ‐0.39 0.02 0.15 0.72 ‐0.03 ‐0.14 ‐0.16 0.72 ‐0.12

Fe 0.03 0.41 1.00 ‐0.34 ‐0.90 0.09 0.50 0.31 0.01 ‐0.24 0.02 0.31 ‐0.18

Mg 0.48 ‐0.15 ‐0.34 1.00 0.25 ‐0.39 ‐0.13 ‐0.19 ‐0.05 ‐0.11 ‐0.25 ‐0.19 ‐0.19

Si ‐0.04 ‐0.39 ‐0.90 0.25 1.00 ‐0.41 ‐0.59 ‐0.33 ‐0.01 0.17 ‐0.09 ‐0.33 ‐0.09

Al ‐0.42 0.02 0.09 ‐0.39 ‐0.41 1.00 0.11 0.07 0.05 0.24 0.26 0.07 0.70

Cr 0.16 0.15 0.50 ‐0.13 ‐0.59 0.11 1.00 0.06 0.01 ‐0.21 0.12 0.06 ‐0.08

Ca 0.05 0.72 0.31 ‐0.19 ‐0.33 0.07 0.06 1.00 ‐0.02 ‐0.07 ‐0.03 1.00 ‐0.06

Na ‐0.07 ‐0.03 0.01 ‐0.05 ‐0.01 0.05 0.01 ‐0.02 1.00 0.00 0.06 ‐0.02 0.08

K ‐0.23 ‐0.14 ‐0.24 ‐0.11 0.17 0.24 ‐0.21 ‐0.07 0.00 1.00 0.12 ‐0.07 0.13

P ‐0.16 ‐0.16 0.02 ‐0.25 ‐0.09 0.26 0.12 ‐0.03 0.06 0.12 1.00 ‐0.03 0.21

Mn 0.05 0.72 0.31 ‐0.19 ‐0.33 0.07 0.06 1.00 ‐0.02 ‐0.07 ‐0.03 1.00 ‐0.06

Ti ‐0.27 ‐0.12 ‐0.18 ‐0.19 ‐0.09 0.70 ‐0.08 ‐0.06 0.08 0.13 0.21 ‐0.06 1.00

Table 24: Correlation statistics between elements for the transition facies at the Araguaia project. Strong and moderate correlations are highlighted in red and green, respectively

Transition


Ni 1.00 0.45 0.39 ‐0.17 ‐0.41 0.05 0.28 0.10 ‐0.05 ‐0.12 ‐0.21 0.10 0.05

Co 0.45 1.00 0.47 ‐0.14 ‐0.39 0.06 0.28 0.50 ‐0.06 ‐0.07 ‐0.06 0.50 ‐0.09

Fe 0.39 0.47 1.00 ‐0.31 ‐0.68 0.08 0.54 0.27 ‐0.06 ‐0.10 0.07 0.27 ‐0.04

Mg ‐0.17 ‐0.14 ‐0.31 1.00 ‐0.26 ‐0.37 ‐0.14 ‐0.23 ‐0.02 ‐0.18 ‐0.20 ‐0.23 ‐0.21

Si ‐0.41 ‐0.39 ‐0.68 ‐0.26 1.00 ‐0.30 ‐0.38 ‐0.15 0.05 0.02 0.02 ‐0.15 ‐0.18

Al 0.05 0.06 0.08 ‐0.37 ‐0.30 1.00 ‐0.09 0.08 0.05 0.43 0.27 0.08 0.68

Cr 0.28 0.28 0.54 ‐0.14 ‐0.38 ‐0.09 1.00 0.09 ‐0.06 ‐0.11 ‐0.05 0.09 ‐0.26

Ca 0.10 0.50 0.27 ‐0.23 ‐0.15 0.08 0.09 1.00 ‐0.02 0.05 0.20 0.01

Na ‐0.05 ‐0.06 ‐0.06 ‐0.02 0.05 0.05 ‐0.06 ‐0.02 1.00 0.05 0.04 ‐0.02 0.08

K ‐0.12 ‐0.07 ‐0.10 ‐0.18 0.02 0.43 ‐0.11 0.05 0.05 1.00 0.20 0.05 0.23

P ‐0.06 ‐0.06 0.07 ‐0.20 0.02 0.27 ‐0.05 0.20 0.04 0.20 1.00 0.20 0.17

Mn 0.10 0.50 0.27 ‐0.23 ‐0.15 0.08 0.09 ‐0.02 0.05 0.20 1.00 0.01

Ti 0.05 ‐0.09 ‐0.04 ‐0.21 ‐0.18 0.68 ‐0.26 0.01 0.08 0.23 0.17 0.01 1.00

Table 25: Correlation statistics between elements for the saprolite facies at the Araguaia project. Strong and moderate correlations are highlighted in red and green, respectively

Saprolitde


Ni 1.00 0.43 0.25 ‐0.12 ‐0.18 0.08 0.22 0.08 ‐0.03 ‐0.11 ‐0.10 0.08 ‐0.02

Co 0.43 1.00 0.41 ‐0.15 ‐0.04 ‐0.07 0.37 0.38 ‐0.05 ‐0.07 ‐0.06 0.38 ‐0.14

Fe 0.25 0.41 1.00 ‐0.38 ‐0.14 0.04 0.49 0.24 ‐0.01 ‐0.07 0.03 0.24 0.06

Mg ‐0.12 ‐0.15 ‐0.38 1.00 ‐0.58 ‐0.58 0.01 ‐0.29 ‐0.14 ‐0.25 ‐0.28 ‐0.29 ‐0.47

Si ‐0.18 ‐0.04 ‐0.14 ‐0.58 1.00 ‐0.11 ‐0.07 0.04 0.03 0.12 0.07 0.04 ‐0.10

Al 0.08 ‐0.07 0.04 ‐0.58 ‐0.11 1.00 ‐0.34 0.19 0.14 0.29 0.28 0.19 0.79

Cr 0.22 0.37 0.49 0.01 ‐0.07 ‐0.34 1.00 0.05 ‐0.12 ‐0.17 ‐0.19 0.05 ‐0.40

Ca 0.08 0.38 0.24 ‐0.29 0.04 0.19 0.05 1.00 0.00 ‐0.02 0.06 0.99 0.13

Na ‐0.03 ‐0.05 ‐0.01 ‐0.14 0.03 0.14 ‐0.12 0.00 1.00 0.15 0.89 0.00 0.36

K ‐0.11 ‐0.07 ‐0.07 ‐0.25 0.12 0.29 ‐0.17 ‐0.02 0.15 1.00 0.19 ‐0.02 0.18

P ‐0.06 ‐0.06 0.03 ‐0.28 0.07 0.28 ‐0.19 0.06 0.89 0.19 1.00 0.06 0.52

Mn 0.08 0.38 0.24 ‐0.29 0.04 0.19 0.05 0.99 0.00 ‐0.02 0.06 1.00 0.13

Ti ‐0.02 ‐0.14 0.06 ‐0.47 ‐0.10 0.79 ‐0.40 0.13 0.36 0.18 0.52 0.13 1.00



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17.1.6.2 Characterisation Mineralisation and Grade Trends No meaningful grade trends were identified in the horizontal directions. The down‐hole directions,

however, provide evidence for important trends in some chemical components. The chemical

characterisation was made using data from drill‐holes with complete assay suites only. Figures 54 to

57 show the average composition with to depth for limonite, transition, saprolite and bedrock for

the four main sectors at the Araguaia project.

Data is presented in such a way that each horizon is consecutive and starts at a given depth, i.e., for

the sector North; limonite at 0 m, Transition at 15m, saprolite at 20m and bedrock at 45 m. Thus, the

thicknesses are artificial and refer for each horizon at the respective starting depth going down. This

method allows generalization of the chemical trend of the entire population although it must be

stressed as deeper levels (wider sections) are reached fewer sample contribute as there are fewer

samples with such lengths in the database.

17.1.6.2.1 Limonite horizon Ni Increases smoothly from 0.10% to 0.20% near surface to about 0.95% at 10 m depth,

remains constant for few meters and then declines below 0.50% at depth. It is only at the sector Pequizeiro that the Ni continue to increase down to the interface with the transition.

Fe is around 30% near surface, increase slightly few meter below surface for then gradually declines below30% at the bottom of the limonite horizon

MgO is below 3% for the entire limonite horizon. Al2O3 shows a steady decline from 17% to 18% at surface to less than 10.0% at the base of the

limonite interval. SiO2 gradually increases from 17% at surface to up to 32% at the bottom of the limonite horizon Cr2O3 behave differently for each sector, but generally remain below 3%.

17.1.6.2.2 Saprolite horizon Ni shows a clear trend with grades decreasing with depth, from 1.25% near the top of the

saprolite to below 0.7% at depth Fe decreases from around 20% at the top of the horizon to 9% at depth MgO is significantly higher than in limonite and ranges from 15% to around 30%. Behaviour is

slightly erratic but generally shows a gradual increase with depth. Al2O3 ranges from around 2.0% to around 5% SiO2 increases from 37% to 42% with depth Cr2O3 decrease gradually with depth, from around 1.3% to around 0.7% at depth



126

Figure 54: Characterisation of vertical grade trend for sector North

Figure 55: Characterisation of vertical grade trend for sector Center



127

Figure 56: Characterisation of vertical grade trend for sector Pequizeiro

Figure 57: Characterisation of vertical grade trend for sector South



128

17.1.7 Unwrinkling and modelling It was decided that unwrinkling of the Araguaia laterite deposits was an appropriate method to improve grade connectivity and interpolation during the estimation process. Unwrinkling is a Gemcom™ term to describe a method of unfolding whereby only the Z‐coordinate of spatially located data is moved, to effect a flattening of a geological horizon. In the case of the Araguaia project, the transformation was applied to composites.

The inputs required for unwrinkling of points are: a pair of bounding surfaces defining each horizon,

a constant thickness parameter for each horizon and a mid‐level elevation to define the new

transform. After grade estimation in unwrinkled space, the estimates were back transformed to

normal coordinated space (‘rewrinkling’).

Horizon surfaces were generated in GEMS using the bottom of each horizon from each drill‐hole.

These surfaces became the basis for the triangulation of horizon surfaces used for controlling the

unwrinkling of composites.

A new block model in unwrinkled space was created using the same dimensions than the block

model in normal space, with the difference that the thickness for each horizon (limonite: code 100

series, Transition: code 200 series and saprolite: code 300 series) are constant and equivalent to the

maximal thickness encountered in normal space.

Each block of the unwrinkled block model was then independently interpolated using the Inverse

Distance at the power of 2 (ID2) methodologies in transformed space using Gemcom software. An

ellipsoid sample search parameters of 1,000 × 1,000 × 20 m was used in unwrinkled space using a

minimum of 2 samples to maximum of 12 with limitation of only one sample per hole.

Grade estimates for each block in transformed space were then exported as a single point

representing the centroid of the block. Those informed points were then back transformed to

normal space.

Blocks of the normal space 3D model were assigned the value of the nearest back‐transformed

centroid using a search ellipsoid of the size of the block in normal space (i.e., 25 × 25 × 2 m). As a

real space block may have several back‐transformed centroids, part of the information is not used.

Significant visual comparisons have been made between estimated block grades and insitu drillhole

data. All shows reasonable comparison. Despite the large drill spacing, these 3D models are

considered as good representation of the insitu data. Figures 58 and 59 show good correlation

between block model estimated grades and drillhole data.



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Figure 58:Pequizeiro 3D model versus drillhole data (PCA‐DD‐0291) showing correlation between the block model estimated grades and drillhole data

Figure 59: Baiao 3D model versus drillhole data (PCA‐DD‐0184) showing correlation between the block model estimated grades and drillhole data



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17.1.8 Classification

Dr Audet reviewed the historical data and found the historical data to be of industry standards (Ref:

Section 9). Horizonte’s geologists have, under Dr Audet supervision, re‐logged approximately 20% of

all Teck’s boreholes and despite some discrepancies with Teck’s nomenclatures, found that the

relogging fits well with the assigned facies defined by the correlation.

It is the opinion of Dr Audet that mineral resource estimated using Teck’s data qualify for been

classified as inferred under either the JORC or the NI43‐101 regulations for selected deposits.

Mineral Resource estimates for the Oito West, Vila Oito West, Pequizeiro East and Baião South areas

were not reported due to the poor drilling coverage.

17.1.9 Mineral Resources

The mineral resources for the Araguaia project are classified as Inferred Resources due to the large

drill spacing of the historical holes as well as for the intrinsic variability in thickness of facies. The

resources are shown by total and per facies (limonite, transition and saprolite) using 1.0% Ni cut‐offs

grade in Tables 26 to 30.

To the best of our knowledge the reported Araguaia mineral resources are not affected by any

known environmental, permitting, legal, title, taxation and/or socio‐economic considerations.



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Table 26: Araguaia Project: Inferred Mineral Resources as of October 2010



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Table 27: Inferred Mineral Resources for the North Sector as of October 2010

Sector Area Horizons volume Density Tonnes % Ni Metal Ni Co Fe MgO SiO2 Al2O3 Cr2O3

(,000) m3 (,000) t t % % % % % % %

North Oito Limonite 1,791 1.34 2,404 30% 27,405 1.14 0.122 37.62 2.76 18.16 10.44 2.36 Transition 2,404 1.34 3,231 41% 45,454 1.41 0.051 19.34 13.79 40.40 5.07 1.24

Saprolite 1,544 1.46 2,257 29% 27,019 1.20 0.032 12.23 21.95 42.64 4.89 0.75 5,739 1.38 7,892 99,878 1.27 0.067 22.88 12.77 34.26 6.65 1.44

Oito West Not estimated Total 7,892 99,878 1.27 0.067 22.88 12.77 34.26 6.65 1.44



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Table 28: Inferred Mineral Resources for the Center Sector as of October 2010


(,000) m3 (,000) t t % % % % % % %

Center Vila Oito E. Limonite 475 1.33 630 7% 7,689 1.22 0.128 29.23 3.10 36.09 6.22 1.53

Transition 2,970 1.35 3,997 44% 54,124 1.35 0.063 18.93 11.23 44.22 4.48 1.38

Saprolite 3,112 1.45 4,517 49% 54,927 1.22 0.040 11.87 23.60 43.34 3.00 0.78

Sub-total 6,557 1.39 9,144 116,739 1.28 0.056 16.15 16.78 43.22 3.87 1.09

Vila Oito Limonite 876 1.37 1,196 9% 15,102 1.26 0.159 33.95 4.15 26.08 7.33 1.99

Transition 2,539 1.36 3,463 25% 44,025 1.27 0.055 19.33 13.44 41.15 4.99 1.11

Saprolite 6,191 1.46 9,066 66% 110,082 1.21 0.035 12.49 24.54 40.87 3.64 0.77

Sub-total 9,606 1.43 13,725 169,209 1.23 0.051 16.09 19.96 39.65 4.30 0.96

Vila Oito W. Limonite Not estimated

Transition

Saprolite

Sub-total

Jacutinga Limonite 565 1.34 755 19% 8,594 1.14 0.174 36.16 2.52 25.21 7.51 2.26

Transition 520 1.35 702 18% 13,932 1.98 0.107 23.22 14.99 33.54 3.84 1.73

Saprolite 1,614 1.52 2,452 63% 34,249 1.40 0.049 12.00 21.82 46.31 2.49 0.89

Sub-total 2,699 1.45 3,909 56,775 1.45 0.084 18.68 16.87 39.94 3.70 1.31

Total 18,862 1.38 26,778 342,724 1.28 0.057 16.49 18.43 40.91 4.07 1.06



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Table 29: Inferred Mineral Resources for the Pequizeiro Sector as of October 2010


(,000) m3 (,000) t t % % % % % % %

Pequizeiro Piquizeiro Limonite 727 1.35 980 5% 11,658 1.19 0.143 38.02 3.94 16.50 10.15 2.68 Transition 5,709 1.37 7,797 43% 131,054 1.68 0.064 18.25 14.26 39.53 5.53 1.27

Saprolite 6,336 1.48 9,378 52% 131,540 1.40 0.036 11.87 22.90 42.05 4.42 0.94 Sub-total 12,772 1.42 18,155 274,252 1.51 0.053 16.02 18.17 39.59 5.21 1.18

Piquizeiro E Limonite not estimated

Transition

Saprolite

Sub-total

Piquizeiro W Limonite 421 1.35 568 14% 7,028 1.24 0.067 27.95 4.47 33.36 7.09 1.83

Transition 2,160 1.35 2,918 73% 40,200 1.38 0.054 17.45 10.72 46.96 4.52 1.22

Saprolite 349 1.47 514 13% 6,573 1.28 0.053 10.73 22.00 45.22 3.23 0.77 Sub-total 2,930 1.36 4,000 53,801 1.35 0.056 18.08 11.29 44.81 4.72 1.25

Piquizeiro NW Limonite 572 1.35 770 46% 8,843 1.15 0.082 35.04 5.40 18.78 9.61 2.43

Transition 504 1.34 677 40% 9,032 1.33 0.050 21.12 14.00 33.57 7.01 1.57

Saprolite 159 1.55 245 14% 2,742 1.12 0.036 14.18 23.25 39.15 3.43 1.07 Sub-total 1,235 1.37 1,692 20,618 1.22 0.062 26.45 11.42 27.65 7.67 1.89

Total

16,937 23,847 348,671 1.46 0.054 17.10 16.53 39.62 5.30 1.24



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Table 30: Inferred Mineral Resources for the South Sector as of October 2010


(,000) m3 (,000) t t % % % % % % %

South Baiao Limonite 4,456 1.34 5,970 33% 76,475 1.28 0.124 36.28 3.22 18.18 10.26 2.95 Transition 6,063 1.37 8,325 46% 119,369 1.43 0.055 18.54 14.01 40.31 5.52 1.42

Saprolite 2,563 1.48 3,790 21% 45,532 1.20 0.029 11.93 23.88 41.59 4.09 0.96 13,082 1.38 18,085 241,375 1.33 0.072 23.01 12.52 33.27 6.79 1.83

Baiao South Not estimated

Total 13,082 18,085 241,375 1.33 0.072 23.01 12.52 33.27 6.79 1.83



136

17.1.10 Mineral Reserves

Not applicable



137

18 Other Data and Information There is no further information deemed necessary to make this report understandable and not

misleading.



138

19 Interpretation and Conclusions

19.1 Araguaia Project

The Teck’s field investigations undertaken between 2006 and 2008 gave a good geological

understanding of the investigated areas. The resulting geological knowledge together with quality

data obtained from Teck’s drill program in 2008 are the basis for the Araguaia Nickel Project

preliminary mineral resources estimates as reported in this technical report.

Teck previous geological mapping conducted along with the drilling campaigns has been focused on

determining the limits of laterite developments. Using this input the 3D modelling of limonite,

transition and saprolite horizons are considered to provide a fair and reasonable representation of

the geology of the deposits.

Core re‐logging has shown good correspondence with previous Teck descriptions as well as the

chemical discrimination for the vast majority of drill‐cores, with uncertainty confined in some cases

to the distinction of transition and saprolite. This is not unexpected and is considered fully

acceptable. The density of data has been found to be adequate for designation of the Araguaia’s

Inferred Mineral Resources.

The mineral resource estimate of Araguaia Nickel Project laterite deposits was based on 489 core

boreholes for a total of 11,404 meters and includes targets within the North, Centre, Pequizeiro and

South Sectors. The model integrates the concept of geological horizons (limonite, transition and

saprolite) to create a 3D block model. Estimation was conducted in unwrinkled space using Inverse

Distance at Power of 2 (ID2) using Gemcom software. Mineral resources for the project are reported

using 1.0% Ni cut‐off values. The Inferred Mineral Resources estimated are reported in Table 31.

Table 31: Inferred Mineral Resource at 1.0% Ni cut‐off grade. † DBD = Dry bulk density

DBD† Tonnage Nickel Ni Co Fe MgO SiO2 Al2O3 Cr2O3

t/m3 (,000) t tonnes % % % % % % %

Araguaia laterite deposits

Limonite 1.34 13,273 162,793 1.23 0.13 35.67 3.41 20.70 9.50 2.55

Transition 1.36 31,110 457,190 1.47 0.06 18.75 13.34 41.04 5.18 1.32

Saprolite 1.47 32,219 412,664 1.28 0.04 12.09 23.42 42.24 3.82 0.85

Total 76,604 1,032,647 1.35 0.06 18.88 15.86 38.02 5.36 1.34

The qualified person, consulting geologist Marc‐Antoine Audet, P.Geo., Ph.D. concludes that the

procedures followed during exploration drilling, sampling, assaying, bulk density determination and

QA/QC, as well as data management and modelling to determining the mineral resources of the

deposits have been satisfactory and are not misleading. Horizonte Mineral’s Araguaia Nickel Project

resource database meets industry standards and is compatible with the JORC and CIM codes for

public reporting.



139

19.2 Lontra Project

The Lontra licences contain a substantial area of ultramafic rocks; which are the principal lithology

from which the nickel mineralisation is derived. Several of these target areas have the potential to

hold significant resources of nickel, but WAI considers that considerable exploration effort and

budget will be required before the magnitude of such resources can be quantified (Owen et al,

2010).

WAI considers that the results of the 2008 drilling programme are very encouraging and

demonstrate that the near surface laterite developments at the Northern and Raimundo zones could

potentially contain a sizeable nickel resource. The targets remain open, and extensions and

subsidiary targets at both sites are as yet untested (Owen et al, 2010).



140

20 Recommendations

Further evaluation is recommended to complete a preliminary assessment of the Araguaia Nickel

Project.

Current planned and budgeted (£1.5M {C$2.3M}) work in progress on the Araguaia Nickel Project

includes:

An 8000m diamond drilling programme designed to reduce the drill spacing on the Pequizeiro

West, Pequizeiro and Baião targets to 141m x 141m and then on the Pequizeiro and Baião

targets to 100m x 100m.

A NI 43‐101 compliant mineral resource estimate on the Pequizeiro and Baião targets based on

100m x 100m diamond drilling.

Compilation of all the historical exploration data over the entire project and reconnaissance

exploration and mapping over priority targets.

Mineralogical test program on selected samples of the major mineralised facies including optical

microscopy, quantitative evaluation of materials using scanning electron microscopy (QEMSCAN)

analysis, X‐ray diffraction (XRD) analysis and electron microprobe (EMP) analysis

It is recommended that further evaluation of the Araguaia Nickel Project potential will include:

Environmental baseline study

Preliminary metallurgical process studies to identify the optimum processing route to maximise

the economic return.

Infill drilling in the Lontra Sector suitable for first mineral resource estimation.

Reduce drill spacing on all significant targets to 141m x 141m prior to selection of targets for

additional 100m x 100m drilling.

Infill drilling on the Pequizeiro and Baião targets if closer spacing than 100m x 100m is required

to raise the resource estimations to an Indicated Mineral Resource category.

Reconnaissance drilling on selected targets from reconnaissance exploration and mapping.

Scoping Study to determine order of magnitude economic parameters

Airborne laser topographical survey (2m contours)



141

21 References M. Bennell; January 2010; Technical Report on the Araguaia Nickel Exploration Project, Para State, Brazil, NI43‐101 report by Lara Exploration Limited R. Bisneto et al; December 2006; Relatorio Anual De Pesquisa, Projeto 128500 Araguaia/PA, Exploration report by Teck Cominco Limited M L Owen et al; July 2010; Competent Person’s Report on the Assets of Horizonte Minerals Plc, Brazil, Independent Competent Persons Report by Wardell Armstrong International Ltd.



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22 Date and Signatures

The effective date of this Technical Report, entitled “Geology and Mineral Resources of the Araguaia

Nickel Project, Brazil, NI 43‐101 Technical Report” is 15 May, 2011.

15 May, 2011 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ James Hogg, MSc, MAIG Date.

15 May, 2011 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Owen Milalop, MCSM, BSc, CEng, MIMMM Date.



143

23 Certificate and Consent of CoAuthors

Marc‐Antoine Audet, P. Geo. Ph.D.

Geological Consultant

787 Powell

Town of Mont‐Royal

PQ

Canada

Tel: (514) 344‐1056

Fax: (514) 344‐1056

marc‐[email protected]

CERTIFICATE OF AUTHOR

I, Marc‐Antoine Audet, P. Geo., of 787 Powell, Town of Mont‐Royal, Quebec, Canada hereby certify that:

I am currently self‐employed as a geological consultant.

I graduated with a degree in Geology from the University Laval of Quebec City in 1986. In addition, I

have obtained a Master of Science in Geology, 1995 from the Witwatersrand University,

Johannesburg, RSA and a Ph.D in 2008 from Université du Québec à Montréal (UQAM) and from

Université de la Nouvelle‐Calédonie (UNC).

I am a member of the Association of Professional Geoscientists of Ontario (APGO), member 612 and

l’Ordre des Géoloques du Québec (OGQ), member 1341.

1. I have worked as a geologist for a total of 24 years since my graduation from university.

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

3. I am responsible for the preparation of sections 1, 2, 8, 9, 10.3, 12.1.4, 13, 14, 16, 17, 18, 19.1, 20, 22 and 23 of the technical report relating to the 3D modelling and mineral resource estimations of the report titled :

Geology and Mineral Resources of the Araguaia Nickel Project, Brazil, NI 43‐101 Technical Report. Dated May 15, 2011.

4. I had no prior involvement with the property that is the subject of the Technical Report.

5. I visited the properties that are the subject of the Technical Report for the first time between the 13th and the 20th October 2010.



144

6. I am independent of Horizonte Minerals Inc. applying all of the tests in section 1.4 of NI 43‐101.

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

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



145

James Nicholas Hogg, M.Sc, MAIG

Consulting Geologist ‐ Micromine Consulting Services

Unit 104, 27‐31 Clerkenwell Workshops, London, EC1R 0AT

Tel: +44 (0) 203 176 0081

Fax: +44 (0) 203 176 0082

[email protected]


I, James Nicholas Hogg, M.Sc, MAIG, of 104 Clerkenwell Close, London, EC1R 0AT hereby certify that:

I am currently employed as a Micromine Consulting Services geological consultant with Micromine

Limited.

I graduated with a degree in Geology from Kingston University, London in 1993. In addition, I have

obtained a Master of Science in Mineral Exploration (merit), in 1996 from the University of Leicester,

Leicester, United Kingdom.

I am a member of the Australian Institute of Geoscientists, Australia.

1. I have worked as a geologist for a total of 15 years since my graduation from university.

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

3. I am responsible via desk study report research and process verification for the preparation of sections 1, 2‐7, 10‐12 15, 18, 19, 20, 21, 22 and 23 of the technical report titled:


4. I had no prior involvement with the property that is the subject of the Technical Report.

5. I have not visited the properties that are the subject of the Technical Report.





146


Dated this 15 day of May, 2011.

James Nicholas Hogg, M.Sc, MAIG.



147

Owen Daniel Mihalop, CEng, MIMMM

Technical Director – Wardell Armstrong International

Wheal Jane, Baldhu, Truro, TR3 6EH

Tel: +44 (0) 1872 560 738

Fax: +44 (0) 1872 561 079

omihalop@wardell‐armstrong.com


I, Owen Daniel Mihalop, CEng, MIMMM, of Wheal Jane, Baldhu, Truro, TR3 6EH hereby certify that:

I am currently employed as Technical Director of Mining with Wardell Armstrong International

Limited.

I graduated with a degree in Mining and Exploration Geology from the University of Wales, Cardiff in

1995. In addition, I have obtained a Master of Science in Mining Engineering, in 2001 from the

University of Exeter, Camborne School of Mines, United Kingdom.

I am a professional member of the Institute of Materials, Minerals and Mining and a registered

Chartered Engineer of the Engineering Council, UK.

1. I have worked as a geologist and mining engineer for a total of 15 years since my graduation from university.

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

3. I am jointly responsible via previous reports that I have written for the preparation of sections 1,2,3,5,6, 10,11, 18, 19.2, 20, 22 and 23 of the technical report entitled:


4. Prior to this Technical Report I was a co‐author of a CPR concerning these properties for a re‐admission document to the Alternative Investment Market of the LSE.

5. I visited the properties that are the subject of the Technical Report between 20th and 25th of January 2010.



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Dated this 15th day of May, 2011.

Owen Daniel Mihalop, CEng, MIMMM

geology and mineral resources of the araguaia nickel ...marc‐antoine audet géologue consultant...

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