Technical Report Ok Tedi

TECHNICAL REPORT ON THE
OK TEDI MINING LIMITED

MT. FUBILAN COPPER-GOLD MINE
MINERAL RESOURCE AND MINERAL
RESERVE ESTIMATES,
PAPUA NEW GUINEA
PREPARED FOR
INMET MINING CORPORATION
NI 43-101 REPORT
Authors:
James W. Hendry, P.Eng.
Luke Evans, M.Sc., P.Eng.
Gerd Wiatzka, P.Eng.
RPA August 2, 2005

ROSCOE POSTLE ASSOCIATES INC.
Toronto, Ontario.
Vancouver, B.C.
ROSCOE POSTLE ASSOCIATES INC. www.rpacan.com
TABLE OF CONTENTS
PAGE
1 EXECUTIVE SUMMARY .......................................................................................... 1-1

2 INTRODUCTION AND TERMS OF REFERENCE .................................................. 2-1
3 LIST OF ABBREVIATIONS....................................................................................... 3-1
4 QUALIFICATIONS ..................................................................................................... 4-1
5 DISCLAIMER .............................................................................................................. 5-1
6 PROPERTY DESCRIPTION AND LOCATION ........................................................ 6-1
Property Location....................................................................................................... 6-1
Property Status ........................................................................................................... 6-3
Surface Leases ..................................................................................................... 6-3
Land Act Tenements ............................................................................................ 6-4
Exploration Licenses............................................................................................ 6-8
Environmental and Permitting Status ........................................................................ 6-8
Regulatory Regime .............................................................................................. 6-8
Community Mine Continuation Agreements....................................................... 6-9
Social Commitments and Implementation......................................................... 6-10
Closure Requirements........................................................................................ 6-11
7 ACCESSIBILITY, LOCAL RESOURCES, PHYSIOGRAPHY AND
INFRASTRUCTURE ...................................................................................................... 7-1
Accessibility............................................................................................................... 7-1
Climate....................................................................................................................... 7-1
Local Resources ......................................................................................................... 7-1
Infrastructure.............................................................................................................. 7-3
Physiography.............................................................................................................. 7-3
8 HISTORY ..................................................................................................................... 8-1
Exploration History.................................................................................................... 8-2
Historical Mineral Resource and Mineral Reserve Estimates ................................... 8-3
9 GEOLOGICAL SETTING ........................................................................................... 9-1
Regional Geology ...................................................................................................... 9-1
Property Geology ....................................................................................................... 9-2
10 DEPOSIT TYPES..................................................................................................... 10-1
11 MINERALIZATION ................................................................................................ 11-1
Ore Types & Key Characteristics ............................................................................ 11-2
Geological Models ................................................................................................... 11-3
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12 EXPLORATION....................................................................................................... 12-1
13 DRILLING................................................................................................................ 13-1
Drill Core Logging................................................................................................... 13-1
Drill Core Size ......................................................................................................... 13-2
Collar Surveys.......................................................................................................... 13-2
Downhole Surveys ................................................................................................... 13-2
Core Recovery ......................................................................................................... 13-3
14 SAMPLING METHOD AND APPROACH ............................................................ 14-1
15 SAMPLE PREPARATION, ANALYSES, AND SECURITY PROTOCOLS........ 15-1
Sample Preparation and Analysis ............................................................................ 15-1
Security .................................................................................................................... 15-3
Assay Quality Control and Quality Assurance ........................................................ 15-3
16 DATA VERIFICATION .......................................................................................... 16-1
Mount Fubilan Mine Database Validation............................................................... 16-1
Mount Fubilan Mine Database Verification ............................................................ 16-1
RPA Database Verification Work...................................................................... 16-1
Historical Database Verification Work.............................................................. 16-1
RPA Independent Sampling..................................................................................... 16-2
17 ADJACENT PROPERTIES ..................................................................................... 17-1
18 MINERAL PROCESSING AND RECOVERY....................................................... 18-1
Mill Operations ........................................................................................................ 18-1
Ore Types........................................................................................................... 18-5
Current Mill Operating Performance ....................................................................... 18-7
19 MINERAL RESOURCES AND MINERAL RESERVES ...................................... 19-1
Mineral Resources ................................................................................................... 19-1
OTML Drill Hole Database ............................................................................... 19-1
Composites......................................................................................................... 19-3
Wireframe Models ............................................................................................. 19-4
Cutting High Assays .......................................................................................... 19-5
Cut-off Grade ..................................................................................................... 19-5
Density Data....................................................................................................... 19-6
Variography ....................................................................................................... 19-7
Search Strategy and Grade Interpolation Parameters ........................................ 19-8
Block Models ..................................................................................................... 19-8
Block Model Validation..................................................................................... 19-8
Mineral Resource Classification ........................................................................ 19-9
Mineral Resource Estimate .............................................................................. 19-12
Mineral Reserves ................................................................................................... 19-13
Economic Optimization ................................................................................... 19-13
Revenue Parameters......................................................................................... 19-13
Mine Performance Parameters......................................................................... 19-13
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Mill Performance Parameters .......................................................................... 19-16

Key Product Characteristics............................................................................. 19-17
Mill Operating Cost Forecast........................................................................... 19-19
Overhead Cost Forecast ................................................................................... 19-20
Optimization Results........................................................................................ 19-21
Sensitivity ........................................................................................................ 19-21
Ultimate pit Design ................................................................................................ 19-22
Pit Slope Design Criteria ................................................................................. 19-22
Cutoff Grade .................................................................................................... 19-23
Mine Phase Designs......................................................................................... 19-24
Mineral Reserve ............................................................................................... 19-26
20 OTHER RELEVANT DATA AND INFORMATION ............................................ 20-1
Current Mine Operations ......................................................................................... 20-1
Current Mine Operating Performance ..................................................................... 20-2
Current Mine Equipment Fleet .......................................................................... 20-3
Kiunga Operations ............................................................................................. 20-4
Power Supply ..................................................................................................... 20-4
Environmental Impacts of Mining ........................................................................... 20-5
Vegetation dieback............................................................................................. 20-5
Acid Rock Drainage (ARD) Issues................................................................... 20-6
Other impacts ..................................................................................................... 20-7
Mine Waste Management .................................................................................. 20-8
Social Commitments and Implementation....................................................... 20-10
Closure Requirements...................................................................................... 20-11
Compliance ............................................................................................................ 20-13
Internal Management ....................................................................................... 20-15
Conclusions...................................................................................................... 20-15
Project Economics ................................................................................................. 20-18
Capital Costs .................................................................................................... 20-18
Operating Costs................................................................................................ 20-19
Processing ........................................................................................................ 20-19
Operations Support .......................................................................................... 20-20
Commercial Group Costs................................................................................. 20-20
Community and Business Support................................................................... 20-21
Contracts ................................................................................................................ 20-22
Taxes and Royalties ............................................................................................... 20-22
Cash Flow .............................................................................................................. 20-22
21 INTERPRETATION AND CONCLUSIONS.......................................................... 21-1
Mineral Resource Estimate ...................................................................................... 21-1
Mineral Reserve Estimate ........................................................................................ 21-2
22 RECOMMENDATIONS.......................................................................................... 22-1
Mineral Resource ..................................................................................................... 22-1
Drill Hole Database Recommendations............................................................. 22-1
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QA/QC and Sampling Recommendations ......................................................... 22-1

Resource Estimation Recommendations............................................................ 22-2
23 SOURCES OF INFORMATION ............................................................................. 23-1
24 SIGNATURE PAGE ................................................................................................ 24-1
25 CERTIFICATES OF QUALIFICATIONS .............................................................. 25-1
James W. Hendry ..................................................................................................... 25-1
Luke Evans............................................................................................................... 25-3
Gerd Wiatzka ........................................................................................................... 25-5
26 APPENDIX A........................................................................................................... 26-1
List of Acts, Amendments and Change Notices ...................................................... 26-1
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LIST OF TABLES
PAGE
Table 1-1 December 2004 Mineral Resource Estimate With RPA Whittle Pit Depth
Constraint......................................................................................................................... 1-8
Table 1-2 Mineral Reserve Estimates (Dec 31, 2004)................................................... 1-9
Table 1-3 Support cost estimates ................................................................................. 1-14
Table 1-4 Ok Tedi Cash Flow Projection ..................................................................... 1-16
Table 3-1 List of Abbreviations..................................................................................... 3-1
Table 6-1 List of Active Surface Leases........................................................................ 6-5
Table 6-2 List of Expired Surface Leases With Applications for Surrender................. 6-7
Table 6-3 OTML Exploration Licenses......................................................................... 6-8
Table 8-1 Mount Fubilan Mine Production History ...................................................... 8-2
Table 8-2 Recent Historical Mineral Resource Estimates ............................................. 8-4
Table 8-3 Recent Historical Mineral Reserve Estimates ............................................... 8-5
Table 11-1 Main Rock Types in Reserve Estimate ..................................................... 11-6
Table 13-1 Diamond Hole Core Recovery (from OTML (2004) ................................ 13-3
Table 19-1 OTML Drill Hole Database Records......................................................... 19-1
Table 19-2 OTML 2002 and 2004 Tonnage Factors ................................................... 19-7
Table 19-3 December 2004 Mineral Resource Estimate With RPA Whittle Pit Depth
Constraint..................................................................................................................... 19-12
Table 19-4 Drilling & Blasting Costs ........................................................................ 19-14
Table 19-5 Mill Operating Parameters ...................................................................... 19-17
Table 19-6 Key Product Characteristics .................................................................... 19-19
Table 19-7 Processing Costs...................................................................................... 19-20
Table 19-8 Cut Off Grade Factors ............................................................................. 19-24
Table 19-9 Mineral Reserve Estimates (Dec 31, 2004)............................................. 19-26
Table 20-1 Primary Mine Equipment List ................................................................... 20-4
Table 20-2 Life of Mine Capital Cost by Area .......................................................... 20-19
Table 20-3 Ok Tedi Cash Flow Projection ................................................................ 20-23
LIST OF FIGURES
PAGE
Figure 1-1 Ok Tedi NPV Sensitivity Analysis ............................................................ 1-17
Figure 1-2 Ok Tedi Sensitivity Analysis .................................................................... 1-18
Figure 6-1 General Location Map.................................................................................. 6-2
Figure 6-2 OTML Property Map ................................................................................... 6-6
Figure 7-1 Air Photo of Tabubil (Photo from www.oktedi.com) .................................. 7-2
Figure 7-2 Mount Fubilan Site and Tabubil in Background.......................................... 7-3
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Figure 9-1 Ok Tedi Property Geology ........................................................................... 9-3

Figure 11-1 3-D Perspective of the Wireframes on December 2004 Pit Topography. 11-7
Figure 15-1 OTML Laboratory Drill Core Sample Preparation and Analysis ............ 15-2
Figure 18-1 Ok Tedi Copper Concentrator Flowsheet ................................................ 18-2
Figure 19-1 Surface Drill Plan..................................................................................... 19-2
Figure 19-2 Resource Classification on the 1460 m bench (From OTML, 2004)...... 19-11
Figure 19-3 Resource Classification on Section 422,312N (From OTML, 2004). .... 19-11
Figure 19-4 Copper Mined vs. Copper Price Assumption......................................... 19-22
Figure 20-1 Ok Tedi NPV Sensitivity Analysis ........................................................ 20-24
Figure 20-2 Ok Tedi Sensitivity Analysis ................................................................ 20-25
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1 EXECUTIVE SUMMARY
INTRODUCTION
Roscoe Postle Associates Inc. (RPA) was retained by Inmet Mining Corporation
(Inmet) and Ok Tedi Mining Limited (OTML) to independently review and audit the
Mineral Resource and Mineral Reserve estimates of the Mount Fubilan Mine in Papua
New Guinea and to prepare a National Instrument 43-101 (NI 43-101) report. This
technical report was written by RPA in accordance with the requirements of NI 43-101,
Companion Policy 43-101CP, and Form 43-101F1 of the Canadian Securities
Administrators (CSA).
OTML operates the Mount Fubilan Mine in the Western Province of Papua New
Guinea (PNG). Inmet owns an 18% interest in OTML, with 52% of OTML held by the
PNG Sustainable Development Program Limited. The remaining 30% interest in OTML
is owned by the PNG government.
The Ok Tedi porphyry copper prospect was discovered by Kennecott Copper

Corporation (Kennecott) in June 1968. Gold production commenced at the Mount
Fubilan Mine in 1984, after completion of feasibility studies in 1978 for an open pit
operation under an international consortium of companies led by the Broken Hill
Proprietary Company Limited (BHP). The first copper processing facilities were
commissioned in 1987.
This technical report is based on the OTML December 2004 Mineral Resource and
Mineral Reserve estimates for the Mount Fubilan Mine. The principal technical
documents and files related to RPA’s audit of the December 2004 Mineral Resource and
Mineral Reserve estimates are listed in the Sources of Information.
Work on this project was completed by RPA Principal Mining Engineer James
Hendry, P.Eng., RPA Consulting Geological Engineer Luke Evans, M.Sc., P.Eng, and
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Gerd Wiatzka, P.Eng., Principal, Manager Mining with SENES Consultants Limited
(SENES).
Mr. Hendry, Mr. Evans, and Mr. Wiatzka are Qualified Persons in accordance with
the requirements of NI 43-101. Mr. Hendry, Mr. Evans, and Mr. Wiatzka visited the
Mount Fubilan Mine from March 7 to 11, 2005.
Technical documents and reports on the property were reviewed and obtained from
OTML personnel at the site.
PROPERTY STATUS
The Mount Fubilan Mine property comprises two contiguous mineral licenses
covering an area of 21,700 ha, one Special Mining Lease (SML), twenty Leases for
Mining Purposes (LMP), and one Special Mining Easement (SME) that collectively
cover an area of approximately 14,959 ha. All of the leases have been surveyed.
Special Mining Lease 1 and Lease for Mining Purposes 1 are being renewed currently
under the Mining Act for a further 21 years to May 2022. Fifteen expired surface leases
have been submitted for surrender. Other leases are current, and OTML expects all
surface and dredging operation lease agreements to remain for the life of the Mt. Fubilan
operation.
Exploration Licences have two year terms and can be renewed under the terms of the
Mining Act.
ENVIRONMENTAL AND PERMITTING STATUS

The mine operates under the direction and obligations of the Mining Ok Tedi
Agreement Act Chapter 363 (the Ok Tedi Agreement Act) and supplementary
amendments.
1-2
The regulatory regime is as set out in the the OTML Environmental Regime of
December 2001 which was put in place through passage of the Ok Tedi Mine
Continuation (Ninth Supplemental Agreement) Act. This agreement specifies the basis
for continuation of operations and the requirements for environmental and social impact
mitigation under the following principal components:
• Environmental Regime 2001
• PNG Sustainable Development Program
• Community Mine Continuation Agreements
• Ok Tedi Development Foundation
• Mine Closure Sinking Fund.
This regime put into place a work program of activities designed to improve the
understanding of potential mitigative measures. The environmental regime comprises
major management programs including Acid Rock Drainage (ARD), riverine ecology and
industrial sites. The regime is based on a set of values against which ongoing impacts are
assessed. These values relate to all aspects of the safety of the aquatic and terrestrial
environment.
Schedules 1 and 2 of the Ninth Supplement Agreement set out the key environmental
performance requirements for OTML, including closure and decommissioning standards.
The Community Mine Continuation Agreement (CMCA) was enacted by the PNG
government in 2001 and is monitored by independent non-government organizations.
The CMCA provides the framework for setting out the expected impacts of the OTML
operations as negotiated and agreed with the communities respective to ongoing
operations. Parties to the agreement include all local and national administration
stakeholders. CMCAs cover nine regions including 156 villages. They provide a mix of
benefits for landowners affected by the mine, including compensation for past and
current impacts as well as initiatives for sustained development beyond the life of the
mine.
1-3
The PNG Sustainable Development Program and the Ok Tedi Development

Foundation have been set up as 40-year trust funds and are a means whereby funds will
be channelled back to the local communities and to the nation as a whole during
operations and post closure.
The Mine Closure Sinking Fund, which is known as the Ok Tedi Financial Assurance
Fund, is set aside in biannual contributions to handle the $100 million closure cost
estimate as accepted by the PNG government. Contributions commenced in July 2002
and currently stand at $36,057,664.
Finally, OTML operates a number of programs that provide advice and assistance for
local agriculture, health and education, and community development.
GEOLOGY AND MINERALIZATION

The regional geologic setting comprises the northern margin of Proterozoic-Paleozoic
basement rocks of the Australian continent overlain by a fold-thrust belt of Mesozoic and
Tertiary platform cover rocks. Miocene-Pleistocene igneous intrusives within this belt
host major mineral-producing districts of the area including Ok Tedi (Mount Fubilan),
Ertsberg, Porgera, and Kare. Regional geology surrounding Ok Tedi is dominated by
continental margin marine sedimentary siltstones, mudstones, and limestones. These
sediments were deposited from the Cretaceous to mid-Miocene in an extensional
framework.
Emplacement of the Pliocene Sydney Monzodiorite is believed to have produced the

Ok Tedi skarns through metasomatic replacement of limestone/carbonate facies by
reaction with magmatic fluids. The Sydney Monzonite is relatively unaltered and
contains limited economic gold and copper mineralization, although it is enriched near
the Fubilan monzonite porphyry contact. The fault network provided conduits for
magma and intrusion by multiple phases of variably mineralized calc-alkaline stocks with
contemporaneous skarn formation.
1-4
Subsequent intrusive bodies (porphyritic monzodiorite, southern monzonite porphyry)

are observed in the southern portion of the ore body within and adjacent to the Sydney
Monzodiorite. The Fubilan monzonite porphyry (1.1 Ma to 1.2 Ma) intruded the Sydney
Monzodiorite and associated stocks, breccias, skarn bodies and shallow dipping
sediments. Important Cu-Au mineralization is hosted within the Fubilan monzonite
porphyry. The protore Cu-Au-Ag mineralization is predominantly chalcopyrite with
pyrite-marcasite and small amounts of bornite and molybdenite within intrusives, skarns,
and fractured siltstones proximal to the intrusive stocks. Irregularly distributed sphalerite
and galena are present around the fringe areas of the deposit and within some skarns.
Magnetite skarns contain chalcopyrite-pyrite-marcasite-bornite mineralization,

sometimes with chalcocite, digenite, and covellite enrichment. Gold is closely associated
with the copper mineralization in both the skarns and intrusive rocks.
The near-surface weathering of the mineralized zones has led to the extensive
oxidation and leaching of the sulphide minerals. As a result, an oxide cap has developed
containing elevated gold values and virtually no remaining copper. The oxidation and
leaching process has resulted in the development of a supergene enriched copper zone of
chalcocite and digenite immediately below the oxide cap. Further downwards, this
supergene zone merges into lower grade chalcopyrite-dominated protore mineralization.
EXPLORATION AND PRODUCTION HISTORY

After the discovery of the Mount Fubilan deposit by Kennecott in 1968, exploration
lapsed from 1972 to 1975 while Kennecott and the PNG government negotiated future
mining terms. The government then carried out exploration under the supervision of
Behre Dolbear and in 1976 entered into an agreement with an international consortium of
companies led by the Broken Hill Proprietary Company Limited (BHP) for final
feasibility studies, presented to the PNG government in 1979. Thereafter, the project
entered the construction phase with approval of the project and incorporation of OTML
in 1981. Subsequent exploration has been confined to mining project support and
1-5
development of the environmental regime. Diamond drilling continues around the Mt.
Fubilan deposit in 2005.
Production commenced in 1985 with mining of the gold cap, and in 1987 the first
copper concentrate was produced. As of fiscal year end 2004, OTML has produced
3,030,522 tonnes of copper contained in 9,589,172 tonnes of copper concentrate and
7,579,725 oz of contained gold. 1,680,533 oz of gold bullion were produced from the
gold cap in the first five years of production.
MINERAL RESOURCES AND MINERAL RESERVES

MINERAL RESOURCES
RPA has reviewed the current OTML December 31, 2004 Mineral Resource and
Reserve estimates, and considers that the resource block model is valid, reasonable, and
appropriate for supporting the OTML 2004 Mineral Resource estimate, summarized in
Table 1-1.
The current resource estimate is supported by 647 drill holes and 320 reverse
circulation (RC) drill holes where drill hole spacing is generally on a 70m x 100m grid
for intrusives and 50m x 50m for skarns. RPA found no significant problems with the
drill hole database.
RPA has reviewed a selection of the historical core logs and regards them to be
complete and of good quality. Downhole drill surveys, where taken, were carried out
with a multishot instrument, and are judged to be reliable. About one third of the
diamond drill holes used in the December 2004 resource estimate were not surveyed.
Drill hole deviations are expected to be minor due to the large diameter of holes drilled
and where most holes were collared vertical to sub-vertical. Excellent core recovery was
achieved with only 0.6% of the diamond drill hole samples having a core recovery less
than 90%.
1-6
OTML has used composites from both diamond drill and RC drill holes to support the
current resource block model. Drill core sampling methods used were standard. RPA did
not have information on the RC sampling methodology; however, only 5% of the
composites used in the model were derived from RC drill holes.
RPA found the OTML assay laboratory to be clean, well-run and following
conventional procedures. An outside audit, independent of the laboratory, was completed
in June 2003. The procedures call for quality checks to be made using Cu-Au reference
standards at a frequency of one in every ten samples. RPA’s review of more recent
OTML laboratory reference standard graphs suggests that copper and gold results are
reliable and unbiased. RPA recommends measures to be taken to improve the reliability
of the in-house reference standards and QA/QC methodology, with regular checks on
pulps to be sent to an outside accredited laboratory.
The current resource estimate is based on a geological interpretation and on a three

dimensional wireframe model of the major rock types in the deposit. OTML currently is
updating the interpretation to reflect recent infill diamond drilling results. Sulphide
skarns represent approximately 25% of the resource tonnage, 44% of the contained
copper, and 40% of the contained gold, and are now the most important single component
of the remaining resource. The monzonite hosts approximately 38% of the resource
tonnage, 22% of the contained copper, and 18% of the contained gold.
The current resource model is based on the results of a 2002 review of the historical
specific gravity data. In 2004, OTML developed density versus depth relationships that
have now been incorporated. RPA believes that both the 2002 and 2004 tonnage factors
are reasonable. RPA recommends investigation on the use of an interpolated density
model, particularly for skarn mineralization.
RPA reviewed the omni-directional and down hole variograms for the composites in
the main rock types. RPA concurs with an OTML recommendation that a new
directional variography study be completed.
1-7
OTML uses the Australasian Code for Reporting of Identified Mineral Resources and
Ore Reserves (the JORC Code). The resource and reserve classifications are similar to the
Canadian CIM (2000 and 2004) definitions.
OTML reported the December 2004 Mineral Resources based on using a bench
datum of 1,153 m ASL. It is RPA’s view that a portion of the OTML resource estimate
does not have reasonable prospects for economic extraction even at significantly higher
metal price assumptions. Based on the economic assessment work, RPA is of the opinion
that the portion of the model that can be classified as meeting the requirements of a
Measured and Indicated Mineral Resource under NI 43-101 guidelines is 543 million
tonnes averaging 0.77% copper and 0.9 grams per tonne gold
Table 1-1 summarizes the December 2004 classified Mineral Resources modelled
between the December 31, 2004 surface topography and the high metal price Whittle pit
shell developed by RPA.
TABLE 1-1 DECEMBER 2004 MINERAL RESOURCE ESTIMATE WITH

RPA WHITTLE PIT DEPTH CONSTRAINT
Inmet Mining Corporation Mount Fubilan Mine, Papua New Guinea
Classification Million tonnes Copper % Gold grams per

tonne
Measured 371 0.77 0.91
Indicated 171 0.78 0.98
Total Measured and Indicated 543 0.77 0.93
Inferred 33 0.92 1.44
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MINERAL RESERVES
OTML undertook an optimization study in early 2005 to evaluate the extent of
economic mining limits at the Mount Fubilan deposit. The evaluation used metal price
assumptions of $0.90 Cu, $350 Au, and $4.75 Ag. Operating costs were developed and
forecast based on the current 2005 budget factors and estimates.
Cut-off grades are calculated based on an economic factor that reflects the costs and
recoveries appropriate for each of the seven ore types.
An ultimate pit design, 13D4, derived from the 2004 mine reserve assessment process
was used by OTML as the basis for calculating the mineable reserve for the Mount
Fubilan deposit. Two further development options have been identified: Phase 2,
expanding to the southeast beyond the 13D4, and Phase 3, expanding to the west. Both
would have added significantly to the mine life; however, they were abandoned due to
technical complications and extensive pre-stripping requirements. RPA concurs with this
assessment.
RPA notes that the current ultimate pit design is well within the potential economic
limits developed in the optimization study carried out by OTML.
Table 1-2 summarizes the Mineral Reserves as of December 31, 2004:
TABLE 1-2 MINERAL RESERVE ESTIMATES (DEC 31, 2004)

Classification Ore Copper Gold Contained Contained

Tonnes Grade Grade Copper Gold
(Mt) (%) (g/t) (kt) (koz)
Proven 226 0.85 1.04 1,920 7,550
Probable 24 0.76 1.26 180 970
Total Mineral Reserves 250 0.84 1.06 2,100 8,520
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In RPA’s opinion, the technical assessment carried out by OTML in preparing the
mineral reserve estimate has been thorough and complete in dealing with the complex
issues surrounding the Ok Tedi operations. RPA concludes that the Mineral Reserves as
estimated, based upon the 13D4 pit design, represent Proven and Probable Mineral
Reserves consistent with the definitions set out in NI 43-101 and specified in the CIM
Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by the
CIM Council on August 20, 2000.
CURRENT MINE OPERATIONS

The current mining operations of Ok Tedi Mining Limited are carried out at the
Mount Fubilan open pit using conventional open pit mining methods and equipment. As
of the end of December 2004, the main mining activities were being carried out on the
1550 m, 1565 m, and 1580 m benches in the main mining zone. Mining was also active
in the Moscow Ridge and Paris limestone quarry areas located adjacent to and above the
south end Paris waste dump site.
At the Mount Fubilan pit, waste rock material is hauled to the south end of the pit
where it is dumped and pushed over the edge of the topography. The material then slides
down the slope to lower elevations. Permanent dumps for accumulation and storage of
waste rock materials have not been established due to the steep topography and poor
ground stability conditions surrounding the Mount Fubilan mine.
The high rate of rainfall introduces substantial quantities of surface water into the
operation, and pit water management is one of the key components of the mining system.
At the present time, the rate of total material movement is primarily limited by the
capacity of the truck fleet. There is surplus excavator capacity.
MINERAL PROCESSING AND METALLURGY

OTML operates a mill with a nominal capacity to process 80,000 tonnes of ore per
day. Ore is crushed and ground for treatment, and recovery of copper and gold values is
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achieved through a conventional flotation circuit to produce a high grade copper and gold
concentrate. The copper concentrate is pumped via an overland pipeline that delivers the
concentrate to the Kiunga dewatering and concentrate storage facilities located
approximately 157 kilometres to the east of the mine site. The pipeline has a capacity of
2,400 tonnes of concentrate per day.
Tailings are disposed of via the unconfined end of the pipe discharge to Harvey
Creek, which drains to the Ok Mani, and then eventually to the Ok Tedi and Fly Rivers.
The original project design called for the construction of a tailings dam (Lukwi) and a
conventional mine tailings management system. Successful construction of a tailings
dam structure was prevented by the natural instability of the terrain due to poor rock
strength characteristics, steep topography, and very high rates of precipitation. The
original design concept was abandoned and replaced with the present riverine disposal
system.
The discharge of rock and sand into the river has filled the Ok Tedi river bed
significantly and has raised its upper regions by many metres. Dredging of the river
sediment has become necessary to maintain a navigable channel for concentrate barges,
and for reducing the incidence of forest dieback due to flooding. OTML operates a
continuous river dredging operation at Bige on the Fly River. Dredged materials
including fine sediment and tailings are stockpiled in the areas adjacent to the river.
ENVIRONMENT
In RPA’s opinion, OTML is doing excellent work in managing the environmental
impacts of the Mount Fubilan operation. The company recognized at the outset the
considerable problems arising from disposal of mine waste, and has engaged local,
national and international cooperation to conduct ongoing scientific studies in
environmental mitigation.
Mining at Ok Tedi has caused significantly greater environmental impacts than was
projected in the initial development stage. The key impact issues are:
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• 60– 90 million tonnes per annum of waste rock and tailings are discharged
into the Ok Tedi River system with the legal approval of the PNG
government.
• Build up of mine-derived sediment has raised the elevation of the riverbed,

resulting in over-bank flooding, vegetation dieback, and shallowing of the
navigable waters. The fish habitat is being impacted in places by sediment.
• Acid Rock Drainage (ARD) has recently been identified as a potential

problem due to the oxidation of sulphides present in dredge stockpiles.
Mitigation measures are now being identified and evaluated.
Numerous environmental, health, and engineering studies have been undertaken to

investigate the impacts of the Mount Fubilan operation. These studies have focused
primarily on the challenges associated with mine waste and process tailings impacts.
All stakeholders associated with the project, including the PNG government, the local
community, OTML, the World Bank, and NGOs have recognized the impact that the
operation is having on the associated areas. At the same time they recognize the
significant impact that would result from a cessation of operations. The stakeholders
have agreed to continue the operation while striving to minimize and mitigate both
current and long-term environmental impacts. This will be achieved through using
current best practice measures and by continuing scientific research.
RPA believes that OTML is pursuing these goals and that the impacts are being
managed consistent with the objectives set out in various agreements supporting the
operation.
MINE CLOSURE
OTML set out its plans for mine closure in 1998 in a conceptual Rehabilitation and
Closure Plan. After many workshops and full discussions with interested parties, OTML
prepared a document entitled “Social and Sustainable Development Issues in Relation to
Mine Closure”. This was reviewed and accepted by the PNG government agencies, and
the “2002 Draft Mine Closure Plan” was approved by the Minister for Mining in August
1-12
2003 and by the Minister for Environment and Conservation in May 2004. The closure
plan is the basis for the OTML Internal Mine Closure Planning Committee (IMCPC)
consultation with local communities.
The 2002 Draft Closure Plan estimated that the cost for closure of the sites would be
approximately $150 million. RPA understands that a revised closure plan has been
reviewed and accepted by the PNG government that sets out a revised estimate of
US$100 million. Financial assurance provisions require that funds be set aside in
biannual contributions to the Ok Tedi Financial Assurance Fund (FAF) to be held jointly
by the State and OTML. At present, the FAF stands at $36,057,664, with contributions
from July 2002 to January 2005. Impact management and site closure plans are currently
under review for the tailings sediment stockpile, and additional closure costs may be
incurred. RPA estimates that the latter could add between $40 and $80 million to the
overall cost.
CAPITAL COSTS
A capital cost estimate totalling US$243 million has been provided for in the life of
mine plan based on the estimates presented by OTML. These include replacement
equipment and ongoing support items. One-time capital projects provided for within this
estimate encompass relocation of the Taranaki crusher and conveyor system, pit
dewatering, a new mill process control system and flotation optimization, and additional
power generation capacity. In the capital cost of $150 million for site closure in the last
year of mine life, RPA has included provision for the Bige tailings site to be closed along
with the mine and mill operations site.
OPERATING COSTS
OTML has carried out a detailed analysis of historical operating costs to provide the
basis for estimating future costs. Unit mining costs are projected to range from $0.75 per
tonne mined in 2005, climbing to the highest level of $1.10 per tonne in the last year of
operation in 2013. Mining costs are forecast to average $0.82 per tonne over the
remaining nine years of mine life. Projected unit mining costs incorporate efficiency
1-13
improvements in haulage fleet productivity to reduce unit costs from the current level of
$0.84 per tonne.
Mill operating costs have been estimated based on the forecasts developed by OTML
in their 2004 Reserve Support Document. Unit milling costs are provided for each of the
primary ore types, reflecting their individual throughput rates and reagent consumption
factors. The mill costs are forecast to vary over a fairly narrow range between a low of
$1.78 per tonne milled to a high of $1.82 per tonne milled with the average over the nine
year life at $1.80 per tonne milled.
Operating costs for concentrate handling, including storage, barging, and reloading
onto export vessels, are forecast at $55.52 per tonne of concentrate.
Other support costs based on the 2004 Reserve Support Document, OTML 2005 – 3
Year Business Plan and on current experience are summarized in Table 1-3:
TABLE 1-3 SUPPORT COST ESTIMATES

Item $ million per year

Dredging $30.4
Technical Services $7.7
Diesel power generation $19.3
Environment $2.5
Commercial Group (logistics, accounting, senior management) $64.2
Community and Business Support $42.5
Total $166.6
1-14
PROJECT ECONOMICS
RPA has developed a project development scenario based on the December 2004
Mineral Reserves and on capital and operating cost estimates.
Table 1-4 presents the Ok Tedi life of mine cash flow projection:
1-15
Table 1-4 Ok Tedi Cash Flow Forecast
2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Ore Mined (000 t) 28,966 28,112 28,900 29,588 29,481 29,282 28,968 29,018 16,759 249,074
Total Waste Mined (000 t) 54,412 49,179 40,465 32,603 17,254 15,568 16,222 13,264 4,009 242,976
Total Mined (000 t) 83,378 77,291 69,365 62,191 46,735 44,850 45,190 42,282 20,768 492,050
Strip Ratio 1.88 1.75 1.40 1.10 0.59 0.53 0.56 0.46 0.24 0.98
Mill Feed (000 t) 28,966 28,112 28,900 29,588 29,481 29,282 28,968 29,018 16,759 249,074
Head Grade - Cu% 0.77 0.80 0.78 0.78 0.81 0.81 0.86 0.92 0.76 0.81
- Au g/t 0.79 1.04 1.13 1.04 1.04 1.02 1.09 1.20 1.09 1.05
Recovery - Cu % 85% 84% 84% 86% 87% 87% 87% 87% 89% 86%
-Au % 72% 72% 70% 68% 68% 68% 68% 68% 67% 69%
Recovered Cu (000 t) 191.3 188.2 188.8 198.4 208.3 207.5 217.8 232.1 112.9 1,745.4
Recovered Au kg 16,472 21,115 22,727 20,795 20,966 20,445 21,573 23,528 12,330 179,951
Cu Concentrate (000 t) 738,755 652,970 665,469 702,405 734,841 733,935 773,829 824,167 397,800 6,224,171
Copper Price ($/lb.) $1.15 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.93
1-16
Copper Revenue ($ 000) $404,761 $252,823 $252,672 $265,142 $278,195 $276,913 $290,261 $309,493 $151,416 $2,481,676
Gold Price ($/oz) $397 $361 $361 $361 $361 $361 $361 $361 $361 $364
Precious Metal Revenue ($ 000) $202,589 $239,198 $257,978 $234,952 $236,601 $230,573 $243,314 $265,532 $139,513 $2,050,250
Total Revenue ($ 000) $607,350 $492,021 $510,650 $500,094 $514,797 $507,486 $533,575 $575,024 $290,928 $4,531,925
Operations Cost ($ 000) $214,894 $203,991 $201,406 $201,519 $193,714 $192,518 $195,676 $198,932 $134,628 $1,737,276
Commercial and Mng. Director ($ 000) $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $577,800
Community & Business Support ($ 000) $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $382,500
Subtotal Operating Cost ($ 000) $321,594 $310,691 $308,106 $308,219 $300,414 $299,218 $302,376 $305,632 $241,328 $2,697,576
Other Cost ($ 000) $61,811 $5,220 $5,220 $5,220 $5,220 $0 $0 $0 $0 $82,691
Total Cost of Production ($ 000) $383,405 $315,911 $313,326 $313,439 $305,634 $299,218 $302,376 $305,632 $241,328 $2,780,267
Capital Costs ($ 000) $39,045 $14,785 $24,370 $17,385 $9,356 $11,145 $5,895 $11,813 $150,000 $283,794
Income Tax ($ 000) $64,381 $47,672 $55,976 $52,698 $61,230 $61,787 $70,534 $84,734 $8,348 $507,359
Net Cash Flow ($ 000) $120,519 $113,653 $116,978 $116,572 $138,577 $135,336 $154,771 $172,846 -$108,748 $960,505
www.rpacan.com
10% NPV $647,374
12% NPV $603,359
SENSITIVITY ANALYSIS
RPA has developed a sensitivity analysis from the cash flow projection (Table 1-3) to
test the impact of the key assumptions such as grade forecast, capital cost estimate,
operating cost factors, and metal prices. The results of each of these sensitivities are
illustrated in Figures 1-1 and 1-2. The results indicate that the net present value of the
project cash flow estimate is most sensitive to metal prices, with the project being least
sensitive to the capital cost assumptions.
FIGURE 1-1 OK TEDI NPV SENSITIVITY ANALYSIS

Ok Tedi Cash Flow Sensitivity
Based on $0.90 Cu & $360 Au
$1.4
Billions
$1.2
$1.0
$0.8
Cashflow 15% NPV
$0.6
$0.4
$0.2
$0.0
-30% -20% -10% 0% 10% 20% 30%
($0.2)
Percentage Change
Price Grade Capital Operating
Source: RPA
1-17
FIGURE 1-2 OK TEDI SENSITIVITY ANALYSIS

Ok Tedi Sensitivity Summary
Cash Flow Sensitivity to +/- 30% Change on Key Factors
$1.6
Billions
$1.4
+/- 30% Sensitivity

$1.2
$1.0
15% NPV Cash Flow Value
+/- 10% Sensitivity
$0.8
$0.6
$0.4
$0.2
$0.0
Price Operating Cost Grade Capital Cost
($0.2)
Key Factors
Source: RPA
INTERPRETATION AND CONCLUSIONS

MINERAL RESOURCE ESTIMATE
OTML has produced a very thorough and well-organized December 2004 report on
Mount Fubilan mineral resources, describing all of the technical details related to the
2004 resource estimate. In RPA’s opinion, OTML has done an excellent job in
developing and documenting its 2004 resource estimation procedures.
Drill hole data and geological interpretations have been based on information that is
two years old, and newer information is now available. OTML is currently in the process
of updating these data for the next mineral resource estimate. RPA is of the opinion that
this issue primarily affects the confidence associated with the deep resources well below
the current ultimate pit design.
1-18
MINERAL RESERVE ESTIMATE

The ultimate pit design used to determine the estimate of Mineral Reserves is well
within the theoretical economic limits developed in the optimization study.
RPA concludes that some of the operating cost and performance parameters used in
the analysis are based on the assumptions of performance and cost improvements
compared to current experience. OTML is now implementing initiatives to reduce
haulage costs in the mine and to increase mill productivity and performance. These are
key factors underlying OTML’s life of mine cost estimates.
On the basis of the detailed and extensive analysis, and methods applied by OTML,
RPA concludes that the Mineral Reserves as estimated based on the 13D4 pit design
represent Proven and Probable Mineral Reserves consistent with the definitions set out in
NI 43-101 and specified in the CIM Standards on Mineral Resources and Reserves
Definitions and Guidelines adopted by the CIM Council on August 20, 2000.
EXPLORATION POTENTIAL
No significant exploration potential has been found other than in the immediate
environs of the Mount Fubilan mine.
RECOMMENDATIONS
RPA recommends that OTML continue its efforts to assess the management and
closure aspects of the Bige dredging operation and to evaluate the closure costs
associated with this aspect of the operation.
RPA has not identified any significant problems with the OTML resource estimation
methodology. OTML reported the December 2004 Mineral Resources based on a bench
datum of 1,153 m ASL. It is RPA’s view that a portion of the OTML resource estimate
does not have reasonable prospects for economic extraction even at significantly higher
metal price assumptions. RPA recommends that an economic pit limit based on higher
1-19
level price assumptions be adopted as a limit on the reported resource estimate. Other
RPA resource-related recommendations should be considered as opportunities for future
refinements. RPA notes that some of RPA’s recommendations have been made
previously in past reports by OTML and SRK, and that OTML could not implement these
refinements for the 2004 resource estimate because of time limitations.
RPA has made recommendations on streamlining the drill hole database, QA/QC
reviews specifically as they relate to assay checking, and on improvements to the mineral
resource modelling methodology.
RPA recommends that the ongoing geotechnical assessment and monitoring progress
be continued, specifically as it relates to the pit slope design and construction criteria as
well as to the dewatering and depressurization work necessary to achieve the design pit
limits safely and effectively.
1-20
2 INTRODUCTION AND TERMS OF

REFERENCE
Roscoe Postle Associates Inc. (RPA) was retained by Inmet Mining Corporation
(Inmet) and Ok Tedi Mining Limited (OTML) to independently review and audit the
Mineral Resource and Mineral Reserve estimates of the Mount Fubilan Mine in Papua
New Guinea and to prepare a National Instrument 43-101 (NI 43-101) report. This
technical report was written by RPA in accordance with the requirements of NI 43-101,
Companion Policy 43-101CP, and Form 43-101F1 of the Canadian Securities
Administrators (CSA).
OTML operates the Mount Fubilan Mine located in the Western Province of Papua
New Guinea (PNG). Inmet owns an 18% interest in OTML, with 52% of OTML held by
the PNG Sustainable Development Program Limited and the remaining 30% interest in
OTML is owned by the PNG government.
The Ok Tedi porphyry copper prospect was discovered by Kennecott Copper

Corporation (Kennecott) in June 1968. Exploration lapsed from 1972 to 1975 while
Kennecott and the PNG government negotiated future mining terms. Over the following
fifteen months, the government carried out further exploration under the supervision of
Behre Dolbear and Company Inc. (Behre Dolbear) and in 1976 entered into an agreement
with an international consortium of companies led by the Broken Hill Proprietary
Company Limited (BHP) for final feasibility studies.
The mining of the deposit was planned in three phases. The initial phase involved
mining and processing of oxide gold mineralization from the gold cap. The second phase
consisted of mining and treatment of both sulphide copper and oxide gold ore. The final
and current stage involves mining of sulphide copper-gold ore, which includes both
porphyry and skarn types of mineralization. Gold production commenced at the Mount
Fubilan Mine in 1984, and the first copper processing facilities were commissioned in
1987.
2-1
This technical report presents the OTML December 2004 Mineral Resource and
Mineral Reserve estimates for the Mount Fubilan Mine. The principal technical
documents and files related to RPA’s audit of the December 2004 Mineral Resource and
Mineral Reserve estimates are listed in the Sources of Information.
Work on this project was completed by RPA Principal Mining Engineer James
Hendry, P.Eng., RPA Consulting Geological Engineer Luke Evans, M.Sc., P.Eng, and
Gerd Wiatzka, P.Eng., Principal, Manager Mining with SENES Consultants Limited
(SENES).
Mr. Hendry, Mr. Evans, and Mr. Wiatzka are Qualified Persons in accordance with
the requirements of NI 43-101. Mr. Hendry, Mr. Evans, and Mr. Wiatzka visited the
Mount Fubilan Mine from March 7 to 11, 2005.
Technical documents and reports on the property were reviewed and obtained from
OTML personnel at the site. Additional information was obtained from Inmet and public
sources. Discussions were held with the following technical personnel:
• Frank Balint, Inmet Vice-President Corporate Development
• Jochen E. Tilk, Inmet President and Chief Operating Officer
• Ian Sheppard, OTML Executive Manager Planning and Technical Services
• Andrew Sharp OTML Manager Mine Planning Services
• Michael Humphreys, OTML Senior Resource Analyst
• Janet Edgecombe, OTML Manager Mill Technical Services
• Norbert Baczynski, OTML Team Leader Geotechnical Engineering
• Jim Veness, OTML Manager Environment
• David L.K. Willy, Manager Laboratory Services
• Jonathan Kepa, OTML Senior Mine Geologist
• Benedict Jainona, OTML Senior Exploration Geologist
• Amane Sino, OTML Senior Resource Geologist
2-2
RPA would like to thank everyone for their co-operation and assistance in carrying
out this assignment.
2-3
3 LIST OF ABBREVIATIONS
In this report, monetary units are United States dollars (US$) unless otherwise
specified. The metric system (SI) of measurements and units has been used unless
otherwise specified. A table showing abbreviations used in this report is provided below.
TABLE 3-1 LIST OF ABBREVIATIONS

Abbreviation Meaning Abbreviat Meaning

ion
Ag Silver m3 cubic metres
ASCu acid soluble copper m Metre
ASL elevation above sea level (m) mm millimetre
Au Gold Ma million years
Cu copper Mt million tonnes
ft Feet NQ drill core (47.6 mm
diam.)
g Grams oz troy ounce
g/t Grams per tonne pH acidity/alkalinity
Ha hectare (2.471 acres) ppm, ppb parts per million/billion
HQ drill core (63.5 mm diam.) PQ drill core (85mm diam.)
kg kilogram RC reverse circulation
km kilometre S Sulphur
koz kilo ounce SCu sulphide copper
kt kilotonne tonnes or t metric tonnes
m Metre
3-1
4 QUALIFICATIONS
Roscoe Postle Associates Inc. (RPA) is an independent firm of Geological and
Mining Consultants based in Toronto with an office in Vancouver. Since its
establishment in 1985, RPA has carried out close to 1,000 consulting assignments
worldwide for more than 450 clients, including major mining companies, junior mining
and exploration companies, financial institutions, governments, law firms, and individual
investors. Our clients are principally Canadian, American, and European companies.
Our business primarily involves providing independent opinions on ore reserves,

technical aspects and economics of mining projects, valuation of mining and exploration
properties, and scoping, pre-feasibility, and feasibility studies. For chartered banks and
offshore banks, we have carried out a number of due diligence and project monitoring
assignments. We have completed assignments on projects located in all parts of Canada,
the United States, Russia, Latin America, Australia, and in other countries in Europe,
Africa and Asia.
4-1
5 DISCLAIMER
This report has been prepared by RPA for Inmet and OTML. RPA has neither
verified the mineral land titles nor the status of ownership. RPA has relied on mineral
land title information as provided by OTML and Inmet. The information, conclusions,
and estimates contained herein are based on:
• Information available to RPA at the time of preparation of this report,
• Assumptions, conditions and qualifications as set forth in this report, and
• Data, reports, and opinions supplied by OTML and Inmet and other third party
sources.
5-1
6 PROPERTY DESCRIPTION AND

LOCATION
PROPERTY LOCATION
The Mount Fubilan Mine is located in the Western Province of Papua New Guinea
(PNG) at approximately longitude 141° 08’E and latitude 5° 12’S (Figure 6-1). The mine
is approximately twenty kilometres by road northeast of Tabubil.
The mine area is located 18 km east of the PNG-Indonesia border, on the

southernmost extremity of the Star Mountain Range, which is situated on the northwest
edge of the Western Province. Sitting roughly equidistant from the north and south
coastlines, the mine lies 210 km directly west of the Porgera gold mine. The headwaters
of the Fly River system are also in the Star Mountains.
The mining activities centre on Mount Fubilan, in a high rainfall area characterized
by near vertical cliffs and dense tropical rainforest. The ore treatment facilities are
located at Folomian at an elevation of 1,630 metres. Mount Fubilan has now been
reduced by over 300 metres from its original pre-mining elevation of 2,095 metres above
sea level.
6-1
N 144° 150° 156°
Legend:
Pacific Ocean National capital 0°
Provincial capital
OK TEDI MINE Mussau Is. City, town
Admirality Islands
Lorengau Major airport
Manus New Ireland
Vanimo Manus Is.
New Hanover International boundary
Kavieng
Jayapura Tabar Is. Provincial boundary
West
Aitape
PAPUA NEW GUINEA New Ireland Main road
Lihir Is.
Sepik Wewak
Maprik Namatanai
Angoram Bismarck Sea Rabaul
Awar Western Highlands Feni Is.
East Sepik Karkar Island
Indonesia
Eastern Highlands
Madang Long Island
Buka Is.
Mount Madang Talasea Hanahan
Enga Hagen East New
Tabubil Wabag Kimbe Hoskins Britain Bougainville
Kiunga Mendi Goroka Umboi Is. New Britain
Arawa 6°
SouthernKundiawa Morobe Kandrian Kieta
Highlands Lae West New
Fly
Okapa Britain Buin Choiseul Isl.

Gulf
Western Kikori Chimbu Bulolo
Riv
er
Kaintiba Wau Solomon Sea Santa Is.
Morobe New Georgia
Group
Kerema Trobriand Islands
Weam Central Popondetta Losuia
Merauke Gulf of Papua Kokoda Goodenough Is.
Woodlark Is. Solomon Islands
Daru Northern
Talbot Is.(Aus.)
Saibai Is.(Aus.) Port Moresby
Fergusson Is.
D'Entrecasteaux Islands
Honiara
Alotau
Arafura Sea Kupiand
Normanby Is. Guadalcanal
Torres Strait
National Capital Abau Milne Bay
District Misima Is. Louisiade Archipelago
Rossel Is. Rennell Is.

Tagula Is.
12°
G
Wuipa
re
at
Ba
rri
er
Coral Sea
Re
ef
Gulf of
Carpentaria
Cooktown
0 100 200 300 400 500
Australia
Kilometres
Cairns
CHINA
TAIWAN
MYANMAR Hong Kong
LAOS
PACIFIC
THAILAND VIETNAM
15° PHILIPPINES
CAMBODIA
OCEAN
BRUNEI
MALAYSIA
PAPUA NEW GUINEA
0° SINGAPORE
1 Figure 6-1
INDONESIA SOLOMON
ISLANDS
15° VANUATU
Inmet Mining Corporation
FIJI
New
AUSTRALIA
Caledonia (Fr.)
Ok Tedi Mine
30°
Papua New Guinea, South Pacific
NEW ZEALAND
General Location Map
105° 120° 135° 150° 165°
June 2005
6-2
PROPERTY STATUS
SURFACE LEASES
The Mount Fubilan Mine property comprises two contiguous mineral licenses
covering an area of 21,700 ha, one Special Mining Lease (SML 1), twenty Leases for
Mining Purposes (LMP), and one Special Mining Easement (SME) that collectively
cover an area of approximately 14,959 ha (Table 6-1). All of the leases have been
surveyed. OTML makes an annual rental payment to the Government Department of
Mines (DOM) at a fixed rate per hectare.
Special Mining Lease 1 was issued under the Mining Act and it grants a right to mine
at Mount Fubilan covering an area of 2,083 ha. Renewal negotiations for this lease are
now underway. Clause 12.2 of the Mining (Ok Tedi Agreement) Act gives a right to
renew for a further 21 years from the expiry date. Any new applications for land are tied
to the principal lease SML 1 which will be due for expiry in May 2022, once renewed.
OTML expects that leases will be renewed, as required, to enable full exploitation of the
Mount Fubilan Mine.
Under the Mining Act, a lease compensation agreement between OTML and the
landowners is necessary before a lease can be granted by the DOM. In the case of
OTML, the compensation payments per hectare are standardized and comprise a number
of cost components, including Occupation Fee, Restriction of Access Fee, Cleared Land
Fee, Physically Used Land Fee, and Non Renewable Resource Fund. Payments to the
Non Renewable Resource Fund are accumulated in the Lamin Trust Account for the
future generations of the landowners. The agreements all have five year review clauses,
and in the case of the SML and LMP the review will take place in 2006.
LMP 1 is currently under renewal and partial surrender. LMP 1 will cover an area of
8,593 ha once renewed. OTML also has 14 expired surface leases with applications for
surrender that cover an area of approximately 6,560 ha (Table 6-2). LMP 26, which
6-3
covers the southern part of the original Lukwi tailings area, has expired and an
application for surrender has been made.
The exploration licences and the main surface leases (SML 1 and LMP 1) are shown
in Figure 6-2.
There are smaller surface leases not shown in Figure 6-2 as they are generally
associated with small gravel pits, covering areas ranging from a few hectares to just over
100 ha, and environmental monitoring stations, covering areas that are less than one
hectare.
OTML also has two leases related to the dredging operation at Bige (Inset Drawing in
Figure 6-2). The surface areas for LMP 37 and LMP 79 are 2,116 ha and 1,504 ha,
respectively.
LAND ACT TENEMENTS

Some portions of land used by OTML have been acquired under the Land Act
provisions and they mainly include the Tabubil Township and the Ok Menga Hydro
scheme (Figure 6-2). In the case of the Land Act provisions, the State acquires the land
for a period of ninety-nine years and then sub-lets it back to OTML for various periods of
time as required.
6-4
TABLE 6-1
List of Active Surface Leases
Mount Fubilan Mine, Papua New Guinea
Lease
Count Number Lease Description Area (ha) Expiry Date Status
1 SML 1 Mine & Mill 2083 28/05/2002 Under Renewal, Application lodged
26/02/2002
2 LMP 1 Southern Dumps, Taranaki and Ok Mani Catchment 8,593 25/8/2002 Under Renewal & Partial Surrender,
Application Lodged 26/02/2002
3 LMP 9 Primden Smarden (Alice) Gravel Pit 38.645 29/10/2003 Under Renewal, Application Lodged
17/12/2003
4 LMP 12 Migalkit gravel pit (Km. 122-123) 54 29/10/2003 Under Renewal, Application Lodged
17/12/2003
5 LMP 16 Sawmill flats (CampSite area) 11.07 28/12/2004 Under Renewal, Application Lodged
21/09/2004
6 LMP 17 Lower OK Tedi Gravel Pit South 5.5 28/12/2004 Under Renewal, Application Lodged
21/09/2004
7 LMP 22 Yuk Creek Mini Hydro 6.826 28/12/2004 Under Renewal, Application Lodged
21/09/2004
8 LMP 25 Rumginae Gravel Pit Extension 118.81 3/4/2006 Current
9 LMP 27 Kumsumbip Gravel Pit (Km 142.5) 38.21 10/8/2010 Current
10 LMP 28 Tabubil Plateau Extension (Eastern Escarpment) 219.1 Period tied to SML 1 Current
11 LMP 29 Daplan Creek Water Supply 4.507 12/12/2011 Current
12 LMP 31 Kuambit Environment Station 0.2404 Period tied to SML 1 Current
13 LMP 32 Krohoi Environment Station 0.4736 Period tied to SML 1 Current
14 LMP 33 Hukit Environment Station 0.1316 Period tied to SML 1 Current
15 LMP 36 Tabubil East Extension 6.599 Period tied to SML 1 Current
16 LMP 37 Dredge Trial/Mine waste camp 2,116 Period tied to SML 1 Current
17 LMP 73 Alice Gravel Pit Extension 0.796 Current
18 LMP 74 Haidauwogam Environmental Station 0.0435 Current
19 LMP 75 Tabubil Escarpment Extension (down to Ok Tedi 153.96 Current
River)
20 LMP 76 Alice Gravel Pit Access Road 0.825 Current
21 LMP 79 West Bank – Sand Storage. 1,504.23 Period tied to SML 1 Current
22 SME 4 Yuk/Dablan Creek Pipeline Easement. 3.165 Period tied to SML 1 Under Renewal
Total 14,959
Notes
SML Special Mining Lease
LMP Lease for Mining Purposes
SME Special Mining Easement
6-5
320,000 E
300,000 E
310,000 E
330,000 E
340,000 E
141°E
141°0’0” E
141°10’0” E
LMP 37
5°10’0” S
N
BIGE
EL 581
430,000 N
N EL 1337 LMP 79
PAPUA NEW GUINEA

EL 581 SML 1 6°00’S
Ok Tedi River
Worlshop
IRIAN JAYA
Gold Process
Facility
Mine Mine A
Area ccess R
Ok Ningi oad
5°15’0” S Dam
KIUNGA
iver
Fly R
Mt Robinson 0 4 8 12 16 20
420,000 N
Ok Tedi River
Kilometres
6-6
Ok Man
i River Tabubil Township Lease
Construction Thermal Power Station
141°00’E 141°30’E Mt Anju Camp TABUBIL Legend:

Industrial Area
Folomian Road
LMP 1
MINE Drainage
Tabubil
SITE Powerhouse Area
Ta
bu
bil
-K
Ok Ma
iun Ok Menga
5°30’S 410,000 N
NEW GUINEA
ga Ok Menga
Ro Hydro Plant Lease
er
Dam
a d
Riv
IRIAN JAYA
Fly
Ningerum
Figure 6-2
ad
Ro
ss
PAPUA
ce
Ac

i
kw
www.rpacan.com
Lu
i
6°00’S
Ok Ted
Kiunga LMP 26 Ok Tedi Mine

0 30 km
145° E 150° E 155° E
Madang
5° S 400,000 N Exploration Licenses
Ok Tedi
0 2 4 6 8 10 & Surface Leases
10° S
Port Moresby
June 2005 Kilometres
TABLE 6-2
List of Expired Surface Leases With Applications for Surrender
Mount Fubilan Mine, Papua New Guinea
Lease
Count Number Lease Description Area (ha) Expiry Date Status
1 LMP 8 Haidum Gravel Pit Pit 92.11 29/10/2003 Expired. Applied for Surrender
17/12/2003.
2 LMP 10 Mariksim Gravel Pit (Km. 115) 31.55 29/10/2003 Expired. Applied for Surrender
17/12/2003.
3 LMP 11 Kalamuksim Gravel Pit (Km. 118) 5.76 29/10/2003 Expired. Applied for Surrender
17/12/2003.
4 LMP 14 Abayakbang Gravel Pit A (Km. 132) 2.092 29/10/2003 Expired. Applied for Surrender
17/12/2003.
5 LMP 15 Abayakbang Gravel Pit A1 (Km. 128) 2.135 29/01/2004 Expired. Applied for Surrender
17/12/2003.
6 LMP 18 Lower OK Tedi Gravel Pit North 23.4 28/12/2004 Expired. Applied for Surrender
21/09/2004
7 LMP 19 Old Sawmill Site East of Road 12.12 28/12/2004 Expired. Applied for Surrender
17/12/2003
8 LMP 21 Tabubil Explosive Magazine 9.13 28/12/2004 Expired. Applied for Surrender
17/12/2003
9 LMP 23 Maraksim Gravel Pit (Km 118) 2.957 22/3/2005 Expired, Applied for Surrender 21/09/04
10 LMP 24 Ok Whae Sand Pit 16.3 22/3/2005 Expired, Applied for Surrender 21/09/04
11 LMP 26 Lukwi Extension 6,200 25/08/2002 Expired, Applied for Surrender

26/02/2002
12 SME 1 Ok Ma Access Road 79.72 28/12/2004 Expired. Applied for Surrender
21/09/2004
13 SME 2 Tabubil/Mine Access Road 54.36 28/12/2004 Expired. Applied for Surrender
21/09/2004
14 SME 3 Tabubil/Ok Ningi Transmission Line 28.016 28/12/2004 Expired. Applied for Surrender
21/09/2004
Total 6,560
Notes
SML Special Mining Lease
LMP Lease for Mining Purposes
SME Special Mining Easement
6-7-7
EXPLORATION LICENSES
Exploration Licenses (EL) have a term not exceeding two years and can be renewed
in accordance with the provisions of the Mining Act. The exploration licenses currently
have terms to November and December 2005 (Table 6-3). EL581 has an area of 18,000
ha surrounding the mine, and EL1337 covers 3,700 ha around Mount Binnie West. The
exploration licences are shown in Figure 6-2.
TABLE 6-3 OTML EXPLORATION LICENSES

Exploration License Hectares Licence Term

EL581 18,000 22/12/03 to 21/12/05
EL1337 3,700 4/11/03 to 03/11/05
Total 21,700
ENVIRONMENTAL AND PERMITTING STATUS

REGULATORY REGIME
The mine operates under the direction and obligations of the Mining (Ok Tedi
Agreement) Act Chapter 363 and its supplementary amendments (see complete list in
Appendix A).
At present the regulatory regime is defined by the OTML Environmental Regime,

which was brought into effect in December 2001 through passage of the Ok Tedi Mine
Continuation (Ninth Supplemental Agreement) Act. This supplemental agreement
provides the basis for continuation of operations, including requirements for
environmental and social obligations within the context of the following principal
components:
• Environmental Regime 2001
• PNG Sustainable Development Program
• Community Mine Continuation Agreements
• Ok Tedi Development Foundation
6-8
• Mine Closure Sinking Fund.
The Ninth Supplemental Agreement defines the expectations with respect to

environmental performance of the operation and the ongoing scientific research program
(Schedule 1 and 2, respectively). The mandatory requirements of Schedule 1 provide the
framework for reporting on the Environmental Values agreed to by the community, state,
and OTML. Schedule 2 provides the basis for research and development for critical
issues associated with the ongoing operation and for its effective closure and
decommissioning.
COMMUNITY MINE CONTINUATION AGREEMENTS

The national government of PNG passed legislation in November 2001 establishing
the basis under which the Ok Tedi mine was to continue operating. The key aspect of
this legislation was the basis for the consent given by the communities affected by the
continuation of the mine operation.
The Community Mine Continuation Agreement (CMCA) process was the framework
for expressing the predicted mine impacts and negotiating with the communities with
respect to the ongoing operations. Principal parties to the agreements were landowner
representatives from six Fly River/Ok Tedi regions, the PNG National Government, and
OTML. The Fly River Provincial Government and relevant local governments were also
involved in the negotiations.
The process was observed by independent non-government organizations, the

Individual and Community Rights Advocacy Forum (ICRAF), and the PNG Council of
Churches. OTML also provided landowners with negotiation and conflict resolution
training through PEACE Foundation Melanesia.
The process was supported by three key functions:

• Setting up a development foundation to contribute to sustainable development
in the Western Province into the future,
6-9
• A new environmental monitoring and reporting regime to better understand

the impacts of the mine operations,
• Legislation - Mining (Ok Tedi Mine Continuation (Ninth Supplemental)

Agreement) Act.
SOCIAL COMMITMENTS AND IMPLEMENTATION

The CMCAs provide a mix of benefits for landowners affected by the mine that
includes compensation for past and current impacts as well as initiatives for sustained
development beyond the life of the mine. The mix of benefits acknowledges the need to
provide for the landowners’ families well beyond the mine's economic life, and that
replacement economic support must begin immediately. Activities in this respect have
included the following:
COMPENSATION AND SUSTAINABILITY

Before 2001, the only offset compensation was the Fly River Development
Trust and the Highway Development Trust, both of which have since been rolled
into the CMCAs.
The CMCAs cover nine regions that include 156 villages. The agreements
resulted from meetings and discussions with villagers, comprising at least two
consultation visits and sign off by 2 representatives of each village. As a result of
the agreements multiple community offsets are now in place, including:
• 9th Trust Mine Continuation Agreements (MCAs), which for most
communities have 3 components to them, namely:
Cash component (not all)
Investment Component (at closure, goes to development)
Development Component.
• 8th Trust MCA provided for flooding and sedimentation impacts due to
production of mine waste and lease compensation.
• Lower Ok Tedi Agreement that deals with agreed settlement for dieback and
development.
6-10
GOODWILL AND SUSTAINABILITY

In addition to the community offset agreements outlined above, OTML also has a
number of goodwill programs underway that include for example:
• Food Security – food programs to help people stay in “home” areas for longer
periods and agriculture training and support.
• Health and Education – provision of local community health programs,

mobile floating clinics, addressing malaria, TB, HIV/AIDS, upper respiratory
diseases.
• Community Development training programs.
CLOSURE REQUIREMENTS
OTML commenced planning for mine closure in 1998 with a conceptual
Rehabilitation and Closure Plan. After many workshops and comprehensive discussions
with interested parties, OTML prepared a submission entitled “Social and Sustainable
Development Issues in Relation to Mine Closure”. This was subsequently accepted by the
State, and the “2002 Draft Mine Closure Plan” was approved by the Minister for Mining
in August 2003 and by the Minister for Environment and Conservation in May 2004. The
mine closure plans and supporting discussion have been used by the OTML Internal
Mine Closure Planning Committee (IMCPC) as the basis for community consultation and
subsequent preparation of the draft mine closure plan.
The first estimate of the closure cost totalled approximately $US150 million,
primarily for the mine and mill operations sites. RPA understands that the PNG
government had accepted a required closure cost estimate of US$100 million. A
Financial Assurance program is currently in place where OTML biannual contributions
are made to the Ok Tedi Financial Assurance Fund (FAF), held jointly by the state and
OTML. The FAF funds are to be used for the final closure, reclamation and
rehabilitation required after the operations cease. The FAF currently stands at US$36
million accumulated through contributions from July 2002 to January 2005.
6-11
7 ACCESSIBILITY, LOCAL
RESOURCES, PHYSIOGRAPHY AND
INFRASTRUCTURE
ACCESSIBILITY
Tabubil can be accessed via air and boat/road from Port Moresby. The primary
means of transporting personnel is via an OTML aircraft which provides regular flights
between Tabubil and Cairns Austalia, Port Moresby and smaller communities in the
immediate vicinity. Concentrate products and freight are primarily transported via river
barge between tidewater and Kiunga located on the Fly River at a distance of more than
800 km. From Kiunga freight is transported to the operation site via an all weather gravel
road approximately 137 km. Copper concentrate is transported by pipeline, in slurry
form, from the concentrator to Kiunga, where it is dewatered and loaded onto the barges
for transport and reloading into ocean going ships. Access between Tabubil and the
Mount Fubilan operations site is via the Mine Access Road (Figure 6-2).
CLIMATE
In Tabubil, temperatures range from a mean of 20° C at night to a daytime average of
27° C. Extremes of 12° C and 39° C have been recorded. Rain falls 339 days each year
and averages 8,000 mm per annum at Tabubil and approximately 10,000 mm per year at
Mount Fubilan, making this area one of the wettest places on earth. There is a
pronounced wet season from October to March. The high rainfall has enhanced
vegetation growth with moss forest and dense, broad leaf undergrowth.
LOCAL RESOURCES
Tabubil is a town that was established by OTML as a residential and support base for
the mine. The community has primary and secondary schools, churches, a hospital, a
supermarket, sporting facilities, a golf club, and a large number of locally-owned
7-1
businesses. People from all over PNG come to Tabubil for employment. Tabubil has a
population of about 10,000 people, making it the largest settlement in western PNG. The
Western Province is the most sparsely populated province in PNG with an estimated total
population of 155,000.
OTML operates its own hydro-electrical power generation plant on the Ok Menga
River (Figure 6-2).
FIGURE 7-1 AIR PHOTO OF TABUBIL (PHOTO FROM WWW.OKTEDI.COM)
7-2
INFRASTRUCTURE
The Mount Fubilan mine infrastructure is shown in Figure 7-2.
FIGURE 7-2 MOUNT FUBILAN SITE AND TABUBIL IN BACKGROUND
PHYSIOGRAPHY
The mining activities are centred on Mount Fubilan, which had a pre-mining peak
elevation of 2,095 m. The area experiences high rainfall and is characterized by near-
vertical cliffs surrounded by dense tropical rain forest. The terrain is mountainous, with
local relief of 1,500 m or more. Ridges are typically narrow with very steep flanks.
Mount Fubilan lies within the southern foothills of the Star Mountains, which rise to
4,000 m above sea level and form the watershed divide between the Sepik and Fly rivers.
7-3
8 HISTORY
In 1963, a government patrol made first contact with the Min people of the Star
Mountains and noticed signs of copper mineralization near the present mine site. In 1968
the Mount Fubilan copper-gold deposit was discovered. In 1969, geologists from the
Kennecott Copper Corporation were issued a prospecting authority over the area
From 1969 to 1971 diamond-drilling programs established ore reserves; however,

Kennecott and the PNG Government could not reach agreement on terms to develop the
mine and in 1975 Kennecott withdrew from the project. In 1976, the Broken Hill
Proprietary Company Limited (BHP) of Australia entered into negotiations with the PNG
Government, and subsequently the government passed the Mining (Ok Tedi Agreement)
Act and an international consortium was formed to assess the feasibility of developing a
gold and copper mining operation. A ten-volume feasibility study was prepared and
presented to the PNG Government in 1979.
In February 1980 the national government approved the project and exercised its
option to take up a 20 per cent shareholding, and in June the Ok Tedi Supplemental
Agreement Act was passed. In 1981, Ok Tedi Mining Limited (OTML) was incorporated
to develop and operate the project, a lease was granted to OTML, and the construction
began. The development program took almost eight years and cost US$1,400 million.
The operation was planned to be developed in three phases:
• Phase 1: construction of the mine site infrastructure, including 170 kilometres of

roads, a tug and barge system with full port facilities at Kiunga to operate over
1,300 kilometres of river and sea, and the Tabubil township, and mining of the
gold ore capping the main copper deposit.
• Phase 2: development of separate treatment facilities for the copper ore,

construction of the hydroelectric power station, and provision of river transport
and export loading facilities for copper concentrates.
• Phase 3: increased copper production and shutdown of the gold circuit after
exhaustion of the gold cap.
8-1
The third (current) stage involves mining of sulphide copper-gold ore, which includes
porphyry and skarn mineralization. Table 8-1 summarizes the production history.
TABLE 8-1 MOUNT FUBILAN MINE PRODUCTION HISTORY

Copper Contained Contained

Financial Gold Bullion Concentrate. Copper Gold
Year (ozs.) (tonnes) (tonnes) (ozs.)
1985 523,847 - - -
1986 601,475 - - -
1987 353,853 106,578 39,488 230,065
1988 198,770 196,360 52,677 381,365
1989 2,608 441,795 135,309 510,367
1990 521,267 170,210 443,766
1991 - 600,933 204,459 355,864
1992 - 568,599 193,359 337,415
1993 - 588,849 203,184 394,039
1994 - 587,644 207,236 476,643
1995 - 613,957 212,737 482,132
1996 - 542,415 185,665 425,611
1997 - 334,130 111,515 265,758
1998 - 491,336 151,556 413,265
1999 - 623,987 187,920 401,568
2000 - 693,654 203,060 533,959
2001 - 694,900 203,762 455,222
2002 - 716,021 208,123 467,886
2003 - 638,747 186,862 480,300
2004 628,000 173,400 524,500
Total 1,680,553 9,589,172 3,030,522 7,579,725
EXPLORATION HISTORY
The Ok Tedi porphyry copper prospect, now known as the Mount Fubilan mine, was
discovered by Kennecott Copper Corporation (Kennecott) in June 1968. Kennecott
geologists D. Fishburn and J. Felderhoff, on helicopter reconnaissance exploration,
8-2
discovered mineralized float at the confluence of the Ok Tedi and Ok Menga rivers and
traced it back to its source in the Mount Fubilan region. Exploration lapsed from 1972 to
1975 while Kennecott and the PNG government negotiated future mining terms. During
this period of initial exploration and negotiations on possible development of the deposit,
PNG itself was undergoing the change from colonial rule to self-government and finally
to full independence in September 1975. Negotiations failed in March 1975 when the
PNG government announced their refusal to renew the prospecting authorities that
covered the deposit and that had been held by Kennecott since 1968. Over the following
15 months, the government carried out exploration under the supervision of Behre
Dolbear and in 1976 entered into an agreement with an international consortium of
companies led by the Broken Hill Proprietary Company Limited (BHP) for final
feasibility studies (Howell et al., 1978).
Exploration continues at the present time with diamond drilling, specifically in the
immediate proximity of the Mount Fubilan mine.
HISTORICAL MINERAL RESOURCE AND MINERAL

RESERVE ESTIMATES
The recent historical OTML Mineral Resource and Reserve estimates are summarized
below. RPA has not reviewed the historical estimates in detail and cannot comment on
their reliability. They are presented only as relevant historical information. OTML has
used the classification conventions of the Australasian Code for Reporting of Identified
Mineral Resources and Ore Reserves (the JORC Code-1996). The Australian JORC
Code (1996 and 2004) resource and reserve classification definitions are similar to the
Canadian CIM (2000 and 2004) definitions.
Table 8-2 presents a summary of the June 2002, December 2003, and June 2004
resource estimates. A significant increase in the global resource occurred in June 2004
due primarily to a lowering of the cut-off grade. SRK audited the December 2003 and
8-3
the June 2004 resource and reserve estimates and identified no material flaws (SRK,
2004a and 2004b).
TABLE 8-2 RECENT HISTORICAL MINERAL RESOURCE ESTIMATES

Date Classification Tonnes Cu Au

(Mt) (%) (g/t)
June 2002 Measured 470.6 0.87 0.96
June 2002 Indicated 217.6 0.55 0.65
June 2002 Inferred 15.5 0.46 0.46
June 2002 Total Mineral Resource 703.6 0.76 0.85
December 2003 Measured 432.2 0.87 0.97

December 2003 Indicated 215.8 0.56 0.65
December 2003 Inferred 15.4 0.46 0.46
December 2003 Total Mineral Resource 663.5 0.76 0.85
June 2004 Measured 375.1 0.79 0.92

June 2004 Indicated 352.7 0.56 0.67
June 2004 Inferred 176.4 0.49 0.68
June 2004 Total Mineral Resource 904.1 0.64 0.78
The resource estimates all have been based on geological interpretations developed in
2000 and 2001 and are reported as all material between the then current topographic
surface and a base datum of 1153 m elevation.
Table 8-3 summarizes the recent historical Mineral Reserve Estimates.
8-4
TABLE 8-3 RECENT HISTORICAL MINERAL RESERVE

ESTIMATES
Date Classification Tonnes Cu Au

(Mt) (%) (g/t)
June 2002 Proven 253.9 0.90 0.94
June 2002 Probable 34.1 0.57 0.67
June 2002 Total Mineral Reserves 288.0 0.85 0.91
December 2003 Proven 214.6 0.91 0.97

December 2003 Probable 31.5 0.58 0.67
December 2003 Total Mineral Reserves 246.1 0.87 0.93
June 2004 Proven 239.4 0.84 1.03

June 2004 Probable 24.7 0.75 1.27
June 2004 Total Mineral Reserves 264.1 0.84 1.05
The reserve estimates are each based on the then current pit limit designs and the
mining elevations at that time.
8-5
9 GEOLOGICAL SETTING
REGIONAL GEOLOGY
The Ok Tedi mineral district lies at the fringe of the northwest trending physiographic
province in the southwestern region of PNG. The regional setting comprises the northern
margin of Proterozoic-Paleozoic basement rocks of the Australian continent overlain by a
fold-thrust belt of Mesozoic and Tertiary platform cover rocks. Miocene-Pleistocene
igneous intrusives within this belt host major mineral districts of the area, including Ok
Tedi (Mount Fubilan), Ertsberg, Porgera, and Kare. A belt of greenschist facies
metamorphic slates and phyllites occurs to the north. Unmetamorphosed overthrust slabs
of Eocene oceanic crust and Miocene volcanic rocks unconformably overlie the
metamorphic rocks. Island arc type volcanic rocks with wedges of basement oceanic
crust occur beyond the metamorphic rocks, fringing the PNG coastal range.
Regional deformation, metamorphism, and igneous activities accompanied a

southwest-northeast tectonic compression contemporaneous with north-west trending
basement core uplift. A prominent northeast-southwest trending regional structure
governs the attitudes of the steeply dipping north to northeast trending fractures,
dilational faults, and fractures. Igneous, hydrothermal activity and mineralization are
associated with the deformation events in the region.
Regional geology is dominated by continental margin marine sedimentary siltstones,

mudstones, and limestones. These sediments were deposited from the Cretaceous to mid-
Miocene in an extensional framework. The fault network provided conduits for magma
and fluid during subsequent reactivation.
Post depositional (<12 Ma) regional compression occurred in response to the oblique
convergence of the Australian Plate to the south and Pacific Plate to the north. This
compression produced regional folding and reactivation of the extensional structural
framework.
9-1
Emplacement of regional intrusive complexes along faults commenced approximately

2.6 Ma and continued intermittently until 0.7 Ma. Two major intrusives are recognised in
the region, including the Miocene - Pliocene Mount Ian Intrusive Complex in the
Townsville area and the younger Pliocene-Pleistocene (2.6Ma -1.1 Ma) Star Mountains
Intrusive Complex at Ok Tedi, in the Mount Frew and Mount Kwang areas.
The Mt. Ian Intrusive complex is zoned and comprises a younger gabbroic core (1.9±
0.2 Ma) which grades outward into older (12.9 Ma) monzodiorite, diorite, and andesitic
porphyries on the margins. The intrusives occur mainly as relatively flat lying sills and
as minor stocks and dikes. The regional thrust fault systems appear to have strong
control on the geometry of the flat lying intrusives.
The continued regional and localized compression produced reactivation of some

fracture sets, rapid uplift, and subsequent erosion and supergene enrichment.
PROPERTY GEOLOGY
The geological setting for the Ok Tedi mineralization consists of sediments intruded
by multiple phases of variably mineralized calc-alkaline stocks with contemporaneous
skarn formation (Figure 9-1).
Ieru Formation siltstone (mid-to-late Cretaceous) represents the dominant

sedimentary unit in the current OTML operation.
9-2
FIGURE 9-1 OK TEDI PROPERTY GEOLOGY
9-3
Darai Limestone (late Oligocene to early Miocene) was thrust both within (Parrot’s
Beak Thrust) and above (Taranaki Thrust) the Ieru Formation during a period of
compression and structural reactivation.
Pnyang Formation mudstones and siltstones (middle Miocene) conformably overlie

the Darai Limestone and display a gradational and variable facies change from
moderately carbonaceous near the basal contact to weakly or non-carbonaceous away
from the contact.
Sydney Monzodiorite (2.6 Ma) is the earliest and most extensive intrusive stock in the
Ok Tedi complex. It is porphyritic to equigranular in texture and contains andesine,
clinopyroxene, orthoclase, hornblende, and biotite with accessory sphene, apatite, and
magnetite. It is relatively unaltered and contains limited economic gold and copper
mineralization, although it is enriched near the Fubilan monzonite porphyry contact.
Hornfelsed Ieru siltstones displaying limited propylitic alteration and monzodiorite
siltstone breccias occur peripheral to the intrusion.
Emplacement of the Sydney Monzodiorite is believed to have produced the Ok Tedi

skarns through metasomatic replacement of limestone/carbonate facies by reaction with
magmatic fluids.
Skarns have formed along thrust faults proximal to the Sydney Monzodiorite with
more massive skarn bodies located along high angle monzodiorite-limestone contacts.
Skarn mineralization is characterized by an inner calc-silicate garnet and pyroxene
alteration of monzodiorite (endoskarn), a central massive magnetite pyroxene phase
which grades to massive sulphide and limited calc-silicate alteration at the outer contact
with siltstone or limestone sediments.
Subsequent intrusive bodies (porphyritic monzodiorite, southern monzonite porphyry)

are observed in the southern portion of the ore body within and adjacent to the Sydney
Monzodiorite.
9-4
The Fubilan monzonite porphyry (1.1 Ma to 1.2 Ma) intruded Sydney Monzodiorite
and associated stocks, breccias, skarn bodies, and shallow dipping sediments. Important
Cu-Au mineralization is hosted within the Fubilan monzonite porphyry. The rock
consists of phenocrysts of oligoclase, orthoclase, quartz, hydrothermal biotite after
hornblende and primary biotite with accessory apatite, sphene, rutile after sphene and
magnetite in a glassy fine grained felsite matrix.
The stock has undergone two phases of potassic alteration. Phase One is
characterized by pervasive dark brown to green brown primary igneous micas that were
partially clay altered. Sphene is partly replaced by rutile. Chalcopyrite and martitized
magnetite are commonly observed. Phase Two is more intense and is characterized by
pervasive and fracture controlled pale brown phlogopitic mica that forms aggregates after
mafic minerals and is commonly associated with chalcopyrite, bornite, molybdenite, and
gold. Argillic alteration is observed marginal to the potassic alteration.
Ieru siltstones were hornfelsed peripheral to the Fubilan monzonite porphyry

intrusion.
Intrusive breccias containing siltstone, Fubilan monzonite porphyry, skarn, and

Sydney Monzodiorite are observed within and proximal to the Fubilan monzonite
porphyry. These are believed to have exploited zones of weakness during structural
reactivation subsequent to emplacement of the Fubilan monzonite porphyry.
Significant skarn mineralization is believed to have been engulfed and absorbed by

the Fubilan monzonite porphyry stock. Skarn bodies were enriched peripheral to the
intrusion. The Fubilan monzonite porphyry contains an inverted cone-shaped quartz
stockwork core that has been intensively weathered and is now devoid of economic
copper or gold mineralization.
9-5
Late phase barren dikes (e.g. hornblende porphyry) transgress all other lithologies
within the mine area. Emplacement of these is believed to have occurred until
approximately 0.7 Ma.
The mine area has also experienced post emplacement regional compression, uplift,
water table fluctuation, leaching due to downward percolation of meteoric waters, and
supergene enrichment.
9-6
10 DEPOSIT TYPES
The Ok Tedi (Mount Fubilan) copper-gold deposit is a porphyry copper deposit with
associated deposits of skarn type mineralization. The porphyry copper deposits are the
products of large, intrusion-related hydrothermal systems. The skarn mineralization has
formed by replacement of mostly carbonate-bearing rocks during contact metamorphism
and metasomatism.
10-1
11 MINERALIZATION
The protore Cu-Au-Ag mineralization in intrusives, skarns, and fractured siltstones
proximal to the intrusive stocks is predominantly chalcopyrite with pyrite-marcasite and
small amounts of bornite and molybdenite. Irregularly distributed sphalerite and galena
are present around the fringe areas of the deposit and within some skarns. The primary
mineralization is distributed throughout the porphyry and well into the monzodiorite to
the south. However, the greatest concentration is contained within the upper central part
of the monzonite porphyry stock adjacent to the quartz core. Smaller intrusive events
within the same rock type are found to carry elevated metal values.
Massive magnetite skarns contain chalcopyrite-pyrite-marcasite-bornite

mineralization, sometimes with chalcocite, digenite and covellite enrichment. Gold is
closely associated with the copper mineralization in the skarns and intrusive rocks. A
department study suggests that much of the gold mineralization associated with massive
pyrite-marcasite skarn is refractory, being contained within pyrite-marcasite and
magnetite minerals.
Mineralization was significantly enriched through supergene processes. Oxidation

and leaching produced a gold-rich leached cap underlain by a supergene enriched copper
zone of chalcocite and digenite merging downwards into lower grade chalcopyrite-
dominated protore mineralization. Oxidation of copper and iron sulphides released
sulphate copper, which was then transported downward by meteoric water percolation.
In a reducing environment at or below the water table, the copper precipitated as
chalcocite and digenite, mostly as rinds on fresh chalcopyrite and to a lesser extent on
pyrite-marcasite grains. Leaching and enrichment has also occurred in the skarn bodies,
with oxidation preferentially developed to deep levels along the outer brecciated skarn
margins in contact with the Darai Limestone.
11-1
The boundary between the zone of enrichment and primary sulphide mineralization is
gradual and diffuse, exhibiting a slow decay of enrichment with depth.
The global ratio of Au to Cu in sulphide mineralization throughout the deposit

approximates 1.1 g/t Au to 1.0 % Cu. Current mining is predominantly exploiting the
protore and displays an Au to Cu ratio of approximately 1.0 g/t Au to 1.0 % Cu.
ORE TYPES & KEY CHARACTERISTICS

The Ok Tedi orebody displays some characteristics that are deleterious to optimal
processing and production of marketable concentrate. These elements require proactive
delineation and management (OTML, 2004).
OTML is contractually bound to produce a copper-gold concentrate containing lead,

zinc, and bismuth below specific grades and a penalty clause is invoked if the maximum
acceptable fluorine grade in the concentrate is exceeded. Copper grade of concentrate is
expected to range from 27 % to 37 %.
Elevated concentrations of fluorine are present locally within the orebody. Fluorine
is concentrated from talc and phlogopite during the mill flotation process. Talc is
produced as an alteration product of tremolite that is formed within the skarn orebodies
due to prograde metamorphism of carbonate facies. Phlogopite commonly occurs within
the Fubilan monzonite porphyry as a product of potassic alteration.
Lead, zinc, and bismuth concentrations are elevated at the extremities of the porphyry
system and contact margins or fault zones within the skarn orebodies.
Precipitation of chalcocite/digenite/chalcanthite produced thin overgrowths on pyrite/

marcasite and chalcopyrite grains during secondary enrichment. The overgrowths are
commonly observed in pyrite/marcasite skarns and are attracted to chemical collectors
11-2
during the milling process. This results in selective flotation of pyrite/marcasite grains
and production of a lower grade concentrate.
Acid soluble copper (ASCu) species such as cupriferous goethite, malachite, bornite,
chalcocite, chrysocolla, and native Cu are present in oxidized skarns, fault zones and
calc-silicate altered intrusives adjacent to skarns. Metal recovery is reduced when
processing these minerals.
Hard and blocky material requires additional milling time resulting in increased
production costs and reduced milling throughput. Hornfelsed siltstones and intrusive
lithologies with limited argillic alteration can cause milling problems.
Geological and operational controls have been implemented in the OTML systems to
manage and mitigate the effects of the various ore attributes described above on the
processing systems and the final product characteristics.
GEOLOGICAL MODELS
The current geological interpretation that is the basis for the current resource estimate
was developed in 2000 and 2001. OTML modelled the major rock types using wireframe
models. OTML is currently updating the interpretation in order to reflect the most recent
operating experience and infill drilling information. This new interpretation will provide
a new basis for the next Mineral Resource estimate.
The following are the major geological units identified and interpreted:
• Siltstone - Hornfelsed, altered (potassic and argillic) and locally unaltered

siltstone of both the Ieru and Pnyang formations. Commonly sub-economic due
to hardness and low grade mineralization. Ore grade mineralization is best
developed along fractures in areas adjacent to intrusive rocks, in contact with
skarns and in contact breccias formed proximal to the intrusive contacts.
• Limestone - The Darai Limestone unit includes unaltered limestone, marble and
fault gouge material associated with the Taranaki and Parrots Beak thrust faults.
Limestone is barren and has a high acid neutralizing capacity. It is required for
neutralization of sulphidic waste and tailings.
11-3
• Monzodiorite - Sydney Monzodiorite intrusion plus younger porphyritic

monzodiorite (PMD) intrusive rocks and dikes. Mainly chalcopyrite protore but
includes small zones of chalcocite enrichment, quartz stockwork and breccias.
Mineralization is generally present but is mostly of sub-economic grade.
• Endoskarn - Zone of calc-silicate alteration of the monzodiorite intrusive stock.

Associated with the formation of magnetite and sulphide skarn deposits.
• Skarn - Lithology formed by metasomatic alteration of sedimentary carbonate

facies at the contacts with monzodiorite and monzonite intrusions. Skarns are
most extensive in the Darai Limestone unit, with smaller calc-silicate skarn zones
developed within the Ieru siltstone. The dominant skarn formation was associated
with the monzodiorite intrusive with a later overprinting associated with the
monzonite porphyry. The skarn deposits generally contain higher concentrations
of Au and Cu mineralization than the associated intrusive rocks because they
reflect a more chemically reactive environment for the precipitation of sulphide
minerals from emanating hydrothermal fluids. The skarn ore bodies have internal
zonation characterized by inner calc-silicate mineralogy, a central massive
magnetite-dominated assemblage, and massive pyrite-marcasite on the outer
margins.
• Monzonite - Includes the Fubilan monzonite porphyry intrusive complex,

Southern monzonite porphyry intrusion, plus minor dikes and younger intrusive
rocks. Incorporates a leached zone, barren quartz core, the majority of the
chalcocite supergene zone, and significant chalcopyrite protore. This rock unit
contains economic mineralization with minor areas of internal waste.
• Oxide Skarn - Oxidation of sulphide and magnetite skarn. Dominated by

ubiquitous limonite, goethite, and hematite. Also characterized by the presence of
Cu oxides (azurite, malachite, and cuprite) and native Cu. Oxide skarns contain
elevated levels of acid soluble Cu. Occurrence at depth is generally due to
structural zones, which provided channels for descending meteoric waters. The
oxide zones have limited lateral extent and are often extremely variable in grade
due to inconsistent leaching and remobilization of Cu.
• Thrust Zones - Breccia and gouge zones composed of siltstone, local skarn
material and very minor limestone, commonly with sericite-clay-pyrite-marcasite
matrix. Two major thrust zones identified in the model are associated with the
Taranaki and Parrot’s Beak thrusts.
The main rock types in the reserve estimate are summarized in Table 11-1. The
sulphide skarns contain approximately 25% of the remaining reserve tonnage
11-4
contributing 44% of the copper metal and 40% of the contained gold. This unit is now
the most important single component of the remaining reserve. The monzonite hosts
approximately 38% of the reserve tonnage, 22% of the contained copper, and 18% of the
contained gold.
11-5
TABLE 11-1 MAIN ROCK TYPES IN RESERVE ESTIMATE

Lithology Colour Legend Percent of Total Percent of Percent of

Name for Figure 11-1 Reserve Total Reserve Total Reserve
Tonnage Copper Metal Gold Metal
Siltstone Pnyang-cyan, Ieru-green 0.5% 0.4% 0.3%
Limestone Darai-blue 0.0% 0.0% 0.0%
Monzodiorite Brown 14.6% 6.3% 7.2%
Endoskarn Magenta 12.6% 13.3% 13.5%
Pyrite Skarn Orange 9.2% 13.6% 21.0%
Sulphide Skarn Orange 24.7% 44.0% 39.8%
Monzonite Pink 37.8% 21.8% 17.5%
Oxide Skarn Not Shown 0.6% 0.5% 0.8%
Thrust Zones Yellow 0.0% 0.0% 0.0%
Total 100.0% 100.0% 100.0%
A 3-D perspective that shows the geological wireframes at the December 2004 pit
topography is given in Figure 11-1. A lithological colour legend is included in Table 11-
1. All of the skarns are shown in orange.
11-6
FIGURE 11-1 3-D PERSPECTIVE OF THE WIREFRAMES ON DECEMBER

2004 PIT TOPOGRAPHY
11-7
12 EXPLORATION
The chronology of exploration at the Mount Fubilan mine has been described above
under History.
12-1
13 DRILLING
The exploration drill hole database is composed of both core and reverse circulation
drill hole data dating back to the earliest exploration drilling by Kennecott (1968 to
1971). From 1969 to 2005, some 889 diamond drill holes totalling 203,261 m and 2,116
reverse circulation holes totalling 97,275 m were drilled in the Mount Fubilan area.
Some of the short diamond drill holes and most of the reverse circulation holes are
only relevant in areas that have been mined out and these holes have been excluded from
the current resource database. The assays in these excluded holes, which are mostly
associated with the gold cap zone, would not influence the current resource estimate in
any case. The current resource estimate is supported by 647 drill holes and 320 reverse
circulation drill holes.
Drill hole spacing is generally targeted on a 70 m by 100 m grid for intrusives and 50
m by 50 m grid for skarns. Typically complex ore zones have increased drill hole
density. Drill holes are spaced further apart around the margins of the deposit and in
waste areas.
OTML has evaluated the use of blasthole assays to support resource estimation;
however it was found that they produced less reliable results. Consequently, the current
resource estimate does not use blasthole data.
DRILL CORE LOGGING

Drill core is logged and described in detail. The intervals and logging codes have
been entered into the drill hole database. Collar location, downhole surveys, and assay
results are also recorded in the database.
13-1
A review of some of the historical logs indicates that the geological information is
complete and of good quality. In RPA’s opinion, the graphical drill logs by OTML,
Behre Dolbear, and Kennecott are of high quality.
DRILL CORE SIZE

All recent and current drilling is diamond core drilling, with the greater part of the
remaining resource being estimated from this method of drilling. Diamond drill holes are
generally drilled in PQ (85 mm) diameter and completed in HQ (63.5 mm) and less
commonly NQ (47.6 mm).
COLLAR SURVEYS
All of the diamond drill holes and most of the reverse circulation holes related to the
resource estimate have collar surveys recorded. Some reverse circulation holes and a few
of the older diamond drill holes do not appear to have been surveyed. Although it is
preferable to survey all drill hole collars to minimize location uncertainty, RPA believes
that most of the unsurveyed collar coordinates are likely within a few metres of their
planned locations. This level of accuracy is acceptable considering that the drill holes are
generally spaced at 50 m to 100 m apart.
DOWNHOLE SURVEYS
Drill holes are surveyed via the Eastman single-shot method. General practice is to
have surveys taken within 20 metres of the surface and then repetitively at intervals of 40
m to 100 m down hole. RPA notes that approximately one third of the diamond drill
holes that support the December 2004 resource estimate have no downhole survey
measurements. The drill hole deviations, however, are generally minor due to the large
diameter drill rods used and because most of the drill holes are collared with vertical to
near-vertical orientations.
13-2
CORE RECOVERY
OTML reports that core recovery is generally good across all lithologies. Overall
recovery is summarized in Table 13-1.
TABLE 13-1 DIAMOND HOLE CORE RECOVERY (FROM OTML (2004)

Core Recovery Cumulative Number of Cumulative Frequency

(%) Samples (%)
0 13 0.03
10 5 0.01
20 20 0.04
30 37 0.07
40 91 0.18
50 94 0.18
60 112 0.22
70 168 0.33
80 237 0.46
90 330 0.64
100 50,156 97.84
Total 51,263 100.00
Only 0.6% of the diamond drill hole samples have core recovery values that are less
than 90%. In RPA’s opinion, the OTML core recovery statistics are very good. RPA
notes that a number of deeper drill holes were abandoned in the thrusts due to blocky
ground and difficult drilling conditions.
13-3
14 SAMPLING METHOD AND APPROACH

There are approximately 53,120 assays related to the resource diamond drill holes
(DDH) and 12,571 assays in the resource reverse circulation (RC) drill holes.
The historical drill hole samples vary in length. Approximately 76% of the core
samples and 83% of the RC samples have 3 m sample lengths. Approximately 1% of the
core samples and slightly less than 12% of the RC samples have 2 m sample lengths.
Over 2% of the core samples and 5% of the RC samples have 1 m sample lengths.
Diamond drill core is sawn in half, with half sent to the mine laboratory and half
preserved for future reference. Drill core from the pre-development holes was sent to a
number of laboratories. OTML has a large core logging and storage facility that
overlooks the open pit. The preserved half of the core is stored in plastic core trays for
future reference and use in special studies.
Approximately 33% of the resource database comes from RC drill holes. However,
most of the RC drill hole-related composites are derived from shallow holes that no
longer influence the resource block model significantly below the December 2004
topography. Some of the composites from RC holes may have a minor influence on the
recent reconciliation results. OTML only created composites that occur below the
surveyed surface as of the end of May 1992 (period 38) to help reduce the file sizes. The
OTML composite file contains 11,853 composites, including 10,130 from diamond drill
holes and 1,723 from reverse circulation drill holes. Only 292, or 5%, of the composites
located below the December 2004 surface are based on RC sample values. RPA
concludes that the resource-related assays from RC drill holes will have a minor
influence on the global resource estimate. RPA does not have information on the
sampling methodology for RC samples.
14-1
15 SAMPLE PREPARATION, ANALYSES,

AND SECURITY PROTOCOLS
SAMPLE PREPARATION AND ANALYSIS
RPA visited the OTML Laboratory located adjacent to the mill. The laboratory
handles about 300 samples per day comprising 100 blasthole and 200 mill samples. The
laboratory is clean, bright, spacious and well-organized with low noise levels and low
levels of dust in the air. The OTML Laboratory has provided the majority of exploration
and production related assaying (OTML, 2004).
The OTML Laboratory sample preparation and analytical flow sheet for diamond
drill core is shown in Figure 15-1. Split drill core is dried for three to four hours and then
crushed to approximately 5 mm with a jaw crusher. The entire sample is further reduced
to minus 3 mm in a Nugget Crusher. A split of approximately 3 kg is obtained from the
minus 3 mm crushed product, which is then pulverized using a LM5 ring mill to about 75
microns. A sizing check is completed on approximately one in every 50 pulps. A split of
about 500 g is placed in labelled pulp packets ready for assaying. The coarse rejects and
pulp rejects from the above process are returned to the Geology Department for storage
or disposal as deemed appropriate.
Standard analysis was conducted for copper (Cu), gold (Au), acid soluble copper
(ASCu), and sulphur (S). Samples of skarn were additionally analyzed for fluorine and
occasionally for such elements as lead, zinc, and other deleterious elements.
Cu was assayed by an atomic absorption spectrometer (AAS) up until 2001, when

OTML installed an X-ray fluorescence spectrometer (XRF). Most copper assays were by
XRF since approximately August 2002. OTML used 0.5 g of pulp for the AAS assays
and 0.2 g of pulp is used for the XRF assays. Gold assays use 30 g of pulp and are fire
assays with an atomic absorption finish.
15-1
FIGURE 15-1 OTML LABORATORY DRILL CORE SAMPLE PREPARATION

AND ANALYSIS
DDH
10 kg – 15 kg
Dried 140 +/- 10 oC

3 - 4 hours
Jaw Crusher = 5mm
Nugget Crush = 3mm
Coarse Rejects
Riffle Split ( 3x)
(Return to Geology)
Pulverize
Pulp Rejects
3.5 kg or less
3.0 kg
LM5
(Return to Geology)
Finest Test
Assay Pulp
QC_95%
500g
pass75micron
Cu, S, Fe, Pb, Zn ( XRF)

AsCu (AAS)
Au (FA-AAS)
Ag AAS
Other Tests as requested
Report Results to Geology
15-2
Routine assaying of the ASCu grade is carried out for all diamond drill samples with
a total Cu grade exceeding 0.2 percent and for all skarn and endoskarn lithology blasthole
samples. These procedures have not always been followed, and significant areas in the
deposit have no ASCu assays.
SECURITY
All drill core and assay samples are stored on the mine site, which has its own gated
security.
ASSAY QUALITY CONTROL AND QUALITY ASSURANCE

A quality assurance (QA) and quality control (QC) check program was developed and
implemented in 2001. A suite of standards prepared from samples of the two major rock
types (monzonite porphyry and skarn) across a range of ore grades was prepared and
analyzed by the Geostats Sample and Assay Monitoring Service, Australia. In April
2003, a suite of monzonite porphyry certified standards was produced by Ore Research
Australia. These Cu-Au reference standards have routinely been inserted into the sample
stream since July 2003 at a frequency of approximately one in every ten samples by both
the geology department and the OTML Laboratory.
Quality controls include one OTML Laboratory blank, two OTML Laboratory
reference standards, two Geology Department reference standards and two replicates in
each batch of 25 samples for gold assays. The copper assay batches are larger, at
approximately 50 to 100 samples, and also include reference standards and replicates.
Replicates are two samples taken from the same pulp packet.
The OTML Laboratory procedures, the blast hole sampling methodology, the mine
QA/QC protocols, and other aspects were audited by Dominique Francois-Bongarcon of
Agoratek International (Agoratek) in June 2003 (Agoratek, 2003). Agoratek questioned
the reliability of some of the standards and their results and made a number of
15-3
recommendations to improve QA/QC procedures at the mine, particularly related to

properly compiling and reporting the QC results on a regular basis.
RPA’s review of some of the more recent OTML Laboratory reference standard
graphs suggests that the copper and gold results are reliable and unbiased. The OTML
Laboratory personnel monitor the laboratories’ reference standard results and will
investigate a whole batch if a laboratory reference standard result is outside of two
standard deviations from the expected value. Batches are re-assayed if a laboratory
reference standard result is over three times the standard deviation envelope.
RPA notes that the OTML standards are in-house reference standards and the rare
erratic assays that are well outside of the mean plus or minus three standard deviations
may be due to problems with the standards and not analytical mistakes. It may be
difficult to use the in-house reference standard results to investigate for minor analytical
biases. Nevertheless, RPA recommends that OTML compile the historical laboratory and
geology reference standard results to confirm that no major analytical biases existed. In
addition, RPA recommends that OTML send several hundred pulps to an outside
accredited laboratory and consider sending pulps out on a routine basis. RPA also
recommends that the geology department designate a responsible person to compile and
monitor all the QC data, including the OTML Laboratory reference standard and replicate
results. The historical laboratory replicate data should be compiled and the relative
standard deviation values should be documented for appropriate grade ranges.
RPA recommends that OTML review its QA/QC procedures with the objective of:
• Reducing the geology reference standard insertion rate from one every ten
samples to one or two per diamond drill hole or approximately one in every
fifty blast hole samples;
• Using barren split core or other suitable barren material for insertion into the
sample stream as blanks at a rate of one or two per drill hole or one in every
fifty blast hole samples;
• Inserting the occasional drill core or blasthole duplicates.
15-4
16 DATA VERIFICATION
MOUNT FUBILAN MINE DATABASE VALIDATION
RPA used a number of MS Access database tests, the Gemcom data validation
routine, and visual inspection to check the drill hole database. RPA found no significant
problems with the drill hole database. RPA notes that lithology data contains a
significant number of missing and zero length intervals.
RPA also recommends:

• Out of sequence intervals be cleaned up and the lithology codes be
standardized,
• Some of the dates be corrected in the collar table.
MOUNT FUBILAN MINE DATABASE VERIFICATION

RPA DATABASE VERIFICATION WORK
RPA checked 1,577 assay records in the drill hole database against assay certificates
and found three minor typographic errors, nine errors associated with assays that were not
entered, and four errors related to inconsistencies with replicates where the lowest assays
were used instead of the first assays. RPA also checked the collar coordinates and down
hole survey data for a number of holes with the drill logs and found no errors in the collar
coordinates. Interpolated downhole survey values in the database were similar to the
values indicated on the drill logs. It is RPA’s opinion that the Mount Fubilan drill hole
database is valid and acceptable for supporting resource estimation work.
HISTORICAL DATABASE VERIFICATION WORK

When the drill hole data was transferred to the Oracle database in 1995, some 10% of
the raw data fields were checked against the original assay records and back to the drill
logs (OTML, 2002).
16-1
During March 2000, April 2001, and June 2002, a further 5% of the drill holes were
checked back to the original assay certificates and drill logs. The records checked
included collar data, sample intervals, copper and gold assays, lithology and survey data.
In addition, every drill hole from DDH_600 onwards was checked for proper collar
survey coordinates. OTML reported that a few minor typographic errors and numerical
transpositions were discovered and corrected and no major discrepancies were found.
OTML planned to continue to check approximately 5% or ±40 holes every year (OTML,
2002).
In May 2003, OTML checked 37 diamond drill holes, including 19 drill holes that
had already been checked in 2001 and 2002. OTML found nine minor typographic
errors, including five errors in previously checked holes (OTML. 2003). RPA notes that
eight of these errors still need to be corrected.
The SRK audit of the 2003 resource and reserve work in January 2004 and the review
of the July 2004 resource model did not include any database verification work. OTML
did not complete any database verification work in 2004.
RPA recommends that OTML continue to check approximately 5% of the drill holes
every year and that OTML retain a digital list of all of the records that have been checked
and any corrections that have been made.
RPA INDEPENDENT SAMPLING

RPA did not take any independent samples to confirm the presence of gold and
copper mineralization because the Mount Fubilan mine has a long production history.
16-2
17 ADJACENT PROPERTIES
There are no known significant deposits or mineralized zones on properties that are
immediately adjacent the OTML exploration licenses.
17-1
18 MINERAL PROCESSING AND

RECOVERY
MILL OPERATIONS
Ore produced from the mine is dumped directly into the main in-pit crusher located in
a slot on the upper portion of the eastern wall of the Mount Fubilan open pit. The run of
mine ore material is processed through a 1,524 mm x 2,794 mm gyratory crusher and
conveyed to one of the series of crushed ore stockpiles located immediately ahead of and
adjacent to the mill facilities. The mill is located on the east facing natural hillside
immediately to the east of the pit. There is a second primary crusher and conveying
facility located in the upper north east corner of the pit, referred to as the Taranaki
crusher, which is also occasionally used to crush and deliver ore to mill. This crusher is
planned to be de-commissioned in the near future leaving the operation working solely
through the main in-pit crusher.
Crushed ore is recovered from the stockpiles on an as-required basis for feeding the
primary grinding mills. The grinding section of the mill consists of two parallel
processing circuits, each consisting of a semi-autogenous grinding mill feeding two ball
mills operating in closed circuit with cyclone classifiers. The primary grind size for
feeding the flotation section of the mill is 80% passing 180 microns. The flotation circuit
includes a series of rougher and rougher-scavenger flotation stages that complete an
initial recovery of copper and gold. The flotation product from this stage is processed
through a regrind circuit and cleaner and re-cleaner flotation stages producing a high
quality copper concentrate product. A portion of the regrind circuit stream is processed
in a gravity concentrator to recover a gravity gold concentrate. The gravity gold
concentrate is shipped as a finished product to precious metal refineries separately from
the bulk copper concentrate.
Figure 18-1 illustrates a flow sheet schematic for the Ok Tedi mill.
18-1
18-2
Figure 18-1
www.rpacan.com
OK Tedi Mine
Copper Concentrator Flowsheet

June 2005
The mill has a nominal capacity of 80,000 tonnes of ore per day depending upon the
particular ore type and mineral nature being processed. Harder ore types are processed at
a somewhat lower throughput rate than softer materials. The main deleterious component
in the Mount Fubilan ore that can impact copper concentrate characteristics is fluorine.
Fluorine occurs in conjunction with talc minerals in certain zones and ore types in the
deposit. In order to deal with this material the mill circuit includes a Jameson cell
flotation circuit designed to treat the fluorine content ores and maintain the final product
specifications below penalty limits. The Jameson circuit is only operated when the ore
characteristics require it.
The finished copper concentrate is thickened in a 2x40 m concentrate thickener from

which the product is pumped to a concentrate batch plant feeding the overland
concentrate pipeline system. The 150 mm diameter overland pipeline delivers the
concentrate to the Kiunga dewatering and concentrate storage facilities located
approximately 157 kilometres to the east of the mine site. The pipeline has a capacity of
2,400 tonnes of concentrate per day.
The ground rock tailings from the process are disposed of via the unconfined end of
the pipe discharge to Harvey Creek, which drains to the Ok Mani, and then to the Ok
Tedi and Fly rivers. The original project design was based on the construction of a
tailings dam (Lukwi) for tailings containment and management. The tailings dam
structure failed during construction as a result of unstable conditions in the area due to
rock characteristics, steep topography, and very high rates of precipitation. Consequently
the original tailings impoundment plans were abandoned.
The discharge of finely ground rock and sand has filled the Ok Tedi river bed and has
raised its upper regions by many metres. Over-bank flooding was common due to flatter
river grades in the lower Ok Tedi, where the river leaves the foothills of the Star
Mountains. Dredging is necessary to maintain a navigable channel in the river for
concentrate barges and to reduce the incidence of forest dieback due to flooding. OTML
18-3
operates a continuous river dredging operation at Bige on the Fly River. Dredged
materials including fine sediment and tailings are stockpiled in areas adjacent to the river.
ORE TYPES
Several different ore types present in the Mount Fubilan deposit are tracked and
monitored in the course of mining and milling the ore. These ore types display varied
and complex characteristics producing different responses and behaviours in the Ok Tedi
mill. The fundamental natures of these ore types cause dynamic changes in the
processing circuit that result in variations in mill throughput, metal recovery, and finished
concentrate grade.
Six primary ore types are tracked:

• Siltstone
• Monzonite
• Monzodiorite
• Endoskarn
• Skarn
• Oxide Skarn
• Pyrite Skarn
Each ore type displays various behaviours in the mill circuit relating to: processing
rate, copper recovery, gold recovery, reagent consumption, concentrate grade produced,
deleterious components in the concentrate, etc. OTML has developed an analysis of
historical performance for a set of parameters to predict the behaviour of each ore type
supporting the economic assessment of the mineral reserve estimate. The resource model
includes estimates of total copper grade, acid soluble copper grade, sulphide copper
grade, and gold grade for each of the ore types.
Of particular importance is the proportion of Pyrite Skarn and Oxide Skarn, as these
ore types display difficult processing characteristics. These ore types also tend to have
high copper and gold grades and to produce lower grade concentrate with relatively lower
recoveries of copper and gold. OTML has an ongoing metallurgical test program
18-4
underway to evaluate processing strategies and alternatives for these materials. The
present plan calls for blending of these materials to the mill feed at relatively low
proportions to minimize their effect on the overall mill performance.
Historically, Acid Rock Drainage (ARD) has not been a concern for the tailings due
to the high natural buffering capacity of the open pit host rock. However, the sulphide
content is expected to increase in the tailings as the mine deepens and an increasing
proportion of skarn deposits are mined.
18-5
CURRENT MILL OPERATING PERFORMANCE

During the last six months of 2003, the mill processed 14,892,000 tonnes of ore at an
average head grade of 0.86% copper and 0.85 grams per tonne gold. The process
achieved an average copper recovery of 83.3%, and a 69.8% gold recovery. Total
concentrate produced over the period was 368,203 tonnes with an average copper content
of 29.1% and 23 g/t gold.
In the 12 months of (calendar year) 2004, the mill processed 26,222,200 tonnes of ore
with an average head grade of 0.80% copper and 0.89 g/t gold. An average copper
recovery of 82.9% was achieved with a gold recovery of 70.2%. 995,963 tonnes of
concentrate were produced at an average grade of 28.2% copper and 23.9 g/t gold.
Mill operating costs, including crushing and conveying, averaged $1.78 per tonne of
ore processed in the last six months of 2003 and $1.96 per tonne over the full year of
2004.
18-6
19 MINERAL RESOURCES AND MINERAL

RESERVES
RPA has reviewed the current OTML December 31, 2004 Mineral Resource and
Reserve estimates. The main resource estimation input parameters and assumptions, and
reserve estimation modifying factors, are discussed below.
MINERAL RESOURCES
OTML DRILL HOLE DATABASE
RPA was provided with the OTML drill hole database while at the site in early March
2005. The database contains all of the diamond drill and reverse circulation drill holes
drilled on the Mount Fubilan deposit since 1969 and includes seven diamond drill holes
drilled in 2005. The drill hole database comprises 889 diamond drill holes totalling
203,261 m and 2,116 reverse circulation drill holes totalling 97,275 m. The OTML drill
hole database has the following tables and records (Table 19-1). The blast holes were not
used for the final 2004 resource estimate.
TABLE 19-1 OTML DRILL HOLE DATABASE RECORDS

Table Name Number Of Records
COLLAR 3,005
SURVEY 35,515
ASSAY 98,463
LITHOLOGY 22,996
The OTML diamond drill hole and reverse circulation drill hole traces are shown in
black and blue, respectively, in Figure 19-1. Note that most of the reverse circulation
drill holes are located on the northern half of the deposit.
19-1
314200 E
www.rpacan.com
314400 E
314600 E
314800 E
315000 E
315200 E
315400 E
315600 E
315800 E
316000 E
316200 E
16 0 3
N
63
18
16
43
1723
Taranaki
63
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16
19
190
66
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78
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8 17 2
3
172
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Edinburgh
20
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20
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17
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3
9631
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783
1
18
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Gold Coast
19
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483
314200 E
314400 E
314600 E
314800 E
315000 E
315200 E
315400 E
315600 E
315800 E
316000 E
316200 E
3
43
16
03
1 5 43
15
422600 N 422600 N
16 03
1723
17 23
14 8 3
1 603
1 663
3
1 6 63 16 63
1 48
23
14
16
1 60
03
1603
14
3
8
December 2004 Topo - 15 m CI
Darai Limestone
Figure 19-1
Thrust
Endoskarn GEOLO GICAL AND MINING CONSULTANTS Mount Fubilan Mine, PNG
Skarn
55 University Avenue, Suite 501 Surface Drill Plan
DDHs in black, RCs in Blue
Toronto, Ontario M5J 2H7 Scale: 1:12,000 June 2005
COMPOSITES
The composite file used by OTML is based on diamond drill hole and reverse
circulation drill hole assays available up to May 23, 2003. The composite database has
not changed since the 2003 resource estimate. Some 37 diamond drill holes and 16
reverse circulation drill holes were drilled in 2003 and 2004 after the May 23, 2003 data
cut-off date. Most of the holes drilled in 2003 and 2004 targeted skarn mineralization at
depths well below the current ultimate pit design. Consequently, RPA concurs with
OTML that excluding the results from the 2003 and 2004 drilling programs will not have
a material affect on the current Mineral Reserve estimate.
OTML created composites that occur below the surveyed surface as of the end of
May 1992 (period 38) to help reduce the file sizes.
Previously, OTML has attempted to use blast hole samples in resource modelling in
addition to the diamond drill and RC data. However, OTML found that the blastholes
introduced a high bias on the grade estimates and that the bias was more pronounced in
the skarns. Consequently, the current resource estimate does not include blasthole assay
data.
OTML has been carrying out work to improve blasthole sampling. RPA believes that
the bias may also be related to assigning rock codes to the blast holes from inaccurate
wireframe boundaries. RPA recommends that OTML investigate the apparent high bias
related to the blast holes.
Approximately 77% of the sample assay composites are 15 m in length, 7% range in

length from 10 m to 15m, 9% range in length from 5 m to 10 m, and 7% are shorter than
5 m. OTML used length weighting in interpolating block model grades to compensate
for the variable length composites.
19-3
OTML selected 15 m composite lengths to reflect the expected variability related to 15 m

bench heights and also to incorporate the blast holes, which have approximately 17 m
lengths. The blast holes were excluded in the final estimate. RPA notes that a 3 m
composite length was used by OTML for some of the skarn mineralization in 2002. RPA
recommends that OTML review the composite length strategy and consider using shorter
length composites, particularly for the skarn mineralization which has more variable
grades and geometries. In RPA’s view, using shorter composites could result in a minor
improvement in the global resource estimate and could improve the local grade estimates.
WIREFRAME MODELS
OTML modelled each of the major rock types separately. The OTML geological
wireframe models used for the December 31, 2004 resource estimate were built from
2000 and 2001 interpretations using Vulcan and Datamine software. The geological
wireframes appear to be reasonably consistent. Some minor gaps exist. OTML assigned
the nearest lithology to the blocks situated in gaps.
Most of the drill holes are vertical to steeply inclined and therefore sub-parallel to the
steeply dipping endoskarn and skarn contacts. As a consequence, although the horizontal
drill hole grid spacing is nominally 50 m by 50 m in the skarn areas, the actual pierce
points are spaced significantly further apart in vertical section. This situation is less than
ideal for constructing accurate geological wireframes. In RPA’s opinion, this problem
adds uncertainty primarily to the location of the interpreted geological contacts that
support the resources at depths well below the current ultimate pit design. Consequently
RPA views this as a minor issue that does not have a significant affect on the current
reserve estimate. OTML has recognized this issue and is carrying out a new drill
program designed to better define the skarn mineralization at depth.
OTML will develop a new interpretation and build new wireframe models to improve
the definition of the skarn zones. RPA believes that the new wireframe models will not
19-4
significantly affect the global resource estimate; however, the work will improve the
local estimates in skarn and endoskarn zones.
CUTTING HIGH ASSAYS

OTML used histograms, log probability plots, and 3-D visualization to evaluate
cutting levels for the Cu, Au, ASCu, and S composite values. Depending on lithology,
composite grades were cut at levels ranging from 4% to 9% for copper and 4.0 g/t to 15
g/t for gold. In addition to cutting the composites, OTML applied shorter search
distances to higher composite values to reduce their influence. The OTML reconciliation
studies comparing model predictions with actual mine/mill performance indicates that the
OTML 2004 cutting practices are reasonable and acceptable.
RPA recommends that high assays be cut prior to compositing and that a study be
completed evaluating the appropriate cutting levels for the assay data. RPA notes that the
2004 OTML cutting levels have been determined for composites from both drill holes
and blast holes, and RPA recommends investigating different cutting levels for each
sample type.
The high grade restricted search parameters were introduced in part to compensate for
local problems with the wireframe models, particularly the skarn boundaries. RPA
recommends that OTML review its threshold grades and restrict search radii once the
new geological interpretation and wireframes are completed.
CUT-OFF GRADE
The resources and reserves are reported at the same cut-off grades. OTML has
developed marginal cut-off grades for gold, sulphide copper (SCu), and acid soluble
copper (ASCu) for the seven main ore types. The OTML cut-off grades are discussed
further in the Mineral Reserves section.
19-5
DENSITY DATA
There are currently 10,942 specific gravity tests entered in the assay table of the
OTML drill hole database.
In March 2002, OTML reviewed the historical specific gravity data available up to
June 2001 and updated the tonnage factors for the main rock types for the 2002 resource
estimate. OTML found that 7,346 or 67% of the 10,823 tests in 98 drill holes were
located below the April 2001 mine pit topography and that 3,688 were located between
that surface and the ultimate pit limit (PIT001). The 2002 study found that the density
increased with depth and developed new tonnage factors based on the density data
situated below the Period 145 surface. OTML concluded that there were sufficient
density data for most of the main rock types, with the exception of the skarns and
endoskarns. OTML recommended that density tests be taken for all new diamond drill
core in skarns. RPA recommends that OTML generate more density data for the skarns
and endoskarn.
In 2003, OTML developed linear equations for some of the main rock types to
correlate density with depth below the original topographic surface. The density values
in the 2004 block model have been assigned based on the equations and fixed values
shown in Table 19-2. The 2002 density values are also shown for comparison. RPA
believes that both the 2002 and 2004 tonnage factors are acceptable overall and that some
of the 2004 fixed tonnage factors for deeper blocks may be slightly conservative. RPA
notes that the 2004 skarn tonnage factor takes an unnatural step-like jump from 3.44 t/m³
to 3.85 t/m³ at 170 m below surface and that the same equation is applied to the Taranaki
and Parrot’s Beak thrusts. RPA recommends that OTML investigate the application of
modelling techniques to interpolate the block model density values.
19-6
TABLE 19-2 OTML 2002 AND 2004 TONNAGE FACTORS

2002 2004
<distance >distance Distance
Lithology (t/m³) (t/m³) (t/m³) M
Pnyang Siltstone 2.65 2.3 + 0.0022(d) 2.65 170
Darai Limestone 2.71 2.71 All
Taranaki Thrust 2.23 1.6 + 0.009(d) 2.5 100
Parrot’s Beak 2.58 1.6 + 0.009(d) 2.5 100
Ieru Siltstone 2.65 2.3 + 0.0022(d) 2.65 170
Monzonite Porphyry 2.44 2.02 + 0.0028(d) 2.41 140
Monzodiorite 2.6 2.25 + 0.00194(d) 2.58 170
Endoskarn 2.85 2.86 All
Skarn (Sulphide) 3.92 3.44 3.85 170
Skarn (Oxide) 3.59 3.44 3.85 170
Pyrite Skarn 3.92 3.44 3.85 170
Where d = distance from natural surface

(from Sharp, 2003)
VARIOGRAPHY
OTML carried out variography studies of the composite data to support the mineral
resource estimation work. RPA reviewed the OTML variograms. OTML constructed
omni-directional and down hole variograms from the Au, Cu, ASCu, and S composites
for the main rock types. The variography has been used to establish ranges of grade
continuity. Generally, the gold and copper composite values displayed similar ranges of
continuity. The monzonite porphyry range was approximately 160 m and the Gold Coast
skarn range was over 100 m. RPA concurs with OTML that a new directional
variography study should be completed.
19-7
SEARCH STRATEGY AND GRADE INTERPOLATION PARAMETERS

OTML used the same search orientations as in 2002. OTML divided the lithological
domains as defined by the geological wireframes into 49 zones. The search ellipsoid
orientations, radii, and other parameters were customized for Au, Cu, ASCu, and S for
each of the 49 zones. The grades were interpolated using inverse distance to a power
weighting. The weights used were 1.2 for sulphur, 1.3 for acid soluble copper, and 1.5
for copper and gold. OTML selected these weights based on the best match with kriging
a small test data set. In RPA’s opinion, the 2004 OTML search strategy and grade
interpolation methodology are reasonable. RPA recommends, however, that OTML use
ordinary kriging in future. Kriging should simplify the process and improve the local
grade estimates without changing the total resource estimate significantly. RPA also
suggests reducing some of the longer search radii to approximately two times the
variography ranges of continuity.
BLOCK MODELS
The OTML block model is very large, containing a total of 27,280,000 blocks. The 5
m by 5 m by 15 m block model is re-blocked by merging 25 blocks into one mining
block, producing a final resource model that has 25 m by 25 m by 15 m high blocks.
BLOCK MODEL VALIDATION

OTML reconciled the 2004 block model with the mill production over the two year
period from July 2002 to June 2004 and the one year period from July 2003 to June 2004.
For the two-year period, the block model overestimated ore tonnage by 6%, the copper
grade by 3%, the gold grade by 0%, the contained copper by 8%, and the contained gold
by 5%. For the more recent one year period, the block model overestimated the tonnage
by 7%, the copper grade by 3%, the gold grade by -3%, the contained copper by 10%,
and the contained gold by 2%. In RPA’s opinion, these reconciliation results indicate
that the 2004 OTML resource block model is reasonable and acceptable. RPA
recommends that OTML investigate developing a system to reconcile by rock type.
19-8
RPA compared the block grades with drill hole assay grades on sections and plans
and found good overall correlation with some minor low and high grade smearing.
RPA suggests that OTML construct scatter plots that show assays and block grades
by elevation, by easting, and by northing for each rock type as a further check on the
local block model grade estimates.
RPA considers that the block model is valid, reasonable and appropriate for
supporting the OTML 2004 Mineral Resource and Reserve estimates.
MINERAL RESOURCE CLASSIFICATION

OTML used the classification conventions of the Australasian Code for Reporting of
Identified Mineral Resources and Ore Reserves (the JORC Code). The Australian JORC
Code (1996 and 2004) resource and reserve classification definitions are similar to the
Canadian CIM (2000 and 2004) definitions. One minor but practical difference is that
the JORC Code permits combining resource categories together as long as they are
reported separately. Inferred Mineral Resources cannot be combined and must always be
reported separately with the CIM definitions.
OTML developed a classification methodology based on the number of composites

found inside 150 m x 150 m search radii, centred on each block and for each bench. The
results are a measure of drilling density. The 150 m search radius is based on the
approximate maximum range of continuity observed in variograms and recommendations
by SRK (SRK, 2004). The count was used to define the breakpoints between resource
categories as follows:
• Measured if there are eight or more data inside the 150 m by 150 m search;
• Indicated if there are two or more data inside the 150 m by 150 m search;
• Inferred is assigned to the remaining resource with interpolated grades.
19-9
RPA found that the classification methodology results in reasonably continuous zones
of classified material. RPA recommends that this classification methodology be modified
to recognize the closer spaced drilling requirement for skarn and endoskarn
mineralization. In RPA’s opinion, the skarn and endoskarn resources currently classified
as Measured should be re-classified as Indicated. Examples of the OTML resource
classification are shown in Figures 19-2 and 19-3.
19-10
FIGURE 19-2 RESOURCE CLASSIFICATION ON THE 1460 M BENCH

(FROM OTML, 2004).
FIGURE 19-3 RESOURCE CLASSIFICATION ON SECTION 422,312N (FROM

OTML, 2004).
19-11

The OTML Mineral Resource estimate as of December 2004, constrained at depth by a
high metal price Whittle pit shell developed by RPA, is summarized in Table 19-3. The
Measured and Indicated Mineral Resources of the Mount Fubilan mine total 543 million
tonnes at an average grade of 0.77% Cu and 0.93 g/t Au. In addition, Inferred Mineral
Resources total 33 million tonnes at an average grade of 0.92% Cu and 1.44 g/t Au.
TABLE 19-3 DECEMBER 2004 MINERAL RESOURCE ESTIMATE WITH

RPA WHITTLE PIT DEPTH CONSTRAINT
Classification Million tonnes Copper % Gold grams per

tonne
Measured 371 0.77 0.91
Indicated 171 0.78 0.98
Total Measured and Indicated 543 0.77 0.93
Inferred 33 0.92 1.44
RPA notes that the OTML reported Mineral Resources have been estimated to the
1,153 m elevation, and that part of these resources may not have reasonable prospects for
eventual economic extraction even at significantly higher metal prices. RPA has used a
high metal price optimization pit shell to constrain the resource estimate.
Based on the economic assessment work, RPA is of the opinion that the portion of the
model that can be suitably classified as meeting the requirements of a Measured and
Indicated Mineral Resource under NI 43-101 guidelines is 543 million tonnes averaging
0.77% copper and 0.9 grams per tonne gold (Table 19-3).
19-12
MINERAL RESERVES
ECONOMIC OPTIMIZATION
The current economic optimization study for the Mount Fubilan mine was completed
by OTML in early 2005 and reported in a document entitled “Support Document for the
Reserve Statement as at 31st July 2004 & 31st December 2004” – Ok Tedi Mining
Limited – March 5th 2005 by Andrew Sharp, Manager Mine Planning Services. This
document describes in considerable detail the methodologies and parameters used in
estimating the extent of the economic mining of the Mount Fubilan deposit. In the
opinion of RPA, the report is thorough and the work extensive in dealing with the
complex issues surrounding the Ok Tedi operations.
REVENUE PARAMETERS
The main economic evaluation has been based on the following metal price
assumptions: Copper - $0.90 /lb., Gold - $350/oz., Silver - $4.75 /oz. Operating costs
have been developed and forecast based on the current 2005 budget factors and estimates.
Deductions provided for in estimating the revenue value of the copper and gold
production at the mine site included: concentrate shipping and handling costs, smelter
charges, copper gold and silver refining charges, royalties, and concentrate penalty
charges.
MINE PERFORMANCE PARAMETERS

OTML has developed an analysis of historical operating costs to estimate unit mining
costs. The unit mining costs have been broken down into the key operating areas,
including drilling and blasting, loading, hauling, dozing, and support services. Some cost
components have been estimated as a function of the rock type characteristics
encountered, where other cost components are driven by other factors (i.e., haulage is a
function of pit depth). Some cost components are forecast to be fixed.
19-13
DRILL & BLAST

Drilling and blasting costs have been estimated based on rock type. There is a
wide variation in unit costs forecast depending upon the characteristics of each
type. Table 19-4 summarizes the drilling and blasting cost factors used in the
current assessment.
TABLE 19-4 DRILLING & BLASTING COSTS

Rock Type Drill & Blast Cost

$/t
Pnyang Limestone $ 0.03
Darai Limestone $ 0.12
Siltstone $ 0.07
Monzonite $ 0.20
Monsodiorite $ 0.12
Endoskarn $ 0.12
Skarn $ 0.17
Oxide Skarn $ 0.17
Pyrite Skarn $ 0.17
LOADING
Loading costs have been estimated based on recent historical performance at
$0.22 per tonne. This cost is forecast on the basis that virtually all of the primary
excavation materials will be loaded with the O&K hydraulic shovels and that
higher cost Marion cable shovels will be phased out of operation.
HAULING
Hauling costs have been estimated based on 2003 actual experience using
truck operating cost per hour in conjunction with predicted haulage cycle times
forecast for each bench remaining to be mined. The general trend of increasing
haul distance and haul cycle times will occur as the pit deepens. This analysis
19-14
implicitly assumes that the current maintenance practices, fuel costs and usage
factors remain the same as they were in 2003.
DOZING
Dozing costs are incurred as part of the waste handling process where the
trucks dump short of the dump edge due to safety concerns, in addition to the
normal bulldozing applications required around the pit. The unit cost forecast is
based on the 2003 experience and has been assigned at a rate of $0.05 per tonne
of waste hauled and $0.07 per tonne of ore.
PIT SERVICES
The cost of pit services associated with the operation of various service
equipment employed in road maintenance, pit slope maintenance, drainage
control, electrical distribution, etc. is provided for as an average cost per tonne
mined. These expense items are not directly related to tonnage moved and they
tend to be fixed regardless of the volume of material moved. For this study the
category has been estimated based on a $0.06 per tonne mined factor, representing
the combination of a trend toward decreasing pioneering work in upper mining
benches, countered by changes in operating policy regarding fuelling and
servicing of equipment in the pit. Pit pumping costs have been provided for
separately as they are expected to show an increasing trend as the pit deepens.
Current pumping costs are essentially nil since the pit is free draining, however
the pump cost is forecast to rise to a maximum of $0.06 per tonne by the time the
pit bottom is reached.
Overall, the cost factors in the Optimization Study outlined above result in an
estimate of the current average mining cost per tonne of $0.70. This forecast
compares with an actual 2004 operating cost average of $0.84 per tonne moved. The
forecast has incorporated an improvement in efficiency and productivity in the mine
over current operating performance levels. These improvements are predominantly
associated with the productivity of the haulage fleet. An increase in productivity of
the haul fleet will increase the overall mine output, which will substantially reduce
19-15
unit operating costs. While these productivity improvements may be achieved, the
future cost of energy inputs, primarily in the form of diesel fuel, may adversely affect
the unit mining costs. Overall, RPA believes that the mine costs used in the
optimization work may be somewhat optimistic.
MILL PERFORMANCE PARAMETERS

A number of mill performance parameters and factors have been analysed by OTML
in developing the assessment of the Mount Fubilan Mineral Reserve. The following
briefly outlines those parameters and summarizes the performance levels projected. The
key parameters include: mill throughput, primary sulphide copper recovery, secondary
copper recovery, and gold recovery.
MILL THROUGHPUT
The mill processing rate is a key operational parameter. A significant portion
of the mill operating costs are fixed, consequently changes in throughput will
directly impact on the effective cost per tonne for treating the ore.
RECOVERY
There are four key process recovery parameters that are used in developing
the economic evaluation. Recoveries have been estimated by rock type, for
sulphide copper, acid soluble copper, and gold.
FLOTATION RECOVERY OF COPPER

Two types of copper mineralization are analysed and tracked as there is a
substantial difference in the recovery achieved for each type. Primary sulphide
copper responds well in the flotation circuit, and good recovery and concentrate
grades are generally realized from these minerals. Acid soluble copper represents
secondary copper minerals present in the ore which generally produce lower
recovery results. The recovery factors used in the analysis reflect correlations
between historical recoveries achieved against the various ore types and
proportion of copper mineral species in the mill feed.
19-16
FLOTATION RECOVERY OF GOLD

An estimation of gold recovery has been developed based on correlation
studies on historical mill performance versus ore types in the mill feed. The
following table outlines the range of factors used in the analysis.
GRAVITY RECOVERY OF GOLD

A study of historical recovery rates for gold in the gravity concentration
circuit was analysed against different ore types. The study produced no
discernable correlation, and consequently a fixed estimate of 4.5% has been used
in the analysis.
Table 19-5 summarizes the main variables:
TABLE 19-5 MILL OPERATING PARAMETERS

Ore Type Throughput Sulphide Oxide Flotation Gravity

t/op.hour Cu Cu Au Au
Recovery Recovery Recovery Recovery
Siltstone 2,000 77% 41% 53% 4.5%
Monzonite 4,070 94% 49.5% 73% 4.5%
Monsodiorite 3,300 91% 43.1% 73% 4.5%
Endoskarn 3,150 87.5% 42% 63.5% 4.5%
Skarn 3,050 91.8% 45% 66.4% 4.5%
Oxide Skarn 4,340 53% 23% 61.6% 4.5%
Pyrite Skarn 3,780 89% 42% 47.8% 4.5%
KEY PRODUCT CHARACTERISTICS

The historical performance of a number of key product parameters and characteristics
has been analysed by OTML for developing the Mount Fubilan Mineral Reserve
estimate. These product parameters reflect the metallurgical response of the various ore
types based on their mineralogical characteristics and the conditions used in the Ok Tedi
mill. The following briefly outlines those parameters and summarizes the performance
19-17
levels projected for each ore type used in the analysis. The parameters include copper
grade in the copper concentrate and fluorine content in the copper concentrate.
COPPER GRADE IN COPPER CONCENTRATE

Concentrate grade is a key performance parameter that affects the tonnage of
product transported and processed downstream of the mill. Concentrate grade
factors have been developed based on correlation studies of historical production
records.
FLUORINE CONTENT IN COPPER CONCENTRATE

A penalty for fluorine content in the copper concentrate is levied by smelters
processing the Ok Tedi products. Fluorine occurs in all ore types, but certain
zones are recognized as contributing higher amounts that can result in
concentrates being penalized. Fluorine content that is associated with floatable
minerals can be removed and prevented from contaminating the concentrate by
using the Jameson flotation cell circuit in the mill. The OTML technical services
group have analyzed the relationship between ore type and fluorine content and
have developed a correlation.
SILVER/GOLD RATIO IN COPPER CONCENTRATE

While silver is not specifically modeled in the resource as it represents a relatively
minor contributor to economic value, there is a consistent silver value reporting in
the concentrate, generally proportional to the gold content. The correlation
analysis has established a consistent ratio of 2.3 :1 Ag to Au used in the economic
analysis.
Table 19-6 summarizes the main variables:
19-18
TABLE 19-6 KEY PRODUCT CHARACTERISTICS

Ore Type Cu % in Cu Conc. F ppm in Cu Conc. Ag:Au Ratio

Siltstone 24.2% 400 2.3
Monzonite 29.8% 400 2.3
Monsodiorite 28.6 400 2.3
Endoskarn 27.5% 400 2.3
Skarn 28.9% 1600 2.3
Oxide Skarn 24.9% 1750 2.3
Pyrite Skarn 25.1% 1250 2.3
MILL OPERATING COST FORECAST

The forecast of process operating costs developed by OTML is the product of a
comprehensive analysis of a number of factors, including the effect of some of the
operational parameters outlined above. The factors analyzed include power cost as a
function of weather patterns, reagent consumptions by rock type, throughput rates by
rock type, etc. The actual expenditures incurred over three years between 2001 and 2003
were used as the basis for assessing costs for elements not directly related to ore types.
This spending rate experience was then applied against the various throughput rates, for
each ore type, to derive expected base unit costs per tonne of mill feed for each ore type.
Material processed at relatively high rates attracts a correspondingly lower cost per tonne
for these basic cost elements. Costs are added to these basic cost elements, associated
with the mineralogical aspects of the ore types such as lime consumption, or Jameson cell
costs for treating fluorine in the ore. All of the various cost factors and elements derived
from this detailed analysis are combined to predict the cost of processing for each ore
types. The unit costs for processing include costs incurred for crushing and conveying
associated with the in-pit crusher.
Table 19-7 summarizes the unit costs forecast for each ore type in the current
economic analysis.
19-19
TABLE 19-7 PROCESSING COSTS

Inmet Mining Corporation Mount Fubilan Mine, Papua
New Guinea
Ore Type Unit Milling Cost

$/t
Siltstone $1.69
Monzonite $1.79
Monsodiorite $1.39
Endoskarn $1.56
Skarn $1.92
Oxide Skarn $2.07
Pyrite Skarn $1.73
RPA compared these costing factors with the 2004 actual cost experience by applying
the unit costs against the relative proportion of the ore types mined during 2004. The
average mill cost “predicted” on this basis in the Optimization Study for 2004 is $1.68
per tonne compared with an actual cost of $1.99 reported for 2004. In RPA’s opinion,
this indicates that the performance factors as applied in the economic analysis are in the
order of 20% lower than recent performance has achieved and therefore are contingent
upon realizing a number of process performance and cost improvements. A number of
initiatives are under way in the process department to develop efficiencies and
improvements in overall cost performance. These programs include reducing the use of
the Jameson cells as much as possible due to their high cost, maximizing the mill
throughput and improving grinding circuit performance.
OVERHEAD COST FORECAST

A number of overhead cost items have been provided for in the estimate of the Mineral
Reserve. These overhead items include administration and management costs for the
mine and the mill, concentrate transport costs, dredging costs incurred in order to
maintain navigability of the Fly River, environmental management costs, engineering and
logistics support, general overhead costs, and replacement capital costs required to
19-20
maintain the operation going forward. In addition, there are provisions for the Mining
Levy charged by the PNG government, the contributions to the financial assurance fund.
Together, all of these costs, fees, and charges amount to an annual cost of $106 million.
These costs have been incorporated into the economic analysis based on an overhead
charge of $3.66 per tonne of ore.
OPTIMIZATION RESULTS
OTML carried out an open pit economic optimization analysis of the Mount Fubilan
deposit to assess the economic limits of mining given the set of factors and costs outlined
above applied against the current Mineral Resource block model. This optimization
analysis was performed using Lerchs Grossman programs provided in the Medsystem
Software system that OTML uses for mine planning and design. The optimization
process involved the input of the various mining cost, mill cost, metal recovery and
revenue parameters coupled with the assignment of pit slope definitions designed to
construct an ultimate pit limit that provides a safe and stable operating condition. The
base case analysis used a $0.90/lb copper price and a $350/oz. gold price. This work
produced an economic pit limit that mined a total of just under one billion tonnes of
material inside the pit, of which 419 million tonnes are classed as ore containing a total of
3.5 million tonnes of copper and 13.6 million ounces of gold.
SENSITIVITY
The sensitivity of the optimization result to the input factors was tested through a
process that involved running a series of optimization runs using a range of parameters.
Results were compared to the base case. The main variable tested in this process was the
metal price. A series of metal price values were used to calculate optimum economic pit
limits, with copper prices tested between a low of $0.50 per lb up to a high of $1.10 per
lb. Figure 19-4 shows total copper tonnage mined along with the simple calculated net
value for each pit in the series. All calculated values are based on the base case metal
prices. The optimum pit is selected as the pit shell where the net value is highest, in this
case the 5th pit, corresponding to the $0.90 copper price calculation. The results indicate
19-21
that the economic limits are reasonably sensitive to price variation with a 10% change in
price generating a 10% change in copper tonnage mined.
FIGURE 19-4 COPPER MINED VS. COPPER PRICE ASSUMPTION

Mt. Fubilan Optimization Results - Ore Tonnes
4.5 $3.5
Billions
Millions
Optimum Economic Pit
4.0
$3.0
3.5 million tonnes contained copper

3.5
$2.5
3.0
Copper Tonnes Mined
$2.0
2.5
Pit Value
2.0
$1.5
1.5
$1.0
1.0
$0.5
0.5
0.0 $0.0
$0.50 $0.60 $0.70 $0.80 $0.90 $1.00 $1.10
Copper Price
ULTIMATE PIT DESIGN

PIT SLOPE DESIGN CRITERIA
OTML has an in-house geotechnical group that monitors and manages pit slope
design aspects of the operation in addition to other geotechnical aspects. A broad set of
pit slope design criteria has been developed over the years of experience gained at the
site. Periodically, OTML brings in outside specialists to review and advise on specific
areas and aspects of concern. The designs used in the analysis of mineable reserves have
initially been based on these general criteria and have then been subjected to a detailed
review during the design process. Site specific design modifications are implemented
based on localized conditions likely to be encountered on the design pit slopes.
19-22
The general slope design parameters are:

• Overall inter-ramp slope of 35º in weathered and oxidized materials
• Overall inter-ramp slope of 45º in all other rock materials
• Berm face angle of 65º in rock materials
• Bench height – 15 m
• Catchment Berm interval – 15 m
Surface and groundwater management are key aspects to the ongoing management
and maintenance of stable pit slope conditions due to the high rainfall experienced in the
area. The geotechnical group undertook an extensive study of pit slope design and
management aspects at the Mount Fubilan operations in 1998 producing a design
optimization study report and a set of slope design constraints. In the design
recommendations, it was identified that depressurization, or dewatering, of the pit slopes
was a key factor for ensuring stable pit slopes. The recommended means of establishing
those conditions included the drilling of 200 m long horizontal drainage holes around the
perimeter of the pit. At present there are a number of horizontal holes in place that are
actively draining portions of the slopes; however, the actual frequency does not meet this
specification. The effectiveness of the current program in achieving depressurization in
all areas is uncertain and a program of monitoring pore water pressures in the slope
through the installation of piezometers is planned. The ongoing geotechnical
investigation of rock strength conditions and confirmation of pit slope depressurization
are important for achieving the ultimate pit slope designs and recovering all of the
economic reserve.
CUTOFF GRADE
The cutoff grade specifies the minimum metal content required for mineralized rock
to be classified as ore and scheduled for processing through the mill. The cutoff grade is
defined as that point where there is sufficient revenue potential in the material to at least
pay for all of the processing and downstream costs that will be incurred to realize the
revenue.
19-23
OTML has developed a model parameter, called CUT_VAL, which reflects the
application of all of the various cost and performance factors for each ore type. The
appropriate factors based on ore type, mill throughput, recovery, concentrate grade,
milling cost, overhead cost, replacement capital, etc. are used to calculate the minimum
required content of primary sulphide copper, secondary sulphide copper, and gold to
justify classification as ore. The actual primary copper, secondary copper, and gold
grades in each block of the Mineral Resource model are divided by the minimum
required grade for each. The resulting fractions for each grade element are summed to
calculate the CUT_VAL parameter for each block in the model in order to produce a
value that represents the economic contributions of all three metals. Using this method, a
block in the model is classified as ore when the CUT_VAL parameter is greater than or
equal to 1.0. Table 19-8 summarizes the various cutoff grades for each element by ore
type.
TABLE 19-8 CUT OFF GRADE FACTORS

Ore Type Primary Secondary Gold

Cu % Cu % g/t
Siltstone 0.98% 1.86% 1.29 g/t
Monzonite 0.36% 0.69% 0.48 g/t
Monsodiorite 0.49% 1.04% 0.62 g/t
Endoskarn 0.54% 1.14% 0.74 g/t
Skarn 0.52% 1.06% 0.69 g/t
Oxide Skarn 0.85% 1.95% 0.61 g/t
Pyrite Skarn 0.54% 1.15% 0.87 g/t
MINE PHASE DESIGNS

The 2004 mine reserve assessment process produced an ultimate pit design designated at
13D4, which has been used as the basis for calculating the mineable reserve for the
19-24
Mount Fubilan deposit. This design was based on the above criteria while providing for
existing mine ramp access designs and operational conditions. This design is referred to
as Phase 1 by OTML. A production plan has been developed for the mining of this
design.
A development option has been identified in the design process to incorporate an

expansion beyond Phase 1 in the south eastern area of the pit, termed the Moscow zone.
This expansion is referred to as Phase 2. The scheduling of the mining of this pushback
requires an increase in the material excavation and haulage capacity of the operation and
introduces a number of additional technical issues. Phase 2 adds approximately 40
million tonnes of ore and extends the mine life by approximately 1.5 years beyond the
schedule produced for the 13D4 design.
A second development option, Phase 3, has been identified to incorporate an expansion to

the west involving the pushback of the western wall in areas referred to as Edinburgh,
Berlin, and Paris zones. This option adds approximately 70 million tonnes of ore and
extends the mine life by approximately 3 years.
The OTML Technical Services group developed production schedules for each of the
three primary alternatives and completed a preliminary cash flow analysis to assess their
relative merits. While the Phase 2 option added economic value based on this analysis,
the decision to pursue this option was deferred due to technical complications associated
with the development plan. The Phase 3 option economics did not appear to be attractive
due to the long period of pre-stripping required to develop the ore in that area of the pit.
On the basis of this analysis the Phase 1, or 13D4, ultimate pit design has been adopted as
the economic mining limit.
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MINERAL RESERVE
The Mineral Reserve for the Mount Fubilan deposit has been determined based on the
13D4 pit design. Table 19-9 summarizes the Mineral Reserve as of December 31, 2004.
TABLE 19-9 MINERAL RESERVE ESTIMATES (DEC 31, 2004)

Classification Ore Copper Gold Contained Contained

Tonnes Grade Grade( Copper Gold
(Mt) (%) g/t) (kt) (koz)
Proven 226 0.85 1.04 1,920 7,550
Probable 24 0.76 1.26 180 970
Total Mineral Reserves 250 0.84 1.06 2,100 8,520
The total material mined within the 13D4 pit design as of December 31, 2004 is
estimated to be 557 million tonnes, which includes 307 million tonnes of waste required
to be excavated to recover the ore. The resulting average stripping ratio is 1.2:1.
This reserve is considerably smaller than that indicated to be potentially mineable in

the optimization study outlined above. In that analysis the optimum pit shell mined a
total of 957 million tonnes of material, recovering an estimated 419 million tonnes of ore
containing a total of 3.5 million tonnes of copper. The average stripping ratio of the
optimized shell is 1.3:1. An additional 110 million tonnes of ore would be recovered if
the Phase 2 and Phase 3 designs were implemented as outlined. The remaining ore
materials inside the optimized shell but beyond the Phase 2 and 3 limits include remnant
areas where physical design constraints have limited the design from achieving the
theoretical limits as well as areas where there is geologic uncertainty that negates the
economic value of mining.
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20 OTHER RELEVANT DATA AND

INFORMATION
CURRENT MINE OPERATIONS
The current mining operations of Ok Tedi Mining Limited are carried out at the
Mount Fubilan open pit using conventional open pit mining methods and equipment. As
of the end of December 2004, the main mining activities were being carried out on the
1550, 1565, and 1580m benches in the main mining zone. Mining was also active in the
Moscow Ridge and Paris limestone quarry areas located adjacent to and above the south
end Paris waste dump site.
Mining is carried out through a sequence of operations starting with drilling and
blasting the in place rock materials in preparation for excavation using large mining
shovels that load the broken rock materials into conventional mechanical drive mine
haulage trucks with a load carrying capacity of 190 tonnes. The vast majority of the
material mined requires drilling and blasting. A small portion of the excavated material
is moved using bulldozers to push material to the disposal site.
Ore materials are excavated using hydraulic shovels and backhoes and loaded into
haul trucks which then transport the material up and out of the pit via a system of pit
haulage ramps. The ore is delivered to and dumped into one of two crushers where the
material is reduced in size and conveyed to the mill complex for processing.
Waste rock, classified as material that contains copper and gold values below the
cutoff grade, is excavated to expose the mineralized ore. Waste is hauled by truck to a
disposal point beyond the pit limits where it is dumped for permanent disposal. Due to
the steep topography surrounding the Mount Fubilan mine the construction of a
conventional waste dump is not possible. The conditions are such that any significant
accumulation of the material would slide down the slope to lower elevations. Permanent
dumps for accumulation and storage of waste rock materials have not been established.
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At the Mount Fubilan pit, waste rock material is hauled to the south end of the pit
where it is dumped and pushed over the edge of the topography to slide down the slope to
lower elevations. These conditions make the dumping platforms dangerous for personnel
and equipment to operate on; consequently haul trucks dump the waste material at a
stable point (on bedrock), from where bulldozers push the material to, and over, the edge
of the platform. The vigilant monitoring of the dynamic behaviour of the platform
conditions is maintained constantly in order to ensure safe operations. When the platform
behaviour indicates unsafe conditions, dumping operations at the unstable site are
suspended and activity is diverted to other areas.
Surface water management in the pit and the maintenance of groundwater drainage in
the pit slopes are key operational issues. Presently, the highest pit slopes exist on the
west wall where the maximum vertical height is approximately 450 metres. The north
and east pit walls are generally in the range of 250 metres high. The pit is presently open
to the natural topography on the south end, allowing for the natural drainage of in-pit
water and the mine development is being sequenced from south to north with a consistent
gradient to the south to promote drainage. The high rate of rainfall introduces substantial
quantities of surface water into the operation, and pit water management is one of the key
components of the mining system.
CURRENT MINE OPERATING PERFORMANCE

At the present time, the rate of total material movement is primarily limited by the
capacity of the truck fleet. The excavator fleet has surplus capacity beyond what the
truck fleet can provide. RPA reviewed the production performance data for Ok Tedi
reported for the 18 month period from July 2003 through December 2004. In the last six
months of 2003, the mine averaged a daily output of 172,000 tonnes while the twelve
months of 2004 averaged 203,000 tonnes per day. The stripping ratio during these
periods were 1.1:1 and 1.8:1 respectively, indicating that increasing proportions of ore
20-2
reduces the overall capacity to mine material. The ore haul distance and time required to
deliver ore to the crusher are longer that the haul distance and truck cycle time associated
with handling waste.
The average unit mine operating costs per tonne moved were $0.81 during the last
half of 2003 and $0.85 in the year of 2004.
CURRENT MINE EQUIPMENT FLEET

Excavation is primarily carried out using a fleet of four large hydraulic mining
shovels which have a dipper capacity of 28 m3. There are two old Marion M204 cable
shovels in the mine which are used infrequently and are to be decommissioned in the near
future. Where selective mining of ore materials is required, smaller hydraulic excavators
in backhoe configuration are utilized. The primary haulage fleet is made up of twenty
two 190 tonne capacity haul trucks. Additional haulage capacity is available with a small
fleet of 90 tonne capacity trucks. Blasthole drilling is carried out with a fleet of Marion
M3 drills drilling 270 mm diameter holes for loading with explosives. A fleet of various
support equipment is maintained, including dozers for operating the waste dumps and
general clean up and operations support, as well as graders for maintenance of the haul
roads.
Table 20-1 lists the present mine equipment fleet:
20-3
TABLE 20-1 PRIMARY MINE EQUIPMENT LIST

Inmet Mining Corporation Mount Fubilan Mine, Papua
New Guinea
No. Type Model Capacity

4 Hydraulic Shovel O&K RH200 28 m3
1 Cable Shovel Marion M204 25 m3
1 Hydraulic Shovel Hitachi EX1900 10 m3
2 Hydraulic Backhoe Hitachi EX1800 9.5m3
2 Frontend Loader Caterpillar 992 12 m3
22 Haul Truck Caterpillar 789 190 t
3 Haul Truck Caterpillar 777 90 t
5 Blasthole Drill Marion M3 270 mm
3 Bull Dozer Caterpillar D11
1 Rubber Tired Dozer Caterpillar
2 Grader Caterpillar 24H
The maintenance and office facilities for the mine are located on a wide excavated
flat berm on the east wall of the pit.
KIUNGA OPERATIONS
At Kiunga, the concentrate delivered from the overland pipeline is filtered, dried, and
stockpiled for subsequent loading and transport by barge. The dried concentrate is loaded
onto barges and transported more than 800 kilometres down the Fly River to a silo vessel
anchored at the entrance to the Fly River delta or at Port Moresby, depending on weather
conditions. The barges are purpose-built for the shallow water conditions of the Fly
River. The largest vessel has a capacity of 6,200 tonnes. The concentrate barges carry
freight to Kiunga on their return trip. The moored silo vessel, the MV Erawan, stores
concentrate until it is loaded onto export ships that carry it to smelters around the world.
POWER SUPPLY
Power for the mine, mill, and township of Tabubil is supplied by hydroelectric and diesel
generators. The Ok Menga hydroelectric run-of-river scheme supplies about 85 per cent
of the project's energy requirements. Maximum power output from Ok Menga is 59
20-4
megawatts. A 45-megawatt diesel power station at Tabubil and a two-megawatt

hydroelectric power station at Yuk Creek meet any additional power requirements. The
hydro power plant capacity varies depending upon weather patterns and accumulated
precipitation. In periods of low rainfall and resulting low river flows, the power
generation requirements are met through diesel generation capacity.
ENVIRONMENTAL IMPACTS OF MINING

Mining at Ok Tedi has caused significantly greater environmental impacts than
projected at the time of mine planning and commissioning in the 1970s and 1980s. Each
year, the mine discharges approximately 60 to 90 million tonnes of waste rock and
tailings to the Ok Tedi river system. This discharge is carried out with the legal approval
of the PNG Government under the terms of the Ninth Supplement to the Ok Tedi Mines
Act. Agreement has been obtained with local affected communities as expressed in the
Community Mine Continuation Agreements signed with some 156 communities. This
encompasses 9 regions along the Ok Tedi and Fly Rivers between the mine and Fly River
Estuary at the Gulf of Papua.
The discharge of rock and sand has filled the Ok Tedi river bed significantly and has
raised the river bed in the upper regions by many metres. Over-bank flooding was
common in areas of flatter river gradients in the lower Ok Tedi, where the river leaves the
foothills of the Star Mountains.
VEGETATION DIEBACK
Build-up of mine-derived sediment in the lower Ok Tedi and Fly River has raised the
riverbed resulting in over-bank flooding and sediment deposition on the flood plain. This
inundation stresses, and can kill, flood-sensitive vegetation along the riverbanks and on
the floodplain. OTML monitors the amount and the distribution of resultant “dieback”
through satellite images and ground surveys. Dieback progressively increased as the
amount of sediment in the rivers increased. The total area of vegetation affected by
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flooding in 1992 was 18 km2. It increased to 106 square kilometres by 1995, 478 km2 by
1997, and was mapped at a total of 1,294 km2 in 2002. Modelling projections from the
Mine Waste Management Project expected that the maximum forest dieback would
eventually reach about 2,000 km2 if operations continued unmitigated.
The forest affected by dieback is predicted to slowly recover by natural processes

once the mine closes and release of sediment stops. Vegetation is returning to dieback
areas in the form of wetland grasses and shrubs that are more flood-tolerant than the
original forest plant assemblage. Rapid regeneration of forest has also been recorded
over about 170 km2 as a result of dredging at the Bige operation.
The dieback and other changes in vegetation have affected people living in villages
along and in the vicinity of the rivers. The major impacts include loss of gardens,
reduced supplies of sago palm (a staple food source) and more difficult travel due to
flooding. These people are compensated under a number of compensation arrangements.
ACID ROCK DRAINAGE (ARD) ISSUES

OTML has long recognized that ARD issue may be a concern. Currently, water
runoff from the open pit is in the order of pH 3, and the sulphide content of the tailings is
in the order of about 3%. As the mine deepens and materials are extracted with less
buffering capacity, it is expected that the sulphide content of the tailings and waste rock
will increase significantly.
To manage the current ARD potential of the mine waste rock, OTML has calculated
that about 20% limestone needs to be mixed with the waste rock. Although limestone
quarrying has been carried out for this purpose, the ARD problem persists and needs
further consideration.
At present some evidence of ARD has been noted at the Bige dredge repository cells.
Estimated future increases of pyrite content in the ore and, as a result, an increase in the
20-6
tailings sulphide to about 8% suggest that tailing fines to be stored at Bige will have
significant ARD potential. This could result in additional management costs both during
operations and at project closure.
The high sulphide content of the Mount Fubilan ore body means that some potentially
acid-forming mine wastes are generated. This potentially acid-forming material needs to
be managed so that environmental impacts do not occur where acidic water, with
associated high metal content, is released to the environment. To date, small areas of
ARD have been observed on some sandbanks in the lower Ok Tedi during dry periods
when the river level is low. The analysis of river waters indicates no significant impact
on water quality, with alkalinity levels remaining high and copper concentrations within
safe limits.
An extensive ARD monitoring and management program is in place. The active

measures for managing ARD include adding extra limestone to waste rock at the mine to
maintain acid neutralising capacity in the waste rock dumps. OTML is assessing benefits
of preferential dredging of high and low sulphide sediments at Bige to allow better
management of the ARD potential of the dredged sands.
MINE AND MILL IMPROVEMENTS

OTML has been investigating a range of mine and mill improvements to increase
copper and gold recovery and to reduce copper and sulphide minerals released to the river
system. According to OTML, results to date suggest that modifications in the mill could
increase copper and gold recovery by up to five per cent. The studies also show that a
high percentage of the sulphur in mill tailings can be removed in the mill. Alternative
disposal plans for these materials remain to be developed.
OTHER IMPACTS
Copper levels in the river system are slightly elevated due to copper in mine rock and
tailings, but are within Australian, PNG and World Health Organization drinking water
standards. Villagers along the river system obtain their drinking water from smaller
20-7
tributaries rather than the main river channels, although water in the main channels is safe
to drink once silt has settled.
Fish numbers have dropped significantly in the Ok Tedi and the Fly River below the
Ok Tedi junction down to the Strickland River junction. OTML believes this is due to
sediment smothering fish habitat in the main river channels. Fish numbers and variety in
the Fly River flood plain and off-river water bodies are said to be unaffected by the mine-
derived sediment. OTML states that independent studies have shown that mine sediment
in the Fly River catchment has not affected the Torres Strait or the Great Barrier Reef.
Detailed and numerous environmental, health, and engineering studies have been
undertaken to investigate the impacts of mining. Some of the studies are available on the
mine’s web site.
MINE WASTE MANAGEMENT

BACKGROUND AND ISSUES
The management of mine rock waste, including waste rock from the pit and tailings
from the mill, is a significant challenge. OTML has undertaken numerous studies to
assess management options. The original Ok Tedi project design included a large tailings
dam on the Ok Ma. The foundations were destroyed by a landslide in 1984 and the dam
was never built. A small volume of tailings was retained in the Interim Tailings Scheme
near the mill in the early years of gold operations. Since that time, tailings have been
discharged directly into the Ok Tedi River system. In the early 1990s, large areas of
stressed vegetation and vegetation dieback became evident along the Ok Tedi and Upper
Fly systems, caused by increased flooding due to the build-up of mine-derived sediment
in the bed of the river.
RESEARCH INTO MINE WASTE MANAGEMENT

In 1996, OTML set up the Mine Waste Management Project (MWMP). This project
brought together international experts from a wide range of disciplines to undertake an
extensive two-year study of the engineering, environmental, social and risk components
20-8
involved in mitigating the environmental impacts of the mine waste. The MWMP also
included a two-year, US$60 million dredging trial in the lower Ok Tedi to investigate the
effectiveness of dredging as a measure to reduce sediment build up in the river system.
After reviewing a large number of mine waste management possibilities, four

possible options were examined in detail in the MWMP to deal with mine waste issues at
Ok Tedi:
• continue the current dredging trial in the lower Ok Tedi,
• dredge and pipe mine tailings to a storage area on land,
• do neither, or
• close the mine early.
The MWMP comprised a comprehensive risk assessment integrating information

from all environmental, health, engineering, social and economic studies. A large
component of the overall risk assessment, the Human Health and Ecological Risk
Assessment (HERA), was overseen by a group of five senior independent scientists from
around the world. This Peer Review Group provided advice, recommendations and the
peer review of all studies relating to the HERA.
The final Mine Waste Management Project Risk Assessment was completed and
provided to the PNG government in August 1999. The risk assessment concluded that
the environmental effects, particularly the over-bank flooding and vegetation dieback,
were likely to expand significantly and that none of the options examined offered a clear
solution to the environmental and social impacts of the mine operations.
WORLD BANK REVIEW

The government requested its own consultants and the World Bank to review the Risk
Assessment and set up a task force to advise the government on its response to these
findings. In January 2000, the World Bank reported that “from a purely environmental
perspective, the risk assessment suggests that the Ok Tedi mine needs to be moving
20-9
towards closure as soon as possible”, but that “immediate closure would appear to carry
with it the worst social impact”.
PUBLIC CONSULTATION
The government and OTML undertook an extensive consultation process with local
people to inform them of the environmental predictions and to give them the opportunity
to express their views on the future of the mine. Through this process, the communities
within the region affected by the mine, which include about 50,000 people, endorsed the
continued operation of the mine until planned closure. This community endorsement has
been formalised through a series of Community Mine Continuation Agreements
(CMCAs).
DREDGING AT BIGE
Following the scheduled completion of the Ok Tedi dredging trial at Bige in March
2000, the PNG Government requested that dredging continue on a permanent basis. To
date, almost 85 million tonnes of sand and gravel have been removed from the river and
significant recovery of dieback-affected forest has been documented.
SOCIAL COMMITMENTS AND IMPLEMENTATION

At the village and regional levels, implementation plans have been put in place to
meet various program commitments. There are a wide range of concerns and opinions
among the local population regarding these plans.
To address these concerns OTML has:

• targeted that each village should be visited at least once a month,
• developed a communications plan including Trust Meetings, Village Planning

Committee Meetings,
• combined OTML/VPC/Local Trustee Meetings,
• installed VHF radios in many of the villages and now can communicate with
them much easier than before.
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Over a longer term, social and political issues will remain over how the dividends
flowing from the PNG Sustainable Development Program and the Ok Tedi Development
Foundation will be managed and used for local sustainable benefits. One third of the
annual distribution goes to the western region and two thirds go to the whole country in
40 year long-term trust fund.
CLOSURE REQUIREMENTS
PROCESS
A conceptual Rehabilitation and Closure Plan was prepared by OTML following the
process of consultation in March 1998. Subsequent workshops and meetings with OTML
specialists led to the submission in November 2000 along with a companion report titled
“Social and Sustainable Development Issues in Relation to Mine Closure” in recognition
that social issues are a dominant consideration in relation to mine closure. The State
subsequently accepted the Plan and OTML produced the “2002 Draft Mine Closure Plan”
which was approved by the Minister for Mining in August 2003 and by the Minister for
Environment and Conservation in May 2004. The 2000 and 2002 draft Mine Closure
Plans and the comments received following the submission of those plans have been used
by the OTML Internal Mine Closure Planning Committee (IMCPC) as the basis for
community consultation and subsequent preparation of the draft mine closure plan.
MINE CLOSURE OBJECTIVES

The Mine Closure Code provides the guidance framework for the closure plan
including definitions and closure plan commitments/actions, financial assurance and
inspections. Schedule 1 of the code provides content guidance for all areas other than the
Mine Area Rehabilitation Plan, which is covered by Schedule 2. The Mine Closure Plan
provides the basis of proposed reclamation actions and assumptions associated with the
mine and mill site areas. The objective of the mine closure planning process is to
develop a mine closure plan that will:
• provide for orderly relinquishment of leases by satisfying the requirements of
the Mining (Ok Tedi Agreement) Act 1976;
• comply with the Mine Closure Code;
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• satisfy the requirements of other relevant applicable PNG Legislation, e.g.

Mine Safety Act, Chapter 195A;
• ensure facilities, plants, and materials are decommissioned and disposed of in
a safe manner which minimises adverse effects on the environment;
• minimize potential for any post-closure liability;
• satisfy the requirements of the owners/shareholders;
• obtain stakeholder acceptance of closure proposals;
• utilize, where feasible, low maintenance structures and facilities; and
• leave formerly leased land in a condition suitable for the agreed land use.
FINANCIAL ASSURANCE
The first estimate of closure cost for the project was in the order of $150 million.
However, more recent estimates by OTML and its consultants suggested $91 million.
RPA understands that at the time of the visit the PNG government has accepted a closure
cost estimate at $100 million as the basis for the Financial Assurance requirements. This
money is to be set aside in a reserve account, known as the Ok Tedi Financial Assurance
Fund (FAF), held jointly by the state and OTML. The FAF is to receive biannual
contributions with the first contribution to be made on or before 1 July 2002. Actual
contributions have been as follows:
• July 2002 $7,550,000
• January 2003 $7,550,000
• July 2003 $7,550,000
• January 2004 $4,636,344
• July 2004 $4,622,000
• January 2005 $ 4,199.329
• Total to date $36,057,664
RPA reviewed the closure cost estimates and noted that the closure costs for Bige
were estimated at less than US$700,000 providing costs for establishing vegetation on
200 ha of dredge cells. These costs do not reflect the potential need for cover placement
20-12
over the tailings sediment if such measures are needed to mitigate ARD. If covers are
required, the costs could be in the order of US$70,000 per ha. If this requirement were
developed, there could be a significant additional liability. RPA estimates that it could
range between US$40 million US$80 million.
COMPLIANCE
FORMAL PNG REPORTING
The following information was extracted from the OTML 2004 annual report with
respect to the monitoring of compliance within the framework of the new regulatory
regime.
COMPLIANCE MONITORS
• There were no human health issues regarding water quality in terms of

drinking standards. On each of the monthly sampling occasions, none of the
water quality parameters exceeded drinking water guidelines.
• While variation in fish biomass was recorded, it was not statistically

significant and there were no issues relating to the edibility of any fish.
However, biomass declines continue at Ogwa – this is thought to be
attributable to the commercial fishing pressures at Obo. The edibility criteria
will be refined in line with results from the current Community Health Survey.
• Floodplain food crops presented no challenges regarding edibility although

the method through which this is determined continues to require further
attention. This is being actively addressed through the work being undertaken
as part of a Community Health Survey.
• The main channels of the Ok Tedi and Fly River were navigable for most of
the reporting period and any hindrance during FY05 would be climatically
influenced rather than mine related. At the time of writing this report (August
– September 2004) El Nino-like conditions are resulting in low river levels
which are having a marked influence on river navigability.
• Dissolved copper levels throughout the system were consistent with historical
trends and patterns of occurrence. Labile copper analyses continue to require
ongoing datasets before any determination can be made relating to any trends
20-13
or patterns of occurrence. However, it appears that a relationship between

pore water alkalinity and river chemistry is becoming established.
• Ecotoxicological monitoring analyses continue to require ongoing datasets

before any determination can be made relating to any trends or patterns of
occurrence.
• Vegetation dieback mapping revealed a slight 2% increase in the area

affected by dieback but a 33% increase in the area under some form of
recovery. This reflects a continuation of the drier climatic conditions also
experienced during FY03 resulting in a slowing of dieback extension.
However, this pattern can be readily reversed with the onset of wetter than
normal conditions.
• There was no evidence of ARD related adverse changes to riverine chemistry

downstream of the mine. However, while as yet not evident, further work is
required to examine oxidation of mine-derived minerals and any measurable
increase in metal bioavailability or impact on the ecology of the river system
that may result.
ENVIRONMENTAL VALUES
Each of the values was monitored during FY04. None of them was detrimentally
impacted, compared to existing status in December 2001, as a result of the mining
operation. Specifically
• Water quality within the main river channels was well within the stipulated
drinking water guidelines.
• There was no statistically significant reduction in fish biomass at the

monitoring sites.
• There were no instances of fish tissue metal levels presenting any human
health concerns.
• Floodplain availability was not further impacted during FY04.
• As they are grown in flood free areas, no challenges were found regarding the
edibility of food crops.
• The main river channels were generally navigable. Any impact during FY05
will be related to climatic factors rather than mine-derived impacts.
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REGIME PROGRAMS
The Regime currently comprises four programs, viz, the ARD Management Program,
the Riverine Aquatic Ecology Management Program, the Riverine Terrestrial Ecology
Management Program and the Industrial Sites Management Program. The status of each
of these programs is presented and a discussion of future direction identifies specific
activities to be undertaken during FY05. These activities are summarized in Schedule II
which is appended to this report as Appendix 1.
MITIGATION OPTIONS
Current mitigation options are limited to those related to the ARD program. Specific
options are currently in place addressing the buffering capacity contained within the
waste rock disposal areas and the stockpiled sands at the Bige dredge site. Further
development of these options is to be investigated during FY05.
INTERNAL MANAGEMENT
OTML has engaged the services of external consultants to carry out independent third
party environmental performance audits. These audits have been used to confirm
environmental compliance, compare existing practices to best practices, identify
environmental performance issues, and to develop remedial action plans to address
concerns that become apparent. The audits focus primarily on the industrial aspects of
the operation and exclude issues related to social aspects, riverine impacts, and
environmental monitoring data. Key audit findings have been identified that can assist
OTML improve its environmental performance including waste management, secondary
containment, oily water separation, landfill disposal and management, and day to day site
management of environmental risks.
CONCLUSIONS
The sound management and minimization of environmental impacts associated with
operations at the Ok Tedi mine are significant and ongoing challenges. Failure to achieve
the initially proposed designs for containment of mill tailings and waste rock, coupled
with the continuous erosion of mine site materials during the life of operation, has
20-15
resulted in a legacy of large scale sediment deposition and resultant flooding, dieback,
and changes in the river system and its use by humans along the length of the Ok Tedi
and Fly River before its confluence with the Strickland.
These impacts have been significant and have resulted in extensive concern by local
and regional groups, as well as by the government of PNG and international
environmental NGOs. To address these concerns, OTML initiated a far reaching Mine
Waste Management Program (MWMP) initiative that included extensive research and
scientific studies with respect to the areas of concern, as well an in-field large scale test
of river dredging to reduce impacts of sedimentation and consequent flooding and
changes in river use.
In acknowledgement of the MWMP’s conclusions that little could be done to

minimize existing impacts so long as the mine operated, OTML and the government of
PNG consulted with the local and regional communities to see if the mine should be
closed or continue operations. Based on the positive feedback from the communities
with respect to the benefits received especially in health and education services, OTML
developed a framework for continued operations. This framework included research and
development initiatives for areas of concern with the objective of minimizing mine
related impacts. Furthermore, OTML committed to a new environmental regime to
monitor the ongoing impacts of operations and mine discharges within the context of the
agreed to environmental values. OTML recognizes the impact of the past and current
practices. It has committed to compensation for past impacts and has provided a
framework for community development during operation and at closure.
OTML has made commitments to mine closure via its accepted closure code and draft
closure plans in addition to operating commitments. The code and plans provide the
framework, assumptions, and proposed actions for decommissioning facilities at the
mine, in and around Tabubil, at Kiunga and in other offsite areas and systems. The draft
closure plan is to be updated every two years and the final plan must be submitted no
later than four years before final closure. Closure funds are being set aside within a
20-16
Financial Assurance Fund on a biannual basis, with contributions to date exceeding

US$36 million of a required US$100 million. It was noted that this estimate only
includes minimal costs associated with the closure of the Bige dredge cells. It is RPA’s
opinion that closure liabilities at Bige may be significantly increased if the cells require
construction of engineered covers to minimize acid rock drainage, or if post closure water
management is necessary.
The social benefits associated with the mine have been enormous, contrary to the
environmental impacts of the operation on the regions. In addition to its role as a major
employer and wealth generator for employees, the mine has been a significant contributor
to the development and operation of regional infrastructure, including housing, roads, and
communications. Most importantly, the education and hospital and health care systems
have benefited considerably.
The environmental challenges have resulted in:

• An operational framework and community agreements
• Unique ownership status and commitments to the community and the region
• Impact offset compensation
• Operational and long-term development investment agreements
All these contribute to providing far reaching and significant contributions to the
long-term sustainability for the peoples of the region.
20-17
PROJECT ECONOMICS
RPA has developed a project development scenario based on the December 2004
Mineral Reserves as outlined above. The production schedule is based on the Mineral
Reserves and the mining schedule developed by OTML. The capital and operating cost
forecasts presented are based on the estimates and factors outlined below.
CAPITAL COSTS
Capital costs have been provided for in the life of mine plan based on the estimates
presented by OTML in the capital cost analysis section of the 2004 Reserve Support
Document. The capital costs include a number of replacement equipment items and
ongoing support items for the mine. In addition, some one-time capital projects are
provided for including the relocation of the Taranaki crusher and conveyor system, and
the implementation of a pit dewatering system. In the mill area, the capital estimate
provides for specific upgrades and replacement items in addition to the cost estimate for
implementation of a new process control system and projects such as flotation
optimization. Capital items for Bige include additional power generation capacity and
general equipment replacement allowances. Capital provisions for general and
administrative areas have also been included.
In addition to the cost estimates presented by OTML, RPA has included provisions
for site closure costs in the last year of the mine life. This allowance includes $50 million
for the mine area, $50 million for the mill site, and $50 million for the closure of the Bige
tailings site. These estimates are only rough allowances based on closure cost estimates
developed to date. Table 20-2 summarizes the life of mine capital cost forecast:
20-18
TABLE 20-2 LIFE OF MINE CAPITAL COST BY AREA

Inmet Mining Corporation Mount Fubilan Mine, Papua New
Guinea
Area Cost
Mine $87,155,000
Mill/ Kiunga $53,465,000
Bige $50,800,000
Power & Engineering $22,080,000
Planning & Tech. Services $1,088,000
Business Support $5,600,000
Public & Community Affairs $4,000,000
Commercial $4,000,000
Closure $15,000,000
Total Capital $243,188,000
OPERATING COSTS
MINING
Mine operating costs have been estimated based on the forecasts and factors
presented by OTML in their 2004 Reserve Support Document. Various mining cost
factors have been developed to provide for differences expected in various rock types as
well as the impact of longer haul distances that will be incurred as the pit deepens. Unit
mining costs have been derived for each year of the operation over the remaining mine
life based on the productivity and performance estimates developed by OTML. Unit
mining costs are projected to run at $0.75 per tonne mined in 2005, climbing to the
highest level of $1.10 per tonne in the last year of operation in 2013. Mining costs are
forecast to average $0.82 per tonne over the nine years’ remaining mine life.
PROCESSING
Mill operating costs have also been estimated based on the forecasts developed by
OTML in their 2004 Reserve Support Document. Unit milling costs have been
developed for each of the primary ore types to reflect their individual throughput rates
20-19
and reagent consumption factors. The costs are forecast to vary over a fairly narrow
range between a low of $1.78 and a high of $1.82 with the average over the nine year life
at $1.80 per tonne processed.
OPERATIONS SUPPORT
Operating costs associated with various support functions have similarly been
estimated based on information presented in the 2004 Reserve Support Document as well
as the OTML 2005 – 3 Year Business Plan. Concentrate handling costs have been
forecast based on current experience and are based on an average unit cost of $55.52 per
tonne of concentrate throughput. These handling costs provide for operation of the
overland pipeline, dewatering and handling facilities at Kiunga, and the barging and final
re-handling onto export vessels at tide water. Dredging costs have been forecast as a
fixed annual cost of $30.4 million and cover the dredging of river sediments and stacking
and maintaining the tailings stockpiles.
The technical and management costs associated with the planning and technical
services group for the mine and mill are forecast as a fixed annual cost of $7.8 million.
Engineering and Power costs are provided for the general costs associated with operating
and maintaining the general peripheral infrastructure, including the transportation and
power systems, the town site, and other operating areas. The cost of diesel power
generation is provided for in this item as well. It is forecast as a fixed annual cost of
$19.3 million. Finally the Environment cost associated with the ongoing monitoring and
management of the environmental impact around the general sites is provided for at a rate
of $2.5 million per annum.
COMMERCIAL GROUP COSTS

The commercial group cost provides for costs associated with various departments
involved in managing and maintaining OTML’s business activities. The commercial
group includes logistics, accounting, information services, marketing, and senior
management. An annual operating cost estimate of $48.0 million covers the logistics
20-20
operations, including the personnel transportation flight operations, freight operations,

and procurement. Accounting department and information services costs have been
estimated at a rate of $13.0 million per year, and senior management costs at $3.2
million. In total the commercial group is forecast to incur $64.2 million per year.
COMMUNITY AND BUSINESS SUPPORT

The community and business support group includes the human resources department
and provides security, infrastructure support, and community services and support. In
total this area is forecast to cost $42.5 million per annum.
20-21
CONTRACTS
There are a number of contracts that OTML uses in managing and maintaining the
overall operation. On the whole, these contracts make up a relatively small part of the
overall OTML operations and individually do not represent key integral parts of the Ok
Tedi operation. The primary mine excavators are operated under the terms of an
operating contract with Starwest Constructions Pty Ltd. (“Starwest”). The contract has
been in effect since August 1998 for a period of seven years. Under the terms of the
contract, Starwest supplies and operates hydraulic excavators and provides supervisory,
operations and maintenance personnel, equipment, and supplies as required, to meet a
minimum guarantee on productivity performance. The contractor excavates ore and
waste materials and loads these materials into OTML operated haulage trucks. The
contractor is paid for services based on an hourly rate for equipment time. OTML report
that the contractor is operating satisfactorily and that they enjoy a good working
relationship.
TAXES AND ROYALTIES

A 2% net smelter return royalty is paid to the PNG government on all metal
production from the Ok Tedi mine. This royalty is calculated based on the net revenue
realized after deducting smelting, refining, transportation, and selling costs associated
with the metal sales.
CASH FLOW
Table 20-3 summarizes the operating parameters forecast for the remainder of the
mine life, including production quantities, revenues, costs, and net cash flow.
20-22
Table 20-3 Ok Tedi Cash Flow Forecast
2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Ore Mined (000 t) 28,966 28,112 28,900 29,588 29,481 29,282 28,968 29,018 16,759 249,074
Total Waste Mined (000 t) 54,412 49,179 40,465 32,603 17,254 15,568 16,222 13,264 4,009 242,976
Total Mined (000 t) 83,378 77,291 69,365 62,191 46,735 44,850 45,190 42,282 20,768 492,050
Strip Ratio 1.88 1.75 1.40 1.10 0.59 0.53 0.56 0.46 0.24 0.98
Mill Feed (000 t) 28,966 28,112 28,900 29,588 29,481 29,282 28,968 29,018 16,759 249,074
Head Grade - Cu% 0.77 0.80 0.78 0.78 0.81 0.81 0.86 0.92 0.76 0.81
- Au g/t 0.79 1.04 1.13 1.04 1.04 1.02 1.09 1.20 1.09 1.05
Recovery - Cu % 85% 84% 84% 86% 87% 87% 87% 87% 89% 86%
-Au % 72% 72% 70% 68% 68% 68% 68% 68% 67% 69%
Recovered Cu (000 t) 191.3 188.2 188.8 198.4 208.3 207.5 217.8 232.1 112.9 1,745.4
Recovered Au kg 16,472 21,115 22,727 20,795 20,966 20,445 21,573 23,528 12,330 179,951
Cu Concentrate (000 t) 738,755 652,970 665,469 702,405 734,841 733,935 773,829 824,167 397,800 6,224,171
Copper Price ($/lb.) $1.15 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.90 $0.93
20-23
Copper Revenue ($ 000) $404,761 $252,823 $252,672 $265,142 $278,195 $276,913 $290,261 $309,493 $151,416 $2,481,676
Gold Price ($/oz) $397 $361 $361 $361 $361 $361 $361 $361 $361 $364
Precious Metal Revenue ($ 000) $202,589 $239,198 $257,978 $234,952 $236,601 $230,573 $243,314 $265,532 $139,513 $2,050,250
Total Revenue ($ 000) $607,350 $492,021 $510,650 $500,094 $514,797 $507,486 $533,575 $575,024 $290,928 $4,531,925
Operations Cost ($ 000) $214,894 $203,991 $201,406 $201,519 $193,714 $192,518 $195,676 $198,932 $134,628 $1,737,276
Commercial and Mng. Director ($ 000) $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $64,200 $577,800
Community & Business Support ($ 000) $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $42,500 $382,500
Subtotal Operating Cost ($ 000) $321,594 $310,691 $308,106 $308,219 $300,414 $299,218 $302,376 $305,632 $241,328 $2,697,576
Other Cost ($ 000) $61,811 $5,220 $5,220 $5,220 $5,220 $0 $0 $0 $0 $82,691
Total Cost of Production ($ 000) $383,405 $315,911 $313,326 $313,439 $305,634 $299,218 $302,376 $305,632 $241,328 $2,780,267
Capital Costs ($ 000) $39,045 $14,785 $24,370 $17,385 $9,356 $11,145 $5,895 $11,813 $150,000 $283,794
Income Tax ($ 000) $64,381 $47,672 $55,976 $52,698 $61,230 $61,787 $70,534 $84,734 $8,348 $507,359
Net Cash Flow ($ 000) $120,519 $113,653 $116,978 $116,572 $138,577 $135,336 $154,771 $172,846 -$108,748 $960,505
www.rpacan.com
10% NPV $647,374
12% NPV $603,359
SENSITIVITIES
RPA developed a sensitivity analysis that tested the impact of changing certain key
assumptions and factors on the base case cash flow in Table 20-3. The factors tested
included head grade forecast, capital cost estimate, operating cost factors, and metal
prices. The results of each of these sensitivities are illustrated in Figures 20-1 and 20-2.
The results indicate that the net present value of the project cash flow estimate is most
sensitive to metal prices, with the project being least sensitive to the capital cost
assumptions.
FIGURE 20-1 OK TEDI NPV SENSITIVITY ANALYSIS

Ok Tedi Cash Flow Sensitivity
Based on $0.90 Cu & $360 Au
$1.4
Billions
$1.2
$1.0
$0.8
Cashflow 15% NPV
$0.6
$0.4
$0.2
$0.0
-30% -20% -10% 0% 10% 20% 30%
($0.2)
Percentage Change
Price Grade Capital Operating
Source: RPA
20-24
FIGURE 20-2 OK TEDI SENSITIVITY ANALYSIS

Ok Tedi Sensitivity Summary
Cash Flow Sensitivity to +/- 30% Change on Key Factors
$1.6
Billions
$1.4
+/- 30% Sensitivity

$1.2
$1.0
15% NPV Cash Flow Value
+/- 10% Sensitivity
$0.8
$0.6
$0.4
$0.2
$0.0
Price Operating Cost Grade Capital Cost
($0.2)
Key Factors
Source: RPA
20-25
21 INTERPRETATION AND CONCLUSIONS

OTML has produced a very thorough and well-organized report that describes all of
the technical details related to the December 2004 Mineral Resource estimate. In RPA’s
opinion, OTML has done an excellent job in documenting its 2004 resource estimation
procedures and results.
As of December 2004, OTML estimated the Measured and Indicated, and Inferred
Mineral Resources of the Mount Fubilan. In RPA’s opinion, the December 2004 Mineral
Resource estimate is reasonable and acceptable to support the Mineral Reserve estimate.
The Mineral Resources have been calculated to an elevation of 1,153 m. It is RPA’s

view that a portion of the resources do not have reasonable prospects for economic
extraction even at significantly higher metal price assumptions. Based on an economic
assessment using higher revenue value assumptions (Base Case prices x 1.4 factor,
approximately $1.25 Cu, $490 Au) RPA believes that the portion of the model that can be
suitably classified as meeting the requirements of a Measured and Indicated Mineral
Resource under NI 43-101 guidelines would be 543 million tonnes averaging 0.77%
copper and 0.9 grams per tonne gold.
It is RPA’s opinion that the estimate of Measured skarn and endoskarn resources
should be re-classified as Indicated.
Drill hole data and wireframe models were not updated for the 2004 resource
estimate. RPA concludes that this mostly affects reliability of the deeper resources
situated well below the current ultimate pit design called “13D4”.
21-1
OTML is drilling more holes to evaluate the open pit and underground potential of
the skarn mineralization located below the ultimate pit design.
MINERAL RESERVE ESTIMATE

The ultimate pit design used to determine the estimate of Mineral Reserves is well
inside the potential economic limits developed in the optimization study.
RPA concludes that some of the operating cost and performance parameters that have
been used in the economic optimization work are based on an assumption of performance
and cost improvements compared to current experience. At present, RPA regards some
of the forecast productivity factors to be optimistic but recognizes that OTML has
initiatives in place to reduce haulage costs and to increase mill productivity. These are
key factors underlying OTML’s life of mine cost estimates.
RPA concludes that ongoing geotechnical assessments of the pit slope stability and
implementation and monitoring of the depressurization program are key requirements to
achieving the ultimate pit limits and recovery of the Mineral Reserves.
On the basis of the detailed and extensive analysis, and methods applied by OTML,
RPA concludes that the Mineral Reserves as estimated based on the 13D4 pit design
represent Proven and Probable Mineral Reserves consistent with the definitions set out in
NI 43-101 and defined by the CIM Standards on Mineral Resources and Reserves
Definitions and Guidelines adopted by the CIM Council on August 20, 2000.
21-2
22 RECOMMENDATIONS
MINERAL RESOURCE
RPA has not identified any significant problems with the OTML resource estimation
methodology and RPA’s resource related recommendations should be considered as
opportunities for future refinements. RPA notes that some of RPA’s recommendations
already exist in past reports by OTML and SRK and that OTML could not implement
these refinements for the 2004 resource estimate because of the time limitations. RPA
recommends the following:
DRILL HOLE DATABASE RECOMMENDATIONS

1. Continue to verify approximately 5% of the drill holes every year and retain a
digital record that lists all of the records that were checked and any
corrections that were made.
2. Clean up the lithology data.
3. Correct some of the dates in the collar table.
QA/QC AND SAMPLING RECOMMENDATIONS

1. Review the QA/QC procedures, and the geology department should designate
someone to be responsible for compiling and monitoring all of the QC data,
including the OTML Laboratory reference standard and replicate results.
2. Reduce the geology reference standard insertion rate from one every ten
samples to one or two per diamond drill hole or approximately one in every
fifty blast hole samples.
3. Insert barren split core or other suitable barren material as blanks into the
sample stream at a rate of one or two per drill hole or one in every fifty blast
hole samples.
4. Insert occasional drill core or blasthole duplicates.
5. Compile the historical laboratory and geology reference standard results to

confirm that no major analytical biases existed.
22-1
6. Send several hundred pulps to an outside accredited laboratory and consider

sending pulps out on a routine basis.
7. Compile the historical laboratory replicate data.
8. Investigate the apparent high bias associated with the blast hole data.
RESOURCE ESTIMATION RECOMMENDATIONS

1. Complete the new wireframe models.
2. Investigate including the blast hole data.
3. Review the composite length strategy and consider using shorter length
composites, particularly for the skarn mineralization which has more variable
grades and geometries.
4. Investigate whether different cutting levels should be applied to the drill holes
and blast holes. RPA’s preference is to cut high resource assays before
compositing.
5. Review the threshold grades and restricted search radii once the new
wireframes are completed.
6. Generate more density data for the skarns and endoskarn mineralization.
7. Investigate interpolating the block model density values, particularly for the
skarn mineralization.
8. Carry out new directional variography studies.
9. Use ordinary kriging in the future.
10. Reduce some of the longer search radii to approximately two times the
variography ranges of continuity.
11. Build a partial block model with 25 m by 25 m by 15 m high blocks. This

would allow each lithology to be properly represented by its proportion in the
block.
12. Investigate developing a system to reconcile by rock type.
13. Construct scatter plots that show assays and block grades by elevation, by
easting, and by northing for each rock type as a further check on the local
block model grade estimates.
22-2
14. Modify the classification methodology so that it is more compatible with the
closer spaced drilling required to define skarn and endoskarn resources.
15. Use a high metal price optimization pit shell to constrain future resource
estimates at depth.
22-3
23 SOURCES OF INFORMATION
Agoratek International, 2003, Ok Tedi Mining Limited Audit of Sampling Procedures
and Equipment, Internal Report by Francois-Bongarcon Dated October, 2003.
Bamford, W.R., 1972, The Mount Fubilan (Ok Tedi) Porphyry Copper Deposit, Territory
of Papua and New Guinea: Economic Geology, v. 67, p. 1019-1033.
Cox, D.P., and Singer, D.A., 1992, Distribution of gold in porphyry copper deposits, in
DeYoung, J.H., and Hammerstrom, J.M. eds., Contributions to commodity research:
U.S. Geological Survey Bulletin 1877, p. C1-C14.
Einaudi, M.T., Meinert, L.D., and Newberry, R.J., 1981, Skarn deposits, in Skinner, B.J.,
ed., Economic Geology 75th Anniversary Volume: El Paso, Texas, Economic
Geology Publishing Co., p. 317-391.
Howell, W.J.S., Fardon, R.S.H., Carter, R.J., and Bumstead, E.D., 1978, History of the
Ok Tedi Porphyry Copper Prospect, Papua New Guinea, Economic Geology Vol. 73,
p. 796-809.
Mining Journal Special Publication, 2004, Papua New Guinea, February 2004.
OTML, 2005, Support Document for the Reserve Statement as at 31st July 2004 & 31st
December 2004, A document for OTML internal use detailing Ore Reserves by A.
Sharp Dated March 5, 2005.
OTML, 2005, Exploration License 581 and SML1 Ok Tedi Annual Exploration Report
for Period Ending November 3, 2004, by J. Kepa, R. Sumaiang, and B.L. Jainona,
Internal report Dated January 2005.
OTML, 2004, Resource Estimation Report for F405 Model, Internal Report by A. Sharp
and M. Humphreys Dated September 27, 2004.
OTML, 2003, Prove Check of Drill Hole Data in Oracle Database, Internal Memorandum
by A. Sino Dated May 22, 2003.
OTML, 2002, CY-03 Mineral Resource and Ore Reserve Report as at 31 December 2002,
Internal Report by D.T. Brost Dated December 2002.
OTML, 2002, Untitled Internal Report on Density Data Dated March 2002.
OTML, 2001, Ok Tedi Rock/Ore Types Moisture Content and Dry Density
Determination, Internal Memorandum by John Ninduara Dated May 12, 2001.
23-1
OTML, 2001, Annual Review 2001, OTML Report to Shareholders.
Rogerson, R., and McKee, C., 1990, Geology, volcanism and mineral deposits of Papua
New Guinea, in Hughes, F.E., ed., Geology of the mineral deposits of Australia and
Papua New Guinea: Melbourne, Australasian Institute of Mining and Metallurgy
Monograph 14, p. 1689-1701.
Rush, P.M., and Seegers, H.J., 1990, Ok Tedi copper-gold deposits, in Hughes, F.E., ed.,
Geology of the mineral deposits of Australia and Papua New Guinea: Melbourne,
Australasian Institute of Mining and Metallurgy Monograph 14, p. 1747-1754.
Sillitoe, R.H., 1989, Gold deposits in western Pacific island arcs: the magmatic
connection, in Keays, R.R., Ramsay, W.R.H., and Groves, D.I., eds., The geology of
gold deposits: the perspective in 1988: Economic Geology Monograph 6, p. 274-
291.
SRK Consulting, 2004a, Review of the July 2004 Resource Model and Related Practices
for the Mount Fubilan Operations, SRK Project OKT402, Internal Report by A.
Wesson for OTML, July 2004.
SRK Consulting, 2004b, Ok Tedi Mining Limited Audit of Mineral Resources as at 31

July 2003 and Ore Reserve Estimate as at 31 December 2003, SRK Project OK301,
Internal Report by A. Wesson and J. MacIsaac Dated January 2004.
CMCA 2004, CMCA Environmental Predictions Community Patrols – April-June.
Ok Tedi Development Foundation 2001, Investing in the Future of Western Province,

November 2001.
OTML, 2005, OTML Mine Closure Planning January 2005, Presentation Prepared by
Ani Topurua, OTML Tabubil, January 2005.
OTML, 2005, Mine Area Creeks: Recent Findings, Presentation, February 2005.
OTML, 2005, Provincial Health Services in Western Province/Telefomin District,

Presentation, 2005 Health Implementation Plan.
OTML, 2005, Riverine Management Programs, Environment Department Ok Tedi

Mining Limited, March 2005.
OTML, 2005, ARD Management Program: A Status Report, Presentation Prepared by

Henry Kundapen, Riverine Management, Environment Department, March 2005.
23-2
OTML, 2004, Annual Environmental Audit 2003, Final Report, January 2004.
OTML, 2004, Annual Environmental Audit 2004, Draft Report, January 2004.
OTML, 2004, Annual Environmental Report, FY04, Report ENV040920 Environment

Department, September 2004.
OTML, 2004, Draft Mine Closure Plan, Part 1 – Decommissioning and Infrastructure
Plan, December 2004.
OTML, 2004, Draft Mine Closure Plan, Part 2 – Social and Economic Impact Repor,.
December 2004.
OTML, 2004, Draft Mine Closure Plan, Part 3 – Mine Area Rehabilitation Plan.
December 2004.
OTML, 2004, Environment Presentation, Environment Department Ok Tedi Mining

Limited, May 2004.
OTML, 2004, OTML Mine Closure Update December 2004, Part 1 – Decommissioning
and Infrastructure Plan, Presentation to the State February 2005.
OTML, 2004, Past, Present and Future, 8th PNG Mining and Petroleum Investment
Conference, Sydney, December 2004.
OTML, 2004, Personal Correspondence to David Gwyther re: OTML Riverine Review,
May 2004.
OTML, 2004, Environment Presentation, Environment Department, May 2004.
OTML, 2004, Patrol Report Presentation, November 2004.
OTML, 2004, Social and Economic Impact Report, 2004 Draft Mine Closure Plan,
Presentation to the State February 2005.
OTML, 2003, Environmental Action Plan 2002-2003, Actions Developed from Findings
of HLA-Envirosciences FY02 Audit Report, 14 January 2003, Report No. ENV
03 01 10.
23-3
OTML, 2001, Community Mine Continuation Agreement Between Middle Fly

Communities and Ok Tedi Mining Limited, December 6, 2001.
OTML, 2001, Community Mine Continuation Agreement Between Lower Ok Tedi

Communities and Ok Tedi Mining Limited, November 28, 2001.
OTML, 2001, Interim Tailings Storage Area Conceptual Closure Plan, Final Report, PM
6762 34, June 2001.
OTML, 2001, OK Tedi Mine Closure and Decommissioning Code 2001.
OTML, 2001, Independent State of Papua New Guinea, No. 7 of 2001, AN ACT entitled
– Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement) Act,
2001, PNG National Legislation.
OTML, 2003, Annual Environmental Report, FY03, Report ENV030927 Environment

OTML, 2003, Environment Standards External Audit, April 30 – May 7, 2003, June
2003.
OTML, 2003, Mine Closure Cost Review, Prepared by Ken Voigt, November 2003.
OTML, 2003, OTML’s Response to the NSR Riverine Review, October 2003.
OTML, 2003, Review of Compliance with the Environmental Regime and the Science of
OTML’s Monitoring Activities and Other Work Assessing the Effects of its
Operations on the Downriver Environment, CR 1065_1_v4, October 2003.
OTML, 2002, Environment Standards, December 2002.
OTML, 2001, Proposed Environmental Regime, Report ENV010914 Environment

OTML, 2003, Lower Ok Tedi Dredge Project, ARD Mitigation Option Studies. Klohn
Crippen, M09135 02. Final Report.
OTML, 2003, Lower Ok Tedi Dredge Project. Phase 2 ARD Mitigation Study, Klohn
Crippen, M09135 06.
23-4
OTML, 2005, Lower Ok Tedi Dredge Project, Phase 3 ARD Mitigation Study, Klohn
Crippen, M09135 A10.
OTML, Regional Development – Project Delivery Issues.
OTML, Regional Development Strategies.
OTML, 2004, OTML Welcomes you all to this Important Provincial Immunisation and
Fly River Community Healthy Services Program Planning Workshop,
Presentation, August 2004.
Parametrix, Inc. and URS Greiner Woodward Clyde, 1999, Assessment of Human Health
and Ecological Risks for Proposed Mine Waste Mitigation Options at the Ok Tedi
Mine, Papua New Guinea, Detailed Level Risk Assessment, Final Report,
Prepared for Ok Tedi Mining Limited, November 1999.
Parametrix, Inc. and URS Greiner Woodward Clyde, 1999, Assessment of Human Health
and Ecological Risks for Proposed Mine Waste Mitigation Options at the Ok Tedi
Mine, Papua New Guinea, Screening Level Risk Assessment, Final Report,
Prepared for Ok Tedi Mining Limited, November 1999.
23-5
24 SIGNATURE PAGE
This report titled “Technical Report on the Ok Tedi Mining Limited Mount Fubilan
Mine Mineral Resource and Mineral Reserve Estimates, Papua New Guinea, Prepared for
Inmet Mining Corporation” and dated August 2, 2005 was prepared and signed by the
following authors:
(Signed and Sealed)
Dated at Toronto, Ontario James W. Hendry, P. Eng.

August 2, 2005 ROSCOE POSTLE ASSOCIATES INC.
Principal Mining Engineer
(Signed and Sealed)
Dated at Toronto, Ontario Luke Evans, M.Sc., P.Eng.

August 2, 2005 ROSCOE POSTLE ASSOCIATES INC.
Consulting Geological Engineer
(Signed and Sealed)
Dated at Toronto, Ontario Gerd Wiatzka, P.Eng.

August 2, 2005 SENES Consultants Limited
Principal, Manager Mining
24-1
25 CERTIFICATES AND QUALIFICATIONS

JAMES W. HENDRY
As an author of this report entitled “Technical Report on the Ok Tedi Mining Limited
Mount Fubilan Mine Mineral Resource and Mineral Reserve Estimates, Papua New
Guinea, Prepared for Inmet Mining Corporation” and dated August 2, 2005 (the Report)
and on behalf of Inmet Mining Corporation (Inmet), I hereby make the following
statements:
A. My name is James W. Hendry and I am Principal Mining Engineer with Roscoe

Postle Associates Inc. My office address is 55 University Avenue, Suite 501,
Toronto, Ontario M5J 2H7.
B. I have received the following degree in Mining Engineering:

• B.Sc. in Mining Engineering, Queen’s University, Kingston, Ontario.
C. I am registered as a Professional Engineer in the Province of Ontario. I am also a

Member of the Canadian Institute of Mining, Metallurgy and Petroleum (CIM).
D. I am a Qualified Person for the purposes of National Instrument 43-101.
E. My contributions to the Report are based on my personal review of technical

reports provided by the Ok Tedi Mining Limited (OTML) and Inmet, on
discussions with OTML and Inmet representatives, and on information available
in public files. My relevant experience for the purpose of the Technical Report is:
• Mining engineering experience in mining industry since 1976 including

development of numerous open pit mine designs, feasibility studies, and
operations reviews.
• Mining operations experience ranging from operations supervisor through
senior executive responsible for overall operating performance.
• Reviews and evaluations of numerous open pit mines in Canada, the
United States, Latin America, Russia, Europe, and Africa.
• Extensive experience with computerized modeling and optimization of
open pit mines.
F. I have been practising as a professional mining engineer for over 25 years.
G. I visited the Mount Fubilan Mine from March 7 to 11, 2005.
H. I am responsible for the Mineral Reserve related parts of the Report:
25-1
I. I am not aware of any material fact or material change with respect to the subject
matter of the Technical Report that is not reflected in the Technical Report, the
omission to disclose which makes the Technical Report misleading.
J. I am independent of Inmet and OTML applying the tests set out in section 1.5 of
National Instrument 43-101. . I have no prior involvement with the property that
is the subject of the Report.
K. I have read National Instrument 43-101 and Form 43-101F1, and the Technical
Report has been prepared in compliance with both of them.
I consent to the filing of the Report with any stock exchange and other regulatory
authority and any publication by them, including electronic publication in the public
company files on their websites accessible by the public, of the Report.
(Signed and Sealed)

Dated at Toronto, Ontario ROSCOE POSTLE ASSOCIATES INC.
August 2, 2005 James W. Hendry, P.Eng.
Principal Mining Engineer
25-2
LUKE EVANS
statements:
A. My name is Luke Evans and I am a Consulting Geological Engineer with Roscoe

Postle Associates Inc. (RPA). My office address is Suite 501, 55 University
Avenue, Toronto, Ontario M5J 2H7. I am a Qualified Person for the purposes of
National Instrument 43-101 of the Canadian Securities Administrators.
B. I have received the following degrees:

• B.A.Sc. (Geol. Eng.) 1983 - University of Toronto, Toronto, Ontario
• M.Sc. (MinEx) 1986 - Queens University, Kingston, Ontario
C. I am registered as a Professional Engineer in the Province of Ontario and I am

designated as a Consulting Engineer. I am a Member of the Canadian Institute of
Mining, Metallurgy and Petroleum, and the Prospectors and Developers
Association of Canada.
E. This Report is based on my personal review of information provided by Ok Tedi

Mining Limited (OTML) and Inmet and on information available in public files.
My relevant experience for the purpose of the Report is:
• Exploration Geologist, Ontario, 1984 to 1985
• Mine Exploration Geologist, Chibougamau, Québec, 1986 to 1992
• AFRI Project Geoscientist, Toronto, 1993
• Supervisor, Ontario Drill Hole Database, 1994
• Consulting Geologist with RPA from 1995 to present
F. I have been practicing as a professional geologist for over 20 years.
G. I visited the Mount Fubilan Mine from March 7 to 11, 2005.
H. I am responsible for the geology and Mineral Resource related parts of this
Report.
I. I am not aware of any material fact or material change with respect to the subject
matter of the Report, which is not reflected in the Report, the omission to disclose
which makes the Report misleading.
25-3
J. I am independent of OTML and Inmet applying the tests set out in section 1.5 of
National Instrument 43-101. I have no prior involvement with the property that is
the subject of the Report.
K. I have read National Instrument 43-101 and National Instrument 43-101F1 and
this Report has been prepared in compliance with both of these Instruments.
(Signed and Sealed)
Dated at Toronto, Ontario ROSCOE POSTLE ASSOCIATES INC.

August 2, 2005 Luke Evans, M.Sc., P.Eng.
Consulting Geological Engineer
25-4
GERD WIATZKA
statements:
A. My name is Gerd Wiatzka and I am Principal, Manager Mining with SENES

Consultants Limited (SENES). My office address is 121 Granton Avenue, Unit
12, Richmond Hill, Ontario, L4B-3N4. I am a Qualified Person for the purposes
of National Instrument 43-101 of the Canadian Securities Administrators.
B. I have the following degree:

• B.A.Sc., (Honours) Civil Engineering, 1974, University of Waterloo
C. I am registered as a Professional Engineer in the Province of Ontario.
E. This Report is based on my personal review of information provided by Ok Tedi

Mining Limited (OTML) and Inmet and on information available in public files.
My relevant experience for the purpose of the Report is:
• Senior Environmental Engineer with SENES from 1991 to present
• SRK Toronto Branch Manager in 1991
• Director Information Services for Noranda Inc, from 1986 to 1990
• Manager Business Services fro Noranda Inc. from 1984 to 1986
• Construction and Environmental Manager for Mining Corporation of
Canada Inc. from 1978 to 1983
• Project Engineer for Kilborn Engineering Ltd. from 1974 to 1978
F. I have been practicing as a professional engineer for over 30 years.
G. I visited the property from March 7 to 11, 2005. I am responsible for the
environmental aspects of this Report.
H. I am not aware of any material fact or material change with respect to the subject
matter of the Report, which is not reflected in the Report, the omission to disclose
which makes the Report misleading.
I. I am independent of OTML and Inmet applying the tests set out in section 1.5 of
National Instrument 43-101. I have no prior involvement with the property that is
the subject of the Report.
25-5
J. I have read National Instrument 43-101 and National Instrument 43-101F1 and
this Report has been prepared in compliance with both of these Instruments.
(Signed and Sealed)
Dated at Toronto, Ontario SENES Consultants Limited

August 2, 2005 Gerd Wiatzka, P.Eng.
Principal, Manager Mining
25-6
26 APPENDIX A
List of Acts, Amendments and Change Notices

(source OTML Registration of Environmental Obligations Allens Arthur Robinson, 27 2
2003)
• The Mining (Ok Tedi Agreement) Act Chapter 363 (the Ok Tedi Agreement Act)
• The Agreement dated 22 March 1976 set out in the Schedule to the Ok Tedi Agreement Act (as
amended, the Principal Agreement)
• The Mining (Ok Tedi Supplemental Agreement) Act Chapter 363A (the First Supplemental
Agreement Act), as amended
• The Supplemental Agreement dated 26 June 1980 set out in the Schedule to the First
Supplemental Agreement Act (as amended, the First Supplemental Agreement)
• The Mining (Ok Tedi Second Supplemental Agreement) Act Chapter 363B (the Second
Supplemental Agreement Act), as amended
• The Second Supplemental Agreement dated 26 February 1981 set out in the Schedule to the
Second Supplemental Agreement Act, as amended
• The Mining (Ok Tedi Third Supplemental Agreement) Act Chapter 363C (the Third Supplemental
• The Third Supplemental Agreement dated 4 March 1982 set out in the Schedule to the Third
Supplemental Agreement Act, as amended
• The Mining (Ok Tedi Fourth Supplemental Agreement) Act Chapter 363D (the Fourth
• The Fourth Supplemental Agreement dated as of 1 March 1984 set out in the Schedule to the
Fourth Supplemental Agreement Act, as amended
• The Mining (Ok Tedi Fifth Supplemental Agreement) Act Chapter 363E (the Fifth Supplemental
• The Fifth Supplemental Agreement dated as of 1 August 1985 set out in the Schedule to the Fifth
Supplemental Agreement Act, as amended
• The Mining (Ok Tedi Sixth Supplemental Agreement) Act 1986 No 27 of 1986 (the Sixth
• The Sixth Supplemental Agreement dated as of 28 February 1986 set out in the Schedule to the
Sixth Supplemental Agreement Act, as amended (the Sixth Supplemental Agreement)
26-1
• The Mining (Ok Tedi Seventh Supplemental Agreement) Act 1986 No 39 of 1986 (the Seventh
• The Seventh Supplemental Agreement dated as of 10 July 1986 set out in the Schedule to the
Seventh Supplemental Agreement Act, as amended
• The Mining (Ok Tedi Restated Eighth Supplemental Agreement) Act 1995 No 48 of 1995 (the
Restated Eighth Supplemental Agreement Act)
• The Restated Eighth Supplemental Agreement dated as of 4 August 1995 set out in the Schedule
to the Restated Eighth Supplemental Agreement Act
• The Mining (Ok Tedi Mine Continuation (Ninth Supplemental) Agreement) Act 2001 No 7 of
2001 (the Mine Continuation Agreement Act)
• The Mine Continuation Agreement dated as of 11 December 2001 set out in the Schedule to the
Mine Continuation Act (the Mine Continuation Agreement).
• The Mine Closure and Decommissioning Code is the Third Schedule to the Mine Continuation
Agreement Act.
• The Approved Proposals (as defined in the Principal Agreement) comprising the Feasibility Study
and Development Proposals Supplement dated November 1979 completed under the Principal
Agreement, approved by the State in accordance with the Principal Agreement subject to certain
conditions set out in the instrument of approval dated 29 February 1980 (the Approved Proposals),
as amended and varied in accordance with the Principal Agreement
• Change Notice 1/29.2 - Alternate Tailings Disposal System, as approved by the State in
accordance with the Principal Agreement and subject to the conditions of approval
• Change Notice 2/29.2 - Environmental Management, as approved by the State in accordance with
the Principal Agreement and subject to the conditions of approval
• Change Notice 3/29.2 - Tailings Disposal System, as approved by the State in accordance with the
Principal Agreement and subject to the conditions of approval
• Change Notice 5/29.2 - Interim Tailings Disposal System, as approved by the State in accordance
with the Principal Agreement and subject to the conditions of approval
• Change Notice 5/29.2 - Interim Tailings Disposal System (amended), as approved by the State in
• Change Notice 5/29.2 - Interim Tailings Disposal System (addendum), as approved by the State in
• Change Notice 26/4.2; 8/29.2 - Permanent Tailings, as approved by the State in accordance with
the Principal Agreement and subject to the conditions of approval
• Change Notice 27/4.2; 9/29.2 - Permanent Tailings System Amendment, as approved by the State
in accordance with the Principal Agreement and subject to the conditions of approval
26-2
• Change Notice 28/4.2; 10/29.2 - Interim Tailings System, as approved by the State in accordance
• Change Notice 31/4.2; 13/29.2 - Interim Tailings System Amendment; Permanent Tailings System
Further Amendment; and Waste Dumping Amendment, as approved by the State in accordance
• Change Notice 32/4.2; 14/29.2 - Tailings System Further Amendment, as approved by the State in
• Change Notice 35/4.2; 15/29.2 - Project Stages, as approved by the State in accordance with the
• Change Notice 39/4.2; 16/29.2 - Interim Tailings System Further Amendment, as approved by the
State in accordance with the Principal Agreement and subject to the conditions of approval
• Change Notice 44/4.2; 19/29.2 - Environmental Monitoring and Environmental Facilities, as
approved by the State in accordance with the Principal Agreement and subject to the conditions of
approval
• Change Notice 45/4.2; 20/29.2 - Overburden Disposal (Southern Dumps), as approved by the
State in accordance with the Principal Agreement and subject to the conditions of approval
• Change Notice 47/4.2; 21/29.2 - Dredging Trial, as approved by the State in accordance with the
• Change Notice 48/4.2; 22/29.2 – Tailings System Further Amendment, as approved by the State in
• Change Notice 48A/4.2; 21A/29.2 – Continuation of Dredging, as approved by the State in
• Change Notice 49/4.2; 23/29.2 – New Environmental Regime, as approved by the State in
accordance with the Mine Continuation Agreement
26-3

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Technical Report Ok Tedi

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TECHNICAL REPORT ON THE

OK TEDI MINING LIMITED

RPA August 2, 2005

1 EXECUTIVE SUMMARY .......................................................................................... 1-1

Mill Performance Parameters .......................................................................... 19-16

QA/QC and Sampling Recommendations ......................................................... 22-1

Figure 9-1 Ok Tedi Property Geology ........................................................................... 9-3

The Ok Tedi porphyry copper prospect was discovered by Kennecott Copper

ENVIRONMENTAL AND PERMITTING STATUS

The PNG Sustainable Development Program and the Ok Tedi Development

GEOLOGY AND MINERALIZATION

Emplacement of the Pliocene Sydney Monzodiorite is believed to have produced the

Subsequent intrusive bodies (porphyritic monzodiorite, southern monzonite porphyry)

Magnetite skarns contain chalcopyrite-pyrite-marcasite-bornite mineralization,

EXPLORATION AND PRODUCTION HISTORY

MINERAL RESOURCES AND MINERAL RESERVES

The current resource estimate is based on a geological interpretation and on a three

TABLE 1-1 DECEMBER 2004 MINERAL RESOURCE ESTIMATE WITH

Classification Million tonnes Copper % Gold grams per

Inferred 33 0.92 1.44

Table 1-2 summarizes the Mineral Reserves as of December 31, 2004:

TABLE 1-2 MINERAL RESERVE ESTIMATES (DEC 31, 2004)

Classification Ore Copper Gold Contained Contained

CURRENT MINE OPERATIONS

MINERAL PROCESSING AND METALLURGY

• Build up of mine-derived sediment has raised the elevation of the riverbed,

• Acid Rock Drainage (ARD) has recently been identified as a potential

Numerous environmental, health, and engineering studies have been undertaken to

TABLE 1-3 SUPPORT COST ESTIMATES

Item $ million per year

FIGURE 1-1 OK TEDI NPV SENSITIVITY ANALYSIS

Price Grade Capital Operating

FIGURE 1-2 OK TEDI SENSITIVITY ANALYSIS

+/- 30% Sensitivity

+/- 10% Sensitivity

INTERPRETATION AND CONCLUSIONS

MINERAL RESERVE ESTIMATE

2 INTRODUCTION AND TERMS OF

The Ok Tedi porphyry copper prospect was discovered by Kennecott Copper

TABLE 3-1 LIST OF ABBREVIATIONS

Abbreviation Meaning Abbreviat Meaning

Our business primarily involves providing independent opinions on ore reserves,

• Information available to RPA at the time of preparation of this report,

• Assumptions, conditions and qualifications as set forth in this report, and

6 PROPERTY DESCRIPTION AND

The mine area is located 18 km east of the PNG-Indonesia border, on the

Okapa Britain Buin Choiseul Isl.

Rossel Is. Rennell Is.

LAND ACT TENEMENTS

PAPUA NEW GUINEA

141°00’E 141°30’E Mt Anju Camp TABUBIL Legend:

Inmet Mining Corporation

Kiunga LMP 26 Ok Tedi Mine

11 LMP 26 Lukwi Extension 6,200 25/08/2002 Expired, Applied for Surrender

TABLE 6-3 OTML EXPLORATION LICENSES

Exploration License Hectares Licence Term

ENVIRONMENTAL AND PERMITTING STATUS

At present the regulatory regime is defined by the OTML Environmental Regime,

• Mine Closure Sinking Fund.

The Ninth Supplemental Agreement defines the expectations with respect to

COMMUNITY MINE CONTINUATION AGREEMENTS

The process was observed by independent non-government organizations, the

The process was supported by three key functions: