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Independent Report on the Nickel Laterite Resource at Agata North

INDEPENDENT GEOLOGICAL REPORT ON THE NICKEL


LATERITE RESOURCE AT AGATA NORTH
LATERITE PROJECT AREA

AGATA PROJECT
AGUSAN DEL NORTE PROVINCE
NORTHERN MINDANAO, PHILIPPINES

FOR

MINDORO RESOURCES LIMITED


SUITE 104, 17707 – 105 AVENUE,
EDMONTON, ALBERTA T5S 1T1
CANADA

19th September, 2008

DALLAS M. COX, BE (M IN)


52 SOMERVILLE STREET BENDIGO VICTORIA, AUSTRALIA 3550

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Independent Report on the Nickel Laterite Resource at Agata North

TABLE OF CONTENTS

3.0  SUMMARY .....................................................................................................................................1 


4.0  INTRODUCTION .............................................................................................................................3 
5.0  RELIANCE ON OTHER EXPERTS ..................................................................................................4 
6.0  PROPERTY DESCRIPTION AND LOCATION ................................................................................4 
6.1  Location .....................................................................................................................................4 
6.2  Property Description: ...................................................................................................................5 
6.2.1  Tenement Type: ........................................................................................................... 8 
7.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE and
PHYSIOGRAPHY ................................................................................................................................ 11 
7.1  Accessibility: ............................................................................................................................ 11 
7.2  Climate: .................................................................................................................................... 12 
7.3  Local Resources and Infrastructure: ............................................................................................ 12 
7.4  Physiography: ........................................................................................................................... 12 
8.0  HISTORY....................................................................................................................................... 13 
9.0  GEOLOGICAL SETTING............................................................................................................... 14 
9.1  Regional Geology...................................................................................................................... 14 
9.2  Local Geology of Agata Project Area.......................................................................................... 16 
9.2.1  Greenschist (Cretaceous) ........................................................................................... 16 
9.2.2  Ultramafics (Cretaceous) ........................................................................................... 16 
9.2.3  Limestone (Upper Eocene) ........................................................................................ 17 
9.2.4  Andesite and Tuff ...................................................................................................... 17 
9.2.5  Intrusives (Upper Oligocene to Lower Miocene) ...................................................... 17 
9.2.6  Limestone (Lower Miocene) ..................................................................................... 17 
9.2.7  Recent Alluvium ........................................................................................................ 17 
9.3  Geology of the ANLP Area ........................................................................................................ 19 
10.0  DEPOSIT TYPES ..................................................................................................................... 19 
11.0  MINERALIZATION ................................................................................................................. 24 
11.1  Agata Nickel Laterite Project ..................................................................................................... 24 
12.0  EXPLORATION ....................................................................................................................... 26 
12.1  MRL Exploration (1997-2000) ................................................................................................... 26 
12.2  MRL Exploration (2004-2006) ................................................................................................... 27 
13.0  DRILLING ............................................................................................................................... 37 
13.1  Drilling Contractors: .................................................................................................................. 37 
13.2  Drilling Rates: ........................................................................................................................... 39 
13.3  Drillhole Collars Survey ............................................................................................................ 39 
13.4  Drilling Results ......................................................................................................................... 40 
14.0  SAMPLING METHOD AND APPROACH ................................................................................ 41 
15.0  SAMPLE PREPARATION, SECURITY AND ANALYSES ....................................................... 42 
15.1  MRL Protocols .......................................................................................................................... 42 
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Independent Report on the Nickel Laterite Resource at Agata North

15.1.1  MRL Core Sampling.................................................................................................. 42 


15.1.2  Rechecking of Laboratory Results............................................................................. 44 
15.2  Laboratory Protocols ................................................................................................................. 46 
15.2.1  McPhar Geoservices (Phil.), Inc. ............................................................................... 46 
15.2.2  Intertek Testing Services Phils., Inc. ......................................................................... 48 
16.0  DATA VERIFICATION............................................................................................................ 50 
16.1  Internal QAQC (McPhar/Intertek) .............................................................................................. 50 
16.2  External QAQC (MRL) ............................................................................................................. 52 
16.2.1  Nickel Standards ........................................................................................................ 53 
16.2.2  Field Duplicates ......................................................................................................... 55 
16.2.3  Coarse Rejects............................................................................................................ 59 
16.2.4  Pulp Rejects Analyzed by Primary Laboratory ......................................................... 60 
16.2.5  Pulp Rejects Analyzed by Umpire Laboratory .......................................................... 62 
17.0  ADJACENT PROPERTIES ....................................................................................................... 64 
17.1  Tapian-San Francisco Property: .................................................................................................. 64 
17.1.1  Gold Hill [C5] ............................................................................................................ 64 
17.1.2  Cantikoy (C6) ............................................................................................................ 64 
17.1.3  Canaga (C9) ............................................................................................................... 64 
17.1.4  Waterfalls (C1) .......................................................................................................... 65 
17.2  Tapian Main Property ................................................................................................................ 65 
17.3  Tapian Extension....................................................................................................................... 66 
17.3.1  Bolobolo..................................................................................................................... 66 
17.4  Other Nickel Laterite Prospects: ................................................................................................. 67 
18.0  MINERAL PROCESSING AND METALLURGICAL TESTING ............................................... 67 
19.0  MINERAL RESOURCE ESTIMATE......................................................................................... 67 
19.1  Data Set: ................................................................................................................................... 67 
19.2  Raw Assay Statistics:................................................................................................................. 68 
19.3  Compositing: ............................................................................................................................ 69 
19.4  Surfaces and Domains: .............................................................................................................. 75 
19.5  Data Manipulation: .................................................................................................................... 76 
19.6  Specific Gravity, Bulk Density and Moisture Content: ................................................................. 76 
19.7  Block Modelling and Grade Estimation:...................................................................................... 82 
19.8  Conclusions: ............................................................................................................................. 84 
20.0  OTHER RELEVANT DATA AND INFORMATION ................................................................. 84 
21.0  INTERPRETATION AND CONCLUSIONS .............................................................................. 85 
21.1  Agata North Nickel Laterite Project ............................................................................................ 85 
21.2  Regional Prospects .................................................................................................................... 86 
22.0  RECOMMENDATIONS ........................................................................................................... 87 
22.1  Agata North Nickel Laterite Project ............................................................................................ 87 
22.2  Regional Prospects .................................................................................................................... 87 
23.0  REFERENCES ......................................................................................................................... 88 

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24.0  DATE AND SIGNATURES ...................................................................................................... 90 


25.0  ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT
PROPERTIES & PRODUCTION PROPERTIES .................................................................................... 92 
26.0  ILLUSTRATIONS .................................................................................................................... 92 

LIST OF FIGURES

Figure 1:  Philippine Map showing location of MRL Gold projects .................................................. 4 
Figure 2:  MRL Tenements and Projects in the Surigao Mineral District .......................................... 7 
Figure 3:  Geologic Map of Surigao Mineral District .....................................................................15 
Figure 4:  Agata Geologic Map ....................................................................................................18 
Figure 5:  Agata Compilation .......................................................................................................21 
Figure 6:  Model of spatial relationship between nickel laterite and porphyry targets........................21 
Figure 7:  Compilation Map Showing areas of Nickel Laterite Mineralization .................................23 
Figure.8:  Agata Projects Map showing areas of Nickel Laterite Mineralization. ..............................25 
Figure 9:  Cross section Line 10150N Linegraph. ..........................................................................26 
Figure 10:  Agata Soil (Gold) Map..............................................................................................29 
Figure 11:  Agata Soil (Copper) Map ..........................................................................................30 
Figure 12:  Agata Soil (Zinc) Map ..............................................................................................31 
Figure 13:  Agata Rock Geochemistry Map .................................................................................32 
Figure 14:  Agata Ground Magnetic Survey Map .........................................................................33 
Figure 15:  Agata Chargeability @ L=7 ......................................................................................35 
Figure 16:  Agata Resistivity @ L=7 ...........................................................................................36 
Figure 17:  ANLP Drillhole Location Map ..................................................................................38 
Figure 18:  Cross Section Line 10150N showing grades and thickness of laterite horizons..............40 
Figure 19:  Flowchart of Mcphar’s Sample Preparation for Laterite ..............................................47 
Figure 20:  McPhar’s Laterite Analysis Procedure Flowsheet .......................................................48 
Figure 21:  Intertek’s Sample Preparation Procedure for Laterite ..................................................49 
Figure 22:  Graphs of Laboratory Internal Recheck Assays..........................................................51 
Figure 23:  Graphs of Nickel Standards .......................................................................................53 
Figure 24:  Graphs of Field Duplicates Assays ............................................................................57 
Figure 25:  Graphs of Coarse Duplicates Assays ..........................................................................59 
Figure 26:  Graphs of Pulp Rejects analyzed by Primary Laboratory .............................................61 
Figure 27:  Graphs of Pulp Rejects Analyzed by Umpire Laboratory.............................................63 
Figure 28:  Tapian-San Francisco Compilation ............................................................................65 
Figure 29:  Tapian Main Compilation .........................................................................................66 
Figure 30:  Domain Surfaces and Composite Coding ...................................................................76 
Figure 31:  Agata North Test Pit Location Map ...........................................................................77 
Figure 32:  Graphs of Dry Bulk Density Measurements................................................................81 
Figure 33:  Graphs of Moisture Content ......................................................................................81 
Figure 34:  Block Model Configuration .......................................................................................82 
Figure 35:  Block Model Cross Section (N1027590) ....................................................................83 
Figure 36:  Block Model Classification .......................................................................................83 

LIST OF TABLES

Table 1:  Original Mining Application Claims under MPSA 134-99-XIII........................................ 5 


Table 2:  Surigao-Agusan del Norte Tenements held by Mindoro: .................................................10 
Table 3:  Climatological Normals and Extremes 1961-2000 ..........................................................12 
Table 4:  Average Grades of Nickel Laterite Horizons ..................................................................25 
Table 5:  Drilling Rates ..............................................................................................................39 

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Independent Report on the Nickel Laterite Resource at Agata North

Table 6:  NAMRIA Tie Points Technical Description ...................................................................40 


Table 7:  Average Grades of Laterite Horizons at Line 10150N .....................................................41 
Table 8:  Core Recovery Percentages...........................................................................................42 
Table 9:  List of Sampling Intervals .............................................................................................43 
Table 10:  Numbers of Core, Reference and Recheck Samples Analyzed .........................................45 
Table 11:  Frequency of Check Sampling per Laterite Zone ............................................................46 
Table 12:  Frequency of Using Nickel Reference Materials .............................................................46 
Table 13:  Relationship of Original and Repeat Analyses ................................................................50 
Table 14:  Relationship of Field Duplicate and Original Assays ......................................................56 
Table 15:  Relationship of Coarse Rejects and Original Assays .......................................................59 
Table 16:  Data Set.......................................................................................................................68 
Table 17:  Drillhole Summary .......................................................................................................68 
Table 18:  Raw Assay Statistics ....................................................................................................68 
Table 19:  Compositing Data ........................................................................................................70 
Table 20:  Frequency Distribution Plots Ni% .................................................................................71 
Table 21:  Cumulative Probability Plots Ni% .................................................................................72 
Table 22:  Limonite Composite Statistics.......................................................................................73 
Table 23:  Saprolite Composite Statistics .......................................................................................74 
Table 24:  Domain Coding............................................................................................................75 
Table 25:  Specific Gravity Parameters ..........................................................................................76 
Table 26:  Summary of Bulk Density Measurements ......................................................................78 
Table 27:  Bulk Density Measurements on Ferruginous Laterite Materials .......................................78 
Table 28:  Bulk Density Measurements on Limonite Materials........................................................79 
Table 29:  Bulk Density Measurements on Saprolite Materials (Pit Samples) ...................................79 
Table 30:  Bulk Density Measurements on Saprolite Materials (Core Samples) ................................80 
Table 31:  Mineral Resource Classification ....................................................................................84 
Table 32:  Mineral Resource Estimation by Classification ..............................................................84 
Table 33:  Summary of Resource: Combined Limonite and Saprolite @ 0.8% Ni cutoff grade ..........86 

LIST OF APPENDICES

Appendix 1: Notice of Relinquishment of portion of MPSA 134-99-XIII


Appendix 2: Certified technical descriptions of NAMRIA Stations
Appendix 3: ANLP QAQC Procedures
Appendix 4: Certificates of Nickel Reference Materials

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Independent Report on the Nickel Laterite Resource at Agata North

3.0 SUMMARY

On July 2008, Mindoro Resources Ltd. [Mindoro] requested the author to update the 43-101
Technical Report on its mineral resource at the Agata North Laterite Project (ANLP), which was
filed on June 2008. That first report was written by this author. This current report discloses the
updated results of the mineral resource estimation at the ANLP and describes results for all
exploration carried out to date by MRL Gold Phils. Inc. (MRL) on its Agata Projects. MRL is a
wholly-owned subsidiary of Mindoro. The project was explored under a Memorandum of Agreement
between MRL and Minimax Mineral Exploration Corporation (Minimax). MRL has earned a 75%
interest in all the Surigao projects (except the Mat-I Project) including the Agata Project. Minimax
has also granted MRL an option to acquire additional 25% direct and indirect participating interest in
such projects as the Agata Projects.

The ANLP is one of the projects located within the Agata Projects, which is covered by the Mineral
Production Sharing Agreement (MPSA) Contract Area of Minimax denominated as MPSA-134-99-
XIII and approved by the Department of Environment and Natural Resources (DENR) on May 26,
1999.

The Agata Projects area is situated along the southern part of the uplifted and fault-bounded Western
Range on the northern end of the east Mindanao Ridge. At least six juxtaposed rock units underlie
the area. These are greenschists; ultramafics; limestones; andesite and tuff; younger limestones;
intrusives; and alluvium.

Widespread occurrence of serpentinized harzburgite, serpentinized peridotite, serpentinites and


localized lenses of dunite comprise the lithology in the resource area. Geological mapping showed
favorable development of laterite along the broad ridges characterized by peneplane topography and
underlain by ultramafic rocks.

Nickeliferrous laterite mineralization is present over a broad region in the Agata Projects area. They
are divided into two (2) major areas known as the ANLP and the ASLP. The former has an area of
approximately 379 ha while the latter comprises about 235 ha. In the ANLP, drilling is concentrated
in approximately thirty-five (35) percent of the interpreted nickel laterite mineralization to date.

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

The laterite profile in the ANLP consists of the ferruginous laterite, limonite zone, saprolite zone,
and the saprolitic rock, arranged from surface going down. The limonite zone is characteristically
iron oxide-rich where the predominant minerals are hematite and goethite while the saprolite zone is
Mg-rich. Patches of garnierite were noted within the saprolite and saprolitic rock horizon.

The bases for this report are the data that were produced and compiled by MRL. The assay data were
collected from drilling activities in the area. Work on the current mineral resource estimation yielded
the following:

• Preliminary statistical analysis on raw assays was carried out on 228 drill holes. Raw Assay
data was analyzed above a cut-off grade of 0.8 Ni%. The 0.8 Ni% cut-off grade was
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Independent Report on the Nickel Laterite Resource at Agata North

considered the lower bound for Nickel Laterite ore exploitable via Direct Shipping Ore
contracts in the Asian refineries with consideration to current and short term forecast Nickel
prices.

• The MineSight ® IDW Interpolation procedure was used to interpolate Nickel, Cobalt, Iron
and Phosphor grades. Inverse Distance Weighting (IDW) Power 2 was used for grade
estimation. This method was considered acceptable given the tight constraints applied to
limonite and saprolite domaining. The density of drilling and continuity of mineralization is
sufficient to classify the estimated resource.

• Grades were interpolated in Ferruginous Laterite, Limonite and Saprolite domains only.
Saprock composites above 1.0 Ni % were excluded from surface domaining, statistical
analysis and mineral resource estimation pending future variographic studies.

• Generally, Nickel grades in the Limonite horizon, increase and peak at a point about the
base of the Limonite. Nickel grades remain respectively high and thereafter diminish as the
ore grades into basement/bedrock. Unfolding to this surface ensures that Nickel grades in
both Limonite and Saprolite are preferentially honored in the mid section of the laterite
profile which represents a greater proportion (50+%) of the body.

• The Bulk Density for Limonite and Saprolite were measured in places and has been set at
1.20 and 1.50 respectively, for the mineral resource estimates.

• Resource classification methodology for Limonite was based on the grid spacing as denoted
in Table 31. Planar and elevation search ellipses for Saprolite were reduced by 1/3rd of the
limonite search ellipse parameters given the undulating saprolite/bedrock contact and
laterally erratic nature of metal grades in the saprolite domain. There is upside potential to
increase indicated and inferred ore category tonnages following favorable outcome from a
planned variographic study, in conjuction with the analysis of the results of twinning
diamond holes and test pits, to increase search ellipse parameters and domain extents.

The summary of the initial resource @ 0.8% Ni cutoff grade is presented in the following table:
Classification Laterite Horizon Mil. WMT Mil. DMT Ni % Co % Fe %
Limonite 0.85 0.55 1.07 0.117 44
Measured Saprolite 0.58 0.47 1.30 0.031 13
Subtotal 1.43 1.02 1.17 0.078 30
Limonite 1.88 1.22 1.06 0.117 44
Indicated Saprolite 1.63 1.31 1.30 0.031 13
Subtotal 3.52 2.53 1.18 0.073 28
Measured & Limonite 2.73 1.78 1.06 0.117 44
Indicated Saprolite 2.22 1.77 1.30 0.031 13
Total Measured + Indicated 4.95 3.55 1.18 0.074 28
Limonite 1.14 0.74 1.04 0.105 43
Inferred
Saprolite 3.23 2.58 1.32 0.030 13
Total Inferred 4.37 3.33 1.26 0.047 20
• Mineral resources which are not mineral reserves do not have demonstrated economic viability.
• The tonnage and nickel grades above have been rounded to the nearest 2nd decimal, and iron grades
to the nearest whole number, which may have resulted in minor discrepancies.
• The estimate of mineral resources may be materially affected by environmental, permitting, legal,
title, taxation, socio-political, marketing, or other relevant issues.

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Independent Report on the Nickel Laterite Resource at Agata North

• It is uncertain if further exploration will result in upgrading the Inferred mineral resource to an
Indicated or Measured mineral resource or the Indicated mineral resource to a Measured Resource
category.

The methodologies employed for this mineral resource estimate are considered acceptable for the
purposes of definition and classification of a resource for a future ore reserve study to be carried out
for ore amenable to direct shipping product. The current resource in relation to a Direct Shipping
product could be further enhanced following the analysis of variographic study.

4.0 INTRODUCTION

This technical report was prepared at the request of Mr. J.A. Climie, CEO of Mindoro of Canada
[TSX-Venture Exchange] and CEO and President of MRL Gold Phils., Inc. (MRL). It provides a
nickeliferrous laterite updated resource estimate of the ANLP located within the Agata Projects
MPSA in Agusan del Norte, Philippines (Figures 1 & 2). The report was wholly prepared by the
author, a qualified person as defined by National Instrument 43-101.

The Agata Projects, which host the Agata North Laterite Project (ANLP), is one of the subject
properties covered by the Memorandum of Agreement (MOA) signed by Mindoro and Minimax in
January 19, 1997 by virtue of which Mindoro (thru its wholly-owned operating subsidiary, MRL) is
granted the exclusive and irrevocable right to earn the Option Interests in the said project. Also
included in the MOA are the Tapian Main, Tapian San Francisco, and Mat-I projects and the various
Extension Projects in the Surigao Mineral District; and Lahuy Island and Pan de Azucar Projects in
Luzon and Visayas respectively. At present, Mindoro has earned a 75% interests in the Agata,
Tapian Main, and Tapian San Francisco and the Extension Projects and it has a further option to
acquire an additional 25% direct and indirect participating interest in projects, which will be
designated later as Designated Development Projects in the Surigao Mineral District.

The Agata Projects comprise various projects and prospects, namely, the ANLP; the Agata South
Laterite Project [ASLP]; the North Porphyry Prospect; the South Porphyry Prospect; the Assmicor
Porphyry and Gold Prospects; the American Tunnels Porphyry and Gold Prospects; the Limestone
Gold Prospect; and a host of other gold and copper-gold prospects, which have not been evaluated in
detail.

The report provides a detailed summary of the geology and mineralization and discusses the results
of the resource delineation exploration activity in the ANLP, to date. It also assesses historical data
and discusses the results of the exploration programs carried out over the general Agata Project
itself.

This document is compiled from technical reports written by MRL, from reports held by the Mines
and Geosciences Bureau of the Philippines (MGB), from published technical data, and from
observations made by the MRL geologists. All sources of data used in this report are cited herein and
are listed in Item 23.

All work of MRL at the Agata Projects was carried out under the direct and close supervision of
James A. Climie, P. Geol., also a qualified person, who carried out frequent and extensive site visits.

The author has visited the project site in July 2007 and January 2008. During these visits, MRL
geologists and mining engineers were present to assist and discuss protocols, observations, results
and interpretations with the author/consultant. Likewise, various meetings were held off-site to
broaden the discussions and consultations. Further exchange of ideas is also continuing through
correspondence.
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Independent Report on the Nickel Laterite Resource at Agata North

The ANLP is located about 47 km northeast of Butuan City or 73 km southwest of Surigao City
(Figure 2). It is within the villages of Lawigan and Tinigbasan, municipality of Tubay, E. Morgado
and La Paz, municipality of Santiago; and Colorado municipality of Jabonga all in the province of
Agusan del Norte.

This report is compliant to National Instrument 43-101 Standards of Disclosure for Mineral Projects.

A follow-up infill drilling program in the ANLP was conducted from December 2007 to May 2008.
The purpose of this exercise is to better define the deposit and to extend the resource. This was
followed by a wider-spaced drilling from June 18, 2008 and is ongoing as of this writing. All of the
drilling and assay results that came in as of August 1, 2008 are the basis for this current resource
estimate.

5.0 RELIANCE ON OTHER EXPERTS

The author relied on the information given by Mindoro in terms of property rights or its validity, and
cannot be held responsible for potential issues caused by irregularities. Nevertheless, these are
supported by legal documents. Appendix 1 presents the Notice of Relinquishment of portion of
MPSA 134-99-XIII.

Figure 1: Philippine Map showing location of MRL Gold projects.

6.0 PROPERTY DESCRIPTION AND LOCATION


6.1 Location:

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Independent Report on the Nickel Laterite Resource at Agata North

The Agata Projects are located within the northern part of Agusan del Norte province in Northeastern
Mindanao, Republic of the Philippines. It lies within the Western Range approximately 10
kilometers south of Lake Mainit (Figures 1-2). The Agata Project falls within the political
jurisdiction of the municipalities of Tubay, Santiago and Jabonga. The MPSA Contract Area,
encompassing the Agata Projects, is bounded by geographical coordinates 9010’30” and 9019’30”
north latitudes and 125029’30” to 125033’30” east longitudes.

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

The ASLP, on the other hand, is located in barangays Binuangan, Tagpangahoy, and Tinigbasan,
municipality of Tubay. Under a joint venture agreement with Delta Earthmoving, Inc. [Delta], a
resource delineation drilling is being carried out by the latter in the ASLP. Their initial area of
coverage is located in barangay Binuangan, Tubay.

6.2 Property Description:

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

The MPSA was approved on May 26, 1999 by the DENR and was registered on June 19, 1999. The
1st exploration period was renewed on July 23, 2004 to July 22, 2006 while the 2nd exploration period
was granted on February 7, 2007 to February 6, 2009. The original area of the MPSA was 7,679 ha
comprising 99 blocks, but 32 claim blocks with an approximate area of 2,700 ha were later
relinquished. This leaves 4,995 ha of the approved Contract area as of May 18, 2000. (Appendix 1)
The details of the original 99 claim blocks are listed below:

Table 1: Original Mining Application Claims under MPSA 134-99-XIII


Name of Mining Application Claims Name of Locator
Lingling 1-2 Leonor Cocon, Jr.
Titus 1-3 Ruperth Villamucho
Titus 10-11 Leo Deiparine
Titus 14, 16 Edsel Abrasaldo
Guiah and Sheryl Marenda Cabiling
Noah 52 Galactica Mineral Exploration Corp.
Japeth 10, 12, 15, 19 Galactica Mineral Exploration Corp.
Japth 1, 3, and Jabez; Noah 53, 55, 57, 58 Galactica Mineral Exploration Corp.
Noah 54 Lakeshore Mineral Exploration Corp.
Titus 20, 26, 27 Resource Mineral Exploration Corp.
Titus 82 Solar Mineral Exploration Corp.
Banner 1-9; 12-13; 16-19; 22-29; 31; 33; 38; 40-41; 43; 44-B; 46;
Affluent Mineral Exploration Corp.
47; 49; 51; 53; 55; 57; 59
Additional Minimax blocks Minimax Mineral Exploration Corp.

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Independent Report on the Nickel Laterite Resource at Agata North

On April 12, 1986, Leonor Cocon, Jr. executed a Special Power of Attorney in favor of Jessie
Juansengfue involving his two (2) mining claims in Agata. This legal instrument was registered with
the MGB-Regional Office No. XIII on March 10, 1987. On July 31, 1987, Jessie Juansengfue signed
the said two (2) mining claims with Minimax through a Royalty Agreement with Option to Purchase.
This was registered with the MGB-Regional Office No. XIII on August 5, 1987. On April 17, 1997,
this agreement was amended via an Amendment to Royalty Agreement, which was registered with
the MGB-Regional Office No. XIII on June 4, 1997. The Royalty Agreement was further amended
through an Amendment to Royalty Agreement on November 23, 2005, which was subsequently
registered with the MGB-XIII.

On May 15, 1987, Marenda Cabiling executed and registered with the MGB-Regional Office a
Special Power of Attorney in favor of Rod Manigos regarding her two (2) mining claims in Agata.
Rod Manigos in turn, signed the subject mining claims with Minimax via a Royalty Agreement with
Option to Purchase on August 4, 1987. The Agreement was registered with the MGB-Regional
Office No. XIII [MGB-XIII] on August 5, 1987. The Royalty Agreement was amended via an
Amendment to Royalty Agreement on April 17, 1997 and registered with the MGB-XIII on June 4,
1997. It was further amended on April 24, 2006 and subsequently registered with MGB-XIII.

On December 4, 1987, Ruperth Villamucho, Leo Deiparine, and Edsel Abrasaldo executed a Special
Power of Attorney regarding their mining claims in favor of Jose de Guzman. This was registered
with the MGB-XIII on December 7, 1987. On February 7, 1997, Ruperth Villamucho, Leo
Deiparine, and Edsel Abrasaldo, through their Attorney-in-Fact, executed a Deed of Assignment for
their mining claims in favor of Minimax. This was registered with the MGB-XIII on February 28,
1997.

On February 7, 1997, Resource Mineral Exploration Corporation executed a Deed of Assignment


over its mining claims in favor of Minimax. On February 12, 1997, Galactica Mineral Exploration
Corporation deeded the mining claims Japeth 10, 12, 15 and 19 via a Deed of Assigment in favor of
Minimax. Likewise, on February 14, 1997, Solar Mineral Exploration Corporation made a Deed of
Assignment regarding its mining claims in favor of Minimax. These Deeds were registered with the
MGB-XIII on February 28, 1997.

On August 18, 1997, Lakeshore Mineral Exploration Corporation, Affluent Mineral Exploration
Corporation and Galactica Mineral Exploration Corporation (for the mining claims “Japeth 1,3”,
“Jabez”, “Noah 52, 55, 57, and 58”) deeded their mining claims to Minimax. The Deed of
Assignment was registered with MGB-XIII on October 3, 1997.

During the processing of the Minimax MPSA Application, Minimax was able to expand the areas it
originally applied for. The additional tenement blocks automatically became part of the MRL-
Minimax MOA.

On May 26, 1999, the Secretary of the DENR signed the Minimax MPSA application covering 7,679
ha comprising 99 claim blocks. The approved MPSA was registered on June 17, 1999.

6
Independent Report on the Nickel Laterite Resource at Agata North

Figure 2: MRL Tenements and Projects in the Surigao Mineral District

7
Independent Report on the Nickel Laterite Resource at Agata North

On May 18, 2000, 32 claim blocks with an area of approximately 2,700 ha were relinquished by
Minimax, leaving 4,995 ha of the approved Contract Area (Appendix 1).

On September 29, 2000, immediately after the Boyongan Porphyry Copper discovery, Minimax’s
affiliate, Apical Mining Corporation filed an MPSA application covering 7,764 ha of ground
adjacent to (north, southeast, and south of) Agata Projects. This property is known as the Agata
Extension (Figure 2). The application was later converted to EPA and is in the advanced stage of
processing by MGB-XIII.

On October 26, 2004, MRL Gold was able to acquire, via an Agreement to Explore, Develop and
Operate Mineral Property, one claim block of approximately 84 ha within the Agata Projects known
as the Bautista Claim. The Agreement was signed between Estrella Bautista, claimowner, and MRL
and was registered with MGB-XIII on November 4, 2004. The MPSA application of Bautista was
converted into an EP application; the EP was approved on October 2, 2006 and is known as EP-
00021-XIII.

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

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

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

MRL, through the assistance of the National Commission on Indigenous Peoples (NCIP) - Regional
Office No. XIII, has recently signed a Memorandum of Agreement with the IPs living within the
MPSA Contract Area albeit the latter have no Certificate of Ancestral Domains Claim (CADC) nor
Certificate of Ancestral Domains Title (CADT) within the Contract area. The MOA calls for a 1%
royalty on gross sales of mineral products to be given to the IPs as provided for in the Indigenous
Peoples Reform Act (IPRA) of the Republic of the Philippines.

An area of nickel laterite mineralization has been mapped at a regional scale in the ASLP located in
the southern part of the Agata Projects and is the subject of a Mining Services Agreement between
MRL, Minimax and Delta. No drilling or sampling has been carried out in this area prior to the
negotiations with Delta. The southernmost area of the ASLP is 1 to 2 km north of the operating
nickel laterite mine of SR Metals Inc., just to the south of the Agata Projects. Delta, at its sole cost
and risk, carried out exploration of the ASLP and may select an area of up to 250 ha to advance to
production if warranted.

6.2.1 Tenement Type:

An MPSA is a form of Mineral Agreement, for which the government grants the contractor the
exclusive right to conduct mining operations within, but not title over, the contract area during a
defined period. Under this agreement, the Government shares in the production of the Contractor,
whether in kind or in value, as owner of the minerals. In return, the Contractor shall provide the

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Independent Report on the Nickel Laterite Resource at Agata North

necessary financing, technology, management and personnel for the mining project. Allowable
mining operations include exploration, development and utilization of mineral resources.

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

The Contractor is required to strictly comply with the approved Exploration and Environmental
Work Programs together with their corresponding budgets. These work programs are prepared by the
Contractor as requirements in securing the renewal of the Exploration Period within the MPSA term.
The Contractor is likewise required to submit quarterly and annual accomplishment reports under
oath on all activities conducted in the Contract Area. All the reports submitted to the Bureau shall be
subject to confidentiality clause of the MPSA. The Contractor is further required to pay at the same
date every year reckoned from the date of the first payment, to the concerned Municipality an
occupation fee over the Contract Area amounting to PhP 75.00 per hectare. If the fee is not paid on
the date specified, the Contractor shall pay a surcharge of 25% of the amount due in addition to the
occupation fees.

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Independent Report on the Nickel Laterite Resource at Agata North

Table 2: Surigao-Agusan del Norte Tenements held by Mindoro:


DATE DATE PERMITTEE/
PROJECT PERMIT APPLICATION AREA
TENEMENT ID FILED APPROV CONTRACTOR LOCATION ST ATUS
NAME NUMBER NUMBER (ha**)
(MGB XIII) ED / APPLICANT
- 2nd Exploration Period approved
MPSA- on 7-Feb-07
Jabonga, Santiago, &
AGATA 134-99- APSA-XIII-007 4-Jul-97 26-May-99 MINIMAX 4,995.00 -ECC granted. Processing of
Tubay, AdN
AGATA XIII permits/documents pertaining to
mining operations on-going
AGATA- EPA-00080-
EP-21-XIII 2-Oct-06 BAUTISTA Santiago, AdN 84.39
BAUTISTA XIII
-2nd Renewal of Exploration Period
MPSA- Mainit & Malimono, applied on 13-Aug-07
TSF-CANAGA 1-Feb-96 BAUTISTA 486.00
033-95-X SdN -renewal under evaluation by the
MGB
TAPIAN MAIN & Mainit & Malimono,
TAPIAN-SAN EP-16-XIII APSA-XIII-009 4-Jul-97 21-Jun-04 MINIMAX 1,939.57 -1st renewal granted on 10-Aug-07
TAPIAN SF* SdN
FRANCISC O
WEST CANAGA EP-22-XIII EPA-85-XIII 8-Dec-06 MRL Malimono, SdN 316.22
TSF-EP EPA-106-XIII 31-Oct-06 MINIMAX Mainit, SdN 421.58
MINDANAO Mainit & Malimono,
TIBUR EPA-88-XIII 29-Nov-05 527.36
GOLD SdN
TAPIAN MAIN & Mainit & Malimono,
EP-16-XIII APSA-XIII-009 4-Jul-97 21-Jun-04 MINIMAX 1,939.57 -1st renewal granted on 10-Aug-07
TAPIAN SF* SdN
TAPIAN
MAIN -1st renewal applied on 10-Nov-06
TAPIAN -
EP-18 XIII EPA-61-XIII 13-Oct-03 16-Nov-04 TORINO Mainit , SdN 168.67 -cleared by DENR Secretary, ready
TORINO
for release
Jabonga & Kitcharao,
EPA-00042-
TAPIAN EXT TAPIAN EXT'N 31-Oct-06 APICAL AdN;,Mainit & Alegria, 8,094.63
XIII
SdN
MAT-I MAT-I EPA-105-XIII 31-Oct-06 MINIMAX Mat-I, Surigao City 884.78
Jabonga, Santiago,
AGATA
AGATA EXT'N EPA-107-XIII 31-Oct-06 APICAL Tubay, & 7,764.02
EXT'N
Cabadbaran, AdN
MINDANAO
MACANA MACANA EPA-100-XIII 28-Aug-06 Malimono, SdN 648.00
GOLD
MPSA Mineral Production Sharing A greement MGB Mines and Geosciences B ureau
EP Exploration Permit AdN Agusan del Norte
APSA Application for Mineral Production Sharing A greement SdN Surigao del N orte
EPA Exploration Permit Application
* - Area coverage of EP-16-XIII is divided between TSF and Tapian Main
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Independent Report on the Nickel Laterite Resource at Agata North

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

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

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

On February 2005, the Philippine Supreme Court decided with finality allowing for the 100%
foreign ownership of the mineral tenement under the FTAA.

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

7.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE and


PHYSIOGRAPHY
7.1 Accessibility:

The Agata North Laterite Project site is accessible by any land vehicle from either Surigao City or
Butuan City thru the Pan-Philippine Highway. At the highway junction at Barangay Bangonay,
Jabonga, access is through partly cemented, gravel-paved Jabonga Municipal road for approximately
4 km, then for another 6 km thru a farm-to-market road to barangay E. Morgado in the municipality
of Santiago (Figure 2). From Manila, daily flights are available going to Butuan City. Moreover,
commercial sea transport is available en-route to Surigao City and Nasipit (west of Butuan City)
ports.

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

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

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Independent Report on the Nickel Laterite Resource at Agata North

7.2 Climate:

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

Table 3: Climatological Normals and Extremes 1961-2000


RAINFALL TEMPERATURE WIND CLOUD
RH
MONTH AMOUNT # OF Dry Wet Dew AMT
MAX MIN MEAN % DIR SPD
(mm) RD Bulb Bulb Pt. (okta)
Jan 308.0 21 30.1 22 26.1 25.7 24.2 23.6 88 NW 1 6
Feb 211.8 15 30.8 22 26.4 26.0 24.2 23.5 86 NW 1 6
Mar 149.8 16 31.8 22.4 27.1 25.7 24.5 23.7 83 NW 1 5
Apr 107.2 12 33.1 23.1 28.1 27.7 25.2 24.3 82 ESE 1 5
May 104.8 14 33.8 23.8 28.8 28.3 25.8 25.0 82 ESE 1 6
Jun 135.1 16 33.0 23.6 28.3 27.8 25.5 24.7 83 ESE 1 6
Jul 157.5 16 32.5 23.3 27.9 27.5 25.3 24.5 84 NW 1 6
Aug 105.1 12 32.8 23.5 28.1 27.8 25.4 24.6 82 ESE 2 6
Sep 140.2 14 32.8 23.3 28.1 27.7 25.4 24.6 83 NW 2 6
Oct 195.3 17 32.3 23.2 27.8 27.4 25.3 24.6 84 NW 1 6
Nov 193.7 18 31.6 22.9 27.2 26.9 25.1 24.5 86 NW 1 6
Dec 218.4 19 30.8 22.5 26.7 26.3 24.7 24.1 88 NW 1 6
Annual 2026.9 190 32.1 23.0 27.6 27.1 25.1 24.3 84 NW 1 6
Based on Butuan City Synoptic Station

7.3 Local Resources and Infrastructure:

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

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

7.4 Physiography:

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

Within the project area, steep to very steep slopes are incised by gullies and ravines while the central
portion is characterized by broad ridges dissected in the west section by a matured valley formation
exhibiting gentle to moderate slopes. Elevations range from 200 to 320 masl extending similar
topographic expressions going to the south. In the northern expanse, it abruptly changes to rugged

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Independent Report on the Nickel Laterite Resource at Agata North

terrain having a very steep slope. Nickeliferrous laterite is widespread on the ridges stretching from
the central part going to the south.

Based on the initial evaluation of the area, the development of laterite mineralization is extensive,
but not limited to the broad ridges and is present on gently-moderately sloping topography. The
topography over the principal laterite development together with the position of the area of detailed
drilling is shown in the photo below.

Photo 1: Panoramic view of Agata North Laterite Project showing the main area of laterite
development.

8.0 HISTORY

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

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

• Geologists from the former Bureau of Mines and Geosciences Regional Office No. X
(BMG-X) in Surigao documented the results of regional mapping in the Jagupit Quadrangle
within coordinates 125°29´E to 125°45´ east longitude and 9°10´ to 9°20´ north latitudes.
They described the geology of the Western Range as a belt of pre-Tertiary metasediments,
metavolcanics, marbleized limestone, sporadic schist and phyllite and Neogene ultramafic
complex. (Madrona, 1979) This work defined the principal volcano-sedimentary and
structural framework of the region and recognized the allochtonous nature of two areas of
ultramafic rocks that comprise serpentinized peridotite in the Western Range, one between
the Asiga and Puya rivers in the Agata project area and the other west of Jagupit. These were
mapped by Madrona (1979) as blocks thrust westward, or injected into the metavolcanics
between fault slices.

• The United Nations Development Program (UNDP, 1982) conducted regional geological
mapping at 1:50,000 scale and collected stream sediment samples over Northern Agusan.
The UNDP report of 1984 described the geological evolution of this region and included a
detailed stratigraphic column for the Agusan del Norte region. Two anomalous stream

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Independent Report on the Nickel Laterite Resource at Agata North

sediment sites were defined near the Agata project during this phase of work. The Asiga
porphyry system that lies east of the Agata tenements was explored by Sumitomo Metal
Mining Company of Japan in the 1970’s and 1980’s (Abrasaldo 1999).

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

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

Several artisanal miners are active within the project site since the 1980’s up to the present. These
miners are conducting underground mining operations at the Assmicor and American Tunnels area
and gold panning of soft, oxidized materials within Assmicor and Lao Prospect areas and of
sediments in major streams including that of Tubay River. The region of small-scale mining activity
was later named “Kauswagan de Oro” (translated: “progress because of gold”). The majority
subsequently left the region for other high-grading areas in Mindanao. Just recently, a small group of
copper “high-graders” emerged in the American Tunnels area mining direct-shipping grade copper
ore from the said area.

9.0 GEOLOGICAL SETTING


9.1 Regional Geology

The principal tectonic element of the Philippine archipelago is the elongate Philippine Mobile Belt
(PMB – Rangin, 1991) which is bounded to the east and west by two major subduction zone systems,
and is bisected along its north-south axis by the Philippine Fault (Figure 3). The Philippine Fault is a
2000 km long sinistral strike-slip wrench fault. In the Surigao district, this fault has played an
important role in the development of the Late Neogene physiography, structure, magmatism and
porphyry Cu-Au plus epithermal Au metallogenesis. There has been rapid and large-scale uplift of
the cordillera in the Quaternary, and limestone of Pliocene age is widely exposed at 1000-2000
meters elevation (Mitchell and Leach 1991). A cluster of deposits on the Surigao Peninsula in the
north consists chiefly of epithermal gold stockwork, vein and manto deposits developed in second-
order splays of the Philippine Fault (Sillitoe 1988). The mineralization-associated igneous rocks in
Surigao consist mostly of small plugs, cinder cones and dikes dated by K-Ar as mid-Pliocene to mid-
Pleistocene (Mitchell and Leach 1991; Sajona et al. 1994). (B.D.Rohrlach, 2005)

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

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

Figure 3: Geologic Map of Surigao Mineral District

15
Independent Report on the Nickel Laterite Resource at Agata North

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

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

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

9.2 Local Geology of Agata Project Area

The Agata Projects area is situated along the southern part of the uplifted and fault-bounded Western
Range on the northern end of the east Mindanao Ridge. The Western Range is bounded by two major
strands of the Philippine Fault that lie on either side of the Tubay River topographic depression (B.
Rohrlach, 2005). The western strand lies offshore on the western side of the Surigao Peninsula,
whereas the eastern strand, a sub-parallel splay of the Lake Mainit Fault, passes through a portion of
the property and separates the Western Range from the Central Lowlands to the east (Figure 4).
These segments have juxtaposed lithologies consisting of at least six rock units including pre-
Tertiary basement cover rocks, ophiolite complex, clastic limestone and late-stage Pliocene calc-
alkaline intrusive rocks. (Tagura, et.al., 2007)

9.2.1 Greenschist (Cretaceous)

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

9.2.2 Ultramafics (Cretaceous)

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

16
Independent Report on the Nickel Laterite Resource at Agata North

Serpentinite as a dismembered part of the Dinagat Ophiolite Complex, which is established to be of


Cretaceous age.

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

9.2.3 Limestone (Upper Eocene)

Several bodies of limestone correlative to the Nabanog Formation (UNDP 1984), were mapped in
the project area. The easternmost limestone body lies in the Assmicor-Lao prospect region, in the
central portion of the property and Guinaringan-Bikangkang area and at Payong-Payong area located
at the western side. In the northern half of the property, these limestones occur as narrow scattered
bodies probably as erosional remnants. In places, this unit exhibits well-defined beddings and
schistosity and crisscrossed by calcite ± quartz veinlets. The limestones outcropping near intrusive
bodies are highly-fractured with limonite and fine pyrite, associated with gold mineralization, in
fractures and show green hue due to chloritization. In places, the limestone is interbedded with thin
sandstone, siltstone, and shale beds.

9.2.4 Andesite and Tuff

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

9.2.5 Intrusives (Upper Oligocene to Lower Miocene)

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

9.2.6 Limestone (Lower Miocene)

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

9.2.7 Recent Alluvium

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

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 4: Agata Geologic Map


18
Independent Report on the Nickel Laterite Resource at Agata North

9.3 Geology of the ANLP Area

The widespread occurrence of serpentinized harzburgite, serpentinized peridotite, and localized


lenses of dunite comprise the lithology in the project area. These rocks are confined to broad ridges
extending down to the footslopes. Lineaments trending NE are interpreted to be present in the area.

Geological mapping in the project area showed favorable development of laterite along the broad
ridges characterized by peneplane topography. These areas are where the drilling activities are
concentrated. In areas with moderate to semi-rugged topography, erosion proceeds much faster than
soil development, hence the laterite is thinner. To date, estimated area of laterite in the prospect area
is approximately 379 ha. (Figures 5 & 8).

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

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

10.0 DEPOSIT TYPES

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

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

Most of the known hydrothermal gold mineralization within the district is of low-sulfidation
epithermal character developed in second-order splays of the Philippine Fault. The mineralization is
predominantly of Pliocene age and is spatially and temporally associated with the Mabuhay andesitic
volcanism. Epithermal mineralization tends to be confined to the Mabuhay Clastics and associated
andesitic stocks, lavas and pyroclastics, and in older rocks immediately beneath the unconformity at
the base of the Mabuhay Clastics. The principal low-sulfidation epithermal-type, carbonate-
replacement-type and porphyry-type deposits and occurrences include: vein-type (Tabon-Tabon
vein, Plancoya vein); bulk-mineable stringer stockworks (Placer, Motherlode, Mapaso, Nabago);
stratabound ore or carbonate-hosted (Siana mine); surface workings in argillized zones (Mapawa,
Hill 664, Manpower, Layab, Gumod); placer gold (Malimono-Masgad region); porphyry Cu-Au
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Independent Report on the Nickel Laterite Resource at Agata North

(Boyongan, Bayugo, Asiga and Madja); high-level porphyry-style alteration (Masgad, Malimono,
Tapian-San Francisco) and high sulfidation (Masapelid Island). (B.D. Rohrlach, 2005)

The principal deposit types that are being explored for in the Mindoro tenement holdings in the
Surigao Mineral District are:

Porphyry Cu-Au of calc-alkaline or alkaline affinity: TSF, TM & Ag


Low-sulfidation epithermal Au: TM, TSF, Ag
High-sulfidation epithermal Cu-Au: TSF
Carbonate-hosted Disseminated Au-Ag Ore: Ag
Skarn Au-(Cu): Ag, TSF
Nickeliferrous Laterite: Ag, TSF, TM, Mat-i

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

The Tapian-San Francisco, Tapian Main and Agata properties have high potential for the discovery
of both porphyry Cu-Au style mineralization at depth and epithermal style mineralization at
shallower levels.

The Agata Projects area has high potential for the presence of one or more porphyry-type Cu-Au
hydrothermal systems associated with 3 principal targets, and multiple satellite targets, that are
associated with zones of high IP chargeability. Porphyry-style mineralization has been encountered
previously in the Agata region by shallow drill holes in targets that are associated with modest IP
chargeability anomalies. The Agata Projects possess multiple conceptual target styles such as
porphyry, epithermal, Carlin-type and Ni-laterite (Figure 5).

Occurrences of nickel and cobalt-bearing iron-rich laterites developed on ultramafic rocks are
reported from several areas of the Surigao del Norte province (Louca 1995). Laterites developed on
ultramafic rocks comprising serpentinized peridotite occur within the Agata project area, and
potential exists within the Tapian Main, Tapian-San Francisco and Mat-i properties for these deposit
types, in as much as ultramafic rocks are present on these areas. (B. Rohrlach, 2005)

The spatial relationship of the nickel laterite and the underlying porphyry Cu-Au mineralization
prospects is illustrated in Figure 6. There is no geological relationship.

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 5: Agata Compilation

Figure 6: Model of spatial relationship between nickel laterite and porphyry targets.
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Independent Report on the Nickel Laterite Resource at Agata North

Recent reconnaissance geological mapping by MRL geologists has expanded the company’s global
nickel laterite resource potential. Mapping at Agata Project had previously outlined an area of
potential nickel laterite mineralization covering approximately 600 ha comprising both the ANLP
and the ASLP areas. The latter is the subject of Minimax-MRL- Delta agreement. Delta carried out a
resource delineation program in the said area in 2007-2008.

Encouraged by the results of the nickel laterite exploration in the Agata Project, a regional mapping
program was carried out to determine the potential nickel laterite areas Mindoro has in its Surigao
Mineral District tenements. Results indicate potential for further nickel laterite mineralization on the
adjacent Tapian Main, Tapian SF and Mat-I tenements. (Figure 7)

Based on the mapping alone, there is no guarantee that nickel grades and thickness will be of
commercial interest. Accordingly, a program of reconnaissance auger drilling has commenced to
establish a preliminary indication of the nickel laterite potential in the said areas.

Focus on the nickel laterite prospect was triggered by the very high demand for ferro-nickel
feedstock for stainless steel production in China. The Surigao Region is now emerging as a major
nickel laterite district. There are currently several deposits either in production, providing Direct
Shipping Ore (DSO) to markets and processing plants in China, Japan, Korea and Australia, or being
developed. These include the SR Metals Mine, the geological extension of the Agata nickel laterite
mineralization, located about 4.5km southeast of ASLP and about two (2) km to Delta’s drilling Area
A in Brgy. Binuangan, Tubay.

As the economics of ferro-nickel production has changed in the last months, several attractive
alternatives are emerging for local processing. These include; constructing an on-site blast or electric
arc furnace for nickel pig iron production (a low grade ferronickel product); ferronickel smelting (a
ferronickel smelter recently commenced operation not far away in NW Mindanao); heap-leaching,
for which pilot testing on another Philippine laterite deposit has produced promising results;
atmospheric (tank) leaching; and an improved generation of High Pressure Acid Leach (HPAL)
plants. HPAL technology is currently being used with great success by Sumitomo on its Philippine
Coral Bay operation, and shows considerable promise for the local processing of Surigao ores. In
fact, Sumitomo recently announced plans to proceed with permitting to construct an HPAL plant in
the Surigao District. There is abundant evidence of the beginning of a trend for local/on-site
processing of Philippine laterite ores and the growth of a large high-value industry in the Philippines.

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 7: Compilation Map Showing areas of Nickel Laterite Mineralization

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Independent Report on the Nickel Laterite Resource at Agata North

11.0 MINERALIZATION
11.1 Agata Nickel Laterite Project

Nickeliferrous laterite deposits are present over a broad region in the Agata Projects area (Figures 5,
7 & 8). They are divided into two (2) major areas known as the ANLP and the ASLP. Based on
mapping, the former has an area of approximately 379 ha while the latter comprises about 235 ha. In
the ANLP, drilling is concentrated only in less than thirty-five (35) percent of the interpreted nickel
laterite mineralization to date.

The laterites are developed over ultramafic rocks that lie along the Western Range. Three (3) rock
types within the ultramafics are recognizable, namely, serpentinized harzburgite and serpentinized
peridotite, with localized lenses of dunite. The ultramafic bodies are of probable Cretaceous age, and
were emplaced as part of an ophiolite sequence during the Upper Eocene (Abrasaldo, 1999).
Formation of the laterites is thought to have occurred during the Pliocene or early Pleistocene. The
largest of the laterite bodies overlies the central ultramafic body and occupies an area that is ~9 km
long and 0.1 to 3.2 km wide (Figure 4).

The serpentinized harzburgite is dark brown to grayish black in color, massive, highly fractured and
typically traversed by veinlets of serpentine. It is composed mainly of olivine with readily
discernible sometimes well-formed pyroxene crystals. Serpentinization is evident by the rock’s waxy
texture. Intense serpentinization renders a slippery feel along the rock’s surface. Petrographically, the
harzburgite is actually a serpentinized wehrlite composed of olivine, clinopyroxene (augite) and
chrome spinel (~1%). Olivine and clinopyroxene grains are commonly fractured and the wehrlites
are typically traversed by fine meshworks of serpentine and chrome-spinel micro-veinlets.

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

Nickel laterites are the products of laterization or intense chemical weathering of the ultramafic
rocks, especially the olivine-rich varieties like harzburgite and dunite. This process results to the
concentration of nickel and cobalt of the parent rock. Its formation is favored in stable terrains like
plateaus or broad ridges and in humid climatic conditions with high rainfall and warm temperature.
Latest exploration works in the area have revealed that nickel laterite likewise occurs along the
slopes.

The laterite profile in the ANLP consists of the ferruginous laterite, limonite zone, saprolite zone,
and the saprolitic rock, arranged from surface going down. The degree of weathering gradually
increases as the zone nears the surface. The limonite zone is characteristically iron oxide-rich where
the predominant minerals are hematite and goethite while the saprolite zone is Mg-rich.

Patches of garnierite were noted within the saprolite and saprolitic rock horizon. This was well-
observed in a trench that was dug along the slopes that face the sea on the western portion of ANLP.

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Independent Report on the Nickel Laterite Resource at Agata North

Figure.8: Agata Projects Map showing areas of Nickel Laterite Mineralization.

The table below shows the average values for the different zones. The Ni values are highest in the
saprolite zone (1.21%), though the grade in the limonite zone is relatively close. The ferruginous
laterite horizon has low nickel content. Cobalt content is highest in the limonite zone, Fe and Al in
the ferruginous cover, and Mg and SiO2 in the saprolite. There is a marked drop within the saprolite
in Fe and Al content, and a marked increase in Mg and SiO2. (There is no Al and Mg data in QNPH
drill holes). Along the laterite profile, the saprolite zone is the thickest horizon while the lateritic
cover is the thinnest.

Table 4: Average Grades of Nickel Laterite Horizons


AVE SiO2
LATERITE HORIZON Ni % Co % Fe % Al % Mg %
THICKNESS (m) %
FERRUGINOUS LATERITE 2.33 0.70 0.07 43.74 4.50 0.62 4.16
LIMONITE 4.11 1.08 0.11 42.27 2.55 1.46 7.39
SAPROLITE 6.32 1.21 0.03 11.84 0.48 15.24 39.03

Figure 9 illustrates the variations in the iron, aluminum and magnesium contents for the different
laterite horizons more clearly.

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 9: Cross section Line 10150N Linegraph. It can be observed that the remarkable drop
in iron and aluminum content from the limonite to saprolite horizons commonly coincides with the
increase in magnesium content.

12.0 EXPLORATION

All exploration work on the Agata Project carried out by the operator MRL [Philippine subsidiary of
Mindoro] was under the direct supervision of James A. Climie, P.Geol., MRL President and CEO.

The Agata Project MPSA denominated as MPSA No. 134-99-XIII was registered on June 19, 1999.
Community information and education campaigns commenced in 1997 and have continued since that
time.

12.1 MRL Exploration (1997-2000)

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

The 1st phase of exploration activity commenced in May 1997 in the Assmicor region and consisted
of grid establishment followed by soil geochemical survey (1,617 soil samples analyzed for Au, Ag,
Cu, Pb, Zn, As), geological mapping plus selective rockchip sampling and petrographic studies.
Furthermore, DOZ technologies of Quebec, Canada, interpreted a RadarSat image of the Agata area
and generated a 1:50,000 scale interpretation of the region. In addition, MRL re-sampled by channel
sampling, five test pits (ATP-1 to ATP-5) that were excavated by La Playa Mining Corporation and
submitted 24 samples for Ni, Co and Au analysis by AAS. These pits encountered laterite
thicknesses of 2.48 to 9.40 meters. The composited assay values for each of the re-sampled test pits
range from 0.43% to 0.94% nickel. The results are incorporated in the current soil maps (Figures 10-
12).

The 2nd phase of exploration activities on the Agata Projects was undertaken between June 1999 and
December 1999. This included grid re-establishment, geological mapping within the Assmicor

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Independent Report on the Nickel Laterite Resource at Agata North

Prospect and American Tunnels, ground magnetic survey, soil geochemistry (50 samples), rock/core
sampling, petrography and drilling of 11 holes. (Climie et al., 2000).

The soil sampling survey generated widespread Cu and Au soil anomalies. Soil Cu anomalies tend to
be closely restricted to mapped intrusions at American Tunnels and Assmicor-Lao. Soil Au
anomalies are more widespread and extend into the surrounding and overlying carbonate rocks. In
contrast, soil As anomalies appear to be weakly developed over the intrusions but more strongly
developed over carbonates. The Cu and Au soil anomalies associated with the Assmicor-Lao
prospect region (Figures 10-11) are open to the east beneath the alluvial flood plain sediments of the
Tubay River. The potential for an extension of the Assmicor mineralization to the immediate east
beneath the Tubay River floodplain is strengthened by the observation that the dikes and intrusives
encountered in drilling at Assmicor dip towards the east, that porphyry-like quartz veins were
encountered in drillhole DH 99-11, which lies east of the Assmicor prospect, and the evidence of a
resistivity anomaly developing on the edge of the IP survey east of the Assmicor prospect.

Nineteen surface channel samples were collected in the Limestone Prospect area (Figure 13). Sixteen
of these samples yielded grades ranging from 0.02 g/t Au to 0.85 g/t Au. Three of the samples graded
2.79 g/t Au over 3.7 meters, 3.77 g/t Au over 2 meters and 1.48 g/t Au over 3 meters. The channel
samples indicate a zone of anomalous gold above 0.1 g/t in rock samples that extends over an area of
100m by 50m in oxidized limestone.

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

An in-house ground magnetic survey was conducted in 1999 (Figure 14). The magnetic data
comprised a series of semi-continuous magnetic highs, with values >40250nT, that broadly coincide
with the distribution of ultramafic rocks along the western margin of the Lao and Assmicor areas.
The magnetic signature decreases gradually westward where the ultramafics are thought to be buried
at deeper levels beneath the limestones.

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

12.2 MRL Exploration (2004-2006)

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

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Independent Report on the Nickel Laterite Resource at Agata North

modelled by Dr Peter Elliot of Elliot Geophysics International using inversion modeling (Figures 15-
16).

Induced polarization (IP) surveying on the Agata Project has identified numerous IP chargeability
anomalies that form finger-like apophyses at shallow levels, and which amalgamate into larger
anomalies at deeper levels. The IP chargeability anomalies tend to strengthen with depth in the core
anomaly regions (Southern Target anomaly and Northern Target anomaly). The IP chargeability
anomalies attain values that locally exceed 40 msecs, and routinely exceed 20 msecs on most of the
IP pseudo-sections from Agata. Weaker modeled IP chargeability anomalies are associated with
known mineralization at Assmicor (10-18 msec) and in other satellite positions adjacent to the two
cores Northern and Southern target anomalies. There is an indication, from the four plan views of the
IP chargeability data, that NNW to NW faults may be important in controlling the distribution and
shape of many of the IP anomalies at Agata. Faults that lie along these trends are expected to lie in a
dilational orientation in relation to the regional stress field associated with sinistral movement on the
near north-trending Philippine Fault splay.

A preliminary drilling activity in the Agata Project was carried out between November 2, 2005 and
October 28, 2006. This was conducted under a joint-venture among MRL, Panoro Minerals Ltd.
(Panoro), and Minimax.

The prospects were highly recommended priority targets for drill evaluation as these prospects
exhibit classic stacking of geophysical, geological and geochemical features associated with
Philippine porphyry copper-gold systems. The preliminary drilling program was aimed to test the
area of highest chargeabilities in the North and South Porphyry Targets.

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

All drill holes have intersected and bottomed in strongly serpentinized ultramafics with very minimal
pyrite mineralization. Dr. Peter Elliot, Consulting Geophysicist, affirmed that the serpentine was not
the cause of the anomalies, and would only cause a weak IP anomaly. It would need to contain
reasonable amount of sulphide and/or graphite. Deep drilling in such sheared ultramafics is very
difficult but the targets are considered to have high potential for porphyry Cu-Au mineralization and
further drill testing using alternative drill strategies was recommended.

At the Assmicor Porphyry Prospect, the porphyry-style quartz-magnetite veins with pyrite,
chalcopyrite and gold mineralization intersected in 1999 drill hole 11 clearly indicate a magmatic
source to the east. The very strong and extensive gold and copper in soil anomalies also clearly point
to an eastern magma source, and suggest that this may be significantly mineralized. The “open”
resistivity in the prospect is interpreted as silicification associated with the postulated porphyry
system (Tagura, et.al., 2005).

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 10: Agata Soil (Gold) Map

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 11: Agata Soil (Copper) Map

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 12: Agata Soil (Zinc) Map

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 13: Agata Rock Geochemistry Map


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Independent Report on the Nickel Laterite Resource at Agata North

Figure 14: Agata Ground Magnetic Survey Map

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Independent Report on the Nickel Laterite Resource at Agata North

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

With respect to nickel laterite prospects, QNPH, a subsidiary of BHP-Billiton, conducted


reconnaissance drilling over the ANLP from January 23, 2006 to April 26, 2006 at an initial drilling
grid of 200m x 200m followed by in-fill drilling at 100-m grid spacing. A full report of the drilling
program entitled “Evaluation of Preliminary Exploration on Agata Nickel Laterite Prospect of MRL
Gold Philippines, Inc, Agusan del Norte, Philippines” was completed by QNPH in June 2006 and
submitted to Mindoro immediately thereafter. A total of 35 holes were drilled over an area of
approximately 80 ha, which is 21% of the 340-hectare ANLP. The drillhole locations are
incorporated in the MRL’s AGL Drillhole Location Map (Figure 17).

This drilling program was subsequent to a Memorandum of Understanding (MOU) signed between
MRL and QNPH on December 5, 2005. The MOU allowed QNPH to conduct exploration in the
property, which also include technical review and geological mapping. It was intended to evaluate
and establish resource potential of the area and as a possible Yabulu Refinery ore source, and to
present a resource model.

To evaluate the potential of the ANLP for the Chinese market, MRL commissioned Denny Ambagan
to re-evaluate QNPH’s data with the aim of estimating low-grade resources for the Chinese market.
Ambagan is a geologist, who worked for Crew Minerals in its Lagonoy and Mindoro nickel laterite
exploration areas for three years. An in-house estimate was tabled.

Both QNPH’s and Ambagan’s resource estimates are non-NI-43-101-compliant, and not herein
released. They served as guide in setting the exploration target for MRL’s succeeding drilling
programs.

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 15: Agata Chargeability @ L=7

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 16: Agata Resistivity @ L=7

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Independent Report on the Nickel Laterite Resource at Agata North

13.0 DRILLING

Based on both QNPH’s and Ambagan’s resource estimates of the former’s reconnaissance drilling in
2006, targets were set for an initial drilling program in the ANLP portion of the Agata Nickel
Laterite Projects. This was conducted from February 22 to August 3, 2007 with the purpose of
defining a National Instrument-compliant resource adequate, initially, for three to five years of
production at a rate of 500,000 to 700,000 wet metric tonnes per annum of direct shipping-grade
material for the very high demand ferro-nickel markets of China, India and Korea.

Exploration Target for the various laterite horizons in the northern laterite area is as follows:

Combined ferruginous overburden, limonite and saprolite horizons: 30 to 40 million WMT at a grade
of 0.9 to 1.1 percent nickel and 28 to 32 percent iron. This includes the following division of tonnage
between the overburden/limonite horizon and the saprolite horizon:

• Combined ferruginous overburden and limonite horizons: 18 to 24 million WMT of material at a


grade of 0.9 to 1.1 percent nickel and 40 to 44 percent iron.

• Underlying saprolite horizon: 12 to 16 million WMT of material at a grade of 1.0 to 1.4 percent
nickel and 8 to 10 percent iron.

The northern nickel laterite mineralization covers approximately 379 ha. This exploration target is
based on the first 90+ drill holes. Average thicknesses and grades encountered and a wet bulk density
of 1.5 tons per cubic meter was used.

A follow-up infill drilling program in ANLP was started in December 17, 2007 to May 30, 2008.
The purpose of this exercise is to better define the deposit and to possibly extend the initial resource.
From June 18, 2008 to present, step-out drilling was started with hole spacing widened to 100m by
100m centers This is aimed to completely drill out the Agata North resource potential; leading to an
evaluation of the most applicable processing technologies, and selection of the optimal method to
advance the project.

For the current resource estimate update, a total of 228 vertical holes have been completed in the
ANLP. These are located on 50m- to 100m-spaced grid. Total meterage is 4510.68 with an average
depth of 19.78m/per hole and a maximum of 46.6m. These drill holes are shown in Figure 17.

A total of 4480 core samples composed of 3822 samples from MRL drill holes and 658 samples
from the QNPH drill holes were analyzed and used in the resource estimate.

13.1 Drilling Contractors:

Initially, under a contract agreement, Construction and Drilling Specialists, Inc. was commissioned
by Mindoro to conduct the core drilling at the ANLP. The contractor’s address is 1215 Mega Plaza
Bldg, ADB Avenue, Corner Garnet Rd, Ortigas Center, Pasig City.

Five man-portable drill rigs were used in the program namely: 1) GM-50, 2) TOHO D2-JS, 3) TS-
50/G, 4) TS-50/Y, and 5) YBM-01. NQ size core barrels (but not wireline) were used. Tungsten bits
were normally used but were changed to diamond drill bits whenever hard rocks/boulders were
encountered. A combination of dry and wet techniques was applied, with the latter used for hard
cores/grounds.

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 17: ANLP Drillhole Location Map


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Independent Report on the Nickel Laterite Resource at Agata North

Afterward s, TCD Drilling Consultancy Services of Panorama Hills Subdivision, Cupang, Antipolo
City was contracted to continue the infill drilling in December 2007. It drilled 48 holes with an
aggregate of 773.12 meters. Four man-portable drill rigs were brought in namely: 1.) TONE 1, 2)
TOHO 1, 3) TOHO 2, and 4) TOHO 3. These rigs are similar to those of the previous contractor but
with single tube using conventional dry drilling techniques. A modest amount of lubricants are
applied for hard rocks or boulders. Due to sluggishness of the drilling, the services of TCD were
terminated.

On June 18, 2008, JCP Geo-Ex Services, Inc. of Camella Tierra Grande Homes, Lawaan, Talisay,
Cebu continued the drilling. It drilled 45 holes up to July 18, 2008 with an aggregate of 811.45 m.
JCP is currently continuing the drilling operations at ANLP with its four (4) rigs. These rigs are: 1.)
KOKIN, 2) YBM, 3) JCP 3, and 4) JCP 11. JCP is employing similar drilling techniques as that of
TCD but is accomplishing it at a substantially faster rate.

13.2 Drilling Rates:

Drilling operations in Agata was done on one 12-hr shift/day. Overall production rate for CDSI is
3.28 m/day, for TCD is 1.92 m/day and for JCP is 10.61 m/day. The following table shows the
details.

Table 5: Drilling Rates


No. of Ave Rate/
Meterage Total DRILLING AVE /
RIG TYPE Holes Rig Type
/Rig Duration CONTRACTOR CONTRACTOR
Drilled (m/day)
GM-50 14 327.40 99 3.31
TOHO D2- JS 22 457.62 148 3.09
TS-50/ G 23 466.60 146 3.20 CDSI 3.28
TS-50/ Y 24 539.65 153.5 3.52
YBM-01 17 475.75 145.5 3.27
TOHO 1 9 145.47 109 1.33
TOHO 2 13 178.15 89 2.00
TCD 1.92
TOHO 3 9 160.4 77 2.08
TONE 1 17 289.1 127 2.28
YBM 13 227 19.5 11.64
JCP 11 12 210.65 21 10.03
JCP 10.61
JCP 3 12 216.35 25 8.65
KOKIN 8 157.45 13 12.11
TOTAL 193 3851.59 1172.5

13.3 Drillhole Collars Survey

Surveying of drill hole collars’ position and elevation was undertaken by MRL surveyors using a
Nikon Total Station DTM-332. This, together with the topographic survey of the ANLP is tied to six
National Mapping and Resource Information Authority (NAMRIA) satellite/GPS points and
benchmarks with certified technical descriptions The Reference System used is PRS 92 or WGS 84,
used interchangeably by mathematical conversions. (Appendix 2).

Consequently, the baseline for the local gridlines is based on 51 MRL control stations. About 13,053
survey points were established with varying shot distances. These are downloaded into the computer
by seamless data transfer, imported to MAPINFO, which are then used for the Digital Terrain
Modeling to come up with the contour map.

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Independent Report on the Nickel Laterite Resource at Agata North

Table 6: NAMRIA Tie Points Technical Description


STATION LATITUDE LONGITUDE EASTING NORTHING LOCATION
SW-end corner of
AGN_45 9°11'07.88738" 125°33'39.04409" 561636.287 1015703.065 Sta. Ana Bridge,
Tubay
NW-end corner of
AGN_46 9°11'11.29480" 125°33'39.28491" 561643.476 1015807.756 Sta. Ana Bridge,
Tubay
AGN_48 562018.601 1019260.784
NW-end corner of
AGN_153 9°19'23.02761" 125°33'15.95108" 560907.623 1030913.182 Puyo Bridge,
Jabonga
NW-end corner of
AGN_154 9°19'14.68259" 125°33'13.72449" 560840.077 1030656.707 Bangonay Bridge,
Jabonga

13.4 Drilling Results

Core drilling conducted by Mindoro in its ANLP drilling program totaled 193 holes that spanned an
area of 1,600m x 1,200m. Together with 35 QNPH drill holes, total coverage area is approximately
87 ha. The first 136 Mindoro drill holes were spaced at 50m x 50m, then 11 twin holes were added.
The QNPH holes were mostly 100m by 200m apart. The last 46 holes included in this report were
drilled on 100m x 100m grid centers.

The nickeliferrous horizons encountered in the drill holes are the: ferruginous laterite; limonite;
saprolite; and saprolitic rocks. Drilling continued several meters into the bedrock for most of the
holes. These horizons vary in thickness from hole to hole, and some horizons are absent in some of
the holes.

The drilling completed to date indicated an average thickness of 4.11m for the limonite horizon and
6.42m for the saprolite. Though there is considerable variation in the thickness of the different
laterite horizons, the sections generated from the area show a fairly consistent development of the
whole profile across the drilled area. However, there is considerable thinning of the profile on
steeper slopes in the valleys and on the steep sides of the Western Range. Grades also vary to a
certain degree. The intercepts for the different horizons shown in the generated sections were
calculated without using a cut-off. These generally indicate reasonable continuity of the
mineralization. To illustrate, section 10150N is shown below.

Figure 18: Cross Section Line 10150N showing grades and thickness of laterite horizons
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Independent Report on the Nickel Laterite Resource at Agata North

Table 7: Average Grades of Laterite Horizons at Line 10150N


Laterite Horizon Ave Thickness (m) Ave Ni % Ave Fe %
Ferruginous laterite 2.00 0.70 43.77
Limonite 5.01 1.17 39.54
Saprolite 5.96 1.12 10.14
Saprolitic rock 1.79 0.82 6.86

The preceding table shows the average grades of laterite horizons of the seventeen drill holes along
section 10,150N (Hole 163 is excluded as it is outside area of laterite mineralization). The nickel
and iron grades of the limonite horizon (1.17% Ni and 39.54% Fe) are robust. The average grade of
the underlying saprolite horizon (1.12% Ni) is diluted by internal boulders and un-lateritized blocks
("floaters"). The underlying saprolitic bedrock averages 0.82% nickel over 1.79m.

14.0 SAMPLING METHOD AND APPROACH

The ANLP QA/QC Procedures for the whole ANLP drilling program was set up by MRL geologists
and was followed by all personnel involved in all stages of the program (Appendix 3). This was
adapted from the QA/QC Protocols of QNPH for the 2006 drill program carried out on the ANLP.
Now and again, the protocols are evaluated and improvements are implemented. The core handling,
logging and sampling procedures applied in the program are briefly described below.

It is a standard procedure that core checkers who are under the supervision of MRL technical
personnel are present on every drill rig during operation. This is to record drilling activities from
core recovery, core run, pull-out and put-back, casing and reaming all at the drill site. Once a core
box is filled, it is sealed with a wooden board then secured with rubber packing band. This is placed
in a sack and manually carried to the core house some 300 - 500 m from the drill area.

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

After logging, the geologist determines the sampling interval. As a general rule, core sampling is
done as much as possible at one meter interval down the hole, except at laterite horizon boundaries.
The sample length across the boundaries should only be in the range of 1.0 ± 0.25m to avoid
excessively short and long samples. A total of 3,822 samples were collected from the drill cores. All
of the cores were sampled except for three intervals that are contained in two holes (AGL-2007-46
and AGL-2007-55).

Core recovery was determined by measuring the actual core lengths, then comparing to the core run.
From a total core drilled meterage of 3851.59 m (MRL drilling), 3510.32 m were recovered or
91.14%. This result is generally high but this varies in the different soil horizons wherein recovery is
highest within the limonite zone. There were 8,913 core runs, 61.44% of which had 100% recovery.

For the different rig types, the YBM of JCP Drillers produced the highest recovery (98.46%) while
the lowest is the TOHO D2-JS. The details of recovery averages are shown in the table below.

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Independent Report on the Nickel Laterite Resource at Agata North

Table 8: Core Recovery Percentages


Average Drilling %
Laterite Recovery No. of % %
Recovery Rig Type Contrac- Recovery /
Zone (% ) RUNS FREQ. Recovery
(% ) tor Contractor
FERR. LAT. 90.05 0 - 10 0.21 GM-50 87.62
LIMONITE 94.37 10 - 90 2112 23.70 TOHO D2-JS 86.13
SAPROLITE 91.59 90 - 99 1306 14.65 TS-50G 89.61 CDSI 88.24
SAP ROCK 90.20 100 5476 61.44 TS-50Y 87.55
BEDROCK 88.01 YBM-01 90.13
OVERALL 91.14 TOTAL 8913 100 TONE 1 92.75
TOHO 1 95.15
TCD 92.71
TOHO 2 91.13
TOHO 3 92.44
JCP 11 98.31
JCP 3 96.62
JCP 97.75
KOKIN 97.69
YBM 98.46
OVERALL 91.14

15.0 SAMPLE PREPARATION, SECURITY AND ANALYSES


15.1 MRL Protocols

As in all stages of the program, the ANLP QA/QC Procedures (Appendix 3) were diligently
followed in the sample preparation and security procedures. The analyses for the first 2,689 core
samples were performed by McPhar Geoservices (Philippines), Inc. (McPhar), which follows
internationally-accepted laboratory standards in sample handling, preparation and analysis.

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

Following the recommendations of another qualified person, F. Roger Billington in May 2008, the
sampling protocols were slightly modified. The important modification is the insertion of pulp
rejects in the same batch as the mainstream samples. This is to ensure that all conditions in assaying
are very similar, if not completely the same for both the mainstream and check samples. In addition,
the next 1,133 core samples were sent to Intertek Testing Services, Phils., Inc. (ITS) for analysis
using the XRF scheme.

The ITS Phils. facility is among Intertek’s global network of mineral testing laboratories. It provides
quality assay analysis of mineral samples for nickel deposit exploration projects. Measures are taken
by Intertek mineral testing laboratories to ensure that correct method development and quality
protocols are in place to produce quality results.

15.1.1 MRL Core Sampling

All cores were sampled except for 3 intervals namely:


Hole AGL-2007-46 from 6-12 meters depth
from 13-15.05 meters depth
Hole AGL-2007-55 from 13-14.50 meters depth

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Independent Report on the Nickel Laterite Resource at Agata North

Core sampling is done as much as possible at one (1) meter interval down the hole except at laterite
horizon boundaries. The sample length across the boundaries should only be in the range of 1.0 ±
0.30m to avoid excessively short and long samples. In the saprolitic rocks and bedrock layers, some
sample intervals have lengths greater than 1.30 meters to a maximum of 2.00 meters.

Table 9: List of Sampling Intervals


Length Freq. # (MRL) Freq. # (QNPH)
<1m 969 89
1m 1914 487
≤1.30m 798 76
>1.30m 141 6

Whole core sampling is applied in most of the first 148 holes except for 17 holes wherein the cores
were split for future reference. The purpose of the procedure is to avoid any bias that could occur
during splitting and quartering of the core. The 17 holes with duplicates include hole numbers AGL-
2007-11, 16, 21, 26, 31, 41, 46, 51, 56, 61, 66, 71, 76, 81, 86, 91, and 96. This is equivalent to a
frequency of about 1 in every 5 holes.

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

The next 45 holes (AGL 2008-138 to 187, inclusive) were split-sampled to ensure the availability of
reference samples in the future. The cores were cut in half using a core saw. The remaining half is
stored in properly-labeled core boxes.

The sampling interval is marked in the core box by means of masking tape labeled with the sampling
depth. The sample collected is placed in a plastic bag with dimension of 35 centimeters (cm) x 25cm
tied with a twist tie. The plastic bag is labeled with the hole number and sample interval.

After the samples are collected, they are weighed then sun-dried for about 5 hours and weighed again
(Sample Preparation Sheet) before final packing for delivery to the laboratory. In cases where there
is continuous rain, the samples are pan-dried for 5-6 hours using the constructed drying facility or
wood-fired oven. Starting with batch 2008 AGL 18, only the sun-drying was practiced.

The prepared samples are transported manually into the base camp at Brgy. E. Morgado. These are
then checked and inspected for completeness of sample tags and for any damage to the sample bags.
Sample tags are provided by Mcphar. These samples are placed in a rice sack and then in a box
within a wooden crate to ensure the safety of the samples during transport.

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

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

For batches 2008 AGL 13, 16, 18 and onwards, the core samples were delivered to Intertek’s sample
preparation facility in Surigao City. Once prepared, Intertek-Surigao sends the samples to their assay
laboratory in Muntinlupa City, Metro Manila.

The core sampling and logging facility is under the supervision of Mindoro geologist or mining
engineer at all times. This facility is about 300-500 m from the drill pads. The other core storage
facility at Brgy. E. Morgado base camp is likewise supervised by either a geologist or mining
engineer at all times. A civilian guard secures the base camp premises during the night.

The ANLP drilling was directly under the supervision of James A. Climie, P. Geol., a geologist and
President and CEO of Mindoro.

15.1.2 Rechecking of Laboratory Results

In addition to stringent sampling protocols, QA/QC procedures were also employed following Dr. B.
Rohrlach’s and F.R. Billington’s guidelines. Standard reference materials, field duplicates, coarse
rejects and pulp rejects were analyzed to check the validity/accuracy of the laboratory results. A total
of 760 analyses of such samples were collected. The details are shown in Table 10. Selection of
check samples are spread throughout all holes and in various laterite horizons. For the 2008 samples
standards, field duplicates and pulp rejects were inserted, but no coarse rejects were sent yet nor are
there any pulp rejects analyzed by an umpire laboratory.

For 2007 samples, the field duplicates totaled 117 (5.27%). Normally, 1 in every 20 core samples is
duplicated. A total of 41 field duplicates have been analyzed for the 2008 samples to date. The
duplicate sample is selected to ascertain that the full range of different laterite horizons is
systematically covered. The samples were selected to cover the full range of Ni grades at Agata, and
to extensively cover the different stages and spatial distribution of the drill program, so as to provide
a representative check on the reliability of the original sample splitting process undertaken by MRL
at the drill site. Its distribution for each laterite horizon is shown in Table 11. Originally, splitting
method is the same as for obtaining duplicates for storage but 1/4 part of the prepared sample
represents the field duplicate while the 3/4 part is the regular sample. For the half-core sampling, the
field duplicates are taken by cutting the remaining ½ core into 2. These samples are sent to the
laboratory in the same batch and were treated in the same way as the normal core samples.

A set of 24 coarse reject samples, comprising 1.08 % of the 2221 core samples, were submitted to
McPhar for resampling and assaying. Resampling was done by taking a duplicate split off the reject
and then placing it back into the assay stream for analysis. Again, as in all duplicates, the submitted
samples were chosen to cover the natural range of assays. The reanalysis of the coarse reject samples
was undertaken as an internal check on the crushing and sub-sampling procedures of McPhar to
ensure that the samples taken for analysis were representative of the bulk sample. For the recent
samples, coarse rejects will be submitted in the future to the corresponding laboratory (either Mcphar
or Intertek) where the original samples were analyzed.

Again for the 2007 to May 2008 core samples, selected pulp rejects generated from sample
preparation at Mcphar were sent to (Intertek of Jakarta, Indonesia, and another set of pulp rejects
were resent to Mcphar. This is to establish reproducibility of analysis and determine the presence or
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Independent Report on the Nickel Laterite Resource at Agata North

absence of bias between laboratories. Samples are taken on all of the different laterite horizons.
Starting on June 2008, pulps were inserted together with the mainstream samples (1 in each set of 40
samples).

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

Nickel standards or certified reference materials (CRM) are routinely inserted to the batches of core
samples sent for assaying. This is done as a double check on the precision of the analytical
procedures of Mcphar. The samples are provided by GEOSTATS Pty of Australia. Standard samples
are sent to monitor accuracy of the assay process on a batch by batch basis. These standard samples,
which have known assay values for Ni are already pulverized (pulp) weighing about 5 grams
contained in 7.5cm X 10cm heavy duty plastic bags, which are tightly sealed in packs and with
different grades for each pack. There are about 6-10 samples in each pack. Originally, one (1)
standard sample is inserted for every batch of 40 to 45 samples. However, there were some standards
inserted in smaller intervals of 25-35 samples. Starting with Batch 2008 AGL-18, one standard
sample is included in every set of 40 samples. In all, 104 standards equivalent to 2.72% of the core
samples were used to date.

Twelve types of standards were used with grade ranging from 0.11% to 2 % nickel. Each one comes
with a certificate that shows the accepted mean value and standard deviation (Appendix 4). The
specific nickel standards and the frequency of using each one are listed in Table 12.

Table 10: Numbers of Core, Reference and Recheck Samples Analyzed


NO. OF LAB FIELD PULP PULP COARSE Total # of
DISPATCH CORE
DRILL- GBMs # RECHECK DUPS REJECTS REJECTS REJECTS Check
NO. SPLS
HOLES S# # # (InterLAB) # # Samples
2007 AGL-01 6 134 3 14 6 1 3 1 28
2007 AGL-02 6 178 4 17 9 3 1 2 36
2007 AGL-03 6 183 4 18 9 1 4 2 38
2007 AGL-04 6 185 4 18 9 2 2 2 37
2007 AGL-05 7 220 5 23 11 1 4 2 46
2007 AGL-06 7 189 4 19 10 2 3 2 40
2007 AGL-07 6 117 3 13 6 2 1 2 27
2007 AGL-08 7 141 3 15 7 1 5 1 32
2007 AGL-09 5 109 4 11 6 1 2 2 26
2007 AGL-10 7 129 3 11 7 2 5 1 29
2007 AGL-11 7 150 3 16 8 1 5 1 34
2007 AGL-12 6 109 2 11 7 1 4 2 27
2007 AGL-13 9 127 3 12 7 2 5 1 30
2007 AGL-14 4 46 1 5 3 1 4 1 15
2007 AGL-15 11 204 4 20 12 3 6 2 47
2008 AGL-01 4 81 2 8 2 12
2008 AGL-03 7 127 5 13 3 21
2008 AGL-06 8 143 5 15 3 23
2008 AGL-10 7 117 4 13 17
2008 AGL-13 6 104 4 5 9

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Independent Report on the Nickel Laterite Resource at Agata North

2008 AGL-16 5 5
2008 AGL-18 16 215 12 8 6 12 38
2008 AGL-19 5 115 3 6 3 4 16
2008 AGL-20 8 135 4 7 4 4 19
2008 AGL-21 9 162 4 8 4 4 20
2008 AGL-22 5 69 2 7 2 2 13
2008 AGL-23 4 75 2 4 2 2 10
2008 AGL-24 7 109 3 12 3 3 21
2008 AGL-25 7 149 4 8 4 4 20
OVERALL 193 3822 104 337 158 59 54 24 736

Table 11: Frequency of Check Sampling per Laterite Zone


Field Pulps Pulps Coarse
Laterite Horizons
Duplicates (External) (Internal) Rejects
Ferruginous Laterite 31 8 13 6
Limonite 43 14 10 6
Saprolite 52 13 21 7
Saprolitic Rock 28 13 12 3
Bedrock 8 6 3 2
TOTAL 162 54 59 24

Table 12: Frequency of Using Nickel Reference Materials


Type of Standard No. of Times Used
GBM 302-8 6
GBM 305-9 8
GBM 307-13 6
GBM 398-4C 5
GBM 900-9 5
GBM 901-1 21
GBM 901-2C 8
GBM 903-2 8
GBM 905-13 10
GBM 906-7 6
GBM 906-8 16
GBM 996-1 5
TOTAL 104

15.2 Laboratory Protocols


15.2.1 McPhar Geoservices (Phil.), Inc.

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

Mcphar’s sample preparation procedures and analytical processing are illustrated in the flowcharts
below. (Figures 19 and 20)

Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum (Al),
silica (SiO2) and some samples for phosphorous (P).

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Independent Report on the Nickel Laterite Resource at Agata North

The Ni, Co, Fe, Mg and Al are assayed by dissolving a 25g charge with a two acid digest using hot
hydrochloric (HCl) and nitric acid (HNO3) and reading the results by Atomic Absorption
Spectroscopy (AAS). The SiO2 and P are analyzed by gravimetric process.

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

Figure 19: Flowchart of Mcphar’s Sample Preparation for Laterite

FLOWCHART OF McPHAR’s SAMPLE PREPARATION


(LATERITE)

MRL Dispatch
(thru LBC Courier)

Receipt of Sample
Check LBC Transmittal and
MRL Submission Form

ROCK /CORE
Sample Preparation
\

DRY
(SP1/SP2)

CRUSH –1/4”
(SP6/SP7)

SPLIT 1 KILO

FINE
PULVERIZE
-200 M

SAMPLING 47
Independent Report on the Nickel Laterite Resource at Agata North

Figure 20: McPhar’s Laterite Analysis Procedure Flowsheet

MRL – LATERITE PROCEDURE FLOWSHEET


PROCESS AREA

Weigh 0.25 gram sample

Add 20 ml 6N HCl

Evaporate to near dryness

Add 10 cc HNO3 and 30 cc HCl

Dry and bake for 1 hour

Cool

Leach with 30 cc HCl and boil

Set to mark (100 ml with H2O)

15.2.2 Intertek Testing Services Phils., Inc.

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

Their sample preparation procedure is illustrated in the following flowchart. (Figure 21)

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

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

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 21: Intertek’s Sample Preparation Procedure for Laterite

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

Details of the laboratory QA/QC programs, and check assaying procedures appears under Item 16
(Data Verification).

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Independent Report on the Nickel Laterite Resource at Agata North

16.0 DATA VERIFICATION

The writer, in his visits to the field, drill sites and Manila Office of Mindoro, has observed and
verified the datasets provided by Mindoro against original field sheets and official Analytical
Results. Selected core trays were visually inspected against the logs. Selected Drill hole collars were
likewise inspected during field visits and cross checked against survey plans and topographic data.

The details of the laboratory QA/QC programs and check assaying procedures are presented below.

16.1 Internal QAQC (McPhar/Intertek)

The laboratories of Mcphar Geoservices and Intertek Testing Phils., Inc. in Manila were installed
with a Quality Assurance/Quality Control program incorporated in their sample preparation and
analyses procedures.

McPhar and Intertek laboratories both regularly conduct duplicate analysis of Ni and other elements
as a check on analytical reproducibility. Repeats are routinely conducted on all elements being
analyzed and are typically on every 10th sample for McPhar and on every 20th sample for Intertek.
All in all there are 337, (8.82%) repeat analyses that are spread evenly throughout the entire
database.

Figure 22 shows excellent correlation for all of the elements analyzed with R² = 0.99, and Ni-1 and
Ni-2 correlation being 0.999. The Relative Percentage Errors (RPE) are all below 1% as shown in
the table below, showing consistent and high precision repeatability. Negative values indicate that
the repeat analysis is higher.

Table 13: Relationship of Original and Repeat Analyses


Ni % Co % Fe % Al % Mg % SiO2 %
Mcphar
RE % 0.05 -0.26 -0.15 -0.08 -0.28 0.03
Orig = Recheck 98 204 4 98 23 16
Orig < Recheck 84 38 146 94 137 120
Orig > Recheck 90 30 122 80 112 136
Intertek
RE % -0.09 0.75 0.15 -0.11 0.01 -0.08
Orig = Recheck 27 16 0 0 0 1
Orig < Recheck 20 22 31 26 34 35
Orig > Recheck 18 27 34 39 31 29

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 22: Graphs of Laboratory Internal Recheck Assays

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Independent Report on the Nickel Laterite Resource at Agata North

Plots of rechecks done by both McPhar and Intertek laboratories showing excellent correlation, R² =
0.99 on Ni, Fe, Mg, Al, Co and SiO2. McPhar reanalyzes every 10th sample while Intertek
reanalyzes every 20th. Both laboratories also run rechecks on samples with anomalous nickel values.

16.2 External QAQC (MRL)

Likewise, Mindoro has also set up its own QA/QC protocols vis-à-vis the laboratories’ sample
preparation and analytical procedures, which the author has observed in the field.

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Independent Report on the Nickel Laterite Resource at Agata North

16.2.1 Nickel Standards

As a double check on the precision of the analytical procedures of both Mcphar and Intertek
laboratories, nickel standards are being inserted by Mindoro for every 45 samples on the average. A
total of 104 nickel standards, representing 2.72 % of the 3822 core samples were sent. These
standards were purchased from Geostats Pty. Ltd of Australia. Details of these standards are
provided in the attached certificates (Appendix 4). Twelve types of standards were used for the
whole drilling course to date, with grade ranging from 0.11 to 2.00 % nickel.

Figure 23 shows graphical representations of the standards for nickel. The acceptable limits of each
standard is shown in red shaded area with the red line indicating the mean value and the top and
bottom of the shaded area as the 2 standard deviation upper and lower limits.

Generally, the external standards submitted by MRL fell within two (2) standard deviations from the
accepted mean. Only six out of 104 standards plotted outside the acceptable range, three of which are
the standard GBM 903-2. Both laboratories gave results outside the acceptable range for this
particular standard. The source of error maybe the laboratory analysis or the type of standard. Future
testing for GBM 903-2 shall be done. In summary, the external standards suggest that the analyses in
both laboratories are suitably precise.

Figure 23: Graphs of Nickel Standards Assays.

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Independent Report on the Nickel Laterite Resource at Agata North

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Independent Report on the Nickel Laterite Resource at Agata North

Plots of the assays of the inserted nickel standards vis-à-vis the acceptable limits. Six out of 104 standards did
not fall within the acceptable range.

In addition to inserting nickel standards, a check on the sample preparation and analysis
procedures of the laboratories was done by Mindoro by sending check samples for assaying, also to
the primary laboratory. These samples include field duplicates, coarse rejects and pulp rejects.
Another set of pulp rejects was sent to the umpire laboratory for the 2007 assays of core samples.
The same shall be done for the 2008 assays.

16.2.2 Field Duplicates

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

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Independent Report on the Nickel Laterite Resource at Agata North

The field duplicates were normally sent together with the regular core samples for assaying except
for 5 samples that were dispatched separately (2008 AGL-16). A total of 162 core field duplicates
(4.24%) were analyzed. Of these, 125 were analyzed by Mcphar (normally 1 in 20 cores) while 37
duplicates were by Intertek (1 in every set of 40 samples).

In analyzing the correlation between the original and duplicate sample, the relative difference (RD)
was computed as follows:

(a – b)
RD = ________ x 100
a

Where: a - is the original sample analyzed at McPhar;


B - is the duplicate sample analyzed at McPhar; and
RD - is the percentage relative difference.

Table 14: Relationship of Field Duplicate and Original Assays


Ni % Co% Fe% Al% Mg% SiO2,%
MCPHAR
RD % -1.50 1.05 0.28 -0.51 -0.68 -1.34
Orig = Recheck 16 65 0 24 9 1
Orig < Recheck 71 32 64 52 56 73
Orig > Recheck 38 28 61 49 60 51
INTERTEK
RD % -0.69 2.91 1.35 0.95 -4.14 -3.08
Orig = Recheck 7 3 0 1 0 0
Orig < Recheck 15 13 17 17 19 22
Orig > Recheck 11 17 16 15 14 11

Table 14 presents the results. A value of zero means the two values are equal, a negative value
means the recheck is higher, while a positive value means the original is higher. Another measure of
correlation is the R2 , shown in each graph.

All RD values are within highly acceptable limits, ranging from 0.28% to 1.50% (absolute) for
Mcphar and 0.69% to 4.14% for Intertek. Slight bias was observed for Ni, Si and Mg wherein more
of the original assays are lower than the assays for field duplicates.

High correlation can be observed in Figure 24, the graphical representation of the said procedure,
with R² ranging from 0.956 to 0.997 for the six different elements. These plots indicate that the
splitting procedure of MRL was acceptable.

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Figure 24: Graphs of Field Duplicates Assays

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Plots of the field duplicate samples analyzed by Mcphar and Intertek Laboratories show good correlation, with
R² ranging from 0.956 to 0.997 for the six different elements.

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16.2.3 Coarse Rejects

The reanalysis of the coarse reject samples was undertaken as an internal check on the crushing and
sub-sampling procedures of McPhar to ensure that the samples taken for analysis were representative
of the bulk sample. At the time of the resource estimation, no coarse rejects were analyzed for the
2008 samples yet.

Table 15: Relationship of Coarse Rejects and Original Assays


Ni Co Fe Al Mg Si
RE % -0.25 -2.73 2.42 -7.01 -2.88 -1.33
Orig = Recheck 3 9 0 2 1 0
Orig < Recheck 13 9 11 16 16 14
Orig > Recheck 8 6 13 6 7 10

(a – b)
RE% = _____________________ x 100
0.5 * (a + b)

Where: a - is the original sample analyzed at McPhar;


b - is the duplicate sample analyzed at McPhar

The Relative Percentage Error (RE%) for nickel is well below 1% as shown in the Table 15, showing
consistent and high precision repeatability. RPEs for Co, Fe, Mg and Si are below 5% showing
relatively high repeatability while the value for Al is a little higher but still acceptable below 10%.
Negative values indicate that the repeat analysis is higher. This relationship is further illustrated in
Figure 25.

Figure 25: Graphs of Coarse Duplicates Assays

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Graphs showing the excellent correlation between original assay values and reanalysis of the coarse reject
samples for Fe, Al, Mg and SiO2 (R² = 0.99), while good correlation was observed for Ni and Co, R² = 0.98
and 0.97 respectively.

16.2.4 Pulp Rejects Analyzed by Primary Laboratory

A total of 24 of the McPhar pulp rejects were re-sampled and analyzed during the 2007 initial
resource delineation. This represents 1.08% of the 2,221 core samples. These were selected from
previously submitted batches and were selected to cover a range of sample grades, a range of
horizons and a range of holes from the core drilling programs, so as to be representative of all the
samples during the drilling program.

To date, the pulps for the 572 core samples from batches 2008 AGL 1, 3, 6, 10 and 13 have yet to be
re-sampled. These cores were originally analyzed during the period February to early June 2008.

The method of pulp reject sampling for Intertek Laboratory was modified in June 2008 as per MRL
consultant’s recommendation. Starting with batch 2008 AGL-18, pulp rejects were randomly
selected, approximately one in every set of 40 (37 cores, 1 nickel standards and 1 field duplicate) and
were pre-numbered. These pulps were inserted to its assigned numbers right after sample preparation
and were analyzed in the same batch as its source. To date, 35 pulp rejects (3.09 %) were inserted
out of 1,133 samples analyzed in Intertek using this new method.

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

As shown in Figure 26, there is good correlation between the assays of pulp rejects and the original
values. R² ranges from 0.975 -0.997, which means that pulps generated are consistent.

Figure 26: Graphs of Pulp Rejects analyzed by Primary Laboratory

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The graph of duplicate pulps analyzed by both McPhar and Intertek Laboratory shows good correlation with
R² ranging from 0.975 -0.999 . This procedure proves that pulps generated by the two laboratories are indeed
homogenous.

16.2.5 Pulp Rejects Analyzed by Umpire Laboratory

To further ensure the integrity of the assay results, 54 pulp rejects generated by Mcphar in 2007 were
sent by Mindoro to Australian-owned Intertek Testing Services [ITS], an internationally reputed
laboratory in Jakarta, Indonesia for assay. Intertek-Jakarta is the only ISO 17025-accredited mineral
laboratory in Indonesia.

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The analytical procedure conducted by Intertek was by use of XRF. The results show a high
correlation between McPhar’s original assay and that of Intertek for the pulps. Figure 27 shows the
graphs of the duplicates analyzed by Intertek Laboratory.

Figure 27: Graphs of Pulp Rejects Analyzed by Umpire Laboratory

McPhar original results plotted against Intertek rechecks conducted on McPhar pulps. The inter-laboratory
agreement on the pulp sample is high (R² = 0.994 for Ni).

The writer has verified drill hole locations, sampling and assay procedures, examined mineralized
material in the field and in drill core, as well as the geological and assay databases during his various
site visits in the Agata Project and meetings with MRL staff. With these factors, as well as the
evaluation of the results of assay rechecking, the writer is satisfied that all data can be relied upon.

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17.0 ADJACENT PROPERTIES

The Tapian-San Francisco and Tapian Main properties have high potential for the discovery of both
porphyry Cu-Au style mineralization at depth and epithermal style mineralization at shallower levels.

17.1 Tapian-San Francisco Property:

The Tapian-San Francisco property comprises claim blocks under one MPSA, two Exploration
Permits and two EP Applications (MPSA-033-95-X, EP No. 016-XIII, EP-022-XIII, EPA-106-XIII,
and EPA-088-XIII). It has very high potential for the presence of a porphyry Cu-Au system on the
property associated with extensive IP chargeability anomalies that underlie surficial zones of high-
resistivity, widespread Cu and Au anomalism, surface artisanal workings, widespread hydrothermal
alteration, and mineralization. This is located in extremely favorable structural location near the
Philippine Fault, cut by cross-faults extending from Boyongan and Bayugo porphyry Cu-Au deposits
8km to NE. (Figure 28)

17.1.1 Gold Hill [C5]

Gold Hill Target demonstrates a crude circular-shaped strong chargeability anomaly covering 600m
by 500m that is probably part of a much more extensive chargeability anomaly [sulphides] at depth.
It is capped by resistivity anomaly. It is underlain by andesitic volcanics with limestone and intrusive
dikes and is proximal to a large intrusive complex. Prevailing alteration is pervasive high
temperature propylitic alteration with areas of strong argillic alteration [and phyllic?].

This is an area of historic artisanal gold mining that contains abundant epithermal Au-Cu showings
and high-grade, massive sulphide/precious metal prospect and has coincident strong Cu-Au-arsenic
(As)-Pb-Zn soil anomalies.

17.1.2 Cantikoy (C6)

Cantikoy Target exhibits a crude “pear-shaped” strong chargeability anomaly over 600m by 500m
that is probably part of a much more extensive chargeability anomaly [sulphides] at depth. Further, it
is capped by resistivity anomaly. It is underlain by andesitic volcanics with multi-phase intrusive
stocks and dikes. High temperature propylitic alteration with structurally-controlled zones of intense
phyllic alteration and localized potassic alteration are prevalent. It contains overprinting epithermal
mineralization as well as porphyry-related Cu-Au mineralization. The latter was located in several
areas including a trench of 25m at 1% Cu and 0.5 g/t Au. This is supported by extensive strong
coincident soil Cu-Au-Zn soil anomalies.

17.1.3 Canaga (C9)

An arcuate-shaped strong chargeability anomaly over 400m by 300m, that is probably part of a much
more extensive chargeability anomaly [sulphides] at depth and flanked by resistivity anomalies,
characterizes the Canaga Prospect. Its rock suite includes dominantly recrystallised limestone and
andesitic volcanics with high-temperature propylitic alteration. Multi-phase intrusive stocks and
dikes nearby exhibit phyllic and potassic alteration. Porphyry-related Cu-Au mineralization is
associated with volcanics and intrusives, including a trench of 15m at 1% Cu. This is likewise
supported by coincident soil Cu-Au soil anomalies.

In 2006, a reconnaissance drilling program was carried out at C6 and C9 and 3 drill holes for a total
of 1,176m were completed. The drilling intersected a series of narrow monzonite, monzonite
porphyry, diorite porphyry, porphyritic dacite, and porphyritic andesite intrusive sills/dikes, with
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potassic alteration and chalcopyrite / magnetite mineralization in places; the sills dip east. This is
interpreted as a porphyry Cu-Au system that lies several hundred meters to the east.

Figure 28: Tapian-San Francisco Compilation

17.1.4 Waterfalls (C1)

Waterfalls Prospect is characterized by coincident strong chargeability and resistivity anomaly over
800m by 600m, further supported by coincident stream sediment Au-Cu-As-Zn anomalies. The area
is underlain by dominantly recrystallised and silicified limestone and ultramafics and strongly
propylitized andesite with localized argillic and phyllic areas. Old adits were observed to follow gold
and base metal veins.

17.2 Tapian Main Property

The Tapian Main property comprises mining claim blocks that collectively form part of the same
tenement (EP No. 016-XIII) as that of the Tapian-San Francisco property plus EP No. 018-XIII,
known as the Tapian-Torino claims. It has potential for definition of a shallow epithermal resource
along the Rosario and Samson zones and their possible extensions. A newly-defined porphyry target
at Tapian Main adjoins and lies at depth to the west and southwest of the Mt. Tapian prospect, and
may be linked by a feeder structure to the zones of surficial Cu and Au geochemical anomalism that
lie at shallow levels along its eastern margin at the Mt. Tapian prospect. It is located in favorable
structural setting near the Philippine Fault and cross-faults. (Figure 29)

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Independent Report on the Nickel Laterite Resource at Agata North

This prospect is characterized by a partially-defined chargeability anomaly covering 1km by 1km


with flanking resistivity anomaly. Dominantly andesitic volcanics with limestone, ultramafics and
multi-phase intrusive comprise the underlying rock units. These rocks are affected by extensive
propylitic alteration with scattered narrow argillic zones. A porphyry Cu-Au target is interpreted at
depth. Extensive historic mining of epithermal gold is present in the area.

A pre-WW2 gold mine with extensive underground workings contains grade recorded as 8.3 g/t Au.
Extensive Au soil anomalies were defined in the area.

17.3 Tapian Extension

17.3.1 Bolobolo

Reconnaissance work located extensive porphyry-related alteration [phyllic] in andesitic volcanics,


as well as widely distributed calc-silicate boulders grading in the 1% Cu range in the Bolobolo
Target.

Bolobolo catchment is underlain by schists. At the prospect area, the mineralization is hosted by talc
chlorite schist overlying a thick calc-schist. The talc chlorite schist contains dark colored serpentinite
rich layers whose fragments are flattened along the primary foliation. The primary foliation hosting
the mineralization trends 75˚ and dips about 10˚ to the south. A possible secondary foliation (S2)
trends 275˚ azimuth, and dips 20˚ northwards. (Buenavista, A.G., 2008)

The mineralization on the schist is typically fine grained and appears to be smeared along the
foliation plane. Primary sulfides are chalcopyrite and bornite, and associated with hematite and some
magnetite. The mineralization can be traced for about 100 meters along the schist layer. (Buenavista,
A.G., 2008)

Figure 29: Tapian Main Compilation

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Independent Report on the Nickel Laterite Resource at Agata North

17.4 Other Nickel Laterite Prospects:

Recent reconnaissance geological mapping has expanded the global nickel laterite resource potential
of Mindoro. While the ANLP and ASLP potential nickel laterite mineralization covers
approximately 600 ha, results of the regional mapping program indicate potential for a further nickel
laterite mineralization on the adjacent Tapian Main, Tapian SF and Mat-I tenements (Figure 7). The
presence of lateritic soils is manifested by the development of thick, purple-colored clayey soils over
favorable ultramafic rocks. Based on the mapping alone, there is no guarantee that nickel grades and
thickness will be of commercial interest. Accordingly, a program of reconnaissance auger drilling
has commenced to give a preliminary indication of nickel content and laterite thickness.

The Mat-I tenement is covered by Exploration Permit Application of Minimax denominated as EPA-
105-XIII with an area of 884 ha.

These nickel laterite prospects lie along the same mineralization trend as that of San Roque Metals,
Inc. (SRMI) Mine, which is immediately adjacent to Agata South prospect.

Also found within the Surigao District are producing nickel laterite mines such as Hinatuan and
Taganito. These mines are providing direct shipping grade ore to markets and processing plants in
China, Japan, Korea and Australia. There are also plans to put the large Nonoc nickel laterite deposit
back into production. This is located in an island just to the north of Surigao City.

18.0 MINERAL PROCESSING AND METALLURGICAL TESTING

No mineral processing or metallurgical testing has been done on the ANLP to date. The short term
plans are to conduct a direct shipping ore operation if warranted.

However, it is management's strong conviction that the real future for the Agata project is for
enhanced value, local processing. It is believed that it has the potential to outline sufficient resources
to support this concept. Several attractive alternatives are emerging, which include:, at the low
technology end of the spectrum, constructing a blast or electric furnace for nickel pig iron production
(low grade ferro-nickel product which is increasingly entrenching itself as a substitute for refined
nickel in stainless steel production), atmospheric leaching for which pilot testing on another
Philippine laterite has produced promising results, and a new generation of High Pressure Acid
Leach (HPAL) plants. The new generation HPAL plants are being used by Sumitomo on its
Philippine Coral Bay operation.

In view of this, a series of metallurgical tests will be undertaken. As a start, the first batch of samples
taken from test pits was recently dispatched to En Lin Steel Phils. Corp. in the Cavite Economic
Zone, Cavite, Philippines for initial pressure acid leach tests.

19.0 MINERAL RESOURCE ESTIMATE

19.1 Data Set:

The data set used as a basis for the resource interpretation, statistical analysis, grade estimation and
resource classification was sourced from a Microsoft Excel ® spreadsheet
(ANLP_ASSAYS_DATABASE_RAW_1Aug2008.xls date stamped 1 August 2008) provided by MRL
in August 1, 2008. The spreadsheets contained collar, survey, assay and lithology data.

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The data set comprised 235 holes for which assays were available for 228 holes, with assays from
the remaining seven holes not available at the time of this resource estimation.

The data set was reformatted into data tables for import into MineSight ® software and file data and
fields are summarized in Table 16.

Table 16: Data Set


Table File Record Fields
Collar aglcol.csv 228 DHID,EAST,NORTH,ELEV,LEN
Survey aglsrv.csv 228 DHID,FROM,TO,AZI,DIP
Assays & Lithology aglass.csv 4,537 DHID,FROM,<ASSAYS>, LITH, ZONE

The Assay elements <ASSAYS> imported from the data set were Nickel, Cobalt, Iron, Magnesium
and Silicon Dioxide expressed as %.

All holes were drilled vertically. No downhole surveys were carried out. This is acceptable due to
relatively short length of the drill holes. Table 17 tabulates drillhole statistics.

Table 17: Drillhole Summary


# Minimum Maximum Mean Median
m m m m
228 4.4 46.6 19.8 18.6

19.2 Raw Assay Statistics:

Preliminary statistical analysis on raw assays was carried out on 228 drill holes. Raw Assay data
was analyzed above a cut-off grade of 0.8 Ni%. The 0.8 Ni% cut-off grade was considered the lower
bound for Nickel Laterite ore exploitable via Direct Shipping Ore contracts in the Asian refineries
with consideration to current and short term forecast Nickel prices. The large variance in Fe grades
is a function of the grouping of Limonite and Saprolite assays. Further analysis on assays was
carried out after the resource was domained and composited assays coded into geochemical Limonite
and Saprolite domains.

Table 18: Raw Assay Statistics


Cutoff Assays Above Cutoff Grade Item Grade Std Dev
Ni% # % Item Grade %
0.8 2095 100 Ni % 1.22 0.34
Co % 0.063 0.063
Fe % 24 17
0.9 1786 85 Ni % 1.28 0.32
Co % 0.065 0.065
Fe % 24 16
1.0 1457 70 Ni % 1.36 0.31
Co % 0.064 0.067
Fe % 22 16
1.1 1151 55 Ni % 1.44 0.30
Co % 0.063 0.069
Fe % 20 14
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1.2 902 43 Ni % 1.52 0.29


Co % 0.061 0.069
Fe % 20 14
1.3 714 34 Ni % 1.59 0.28
Co % 0.061 0.071
Fe % 19 13
1.4 512 24 Ni % 1.69 0.27
Co % 0.058 0.068
Fe % 19 12
1.5 390 19 Ni % 1.77 0.27
Co % 0.054 0.061
Fe % 18 11
1.6 282 13 Ni % 1.86 0.27
Co % 0.050 0.057
Fe % 18 11
1.7 194 9 Ni % 1.95 0.28
Co % 0.045 0.042
Fe % 17 10
1.8 132 6 Ni % 2.05 0.29
Co % 0.044 0.042
Fe % 17 10
1.9 88 4 Ni % 2.15 0.30
Co % 0.045 0.046
Fe % 17 9
2.0 53 3 Ni % 2.29 0.32
Co % 0.038 0.029
Fe % 16 9

19.3 Compositing:

On reviewing the assaying intervals of the raw assay data, the data set was composited into 1 meter
downhole composites, with small interval merging constraints.

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Table 19: Compositing Data

The composite assay file was coded with a ZONE code (1-5) to honor the domain solids that are
described in Section 19.2. Surfaces and Domains. Statistical analysis was carried out on data above
the geochemical limonite/Saprolite (Limonite: ZONE 2) and between the geochemical
Saprolite/Bedrock contact surfaces (Saprolite: ZONE 4). The results are summarized in Table 22
and Table 23, respectively.

Following a review of Frequency Distribution and Cumulative Probability Plots for Nickel
composites, it was decided not to apply any top cuts to the composite data set prior to grade
estimation, as there were no outliers warranting top cutting. Further evaluation would also involve
differentiating geochemical Limonite and Transitional populations, which is indicated to some
degree by the skewness in the currently modelled Limonite subset.

A variographic study is in progress at the time of reporting, and this will incorporate the most recent
drilling and test pitting data for future resource studies.

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Table 20: Frequency Distribution Plots Ni%

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Table 21: Cumulative Probability Plots Ni%

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Table 22: Limonite Composite Statistics


Cutoff Assays Above Cutoff Grade Item Grade Std Dev
Ni% # % Item Grade %
0.8 755 100 NI% 1.09 0.24
CO% 0.117 0.067
FE% 44 6
0.9 609 81 NI% 1.15 0.23
CO% 0.124 0.070
FE% 44 6
1.0 432 57 NI% 1.23 0.22
CO% 0.135 0.074
FE% 43 6
1.1 276 37 NI% 1.33 0.21
CO% 0.154 0.079
FE% 42 6
1.2 188 25 NI% 1.42 0.20
CO% 0.161 0.081
FE% 41 7
1.3 124 16 NI% 1.51 0.19
CO% 0.170 0.085
FE% 40 7
1.4 82 11 NI% 1.61 0.18
CO% 0.176 0.092
FE% 40 7
1.5 56 7 NI% 1.69 0.16
CO% 0.161 0.094
FE% 38 8
1.6 36 5 NI% 1.77 0.15
CO% 0.159 0.100
FE% 37 8
1.7 20 3 NI% 1.86 0.13
CO% 0.141 0.065
FE% 38 5
1.8 12 2 NI% 1.95 0.10
CO% 0.142 0.076
FE% 37 6
1.9 8 1 NI% 1.99 0.09
CO% 0.143 0.091
FE% 39 7
2.0 3 0 NI% 2.08 0.09
CO% 0.082 0.010
FE% 37 4

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Table 23: Saprolite Composite Statistics


Cutoff Assays Above Cutoff Grade Item Grade Std Dev
Ni% # % Item Grade %
0.8 1009 100 NI% 1.34 0.32
CO% 0.032 0.026
FE% 13 6
0.9 956 95 NI% 1.37 0.31
CO% 0.033 0.026
FE% 13 6
1.0 891 88 NI% 1.40 0.30
CO% 0.033 0.027
FE% 13 6
1.1 771 76 NI% 1.46 0.28
CO% 0.033 0.027
FE% 13 6
1.2 646 64 NI% 1.52 0.26
CO% 0.034 0.029
FE% 13 6
1.3 517 51 NI% 1.59 0.25
CO% 0.035 0.026
FE% 14 6
1.4 381 38 NI% 1.68 0.24
CO% 0.036 0.027
FE% 14 7
1.5 287 28 NI% 1.75 0.23
CO% 0.036 0.026
FE% 15 7
1.6 205 20 NI% 1.84 0.21
CO% 0.035 0.022
FE% 15 7
1.7 137 14 NI% 1.93 0.20
CO% 0.035 0.021
FE% 15 6
1.8 96 10 NI% 2.01 0.19
CO% 0.036 0.023
FE% 16 7
1.9 63 6 NI% 2.10 0.18
CO% 0.034 0.023
FE% 16 6
2.0 37 4 NI% 2.21 0.17
CO% 0.032 0.026
FE% 16 7

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19.4 Surfaces and Domains:

The composited data set was interrogated visually and statistically to determine a geochemical Iron
(Fe) cutoff grade in order to determine a geochemical limonite/saprolite contact. There exists a very
dramatic change in Fe grades within 1m below the occurrence of 30 Fe% in the downhole profile.

The points generator tool within MineSight ® DH View was used to establish points at the bottom-
of-sequence occurrence of 30 Fe%. The limonite contact points were set at the hole collar where no
downhole assays of above 30 Fe% were encountered. Points were used to generate a geochemical
limonite/saprolite contact surface.

The geochemical technique to determine limonite was chosen, to be consistent with proposed sub-
domaining of Limonite ore in future resource studies in respect to generating Transitional ore
domains using downhole multi-element geochemical criteria.

The points generator tool within MineSight ® DH View was also used to determine top-of-sequence
occurrences of 0.8 Ni% and 1.0 Ni % above the limonite/saprolite contact, and bottom-of-sequence
occurrence of 1.0 Ni% in each drillhole.

There is an abrupt change (drop) in Nickel grades below 1.2 Ni% at the base of the laterite profile,
when the body grades into sub-economic material within 1-2 meters. The 1.0 Ni % (bottom-of-
sequence occurrence) bedrock cut-off grade for the Saprolite domain was chosen to account for the
influence of footwall wall dilution given the block size selected for resource estimation discussed in
Section 19.7. Block Modelling and Grade Estimation.

The Limonite/Saprolite surface and the 0.8 Ni% top, 1.0 Ni% top and 1.0 Ni% bottom surfaces were
used to generate five domains. These surfaces were subsequently used to generate domain solids.

Saprock composites above 1.0 Ni % were excluded from surface domaining, statistical analysis and
mineral resource estimation pending future variographic studies.

Table 24: Domain Coding


Geochemical Fe% & Domain Code
Fe% Ni%
Ni% cutoff domains ZONE
Overburden 1 > 30 < 0.8
Limonite- upper 2 > 30 >= 0.8
Limonite- lower 2* > 30 >= 1.0
Saprolite 4 >= 1.0
Bedrock 5 < 1.0

The domain solids were subsequently used to code the block model and to restrict grade estimation
by using only composites that lay in the respective domains. For the purpose of this study, no
distinction was made between upper and lower limonite. All limonite above 0.8 Ni% was coded as
domain Zone 2 (*).

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Independent Report on the Nickel Laterite Resource at Agata North

Figure 30: Domain Surfaces and Composite Coding

19.5 Data Manipulation:

The Limonite/Saprolite contact surface was subsequently used to generate relative elevation items
in both the composite file and the block model. The MineSight ® Assign Relative
Elevation/Distance procedure was used to “unfold” the data by using the Limonite/Saprolite
contact surface as the reference surface.

In general terms, Nickel grades in the Limonite horizon, generally increase and peak at a point
about the base of the Limonite. Nickel grades remain respectively high and thereafter diminish as
the ore grades into basement/bedrock. Unfolding to this surface ensures that Nickel grades in both
Limonite and Saprolite are preferentially honored in the mid section of the laterite profile which
represents a greater proportion (50+%) of the deposit.

19.6 Specific Gravity, Bulk Density and Moisture Content:

The Specific Gravity for Limonite and Saprolite has been set at 1.20 and 1.50 respectively, for the
mineral resource estimates.

Table 25: Specific Gravity Parameters


Domain Code Specific Gravity
Domain Name
ZONE Dry Density

Ferruginous Laterite 1 1.2


Limonite- upper 2 1.2
Limonite- lower 2* 1.2
Saprolite 4 1.5
Bedrock 5 1.8

In situ bulk density is vital in evaluating the resource tonnage. Two methodologies were undertaken
by Mindoro for the determination of Bulk Density (BD). For the ferruginous laterite and limonite
horizons, bulk samples were collected from test pits and measured on site. The same procedure was
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done for the saprolite zone but was supplemented with another method, i.e., the collection and
measurement of drill core samples.

For BD measurements done on site, large samples ranging in volume from 0.005 m3 to 0.08 m3 were
collected from twenty test pits. The locations of these test pits are distributed around the drilling area
(Figure 31). The bulk samples were measured for volume, wet weight, and dry weight. The
description of the methodology is detailed in the ANLP QA/QC Procedures (Appendix 3)
The BD and moisture content were computed with the following formulas.

Weight (kg)
Bulk Density = _______________ ÷ 1000 (kg/ton)
Volume (m3)

Weight wet – Weight dry


% Moisture Content = __________________ x 100
Weight wet

For the drill cores, relatively solid/uncrumpled portions of 10cm-20cm lengths were selected from
drill holes that are spatially distributed and coated in paraffin wax to preserve the moisture. These
were then dispatched to McPhar Laboratories wherein the samples were measured using the water
displacement method. It is standard practice for Mcphar to check the wax coating and perform re-
waxing if needed.

Figure 31: Agata North Test Pit Location Map

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Independent Report on the Nickel Laterite Resource at Agata North

A total of 30 samples from 15 test pits were used for the ferruginous laterite horizon; 37 samples
from 19 pits for limonite; and 17 pit samples from 6 pits plus 19 core samples for saprolite zone.

The following table shows the summary results of these measurements, while Tables 27-30 are the
results for each of the horizons. Figures 32 and 33 illustrate the values of dry bulk density and water
content, respectively. From these results, the dry bulk density for limonite is estimated at 1.2 and for
saprolite is 1.5. The latter is averaged from the results of the two methodologies.

Table 26: Summary of Bulk Density Measurements


Wet Dry Moisture No. of
HORIZON
Density Density Content % Samples
FERRUGINOUS LATERITE 1.72 1.20 30.49 30
LIMONITE 1.81 1.24 31.74 37
SAPROLITE (Pit Samples) 1.98 1.46 26.11 17
SAPROLITE (Core Samples) 1.82 1.45 20.60 19

Table 27: Bulk Density Measurements on Ferruginous Laterite Materials


Sample No. Wet Density Dry Density Moisture Content %
1 1.70 1.15 32.37
2 1.85 1.29 30.19
3 1.62 1.26 21.98
4 1.67 1.15 31.13
5 1.98 1.34 32.06
6 2.03 1.49 26.70
7 1.63 1.10 32.85
8 1.88 1.33 29.41
9 1.63 1.15 29.16
10 1.54 1.03 33.00
12 1.69 1.24 27.06
13 1.54 1.03 33.26
14 1.56 1.05 32.53
15 1.86 1.17 37.14
16 1.53 1.13 26.32
17 1.61 1.10 31.52
18 1.58 1.05 33.11
19 1.59 1.07 32.65
20 1.60 1.24 22.35
21 1.95 1.32 32.28
22 1.96 1.29 33.83
23 1.57 1.13 28.29
24 1.62 1.19 26.61
25 1.59 1.09 31.63
26 1.78 1.22 31.65
27 1.78 1.27 28.82
28 1.88 1.27 32.13
29 1.54 1.05 31.74
30 2.07 1.38 33.12
31 1.84 1.29 29.82

78
Independent Report on the Nickel Laterite Resource at Agata North

Table 28: Bulk Density Measurements on Limonite Materials


Sample No. Wet Density Dry Density Moisture Content %
32 1.76 1.14 34.97
33 2.07 1.46 29.50
34 1.75 1.22 30.40
35 1.67 1.13 32.75
36 1.88 1.34 28.52
37 1.97 1.35 31.45
38 1.99 1.36 31.72
39 1.90 1.30 31.24
40 2.00 1.34 32.83
41 2.04 1.40 31.44
42 1.82 1.25 31.42
43 1.82 1.22 33.21
44 2.02 1.40 30.72
45 1.82 1.21 33.67
46 1.67 1.13 32.10
47 1.74 1.21 30.50
48 1.73 1.17 32.43
49 1.91 1.36 28.84
50 1.86 1.27 31.86
51 1.64 1.09 33.65
52 1.63 1.06 34.75
53 1.83 1.20 34.29
54 1.58 1.06 33.35
55 1.77 1.26 28.86
56 1.66 1.19 28.48
57 1.75 1.28 26.83
58 1.79 1.14 36.50
59 1.67 1.03 38.31
60 1.82 1.32 27.17
61 1.87 1.31 30.06
62 1.60 1.05 34.19
63 1.83 1.21 33.91
64 1.89 1.31 30.87
65 1.82 1.17 35.80
66 1.75 1.23 30.00
67 1.82 1.23 32.55
68 1.97 1.47 25.23

Table 29: Bulk Density Measurements on Saprolite Materials (Pit Samples)


Sample No. Wet Density Dry Density Moisture Content %
69 2.08 1.338 35.8
70 1.96 1.336 31.8
71 2.17 1.548 28.5
72 2.12 1.609 24.1

79
Independent Report on the Nickel Laterite Resource at Agata North

73 2.20 1.711 22.3


74 2.23 1.380 38.1
75 1.71 1.425 16.7
76 1.91 1.338 29.8
77 2.03 1.498 26.2
78 2.16 1.714 20.8
79 1.95 1.355 30.6
80 1.89 1.323 30.0
81 1.73 1.340 22.6
82 1.651 1.348 18.4
83 1.90 1.505 20.7
84 1.83 1.558 14.9
85 2.15 1.449 32.6

Table 30: Bulk Density Measurements on Saprolite Materials (Core Samples)


Sample No. Wet Density Dry Density Moisture Content %

13666 1.96 1.52 22.24


13905 1.61 1.18 26.84
13909 1.68 1.31 21.90
13913 2.13 1.93 9.33
13603 1.79 1.30 27.48
13612 1.75 1.11 36.58
13606 1.74 1.39 19.90
13877 1.96 1.67 14.61
13880 2.13 1.80 15.35
13884 1.89 1.44 23.99
13907 1.72 1.37 20.37
13912 1.62 1.15 28.79
13917 1.84 1.53 16.68
13923 1.90 1.66 12.72
17582 1.64 1.28 21.98
17586 1.70 1.28 24.66
17596 1.90 1.68 11.43
17604 1.70 1.26 25.64
17610 1.90 1.69 10.82

80
Independent Report on the Nickel Laterite Resource at Agata North

Figure 32: Graphs of Dry Bulk Density Measurements

Figure 33: Graphs of Moisture Content

81
Independent Report on the Nickel Laterite Resource at Agata North

19.7 Block Modelling and Grade Estimation:

The lateral block dimensions were originally selected at 12.5m or ¼ of the drillhole spacing of the
greater part of the drilling program. This was reduced to 10m laterally to be relative to the proposed
grade control drilling program/sampling program (5m x 5m) when the project moves into production
phase. Vertical block dimension was set at 1.5m, which is the minimum anticipated mining selective
mining bench height.

Figure 34: Block Model Configuration

The MineSight ® IDW Interpolation procedure was used to interpolate Nickel, Cobalt, Iron and
Phosphor grades. Inverse Distance Weighting (IDW) Power 2 was used for grade estimation. This
method was considered acceptable given the tight constraints applied to limonite and saprolite
domaining.

Grades were interpolated in Ferruginous Laterite, Limonite and Saprolite domains only.

The transformed composited data set was used for grade estimation in order to generate block grade
estimates that would honor the undulating lateral spatial position of composited assays within the
laterite profile. Block grade estimation was constrained by coded composites in the respective
domains.

82
Independent Report on the Nickel Laterite Resource at Agata North

Figure 35: Block Model Cross Section (N1027590)

Blocks were coded as Measured, Indicated, Inferred and Potential (else undefined) according to the
distance to the nearest sample in the grade estimation process. Distances used for mineral resource
classification are considered conservative and may be expanded following a future variographic
study.

The ore blocks coded as “potential” have not been included in the mineral resource estimate.

Figure 36: Block Model Classification

83
Independent Report on the Nickel Laterite Resource at Agata North

Resource classification methodology for Limonite was based on the grid spacing as denoted in Table
31. Planar and elevation search ellipses for Saprolite were reduced by 1/3rd of the limonite search
ellipse parameters given the undulating saprolite/bedrock contact and laterally erratic nature of metal
grades in the saprolite domain.

There is upside potential to increase indicated and inferred ore category tonnages following
favorable outcome from a planned variographic study, in conjuction with the analysis of the results
of twinning diamond holes and test pits, to increase search ellipse parameters and domain extents.

Table 31: Mineral Resource Classification


Search Ellipse Minimum Maximum
Classification Code Grid
(Planar, Elevation) Samples Samples
LIMONITE SAPROLITE
m m # # mxm
Measured 1 <34,<4 <22,<3 3 24 25x25
Indicated 2 <68,<7 <46,<5 3 24 50x50
Inferred 3 <136,<14 <90,<9 3 24 100x100
Potential 4 >136,<14 >90,<9 3 24 >100

Table 32: Mineral Resource Estimation by Classification


Laterite ORE ORE Ni Co Fe MC DBD WBD
Category
Horizon M dmt M wmt % % % % kg/m3 kg/m3
LIMONITE 0.55 0.85 1.07 0.117 44 35 1.20 1.85
Measured SAPROLITE 0.47 0.58 1.30 0.031 13 20 1.50 1.87
Subtotal 1.02 1.43 1.17 0.078 30 28 1.34 1.86
LIMONITE 1.22 1.88 1.06 0.117 44 35 1.20 1.85
Indicated SAPROLITE 1.31 1.63 1.30 0.031 13 20 1.50 1.87
Subtotal 2.53 3.52 1.18 0.073 28 27 1.36 1.86
LIMONITE 1.78 2.73 1.06 0.117 44 35 1.20 1.85
Measured &
SAPROLITE 1.77 2.22 1.30 0.031 13 20 1.50 1.87
Indicated
Total 3.55 4.95 1.18 0.074 28 28 1.35 1.86
LIMONITE 0.74 1.14 1.04 0.105 43 35 1.20 1.85
Inferred SAPROLITE 2.58 3.23 1.32 0.030 13 20 1.50 1.88
Total 3.33 4.37 1.26 0.047 20 23 1.43 1.87

19.8 Conclusions:

The methodologies employed for this mineral resource estimate are considered acceptable for the
purposes of definition and classification of a resource for a future ore reserve study to be carried out
for ore amenable to direct shipping product. The current resource in relation to a Direct Shipping
product could be further enhanced following the analysis of variographic study.

20.0 OTHER RELEVANT DATA AND INFORMATION

There are no other pertinent data.

84
Independent Report on the Nickel Laterite Resource at Agata North

21.0 INTERPRETATION AND CONCLUSIONS

21.1 Agata North Nickel Laterite Project

Widespread occurrence of serpentinized harzburgite, serpentinized peridotite, serpentinites and


localized lenses of dunite comprise the lithology in the Agata Projects area. Nickeliferrous laterite
mineralization is present over a broad region in both the ANLP and the ASLP areas. The former has
an area of approximately 379 ha while the latter comprises about 235 ha. In the ANLP, drilling is
concentrated only in less than twenty five (25) percent of the interpreted nickel laterite
mineralization to date.

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

The laterite profile in the ANLP consists of the ferruginous laterite, limonite, saprolite, and the
saprolitic rock zones, arranged from surface going down. The limonite zone is characteristically iron
oxide-rich while the saprolite zone is Mg-rich. Patches of garnierite were noted within the saprolite
and saprolitic rock horizons.

Work on the updated mineral resource estimation yielded the following:

• Preliminary statistical analysis on raw assays was carried out on 228 drill holes. Raw Assay
data was analyzed above a cut-off grade of 0.8 Ni%. The 0.8 Ni% cut-off grade was
considered the lower bound for Nickel Laterite ore exploitable via Direct Shipping Ore
contracts in the Asian refineries with consideration to current and short term forecast Nickel
prices.

• The MineSight ® IDW Interpolation procedure was used to interpolate Nickel, Cobalt, Iron
and Phosphor grades. Inverse Distance Weighting (IDW) Power 2 was used for grade
estimation. This method was considered acceptable given the tight constraints applied to
limonite and saprolite domaining. The density of drilling and continuity of mineralization is
sufficient to classify the estimated resource.

• Grades were interpolated in Ferruginous Laterite, Limonite and Saprolite domains only.
Saprock composites above 1.0 Ni % were excluded from surface domaining, statistical
analysis and mineral resource estimation pending future variographic studies.

• Generally, Nickel grades in the Limonite horizon, increase and peak at a point about the
base of the Limonite. Nickel grades remain respectively high and thereafter diminish as the
ore grades into basement/bedrock. Unfolding to this surface ensures that Nickel grades in
both Limonite and Saprolite are preferentially honored in the mid section of the laterite
profile which represents a greater proportion (50+%) of the body.

• The Bulk Density for Limonite and Saprolite were measured in places and has been set at
1.20 and 1.50 respectively, for the mineral resource estimates.

85
Independent Report on the Nickel Laterite Resource at Agata North

• Resource classification methodology for Limonite was based on the grid spacing as denoted
in Table 31. Planar and elevation search ellipses for Saprolite were reduced by 1/3rd of the
limonite search ellipse parameters given the undulating saprolite/bedrock contact and
laterally erratic nature of metal grades in the saprolite domain. There is upside potential to
increase indicated and inferred ore category tonnages following favorable outcome from a
planned variographic study, in conjuction with the analysis of the results of twinning
diamond holes and test pits, to increase search ellipse parameters and domain extents.

The summary of results is presented in the following table:

Table 33: Summary of Resource: Combined Limonite and Saprolite @ 0.8% Ni cutoff grade
Classification Mil. WMT Mil. DMT Ni% Co% Fe%
Measured 1.43 1.02 1.17 0.078 30
Indicated 3.52 2.53 1.18 0.073 28
Total Meas. + Ind. 4.95 3.55 1.18 0.074 28
Inferred 4.37 3.33 1.26 0.047 20

• Mineral resources which are not mineral reserves do not have demonstrated economic viability.
• The tonnage and nickel grades above have been rounded to the nearest 2nd decimal, and iron grades
to the nearest whole number, which may have resulted in minor discrepancies.
• The estimate of mineral resources may be materially affected by environmental, permitting, legal,
title, taxation, socio-political, marketing, or other relevant issues.
• It is uncertain if further exploration will result in upgrading the Inferred mineral resource to an
Indicated or Measured mineral resource or the Indicated mineral resource to a Measured Resource
category.

As a final point, the methodologies employed for this mineral resource estimate are considered
acceptable for the purposes of definition and classification of a resource for a future ore reserve
study to be carried out for ore amenable to direct shipping product. The current resource in relation
to a Direct Shipping product could be further enhanced following the analysis of variographic study.

21.2 Regional Prospects

Encouraged by the results of the nickel laterite exploration in the Agata Projects, a regional mapping
program was carried out to determine the potential nickel laterite areas Mindoro has in its Surigao
Mineral District tenements. Results indicate potential for further nickel laterite mineralization on the
adjacent Tapian Main, Tapian SF and Mat-I tenements. These are currently the exploration targets
that need to be drill-tested at a later date.

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

86
Independent Report on the Nickel Laterite Resource at Agata North

22.0 RECOMMENDATIONS

22.1 Agata North Nickel Laterite Project

• Continue the follow-up drilling program covering both in-fill and extensions into the
undrilled areas (to the east, north and south). This is to possibly extend the current inferred
resource and upgrade some into indicated or measured.
• Conduct more petrographic/mineragraphic studies on the parent rocks (ultramafics).
• Carry out metallurgical test work.
• Develop mine plans based on the geometry of the body.

22.2 Regional Prospects

• Conduct reconnaissance to detailed geological mapping on other laterite prospect areas.


• Program a systematic auger drilling activity to cover these areas in order to determine the
viability of conducting a more detailed resource-delineation drilling program. This will
likewise discriminate which of the various areas have potential or not.

87
Independent Report on the Nickel Laterite Resource at Agata North

23.0 REFERENCES

Abrasaldo, E.M. 1999. Exploration Report Agata Project June 1997-April 1998. MRL Gold Phils.,
Inc., Internal Company Report (unpubl)

Ambagan, D. 2007. Notes on Resource Estimation of Agata Nickel Laterite Project of MRL Gold
Phils., Inc., Internal Report., (unpubl). January 2007.

Aurelio, M.A. and Peña R.E. 2002. Geology and Mineral Resources of the Philippines, Volume 1:
Geology. (eds) Aurelio, M.A. and Peña, R.E., Department of Environment and Natural
Resources, Mines and Geosciences Bureau, Philippines.

Bailey, D.G. 2003. Surigao Property Group, Northeastern Mindanao, Geology and Exploration
Potential. Bailey Geological Consultants (Canada), Technical Report for Panoro Minerals Ltd.

Buenavista, A.G. 2008. Notes on the Geology and Mineralization in the Surigao Western Range.
MRL Gold Phils., Inc. Internal Report, February 2008.

Buenavista, A.G. 2008. Geochemistry of the Agata Nickeliferrous Laterite Deposit. MRL Gold
Phils., Inc. Internal Report, May 2008.

Climie, J.A., et,al. 2000. Accomplishment Report for the Period: June to December 1999. MRL
Gold Phils., Inc., Internal Company Report (unpubl). January 2000.

Climie, J.A., et,al. 2005. Interim Exploration Program Report, Surigao Joint Venture Projects:
March 1 to June 20, 2005. MRL Gold Phils., Inc., Internal Company Report (unpubl). July
2005.

De Luna, R., et.al., 2004. Report on the Reconnaissance Geologic Survey of the Nickeliferrous
Laterite Deposits at Barangay Tapian, Mainit, Surigao del Norte and Barangay E. Morgado,
Santiago, Agusan del Norte. Taganito Mining Corp. Report, July 2004.

Elliott, P.J. 2005. Report on IP and Magnetic Surveys Over the: Agata Prospect, Sand Francisco
Project, Philippines. MRL Gold Phils., Inc. and Panoro Minerals Ltd,, Company Report, June
2005

Fang, E.F.E and C.A. Matilac. 2006. Evaluation of Preliminary Exploration on Agata Nickel Laterite
Prospect of MRL Gold Phils., Inc., QNPH Report, June 2006

Fetiza, I.A. Jr 1999. Exploration Report: Tapian-San Francisco Project, May 1997 - May 1998. MRL
Gold Philippines Inc. Internal Company Report (unpubl.).

Marshall, N.J., 1997. Geological Report on the Agata, Mat-I, Nabago and Tapian Gold Prospects,
Northern Mindanao, Republic of the Philippines. Marshall Geoscience Services Pty. Ltd.,
Australia.

Mitchell, A.H.G. and Leach, T.M. 1991. Epithermal gold in the Philippines: Island arc
metallogenesis, geothermal systems and geology. Academic Press Geology Series.

Rangin, C. 1991. The Philippine Mobile Belt: A complex plate boundary. Journal of Southeast Asian
Earth Sciences, 6 (3/4), pp. 209-220.

88
Independent Report on the Nickel Laterite Resource at Agata North

Rohrlach, B.D. 2005. Independent Geological Report on the Surigao Property Group, Northern
Mindanao, Philippines. MRL Gold Phils., Inc. and Panoro Minerals Ltd., Company Report,
April 2005

Sajona, F.G., et.al., 1994. Magmatic response to abrupt changes in geodynamic settings: Pliocene-
Quaternary calc-alkaline and Nb-enriched lavas from Mindanao (Philippines). Tectonophysics,
237(1-2), pp. 47-72.

Sillitoe, R.H. 1988. Geotectonic setting of western Pacific gold deposits. In: M.J. Bartholomew.
D.W. Hyndman, D.W. Mogk, and R. Mason, (eds), 8th International Conference on Basement
Tectonics, 8, pp. 665-678. Kluwer Publishers, Butte, Montana.

Tagura, F. et. al. 2005. Surigao Interim Report (March 1 to June 20, 2005). MRL Gold Phils., Inc.
Internal Company Report (unpubl.), August 2005

Tagura, F. et. al. 2006. Comprehensive Report, MPSA-134-99-XIII, Agata Tenement Blocks. MRL
Gold Phils., Inc. Internal Company Report (unpubl.), 2006

Tagura, F. et. al. 2006. Report on the Preliminary Drill Evaluation on Canaga (MPSA-33-95-X),
Malimono, Surigao del Norte. MRL Gold Phils., Inc. Internal Company Report (unpubl.),
September 2006

Tagura, F. et. al. 2007. Report on Agata Drilling Program, Agusan del Norte, Philippines (Phase 1
Year 2 Expenditure Period 2005-2006), MRL Gold Phils., Inc. Internal Company Report
(unpubl.), January 2007

UNDP. 1984. Geology of Northern Agusan, Mindanao, United Nations Technical Report No. 2,
DP/UN/PHI-79-004/6, New York.

UNDP. 1987. Geology and Gold Mineralization of Surigao del Norte, United Nations Technical
Report No. 4, DP/UN/PHI-85-001/4, New York.

89
Independent Report on the Nickel Laterite Resource at Agata North

24. DATE AND SIGNATURES

CERTIFICATE OF QUALIFICATION

I, Dallas M. Cox of 52 Somerville Street Bendigo Victoria, Australia 3350, hereby certify that:

1. I am a Professional Mining Engineer employed as a private consultant under a sole trader business
registered under Crystal Sun Consulting, with Australian Business Number ABN 28 818 090 933.

2. I am responsible for the preparation of the technical report titled “Independent Geological Report on
the Nickel Laterite Resource at Agata Northern Laterite Area, Agata Projects, Agusan del Norte
Province, Northern Mindanao, Philippines” (the “Technical Report”) and dated 19 September 2008.

3. I am a member in good standing of the Australian Institute of Mining and Metallurgy with
membership number 201098.

4. I am a graduate of the University of New South Wales, Kensington with a degree in Mining
Engineering.

5. I have practiced my profession for 28 years including 22 years as a degree qualified Mining Engineer.
I have been operating as an Independent Consulting Mining Engineer since July 2004.

7. I certify that by reason of my education, affiliation with a professional association (as defined by NI
43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the
purposes of NI 43-101. I am an independent qualified person as defined by NI 43-101 and by the
companion policy 43-101CP to National Instrument 43-101.

8. This technical report is based on my review of available published data and company reports, and
personal visits to the property. I have spent in excess of 20 days working on the property and various
off-site meetings/consultations with geologists and mining engineers on the property. My visits were
on the July 2007 and January 2008. It is my professional opinion that the Agata Property shows
strong development potential and that further exploration of this property is warranted.

10. I have read N.I. 43-101 and Form 101F1. The technical report has been prepared in compliance with
both of these documents.

11. I, Dallas Cox, do not expect to receive any interest (direct, indirect or contingent) in the properties
described herein, nor in the securities of Mindoro Resources or any of their affiliates. I am
independent of the issuer under all criteria of Section 1.5 of National Instrument 43-101.

12. I am not aware of any material fact or material change with respect to the subject matter of this
technical report which is not reflected in this report, the omission to disclose which would make this
report misleading.

13. I consent to the filing of the Technical report with any stock exchange and other regulatory authority
and any publication by them for regulatory purposes. I consent to the filing of extracts from the
technical report in the written disclosure which was filed on August 12th, 2008 (the press release). I
also consent to the inclusion of parts of the Technical Report as electronic publication on the
companies’ websites that are accessible to the public.
Independent Report on the Nickel Laterite Resource at Agata North

14. I have read the written disclosure filed on August 12th, 2008, and do not believe that there area any
misinterpretations.

Signed in Manila, Philippines. Dated 20 September 2008

__________________________
Signature of Qualified Person

Dallas M. Cox BE(Min) AusIMM


__________________________
Name of Qualified Person
Independent Report on the Nickel Laterite Resource at Agata North

25.0 ADDITIONAL REQUIREMENTS FOR TECHNICAL REPORTS ON


DEVELOPMENT PROPERTIES & PRODUCTION PROPERTIES

The Agata Property (MPSA 134-99-XIII) is not a development property as defined by NI 43-
101(F1), nor is it a property which is under mineral production. Hence, no further information is
needed.

26.0 ILLUSTRATIONS

Relevant maps, figures, photos or graphs were inserted in the appropriate sections of this report.

92
Appendix 1

Notice of Relinquishment of Portion of MPSA 134-99-XIII


Appendix 2

Certified Technical Descriptions for NAMRIA Control Stations


Republic of the Philippine9 +
Department of Environment and Natural Resources
NAWtdAL MAPPING AND RESOURCE INFORMATION AUHORl'l'Y
Lawton hnue, Fort Wres E M k b . 1T~ ~ l Ci
qty

Certification Date 1 1 / 2 0 / 0 7
To Whom I t May Coacern :
This is t o certify t h a t according t o t h e r e c o r d s on file i n Chis o f f i c e ,
t h e requested survey I n f b r l n a t l o n is as folfows -

Province AGUSAK DEL NORTE


Station No : 248 Statlon Name : AGN-153
Located on Island : MfNDANAO
i 4 n n i c i p a l l t y : JABONGA Barsngay : BANGONAY, PtfROK 3
Horizontal Details
Latitude : 9 19 23.02761 Longitude : 125 33 1 5 , 9 5 1 0 8 Order : 3
Eastima : 560907.623 Northing : 1030913.182 Zone : 5
~ e f e s e n c eSystem : PRS92
No Vertlcal Details

L o c a t l ~ nDescription
AGN-153 .
1s about 400 m..N I S * E of AGM-154. I t Is situated on t h e EE end corner of Puyo
Bridge (Km. 1186+780). I t is sLso about 150 m. kNG of t h e road leading t o
Jabonga town proper,. Station. mark is t h e head of a 4 " copper nai 1 s e t on a 3 0
em. ,x 390' c~n-eealsnt putty on t o p of t h e eoncrete catwalk of Puyo Bridge w i t h
inscribed statlon name, "AGN-153 2001 NAMRIA",

ELLIPSOIDAL HT. : 112 -9686 ni.


Requesting Party : MRL GOLD PRILS. TNC.
Purpose t For Reference
+%A-

Comfi~odare RUDOLF0 M. AGATON


v Directorr CGSD
7 NATIONAL MAPPING AND RESOURCE IYFORMA'TION AUTWORM
tawion Avenue. Fal AndresXhikio,,l83il fapig City

Certification Date 11/20/07


To Whom I t May Concern :
Thls is to c e r t i f y that according t o t h e records on f i l e i n t h i s o f f i c e ,
t h e requested survey information is as follows -

Provlilce AGUSAH DEL XORTE


Station No : 249 S t a t i o n Name : AGN-IS4
Located an Island : MfNDANnO
Municipality : SABDNGA Barsngay : BANGONAY+ P U R O ~3

Horizontal Details
Latitude : 9 19 1 4 . 6 8 2 5 9 Longitude : 125 3 3 1 3 . 7 2 4 4 9 Order : 3
.,
E q s t in$ : 560840 0 7 7 Northing' : 1030656.707
Reference System : PRS92
Zoi~e : 5

No Vertical DstalZs

Locatiofi DesCrlption
AGE- 1 5 4
Is located a t Purok 3 , Brgy. Bangonay. I t 1s s i t u a t e d on t h e NW and corner of
3angoflay B r i d g e (KO), 1 1 8 7 t 1 9 G ) . I t i s 190 01, S o f Rm. Post 1187 and about 210 w A
S of s road junction leading t o Jabonga town prapkr. Stailon inark is t h e head of
a 4>co@per nadt s e t on a 30 cm. x 30 em. cement p u t t y on top of t h e concrete
cktwalk of Bangonay BrAdge with' Inscribed..station name, "AGN-154 2001 NBMRIA".
WGS84 COORDINATES: N 9 14.10.959097
E 125 33 1 9 . 0 4 5 0 2 4

ELLIPSOIDAL HT, : 112.5377 fi~,

Raquasting.Party : MRL GOLD PHILS. ING.


Purpose : For Reference
Conmodor e RODOLFO M AGATON .
p Director, C G S D

Page 1
m.&iarn.ph o s s O n m , p h ~ o n ~ r m m B o n W o , T d . N o . ~ ~ 8 ~ 1~hodo~aooh,l.*la4241mbt#I
to41
Appendix 3

ANLP QA/QC Procedures


MNDORO RESOURCES LIMITED
[MRL GOLD PHILS., INC.]

AGATA NICKEL LATERITE PROJECT

QUALITY ASSURANCE AND QUALITY


CONTROL PROCEDURES

MRL Gold Phils., Inc. Agata Project Exploration Staff

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Table of Contents 
1. INTRODUCTION ......................................................................................................................................... 3 
2. GEOLOGIC MAPPING ................................................................................................................................ 4 
3. TRENCHING ................................................................................................................................................ 4 
4. SURVEYING ................................................................................................................................................ 5 
4.1 Grid Lines Survey .................................................................................................................................... 5 
4.2 Topographic Surveying ............................................................................................................................ 6 
5. DRILLING ..................................................................................................................................................... 6 
6. CORE SECURITY ...................................................................................................................................... 10 
7. CORE LOGGING ........................................................................................................................................ 11 
7.1 Logging Codes ....................................................................................................................................... 11 
7.2 Weathering Scale ................................................................................................................................... 12 
7.3 Boulder Size ........................................................................................................................................... 12 
7.4 Color Code ............................................................................................................................................. 12 
8. CORE SAMPLING ..................................................................................................................................... 13 
9. TRANSPORT OF SAMPLES ..................................................................................................................... 14 
10. ASSAYING ............................................................................................................................................... 15 
11. ASSAY DATA QUALITY ANALYSIS ................................................................................................... 16 
11.1  Duplicate Samples ........................................................................................................................... 16 
11.2  Standard Samples ............................................................................................................................. 16 
11.3  Check Samples ................................................................................................................................. 16 
12. Bulk Density and Moisture Content Determination................................................................................... 17 
13. Documentation ........................................................................................................................................... 18 
14. Data Management ...................................................................................................................................... 20 

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1. INTRODUCTION
MRL as any other exploration company ensures that sampling procedures and sample quality is up to
standard. It is not only a “must” but also guarantees that the sanctity of the samples is maintained all-
throughout from its collection to its transport into the laboratory for analysis.

As SOP of the company, a site geologist or mining engineer is assigned on the drill site to make sure that
QA/QC procedures and protocol is consistently followed. The QA/QC measures being implemented in Agata
Nickel-Iron Laterite Project were adapted from the QC/QA practiced from other MRL Projects and mostly
from BHP QC/QA protocol that was used during BHP preliminary drilling evaluation study of Agata Laterite
Prospect conducted on January – April, 2006.

This paper document details protocols being implemented. The project area straddles over Bgy, Lawigan,
Tubay, and Bgy. E. Morgado, Santiago in the province of Agusan Del Norte. The field office and main camp
is located at Barangay E. Morgado.

MRL field camp and core house Panoramic view of field camp and core house

A panoramic view of the nickel-iron laterite prospect area

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MRL fly camp and core house/storage and drillers camp proximal to the drilling area

2. GEOLOGIC MAPPING

Geologic map is essential and foremost in any geological studies. As such geologic mapping is done by
geologists. There was previous mapping conducted in the area. However, detailed mapping has to continue to
progressively updating the geologic map on a regular basis as there are new exposures seen on the newly
brushed/cut grid lines, roadcuts, creeks, trenches and test pits as the drilling program advances. The purpose
of this activity is:

2.1. To identify and delineate different lithologic units in the area.


2.2. To determine the surficial characteristics and contact of the different laterite horizons as well
as bedrock geology.

3. TRENCHING

Trenching activities are being undertaken at the western and southern periphery of the current drilling area.
The purpose is to expose the laterite profile and determine contacts and thickness of the different laterite
horizons and the bedrock.
Determining the different laterite horizons at the periphery of the deposit is useful in the correlation and
projection to the surface profile at the edge of the deposit when doing cross section maps for each grid line.
This is very important in ore estimation and formulation of the site development plan where mine pit limit
will be based on the contoured contacts.

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Trenching at L10000N/9325E showing garnierite Trench showing laterite profile
Staining (green) on the saprolite zone

4. SURVEYING

Prior to the implementation of the proposed drilling program survey team was sent to the area to conduct the
following;

4.1 Grid Lines Survey


Grid lines were laid in the area using an EDM survey instrument. The grid lines were established every
twenty five (25) meters interval with control stakes marked by flagging tape and aluminum plates for easy
reference and location by drill site preparation team.

The proposed drill holes are located on a 50 x 50 meters interval along the established gridlines. Gridlines are
controlled using the local gridlines designated as 10,000N/10,000E as baseline grid.

Grid line survey and location of proposed drill site

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4.2 Topographic Surveying

Simultaneous with the laying out of the gridlines a detailed topographic survey was likewise done in the area.
Control points are shot at five (5) meters interval to generate a relatively accurate topographic contour. Drill-
hole collar elevation is shot before the start of the drilling activity and after the completion of the drill hole.
Reference points BLM, and other government monument established by the concerned government agency
(DENR land management) in the area are likewise located on the ground and verified as to geographical
coordinates and the elevation of these established monuments.

To avoid data overloading and instrument error, data collected by the EDM machine are regularly
downloaded into the company computers and regularly processed by the chief GIS. Back-up files are kept in
the Surigao office to avoid data losses in case the computer crashes or bugs down due to virus infestation that
may destroy the stored files.

Surveyor Frank Sumpo doing topographic survey

5. DRILLING

After the drill holes have been located, the site preparation team prepares the site for drilling. Drill sites are
leveled manually usually by four (4) laborers, thence, a water sump is manually dug with dimensions of 1.5m
x 1.5m x 1.5m for water storage and as container for the return water.

Drilling was carried out by Construction and Drilling Specialists, Inc. using five (5) man-portable or
lightweight rigs during the initial resource delineation. These rigs are Toho DS-Js, YBM-01, GM-50 and
twoTS-50. NW drill rods and tungsten carbide bits will be used except for very dense hard rocks where
diamond bits and NQ drill rods are used. Dry blocking or drilling with no water is usually done in the
limonitic soil. When penetrating into dense bedrocks, wet is employed.

In December 2007, TCD Drilling Consultancy Services was contracted to commence the infill drilling. It
drilled 48 holes with an aggregate of 773.12 meters. Four man-portable drill rigs were brought in namely: 1.)
TONE 1, 2) TOHO 1, 3) TOHO 2, and 4) TOHO 3. These rigs are similar to those of the previous contractor

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but with single tube using conventional dry drilling techniques. Due to sluggishness of the drilling, the
services of TCD were terminated.

On June 18, 2008, JCP Geo-Ex Services, Inc. continued the drilling. It drilled 45 holes up to July 18, 2008
with an aggregate of 811.45 m. JCP is currently continuing the drilling operations at ANLP with its four (4)
rigs. These rigs are: 1.) KOKEN, 2) YBM, 3) JCP 3, and 4) JCP 11. JCP is employing similar drilling
techniques as that of TCD but is accomplishing it at a substantially faster rate.

A manually leveled drill site supervised by Engineer J. B Reyes A manually dug sump for water storage and as container for
return water.

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Drill Rig Type TOHO-DS-JS Drill Rig Type GM-50

Drill Rig Type TS – 50 (Green) Drill Rig Type TS – 50 (Yellow)

Drill Rig Type YBM - 01

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The drilling activities are constantly monitored by the site geologist. The purpose is to avoid over-drilling
and ensure that the bedrock has been penetrated at least three (3) meters as standard operating procedure.
There were instances that more than two (2) meters of boulders were encountered at the current drilling
activity.

It is also a standard procedure that core checkers who is under the supervision of MRL technical staff are
present in every drill rig during drilling operation. This is to record drilling activities from core recovery,
core run, pull-out and put-back, casing and reaming (Appendix 1 – Drilling Activity Report) and most
important is to watch out if the retrieval of core from the core tube is done properly and see to it that the
recovered cores are properly placed in the core box and appropriately labeled. Core blocks are placed at the
bottom of each run indicating drillhole number, core run, core recovered and current bottom. Core recovery
is checked after each run and recorded in the core recovery sheet (Appendix 2 – Borehole Recovery).

Before the start of the drilling program the core checkers were properly oriented and trained on the nature
and routine of their job. A daily briefing before the start of their work is being done to remind them to keep
the core always in good quality. The core checkers sees to it that the drill site is clean and also safe to work.

The Safety Engineer assigned in the area as well as company environmental officers regularly inspects the
drill site. The completed drill holes are immediately rehabilitated and concrete markers are installed with
markings such as drill hole number, local coordinates and depth of the drill holes.

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Marker showing completed drill hole A newly rehabilitated drill hole

6. CORE SECURITY

The core box is at all times covered by plywood after each retrieved core was placed in the core box to
prevent any accidental spillage or contamination. Once a core box is filled up, it is sealed with a plywood
board and nailed to the core box then tightly tied with rubber packing band. Since this is manually
transported to the core house some 300 - 500 meters from the drill area, the core box is placed inside a sack
and carried by two persons accompanied by MRL supervisor/personnel.

Core box is covered at all times as a precaution to accidental A filled core box transported to the core house
Spillage or contaminant.

The core storage and core house is strictly under the supervision of the site geologist. Only authorized
personnel are allowed to enter the core house premise. The filled-up core boxes which are not yet log are
stored on an elevated rack and are kept dry and shielded from rain and excessive sunlight. The empty core
boxes are likewise kept in a dry place, cleaned and ready for re use.

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Core house and storage Background shows quarter of Engr. JB Reyes who is in
charge of security of core storage

7. CORE LOGGING

Core logging is absolutely done by the site geologist so that he can gain intimate knowledge of the geological
aspects of the deposit. Appendix 3 (Drill hole log sheet) shows the logging sheet being used.

7.1 Logging Codes


Code Laterite Horizon
LF Red-brown limonite (ferruginous or overburden)
LA Yellow limonite (without Mn staining or veining)
LB Yellow limonite (with Mn staining or veining)
TM Transition Material (mixed zone of limonite and saprolite
SAP Saprolite (gritty clay with <10% boulders of weathered bedrock
R_SAP Rocky saprolite (with 10% -50% boulders of weathered bedrock)
S_ROCK Saprolitic rock (with 50% - 90% bedrock)
D Dunite
SD Serpentinized Dunite
SS Serpentinite
HZ Harzburgite
SHZ Serpentinized Dunite

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7.2 Weathering Scale

Laterite Horizon Classification Characteristic


Fresh Rock 0 Black/green/light grey, unweathered, dense and hard
Saprolite 1 Black/brown, slightly weathered, discolored, still hard
2 Brown/gray
3 Pink / brown/ green
4 Pink/brown/green, friable, relatively low density with
some remnant textures
5 Brown, yellow/red, pink/green-grey, very soft, original
texture still visible
Limonite 5F Yellow-red, very soft “soil like” very low density to
compact, mud-like texture
Ferricrete 6 Red-black, hard include pisolite

Combinations of the various weathering “stages” could be used i.e.; 2/3, 3/4, 2-5 or 0-3. The first number in
double-digit references indicates the predominant weathering stage, but the numbers separated by a hyphen
include all intermediate weathering stages.

7.3 Boulder Size


The size of the boulders is also recorded to help in the analysis of rock distribution and to determine whether
screening of these rocks during mining operation is necessary.

Code Description
1 < 20 cm (will be acceptable for shipping)
2 20 -50 cm (will be screened at the grizzly)
3 > 50 cm (will be left at the pit)

7.4 Color Code


Code Color
Bl Black
Br Brown
R Red
Bu Blue
P Pink
O Orange
Y Yellow
Gn Green
Gy Grey
W White

Combination of colors or color codes could be used i.e. YO – yellow orange, RBr – red brown, etc.

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Site Geologist Ramon Diaz doing the core logging

8. CORE SAMPLING

Whole core sampling is applied in most of the first 148 holes except for 17 holes wherein the cores were split
for possible checking of the sampling process, performance of the laboratory and their analytical process at a
later time. This is equivalent to a frequency of about 1 in every 5 holes. The purpose of the procedure is to
avoid any bias that could occur during splitting and quartering of the core.

Splitting of the above-mentioned cores was manually done. The core was laid on a canvass sheet, pounded
and crushed by use of a pick, thoroughly mixed, quartered, then the split sample is taken from 2 opposite
quarter portions. The other 2 quarters are combined and kept as a duplicate in a properly-sealed and labeled
plastic bag and arranged in core boxes according to depth. The duplicates are stored in the core house at the
Agata core storage located at Barangay E. Morgado, Santiago, Agusan Del Norte.

The next 45 holes (AGL 2008-138 to 187, inclusive) were split-sampled to ensure the availability of
reference samples in the future. The cores were cut in half using a core saw. The remaining half is stored in
properly-labeled core boxes. Core sampling is done as much as possible at one (1) meter interval down the
hole except at laterite horizon boundaries. The sample length across the boundaries should only be in the
range of 1.0 ± 0.30m to avoid excessively short and long samples.

Geologist Reggie Visperas doing core sampling Samples collected are put in plastic bags with corresponding
depth. Split samples taken on drill hole AGL-2007-04 arranged
according to depth.
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The sampling interval is marked in the core box by means of masking tape and written on it is the sampling
depth. The sample collected is placed on a plastic bag with dimension of 35cm X 25cm tied with a “magic
twister” tie wire. Outside of the plastic bag is written the hole number and sample interval.

After the samples are collected it is weighed then sun-dried for about 5 hours and weighed again (Appendix
4 – Sample Preparation Sheet) before finally packing for delivery to the laboratory. In cases where there is
continuous rain the samples are pan dried for 5-6 hours using the constructed drying facility or wood-fired
oven. Starting with batch 2008 AGL 18, only the sun-drying was practiced. This simple process aims to
determine moisture content of the samples.

Sampling interval markings using masking tape Samples are sun-dried for 5 hours

A wood-fired oven (pugon) for drying samples during rainy season

9. TRANSPORT OF SAMPLES

From the core house at the drilling area, the samples are manually carried down to the Agata camp for final
checking and packing before delivery to the laboratory. Six to eight samples are placed in a rice sack

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depending on the weight that should have maximum of 12 kilos sufficient enough for one person to carry it
carefully. The sample haulers are convoyed by MRL personnel.

Once at the Agata camp, the samples are checked and inspected for completeness of samples and sample tags
and check any damage to the sample bags. Sample tags are provided by Mcphar. These samples are placed in
a rice sack and then in a box within a wooden crate to ensure the safety of the samples during transport.

For all of the 2007 cores and batch 2008 AGL 10, the samples are delivered to Mcphar Laboratory through
LBC-Butuan City or LBC-Surigao City with a transmittal receipt. The transportation of the crates containing
the samples is always accompanied by designated MRL staff. The LBC personnel acknowledge the receipt
that they have received the samples with corresponding receipt of the weight and payment of samples
(Appendix 5 – Transmittal letter). For batches 2008 AGL 1, 3 and 6, the samples were delivered by MRL
personnel to McPhar’s sample preparation facility in General Santos City. The assaying was still done in
their laboratory in Makati City.

For batches 2008 AGL 13, 16, 18 and onwards, the core samples were delivered to Intertek’s sample
preparation facility in Surigao City. Once prepared, Intertek-Surigao sends the samples to their assay
laboratory in Muntinlupa City, Metro Manila.

A sample submission form to both McPhar and Intertek Assay Laboratory is included in the package of
samples (Appendix 6 – Sample Submission Form). Only when there is a discrepancy, McPhar or Intertek
will e-mail MRL, otherwise, the results of the analysis will just come in 3 weeks thereafter by e-mail and
delivery of the hard copies to MRL’s Main Office.

Samples in wooden crate ready to transport

10. ASSAYING

In McPhar, each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesia (MgO), alumina
(Al2O3), silica (SiO2) and some samples for phosphorous (P). The Ni, Co, Fe, MgO and Al2O3 are assayed
by dissolving a 25g charge with a three acid digest using hydrochloric and nitric acid and reading the results
by Atomic Absorption Spectroscopy (AAS).The SiO2 and P are analyzed by gravimetric process.
McPhar conducts regular rechecks on their analysis. This is done by preparing a solution different from the
solution on the regular sample taken on the same pulp of a particular sample.
In June 2008, Mindoro changed their primary laboratory for the ANLP Drilling Program to Intertek Testing
Services Philippines, Inc. as recommended by consultant F. Roger Billington. Intertek uses X-Ray
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Fluorescence (XRF) for nickel laterite assaying. In whole rock analysis, samples are fused using lithium
metaborate and analyzed by XRF. This scheme determines total element concentrations that are then reported
as oxides. The elements analyzed include Ni, Co, Fe, Al2O3, MgO, SiO2, P2O4, CaO, Cr2O3, K2O, MnO,
Na2O, TiO2. The loss in ignition (LOI) is also reported.

11. ASSAY DATA QUALITY ANALYSIS

The objective of the quality control of assays is to check the precision of sample preparation, consistency of
performance and accuracy of the laboratory’s analytical results. These objectives are attained through:

11.1 Duplicate Samples


To ensure the repeatability or consistency of samples, a duplicate sample is taken one (1) in a batch of every
twenty (20) samples or about 5% of total samples. The duplicate sample is selected subjectively to ascertain
that the full range of different laterite horizons is systematically covered.
This duplicate sample is taken by crushing to smaller size fragments the sample then quartered after
thoroughly mixing. One-fourth part of the prepared sample represents the field duplicate sample and the
three-fourth part as regular sample. These samples are sent to the laboratory in the same batch.

This on-site procedure of taking duplicate samples was modified in 2008. With split-core sampling, one
duplicate sample in every set of forty (40) is directly obtained, by taking half of the remaining core after
splitting. Simply put, the field duplicate is just the one-fourth of the whole core. These samples are also sent
to the laboratory in the same batch as the mainstream samples. Each subset of 40 samples in a batch contains
37 mainstream cores, 1 nickel standard, and 1 field duplicate.

11.2 Standard Samples

The samples are provided by GEOSTATS of Australia. Standard samples are sent to monitor accuracy of the
assay process on a batch by batch basis. These standard samples, which have known assay values for Ni are
already pulverized (pulp) weighing about 5 grams contained in 7.5cm X 10cm heavy duty plastic bags,
which are tightly sealed in packs. As more standards were later needed, pulverized samples contained in 250-
gram bottles were purchased. Repacking into 5-grams was done in the MRL corehouse facility. One (1)
standard sample is inserted for every batch of forty five (45) samples or 2% of total samples. Recently, the
frequency of inserting standards was changed to 1 in every set of 40 samples, as discussed in Section 11.1.

11.3 Check Samples


Selected pulp rejects from previously analyzed samples from Mcphar weree sent to one independent and
internationally accredited laboratory (Intertek of Jakarta, Indonesia). This is to establish reproducibility of
analysis and determine the presence or absence of bias between laboratories. Two percent (2) or about one in
every 50 samples will be sent at a regular basis to have a constant check on Mcphar analysis. Samples are
taken on all of the different laterite horizons.

An additional check sampling procedure was introduced in 2008. Sample intervals for future pulp rejects
were randomly selected, approximately one in every 40 samples and were pre-numbered. As agreed in the
sample preparation protocol, splits of all pulps are prepared by Intertek in its Surigao facility. MRL then
collects all of these split pulps and discreetly inserts pre-selected ones into their pre-assigned numbers before
the whole batch is sent to Intertek laboratory in Manila. These pulp rejects are therefore analyzed in the same
batch as its source. To date, 35 pulp rejects (3.09 %) were inserted out of 1,133 samples analyzed in Intertek.

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12. Bulk Density and Moisture Content Determination

The bulk density and moisture content is essential in ore reserves estimation. There are several alternatives of
measuring density, ranging from laboratory test on small scale sampling and estimation based on bulk
sampling.

Two methodologies are to be undertaken by Mindoro for the determination of Bulk Density (BD). For the
ferruginous laterite and limonite horizons, bulk samples are collected from test pits and measured on site.
The same procedure will be done for the saprolite zone but to be supplemented with another method, i.e., the
collection and measurement of drill core samples.

The test pits are designed with an optimal dimension of 0.9m x 1.4m with the wider section oriented in the
north-south direction. Old test pits, on the other hand, have dimensions of 0.7m x 1.2m. The narrower side is
extended by0.5m extension to expose a fresh wall for the sampling.

For BD measurements to be done on site, large samples ranging in volume from 0.005 m3 to 0.08 m3 will be
collected from test pits. The locations of these test pits must be distributed around the drilling area.

To secure representative samples for the BD tests, small pits or “boxes” and channels will be excavated or
chiseled into test pit walls. Pre-fabricated plywood with square holes measuring 0.40m x 0.40m and 0.20m x
0.20m are used as guides in excavating and chiseling of the pit faces to ensure volume accuracy. The
plywood guides are then nailed to the pit walls to be sampled. Once nailed, chiseling of the area outlined by
the plywood guide begins from the center of the “boxes” chipping towards the “boxes’” boundaries. To
ensure consistency of the volume excavated, knife putties are used to smoothen the edges of the “box”. Level
bars and square boxes are regularly utilized to achieve a more or less perfect sampling dimension desired.
The chipped samples chiseled from the box falls freely onto a clean canvass placed at the bottom of the pit.

There were instances that the final dimension of the excavation in the pit walls became irregular due to the
presence of boulders or rocks that were hard to chisel. In such cases, the final dimension was determined by
carefully measuring the height, width and breadth. These were done by MRL geologists themselves in
conjunction with their test pit logging.

The bulk samples will be measured for volume, wet weight, and dry weight. The samples are to be contained
in plastic bags and weighed using a 16-kg capacity, Korean made (“Choongang” brand), “Ohaus”-type single
beam field weighing balances equipped with a 5-gram graduation beam. The weighing scales are placed in
tables exclusively used for this purpose. The weighing instruments are cleaned and calibrated regularly. The
weight of the plastic bags are to be subtracted from the weighed samples to arrive at the actual weight of the
samples.

After determining the wet weight, the samples will be spread evenly in a canvass and sun-dried for initial
drying. Thence, these samples will undergo heating in constructed fire wood/charcoal-fired heating facilities
for four to six hours. The samples should be regularly “stirred” to ensure even drying. The dried samples are
cooled naturally for about 20 minutes, after which they are collected onto plastic bags for final weighing.

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The BD and moisture content are computed with the following formulas.
Weight (kg)
Bulk Density = _______________ ÷ 1000 (kg/ton)
Volume (m3)

Weight wet – Weight dry


% Moisture Content = __________________ x 100
Weight wet

For the drill cores, relatively unbroken portions of 10cm-20cm lengths are selected from drill holes that are
spatially well-distributed. The samples are to be coated in paraffin wax to preserve the moisture. These are
then dispatched to McPhar Laboratories wherein the samples will be measured using the water displacement
method. It is standard practice for Mcphar to check the wax coating and perform re-waxing if needed.
At Mcphar, the volume of the core is measured by displacement in a graduated cylinder or by water
displacement. The wax is then removed, and the core is weighed (wet). Thence, the sample is oven-dried and
then re-weighed (dry) to be able to calculated the free moisture content.

13. Documentation

Before the cores are logged the undisturbed core are photographed first to show visual presentation of the
core samples. Three (3) core boxes at a time are placed on the core stand. The header of this core stand
shows the drill hole number and core box numbers.

Core boxes and camera stand

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Photo of core on AGL-07-01 Photo of core on AGL-07-02

Significant intercepts and other relevant activities deemed necessary for documentation are also
photographed.

Garnierite (green) as fracture fill and replacement of Garnierite on fractures of serpentinized harzburgite
Serpentinite in highly oxidized and brecciated silicified harzburgite
harzburgite

Garnierite partially replacing serpentinite in brecciated, Brecciated harzburgite with vuggy quartz veinlets
Slightly silicified harzburgite.
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14. Data Management

The data entry is done in the field camp and MRL Surigao office but database maintenance and safekeeping
is done at Surigao City office. Mindoro’s office has since been transferred to Butuan City (March 2008). To
ensure the security of the data, both digital and hard copies of datasets and field sheets are likewise
maintained in Mindoro’s main office in Makati City.

Since errors are introduced through incorrect transcription of physical field data, all entries of data into the
computer are done by geologists especially the core logging and sampling data and by our GIS, Arnold
Joyno.

GIS specialist Arnold Joyno encoding data at the Agata Camp

Assay results are entered electronically from digital Excel files e-mailed by the laboratories.

Once the datasets are with the Data Management Unit in Makati City, the entries are again re-checked for
consistency vis-à-vis the hard copies. These are also checked for possible logical errors.

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MRL GOLD PHILIPPINES, INC.
AGATA NICKEL LATERITE PROJECT

DRILLING ACTIVITY

Drill Hole No. AGL 2007-29 Date Started 4/14/2007


Location Rig 9950N/9550E Date Completed 4/22/2007
Rig Type YBM-01 Core Checker Alfie P. Agda

Time Activity
Date
From To
4/14/2007 6:56 8:44 start pull out MW casing rod/ set-up
4/14/2007 8:44 9:50 dismantle engine & tripod / set-up
4/14/2007 9:50 11:05 hauling rig and accessories/ set-up
4/14/2007 11:05 1:20 Lunch break
4/14/2007 1:20 4:58 assemble engine and side pump & tripod/ set-up
4/14/2007 4:58 7:00 End of shift
4/15/2007 7:00 7:20 continue set-up
4/15/2007 7:20 7:45 maintenance check up
4/15/2007 7:45 7:55 start drilling run from 0 to 45m
4/15/2007 7:55 8:00 continue from 0.45m to 0.50 total bottom 0.95m
4/15/2007 8:00 10:46 continue drilling/back to normal operation
4/15/2007 10:46 2:00 Lunch break
4/15/2007 2:00 4:00 continue drilling
4/15/2007 4:00 End of shift
4/16/2007 7:00 11:00 casing
4/16/2007 11:00 3:00 continue drilling
4/16/2007 3:00 End of shift
4/17/2007 7:00 10:26 maintenance/ drilling
4/17/2007 10:26 10:40 drilling
4/17/2007 10:40 11:10 drilling
4/17/2007 11:10 1:15 lunch break
4/17/2007 1:15 1:20 drilling/ retrieve
4/17/2007 1:20 1:35 assemble wireline
4/17/2007 1:35 1:45 pull out NQ rods with core barrel
4/17/2007 1:45 3:00 drilling and retrieving of core
4/17/2007 3:00 casing
4/18/2007 7:40 8:04 start drilling run 0.30 rc 0.28 from 19.9m to 20.20m
4/18/2007 8:04 8:12 retrieve
4/18/2007 8:12 8:20 put down inner tube
4/18/2007 8:20 9:38 continue drilling
4/18/2007 9:38 9:43 retrieve
4/18/2007 9:43 9:50 put down inner tube put down inner tube
4/18/2007 9:50 10:44 drilling
4/18/2007 10:44 10:50 retrieve
4/18/2007 10:50 10:58 put down inner tube
4/18/2007 10:58 11:36 drilling
4/18/2007 11:36 11:50 retrieve
4/18/2007 11:50 11:55 put down inner tube
4/18/2007 11:55 1:25 lunch break
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MRL GOLD PHILIPPINES, INC.
AGATA NICKEL LATERITE PROJECT
BOREHOLE RECOVERY SHEET

Drill Hole No. AGL 2007-29 Location 9950N/9550E Date Started April 14, 2007
Total Depth 34.0m Total Rec. 20.11 Date Completed April 22, 2007
Rig No. YBM-01 Core Checker Alfie P. Agda

Interval Core Run (m)


Date Time Core Rec (m) Core Rec % Lithology Comments
From To
4/15/2007 7:55 0 0.45 0.45 0.34 75.55 OV
4/15/2007 8:05 0.45 0.95 0.5 0.34 68 OV
4/15/2007 8:35 0.95 1.95 1 0.73 73 OV
4/15/2007 8:45 1.95 2.95 1 1 100 OV
4/15/2007 9:05 2.95 4.05 1.1 1.1 100 OV/Lim
4/15/2007 9:30 4.05 5.55 1.5 1.5 100 OV/Lim
4/15/2007 9:50 5.55 6.85 1.3 1.3 100 Lim
4/15/2007 10:05 6.85 7.85 1 1 100 Lim
4/15/2007 10:30 7.85 9.35 1.5 1.4 93.33 Lim
4/15/2007 10:46 9.35 10.55 1.2 1.2 100 Lim
4/15/2007 2:00 10 55 11 75 1.2 1.06 88 33
4/15/2007 2:40 11.75 12.75 1 0.9 90
4/15/2007 3:10 12.75 13.45 0.7 0.33 47
4/15/2007 13.45 13.6 0.15 0.12 80
4/16/2007 10:00 13.6 13.8 0.2 0.15 75 Sap rock
4/16/2007 11:30 Lunch break
4/16/2007 1:00 13.8 14.8 1 0.43 43 Sap rock
4/16/2007 2:35 14.8 15.6 0.8 0.7 87.5
4/17/2007 7:00 15.6 16.5 0.9 0.63 70 Lim
4/17/2007 16.5 17.4 0.9 0.33 36.66 Lim
4/17/2007 8:00 12.4 10.2 0.8 0.73 91.25 Lim/sap
4/17/2007 9:25 18.2 18.3 0.1 0.1 100 Lim/sap
4/17/2007 10:30 18.3 18.8 0.5 0.5 100 Sap rock
4/17/2007 11:01 18.8 18.85 0.05 0.05 100 Shz
4/17/2007 18.85 19.45 0.55 0.55 91.66 Shz
4/17/2007 19.45 19.9 0.41 0.41 91.1 Sap rock
4/18/2007 8:12 19.9 20.2 0.3 0.28 93.3 Sap rock
4/18/2007 9:43 20.2 20.85 0.65 0.45 69.23 Sap rock
4/18/2007 10:50 20.85 21.5 0.65 0.62 95.38 Sap rock
4/18/2007 11:50 21.5 22 0.5 0.5 100 Sap rock
4/18/2007 1:43 22 22.1 0.1 0.1 100 Sap
4/18/2007 3:35 22.1 22.6 0.1 0.5 100 Sap rock
4/18/2007 4:35 22.6 23.2 0.6 0.54 90 Sap rock
4/18/2007 5:55 23.2 23.85 0.65 0.65 100 Sap rock
4/19/2007 9:05 23.85 24.55 0.7 0.64 91.42 Sap rock
4/19/2007 9:45 24.55 24.75 0.2 0.17 85 Sap
4/19/2007 11:05 24.75 25.3 0.55 0.47 85.45 Sap rock

22
MRL GOLD PHILIPPINES, INC.
AGATA NICKEL LATERITE PROJECT
DRILL HOLE LOG SHEET

Drillhole No: AGL-2007-01 Date started: 2/22/2007


Location: Lawigan, Tubay, Agusan del Norte Date completed: 2/27/2007
Co-ordinate E: 9400 Remarks; HOLE TERMINATED
Co-ordinate N: 10200 Drilling Co.: CDSI
Collar elevation: 293.2m Logged by: RTV
Date logged: 2/27/2007
Final Depth: 15.02m

Sampl % Rock %
Hole_ID From To Litho Colour Wth Comments
e _ID Rock Size Rec
AGL 2007-01 1 0 1 LF DBr,Br 6 57 w/ organics
AGL 2007-01 2 1 2 LF DBr,Br 6 71
AGL 2007-01 3 2 3 LF/LA Br,LBr 6.5F 72 32% LF
AGL 2007-01 4 3 4 LA Br,LBr 5F 67
AGL 2007-01 5 4 5 LB Obr,Yor 5F 68 Mn traces
AGL 2007-01 6 5 6 TM Obr,Yor 5,4 47 Limonite
AGL 2007-01 7 6 7.25 TM Obr,Yor 5,4 68 Saprolite
80% Saprolite, 10%
AGL 2007-01 8 7.25 8 TM YG,Obr,GY 5,4,3,2 6 55
Saprolitic Rock
AGL 2007-01 9 8 9.27 S_ROCK YG,Obr,GY 5,4,3,2 78 55 Saprolite @8.50-8.77M
AGL 2007-01 10 9.27 10.2 SAP Br,Ybr,YG,Obr 5,4,3 2 68
AGL 2007-01 11 10.2 11.2 S_ROCK Br,Ybr,YG,Obr 5,4,3 3 38
AGL 2007-01 12 11.2 12.2 SAP Br,Ybr,YG,Obr 5,4,3 1 54
Vuggy silicified
AGL 2007-01 13 12.2 13.2 SHz Bl,Gy,Yor 0,1 82 80
fragments @12.82-13.02
AGL 2007-01 14 13.2 14.2 SHz Bl,GY 0,1 100 100 Bedrock
AGL 2007-01 15 14.2 15.02 SHz Bl,GY 0,1 100 100

23
MRL GOLD PHILIPPINES, INC.
AGATA NICKEL LATERITE PROJECT

SAMPLE PREPARATION SHEET

Sample Depth (m) Weight


Hole ID Sample Lithology Remarks
No. From To wet dry
AGL 2007-01 1 0 1 17751 1.5 1.3 LF
AGL 2007-01 2 1 2 17752 2.1 1.75 LF
AGL 2007-01 3 2 3 17753 1.9 1.5 LF/LA
AGL 2007-01 4 3 4 17754 1.6 1.3 LA
AGL 2007-01 5 4 5 17755 1.35 0.95 LB
AGL 2007-01 6 5 6 17756 0.7 0.6 TM_LIM
AGL 2007-01 7 6 7 17757 1 0.8 TM_SAP
AGL 2007-01 8 7 8 17758 1.6 14 R_SAP
AGL 2007-01 9 8 9.25 17759 1.6 1.5 S_ROCK
AGL 2007-01 10 9.25 10.27 17760 2.1 1.8 SAP
AGL 2007-01 11 10.27 11.27 17761 0.6 0.5 S_ROCK
AGL 2007-01 12 11.27 12.27 17762 1.3 1.25 SAP
AGL 2007-01 13 12.27 13.27 17763 3.75 3.7 SHZ
AGL 2007-01 14 13.27 14.27 17764 4.9 4.8 SHZ
AGL 2007-01 15 14.27 15.02 17765 3.95 3.9 SHZ

24
MRLGOLD
PHILS.,INC.

TRANSMITTAL RECEIPT FOR COURIER


DATE : March 29, 2007

ATTENTION: LBC Express, P. Burgos St., Butuan City Please acknowledge


receipt of the following (in duplicate copies):

1 Crate #1 (28 bags) 55 kg. Tracking no. 6019694795


2 Crate #2 (25 bags) 62 kg. Tracking no. 6019694617
3 Crate #3 (27 bags) 66 kg. Tracking no. 6019694637
4 Crate #4 (26 bags) 74 kg. Tracking no. 6019694735
5 Crate #5 (22 bags) 44 kg. Tracking no. 6019695586
6 Crate #6 (15 bags) 35 kg. Tracking no. 6019694775

Dispatched by: Danilo F. Odtojan Date and time: 3/29/07


5:40 pm

Delivered by: Danilo F. Odtojan Date and time: 3/29/07


5:40 pm

Received by: (LBC personnel) Rico A. Orjansa Date and time received:
3/29/07 5:40 pm

Please use separate sheet when necessary.

D:\MRL-SURIGAO PROJECT\DOCUMENTS\FORMS\LBC_BXU_TR_24Mar07.doc

Eledia Apt., Tuazon Village, Barangay Luna, Surigao City Telefax No.: (6386)826-2658 •
www.mindoro.com

25
Form No. SMP - 001

SAMPLE SUBMISSION FORM


TO : McPhar Assay Laboratory BJS Compound 1869 P. Domingo Street Tel. No. 896-1656 / 896-1681 / 896-7973 Fax No. 890-
Makati, Metro Manila 0290 email lab@mcphar.com.ph
FROM : MRL Gold Phils., Inc. Unit 17b, Pearl of the Orient Bldg. 1318 Roxas Tel. No. 02 5258869 / 086 8262658 Fax No. email No. of
Blvd. corner P. Faura, Ermita Manila Elidia Apt., Tuazon Vill., KM.3, Surigao Samples: 195 CORE DISPATCH No. 2007 AGL 02
City
SAMPLE DESCRIPTION NO. SAMPLE PREPARATION ELEMENTS ASSAY METHOD(S) OTHER
TYPE INSTRUCTIONS REQUIRED SEE McPHAR REF. INSTRUCTI
SEE McPHAR REF. DOC DOC NO. SMP-003 ON
NO. SMP-003 SECTIONS
SP1 TO SP9

Box # 1
Dissolving a 25g:
17894 - 17910 17 core
charge with a two
acid digest. (using
Box # 2 hydrochloric and nitric
Ni, Co, Fe, Mg acid) and reading the
17911 - 17937 27 core
and Al, results by atomic
absorption
Box # 3 spectroscopy (AAS)
17938 - 17960 23 core

Box # 4
17961 - 17988 28 core
Si Analysis by a
Si
gravimeter process.
Box # 5
17989 - 17800 12 core
17501 - 17519 19 core

Box # 6
17520 - 17545 26 core

For Density Analysis : After Density Analysis return to tag


Box # 7 no. From : 17585 back to 17563 17586 back to 17565
17546 - 17562 17 core 17587 back to 17570 17588 back to 17581

Box # 8
Note : All samples must be analyzed for the 6 elements as
17563 - 17588 26 core indicated

Reporting Send results and invoice to person indicated below Send results and invoice to : Fax results to :

E-mail : edsel@mrlgold.com.ph/joe@mrlgold.com.ph

Submitted by
Ferland Tagura
Date 14-Apr-07

TEL: 896-1656; 896-1681; 896-7973 FAX: (63-2) 815-8195; (63-2) 761-2080


FAX: (63-2) 890-0290 e-mail: mcphar@info.com.ph email: mcpharlab@portalinc.com

26
Appendix 4

Certificates for Nickel Reference Materials from Geostats Pty., Australia


GEOSTATS PTY LTD

GBM302-8
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM302-8
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 10775 668 51 +/- 183.3
Copper (ppm) 89 10 61 +/- 2.5
Zinc (ppm) 132 53 57 +/- 13.8

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 13 7 31 +/- 2.5
Arsenic (ppm) 29 12 44 +/- 3.5
Cobalt (ppm) 483 31 49 +/- 8.7
Silver (ppm) 1.5 1.2 18 +/- 0.55

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 1.25
Control statsitics were produced from results accumulated in the : Arsenic 33.10
April-2002 Geostats Pty Ltd Laboratory Round Robin Program. Barium -100.00
18 laboratories (at least) tested this material for base metal content. Bromine 19.20
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 4.61
Caesium 1.47
Source Material Chromium 13300.00
Prior to homogenisation and testing, this material was sourced from Cobalt 508.00
Nickel Laterite - Eastern Goldfields Europium -0.50
Gold ppb 34.40
Hafnium -0.50
Colour Designation Iridium ppb -20.00
Moderate yellowish brown Iron % 18.70
Lanthanum 3.71
Lutetium -0.20
Usage Molybendum 49.80
This product is for use in the mining industry as reference materials for monitoring and testing Nickel nr
the accuracy of laboratory assaying. Rubidium -20.00
Samarium 0.82
Preparation and Packaging Scandium 15.70
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -5.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.27
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -1.00
Tellurium -5.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium nr
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 1.08
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin nr
and storage. Tungsten -2.00
Uranium -2.00
Ytterbium -0.50
Assay Testwork Zinc 172.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -500.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% -1.00
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % -0.20
distributions are checked and processed statistically, producing monitoring statistics for these Silver -5.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM398-4
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM398-4
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 4071 187 104 +/- 35.9
Copper (ppm) 3891 195 147 +/- 31.5
Zinc (ppm) 5117 229 127 +/- 39.8

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 11714 776 122 +/- 137.8
Arsenic (ppm) 12 9 72 +/- 2.1
Cobalt (ppm) 1974 125 56 +/- 32.7
Silver (ppm) 48.7 5.1 126 +/- 0.89

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 12.25
Control statsitics were produced from results accumulated in the : Arsenic 6.93
April-1998 Geostats Pty Ltd Laboratory Round Robin Program. Barium -100.00
56 laboratories (at least) tested this material for base metal content. Bromine 1.56
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 9.52
Caesium 24.90
Source Material Chromium 2050.00
Prior to homogenisation and testing, this material was sourced from Cobalt 2010.00
Low grade Cu,Pb,Zn from surface with laterite Europium -0.50
Gold ppb 166.00
Hafnium 22.30
Colour Designation Iridium ppb -20.00
Pale reddish brown Iron % 4.69
Lanthanum 3.73
Lutetium -0.30
Usage Molybendum 847.50
This product is for use in the mining industry as reference materials for monitoring and testing Nickel nr
the accuracy of laboratory assaying. Rubidium 686.50
Samarium 1.33
Preparation and Packaging Scandium 7.26
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -5.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 1.47
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -2.00
Tellurium -10.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium nr
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 1.25
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin nr
and storage. Tungsten 4.21
Uranium -2.00
Ytterbium 1.40
Assay Testwork Zinc 4725.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium 743.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% 1.54
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % 2.91
distributions are checked and processed statistically, producing monitoring statistics for these Silver 45.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM901-1
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM901-1
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 8037 489 59 +/- 124.8
Copper (ppm) 57 10 58 +/- 2.6
Zinc (ppm) 97 17 62 +/- 4.2

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 13 9 37 +/- 2.9
Arsenic (ppm) 6 3 26 +/- 1.2
Cobalt (ppm) 1346 77 55 +/- 20.4
Silver (ppm) 1.2 1.1 22 +/- 0.46

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony -0.20
Control statsitics were produced from results accumulated in the : Arsenic 6.67
October-2001 Geostats Pty Ltd Laboratory Round Robin Program. Barium 379.00
22 laboratories (at least) tested this material for base metal content. Bromine 4.57
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 10.60
Caesium -1.00
Source Material Chromium 6450.00
Prior to homogenisation and testing, this material was sourced from Cobalt 1370.00
Nickel Laterite Kalgoorlie Region Europium -0.50
Gold ppb -5.00
Hafnium -0.50
Colour Designation Iridium ppb -20.00
Pale Brown Iron % 14.30
Lanthanum 6.43
Lutetium -0.20
Usage Molybendum 57.30
This product is for use in the mining industry as reference materials for monitoring and testing Nickel nr
the accuracy of laboratory assaying. Rubidium 40.10
Samarium 0.72
Preparation and Packaging Scandium 11.20
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -5.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.11
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -1.00
Tellurium -5.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium nr
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium -0.50
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin nr
and storage. Tungsten -2.00
Uranium -2.00
Ytterbium -0.50
Assay Testwork Zinc -100.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -500.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% -1.00
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % -0.20
distributions are checked and processed statistically, producing monitoring statistics for these Silver -5.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM900-9
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM900-9
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 11615 744 50 +/- 206.2
Copper (ppm) 63 10 55 +/- 2.7
Zinc (ppm) 263 25 57 +/- 6.5

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 30 11 52 +/- 3
Arsenic (ppm) 40 8 43 +/- 2.4
Cobalt (ppm) 567 67 50 +/- 18.6
Silver (ppm) 1.1 1.0 30 +/- 0.35

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 0.54
Control statsitics were produced from results accumulated in the : Arsenic 45.30
October-2000 Geostats Pty Ltd Laboratory Round Robin Program. Barium -100.00
30 laboratories (at least) tested this material for base metal content. Bromine 3.93
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 56.50
Caesium -1.00
Source Material Chromium 3310.00
Prior to homogenisation and testing, this material was sourced from Cobalt 605.00
Nickel Laterite Western Australia Europium 1.29
Gold ppb -5.00
Hafnium 0.64
Colour Designation Iridium ppb -20.00
Moderate yellowish brown Iron % 23.80
Lanthanum 36.60
Lutetium 0.29
Usage Molybendum -5.00
This product is for use in the mining industry as reference materials for monitoring and testing Nickel nr
the accuracy of laboratory assaying. Rubidium -20.00
Samarium 6.14
Preparation and Packaging Scandium 50.40
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium 10.30
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.10
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum 3.99
Tellurium -5.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium nr
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 1.88
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin nr
and storage. Tungsten 18.90
Uranium 2.86
Ytterbium 2.20
Assay Testwork Zinc 253.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -500.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% -1.00
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % -0.50
distributions are checked and processed statistically, producing monitoring statistics for these Silver -5.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM901-2
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM901-2
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 8830 606 118 +/- 109.3
Copper (ppm) 306 28 134 +/- 4.8
Zinc (ppm) 125 43 134 +/- 7.3

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 16 10 90 +/- 2.1
Arsenic (ppm) 69 12 98 +/- 2.4
Cobalt (ppm) 314 35 118 +/- 6.4
Silver (ppm) 1.2 1.2 43 +/- 0.35

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 1.59
Control statsitics were produced from results accumulated in the : Arsenic 74.35
October-2001 Geostats Pty Ltd Laboratory Round Robin Program. Barium -100.00
43 laboratories (at least) tested this material for base metal content. Bromine 28.90
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 3.02
Caesium 1.66
Source Material Chromium 11750.00
Prior to homogenisation and testing, this material was sourced from Cobalt 340.50
Nickel Laterite Ore Eastern Goldfields Europium -0.50
Gold ppb 23.50
Hafnium -0.50
Colour Designation Iridium ppb -20.00
Grayish orange Iron % 18.35
Lanthanum 1.62
Lutetium -0.20
Usage Molybendum -20.00
This product is for use in the mining industry as reference materials for monitoring and testing Nickel nr
the accuracy of laboratory assaying. Rubidium 26.75
Samarium 0.30
Preparation and Packaging Scandium 13.15
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -5.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.43
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -1.00
Tellurium -5.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium nr
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium -0.50
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin nr
and storage. Tungsten 2.88
Uranium -2.00
Ytterbium -0.50
Assay Testwork Zinc 169.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -500.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% -1.00
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % -0.20
distributions are checked and processed statistically, producing monitoring statistics for these Silver -5.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM906-8
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM906-8
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 5491 342 56 +/- 89.6
Copper (ppm) 250 23 68 +/- 5.4
Zinc (ppm) 57 8 61 +/- 2.1

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 7 6 31 +/- 2
Arsenic (ppm) 5 2 20 +/- 1
Cobalt (ppm) 159 17 57 +/- 4.5
Silver (ppm) 0.6 0.4 22 +/- 0.18

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 0.31
Control statsitics were produced from results accumulated in the : Arsenic 4.59
October-2006 Geostats Pty Ltd Laboratory Round Robin Program. Barium -16.40
20 laboratories (at least) tested this material for base metal content. Bromine 6.74
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium -3.12
Caesium 0.62
Source Material Chromium 574.00
Prior to homogenisation and testing, this material was sourced from Cobalt 175.00
Nickel Sulphide Ore Europium -0.23
Gold ppb 12.20
Hafnium -0.41
Colour Designation Iridium ppb -9.77
Medium light gray Iron % 9.85
Lanthanum 0.24
Lutetium -0.03
Usage Molybendum -0.59
This product is for use in the mining industry as reference materials for monitoring and testing Nickel 5700.00
the accuracy of laboratory assaying. Rubidium -2.79
Samarium 0.11
Preparation and Packaging Scandium 5.46
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -0.94
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.20
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -0.07
Tellurium nr
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium -0.08
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium -0.09
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin -59.20
and storage. Tungsten 0.30
Uranium -0.06
Ytterbium -0.18
Assay Testwork Zinc 52.10
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium nr
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% nr
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % nr
distributions are checked and processed statistically, producing monitoring statistics for these Silver 0.50
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium -9.02
Strontium -13.50

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM906-7
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM906-7
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 5562 276 58 +/- 71.1
Copper (ppm) 362 25 66 +/- 6.1
Zinc (ppm) 51 11 64 +/- 2.8

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 8 4 41 +/- 1.1
Arsenic (ppm) 25 4 41 +/- 1.4
Cobalt (ppm) 210 14 57 +/- 3.6
Silver (ppm) 0.9 0.3 44 +/- 0.1

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 0.68
Control statsitics were produced from results accumulated in the : Arsenic 25.90
October-2006 Geostats Pty Ltd Laboratory Round Robin Program. Barium -16.00
41 laboratories (at least) tested this material for base metal content. Bromine 3.05
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium -3.74
Caesium -0.16
Source Material Chromium 1360.00
Prior to homogenisation and testing, this material was sourced from Cobalt 223.00
Oxide / transition Ni cap rock Europium 0.34
Gold ppb 17.50
Hafnium -0.32
Colour Designation Iridium ppb 13.90
Pale yellowish brown Iron % 9.68
Lanthanum 2.11
Lutetium 0.07
Usage Molybendum -0.58
This product is for use in the mining industry as reference materials for monitoring and testing Nickel 5700.00
the accuracy of laboratory assaying. Rubidium -2.69
Samarium 0.61
Preparation and Packaging Scandium 5.29
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -1.14
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.10
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum 0.14
Tellurium nr
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium -0.09
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 1.02
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin -57.80
and storage. Tungsten 0.74
Uranium 0.71
Ytterbium 0.65
Assay Testwork Zinc 31.40
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium nr
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% nr
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % nr
distributions are checked and processed statistically, producing monitoring statistics for these Silver 0.50
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium 12.50
Strontium -12.80

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM996-1
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM996-1
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 12700 748 47 +/- 213.8
Copper (ppm) 661 60 64 +/- 14.7
Zinc (ppm) 77 11 51 +/- 3

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 13 9 35 +/- 3
Arsenic (ppm) 29 7 38 +/- 2.2
Cobalt (ppm) nr nr nr nr
Silver (ppm) 1.4 1.1 25 +/- 0.43

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 0.89
Control statsitics were produced from results accumulated in the : Arsenic 29.40
October-1996 Geostats Pty Ltd Laboratory Round Robin Program. Barium -100.00
25 laboratories (at least) tested this material for base metal content. Bromine 3.60
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 2.63
Caesium -1.00
Source Material Chromium 1760.00
Prior to homogenisation and testing, this material was sourced from Cobalt 386.00
Cap ore, South West mineral field Europium -0.50
Gold ppb 18.20
Hafnium -0.50
Colour Designation Iridium ppb -20.00
Light brownish gray Iron % 15.80
Lanthanum 3.37
Lutetium -0.20
Usage Molybendum -5.00
This product is for use in the mining industry as reference materials for monitoring and testing Nickel nr
the accuracy of laboratory assaying. Rubidium -20.00
Samarium 1.08
Preparation and Packaging Scandium 6.25
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -5.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.08
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -1.00
Tellurium nr
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium nr
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium -0.50
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin nr
and storage. Tungsten -2.00
Uranium -2.00
Ytterbium 1.04
Assay Testwork Zinc -100.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium nr
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% nr
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % -0.20
distributions are checked and processed statistically, producing monitoring statistics for these Silver -5.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM903-2
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM903-2
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 1110 53 104 +/- 10.1
Copper (ppm) 528 30 122 +/- 5.4
Zinc (ppm) 180 18 113 +/- 3.3

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 78 9 106 +/- 1.8
Arsenic (ppm) 383 28 96 +/- 5.6
Cobalt (ppm) 32 6 102 +/- 1.2
Silver (ppm) 0.9 0.4 75 +/- 0.08

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 12.40
Control statsitics were produced from results accumulated in the : Arsenic 384.50
October-2003 Geostats Pty Ltd Laboratory Round Robin Program. Barium 356.00
75 laboratories (at least) tested this material for base metal content. Bromine 2.66
1 laboratories tested this material using Neutron Activation Analysis. Cadmium nr
Cerium 58.50
Caesium 1.04
Source Material Chromium 159.50
Prior to homogenisation and testing, this material was sourced from Cobalt 36.60
Gold Ore Europium 1.19
Gold ppb 1055.00
Hafnium 4.64
Colour Designation Iridium ppb -12.00
Pinkish gray Iron % 6.05
Lanthanum 29.40
Lutetium 0.29
Usage Molybendum 8.20
This product is for use in the mining industry as reference materials for monitoring and testing Nickel 1100.00
the accuracy of laboratory assaying. Rubidium 40.00
Samarium 4.26
Preparation and Packaging Scandium 16.65
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -3.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 1.23
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum -0.50
Tellurium -5.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium -0.50
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 16.15
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin -100.00
and storage. Tungsten 5.57
Uranium 2.49
Ytterbium 2.00
Assay Testwork Zinc 167.50
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -500.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% 4.14
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % 0.68
distributions are checked and processed statistically, producing monitoring statistics for these Silver 0.50
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM307-13
Mining Industry Consultants
Reference Material Manufacture and Sales

Certified Ore Grade Base Metal Reference Material Product Code

GBM307-13
Certified Control Values

Ore Grade Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 19995 934 43 +/- 283
Copper (ppm) 1251 60 49 +/- 17
Zinc (ppm) 117 26 14 +/- 14

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 45 34 11 +/- 21
Cobalt (ppm) nr
Silver (ppm) nr
Sulphur (%) 6.8 0.3 28 +/- 0.12

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 1.10
Control statsitics were produced from results accumulated in the : Arsenic 291.00
April-2007 Geostats Pty Ltd Laboratory Round Robin Program. Barium 130.00
11 laboratories (at least) tested this material for base metal content. Bromine 1.20
1 laboratories tested this material using Neutron Activation Analysis. Cadmium -5.00
Cerium -5.00
Caesium 0.80
Source Material Chromium 900.00
Prior to homogenisation and testing, this material was sourced from Cobalt 523.00
Nickel Sulphide Ore Europium -1.00
Gold ppb 100.00
Hafnium 4.00
Colour Designation Iridium ppb -50.00
Medium light gray Iron % 17.00
Lanthanum 6.00
Lutetium 0.30
Usage Molybendum -1.00
This product is for use in the mining industry as reference materials for monitoring and testing Nickel 19700.00
the accuracy of laboratory assaying. Rubidium -12.00
Samarium 3.30
Preparation and Packaging Scandium 25.00
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium 8.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 1.50
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum 0.60
Tellurium -10.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium 0.60
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 0.70
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin -100.00
and storage. Tungsten -2.00
Uranium -0.20
Ytterbium 2.00
Assay Testwork Zinc 100.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -200.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% nr
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % nr
distributions are checked and processed statistically, producing monitoring statistics for these Silver -1.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, srr@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM305-9
Sample and Assay Monitoring Services

Certified Base Metal Reference Material Product Code

GBM305-9
Certified Control Values

Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 2536 142 53 +/- 38.3
Copper (ppm) 561 19 54 +/- 5.1
Zinc (ppm) 105 12 57 +/- 3

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 113 11 54 +/- 2.9
Arsenic (ppm) 217 21 48 +/- 6
Cobalt (ppm) 46 6 52 +/- 1.5
Silver (ppm) 0.8 0.4 33 +/- 0.14

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 3.07
Control statsitics were produced from results accumulated in the : Arsenic 220.00
April-2005 Geostats Pty Ltd Laboratory Round Robin Program. Barium 120.00
33 laboratories (at least) tested this material for base metal content. Bromine 2.70
1 laboratories tested this material using Neutron Activation Analysis. Cadmium -3.70
Cerium 41.10
Caesium 3.94
Source Material Chromium 193.00
Prior to homogenisation and testing, this material was sourced from Cobalt 50.50
South West Mineral composite gold ores Europium 0.73
Gold ppb 3460.00
Hafnium 5.96
Colour Designation Iridium ppb -4.60
Grayish orange Iron % 6.25
Lanthanum 21.70
Lutetium 0.17
Usage Molybendum 71.50
This product is for use in the mining industry as reference materials for monitoring and testing Nickel 2500.00
the accuracy of laboratory assaying. Rubidium 131.00
Samarium 2.70
Preparation and Packaging Scandium 15.00
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium -1.20
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.52
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum 1.00
Tellurium -3.90
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium -0.20
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 8.87
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin -67.00
and storage. Tungsten 25.00
Uranium 2.70
Ytterbium 0.87
Assay Testwork Zinc 100.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium 260.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% nr
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % 1.00
distributions are checked and processed statistically, producing monitoring statistics for these Silver -1.20
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury -0.15
Neodymium 12.20
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au
GEOSTATS PTY LTD

GBM905-13
Sample and Assay Monitoring Services

Certified Ore Grade Base Metal Reference Material Product Code

GBM905-13
Certified Control Values

Ore Grade Base Metal Analyses


Element Grade Standard Deviation No of Analyses Confidence Interval
Nickel (ppm) 15137 716 44 +/- 211
Copper (ppm) 98 11 25 +/- 4
Zinc (ppm) 418 42 27 +/- 16

Geostats Pty Ltd, Certified Base Metal Reference Material, Product Code :
Lead (ppm) 28 22 13 +/- 12
Cobalt (ppm) nr
Silver (ppm) nr
Sulphur (%) nr

CRM Details

Neutron Activation
Analysis Results (ppm)
Control Statistic Details Antimony 1.00
Control statsitics were produced from results accumulated in the : Arsenic 61.60
October-2005 Geostats Pty Ltd Laboratory Round Robin Program. Barium -50.00
13 laboratories (at least) tested this material for base metal content. Bromine 5.60
1 laboratories tested this material using Neutron Activation Analysis. Cadmium -5.00
Cerium 61.00
Caesium -0.50
Source Material Chromium 4590.00
Prior to homogenisation and testing, this material was sourced from Cobalt 768.00
Nickel laterite ore Europium 2.00
Gold ppb 15.00
Hafnium -1.00
Colour Designation Iridium ppb -50.00
Light brown Iron % 31.40
Lanthanum 52.00
Lutetium 0.30
Usage Molybendum 2.00
This product is for use in the mining industry as reference materials for monitoring and testing Nickel 14200.00
the accuracy of laboratory assaying. Rubidium -5.00
Samarium 7.50
Preparation and Packaging Scandium 70.70
All standards are dried in an oven for a minimum of 12 hours at 110C. The dry material is then Selenium 16.00
pulverised to better than 75 micron (nominal mean of 45 micron) using an Air Classifier. The Sodium % 0.14
material is then homogenised and stored in a sealed, stable container ready for final packaging. Tantalum 4.10
Tellurium -10.00
Materials are statistically sampled from stores, then packaged into either heat sealed, air tight, Terbium 1.10
plastic pulp packets or screw top sealed plastic containers ready for distribution. All packaging Thorium 2.80
has been chosen to ensure minimal contamination from outside sources during shipment, use Tin -100.00
and storage. Tungsten 23.00
Uranium 5.80
Ytterbium 4.00
Assay Testwork Zinc 360.00
All standards are tested thoroughly in the Geostats bi-annual laboratory survey. This involves Zirconium -200.00
assaying by a minimum of 50 reputable laboratories selected from across the world. Results Calcium% nr
are compiled into a comprehensive report detailing statistics for each standard. Assay Potassium % nr
distributions are checked and processed statistically, producing monitoring statistics for these Silver -2.00
standards. Materials are tested regularly to ensure stability and homogeneity. Mercury nr
Neodymium nr
Strontium nr

10A Marsh Close, O'Connor, Western Australia 6163


Phone : +61 8 9314 2566, Fax : +61 8 9314 3699
e-mail : pjh@geostats.com.au, jcm@geostats.com.au
Website http://www.geostats.com.au

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