UK5525 Boa Fé PEA Report FINAL 20130507

A PRELIMINARY ECONOMIC

ASSESSMENT ON THE BOA FÉ GOLD

Prepared For Colt Resources Inc.

Report Prepared by

SRK Consulting (UK) Limited UK55 25

SRK Consulting Boa Fé PEA – Details

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UK5525 Boa Fé PEA Report FINAL 20130507.docx May, 2013

SRK Consulting Boa Fé PEA – Details

SRK Legal Entity : SRK Consulting (UK) Limited SRK Address: 5th Floor Churchill House 17 Churchill Way City and County of Cardiff, CF10 2HH Wales, United Kingdom. Date: May, 2013 Project Number: UK5525 SRK Project Director : Mike Beare Corporate Consultant (Mining Engineering) SRK Project Manager : Colleen MacDougall Senior Consultant (Mining Engineering) Client Legal Entity : Aurmont Resources Client Address: Unipessoal LDA, Avenida Duque de Loule No.5, 6A, Lisbon 1050-085, Portugal.

A PRELIMINARY ECONOMIC ASSESSMENT ON THE BOA FÉ GOLD Report Title PROJECT, PORTUGAL] Effective Date: 7 May 2013 Signature Date 7 May 2013 Project Number: UK5525 John Arthur CGeol FGS; CEng MIMMM, Principal Resource Geologist Colleen MacDougall BEng MAusIMM(CP), Senior Mining Engineer Jurgen Fuykschot MSc MAusIMM(CP), Principal Mining Engineer Contributors: John Willis BEng MAusIMM, Principal Mineral Processing Engineer Xander Gwynn CEng PhD MIMMM PhD, Geotechnical Engineer Kris Czajewski BSc, Principal Tailings Engineer Mark Raynor MSc, Principal Hydrogeologist Emily Robinson MSc, Senior Environment Consultant Reviewed by: Mike Beare CEng MIMMM ACSM BEng

Qualified Person:

Jurgen Fuykschot MSc MBA MAusIMM(CP)

Principal Consultant (Mining Engineering)

UK5525 Boa Fé PEA Report FINAL 20130507.docx May, 2013

SRK Consulting Boa Fé PEA – Table of Contents Executive Summary

Table of Contents: Executive Summary 1 INTRODUCTION ...... I 2 PROPERTY DESCRIPTION AND OWNERSHIP ...... I 3 GEOLOGICAL SETTING AND MINERALISATION ...... I 4 EXPLORATION STATUS ...... II 5 METALLURGICAL TESTWORK ...... III 6 MINERAL RESOURCE ESTIMATE ...... IV 7 MINERAL RESERVE ESTIMATE ...... V 8 MINING METHOD ...... V 8.1 Mining ...... v 8.2 Geotechnical Assessment ...... vii 8.3 Hydrological and Hydrogeological Related Issues ...... viii 9 RECOVERY METHODS ...... IX 10 PROJECT INFRASTRUCTURE ...... IX 11 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ...... X 12 CAPITAL AND OPERATING COSTS ...... XI 13 ECONOMIC ANALYSIS ...... XI

List of Tables: Executive Summary Table ES 1: Mineral Resource Statement for the Boa Fé Gold Project, Alentejo Region, Southern Portugal: SRK Consulting, March 4, 2013* ...... v Table ES 2: Pit Optimisation Scenarios ...... v Table ES 3: Pit Optimisation Results ...... vi Table ES 4: Life of Mine Schedule Results ...... vi Table ES 5: Summary of Capital and Operating Costs ...... xi

UK5525 Boa Fé PEA Report FINAL 20130507.docx May, 2013 Page i of i SRK Consulting (UK) Limited 5th Floor Churchill House 17 Churchill Way City and County of Cardiff CF10 2HH, Wales United Kingdom E-mail: [email protected] URL: www.srk.co.uk Tel: + 44 (0) 2920 348 150 Fax: + 44 (0) 2920 348 199 A PRELIMINARY ECONOMIC ASSESSMENT ON THE BOA FÉ GOLD PROJECT, PORTUGAL – EXECUTIVE SUMMARY

1 INTRODUCTION

SRK Consulting (UK) Limited (“SRK”) is an associate company of the international group holding company, SRK Consulting (Global) Limited (the “SRK Group”). SRK has been requested by Aurmont Resources (“Aurmont”, hereinafter also referred to as the “Company” or the “Client”) to undertake a Preliminary Economic Assessment (“PEA”) on the Mineral Assets of the Company comprising the Boa Fé – Montemor Gold Project (“Boa Fé”) located in Portugal. Aurmont is 100% owned by Colt Resources Inc. (“Colt”), which currently holds a 100% beneficial ownership of the Boa Fé license area, which was approved on November 2, 2011.

2 PROPERTY DESCRIPTION AND OWNERSHIP

The Project is located in the Alentejo Region of Portugal, approximately 100 km east of the city of Lisbon, near the town of Santiago do Escoural. The Project is centred at the UTM coordinates of 569,419E, 4,270,860N, within the WGS84 Zone 29N system. The Project is accessed via highway (A6 motorway) and secondary paved roads from Lisbon. The current license area (Boa Fé experimental mining license, or Boa Fé license area) encompasses 46.8 km 2, with an additional 728.22 m2 of exploration concession (Montemor exploration concession) staked surrounding the Boa Fé license area. Both licenses were fully approved by the Portuguese mining authorities on November 2, 2011. There is currently no mine development or mine operations in the Project area.

3 GEOLOGICAL SETTING AND MINERALISATION

The known Montemor gold deposits are located within a segment of the Boa Fé shear corridor, considered as part of the wider Montemor shear zone that crosses the Ossa Morena Zone, an important tectonic and metallogenic domain in southern Portugal. Gold mineralisation at Boa Fé – Montemor is considered to conform to the orogenic gold model and occurs in association with several NW-SE trending shear corridors, which make part of the wide Montemor shear zone. Most of the gold deposits outlined to date locate along the northernmost of such shear corridors, referred to as the Boa Fé shear corridor. Gold mineralisation identified to date is hosted in either silicified schist or felsic meta- volcanics. While there are variations amongst the deposits, there are a number of common characteristics, which point to a common genesis:

• Strong silicification of host schist or metavolcanics which can lead to quartz veining; • Gold deposition is disseminated in the schistose fabric of the rock or concentrated in quartz veins; Group Offices: Africa Registered Address: 21 Gold Tops, City and County of Newport, NP20 4PG, Asia Wales, United Kingdom. Australia SRK Consulting (UK) Limited Reg No 01575403 (England and Wales) Europe North America South America SRK Consulting Boa Fé PEA –Executive Summary

• Proximity to breccia zones at the intersection of faults and shears; • Proximity of leucocratic granites; • Mineralogical association of gold with arsenopyrite, loellingite and pyrite; and • Geochemical association with high As, and anomalous Bi, Mo, Te, W. In most gold deposits investigated to date the principal non-auriferous minerals are arsenopyrite, loellingite and pyrite, with arsenopyrite dominant. These occur in the schistose fabric of the rocks, fractures and aligned with the schistosity, as well as in association with quartz veinlets. Arsenopyrite forms individual grains and mineral aggregates up to several millimetres in size. Relict loellingite frequently occurs at the cores of the arsenopyrite and as brecciated aggregates in the gangue. Pyrite is not quite as abundant as arsenopyrite or loellingite but is commonly intergrown with them, and occurs independently as subhedral grains in the gangue. Marcasite is also associated with the arsenic minerals in places. Gold occurs in association with arsenic minerals, in fractures, and in gangue. Although there is a close association with arsenic minerals, a significant quantity of gold also occurs independently of arsenopyrite. The interpretation is that the gold and sulphosalts may have been deposited at different times. On recent work carried out by Colt elsewhere in the Montemor exploration concession, namely at the Monfurado gold prospect, the gold contents have been found to correlate with the presence of pyrite rather than arsenopyrite, and this is also reflected on a much lower, though still anomalous arsenic contents in the analysis.

4 EXPLORATION STATUS

The majority of the exploration conducted to date has focused on mineralisation exposed at surface and for the most part this has concentrated along the Boa Fé shear corridor and within the area that is now under the experimental mining license application. Near deposit exploration has been focused on investigating extensions of known deposits into gap areas, such as Chaminovas between Chaminé and Casas Novas and between Chaminé and Ligeiro deposits, through trenching and re-evaluation of historical data. Other, parallel shear corridors to the South, within the broad Montemor shear zone, may also host additional gold deposits as indicated by the several known gold occurrences or anomalies, and these belts have only been scarcely explored to date. Work has commenced on trenching and limited drill testing of higher ranked target areas identified by previous workers but not subsequently followed up in detail, such as Monfurado and Mourel in the Boa Fé area. A comprehensive program has also been initiated in extending detailed geochemical coverage form soil sampling into un-sampled areas on the southern shear corridor and also selective sampling campaigns for multi-element analysis in the deposit areas previously sampled only for gold and arsenic. In addition it is highly probable that, due to the nature of the geological model, there will be mineralisation that does not crop out at surface. Thus there is significant potential both along strike and at depth for the delineation of further resources. Much of the basic work has been done, and what remains will require a high level of technical input to generate quality drill targets. An airborne geophysical survey carried out across the whole of the Montemor concession is one example of high quality technical data in identifying suitable host structures, which enables greater focus for target generation at the deposit level.

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5 METALLURGICAL TESTWORK

A metallurgical test program was undertaken by AMMTEC Ltd. in 2008 on composite samples from the Casas Novas, Chaminé, and Braços deposits at Boa Fé/Montemor as well as an oxide mineralisation composite. Initial amenability testwork was conducted on each composite to assess gold recovery by a gravity concentration followed by cyanidation of the gravity tailing over a range of different grinds. The results of this series of tests demonstrated the following:

• Gravity recoverable coarse gold content was variable, being low to moderate at the

relatively coarse grind size of P 80 250 µm; and • Gold extraction by cyanidation increased with increasing fineness of grind. At the finest

grind of P 80 53 µm, overall gold recovery from the Casas Novas and Chaminé composites was about 67% and overall gold recovery from the Braços composite was 80.1%. Additional tests were conducted at various grind sizes on the Chaminé and Casas Novas composites to evaluate gold recovery by gravity concentration followed by flotation of the gold contained in the gravity tailing into a bulk sulphide concentrate. The results of these tests demonstrated that:

• Gravity separation followed by flotation of the gravity tailing resulted in excellent overall gold recoveries. Overall gold recovery from the Chaminé composite ranged from 91.8% to 94.0% and overall gold recovery from the Casas Novas composite ranged from 92.5% to 94.0%; and • Almost 90% of the contained arsenic was recovered into the flotation concentrate along with the gold, indicating that subsequent processing of the flotation concentrate could be problematic. After completion of these initial tests, a bulk test was conducted on a 20 kg sub-sample of

both the Chaminé and Casas Novas composites. Each bulk composite was ground to a P 80 of 250 µm and subjected to gravity concentration in a Knelson centrifugal concentrator. The

tailing from the Knelson concentrator was then reground to a P 80 of 125 µm and subjected to bulk sulphide flotation to recover the contained gold values into a sulphide concentrate. The results of these tests demonstrated that for the Chaminé composite 9.8% of gold could be recovered into a gravity concentrate and 82.5% could be recovered into a sulphide flotation concentrate for an overall recovery of 92.3%. Results for the Casas Novas composite were similar with 16.5% of gold recovered into a gravity concentrate and 77% of the gold recovered into a sulphide flotation concentrate for an overall gold recovery into the combined gravity and flotation concentrates of 93.4%. Sulphide flotation concentrates from each composite were then subjected to ultra-fine grinding

to P 95 25 µm and P 95 10 µm and subjected to cyanidation to extract the contained gold. At the

finer grind of P 95 10 µm, 88.9% of the gold was extracted from the Chaminé sulphide concentrate and 92.3%, was extracted from the Casas Novas sulphide concentrate. Overall gold recoveries were 83.1% for the Chaminé composite and 87.5% for the Casas Novas composite. A further testwork program was undertaken by Testwork Process Development Ltd in 2012- 2013. This work program largely confirmed the results of the AMMTEC program, and concluded that a flotation mass recovery of 16% was required in order to maximise the recovery of Au and S into the flotation concentrate, and that slightly higher overall recoveries were possible with the incorporation of a gravity recovery stage ahead of flotation.

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Testwork using alternative lixiviants (i.e. non cyanide) was also conducted in 2012-2013, by Drinkard Metalox Inc. This testwork showed that ammonium thiosulphate leaching could achieve similar recoveries to cyanide (approximately 50% on the as-received ore), and that very high recoveries (98%) could be achieved using halogen lixiviant.

6 MINERAL RESOURCE ESTIMATE

Colt has produced a Mineral Resource estimate of the Chaminé, Casa Novas, Banhos, Braços, Ligeiro and Monfurado deposits in the Boa Fé – Montemor gold project, using data from both historic drilling and the 2011/2012 exploration drilling program carried out by Colt. A database was compiled for all deposit areas using data from 1,346 drill holes and 538 exploration trenches, with collar, survey, geological and assay information for a total of 65,695 individual assay samples over a sampled drill interval of some 117,077m. In the process of completing the resource estimate update, SRK validated and verified the database, interpretation and available data. The block dimensions selected for the open pit models were 10.0 m x 10.0 m x 5.0 m for all the deposits except for Monfurado where a larger block size of 25m x 25m x 5m was used. The resource estimate was interpolated using GEMS™ software using Ordinary Kriging (“OK”) for all deposits, again with the exception of Monfurado and Braços where the inverse distance weighting method (ID 2”) was utilised. The block models were exported to Gemcom™ Whittle (Whittle) software for pit optimisation, based on the Lerchs-Grossman 3D algorithm. The optimised pit shells were generated by SRK using combined Indicated and Inferred resources. Various economic parameters such as mining and processing and general and administrative (“G&A”) costs, gold recovery and pit slope angle were used in as input parameters for the resource pit shells. All open pit resources are stated above a 0.44 g/t gold cut-off. The Mineral Resource Statement for The Boa Fé gold project is provided in Table ES 1. John Arthur from SRK was the qualified person for the March 2013 Mineral Resource Statement.

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Table ES 1: Mineral Resource Statement for the Boa Fé Gold Project, Alentejo Region, Southern Portugal: SRK Consulting, March 4, 2013*

Resource Quantity Average Grade Contained Metal Deposit Area Category Tonnes Au (g/t) Au Oz

Banhos 2,200,000 1.35 95,800 Braços - - - Chaminé 1,390,000 2.05 91,700 Indicated Casas Novas 2,330,000 1.95 146,100 Ligeiro 148,000 1.42 6,730 Monfurado - - - Total Indicated 6,070,000 1.74 340,310

Banhos 172,000 1.97 10,900

Braços 380,000 1.91 23,300

Chaminé 5,000 4.67 730 Inferred Casas Novas 480,000 1.54 23,700

Ligeiro - - -

Monfurado 520,000 1.53 25,600 Total Inferred 1,554,000 1.69 84,200 Notes * • Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. • Resources stated as contained within a potentially economically mineable open pit above a 0.44 g/t Au cut-off. A variable specific gravity was used for each individual model. • Pit optimisation is based on an assumed gold price of US$1,560/oz, metallurgical recovery of 90%, mining cost of US$2.00/t and processing and G&A cost of US$18.00/t. • Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

7 MINERAL RESERVE ESTIMATE

There are currently no Mineral Reserve estimates on the Boa Fé EML or Montemor exploration concession.

8 MINING METHOD

8.1 MINING A pit optimisation, mine schedules and operating strategy were developed for four processing options (Table ES 2) for the Boa Fé project to be used in the economic analysis.

Table ES 2: Pit Optimisation Scenarios Scenarios Description Option A Conventional Off-Site Option B Conventional On-Site Option C Drinkard Heap Leach Option D Drinkard Halogen

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The results of the pit optimisation are summarised in Table ES 3.

Table ES 3: Pit Optimisation Results Units Option A Option B Option C Option D Selling Price USD/oz 1,350 1,350 1,350 1,350 Total kt 18,744 20,934 20,055 24,437 Waste kt 15,234 16,486 15,417 19,380 Strip Ratio t:t 4.34 3.71 3.32 3.83 In-Situ Ore kt 3,510 4,448 4,638 5,057 In-Situ Au Grade g/t 2.86 2.47 2.38 2.31 RoM Ore kt 3,501 4,437 4,627 5,045 RoM Au Grade g/t 2.72 2.35 2.27 2.20 Total Au Output k oz 261.8 286.9 246.3 338.6

The results of the mine schedules are summarised in Table ES 4.

Table ES 4: Life of Mine Schedule Results Units Totals Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Option A Total kt 19,132 1,799 3,947 4,114 4,167 4,533 573 Waste kt 15,234 1,290 3,144 3,292 3,375 3,745 389 Total RoM kt 3,501 450 720 720 720 720 171 Au Grade g/t Au 2.72 2.83 2.56 3.27 2.46 2.69 2.01 Au koz Au 306 41 59 76 57 62 11 LG to stockpile kt 75 15 22 23 13 3 Stripping Ratio t:t 4.3 2.9 4.4 4.6 4.7 5.2 2.3 Option B Total kt 21,955 1,762 4,127 4,310 4,461 3,710 2,763 822 Waste kt 16,486 1,198 3,175 3,340 3,483 2,870 2,006 414 Total RoM kt 4,437 450 720 720 720 720 720 387 Au Grade g/t Au 2.39 2.79 2.54 3.34 2.14 2.62 1.46 1.63 Au koz Au 341 40 59 77 50 61 34 20 LG to stockpile kt 675 71 171 169 207 57 1 Stripping Ratio t:t 3.2 2.8 4.6 4.9 5.1 4.1 2.8 1.1 Option C Total kt 21,276 1,744 4,094 4,094 4,220 3,515 2,629 980 Waste kt 15,403 1,155 3,098 3,078 3,163 2,653 1,876 381 Total RoM kt 4,624 450 720 720 720 720 720 574 Au Grade g/t Au 2.30 2.78 2.55 3.35 2.12 2.66 1.33 1.27 Au koz Au 341 40 59 77 49 62 31 23 LG to stockpile kt 891 96 215 215 286 78 1 Stripping Ratio t:t 2.8 2.8 4.6 4.6 4.8 3.8 2.6 0.7 Option D Total kt 25,791 1,594 4,507 4,123 4,338 5,154 4,698 1,095 282 Waste kt 19,380 1,022 3,488 3,146 3,265 4,236 3,873 349 Total RoM kt 5,045 450 720 720 720 720 720 720 275 Au Grade g/t Au 2.20 2.85 2.66 3.36 2.21 2.19 1.82 1.08 0.77 Au koz Au 356 41 62 78 51 51 42 25 7 LG to stockpile kt 993 77 235 176 299 144 61 Stripping Ratio t:t 3.2 2.4 5.2 4.6 5.0 6.1 5.5 0.5

The following conclusions can be made from the work carried out for the PEA:

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• The optimisation results show that Option D provides an additional USDm 42.0 of undiscounted cashflow over Option B at an Au price of USD 1,350/oz; • The optimisation sensitivity shows that a 3° decre ase in overall slope angle results in a 98 kt decrease in ore, 4.4 k oz decrease in Au metal and 774 kt increase in waste; • Option A has the shortest mine life (6 years), while Option D is longest (8 years) due to the size of the optimised pit shells; • all four schedule scenarios resulted in similar production and grade profiles, with high grade material produced in the early years and lower grades fed towards the end of the mine life; and • total material movement ranges from 4 to 5 Mtpa for all options. The following recommendations should be undertaken in the next phase of the project:

• re-run the optimisation with the results of the financial analysis of the PEA; • select a pit shell from the optimisation results based on the preferred processing method identified from the PEA results and a DCF analysis; • evaluate alternative methods for transporting the ore from the Casas Novas, Banhos, Braços and Monfuardo, such as larger trucks or contractors to reduce capital and operating costs; • review the cut off grade used for the stockpiling strategy for the selected scenario; • review the practicality of mining low grade and high grade separately; and • evaluate the standard mining unit to validate mining recovery and dilution factors. 8.2 GEOTECHNICAL ASSESSMENT A review of the available data for the Boa Fé Project was undertaken to ascertain whether or not the geotechnical slope criteria given by the geotechnical report supplied by the client was suitable a brief stability analysis was undertaken. As the geotechnical data for the deposits at Boa Fé is limited, the pit slope stability analysis concerned itself upon the Chamine and Casas Novas pits. The bulk of the data is related to these two pits. Where data is limited it was combined and applied to the analysis of both pits. At the time of the geotechnical study, 3D wireframes of the complex geology were not finalised. The geotechnical data was therefore combined as one rock mass (bar overburden and weathered rock). No information on large scale features (faults) was available. The pit slope configurations reported can be applied to the other pits at this stage of the study. Subsequent studies should encompass each pit separately when there is sufficient data to do so. The following conclusions can be made from the work carried out for the PEA:

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• Maximum Inter Ramp Slope Height: 100 m. The following recommendations can be made from the work carried out for the PEA:

• Due to the uncertainty in the geotechnical data, it is recommended that economic sensitivity of the deposits to inter ramp angles of 54° and 52° should be tested; • Specific geotechnical boreholes should be drilled at varying angles to remove the drill bias. These holes should be logged on intervals based upon geotechnical parameters; • To address the lack of orientation data, subsequent studies should look at the use of using acoustic televiewer (“ATV”) logging to measure joint structures; and • Subsequent studies should look to identify and separate out the major geotechnical features such as lithologies and faults. This will be helped by further drilling, providing better understanding of the discontinuity orientations and the use of 3D lithological wireframes. 8.3 HYDROLOGICAL AND HYDROGEOLOGICAL RELATED ISSUES Groundwater depth largely follows local topography but varies seasonally and by location; in the wet season groundwater is 9 mbgl at Chaminé and 8 mbgl at Casas Novas increasing to 14 mbgl and 10 mbgl in the dry season. A total of 21 groundwater wells have been identified in the study area, most of them either abandoned or used for livestock. Groundwater levels indicate that dewatering will be required from the start of operations and advanced dewatering will be preferable if borehole yields are sufficiently high to allow advanced dewatering. Two streams merge at the exact location of the Cosas Novas open pit area, and a diversion has been suggested for one of the streams. The suggested path of the south west stream diversion and the naturally kept stream close to the Cocas Novas open pit may intrude on the future pit designs. Additional stream diversion studies may be required to support the Casas Novas deposit valuation. Suggested stream diversions have been reviewed and found reasonably sized to cope with the adopted peak. Currently, the available water supplies from regional sources are designated to the local community and agricultural sector. The assumption is that a water reservoir will be required and once in operation the majority of the water required for the mill operation will be reclaimed from the tailings pond. A preliminary water balance model highlights a likely need for a small water storage dam of 150,000 m3 to keep the process plant fully operational during dry periods (Golder, 2011). The following recommendations can be made from the work carried out for the PEA:

• There is insufficient data to support a dewatering assessment at present and a hydrogeological field programme is required to provide the data to support the dewatering system design. Pit slope depressurisation will also require further evaluation following completion of the field programme; • Hydrogeological site investigations are also required to provide baseline groundwater information around the tailings area and waste rock dumps; • Open pit closure water balance and water quality assessments are required, and a geochemical testwork programme is required to support this; • Baseline surface water flow data is very limited and flow monitoring should be carried out to give confidence in the assumptions used in the site water balance and water supply assessments; and • The surface water diversion around the Casas Novas pit is very close to the east wall of the pit. This will need to be considered during the mine planning process, and further evaluation of diversion options will be required if the pit has the potential to expand further

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to the east.

9 RECOVERY METHODS

Colt has presented four processing options for consideration for the PEA:

• Option A: Production of a combined gravity and flotation concentrate, with Au recovery from the concentrate in an off-site facility. Au recovery from the concentrate would be by ultrafine grinding followed by intensive cyanidation; • Option B: Production of a combined gravity and flotation concentrate, with on-site recovery of the Au using the same process as for Option A; • Option C: Heap leaching using thiosulphate as the lixiviant. SRK understands that the recovery for this option provided by Colt is based on an initial gravity recovery step, with heap leaching of the tailings from gravity recovery; and • Option D: Leaching using a halogen lixiviant. Initial metallurgical testwork has demonstrated that gold is recoverable from Boa Fé – Montemor mineralized material using a combination of gravity, flotation and cyanidation technologies. Of the processing alternatives presented, the most conventional processing strategy would be onsite gold recovery into gravity and flotation concentrates that could be transported offsite for regrinding and cyanidation to recover the gold as a final doré’ product. SRK recommends additional process amenability testwork, which would include assessment of alternative processing technologies to alleviate the issues of arsenic recovery and disposal.

10 PROJECT INFRASTRUCTURE

Power, pipeline, stockpile, waste dump and tailings facility estimates have been made for inclusion in the economic analysis. The following results have been concluded from the work carried out for the PEA:

• High grade stockpiles will be required at Casas Novas, Banhos, Braços and Monfurado, the distance from the deposit to the processing facility requires a separate fleet to transport the ore; • Low grade stockpiles will be required at Chaminé, Casas Novas and Banhos deposits to allow high grade material to be processed in the early years; • The existing roads will be used to transport ore from Casas Novas, Banhos, Braços and Monfurado to the processing facility; • Waste dump locations have been proposed for all the deposits based on the largest optimised pit shells (Option D); • A 3.5 Mt tailings storage facility will require a 21 m main embankment and a 19 m saddle embankment; and • The tailings facility will be built in stages and will be constructed predominately from waste from the pits (except for the initial facility). The following recommendations should be carried out in the next phase of the project:

• Suitable locations for the high grade and low grade stockpiles should be investigated; • The practicality of using existing roads for transporting ore from Casas Novas, Banhos, Braços and Monfurado to the processing facility should be investigated to determine whether the type, size and frequency of the trucks will be allowed on these public roads;

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• The proposed waste dump locations should be investigated to determine their practicality; • Conduct a tailings alternative assessment including potential in pit disposal; • Conduct a hydrogeological investigation of the groundwater condition at and near the tailings impoundment and dam; • Carry out a hydrology study of the precipitation data representative of the site, including analysis of the site precipitation patterns and the development of the site storm scenarios for over 50 years; • Conduct a geochemical study on the geochemical properties of the tailings and the leachate originating from the tailings; • Perform a geotechnical investigation into the condition of the dam foundations and properties of the tailings; • Conduct borrow source investigation; and • Carry out engineering designs of the TSF.

11 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

A review of current environmental and social documents was undertaken to determine the level of studies completed and provide recommendations for future work. The following conclusions can be made from the work carried for the PEA:

• Colt Resources has an experimental mining licence for the Boa Fé project, which covers operations up to five hectares in size and/or less than 150,000 ktpa of ore; • In accordance with mining law an application for a full mining licence requires the submission of a Mine Feasibility Study that includes an EIA; • An EIA for the mining of the Casas Novas and Cheminé pits was prepared by Geomega Consultants and submitted to the APA in August 2012 and according to the Client, the EIA report has been approved; and • The Banhos, Ligeiros, Braços and Monfurado deposits are not included in the EIA reviewed. SRK understands that the Client intends to focus on the exploitation of the Chaminé and Casas Novas deposits and subsequently permit and develop the other deposits. The following recommendations can be made from the work carried out for the PEA:

• Further monitoring will be required to obtain site-specific primary data to quantify potential environmental risks, particularly relating to impacts on surface and groundwater resources. This will be required to ensure that risks are accurately identified and management measures are appropriate for the anticipated impact; • Further studies are required to investigate the need to manage seepage water from the TSF and waste rock dump (“WRD”); • In accordance with the management measure identified for this impact in the EIA it is strongly recommended to find an alternative access route to the main road to avoid passage of trucks through the centre of Nossa Senhora de Boa Fé; and • Further information is required on stakeholder engagement and feedback to ensure there are no delays to the project approval process.

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12 CAPITAL AND OPERATING COSTS

A summary of the total capital and operating costs for the four options is shown in Table ES 5.

Table ES 5: Summary of Capital and Operating Costs Units Option A Option B Option C Option D Operating Expenditure Mining USDm 53.6 60.2 58.0 68.6 Ore Transport USDm 5.8 7.9 8.2 9.7 Processing USDm 55.5 70.4 66.1 101.7 Tailings USDm 2.1 2.7 3.0 3.3 Conc. Transport USDm 6.7 - - - Processing - Conc USDm 34.9 18.5 - - G&A USDm 13.7 17.3 18.0 19.7 Water Treatment USDm 0.8 0.9 0.9 1.0 Dewatering USDm 2.2 1.8 1.8 2.2 Total Operating Costs USDm 174.5 179.6 156.1 206.1 Capital Expenditure Mining USDm 42.5 46.5 44.7 48.6 Land USDm 3.3 3.3 3.3 3.3 Plant (On-Site) USDm 41.6 41.6 19.5 47.8 Plant (Off-Site) USDm 7.8 7.8 - - Environment/Closure USDm 3.8 3.8 3.8 3.8 Tailings/WRD USDm 11.1 11.1 11.1 11.1 Dewatering USDm 5.0 5.0 5.0 5.0 Water Treatment USDm 1.0 1.0 1.0 1.0 Engineering/Studies USDm 3.2 3.2 3.2 3.2 Total Capital Expenditure USDm 119.3 123.2 91.5 123.8

13 ECONOMIC ANALYSIS

The project options demonstrate a positive NPV 5% ranging between USDm 24 and USDm 64, IRR between 16% and 33% and cash costs between 666 and 724 USD/oz. The project is most sensitive to gold price and a reduction in the gold price of between USD 1,100/oz to USD 1,200/oz may result in marginal project economics. Operating costs also have a significant role in the project economics, and additional work should be undertaken to support these parameters for any preferred case taken forward. Based on the limited technical work that has been undertaken and the assumptions which underlie this economic analysis, SRK concludes that there is potential for economically viable development options for the deposit. The positive financial indicators suggest that further studies and field work for this project are justified.

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Table of Contents 1 INTRODUCTION ...... 1 1.1 Background ...... 1 1.2 Terms of Reference ...... 1 1.3 Scope of Work ...... 1 1.4 Qualifications of Consultants ...... 2 1.4.1 Details of Inspection ...... 2 2 PROPERTY DESCRIPTION AND LOCATION ...... 3 2.1 Property Description and Location ...... 3 2.2 Mineral Titles ...... 4 2.2.1 Nature and Extent of Issuer’s Interest ...... 5 2.3 Royalties, Agreements and Encumbrances ...... 6 2.4 Environmental Liabilities and Permitting ...... 6 2.4.1 Environmental Liabilities ...... 6 2.4.2 Required Permits and Status ...... 6 2.4.3 Mining License ...... 7 2.5 Other Significant Factors and Risks ...... 8 2.5.1 Compliance Evaluation ...... 8 3 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 9 3.1 Topography, Elevation and Vegetation ...... 9 3.2 Climate and Length of Operating Season ...... 9 3.3 Sufficiency of Surface Rights ...... 9 3.4 Accessibility and Transportation to the Property ...... 9 3.5 Infrastructure Availability and Sources ...... 10 3.5.1 Access Road and Transportation ...... 10 3.5.2 Power ...... 11 3.5.3 Water ...... 11 3.5.4 Mining Personnel ...... 11 3.5.5 Port ...... 11 3.5.6 Buildings and Ancillary Facilities ...... 11 3.5.7 Camp Site ...... 11 3.5.8 Potential Tailings Storage Areas ...... 11 3.5.9 Potential Waste Disposal Areas ...... 12 3.5.10 Potential Processing Plant Sites ...... 13 4 HISTORY ...... 16 4.1 Mining History ...... 16 4.2 Prior Ownership and Ownership Changes ...... 18 4.3 Previous Exploration and Development Results ...... 19

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4.3.1 1940-1980 Government Mapping and Exploration ...... 19 4.3.2 1984-1986 BPMIL...... 20 4.3.3 1984 - 1992 Rio Tinto (RioFinEx) ...... 20 4.3.4 1995-1999 Portuglobal – MRI joint venture ...... 21 4.3.5 2004-2008 Iberian Resources Limited ...... 22 4.4 Historic Mineral Resource and Reserve Estimates ...... 24 4.4.1 Rio Tinto (RioFinEx) Resource Estimates ...... 24 4.4.2 MRI Resource Estimates ...... 25 4.4.3 IRL Resource Estimates ...... 26 4.5 Historic Production ...... 28 5 GEOLOGICAL SETTING AND MINERALISATION ...... 29 5.1 Regional Geology ...... 29 5.2 Local Geology ...... 30 5.2.1 Stratigraphy ...... 32 5.2.2 Tectonics ...... 32 5.2.3 Metamorphism ...... 34 5.2.4 Intrusive Rocks ...... 34 5.2.5 Mineralization ...... 35 5.3 Property Geology ...... 38 5.3.1 Chaminé ...... 38 5.3.2 Casas Novas ...... 38 5.3.3 Ligeiro ...... 38 5.3.4 Braços ...... 39 5.3.5 Banhos ...... 39 5.3.6 Monfurado ...... 39 5.3.7 Other deposits within Boa Fé EML ...... 40 5.4 Significant Mineralised Zones ...... 40 6 DEPOSIT TYPE ...... 42 6.1 Mineral Deposit ...... 43 6.2 Geological Model ...... 44 6.2.1 Chaminé ...... 44 6.2.2 Casas Novas ...... 47 6.2.3 Ligeiro ...... 48 6.2.4 Braços ...... 48 6.2.5 Banhos ...... 49 6.2.6 Monfurado ...... 49 7 EXPLORATION ...... 51 7.1 Relevant Exploration Work ...... 51 7.1.1 Regional Work done at Montemor and Boa Fé ...... 51

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7.1.2 Pilot Exploration Work ...... 52 7.1.3 Boa Fé Exploration Work ...... 52 7.1.4 Montemor Exploration Work ...... 52 7.1.5 Localised Surveys ...... 55 7.1.6 Procedures and Parameters ...... 58 7.2 Significant Results and Interpretation ...... 60 7.2.1 Geophysical ...... 60 7.2.2 Geochemical ...... 64 7.2.3 Prospecting ...... 67 8 DRILLING ...... 71 8.1 Summary of Previous Drilling ...... 71 8.2 Summary of Drilling by Colt Resources ...... 71 8.3 Type and Extent ...... 74 8.4 Procedures...... 75 8.5 Interpretation and Relevant Results ...... 76 9 SAMPLE PREPARATION, ANALYSIS AND SECURITY ...... 81 9.1 Methods ...... 81 9.1.1 Trench Sampling ...... 81 9.1.2 RC Percussion Sampling ...... 81 9.1.3 Diamond Core Sampling ...... 81 9.2 Security Measures ...... 81 9.3 Sample Preparation ...... 82 9.3.1 Laboratories ...... 83 9.4 QA/QC Procedures ...... 83 9.4.1 Standard Reference Materials ...... 84 9.4.2 Blanks ...... 86 9.4.3 First laboratory validation- Duplicate Pulps ...... 86 9.4.4 Old Database Validation – Duplicate Drillholes ...... 86 9.4.5 QA/QC Actions ...... 87 9.4.6 Results ...... 87 9.5 Opinion on Adequacy ...... 93 10 DATA VERIFICATION ...... 94 10.1 Opinion on Data Adequacy ...... 96 11 MINERAL PROCESSING AND METALLURGICAL TESTING ...... 97 11.1 AMMTEC ...... 97 11.1.1 Samples ...... 97 11.1.2 Gravity Recoverable Gold Test ...... 97 11.1.3 Gravity – Cyanidation Amenability Testwork ...... 98 11.1.4 Gravity / Flotation Amenability Testwork ...... 98

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11.1.5 Bulk Gravity / Flotation with Flotation Concentrate Cyanidation ...... 99 11.1.6 Bulk Gravity with Concentrate and Tailings Cyanidation ...... 99 11.2 Testwork Process Development ...... 100 11.2.1 Samples ...... 100 11.2.2 Head Assay and Mineralogy ...... 100 11.2.3 Comminution Testwork ...... 100 11.2.4 Direct Cyanidation ...... 101 11.2.5 Gravity Concentration ...... 101 11.2.6 Flotation ...... 101 11.3 Testwork Using Alternative Lixiviants ...... 102 11.4 Sample Representativeness ...... 103 11.5 Significant Factors ...... 103 12 MINERAL RESOURCE ESTIMATE ...... 104 12.1 Introduction ...... 104 12.2 Drillhole Database ...... 104 12.3 Coordinate System ...... 105 12.4 Topography ...... 106 12.5 Geology and Grade Modelling ...... 106 12.6 Exploratory Data Analysis and compositing ...... 106 12.7 Assay Capping ...... 112 12.8 Specific Gravity Analysis ...... 112 12.9 Variogram Analysis and Modelling ...... 114 12.10 Block Model Construction ...... 117 12.11 Grade Estimation Methodology ...... 118 12.12 Model Validation ...... 119 12.12.1 Visual comparison ...... 119 12.12.2 Mean block grade verses composite mean grade ...... 121 12.12.3 Swath Plots (Drift Analysis) ...... 122 12.13 Resource Classification ...... 122 12.14 Mineral Resource Statement ...... 123 12.15 Mineral Resource Sensitivity ...... 124 12.16 Relevant Factors ...... 125 13 MINERAL RESERVE ESTIMATE ...... 126 14 MINING METHODS ...... 127 14.1 Mining ...... 127 14.1.1 Pit Optimisation ...... 127 14.1.2 Life of Mine Schedule ...... 135 14.1.3 Operating Strategy ...... 137 14.1.4 Conclusion ...... 139

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14.2 Geotechnical Assessment ...... 140 14.2.1 Approach ...... 140 14.2.2 Available Data and Confidence ...... 140 14.2.3 Rock Mass Characterisation ...... 142 14.2.4 Kinematic Analysis – Bench Scale ...... 146 Slope Stability Analysis...... 149 14.2.5 Conclusions ...... 153 14.3 Hydrological and Hydrogeological Related Issues ...... 154 14.3.1 Slope stability, Dewatering and Pore Pressure Monitoring ...... 154 14.3.2 Stream Diversion and Associated Risks ...... 154 14.3.3 Tailings Water Management ...... 156 14.3.4 Hydrogeological Tests and Dewatering ...... 157 14.3.5 Environmental Impacts and Water Supply Availability ...... 157 14.3.6 Mine Closure ...... 158 15 RECOVERY METHODS ...... 159 16 PROJECT INFRASTRUCTURE ...... 161 16.1 Power ...... 161 16.2 Pipelines ...... 161 16.3 Stockpiles...... 161 16.4 Roads ...... 161 16.5 Proposed Waste Dump Locations ...... 161 16.6 Tailings Storage ...... 163 16.6.1 Introduction ...... 163 16.6.2 Tailing Characteristics ...... 163 16.6.3 Geotechnical Setting ...... 164 16.6.4 Design Considerations ...... 164 16.6.5 Additional Options for Tailings Disposal Studies ...... 164 16.6.6 Main and Saddle Dam Embankments ...... 165 16.6.7 Recommendations...... 165 17 MARKET STUDIES AND CONTRACTS ...... 167 18 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT ...... 168 18.1 Introduction ...... 168 18.2 Environmental and Social Setting ...... 168 18.3 Environmental and Social Approvals ...... 169 18.4 Approach to Management ...... 170 18.5 Stakeholder Engagement ...... 170 18.6 Key Issues ...... 170 19 CAPITAL AND OPERATING COSTS ...... 172

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19.1 Exchange Rates ...... 172 19.2 Mining ...... 172 19.2.1 Approach ...... 172 19.2.2 Equipment ...... 172 19.2.3 Labour ...... 172 19.2.4 Blasting ...... 173 19.2.5 Unit Operating Costs ...... 173 19.3 Processing ...... 174 19.4 Dewatering ...... 175 19.5 Tailings ...... 175 19.6 Waste Dumps ...... 175 19.7 Land Acquisition ...... 175 19.8 Environment ...... 175 19.9 General and Administrative ...... 176 19.10 Closure ...... 176 19.11 Engineering Studies ...... 176 19.12 Capital and Operating Cost Summary...... 177 20 ECONOMIC ANALYSIS ...... 178 20.1.1 Introduction ...... 178 20.1.2 Metal Price ...... 178 20.1.3 Royalties ...... 178 20.1.4 Corporate Income Tax ...... 178 20.1.5 Contingencies ...... 178 20.1.6 Financial Model ...... 179 20.1.7 Conclusion ...... 182 21 ADJACENT PROPERTIES ...... 183 22 OTHER RELEVANT DATA AND INFORMATION ...... 183 23 INTERPRETATION AND CONCLUSIONS ...... 184 23.1 Geological Setting and Mineralisation ...... 184 23.2 Exploration ...... 184 23.3 Mineral Processing and Metallurgical Testwork ...... 184 23.4 Mineral Resource Estimate ...... 184 23.5 Mining ...... 184 23.6 Geotechnical Assessment ...... 185 23.7 Hydrological and Hydrogeological Related Issues ...... 185 23.8 Project Infrastructure ...... 186 23.9 Environmental Studies, Permitting and Social or Community Impact ...... 186 23.9.1 Capital and Operating Costs ...... 186 23.9.2 Economic Analysis ...... 186

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24 RECOMMENDATIONS ...... 188 25 REFERENCES ...... 192 26 GLOSSARY ...... 195 26.1 Mineral Resources ...... 195 26.2 Mineral Reserves ...... 195 26.3 Definition of Terms ...... 196 26.4 Abbreviations ...... 198

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List of Tables Table 2-1: Description of Boa Fé Concession Area ...... 4 Table 4-1: Summary of Geophysical Work Performed at Boa Fé/Montemor Project by RioFinEx ...... 21 Table 4-2: Summary of Historical Geochemical Work Performed at Boa Fé/Montemor Project . 22 Table 4-3: Summary of Trenching and Drilling Work Undertaken by RioFinEx, MRI JV and IRL within current Boa Fé and Montemor licenses ...... 23 Table 4-4: RioFinEx 1991 Resource Estimate* for the Boa Fé Project Area ...... 25 Table 4-5: ACAHowe 1996 Resource Estimate* for the Boa Fé Project Area ...... 25 Table 4-6: MRI 1996 Resource Estimate* for the Boa Fé Project Area ...... 26 Table 4-7: DataGeo 2005 Resource Estimate* for the Boa Fé Project Area – Summary cut-off grades of 0.5 g/t and 1.5 g/t Au ...... 27 Table 4-8: Zilloe 2007 Indicated and Inferred Resource Estimate* for the Boa Fé Project Area - Summary above a Cut-off Grade of 1.5 g/t Au ...... 27 Table 4-9: Maptek 2008 Indicated and Inferred Resource Estimate* for the Boa Fé Project Area - Summary above a Cut-off Grade of 1.0 g/t Au ...... 28 Table 5-1: Gold-bearing Minerals Identified in Boa Fé Gold Mineralization ...... 41 Table 7-1: Anomalous Catchments Selected for Follow-up from the Malaca-Nogueirinha Stream Sediment Survey ...... 64 Table 7-2: Anomalous Catchments Selected for Follow-up from the Stream Sediment Survey covering the NW Extension of the Boa Fé Shear Zone ...... 65 Table 7-3: Selected Rock Sample Results from the Boa Fé EML ...... 67 Table 7-4: Selected Rock Sample Results from the Montemor Concession ...... 67 Table 7-5: Selected trench results from the Chaminé-Ligeiro gap (Boa Fé EML) ...... 68 Table 7-6: Best trench results from Mourel-North (Montemor concession) ...... 68 Table 7-7: Best trench results from Mourel (Montemor concession)...... 68 Table 7-8: Best trench results from Monfurado (Montemor concession) ...... 69 Table 7-9: Best trench results from Malaca (Montemor concession) ...... 69 Table 7-10: Best drill intersections at Monfurado (Montemor concession) ...... 70 Table 8-1: Summary of Previous Drilling and Trenching at the Boa Fé/Montemor Gold Projects ...... 71 Table 8-2: Summary of Drilling and Trenching by Colt Resources within the Boa Fé EML ...... 71 Table 8-3: Summary of Drilling and Trenching by Colt Resources within the Montemor EC ...... 72 Table 8-4: Summary of validation holes drilled by Colt Resources ...... 73 Table 8-5: Significant results from Diamond Drilling at Chaminé deposit ...... 76 Table 8-6: Significant results from Diamond Drilling at Chaminé deposit (con’t) ...... 77 Table 8-7: Significant results from Diamond Drilling at Casas Novas deposit ...... 78 Table 8-8: Significant results from Diamond Drilling at Banhos deposit ...... 79 Table 8-9: Significant results from Diamond Drilling at Banhos deposit (con’t) ...... 80 Table 8-10: Significant results from Diamond Drilling at Monfurado deposit ...... 80 Table 9-1: Used standards ID, period of time analysed and number of samples used (Chaminé, Casas Novas and Banhos) ...... 85 Table 9-2: Used standards ID, period of time analysed and number of samples used (Braços, Ligeiro and Monfurado) ...... 85 Table 9-3: List of twin validation holes for Boa Fé – Montemor project ...... 87 Table 10-1: SRK Independent Re-assaying – Fire Assay Results ...... 96 Table 11-1: Montemor Test Composite Head Assays ...... 97 Table 11-2: GRG Test Results ...... 97 Table 11-3: Gravity / Cyanide Amenability Test Results ...... 98 Table 11-4: Gravity / Flotation Amenability Test Results ...... 99 Table 11-5: Summary of Gold Extraction for the Gravity-Flotation – Flotation Concentrate Cyanidation Process Route ...... 99 Table 11-6: Summary of Gold Extraction for the Gravity-Gravity Concentrate Cyanidation Process Route ...... 100 Table 11-7: Comminution Test Results ...... 101 Table 11-8: Gravity Concentration Test Results ...... 101 Table 12-1: Drillhole Collar Statistics – All Zones ...... 104 Table 12-2: Drillhole Assay Statistics – All Zones ...... 105 Table 12-3: Basic statistics for Chaminé deposit using raw and composite samples...... 107

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Table 12-4: Basic statistics for Casas Novas deposit using raw and composite samples ...... 108 Table 12-5: Basic statistics for Banhos deposit using raw and composite samples ...... 109 Table 12-6: Basic statistics for Braços deposit using raw and composite samples ...... 110 Table 12-7: Basic statistics for Ligeiro deposit using raw and composite samples ...... 110 Table 12-8: Basic statistics for Monfurado deposit using raw and composite samples ...... 111 Table 12-9: Specific gravity data per deposit for the Boa Fé-Montemor Project ...... 113 Table 12-10: Block model parameters for each of the studied deposits in the Boa Fé- Montemor gold project ...... 118 Table 12-11: OK and IDW 2 parameters ...... 119 Table 12-12: Comparison between block and composite average grade, for each deposit...... 122 Table 12-13: Mineral Resource Statement for the Boa Fé Gold Project, Alentejo Region, Southern Portugal: SRK Consulting, March 4, 2013* ...... 124 Table 14-1: Block Model Dimensions ...... 128 Table 14-2: Summary of Rock Types in the Block Model ...... 128 Table 14-3: Pit Optimisation Scenarios ...... 128 Table 14-4: Pit Optimisation Parameters ...... 129 Table 14-5: Processing & Transporting Costs ...... 129 Table 14-6: RoM Transport Costs ...... 129 Table 14-7: Pit Optimisation Ultimate Pit Results ...... 130 Table 14-8: Pit Optimisation Classification Results ...... 132 Table 14-9: Slope Angle Sensitivity ...... 134 Table 14-10: Life of Mine Schedule Results ...... 136 Table 14-11: Equipment Requirements by Option ...... 138 Table 14-12: Personnel Requirements by Option ...... 139 Table 14-13: Intact rock strength logging codes and conversions...... 141 Table 14-14: Overburden and Weathering Zone Thicknesses...... 143 Table 14-15: RMR values from CH; split by lithology code...... 143 Table 14-16: RMR values by domain split by pits ...... 144 Table 14-17: Cohesion and Friction Angles of Joints at CH pit and CN pit ...... 146 Table 14-18: Input parameters for kinematic analysis ...... 146 Table 14-19: Toppling kinematic results for CH and CN ...... 147 Table 14-20: Planar Kinematic Results for CH and CN...... 148 Table 14-21: Material Input Parameters Used for Slope Stability Modelling ...... 151 Table 16-1: Storage Parameters ...... 165 Table 19-1: Supply Quotes ...... 172 Table 19-2: Equipment Unit Operating Costs ...... 172 Table 19-3: Salary Rates ...... 173 Table 19-4: Blasting Unit Costs ...... 173 Table 19-5: Average Unit Operating Costs by Category ...... 174 Table 19-6: Process Plant Capital and Operating Cost Estimates ...... 174 Table 19-7: Capital and Sustaining Capital Costs ...... 175 Table 19-8: Planned Budget for Studies ...... 176 Table 19-9: Capital and Operating Costs Summary ...... 177 Table 20-1: SRK Consensus Market Forecast for Gold Q2 2013 ...... 178 Table 20-2: Amortisation Designations and Rates ...... 178 Table 20-3: Project Scenario Comparison ...... 179 Table 20-4: Project Scenario Metal Price Sensitivity Analysis ...... 181 Table 26-1: Definition of Terms ...... 196

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List of Figures Figure 2-1: Locations of the Boa Fé Experimental Mining License and the Montemor Exploration Concession (Source: Colt Presentation, 2011) ...... 3 Figure 2-2: Boa Fé Project Main Gold Deposits ...... 4 Figure 2-3: Boa Fé Concession Boundary with Coordinates in WGS84 Datum ...... 5 Figure 3-1: Panoramic View of the Boa Fé Project Area ...... 9 Figure 3-2: The Centre of the Montemor Project Area ...... 10 Figure 3-3: Tailings Catchment Area and Potential Location Sites ...... 14 Figure 3-4: Boa Fé Project Area ...... 15 Figure 3-5: Site 4 Conceptual Layout Location for the TMF Map ...... 15 Figure 5-1: Stratigraphic and Tectonic Domains of Portugal ...... 31 Figure 5-2: Geologic Compilation Map of the Boa Fé EML and surrounding Montemor Exploration Concession, showing deposit locations...... 37 Figure 6-1: Deformed and Brecciated Quartz Veins with Sulphide (buff patches), Chaminé deposit, Colt drill hole BFCH-11-02 ...... 44 Figure 6-2: Folded Quartz Veining Parallel to Contorted Foliation in Schist, Casas Novas deposit, Colt drill hole BFCN-12-03 ...... 44 Figure 6-3: Interference of primary and secondary fracture systems during brittle phase of deformation leading to higher density of fracturing and pathways for fluid movement and deposition. Mineralised ...... 45 Figure 6-4: Location in Plan of drilling distribution at Casas Novas, Chamné and Ligeiro deposits ...... 46 Figure 6-5: Cross Section 6400N through Chaminé, taken during infill drilling in mid-March 2012 ...... 47 Figure 6-6: Cross section through Casas Novas Demonstrating Relation of Two Main Aplite Units with Intervening Gold Mineralization ...... 48 Figure 6-7: Drill hole cross section through the Monfurado deposit, showing the regularity and shallow dip of the deposit, controlled by the contact zone between the felsic metavolcanic unit and the lower calcsilicate-carbonate unit ...... 50 Figure 7-1: Location of Geophysical and Geochemical Surveys completed at Montemor and Boa Fé...... 54 Figure 7-2: Location of Banhos-Azinhaga Area Covered with Ground Magnetic Survey, NW of Casas Novas ...... 55 Figure 7-3: Conceptual Flowsheet for Logging of Diamond Core ...... 59 Figure 7-4: Final Air Borne Survey ...... 60 Figure 7-5: Total Magnetic Survey ...... 61 Figure 7-6: Total Count Survey ...... 62 Figure 7-7: Total Magnetic Intensity Map of Banhos-Azinhaga Ground Magnetic Survey ...... 63 Figure 7-8: Carvalhal – Fonte Santa Soil Grid with Modelled Results of Au (left) and Bi (right) ... 65 Figure 7-9: Grou Soil Grid Showing Modelled Results of Au ...... 66 Figure 8-1: Location of Colt’s Drillhole collars at Chaminé ...... 74 Figure 9-1: Schematic Representation of an Example Sample Stream for Diamond Drill Core ... 83 Figure 9-2: Performance Graph for SRM PM-450 ...... 88 Figure 9-3: Performance Graph for SRM PM-452 ...... 88 Figure 9-4: Performance Graph for SRM PM-453 ...... 89 Figure 9-5: Performance Graph for SRM PM-455 ...... 89 Figure 9-6: Performance Graph for SRM PM-456 ...... 90 Figure 9-7: Performance Graph for SRM PM-458 ...... 90 Figure 9-8: Performance Graph for SRM PM-459 ...... 91 Figure 9-9: Performance Results from the non certified blank samples used at the Boa Fé- Montemor Project ...... 92 Figure 9-10: Performance Results from the certified blank samples used at the Boa Fé-Montemor Project ...... 92 Figure 10-1: Database structure ...... 94 Figure 10-2: Data flow ...... 95 Figure 11-1: Flotation Au and S Recovery vs. Mass Recovery ...... 102 Figure 12-1: WGS 84 / UTM Zone 29N ...... 105 Figure 12-2: Directional semi-variograms and modelling results for Chaminé deposit ...... 114 Figure 12-3: Directional semi-variograms and modelling results for Casa Novas deposit ...... 115

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Figure 12-4: Directional semi-variograms and modelling results for Banhos deposit ...... 116 Figure 12-5: Directional semi-variograms and modelling results for Ligeiro deposit ...... 117 Figure 12-6: Section looking North-West of Chaminé deposit ...... 120 Figure 12-7: Section looking North-West of Casas Novas deposit ...... 120 Figure 12-8: Section looking North-West of Banhos deposit ...... 121 Figure 12-9: Section looking North-West of Ligeiro deposit ...... 121 Figure 12-10: Validation plots - Banhos deposit ...... 122 Figure 12-11: Example of block classification at Banhos showing Indicated (green) and Inferred (brown) category blocks and the $1,560 resource pit shell used for final Mineral Resource reporting ...... 123 Figure 12-12: Grade Tonnage curve for combined Boa Fé deposits – Indicated category ...... 124 Figure 12-13: Grade Tonnage curve for combined Boa Fé deposits – Inferred category ...... 125 Figure 14-1: Optimisation Cashflow Results ...... 131 Figure 14-2: Optimisation Results – Ore Tonnage ...... 132 Figure 14-3: Optimisation Results – Recovered Metal ...... 133 Figure 14-4: Optimisation Results – Undiscounted Cashflow by Recovered Metal ...... 134 Figure 14-5: Example of overburden (yellow) and weathered core (remainder of box) ...... 142 Figure 14-6: Example of weathered core transitioning into fresh rock ...... 142 Figure 14-7: Stereonet showing schistosity of CH pit ...... 145 Figure 14-8: Stereonet showing schistosity of CN pit ...... 145 Figure 14-9: Stereonet toppling analysis for CN hangingwall 70° bench face angle...... 147 Figure 14-10: Stereonet Planar Analysis for CH Hangingwall 70° Be nch Face Angle ...... 148 Figure 14-11: Berm width analysis results ...... 149 Figure 14-12: Geometry of Slope Stability Model ...... 150 Figure 14-13: Earthquake Hazard Map for Portugal (10% chance in 50 years)...... 151 Figure 14-14: Hydrogeological Model and Boundary Conditions ...... 152 Figure 14-15: Slope Stability Results ...... 152 Figure 14-16: Schematic Mine Site Layout ...... 155 Figure 14-17: Schematic Mine Site Layout with Geology ...... 155 Figure 14-18: Schematic Mine Site Layout with Streams ...... 157 Figure 16-1: Proposed Ligeiro Waste Dump ...... 162 Figure 16-2: Proposed Banhos Waste Dump ...... 162 Figure 16-3: Proposed Braços Waste Dump ...... 163 Figure 16-4: Proposed Monfurado Waste Dump ...... 163 Figure 16-5: Cross-section of Main Dam with Starter Dam to elevation 297 m ...... 165 Figure 20-1: Project Scenario Sensitivity Analysis ...... 180

List of Technical Appendices A CERTIFICATE & CONSENT OF AUTHOR ...... A-1 B EXPLORATION ...... B-1 C MINING METHOD ...... C-1 D CAPITAL AND OPERATING COSTS ...... D-1 E ECONOMIC ANALYSIS ...... E-1

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SRK Consulting Boa Fé PEA – Main Report

A PRELIMINARY ECONOMIC ASSESSMENT ON THE BOA FÉ GOLD PROJECT, PORTUGAL

1 INTRODUCTION 1.1 Background SRK Consulting (UK) Limited (“SRK”) is an associate company of the international group holding company, SRK Consulting (Global) Limited (the “SRK Group”). SRK has been requested by Aurmont Resources (“Aurmont”, hereinafter also referred to as the “Company” or the “Client”) to undertake a Preliminary Economic Assessment (“PEA”) on the Mineral Assets of the Company comprising the Boa Fé Gold Project (“Boa Fé”) located in Portugal. Aurmont is 100% owned by Colt Resources Inc. (“Colt”), which currently holds a 100% beneficial ownership of the Boa Fé license area, which was approved on November 2, 2011. 1.2 Terms of Reference The terms of reference for the proposed work were discussed during a series of telephone conversations between the company representative Declan Costelloe and Mike Beare of SRK. SRK understand the primary requirement is to provide a PEA based on the resource 43-101 (prepared by SRK under a separate mandate) due for publication on 30 th April 2013. 1.3 Scope of Work The scope of work has taken the form of a review of the current Colt technical work available on the project. In addition SRK has augmented this by authoring, as required, a scoping study in accordance with the definition established under the 43-101 guidelines for a PEA. The PEA has been prepared to cover the following technical disciplines to a scoping level:

• Geology: (being addressed under a separate mandate); • Geotechnical: SRK has reviewed the current status of the project and made appropriate recommendations for the PEA slope angles; • Hydrogeological: SRK has reviewed the current status of the project and made appropriate recommendations for the PEA slope analysis, water supply and site wide water balance; • Mining: SRK has undertaken a pit optimisation and high level schedule to provide inputs to the economic analysis. Capital and operating costs have been estimated to a scoping level from SRK’s in-house database; • Processing: SRK has reviewed the process testwork undertaken to date on the project. Capital and operating costs have been estimated to a scoping level from SRK’s knowledge of similar projects; • Geochemistry: SRK has reviewed the project at a high level and made recommendations for addressing any expected geochemical issues; • Tailings: SRK has reviewed the options for tailings storage and made appropriate recommendations. Capital and operating costs have been estimated to a scoping level from SRK’s knowledge of similar projects; • Environmental: SRK has reviewed the project at a high level and made recommendations for addressing any expected environmental and social issues; and • Financial Evaluation: SRK has prepared a scoping level financial model in real terms based the mine plan developed for the PEA and using all the inputs from the various technical disciplines involved in the study.

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1.4 Qualifications of Consultants The Consultants preparing this technical report are specialists in the fields of geology, exploration, mineral resource and mineral reserve estimation and classification, mining, geotechnical, environmental, permitting, metallurgical testing, mineral processing, processing design, capital and operating cost estimation, and mineral economics. None of the Consultants or any associates employed in the preparation of this report has any beneficial interest in Aurmont. The Consultants are not insiders, associates, or affiliates of Aurmont. The results of this Technical Report are not dependent upon any prior agreements concerning the conclusions to be reached, nor are there any undisclosed understandings concerning any future business dealings between Aurmont and the Consultants. The Consultants are being paid a fee for their work in accordance with normal professional consulting practice. 1.4.1 Details of Inspection Jurgen Fuykschot from SRK, conducted a site visit to Boa Fé during the period 27 to 29 March 2013. During the site visit, the SRK Qualified Person conducted a tour of the concession area and existing infrastructure. SRK also visited locations for potential tailings and waste rock containment facilities as previously identified by Golder and Associates (Golder, 2008), and for the water supply dam. A number of individual land owner properties (primarily cattle ranchers) were observed during the site visit as well as the villages located near the deposits. Dr. John Arthur and Laura Dodd from SRK, conducted a site visit to the Montemor Project during the period 6 to 8 February 2013. During the site visit, the SRK project team reviewed project geology, conducted a tour of the concession area and existing infrastructure, and examined core samples at the core storage facilities at Santiago de Escoural. John Arthur was the qualified person for the March 2013 Mineral Resource Statement.

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2 PROPERTY DESCRIPTION AND LOCATION

2.1 Property Description and Location The Project is located near the towns of Montemor and Évora in Southe rn Portugal, approximately 100 km east of Lisbon (Figure 2-1). The Project currently inc ludes six defined gold deposits with information from diamond drill testing. It includes the following gold deposits:

• Banhos (BH”); • Casas Novas (“CN”); • Chaminé (“CH”); • Ligeiro (“LG”); • Braços (“BR”); and • Monfurado (“MF”). This list excludes several smaller gold prospects which were not extensively or not yet drill tested. The main prospects that form the basis fo r the PEA and Mineral Resource estimate are Casas Novas, Banhos, Braços, Ligei ro, Monfurado and Chaminé. The area covered by the Boa Fé experi mental mining license is 46.78 km 2 and centrally located at the geographical coordinates of 38º32'5"N 8º6'9"W near the villa ge of Escoural, and is located 15 km from the town of Montemor, and 16 km from the town of Évora. With the exception of Monfurado deposit, the currently defined mineral ised areas occur within the experimental mining license of “Boa Fé” with its contract approved on November 2, 2011 and correspond to claim title number C-128, as detailed in Table 2-1. Monfurado is located within the larger “Montemor” exploration concession that surrounds Boa Fé.

Figure 2-1: Locations of the Boa Fé Experimental Mining License and the Montemor Exploration Concession (Sour ce: Colt Presentation, 2011)

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Figure 2-2: Boa Fé Project Main Gold Deposits

2.2 Mineral Titles Figure 2-3 shows the limits and boundary coordinates for the Boa Fé concession. The concession is partly located within the Monfurado Protected area (Plano de Intervenção no Espaço Rural do Sítio Monfurado, or “PIERSM”). On Jan. 31, 2011 a new regulation was announced in the official gazette (Aviso nº 3305/2011, DR 2ª série, (Nº 21), allowing surface mining within the PIERS M area under certain conditions.

Table 2-1: Description of Boa Fé Concession Area

Name Title Type Area(ha) Title Date Expiry Date Owner

Boa Fé C-128 Experimental Mining 4,678 November 2, 2011 3 Yrs + 6 months * Aurmont Resources * 3 years from the date of issue plus one six month extension. Aurmont is 100% owned by Colt Resources Inc. (“Colt”), which currently holds a 100% beneficial ownership of the Boa Fé license area, which was approved on November 2, 2011. The path towards earning 100% ownership is described as follows:

• On January 28, 200 9, Iberian Resources Portugal Recursos Minerais Unipessoal Lda (“Iberian”), a Portuguese subsidiary of Australian Iron Ore PLC (“AIOC”), submitted to the Direcção-Geral de Energia e Geologia (“DGEG”), a request for an Experimental Mining License, covering the Montemor (Boa Fé) gold project ; • The experimental mining license was awarded to the JV between Colt an d Iberian on November 2, 2011; • On July 30, 2010, a JV agreement was formed between Colt and AIOC that states that upon DGEG approval, Colt would pay AI OC EUR 60,000 and become 51% ow ner and operator of the project; • Colt has since paid AIOC the initial EUR 60,000, after which the DGEG approved Colt’s 51% beneficial ownership of the project. It was also agreed that if Colt successfully completed the EML application process, and if Colt paid AIOC EUR 125,000, issued to AIOC 3,000,000 common shares of Colt escrowed over a 24 month period with gradual release of 500,000 shares every four months, Colt would become 100% beneficial owner of the Boa Fé EML;

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• The experimental mining license was awarded to the JV between Colt an d Iberian on November 2, 2011; • Upon award of the Experimental Mining License to the Colt -AIOC joint venture by the DGEG, Colt paid AIOC E UR 125,000, issued to AIOC 3,000,000 common shares of Colt, and Colt became 100% owner of the Boa Fé EML . The common shares of Colt to be issued were escrowed with gradual release of 500,000 shares every four months over a twenty-four month period from the date of granting of the experimental mining license ; and • Subsequently, on February 1, 2012 the ownership of the concession was transferred to Colt’s wholly owned Portuguese subsidiary “Aurmont Resources, Unipessoal, Lda.” The ownership transfer was publ ished in the official gazette in Aviso Nº621 5/2012 (D.R. 2ªS Nº89) of May 8, 2012.

Prior to the approval of the Boa Fé license, Colt also applied for a large exploration concession (Montemor Exploration Concession) surrounding the Boa Fé license area and approval was granted on November 2, 2011.

Figure 2-3: Boa Fé Concession Boundary with Coordinates in WGS84 Datum

2.2.1 Nature and Extent of Issuer’s Interest The Initial Term of the Boa Fé Trial Mining License is for a period of three years (which started on November 2, 2011 and will end on November 1, 2014). The Initial Term may be extended for only one peri od of six months, from November 2, 2014 until May 1, 2015.

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2.3 Royalties, Agreements and Encumbrances The standard corporate tax rate in Portugal is 25%, and an additional municipality tax is also imposed. This municipality tax is variable amongst municipalities, and for Lisbon the current tax rate is 2.5% making a total corporate tax rate of 26.5%. Upon the granting of an Exploitation License, and in the event that mining activities are to take place, then the Company shall be obligated, at the Portuguese Government’s sole discretion, either to pay 10 to 20% of net profits based on a sliding scale, depending on the price of gold or, alternatively, pay a 4% net smelter return “NSR” royalty on production. The Company expects that it will only be required to pay 10 to 20 % of net profits based on a sliding scale once all capital and exploration expenditures incurred on the project have been fully recovered. During the Term, of the Boa Fé Experimental Mining License the Company is obligated to incur prospecting and exploration expenditures of not less than EURm 1 by November 1, 2012, EURm 1 by November 1, 2013 and EURm 1 by November 1, 2014. During the extended term, The Company is required to incur prospecting and exploration expenditures of approximately EURk 500. 2.4 Environmental Liabilities and Permitting 2.4.1 Environmental Liabilities SRK understands that there are no existing environmental liabilities on the concession although there are a few small old workings from antiquity. Cork trees are abundant within and surrounding the exploration area. The local economy includes harvesting cork and tourism related to the cork forest. Cork trees are protected by law. A special permit is required to cut them down. This requirement affects all of the Boa Fé – Montemor deposits. Future mining operations will need to compensate landowners for lost income if cork trees are removed and the operator will need to re-plant cork trees over rehabilitated ground. Rede Natura 2000 is an EU program to protect landscape and traditional uses of land. All ground to the west of the Chaminé deposit is affected but not Chaminé itself. However, that does include the Casas Novas deposit which is located on the eastern margin of the reserve. Special permission will be required to mine there. The proximity of the Casas Novas village, which is within 500 m of the Casas Novas deposit and potential open pit mine, should be considered on the mine development plan due to its potential impact. There is precedent for mining close to towns and special measures will be required to obtain acceptance from the population. 2.4.2 Required Permits and Status The primary environmental framework for mining activity in Portugal is the Environmental Impact Assessment process which is administered by the Agência Portuguesa do Ambiente (Portuguese Environmental Agency, “APA”). The “Nossa Senhora de Boa Fé” project falls within the legal regimen of mining, established in D.L. 88/90, dated March 16th , 1990. APA requires an Environmental Impact Evaluation for mining activities. The phases of the process for an Environmental Impact Evaluation include the following:

• Applicability; • Scope Definition; • Environmental Impact Assessment (“EIA”); • Evaluation;

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• Decision; and • Post–Evaluation. On July 21, 2010, Iberian Resources presented a “Proposta de Definição de Âmbito do Estudo de Impacte Ambiental” (Scope Definition Proposal of the Environmental Impact Study) to the APA. On September 9, 2010 the APA recommended that the following tasks be addressed in the EIA:

• The EIA must present the project objectives and its justification, clarifying the total mine life and duration for each stage; • The EIA must i n c l u d e the tailings dam project, as well as the waste dump project and the installations for industrial waste effluents; • An Environmental Management Plan and Landscape Recovery Plan should be attached; • The project must meet the Plano Director Municipal de Évora (“PDM”) requirements. (Note: a PDM is a Portuguese municipal document which regulates both land use and land management); and • Other plans and studies required are a water resources management plan, a hydrogeological study, a contingency plan and a tailings dam closure plan. On January 2011, Geomega issued the “Estudo de Impacte Ambiental - Relatório de Progresso” (Environmental Impact Study, Progress Report) where the recommendations made by the APA were addressed. The EIA was finished and revised, and on October 19, 2012 it was delivered at DGEG, which as licensing entity, forwarded the document to APA. APA appointed a supervision committee “(CA”), which verified the documents and will make technical visits with the company representatives and the team that produced the EIA. During the first 30 days the CA, requested some amendments and by January 30, 2013, declared the whole document conformable, and requested some more information. The EIA has been made available for public consultation, and a public hearing was appointed for Friday April 5, 2013. At that event, the Company made a public presentation of the mining project and has answered all questions raised in written form during the public consultation period, and all the questions raised by the people present at the hearing. After the meeting, the CA made a detailed field visit to the project area. Later the CA will end the process, and will issue a DIA (Environment Impact Statement). The DIA could be favourable or unfavourable;

• If unfavourable – the company is notified by the Secretary of State, that the EIA was not approved, and to present its point of view in relation to this process, but the process will be closed; and • If favourable – the company will have the EIA approved, usually with a set of conditions, and can proceed with other licensing requirements. 2.4.3 Mining License Application for a full mining license may be made at any time during the 3 year term of the license or during the 6 month extension period at the end of the 3 year EML by May 31, 2015. The following comments describe the criteria required to achieve a full mining license in Portugal. The Mining License (“ML”) is awarded upon approval by both the Direcção-Geral de Energia e Geologia (DGEG) and the APA of a detailed Mine Feasibility Study (“FS”) that includes an EIA.

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Once the ML is granted, a project plan will be prepared for the main physical structures (mine, plant, Tailings Management Facility (“TMF”), support buildings etc.) and subsequently approved by the relevant authorities. The EIA also has to be approved as part of the mine plan, which requires the following:

• Introduction: Company ID, general description of the project, main objectives, production capacity of the mine, short description of infrastructure i.e. access roads, railways, rivers, power lines, etc.; • “Ore” deposit : To include detailed topographic and geological maps, cross and longitudinal sections of the deposit clearly showing the main physical characteristics including the grade variations; • Mining method : To include the relevant details of the mining method, mine schedule and the general blasting diagram; • Other facilities : Description of all facilities including the offices, warehouses, material storage sites, loading areas, waste dumps, tailings dam and fresh water dams, drainage, power and water supply systems including a specific closure and contingency plan; • Concentration process: Location, description of the mineralisation, flow sheet, water and energy circuits, metallurgic balance, equipment, etc. • Health and safety and closure plan : Details the evolution of the mining activities and landscape reclamation from the pre mining natural state until the closure of the mine. This plan will be used to calculate the bank guarantee needed; • Environment Impact Study: To include a complete and comprehensive review of how all aspects of the mining activity will impact on the environment; and • Land access: To include documentation which proves that the company has access (acquisition/lease or rental) to the land included in the mining area. 2.5 Other Significant Factors and Risks 2.5.1 Compliance Evaluation The Boa Fé concession is considered to be currently in environmental compliance. There are currently no environmental activities on site.

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3 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

3.1 Topography, Elevation and Vegetation In elevation the Project area lies between 225 and 425 m above sea level. It is characterized by gently rolling plains in the south, to a more hilly terrain containing a series of ridges in the north. The land is used for a mix of arable and pastoral agriculture notably with crops of cork and olives sharing the same areas. A panorama of the Boa Fé project area is provided below in Figure 3-1.

Figure 3-1: Panoramic View of the Boa Fé Project Area

3.2 Climate and Length of Operating Season The climate of the Montemor area, is according to the Köppen-Geiger classification, as Csa; mild warm and dry Summer and temperate wet winters with the following climatic conditions in the Montemor area (1981-2010) 1:

• The average temperature is 16.5 °C (61.7 °F); • The average temperature range is 10.2°C (50.4 ºF); • The highest monthly average temperature is 24.1 °C (75.4 °F) in August; • The lowest monthly average temperature is 9.6 °C ( 49.3 °F) in January; • There is an average of 585.3 mm (23.04 in.) of rainfall per year; and • The driest months are July and August with an average of respectively 4.1 and 8.2 mm (0.16 and 0.32 in.) of rainfall. The wettest month is February with an average of 87.6 mm (3.45 in.) of rainfall. 3.3 Sufficiency of Surface Rights The landowners and tenants of the farms which host the gold deposits are being engaged in discussions over the possible use of and compensation for land required for mining purposes. It is the policy that full environmental restoration should leave the land in the same condition as prior to mining. 3.4 Accessibility and Transportation to the Property Access to the property is by paved highway (A2 and A6 Motorway) from Lisbon. The Chaminé, Casas Novas deposits (Figure 3-2) and the Ligeiro, Banhos, Braços and Monfurado deposits may be accessed by means of highways from Montemor or Évora, and sealed roads to Santiago do Escoural (Escoural), where the exploration office is located. Tarmac sealed roads lead to all properties, and farm tracks are used off road.

1 Source: IPMA 2013

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There are no restrictions on road acces due to weather restrictions and tey are available throughout the year.

Figure 3-2: The Centre of the Montemor Project Area2

3.5 Infrastructure Availability and Sources There is no existing mining infrastructure in the area apart from equipment services provided to local gravel and marble quarry owners. Local workshops provide back-up mechanical and equipment engineering services, which have previously been useful in exploration. Travel time to Lisbon is one hour by car. The Setúbal and Lisbon ports are the main access for imported equipment and dispatch of samples. Colt Resources has its field office at Escoural, which is within minutes of most of the deposits. Apart from office facilities, core shed and equipment storage, samples are prepared, stored and dispatched from this location. 3.5.1 Access Road and Transportation The Boa Fé project site is located approximately 120 km from Lisbon accessed via highways A2 and A6 to the municipal centre of Montemor-o-Novo then on local paved roads to the town of Santiago do Escoural. The Boa Fé project site is located along a local paved road approximately 7 km east of Escoural near the villages of Casas Novas and Nossa Senhora da Boa Fé. The nearest airport to the project site a municipal airport located approximately 26 km away at Évora (ICAO: LPEV). Amongst the services available are a Flight Information Service (“FIS”), a non-directional beacon (“NDB”) and sunrise to sunset operation. The airport has two runways, the main runway being 01/19. The second runway, 08/26, is a short grass strip that is now closed. Évora has a rail link run by Comboios de Portugal EP (“CP”). This is an electrified broad

2 Source: Google Earth.

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gauge line for passenger service to Lisbon. The nearest rail station is located approximately 5 km south of Santiago do Escoural at Casa Branca. There is a small freight loading platform at this station allowing the station to handle both freight and passenger services. 3.5.2 Power There is an existing national grid power line which passes through the concession property to service the adjacent villages of Casas Novas and Nossa Senhora da Boa Fé with supply of around 17 kV. South of Casa Branca there is an existing power line supplying Évora of 150 kV. 3.5.3 Water Currently, the available water supplies from regional sources are designated to the local community and agricultural sector. Preliminary water investigations have located the water table in the region and have monitored its seasonal change. An extensive water survey and hydrology report will need to be conducted to assure sufficient supply exists to meet the project’s water demand. The assumption is that a water reservoir will be required as part of the project to provide for the mining operations, process plant and tailings facility. Once in operation the majority of the water required for the mill operation will be reclaimed from the tailings pond. Seasonal variations in water availability will however need to be considered, and a source of make-up water may be required in the dry summer months. Dewatering discharge may be used to provide this make-up water but further investigations into the quantity and timing of dewatering discharge is required. 3.5.4 Mining Personnel There are several populated towns in close proximity to the operation. While most of the manual labour force will come from these near-by locations, the majority of the higher skilled labour force will need to be sourced elsewhere in Portugal where there is a history of mining. 3.5.5 Port The closest ports to the project site are ‘The Port of Setúbal’ and ‘The Port of Lisbon’. The Port of Setúbal has a concession to Almina/Somincor/EDP and formerly exported the concentrates from Aljustrel and Neves-Corvo mines. It has a 126 m long pier by a 19,000 m 2 park with dedicated railroad and service facilities. The Port of Lisbon is the premier commercial port in Portugal handling over 12 Mtpa of containerized cargo and solid bulk materials (2010). Container facilities are developed on both banks of the River Tagus equipped to deal with over 3,000 vessels annually. A third port with deep water facilities is located on the Atlantic coast at Sines with capacity to handle and blend large stockpiles. 3.5.6 Buildings and Ancillary Facilities There are no buildings located on the property. It is envisioned that at as a minimum typical requirement for a surface mining operation a mine/mill office, warehouse, repair shop, mine changehouse mill and laboratory will be required. 3.5.7 Camp Site There is no campsite on the mine property. Lodging for the operations personnel will be supported in the near-by towns of Montemor and Évora. 3.5.8 Potential Tailings Storage Areas Colt investigated six potential scenarios for the Tailings Management Facility (“TMF”) location and selected Site 4 as the preferred site with Site 2 as an alternative. Site 4 location for the

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TMF is approximately 500 m south west of the Chaminé deposit. A conceptual layout is presented in Figure 3-3. A more detailed description of the selected TMF is shown in Section 16.1. The review of each site involved the appraisal of the social and environment context together with a technical and financial assessment. The conclusions of the site selection study are summarized as follows:

• No TMF can be considered on the western side of Chaminé open pit due to the presence of a natural park; • Sites 1 and 5 are located close to settlements and would have an impact on local villages and their immediate environment and are not recommended; • The rock-fill requirement for Site 3 is very high and therefore impacts on the estimated capital cost for the project and is not recommended for development; • The preferred sites, with respect to minimal environmental impact and engineering requirements, are Sites 2 and 4, followed by Site 6; • With respect to technical and financial considerations, it appears that Site 4 is the most favourable should the process plant be sited at Location 2; • Site 4 appears to be the optimal economic site to develop. Should the preferred process plant site be Location 1, the preferred TMF Location would be Site 4; and • Should the preferred process plant location be Location 2 then the preferred Site would be Site 2, followed by Site 6. The preliminary environment and technical assessment of potential sites identified for the TMF suggests that the two sites, Site 4 and Site 2, are preferred in that order. Consequently, the Site Investigation has been focused on Sites 4 and 2. Further discussions, subsequent to the submission of the Site Selection Report, led to the following:

• Preferred TMF site: Site 4; • Plant Site moved to the adjacent hill; and • Secondary choice for TMF site: Site 2. The location of the tailings area relative to the mining projects is presented in Figure 3-3, Figure 3-4 and Figure 3-5. SRK supports the selection of Site 4 as the most appropriate at this stage. 3.5.9 Potential Waste Disposal Areas SRK notes that waste rock characterisation has not been performed. SRK recommends acid base accounting (“ABA”) test work to identify the acid generating potential along with an analysis for the potential metal constituent concentrations that could be dissolved from the rock. The Golder Associates (UK) Limited (“Golder”) (2008) report proposed a conceptual waste rock dump design for the Chaminé, Casas Novas and Ligeiro pits, as did the tailings study. Golder’s report stated that the proposed site would be suitable for 12.7 Mt of waste rock with a final placed density of 2 t/m 3, wich resulted in a waste dump capacity of 6.4 Mm 3 having an overall footprint area of approximately 375,000 m 2. SRK considers the proposed waste dump location and size for the Chaminé, Casas Novas and Ligeiro pits to be acceptable. Further details on proposed waste dump for the other deposits are shown in Section 16.1.

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3.5.10 Potential Processing Plant Sites In the above mentioned work commissioned to Golder by Iberian Resources to undertake a conceptual design for the TMF, a potential location for the processing plant was proposed some 100 m north of the main embankment of the TMF. Later, the work carried out by Contecmina proposed a slightly different location closer to the Chaminé pit.

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Figure 3-3: Tailings Catchment Area and Potential Location Sites 3

3 Source: Golder, 2011.

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Figure 3-4: Boa Fé Project Area

Figure 3-5: Site 4 Conceptual Layout Location for the TMF Map

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4 HISTORY

4.1 Mining History Portugal has a long history of mining, with evidence to suggest that the early Iberian settlers worked copper-silver veins as early as circa 2000 BC. The Roman occupation of the Iberian Peninsula brought a larger scale of activity to mining, particularly of gold, silver, copper, lead, iron and tin, in either side of the Portuguese-Spanish border. The most notorious remnants of Roman mining activity in Portugal resulted of their main focus in the exploitation of gold deposits, including:

• Gold-bearing vein deposits occurring in the North and Centre of the country, such as at Tresminas, Poço das Freitas, Jales, Freixeda-Latadas, Valongo-Gondomar, Castromil, Penedono, Caramulo, Escádia Grande; • Gold alluvials and river terraces, mostly in the Centre of the country, as e.g. at the Alva, Ceira, Zêzere, Ocreza, Ponsul, Aravil and Erges rivers; • Gold-enriched gossans associated with the massive-sulphide deposits of the Iberian Pyrite Belt (South-Portuguese Zone), as e.g. at São Domingos, Aljustrel, Caveira. Other significant remnants of Roman mining focused on copper exploitation in Southern Portugal, either in vein type deposits, as e.g. at Salvação do Índio (Azaruja), or in massive-sulphide deposits, as e.g. at Tinoca and Azeiteiros (Campo Maior), and Aljustrel in the Iberian Pyrite Belt. With reference to the Montemor exploration concession, evidence exists of extensive iron mining during Roman times, at least at Mina dos Monges in the Monfurado hills, near Santiago do Escoural. Whereas some small diggings found nowadays at several outcropping gold deposits of the Montemor gold belt, particularly those with coarse free gold (Braços, Caras, Chaminé), are known to be old but their actual age is unknown. At the Chaminé deposit an old shaft was referred to in a Government report dated 1883, and named as the “Poço dos Mouros” (the “Moors’ Shaft”), suggesting that gold mining took place to some minor extent there in ancient times. Mining declined throughout Portugal after the Roman period ended, to be slightly revitalized during the Islamic occupation (8 th to 13 th Centuries), when some alluvium or hard-rock gold deposits were exploited on a small scale. After that and throughout the history of the Portuguese Kingdom, mining was scarce, rather localized and sporadic. The true reactivation of the Portuguese mining activity started only in the middle 19 th Century, coinciding with the start of the industrial revolution, with the first modern mining concession being granted by the Portuguese King in 1836. Mining activity throughout the country (and the Iberian Peninsula in general) was intensified through the second half of the 19 th Century, when exploitation resumed from a number of outcropping deposits. By the end of the 19 th Century a total of 311 mining concessions had been granted in Portugal, for a range of commodities such as antimony, arsenic, asphalt, chromium, coal, copper, gold, iron, lead, manganese, molybdenum, phosphate, silver, tin, tungsten, zinc. In the latest quarter of the 19 th Century the Iberian Pyrite Belt (IPB, part of the South Portuguese Zone, SPZ) attracted international attention as a World Class mining province, when the massive sulphide mines of Rio Tinto and Tharsis (both in Andalucia, Southern Spain), as well as Aljustrel and São Domingos (in Alentejo, Southern Portugal) became significant base metal and pyrite producers. Other most significant mining works in Portugal took place then at the antimony-gold deposits along the Valongo-Gondomar belt, and at tin-tungsten deposits such as Panasqueira. The later part of the 19 th Century and first half of the 20 th Century also saw an increase in mining

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elsewhere in Portugal, with significant production of copper, lead, zinc, iron and manganese from deposits located in the south of the country (OMZ and SPZ); and of gold, silver, tin, tungsten, antimony, lead and zinc in the centre and north of the country (Central Iberian Zone, CIZ; and Galicia-Tras-os-Montes Zone, GTMZ). During this period, at the Montemor area, a total of 9 mining concessions for iron covered the Monfurado ridge. Iron ore, in the form of magnetite, with variable amounts of contaminants such as sulphur (pyrite) and phosphorous (apatite), was extracted from a series of open pit and underground mines, the most significant being Mina dos Monges and Mina da Nogueirinha. Elsewhere within the current limits of the Boa Fé and Montemor licences, a number of mining concessions for a range of commodities had been staked in the later part of the 19 th Century and first half of the 20 th Century, such as:

• Caeiras (pyrite); Carapinha, Courela do Conde, Courelinha, Cufenos, Safira (all Cu); • Chaminé (Ba-Pb-As); Defesa (Ba-Pb-Zn-Sb); Lage (Pb); Ligeiro (Ba-Pb); • Grou (Sb-Au); Catarina Vaz, Falés, Palmas, Prata (all Sb); • Gouveia, Romeiras (As-Au); However, despite some trial or small-scale mining none were sustained. During the Second World War (1939-1945) Portugal became a major producer of tungsten. Post war, the country remained a major producer of tungsten and tin, and it also became a significant European producer of uranium concentrates. In the meantime a large number of mining concessions covering smaller outcropping deposits of other commodities throughout the country became progressively abandoned. By the middle of the 20 th Century all mining production, either for iron or other metals, had ceased in the Montemor area. Elsewhere in the country copper, lead and zinc concentrates kept being produced into the second half of the 20 th Century, mostly from massive sulphide mines in the Iberian Pyrite Belt (SPZ) such as Aljustrel, São Domingos, and Lousal, along with pyrite production for the sulphuric acid and downstream chemical and fertilizer manufacturing industries. Tungsten and tin concentrates were produced mostly from Panasqueira (W-Sn), Borralha (W), Ribeira-Argozelo (Sn-W), Montezinho (Sn), Lagoaça (W), Vale de Gatas (W), Tuela (Sn), among other, mostly from quartz vein deposits located in the centre and north of the country (GTMZ and CIZ). A few gold mines were in production in Portugal, during the 20 th Century. The most significant was the Jalles mine near Vila Pouca de Aguiar (Vila Real district, in the far north of the country), which was on production between 1933 and 1993, for a reported total cumulative production of around 0.8 Moz Au and 3.3 Moz Ag. Other gold producing mines which were in operation for shorter periods of time included França, Freixeda-Latadas, Penedono and Escádia Grande. All these historic gold producers were located in the north or centre of the country, within either the Galicia- Tras-os-Montes Zone (GTMZ) or the Central Iberian Zone (CIZ) of the Hesperian Massif. No significant gold producing mine has operated so far in southern Portugal, either within the Ossa- Morena Zone (OMZ) or the South-Portuguese Zone (SPZ) of the Hesperian Massif. Starting in the 1950’s, and with a particular intensification in the 1980’s, modern mineral exploration and development underwent a boom in Portugal, either carried out by the Government or by mining/exploration companies. This led to the discovery of new tungsten, tin and uranium deposits in the centre and north of the country (GTMZ and CIZ zones); and of base and precious metal deposits in the south (OMZ and SPZ zones). Of particular significance were the discoveries of new polymetallic sulphide deposits (VHMS type) in the Iberian Pyrite Belt (SPZ), which included:

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• Moinho (1955), Feitais (1963) and Estação (1968), all additional buried massive sulphide lenses at the Aljustrel cluster; • Gavião (1970), a massive sulphide lens buried under more than 60 metres of Tertiary cover sediments of the Upper Sado Basin, downtrown and ca. 3 km offset to the SW with regards to the Aljustrel deposit; • Salgadinho (1974) a Cu-Au-Ag bearing stockwork in the Cercal-Odemira volcanic belt; • Neves-Corvo (1977), initially discovered as a set of four massive sulphide lenses, to be increased by a further three lenses discovered more recently; and • Lagoa Salgada (1992), a massive sulphide deposit buried under 128 metres of Tertiary cover sediments in the Lower Sado Basin, with an associated gold-enriched paleo-gossan. Exploration programs carried out since 1970 in the OMZ focused mainly on precious metals (Au, with minor PGM) and base metals (Zn, Pb, Cu). These programs led to the identification of important gold mineralised belts, such as at Montemor, Portalegre, Sousel-Barrancos. While exploration programs carried out in the same period at the CIZ and GTMZ were mostly oriented for either vein or skarn-type tungsten, or vein-type gold deposits. The importance of Portugal as a mining country in the European context is well illustrated by the fact that, for one or another period since middle 20 th Century, Portugal ranked among Western European mining producers as first in terms of copper, tungsten, tin and marble; and third in terms of uranium. Portugal has remained an important producer of copper, tin and tungsten in Western Europe in recent decades, however there has been no gold or uranium production since the 1990’s. 4.2 Prior Ownership and Ownership Changes Exploration title for gold over the Montemor area (including both current Boa Fé EML and Montemor exploration concession) was first granted in 1983. The area comprising the Montemor shear zone was then split between two exploration concessions, respectively the “Montemor” concession held by Sociedade Mineira Rio Artezia Lda (SMRA, a title-holding Portuguese subsidiary of the Rio Tinto plc group, then RTZ Corporation ), and the large “Beja Porphyries” concession held by BP Minerals International Limited (BPMIL, the mining branch of BP - British Petroleum ). Subsequent to BPMIL relinquishing the western zone of the Montemor area in 1986, SMRA obtained another concession covering this part, the “Safira” concession, thus consolidating title over the whole extent of the Montemor shear zone. This lasted until 1992, when the Rio Tinto plc group relinquished their whole exploration title over the Montemor area, as the project status did not meet their corporate targets for development, and the company failed to find an interested joint venture partner to pursue the project. The area remained free until 1995, when the Portuguese Government granted the “Montemor” exploration concession covering the whole Montemor shear zone to Portuglobal – Explorações Mineiras Lda (Portuglobal), a subsidiary of Vancouver-based Auspex Minerals Ltd . In 1996 another Canadian junior company, Montemor Resources Inc (MRI, later renamed European Gold Resources Inc ), joined Portuglobal, and the exploration program continued under a joint-venture agreement. During this period, MRI was the operator through its Portuguese subsidiary Moriminas – Sociedade Mineira de Montemor Lda (Moriminas). The joint-venture however relinquished the concession in 1999 as a result of adverse conditions with regards to both gold price and financing difficulties. In September 2004, Australian-owned Iberian Resources Limited (Iberian, or IRL) obtained exploration title over the whole Montemor area, then split between the “Montemor” advanced gold exploration concession (approximate to the current Boa Fé EML), and the surrounding “Monfurado”

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regional exploration concession. Iberian was subsequently acquired in May 2007 by Tamaya Resources Limited (Tamaya), another Australian company, who pursued exploration towards mine development. However, in October 2008 Tamaya entered into bankruptcy, and during administration the Portuguese assets of Iberian were acquired by Australian Iron Ore Corporation plc (AIOC). AIOC proceeded in January 2009 to apply for an experimental mining license (EML) before the Portuguese mining authority Direcção-Geral de Energia e Geologia (DGEG), a division of the Portuguese Ministry of Economy. This EML roughly corresponded to the limits of Iberian’s “Montemor” advanced gold exploration concession; whereas title over Iberian’s “Monfurado” (now Montemor) regional exploration concession remained free. In August 2010, Colt reached an agreement with AIOC whereby Colt would become the operator of and acquire, in two stages, 100% ownership of the pending “Montemor EML”. This transaction merited the approval of the DGEG, and the then renamed “Boa Fé EML” (47 km 2 in area) was granted to the Colt-AIOC joint venture on November 2, 2011, following which Colt increased its ownership from 51% to 100%. In addition, the DGEG granted to Colt, on the same date, the large “Montemor” exploration concession (728 km 2) surrounding the Boa Fé EML and consolidating Colt’s title ownership over the whole gold prospective ground of the Montemor shear zone. 4.3 Previous Exploration and Development Results The Montemor area has experienced several phases of mineral exploration, with differing target commodities and strategies, since the 1940’s to the present, as detailed below. 4.3.1 1940-1980 Government Mapping and Exploration During the period between 1940 and the early 1980’s the Montemor area was explored by the Serviço de Fomento Mineiro (SFM), a former mineral exploration division of the Portuguese Government. In the early part of this period (1940-1950) their exploration work was mostly done via the excavation and sampling of trenches, pits, shafts and galleries, mostly located on sites of old mining works or concessions. Their main focus during the 1940’s were the old iron mining concessions along the Monfurado ridge, with particular incidence in the Monges and Nogueirinha gold mines. The SFM attention changed in the 1950’s to other old mining concessions for distinct commodities (As, Au, Ba, Cu, Pb, Sb, Zn) dispersed throughout the Montemor area, namely: Caeiras, Carapinha, Catarina Vaz, Chaminé, Courela do Conde, Courelinha, Cufenos, Defesa, Falés, Gouveia, Grou, Lage, Ligeiro, Palmas, Prata, Romeiras, Safira. The SFM progress reports from this period refer to gold grades having been analysed from several samples (mostly grab samples) taken from their diggings, as e.g. at Chaminé (up to 8 g/t Au), Gouveia (up to 1 g/t Au), Grou (up to 129 g/t Au) and Romeiras (up to 22 g/t Au). Gold-oriented follow-up work was then undertaken by SFM in the period 1959-1962 at the Chaminé deposit, where they excavated the 17 m deep shaft that can now be seen on surface at Chaminé; and at the bottom of this shaft they excavated galleries, including a 40 m long cross-cut and a 48 m long drift. They also carried out a soil geochemical survey and excavated a few trenches, having reported the grade of 32 g/t Au as for an “average sample of mineralization at the bottom of one trench” (over unreported width). Besides these gold results, no further work was carried out by the Government since 1962 in order to investigate gold mineralization at Chaminé or elsewhere in the Boa Fé/Montemor area. In the period 1976-1981 the SFM returned to mineral exploration in the Boa Fé/Montemor area, having then focused their attention on testing the possibility for base metal mineralization (copper,

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lead, zinc) associated with the Lower-Cambrian Monfurado volcano-sedimentary formation, the same host of the iron-ore deposits. Their exploration strategy employed soil geochemistry, ground geophysical surveys (magnetics, gravity, and resistivity) and diamond drilling; two holes were drilled at Monges and three at Nogueirinha. The results of this program were considered unfavourable by SFM, as although significant mineralization was encountered by all holes, it consisted mainly of pyrite-pyrrhotite-magnetite association, with only low and highly localized base metal sulphide contents 4.3.2 1984-1986 BPMIL During the period 1984-1986, a gold exploration program was carried out by BP Minerals International Limited (BPMIL) over their very large (nearly 1000 km 2) “Beja Porphyries” gold exploration concession, covering the whole of the so-called “Beja porphyry belt”, which extended from the western portion of the current Montemor concession area to the south and southeast well beyond the longitude of Beja. Their investigations within the Montemor area, however, ignored the regional gold potential, and were limited to the previously known Safira (Cu) and Grou (Sb) vein occurrences, where they carried out a re-assessment of SFM data, additional soil geochemical surveys, ground geophysics and trenching at both prospects. Gold grades were reported from either grab samples or trench samples from both sites, and were followed-up by drilling four bore holes at Safira only (totalling 405.75 m in extension), which turned out negative with respect to gold. 4.3.3 1984 - 1992 Rio Tinto (RioFinEx) In the early 1980’s RioFinEx (the exploration branch of the Rio Tinto plc group) undertook regional gold-oriented geological and geochemical reconnaissance work throughout southern Ossa-Morena Zone. This work led the company to identify the Montemor area as most prospective for gold. Rio Tinto immediately applied for an exploration title covering Montemor, through its Portuguese title- holding subsidiary Sociedade Mineira Rio Artezia Lda (SMRA). SMRA’s 176 km 2 “Montemor” exploration concession was granted in 1984, and covered with an extensive gold exploration program until 1992. Exploration work within the concession was continued by RioFinEx, who covered the whole area with a geochemical and pan-concentrate stream sediment survey, with a 2 sample/km 2 density (Table 4-1); this survey indicated the presence of prospective gold and/or arsenic anomalies in several areas throughout the concession. These anomalies were followed-up through hammer prospecting, with systematic outcrop and float sampling, which led to find gold mineralization at several locations. After acquiring the “Safira” concession, adding another 80 km 2 over the western extension of the Montemor gold belt in 1986, the same regional exploration strategy was applied to this area, with new gold mineralised occurrences being found there too. Exploration work was then pursued through detail geologic mapping, geochemical soil sampling (Table 4-1), a few ground geophysical surveys, trenching, and a large amount of drilling (Table 4-2), resulting in the identification of 14 significant gold deposits or occurrences, of which 9 lay within the limits of Colt’s Boa Fé EML and 5 within Colt’s Montemor concession. The combination of geologic mapping, hammer prospecting and Au-As soil geochemistry was found to be particularly useful in identifying outcropping or near-surface gold occurrences. The company also generated a number of geological maps, applied remote sensing techniques and carried out structural analysis. Several phases of geophysical exploration were conducted during the program (Table 4-1). Induced polarization (“IP”) surveys were carried out over areas of arsenic enhancement in soils, in order to trace arsenopyrite, although pyrite and graphite tended to obscure the signal. Trials of

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VLF-EM, ground magnetics and self-potential were unsuccessful in locating mineralization directly but, once the structural controls were recognized, magnetic and VLF surveys were successful in locating major structural breaks. Of the 14 gold occurrences identified by RioFinEx and tested by trenching and/or drilling, the majority of the occurrences are located within the current Boa Fé EML, with only the Monfurado and Mourel occurrences being located in the Montemor exploration concession. Among these the Braços, Chaminé and Casas Novas deposits were targeted for follow-up grid drilling work with a view to resource delineation. RioFinEx also conducted petrographic and mineralogical studies of the mineralization and host lithologies, as well as a series of metallurgical tests upon mineralised samples from these three deposits. A base line environmental study was also completed for a prefeasibility report (Cliff et al., 1991).

Table 4-1: Summary of Geophysical Work Performed at Boa Fé/Montemor Project by RioFinEx 4 Line kilometers IP-Resistivity VLF Magnetics Self-Potential Braços 4.270 25.950 25.950 Covas-Caras 4.205 0.330 16.800 0.410 Chaminé 4.675 15.000 18.805 0.375 Casas Novas 0.410 13.600 19.500 Azinhaga 0.460 6.050 Banhos 2.780 1.650 TOTAL 16.800 62.580 81.055 0.785

4.3.4 1995-1999 Portuglobal – MRI joint venture The exploration program carried out by the Portuglobal-Moriminas (“MRI”) joint venture in their 262 km 2 Montemor concession during the period 1995 to 1999 comprised additional geologic mapping and prospecting, soil and stream sediment geochemistry (Table 4-2), trenching and drilling (Table 4-3) over the gold targets previously identified by RioFinEx, as well as new areas with favourable geology towards the western region of the Montemor shear zone. As a result, a number of additional gold occurrences were identified and investigated to some extent by the joint venture, leading to a total of around 40 gold occurrences listed within the project area. The MRI advanced exploration work was again largely focused at the eastern portion of the Montemor shear zone (currently within the Boa Fé EML), particularly on the Braços, Chaminé and Casas Novas deposits, as well as to a lesser extent the Banhos, Covas and Caras deposits. Whereas the exploration work that they have carried through the central and western zones of the Montemor area was early stage and consisted mostly of hammer prospecting, soil geochemistry and trenching, with scarce scout drilling.

4 Source: Cliff et al. (1991)

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Table 4-2: Summary of Historical Geochemical Work Performed at Boa Fé/Montemor Project 5

Stream Sediment Geochem Soil Geochem

Company Surveys/Grids Samples Surveys/Grids Samples

RioFinEx 2 484 21 19,530

Portuglobal-MRI jv 4 572 17 4,031

Iberian Resources Ltd 1 319 16 5,151

TOTAL 7 1,375 54 28,712

4.3.5 2004-2008 Iberian Resources Limited The exploration program carried out by Iberian Resources (“IRL”) in this period was focussed on the follow-up investigation of the previously identified gold deposits and occurrences, and comprised additional geologic mapping, stream sediment and soil geochemistry (Table 4-3), trenching and drilling, which included either diamond drilling, reverse circulation (“RC”) drilling and rotary air-blast (“RAB”) drilling. The majority of advanced stage work was concentrated in the Boa Fé EML, at the Chaminé, Casas Novas, Braços and Covas gold deposits, and to a lesser extent at Caras and Ligeiro; whereas most of the geochemical and regional exploration work was spread throughout the Montemor concession.

5 Sources: Cliff et al. (1991); Portuglobal-Moriminas jv (1999); Iberian Resources data base.

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Table 4-3: Summary of Trenching and Drilling Work Undertaken by RioFinEx, MRI JV and IRL within current Boa Fé and Montemor licenses 6 Trenching Diamond Drilling RC Drilling RAB Drilling Target/Deposit No. of Total No. of Total No. of Total No. of Total Company Company Company Company trenches metres holes metres holes metres holes metres Braços/Covas 147 7638 RFX+MRI+IRL 76 4984 RFX+MRI+IRL 75 4684 IRL 240 6241 IRL Vacas 9 452 MRI+IRL 1 59 MRI 5 280 IRL 53 1058 IRL

BOA FÉ BOA Caras/Ligeiro 85 4590 RFX+MRI+IRL 35 2304 RFX+IRL 19 1524 IRL 51 1071 MRI+IRL Chaminé 33 2644 RFX+IRL 82 12499 RFX+IRL 17 980 IRL

Casas Novas 49 2849 RFX+MRI 82 10684 RFX+MRI+IRL 21 1642 IRL

Azinhaga/Banhos 72 7116 RFX+MRI 34 3731 RFX+MRI 271 6115 IRL

Fonte Santa 7 556 RFX 2 258 RFX

Carvalhal/Carrascal 10 711 RFX+MRI 2 191 RFX

Malaca/Monfurado-South 10 593 RFX+MRI

MONTEMOR Monfurado 13 928 RFX 6 559 RFX 62 1392 IRL

Caeiras/Gamela 8 319 MRI 4 185 MRI

Mourel zone 8 439 RFX+MRI

Gouveia/Mata-Ladrões 6 181 MRI+IRL 6 396 IRL

Safira 3 323 IRL

Grou 4 144 MRI

TOTAL 464 29,483 324 35,454 143 9,506 677 15,877

6 Sources: Cliff et al. (1991); Soc.Min.Rio Artezia (1991); Portuglobal-Moriminas jv (1999); Lindsay, Lutherborrow & Jobson ( 2008); Iberian Resources data base.

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Iberian’s drilling program commenced with diamond drilling at Chaminé, Casas Novas and Braços deposits, including some twin/confirmatory holes, scissor pairs of holes to test the structure, and additional holes to test for depth/plunge extensions of the known deposits. Their drilling then proceeded through the execution of RC drill holes, some of which diamond- tailed. RC drilling was focussed on resource definition/infill drilling at Chaminé, Casas Novas, Braços and Covas, plus a combination of strike extensions tests and/or follow up on historical trenches at Chaminovas, Caras, Ligeiro and Braços South. They also drilled RC holes at Gouveia, in the Montemor concession. Towards the latest stages of their program, Iberian tested a series of known gold targets through the drilling of shallow RAB drill hole fences, such as at Braços, Braços-South, Covas, Vacas, Caras, Azinhaga, Banhos and Monfurado. Iberian also elaborated JORC-compliant resource models for all deposits within the Boa Fé EML, and proceeded to execute metallurgical testwork and a scoping/prefeasibility study. 4.4 Historic Mineral Resource and Reserve Estimates Several historical resource estimates have been undertaken by various companies from 1991 to 2008. The reported historical “resource” and “reserve” inventories cannot be considered a mineral resource or a mineral reserve under CIM guidelines as economic parameters used to derive the estimates do not reflect accurately the current economics of exploiting this deposit. Furthermore, procedures and data used have not been reviewed and verified by a Qualified Person and therefore cannot be classified as a mineral resource under Canadian Securities Administrators NI 43-101 guidelines. In all cases, insufficient documentation exists that would allow SRK to classify historic resource and reserve estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material. 4.4.1 Rio Tinto (RioFinEx) Resource Estimates A first resource estimate for the gold deposits at the Boa Fé EML was undertaken by RioFinEx in 1991, through block modelling and kriging for the Chaminé, Casas Novas and Braços deposits; and application of the sectional method for the other satellite deposits/lenses with lesser drilling data. This estimate arrived at a total resource of 2,172,672 tonnes of material averaging 2.69 g/t Au (Table 4-4) thus containing a total of 187,926 oz Au.

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Table 4-4: RioFinEx 1991 Resource Estimate* for the Boa Fé Project Area 7 Measured Indicated Inferred Total Deposit t g/t Au t g/t Au t g/t Au t g/t Au Chaminé 606,510 3.03 606,510 3.03

Casas Novas 1,135,050 2.15 1,135,050 2.15

Braços 51,112 6.33 51,112 6.33

Ligeiro to 20 m 19,000 3.22 19,000 3.22

Caras to 15 m 13,900 7.00 13,900 7.00

Covas to 15 m 33,100 4.68 33,100 4.68

Braços 5 to 10 m 15,000 2.10 15,000 2.10

Banhos 300,000 3.00 300,000 3.00

Total 656,622 3.28 1,135,050 2.15 381,000 3.27 2,172,672 2.69 * This estimate is considered historic due to insufficient supporting documentation that would allow SRK to classify historic reserve and resource estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material.

4.4.2 MRI Resource Estimates In 1996 A.C.A.Howe International Ltd, of Berkhamstead (UK), undertook a block modelling exercise and another resource estimate for MRI, based on historic data (RioFinEx) as well as newly obtained Portuglobal-MRI drill data, for the Chaminé, Casas Novas and Braços deposits. This estimate arrived at a total resource of 2,951,774 tonnes of material averaging 2.54 g/t Au, thus containing a total of 240,867 oz Au (Table 4-5).

Table 4-5: ACAHowe 1996 Resource Estimate* for the Boa Fé Project Area 8

Indicated Inferred Total Deposit t g/t Au oz Au t g/t Au oz Au t g/t Au oz Au

Chaminé 1,046,120 2.40 80,990 124,600 4.05 16,278 1,170,720 2.58 97,268

Casas Novas 924,048 2.88 85,847 748,306 1.67 40,312 1,672,354 2.35 126,159

Braços 108,700 4.99 17,440 108,700 4.99 17,440

Total 2,078,868 2.76 184,277 872,906 2.02 56,590 2,951,774 2.54 240,867

* This estimate is considered historic due to insufficient supporting documentation that would allow SRK to classify historic reserve and resource estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material.

Subsequently the MRI geologists proceeded to an estimate of inferred and potential gold resources associated with a number of satellite gold deposits within Boa Fé as well as Montemor concessions, through the application of simple polygonal method. The results of this estimate, summarized in Table 4-6, arrived at an additional total resource of 1,501,482 t of material averaging 3.36 g/t Au, containing a total of 161,987 oz Au; thus placing the total estimated resource inventory for the concession at 4.45 Mt of material containing 402,854 oz Au.

7 Source: Cliff et al. (1991). 8 Source: Patrick (1996); Portuglobal-Moriminas JV (1999).

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Table 4-6: MRI 1996 Resource Estimate* for the Boa Fé Project Area 9

Maximum Inferred Potential Total Deposit depth considered t g/t Au oz Au t g/t Au oz Au t g/t Au oz Au

Braços-North 30m 29,038 3.79 3,539 9,736 3.79 1,187 38,774 3.79 4,726 Braços-South 30m 34,471 2.86 3,167 23,348 2.86 2,145 57,819 2.86 5,312 Covas 10m 149,804 3.63 17,474 93,850 3.63 10,947 243,654 3.63 28,421 Caras-South 10m 48,766 4.64 7,274 50,739 4.64 7,568 99,505 4.64 14,842 Caras 10m 40,460 5.58 7,257 22,825 5.58 4,094 63,285 5.58 11,351 Ligeiro 50m 51,134 2.76 4,545 44,308 2.76 3,938 95,442 2.76 8,483 Banhos-SE 50m 161,820 4.90 25,478 36,995 4.90 5,825 198,815 4.90 31,303 Banhos-NW 50m 382,602 2.95 36,255 382,602 2.95 36,255 Banhos-NE 10m 28,384 4.66 4,571 28,384 4.66 4,571 Fonte Santa 50m 26,000 2.84 2,375 26,000 2.84 2,375 Carvalhal 50m 27,500 1.72 1,522 27,500 1.72 1,522 Monfurado 30m 188,764 1.72 10,440 23,456 1.72 1,297 212,220 1.72 11,737 Mourel 10m 16,356 1.23 648 11,126 1.23 441 27,482 1.23 1,089 TOTAL 1,185,099 3.27 124,545 316,383 3.68 37,442 1,501,482 3.36 161,987 * This estimate is considered historic due to insufficient supporting documentation that would allow SRK to classify historic reserve and resource estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material.

4.4.3 IRL Resource Estimates In the 2004 Prospectus of Iberian Resources Limited, the total resource estimate published for eleven of the Montemor prospect was of 4.1 Mt at 2.7 g/t Au (363 koz). This resource was calculated through simple polygon methods, based on RioFinEx and Portuglobal-MRI data. In 2005 DataGeo Geological Consultants of Perth, Western Australia (DataGeo) prepared a resource estimate for Iberian Resources using the guidelines set out by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code, 2004 Edition (the JORC Code). This estimate was conducted using Vulcan™ software, with grades estimated using a combination of both Indicator Kriging (“IK”) and inverse distance weighing (“IDW”). The resource estimate was for seven deposits and is detailed in Table 4-7.

9 Source: Portuglobal-Moriminas JV (1999).

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Table 4-7: DataGeo 2005 Resource Estimate* for the Boa Fé Project Area – Summary cut-off grades of 0.5 g/t and 1.5 g/t Au 10 Resources Resources Interpolation Prospect Drill Holes Trenches 0.5g/t Au 1.5g/t Au Method Mt Au g/t Au Mt Au g/t Au Banhos 23 63 ID 2.6 1.5 0.8 3.1 Braços South 16 23 ID 0.2 2.7 0.1 2.8 Braços 68 28 ID 0.2 2.7 0.2 2.7 Casas Novas 70 47 MIK 2.1 2.6 1.1 3.9 Chaminé 68 28 MIK 2.4 2.0 1.0 3.4 Covas 38 61 MIK 1.0 2.6 0.5 3.8 Ligeiro 10 6 ID 0.2 3.1 0.2 3.5 Total 8.7 2.1 3.9 3.5 * This estimate is considered historic due to insufficient supporting documentation that would allow SRK to classify historic reserve and resource estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material.

An updated resource estimate was prepared by Zilloe Pty Ltd (“Zilloe”) on behalf of Tamaya Resources in 2007. The resource estimate was undertaken on three deposits detailed in Table 4-8. The resource estimate prepared by Zilloe was stated at a cut-off grade of 1.5 g/t Au, and grades were estimated using Ordinary Kriging (“OK”) constrained by 0.5 g/t Au grade zones based on 25 m spaced interpretive sections. It is understood that this work was unpublished.

Table 4-8: Zilloe 2007 Indicated and Inferred Resource Estimate* for the Boa Fé Project Area - Summary above a Cut-off Grade of 1.5 g/t Au 11

Prospect Tonnes (Mt) Au Grade (g/t) Contained oz (koz) Indicated Resources Casas Novas 0.6 4.7 91 Chaminé 0.5 4.4 71 Braços 0.2 3.3 21 Total 1.3 4.4 182 Inferred Resources Casas Novas 0.1 3.7 17 Chaminé 0.1 2.8 5 Braços 0.1 1.8 5 Braços South 0.2 2.7 16 Total 0.5 2.9 42 * This estimate is considered historic due to insufficient supporting documentation that would allow SRK to classify historic reserve and resource estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material.

Tamaya Resources updated their 2007 work, producing the most recent resource estimate which was conducted by Maptek (2008), on behalf of Tamaya Resources. The 2008 estimate used 0.5 g/t Au grade solids based on 25 m spaced cross-sectional interpretations and OK for the interpolation. A summary of this resource estimate is provided in Table 4-9.

10 Source: Lindsay, Lutherborrow and Jobson, 2008. 11 Source: Modified from Lindsay, Lutherborrow and Jobson, 2008.

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Table 4-9: Maptek 2008 Indicated and Inferred Resource Estimate* for the Boa Fé Project Area - Summary above a Cut-off Grade of 1.0 g/t Au 12 Prospect Tonnes (Mt) Au Grade (g/t) Contained oz (koz) Indicated Resources Casas Novas 0.94 3.60 108 Chaminé 0.72 3.39 79 Braços 0.08 3.46 11 Total 1.7 3.54 198 Inferred Resources Casas Novas 0.08 2.62 17 Chaminé 0.03 3.80 5 Braços South 0.08 2.04 16 Ligeiro 0.10 2.46 8 Total 0.29 2.52 24 * This estimate is considered historic due to insufficient supporting documentation that would allow SRK to classify historic reserve and resource estimates into the categories as currently defined by CIM guidelines. These historic estimates should be considered unclassified mineralised material.

SRK is of the opinion that the historical resource estimates, as summarized above, represent a broad range of potential tonnage and grade, stated above variable grade cut-offs. Assumptions that form the basis for these cut-offs are not well documented, and SRK recognizes that the potential for both open pit and underground minable resources exists, and has not been adequately addressed in the previous historical resource estimates. SRK notes that as part of the current Mineral Resource estimation and exploration work conducted by Colt, a verification program of historical assays has been initiated, 4.5 Historic Production There are no records of historical gold production from the Boa Fé Experimental Mining License or the Montemor Exploration Concession. Although some small old diggings have been found at places such as e.g. the Braços, Chaminé and Caras deposits, suggesting that artisanal gold mining was undertaken there in ancient times, all these are rather small in scale, and have not touched but the near- outcropping portions of the deposits which have shown coarse free gold.

12 Source: Modified from Maptek, 2008.

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5 GEOLOGICAL SETTING AND MINERALISATION

5.1 Regional Geology All known gold mineralisation at the at Boa Fé EML and Montemor exploration concession are located within the Montemor regional shear zone, located towards the western limit of the Ossa-Morena Zone, an important tectonic and metallogenic domain in southern Portugal. At a broader level, the geology of Portugal is subdivided into two large domains: the Hesperian Massif, and the Epi-Variscan younger cover rocks. The Hesperian Massif, consolidated during the Variscan (Variscan) orogeny, is itself subdivided into four main tectonic domains, which date from the Pre-Cambrian through the Paleozoic:

• Galicia – Trás-os-Montes Zone (“GTMZ”); • Central Iberian Zone (“CIZ”); • Ossa-Morena Zone (“OMZ”); and • South Portuguese Zone (“SPZ”). The GTMZ occurs in the north-east corner of the country and is characterized by the mafic and ultramafic Bragança and Morais massifs. The rocks surrounding the massifs are mainly Silurian and represented by acid and basic volcanic rocks, as well as pelitic meta-sediments, which are thrust against the massifs. Alkali and porphyritic granites are also present. The CIZ is characterized by the predominance of schist and greywacke with minor carbonates, representing metamorphosed flysch-type rocks dating from the Late Precambrian and Lower Cambrian. There are also large areas of alkali and calc-alkali granite and granodiorite. The OMZ is a complex and diverse domain, with a stratigraphic sequence that goes from the Precambrian through Cambrian and Silurian and ends with flysch units in the Devonian. The contact with the CIZ is a regional tectonic feature known as the Tomar-Cordoba Shear Zone. The north-eastern sector of the OMZ has a preponderance of calc-alkali intrusive, which are also found in the north and centre of the zone. Magmatic rocks become progressively more basic towards the south, with granite, granodiorite and tonalite occurring along the Évora Massif (in which the Montemor area integrates); and gabbro, diorite and anorthosite in the Beja massif further south. The Beja Massif, lying close to the contact with the SPZ, is an ophiolite complex which represents a piece of oceanic crust thrust up during the Variscan orogeny. Having suffered some effects of the Upper Proterozoic Cadomian orogenic cycle, the OMZ evolved as a passive tectonic margin from the lower Cambrian to the middle Devonian, with rifting coeval with the Caledonian orogeny of northern Europe. By the late Carboniferous the OMZ turned involved in the Variscan orogeny, and its south-western margin became caught up in the collision between the SPZ and the OMZ. The SPZ is characterized by a Late Devonian to Early Carboniferous volcano-sedimentary complex (“VS”), which is overlain by the Mid-Late Carboniferous flysch sequence (“CULM”). These rocks are all underlain by the Devonian Phyllite-Quartzite Group (“PQ”) and the Pulo do Lobo Formation, comprising phyllite, quartzite and occasional acid and basic volcanics. The rich polymetallic massive sulphide deposits of the Iberian Pyrite Belt, which includes the large Aljustrel and Neves-Corvo mines in southern Portugal, are associated with the acid volcanics of the VS. Finally, the Epi-Variscan (“Variscan”) cover rocks include the Mesozoic-Cenozoic sedimentary

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units (limestone, clay and sandstone) of the south and west of Portugal, and the Tertiary detrital basins of the Tagus (Tejo) and Sado Rivers. The contact of the SPZ with the OMZ is the Ferreira-Ficalho thrust, which is the remnant of the geo-suture resulting of the late Carboniferous subduction or collision of the SPZ into the OMZ. 5.2 Local Geology The Montemor area (comprising both the Boa Fé EML and the Montemor concession) is mostly underlain by geology of the Évora massif of the Ossa-Morena zone (OMZ); while a small portion of the South Portuguese Zone terrane outcrops towards the south-western corner zone of the Montemor concession (Figure 5-1), past an extension of the Ferreira- Ficalho thrust, which in this region had a significant dextral strike-slip component of movement. Towards the Montemor area, the Évora Massif is composed of two different tectonic units which are characterized by variations in the style and intensity of deformation and metamorphism, namely:

• The Évora High Grade Metamorphic Terrain at NE, made-up of paragneisses, orthogneisses, migmatites and associated leucocratic anatectic granites, which represents high temperature/low pressure metamorphism and ultrametamorphism (amphibolite and granulite facies); and • The Montemor Shear Zone at SW, where the several stratigraphic units (Section 5.2.1) can be recognised, with a wide range of metamorphic conditions from low-greenschist facies to amphibolite facies. The border between these two tectonic units locates within a few hundred metres to the NE of the Boa Fé shear corridor, also referred to as the Boa Fé Fault Zone, one of the several belts of shearing recognised across the Montemor Shear Zone, and the one where the highest levels of deformation are seen. The principal ductile structures in the Montemor shear zone occur in a north-west direction, forming transcurrent, sinistral strike-slip features, which imposed a strong mylonitic foliation in the rocks throughout the whole Montemor area. The geology of the Montemor area comprises several, NW-SE trending belts of Upper Proterozoic to early Paleozoic sedimentary and volcanic rocks of three different basement formations, folded and metamorphosed by the Variscan orogeny, intruded by late stage Variscan igneous rocks, and surrounded at both north and south by ultrametamorphic complexes and large granitoid plutons.

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Figure 5-1: Stratigraphic and Tectonic Domains of Portugal

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5.2.1 Stratigraphy The OMZ, and in particular the Évora Massif, comprise the oldest stratigraphic units of the Iberian Variscan orogen, and a stratigraphic column that ranges from the Upper Proterozoic till the Upper Palaeozoic (Carboniferous). The principal stratigraphic units of the Évora Massif, all occurring within the Montemor area (except the Moura formation), are from base to top:

• Escoural Formation : the oldest stratigraphic formation, made of the so-called “Série Negra”, an Upper Proterozoic (Ediacaran) flysch deposit of considerable thickness, also including some meta-volcanic rocks; locally comprising mostly black carbonaceous and/or siliceous pellitic meta-sediments, with subordinate dark grey quartzites, schistose sandstones and meta-greywackes, and basic meta-volcanics. • Monfurado Formation : a Lower Cambrian formation following unconformably on top of the Escoural formation, and locally made of a volcano-sedimentary complex comprising felsic meta-volcanics, carbonate rocks (marble, dolomitic limestone, calc-schist), calc-silicate rocks, basic/intermediate meta-volcanics (amphibolites and amphibolic schists) and to a lesser extent meta-pellitic (schistose) rocks. Some intrusive granitic to rhyolitic rocks coeval with the Lower Cambrian volcanism are thought to have produced foliated igneous felsic rocks described as orthogneisses and leptites (as e.g. the Safira orthogneiss). • Carvalhal Formation : of uncertain age, currently believed to be Upper Cambrian to Ordovician, this is mostly made-up of basic to intermediate meta-volcanics, with subordinate meta-pellitic and exhalative rocks. • Moura Formation : best known as the “Moura Schist formation”, is of Middle Palaeozoic age (Silurian) and comprises pellitic meta-sediments, dark-grey to black cherts (known as lidites) and meta-volcanic rocks of both acid and basic/intermediate composition; this formation has not been recognised within the limits of the Montemor area, but occurs on strike to the SE. Finally, at the top of the Palaeozoic stratigraphy, and restricted towards the north-western limit of the Montemor exploration concession occur two Carboniferous formations, namely:

• Pedreira da Engenharia Formation : made-up of pellitic rocks, impure carbonate rocks and conglomerate; and • Cabrela Formation : comprising pellitic rocks, greywackes, tuffites, felsic and intermediate volcanics. These two latter formations are mostly unaffected by Variscan deformation and metamorphism. 5.2.2 Tectonics The Montemor area has been affected by two orogenic cycles, the Cadomian cycle, which occurred in the Upper Proterozoic to Early Palaeozoic (700-500 Ma), and the Variscan cycle, which is of Upper Palaeozoic age (350-300 Ma). Between these two cycles, in the Lower and Middle Palaeozoic times the area behaved as a stable platform and suffered rifting. The effect of the Cadomian deformation at a local level is reflected by three phases of folding of the Proterozoic units, resulting in the development of a schistose cleavage in the rocks of the Escoural formation. The Variscan orogeny is responsible for most of the structural imprints on the formations of the OMZ in general, and the Montemor area in particular. Two main Variscan deformation

phases are recognised throughout the area, namely D1 and D 2. The first phase (D 1) imprinted the strongest deformation in the geologic units, having originated NW-SE trending folds with

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an axial plane schistosity S 1; it was also associated with the highest grade metamorphic event, leading to some migmatization, anatexis and granitization.

The second phase (D 2) resulted in refolding of the D 1 structures, S 1 schistosity and S 0 stratigraphy along a NW-SE axial plane, resulting in penetrative deformation, and the

formation of fractures and a further schistosity (S2). Associated with this deformation phase occurred also retrograde metamorphism, and the start of ductile shearing related with sinistral transcurrent movement. The regional strike-slip sinistral shearing continued past the peak of

the D 2 phase, into brittle-ductile and ductile shearing episodes. These successive shearing episodes are responsible for the formation of the gold mineralization, which may have been generated by hydrothermal solutions circulating through areas of enhanced permeability created by the shearing. The Carboniferous formations occurring towards the NW end of the Montemor area, namely the Pedreira da Engenharia and Cabrela formations, are mostly unaffected by Variscan deformation. The overall structure of the Montemor area is marked by asymmetric, generally SW- overturned, NW-SE striking folds, with SW thrust faulting planes associated with these folds. The fold limbs are generally steeply dipping on the Northeast, and gently dipping to NE towards the central zone of the structure and the Southwest. The regional structure is dominated by a couple of asymmetric synclinoria with an intermediate anticlinorium (Figure 5-2). The cores of the synclinoria are marked by the presence of the Monfurado and Carvalhal formations, whereas the Escoural formation occurs towards the limbs of these folds as well as in the intercalated anticlinorium. The important regional shearing event which occurred during the Variscan late/post folding phases, with a predominant sinistral strike-slip movement (subordinate vertical movements), gave origin to the regional feature described as the Montemor shear zone. This is a 35 km long by up to 10 km wide regional zone of shearing, within which several shear corridors have been recognised, which have controlled the mineralization, as e.g. the north-westernmost Boa Fé shear corridor. Deformation styles throughout the Montemor area which resulted from this regional shearing ranged from ductile shearing in zones of high metamorphic grade (as evidenced by the strong mylonitic foliation, e.g. at Chaminé and Casas Novas), through brittle-ductile, to purely ductile shearing in the later stages of deformation and/or in areas with lower metamorphic grade (e.g. at Monfurado). The Boa Fé shear zone, host to all gold deposits within the Boa Fé EML and some in the Montemor concession, occurs along the contact zone between the northernmost outcrop of the Monfurado formation (also referred to as the “Calcsilicate Mélange”) at SW, and the outcrop of the highly metamorphosed Escoural formation at NE, and within a few hundred metres from the Évora High Metamorphic Grade Terrain further to the NE. This shear zone is again a sinistral (left lateral) strike-slip structure, which strikes NW-SE in the Braços-Covas zone, N-S between Covas and the Chaminé deposit, and again NW-SE from the Casas Novas deposit to Banhos, and beyond towards the NW limit of the Montemor area. Several, regional or local cross cutting faults cut through the basement formations, some of which may also have been associated with the Variscan shearing, whereas other can be post- Variscan, even up to Cenozoic in age. These faults are mostly orientated between NE-SW and NNE-SSW, less often E-W or NW-SE, and had either strike-slip and/or normal movements across, often of the order of hundreds of meters.

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It is remarkable that the Chaminé and Casas Novas deposits locate in both sides of the flexure of the Boa Fé shear zone from N-S trending to NW-SE trending, which also coincides with a zone of intensified cross cutting faulting, which is the expression on outcrop of a large, deep seated NE-SW fracture zone (Figure 5-2). The Braços and Covas deposits also locate near another flexure of the Boa Fé shear zone at south, from NW-SE trending to N-S trending. Other deposits, such as Banhos, seem to locate along the Boa Fé shear zone where it is intersected by significant cross cutting faults or flexures. It is believed that the intersection of these late structures with the shear zones would have created additional dilation conditions that favoured the movement of gold-bearing fluids and deposition leading to the emplacement of the largest concentrations of gold mineralization. 5.2.3 Metamorphism The Montemor basement formations, from the Upper Proterozoic Escoural formation till the Lower Paleozoic Carvalhal Formation have all undergone regional metamorphism during the

Variscan cycle, comprising a higher metamorphic grade during deformation phase D 1,

followed by retrograde metamorphism during deformation phase D 2. The regional metamorphic grade has been observed to vary throughout the Montemor area, both along and across the NW-SE regional geologic strike. Along the geologic strike of the Montemor structure the metamorphic grade increases from low greenschist facies at NW to high amphibolite facies at SE. The same variation occurs across strike, with the SW zone of the belt having low greenschist facies metamorphism, with metamorphic grade increasing to NE, through the high amphibolite facies and up to ultrametamorphism, with anatectic partial fusion, leading to the formation of migmatites and small anatectic granitic bodies. Associated with the emplacement of the late Variscan granitoid plutons there have also been contact metamorphic phenomena, leading to the local origin of spotted schists and hornfelses. The high thermal gradients and associated hydrothermal fluids related with the metamorphism are thought to have played an important role in the formation of the gold deposits. The Carboniferous formations occurring towards the NW end of the Montemor area, namely the Pedreira da Engenharia and Cabrela formations, are unaffected by Variscan metamorphism. 5.2.4 Intrusive Rocks The Variscan cycle originated, at its late stages, the emplacement of several large intrusive bodies of granitoid rocks, mostly of granodioritic or tonalitic composition, typical of the Évora Massif, and which at Montemor occur to the North, East and South of the prospective geological belt. It is believed that the hydrothermal activity associated with the emplacement of these late plutons may have played a role in the remobilization and concentration of the sulphides and the gold to form the prospective gold deposits. Several, small scale intrusions of leucocratic granite or aplite-pegmatite, occur along the Boa Fé shear zone, being particularly conspicuous in the areas of the Chaminé, Casas Novas, Ligeiro, Braços and Banhos deposits. These form sills, dykes and pods, which intrude the metamorphic sequence, and resulted of anatectic granitic magma derived from the ultrametamorphism at the nearby Évora High Metamorphic Grade Terrain. These small intrusions, though generally barren in terms of gold, are also believed to have played some role in the formation of the gold deposits, by having allowed and increase in temperature and the circulation of mineralised fluids in the enclosed metamorphic units. Other, very small scale intrusives are often observed to cut across the metamorphic rocks at several gold deposit areas, which have either basic or intermediate subvolcanic composition.

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Their age and origin is unclear, as well as the role that they may have played in the mineralizing event. Some pre-Variscan granitic rocks occur in several locations throughout the Montemor area, which have a conspicuous mylonitic foliation and stretching lineation imprinted by Variscan deformation. In general these were originally leucocratic granites or microgranites in composition, and are admitted to have emplaced during the Lower Cambrian, rifting-related igneous cycle. The most conspicuous is the so-called Safira Orthogneiss. 5.2.5 Mineralization Several distinct types of mineralization are known to occur in the Montemor belt, such as:

• Stratabound, volcanogenic (though with significant epigenetic remobilizations) iron and sulphide deposits, associated with the Lower Cambrian, rifting-stage volcanism, and hosted by the Monfurado formation’s carbonates, calc-silicate rocks and basic/intermediate meta-volcanics. The iron mineral is magnetite, and the sulphide minerals are mostly pyrite and pyrrhotite, with much lesser amounts of base metal sulphides (chalcopyrite, sphalerite, and galena). Where larger concentrations of magnetite occurred these deposits were mined for iron in the 19 th and early 20 th centuries, as well as locally in Roman times (e.g. at Monges and Nogueirinha).These iron deposits are however of rather small dimension to be of interest at present. On the other hand, the base metal content of the sulphide deposits is very low, making them of no economic interest in modern times. • Sulphide-gold mineralization, the prospective type of mineralization in the area, is epigenetic in nature, Variscan in age, structurally (shear) controlled, and can occur in a number of host formations (Escoural, Monfurado, etc.) as well as in several host rocks, i.e. so far recognised in biotite schists, black siliceous and/or graphitic schists, carbonate rocks, calc-silicate rocks, leptites/felsic meta-volcanics, orthogneisses). Normally this mineralization has strong silicification and/or sericitization phenomena associated, as well as quartz veining and dissemination. The most common sulphides are arsenopyrite and pyrite. • Late quartz vein-type mineralization, associated to late-Variscan brittle deformation and medium/low temperature hydrothermalism, has led to the formation of several mineral occurrences throughout the area, some of which have been object to artisanal mining in the late 19 th and early 20 th centuries. These veins include several paragenetic mineral associations, such as pyrite and chalcopyrite, pyrite, galena, sphalerite, and barite, stibnite and pyrite, etc. These mineralised occurrences in most cases postdate the main gold mineralization event, and, although some may carry remobilized gold, they are all considered as devoid of economic potential in modern times. Gold mineralization at Boa Fé/Montemor is considered to conform to the orogenic gold model and occurs in association with several NW-SE trending shear corridors, which form part of the wide Montemor regional shear zone. Most of the gold deposits outlined to date in the Montemor area are located along the northernmost of these shear corridors, referred to as the Boa Fé shear corridor. These deposits are currently included within the Boa Fé EML, comprising from Southeast to Northwest: Braços, Braços-South, Covas, Caras-South, Caras, Ligeiro, Chaminé, Casas Novas, Banhos and Fonte Santa. The Montemor exploration concession encloses not only the north-western extension of the Boa Fé shear corridor, but also other, subparallel shear corridors that have been recognised to the southwest of it, and which pass respectively through Gouveia-Safira, Nogueirinha- Monfurado, Malaca-Mourel, and Grou. These shear corridors are favoured by structures

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developing where there are distinctive rheological contrasts between adjacent lithological units. The presence of gold mineralization along these shear corridors has been confirmed from the historical data base in the form of either gold deposits, occurrences or anomalies, extending for a NW-SE strike length nearing 30 km, in addition to the referred gold deposits included within the Boa Fé EML. Gold mineralization identified to date along these shear corridors, at the Boa Fé and Montemor concessions, can be hosted by either silicified mica schists, felsic schists, leptites, black graphitic and siliceous schists, felsic meta-volcanics, carbonate rocks, calc-silicate rocks, or orthogneisses. While there are variations amongst the deposits, there are a number of common characteristics, which point to a common genesis:

• Strong silicification of host rock, which can lead to quartz veining; • Gold disseminated in the schistose fabric of the rock or concentrated in quartz veining; • Proximity to breccia zones at the intersection of faults and shears; • Proximity of leucocratic granites; • Mineralogical association of gold with arsenopyrite, loellingite and pyrite; and • Geochemical association with high As, and anomalous Bi, Mo, Se, Sb, Te, W. In most gold deposits investigated to date the principal non-auriferous bearing minerals are arsenopyrite, loellingite and pyrite, with arsenopyrite being dominant in most cases. In some deposits or occurrences (e.g. Monfurado deposit) pyrite predominates, with associated pyrrhotite and magnetite, while arsenopyrite is rare. In other gold occurrences (e.g. Grou) stibnite may also be present, in association with either pyrite and/or arsenopyrite. These sulphides occur in the fabric of the rocks, in fractures and aligned with the schistosity, as well as in association with quartz veinlets. Arsenopyrite forms individual grains and mineral aggregates up to several millimetres in size. Relict loellingite frequently occurs at the cores of the arsenopyrite and as brecciated aggregates in the gangue. Pyrite is not quite as abundant as arsenopyrite or loellingite but is commonly intergrown with them, and occurs independently as subhedral grains in the gangue. Marcasite is also associated with the arsenic minerals in places. Gold occurs in association with arsenic minerals, in fractures, and in gangue. Although there is a close association with arsenic minerals, a significant quantity of gold also occurs independently of arsenopyrite. The interpretation is that the gold and sulphosalts may have been deposited at different times.

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Figure 5-2: Geologic Compilation Map of the Boa Fé EML and surrounding Montemor Exploration Concession, showing deposit locations UK5525 Boa Fé PEA Report FINAL 20130507.docx May, 2013 Page 37 of 200 SRK Consulting Boa Fé PEA – Main Report

5.3 Property Geology A brief geologic description is made here with regards to the gold deposits identified in this report, in particular those for which a resource estimate has been made, namely, from SE to NW: the Braços, Ligeiro, Chaminé, Casas Novas and Banhos deposits, within the Boa Fé EML; and the Monfurado deposit within the Montemor exploration concession. 5.3.1 Chaminé This deposit is located at a flexure in the Boa Fé shear zone where it changes its orientation from N-S to NW-SE, which coincides with an area where the shear zone is intersected and offset by a major NE-SW deep seated fracture zone (Figure 5-2). The most common lithologies of the volcano-sedimentary unit consist of biotitic and/or muscovitic/sericitic plagioclase schists and leptites. A feature within the zone of shearing is the occurrence of felsic schists, which can either be derived from acid volcanics or represent silicified zones within the country biotite schists. A steeply dipping, concordant unit of microgranitic orthogneiss (leptite), up to 150 m wide, bounds the schistose units at West, outcropping at a prominent hill in the north-western side of the deposit; it has also been intersected at depth underneath some parts of the deposit. The highest gold values occur in zones where the biotite schist has been intensely silicified or has a high density of ptygmatic and deformed quartz veining, ranging from the millimetre up to several centimetres thick. Gold is also associated with small veinlets of arsenopyrite where the schist is less silicified and within shear zones composed of breccia and mylonite. Visible gold, though not common, has also been observed in this area from several drill holes. The schists are cut by numerous granite dykes of aplitic composition, ranging from several centimetres up to several metres thick, whose orientation is variable and relationship to mineralization is complicated by several events. The aplite rock itself is usually barren, but the immediate wall-rock schists, as well as screens of schist within the aplite dykes, are often well mineralised, suggesting that the aplite was emplaced concomitantly and favoured mineralization. A stock of aplite in the northern part of the deposit appears to be post-date mineralization and cut the mineralised zone. Mineralization appears limited to the south by a NNW-SSE orientated brittle fault, while to the north it plunges down to depths below 200 m. 5.3.2 Casas Novas Conjugate to the Chaminé deposit, the Casas Novas deposit occurs on the north-western side of the referred flexure in the shear zone (Figure 5-2). It also is composed of similar lithologies, namely a metamorphosed volcano-sedimentary unit consisting of biotitic and/or muscovitic/sericitic plagioclase schists and leptites, with intrusive tabular granite bodies of aplitic composition. The gold mineralization appears to occur (but not exclusively so) in a biotite schist unit approx. 50 m thick, sandwiched between two tabular aplite dykes which are concordant with one of the shear directions and dip 30º south-west. 5.3.3 Ligeiro At Ligeiro the deposit shows quite similar geology to Chaminé, being dominated by north trending biotite and felsic schists at the margin of an acid metavolcanic unit. There is also a strong NW trending zone of amphibolite adjacent to the schist to the west, and small leucocratic granite intrusions to the east. The deposit is also cut by a number of brittle late fractures, originating several zones of

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brecciation as well as offsets of the mineralization. These postdate the mineralised event, but have locally remobilized some gold grades. 5.3.4 Braços This deposit occurs in the south-east of the Boa Fé EML (Figure 5-2). It is located on the southern continuation of the Boa Fé shear zone, where it is offset several kilometres to the south by post-depositional NNE-SSW transform faulting. The deposit has a lenticular form and is cut by a fault zone at its southeast extremity. The geologic setting and host formations are otherwise much similar to those of the Chaminé deposit. The host sequence constitutes biotite schist, felsic schist and felsite, with calcsilicate rock and amphibolite adjacent to the south. These lithologies bear indications of retrograde metamorphism which has been superimposed on the low-medium grade regional metamorphism. The structure differs from Casas Novas and Chaminé in that the controlling set of shearing appears to dip at shallow angle (<25º) eastwards. The gold is associated with quartz (veins) with arsenopyrite and loellingite. Visible gold has been reported from several drill holes, sometimes coarse grained. There is also a high density of sub-vertical late quartz veining near surface, locally with associated barite, which is associated with the late N-S to NNE-SSW faulting that occurs in this area of flexuring along the shear zone. 5.3.5 Banhos The Banhos deposit is located four kilometres to the north-west of Casas Novas, further along the Boa Fé shear zone (Figure 5-2). It is a set of steeply dipping, strike concordant lenticular bodies of mineralization that occur within a lithological sequence composed of mica schists, leptites and the calcsilicate rocks of the Calcsilicate Mélange (the local name given to the Monfurado Cambrian formation). However in detail its setting differs from that of the Casas Novas and Chaminé deposits, in that at Banhos the gold mineralization is hosted by the Cambrian lithologies that occur to the southwest of the Boa Fé shear zone, rather than by the Proterozoic metasedimentary rocks (mica schists) northeast of the shear zone, as in the case of the latter two deposits. The location of the deposit, when examined against the detail surface geologic mapping of the area, suggests that it occurs in association with the intersection of several cross-cutting faults with the principal shear zone. With regards to the gold-bearing minerals, although arsenopyrite is present locally, pyrite is the most common sulphide mineral, occasionally with associated pyrrhotite; concentrations of disseminated to semi-massive magnetite have also been intersected by drilling. 5.3.6 Monfurado The Monfurado gold deposit located outside the Boa Fé EML, in the Montemor exploration concession, circa 4 km due west of the Banhos deposit (Figure 5-2). Furthermore it is not on the Boa Fé shear corridor, but along another, sub-parallel shear corridor that occurs to the southwest, namely the Nogueirinha-Monfurado shear corridor. The gold mineralization at Monfurado is completely enclosed within units of the Lower Cambrian Monfurado volcano-sedimentary formation, being at some distance (either vertically or horizontally) from the schistose Upper Proterozoic Escoural formation. The host rocks of the Monfurado gold mineralization are both felsic metavolcanic and calcsilicate rocks. The deposit has a very regular, tabular morphology with a shallow

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northeast dipping (30-35º), sub-paralleling the contact between an upper felsic metavolcanic unit and a lower calcsilicate-carbonate unit, with the gold grades occurring to either side of this contact (Figure 6-6). Also in contrast with most deposits along the Boa Fé shear zone, the main gold-bearing minerals at Monfurado are pyrite, pyrrhotite and magnetite, with arsenopyrite being very rare. 5.3.7 Other deposits within Boa Fé EML Other deposits that have had limited drill testing along the Boa Fé shear zone are Caras and Covas. These deposits are located in the 5.5 km long, NNW-SSE orientated corridor of the shear zone between the Ligeiro and Braços deposits. The geological understanding of these deposits, along with the morphology of mineralization, is less clear due to erosion and a lack of outcrop. They however seem to have in common the association of gold with leptites (felsic meta-volcanics) and felsic schists; a sub-horizontal to shallow dipping orientation; and the presence of sometimes high gold contents over narrow widths, as well as the frequent appearance of coarse visible gold. 5.4 Significant Mineralised Zones As noted in Section 6, the gold mineralisation at Boa Fé – Montemor is considered to conform to the orogenic gold model. It occurs in association with the overall NW-SE trending Montemor shear zone. The mineralisation is hosted either within silicified schists of the Proterozoic formation, or at the interface between felsic metavolcanics and calcsilicate rocks within the Lower Cambrian formation. While there are variations amongst the deposits and the likelihood of more than one phase of mineralization, there are a number of common characteristics, which point to a common genesis:

• Strong silicification of the host rocks, which can lead to quartz veining; • Gold occurring either disseminated in the fabric of the rock or concentrated in quartz veins; • Proximity to intersections of faults with conjugate shear zones; • Proximity of small, leucocratic granite or aplite bodies; and • Mineralogical association of gold with arsenopyrite, loellingite and pyrite. The principal non-auriferous minerals are arsenopyrite, loellingite and pyrite, with arsenopyrite dominant in most cases, while pyrite is dominant in the deposits hosted by the Lower Cambrian Monfurado formation (Table 5-1). These minerals may occur either in the schistose fabric of the rocks, in fractures cutting through the schistosity, or in association with quartz veining and pods. Arsenopyrite forms individual grains and mineral aggregates up to several millimetres in size. Relict loellingite frequently occurs at the cores of the arsenopyrite and as brecciated aggregates in the gangue. Pyrite but is commonly intergrown with arsenopyrite or loellingite, or occurs independently as subhedral grains in the gangue. Marcasite is also associated with the sulphide minerals in places.

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13 Table 5-1: Gold-bearing Minerals Identified in Boa Fé Gold Mineralization Principal Minerals

Arsenopyrite FeAsS Loellingite FeAsS 2 Pyrite FeS 2 Accessory Minerals

Marcasite FeS 2 Chalcopyrite CuFeS 2

Trace Minerals

Pyrrhotite FeS Bismuthinite Bi 2S3 Native Bismuth Bi

Wittchenite Cu 3BiS 3 Gersdorffite (Ni,Cu,Fe)AsS Maldonite Au 2Bi Gold Au Electrum (Au,Ag)

Secondary Minerals

Chalcocite Cu 2S Covellite CuS Limonite FeO.OH

Hematite Fe 2O3 Scorodite Fe(AsO 4).2H 2O

The gold mineralization is most commonly associated with the arsenic minerals, in fractures and in the gangue. However, a significant quantity of gold occurs independently of arsenopyrite as borne out by enhanced recovery of free gold from gravity separation at Braços (see Section 11). The interpretation is that the gold and the sulphide minerals may have been deposited at different times.

13 Source: Cliff et al. (1991).

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6 DEPOSIT TYPE

The deposit model that most closely corresponds to the geological occurrence of gold at Boa Fé – Montemor is that described as "Orogenic Gold Deposits" (Groves et al., 1998; Cassidy & Hagemann, 2001; Robert et al., 2007). These deposits are formed during deformation processes (compressional to transpressional) at convergent plate margins, and have the following common features:

• Strong structural control on mineralization; • Timing of deposition closely related to peak metamorphism; • Consistent metal association; and • Intrusion by low-moderate salinity, mixed aqueous-carbonic hydrothermal fluids. While there is lack of an overall consensus on the genesis of Orogenic Gold deposits, it is generally agreed that they were formed by metamorphism, with fluids originating from the accreted host terranes and/or from subducted oceanic material. Typical orogenic gold provinces develop in the fore-arc region of an active margin, often form during the late stages of orogeny and are characteristically associated with regional contacts between terranes (Crispini et al 2007). There is also a direct association with magmatism, which needs to be taken into account in understanding a deposit. Oliveira et al. (2002) suggested such an origin for the Portalegre gold deposits (Central Eastern Portugal), which are considered similar to Boa Fé/Montemor deposits. Here, metamorphism of greenschist to amphibolite facies, associated with deformation along the Tomar-Cordoba Shear Zone, is interpreted as having resulted in metamorphic fluids depositing gold in the fabric along structures. Remobilization and secondary enrichment is believed to have been driven by magmatic fluids from intrusions. Tornos et al. (2004) have described the Ossa-Morena Zone (OMZ) evolution during the Variscan orogenic cycle as having first been an active continental margin and magmatic arc that evolved into a collision zone after amalgamation with the South Portuguese Zone terrane. They refer that abundant mineral deposits found in the OMZ were for the most part formed during the Cadomian and the Variscan orogenic cycles, and the intermediate rifting and stable platform stages. The older Cadomian mineralization (Late Proterozoic to Early Paleozoic) is comparable to active arc-related mineral deposits such as volcanic-hosted massive sulphides, barite and Zn- Pb SEDEX deposits and some minor porphyry copper mineralization. In the period between the Cadomian and Variscan orogeny the OMZ went through a rifting and stable platform stage, during which a bi-modal Lower-Cambrian rifting volcanic activity gave origin to iron oxide and/or base metal, massive and disseminated stratabound deposits. During the younger Variscan orogeny, major tectonic dismemberment occurred, which is interpreted as a continental crust undergoing transpressional strain. Variscan tectonic, metamorphic and magmatic activity led to the formation of several different types of mineralization, including syn-metamorphic and peri-granitic base metal-bearing veins, small volcanic-hosted polymetallic massive sulphide deposits, iron oxide replacements and skarns, magnetite and Cu-Ni magmatic mineral deposits and Sn-W veins and replacements (Tornos et al 2004). The origin of the gold mineralization at Boa Fé/Montemor is interpreted as resulting of likely volcanogenic gold pre-concentrations during the Cadomian orogenic cycle, followed by several stages of gold remobilization and localized concentration during the Variscan orogeny

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in association with the formation of a zone of crustal weakness (the 35 km long Montemor shear zone), and as a result of shearing, metamorphism, granite emplacement and associated hydrothermal activity. As a result, gold concentrations can be found at the Montemor area in a wide range of host lithologies and formations such as meta-sediments (e.g. micaschists, graphitic schists, metagreywackes) of the Upper-Proterozoic Escoural Formation; felsic metavolcanics and calcsilicate rocks of the Lower-Cambrian Monfurado Formation; sheared/foliated Cambrian granites (Safira orthogneiss), etc. It is likely that there are multiple phases of gold remobilization and concentration, due to the complex tectonic evolution of the area, which underwent a strong ductile Variscan transcurrent shearing superposed by semi-brittle and brittle deformation. The high strain gradients originated a ductile mylonitic foliation which records a sin-kinematic prograde HT-LP metamorphism followed by a generalized retrogradation. The main phases of gold mineralization appear to be associated with the subsequent brittle-ductile and brittle deformational events which occurred during relaxation of orogenesis, and spatially related with competency contrasts between silica rich, robust units and weaker, plastic pelitic or carbonate units. 6.1 Mineral Deposit The depositional environment at Chaminé, Casas Novas and other deposits in the Boa Fé EML and the Montemor concession is strongly related to shearing and the pattern created by interference of shear structures. While changes in chemical composition between lithological types is a factor, it is the competency contrasts within the schistose, felsic metavolcanic and calcsilicate units which is the key governing factor, for the space that it creates for mineralizing fluids. A marked increase in the presence of silica through secondary silicification, ptygmatic and linear quartz veins or quartz boudins, and augen within pelitic schist, creates rheological heterogeneity which has a tendency for the units to behave like “compressing and buckling a deck of cards” on deformation, rather than pushing a robust block over a plane of weakness (décollement), which may be expected of more homogeneous lithology. The net effect of heterogeneous deformation is to create sets of shears which not only exploit existing schistosity but also oblique to it in zones of low strain creating sub- horizontal tensional saddlebacks and conjugate planes of slippage. Figure 6-1 and Figure 6-2 show typical morphology of high-grade gold mineralization at Chaminé and Casas Novas respectively. Foliation in the schist flows around abundant blocks of aplite and gneiss forming pressure shadows. Quartz veins and stockwork associated with the granitoid blocks undergo ductile deformation and are offset parallel to foliation to produce wispy kink folds. On a macro scale this offset can occur over several meters to produce a “smearing out” effect of the veins. Gold occurs as inclusions in porphyroblastic grains, at sulphide grade boundaries and as free grains in strain shadows and fractures. There is no significant oxide or transitional material at either Chaminé or Casas Novas with only slight to partial weathering from 0.3 to 25 m, deeper where fault zones subcrop. It is assumed that all oxidized material within this zone will be floatable in terms of geometallurgical properties.

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Figure 6-1: Deformed and Brecciated Quartz Veins with Sulphide (buff patches), Chaminé deposit, Colt drill hole BFCH-11-02 Strain incompatibility across the contacts between silica rich zones (veins, aplite) and schist caused loss of cohesion and fracturing to produce porosity for fluid flow. Cycles of annealing of these fractures and deformation produce favourable conditions for gold deposition (after Hill, 2011).

Figure 6-2: Folded Quartz Veining Parallel to Contorted Foliation in Schist, Casas Novas deposit, Colt drill hole BFCN-12-03 Gold is associated with arsenopyrite in fractured quartz to the right of block marked “83,75”. 6.2 Geological Model 6.2.1 Chaminé The model currently applied to Chaminé is based on a heterogeneous shear zone system whereby peak gold deposition derived from deep seated mesothermal temperature fluids circulating from granitoid intrusives during retrograde metamorphism and a prolonged ductile- brittle deformational event. This model is based on three assumptions:

• Ductile and plastic deformation of schist at hard siliceous boundaries opened fluid pathways for gold bearing fluids; • Development of conjugate shears during slippage along cleavage planes and fracturing during late ductile and brittle deformation due to lithological heterogeneity within the shear zone. Reinforcing of conjugate shears during fracturing and brittle deformation to produce lenticular bodies of high grade gold mineralization (Figure 6-3), also enhanced by sub- horizontal tensional ‘saddleback type structures; and • Elongation and stretching out of the mineralization north-south by shearing from strike-slip movement parallel to the main shear zone trend. This gives some continuity to mineralised zones along strike and enables the model to be projected and built in 3D along this north- south axis.

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Figure 6-3 demonstrates the overall product from these assumptions. Due to structural complexity the approach was made by taking 2D slices through the mineralized zones and putting all the geological working (“crayon” work) on cross sections and then modelling the geology and mineralization along strike. Based on the drill spacing a total of 34 section lines orientated WSW-ENE were generated on 12.5 m centres. The shear sets demonstrated in Figure 6-4 were traced and modelled along strike for a total length of 400 m through the deposit. A structural skeleton was constructed by wireframing the 2D shears sets in 3D. A broad mineralised envelope at 0.4 g/t Au cut-off grade was then generated by draping over this skeleton.

Figure 6-3: Interference of primary and secondary fracture systems during brittle phase of deformation leading to higher density of fracturing and pathways for fluid movement and deposition. Mineralised

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Figure 6-4: Location in Plan of drilling distribution at Casas Novas, Chamné and Ligeiro deposits

Section 6400N shows the interpretation of the mineralisation style (Figure 6-5) which is associated with shears at low-angle to the regional shear direction (S1, S2, T and R) developed due to the contrasts in competency between granitic and silica–rich units with pelitic schist within the main regional shear zone. Where conjugate sets of shears (i.e., S1 and S2 with T) the best development of mineralisation occurs. Conjugate sets of mineralisation may occur anywhere within the regional shear zone and are not restricted by depth. In late November 2012, two deeper drill holes beneath Chaminé deposit, confirm the continuation of similar mineralization in depth. While there is consistency in this interpretation along strike, there is an apparent plunge to the north which becomes marked north of section line 6525N. This has been interpreted as an east-west brittle fault parallel to the plane of the section lines with strike-slip movement and downthrow to the north of at least 40 m. There is limited drill evidence for such a fault. An alternative tentative explanation is that the granite gneiss pendant/synform is thrust over the schist which in itself may cause the pressure shadow responsible for mineralization.

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Figure 6-5: Cross Section 6400N through Chaminé, taken during infill drilling in mid-March 2012

6.2.2 Casas Novas The Casas Novas deposit is located 650 m to the NW of the Chaminé deposit (Figure 6-6). Using the same principles applied to Chaminé, a total of 29 section lines orientated SW-NE were generated on 25 m centres, that allow modelling the deposit along strike for 600 m. The foliation control of the mineralization is more evident than in the Chaminé deposit, conjugate with a grade enrichment induced by two main leucocratic granite/aplite lenses with a thickness of 5 to 15 m, dipping 30 to 40º north-west, intervening and silicifying the schist between. The mineralization is not constrained by the leucocratic granite “sandwich” with 30 to 60 m thickness and is open in depth to the South-West, dipping -60º to 75º.

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Figure 6-6: Cross section through Casas Novas Demonstrating Relation of Two Main Aplite Units with Intervening Gold Mineralization 6.2.3 Ligeiro The Ligeiro deposit is located at 400m to the SSE of the Chaminé deposit, near the contact between the mica schist of the Escoural formation (Upper Proterozoic “Serie Negra”) and the Gneiss-Migmatite complex. It appears to be a satellite deposit of Chaminé. A total of 22 section lines orientated E-W were generated on 12 m to 13 m centres, that allow modelling the deposit along strike for 150 m. The gold mineralization seems to be mostly associated with the mica and felsic schist, within the foliation. The morphology consists in a series of lenses that dip sub-vertical or steeply dipping (-70º) to the East, along 130 m in a North-South direction. 6.2.4 Braços The Braços deposit is located in the South-East zone of the Boa Fé EML and it was modelled a 2 distinct mineralised deposits due to its lithological main host units. The Braços North deposit is hosted by the mica schist of the Escoural formation (Upper Proterozoic “Serie Negra”) and locally by intrusions from the Gneiss-Migmatite complex. The Braços South deposit is hosted by units of the Monfurado formation (Lower Cambrian volcano-sedimentary sequence). The morphology at Braços North, consists of lenses whose dips varies from sub-horizontal to shallow dipping (<-25º) in the Southern part of the zone but change along strike towards the North to dipping sub-vertically. A total of 14 section lines orientated WSW-ENE were generated on 25 m centres that allow modelling the deposit along strike for 250 m. The morphology at Braços South, consists of lenses that dip -30º to -40º to South-West along

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a NW-SE strike. A total of 13 section lines orientated SW-NE were generated on 25m centres that allow modelling the deposit along strike for 275 m. 6.2.5 Banhos The Banhos deposit is located 4 km along strike from the Casas Novas deposit along the Boa Fé shear corridor (Figure 5-2). It is located on the SW limb of the shear and hosted by lithological units of the Monfurado formation (Lower Cambrian volcano-sedimentary sequence), in contrast with Casas Novas, Chaminé and Ligeiro, which are positioned at the NE limb of the shear and hosted by mica schist of the Escoural formation (Upper Proterozoic “Serie Negra”). The gold mineralization seems to be mostly associated with the calcsilicate rocks and felsic schist, although locally the mineralization’s can occur along breccias and fault gauge. A total of 67 section lines orientated SW-NE were generated on 25m centres that allow modelling the deposit. The morphology consists of a series of lenses that dip sub-vertically or dipping (>-60º) to the North-East, along a strike of 1,675 m in a NW-SE, direction. These mineralised bands are discontinuous due to interpreted cross faulting. The Banhos deposit can be divided into three main zones that are slightly displaced from each other. 6.2.6 Monfurado The Monfurado gold deposit (Montemor exploration concession) has several distinct characteristics with regards to the previously described gold deposits of the Boa Fé shear corridor (Boa Fé EML), namely:

• The Monfurado deposit is completely enclosed in the Lower Cambrian Monfurado volcano- sedimentary formation, at some distance from the Upper Proterozoic Escoural formation (Figure 5-2); • It is entirely hosted by felsic metavolcanic and calcsilicate rocks, with no schistose rocks in the vicinity; • The metamorphic grade is low (greenschist facies), and there are no granitic rocks in the close by; • The deposit is located within a distinct ~20 m wide corridor that encloses the contact between two, well identified lithological units, namely a lower calcsilicate-carbonate unit and an upper felsic metavolcanic unit (Figure 6-7) suggesting that it is controlled by either the distinct rheological characteristics and/or the chemically reactive contrast between these two lithologies; • It has a very regular, tabular morphology with a shallow northeast dipping (30-35º), sub- paralleling the contact between the two referred lithological units (Figure 6-7); • A total of 13 section lines orientated SW-NE were generated on 50m centres, that allow modelling the deposit along strike for 550m; • The main gold-bearing minerals are pyrite, pyrrhotite and magnetite, with arsenopyrite being very rare. The gold mineralization seems to be generally associated to a late stage episode of brittle shearing, leading to the formation of quartz-tourmaline-pyrite veining and local brecciation; although early stage ductile shearing is evidenced throughout by the stretched fabric of the silicate minerals. These contrasting features are in the most part due to the fact of the Monfurado deposit is located along a structural setting distinct from the Boa Fé EML deposits, namely within the

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south-western limb of the Montemor synclinorium, and in particular along the distinct Monfurado shear corridor, which parallels the Boa Fé shear corridor circa 2.5 to 3 km to the SW. However there are some similarities with the Banhos deposit in the Boa Fé shear corridor, namely with respect to the association with the Lower Cambrian Monfurado formation, the host lithologies and the mineralogy.

Figure 6-7: Drill hole cross section through the Monfurado deposit, showing the regularity and shallow dip of the deposit, controlled by the contact zone between the felsic metavolcanic unit and the lower calcsilicate- carbonate unit

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7 EXPLORATION

On being awarded the Boa Fé EML and the Montemor exploration concession by the Portuguese Government on November 2, 2011, Colt began working in these licenses immediately. Field work was first commenced at the Boa Fé EML, with the preparation of a diamond drilling program to test the Chaminé deposit. The first drill rig, supplied by the Portuguese Geological Survey department (“LNEG”), started drilling on November 14, to be followed by a second rig supplied by Spanish drill contractor CGS towards the beginning of December 2011. In early January 2011 the ongoing drilling program at the Boa Fé EML was intensified with the arrival of another three drill rigs supplied by Portuguese drill contractors Teixeira Duarte and Geoplano. Towards the summer of 2012 the drilling program at Boa Fé EML was further intensified with the arrival of three drill rigs from Turkish drilling contractor Spektra Jeotek. The previous report “ NI 43-101 Technical Report Boa Fé/Montemor Gold Project Alentejo Region of Southern Portugal ”, (effective date July 3, 2012, SRK Project Number 220700.070) ” discussed the exploration at Boa Fé/Montemor in detail. Since completion of that report, exploration work has concentrated on infill drilling on the six deposits which are reported herein. Further discussion with regards to the drilling program at the Boa Fé EML will be dealt with in section 8. Exploration work at the Montemor exploration concession was commenced in December 2011 by a data compilation and assessment exercise, with particular emphasis on the available geologic mapping and geochemical information. Field exploration work at the Montemor concession had a later start, in late February 2012, as priority in field work had been given to the Boa Fé EML. 7.1 Relevant Exploration Work Exploration work carried out by Colt in the Montemor area during the period from November 2011 to February 2013 comprised several investigations done at both regional and local scale at the Boa Fé EML and the Montemor exploration concession. 7.1.1 Regional Work done at Montemor and Boa Fé Field and desktop work, covering both licenses, and carried out at the regional scale in the early stages of the program included:

• Geologic Mapping : A compilation 1:50,000 scale geologic map (Figure 5-2) covering the whole of Colt’s consolidated tenement in the region (779 km 2) was produced in digital format, based on existing geologic mapping from several sources (Government departments as well as previous exploration companies) for the purpose of guiding future field exploration work. • Historical Geochemical Data : Also in order to guide subsequent field work, a digital compilation of all historical stream sediment and soil geochemical data was carried out at early stages, for the dual purpose of identifying either anomalies that might have been improperly tested or geologically prospective areas that had insufficient geochemical coverage. • Airborne Magnetic and Radiometric Survey : A helicopter-borne aeromagnetic and radiometric geophysical survey was flown over a 264 km 2 area, which included the whole 47 km 2 of the Boa Fé EML and the most prospective portion of the Montemor concession (217 km 2, or ca. 30% of the total concession area).

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7.1.2 Pilot Exploration Work Some pilot exploration work was also carried out in early stages at both licenses, in order to orientate subsequent exploration efforts, which included:

• Pilot Soil Geochemical Traverses : A total of seven pilot soil sampling traverses, adding to a total of 269 soil samples, were done over selected known gold deposits at the Boa Fé and Montemor concessions, with a view to get multi-element geochemical data for orientation of subsequent geochemical surveys. • Pilot Geophysical Surveys : Test geophysical surveys were carried out over known gold deposit areas of the Boa Fé EML in order to test their response, which comprised on one hand seismic survey traversing (reflection and refraction) and on the other hand resistivity survey lines. 7.1.3 Boa Fé Exploration Work Near deposit exploration work carried out within the Boa Fé EML has been focused on investigating extensions of known gold deposits, as well as on testing the gaps between these gold deposits, the following work having been done: A detail ground magnetic survey was completed over the Banhos-Azinhaga zone, a section of the Boa Fé shear corridor located to the NW of the Casas Novas deposit, and comprising the several gold lenses of Banhos as well as the Banhos-North and Azinhaga geochemical anomalies. Detail prospecting work completed at the Boa Fé EML was focussed on the following targets (from NW to SE):

• Fonte Santa : The area of this historical Au-As soil geochemical anomaly, less than 2 km NW of the Banhos deposit, was investigated through hammer prospecting and rock sampling. • Banhos-North : This wide historical arsenic anomaly in soils, located less than1 km north of the Banhos deposit, was investigated through hammer prospecting and rock sampling, followed-up by trenching and scout diamond drilling. • Azinhaga : This historical occurrence (Au-As soil anomaly with scarce trenching and drilling) was investigated through hammer prospecting and rock sampling; follow-up trenching was planned but has not been executed yet. • Chaminé-Ligeiro gap : The area between the Chaminé and Ligeiro gold deposits was tested by trenching, in order to investigate the offset between the two deposits, and to try and find possible mineralization between them. • Ligeiro-South : This presumed southern extension of the small Ligeiro deposit into the gap towards Caras was investigated by scout diamond drilling. • Vacas gap : One single, long trench was excavated in this gap between the Covas and Caras deposits, in order to try and reproduce a historical trench with reported interesting gold contents. 7.1.4 Montemor Exploration Work Field exploration work carried out since early 2012 in the Montemor exploration concession comprised on one hand geochemical (stream sediment and soil) surveys covering selected prospective zones, and on the other hand detail investigation of selected exploration targets. The following geochemical surveys were carried out (Figure 7-1):

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Stream Sediment Surveys Stream sediment surveys (with collection of both geochemical and pan-concentrate samples) were carried out in order to cover prospective areas within the Montemor concession, where the historical stream sediment coverage was found either as insufficient or needing further confirmation or detail. This survey covered two areas:

• the Monfurado Cambrian belt to the Southeast of the Monfurado deposit, referred to as the Malaca-Nogueirinha belt; and • the NW extension of the Boa Fé shear corridor beyond the Banhos deposit;

Soil Geochemical Surveys Soil geochemical surveys with multi-element analysis of samples, were carried out at the following target zones:

• the Malaca-Nogueirinha belt, covering the prospective Monfurado Cambrian outcrop to the SE of the Monfurado deposit, as well as the enclosing formations outcropping at N and S, was covered with one wide-spaced traverse soil sampling survey; • the Carvalhal – Fonte Santa area, on the immediate NW extension of the Boa Fé shear corridor beyond the Banhos deposit, and with favourable geologic setting and good geochemical and geophysical indicators, was covered with a soil geochemical square grid; • the Grou area, towards the western limit of the Montemor concession, where historical records point at significant gold values, was also covered with a soil geochemical square grid; and • the Torre da Gadanha target, where a couple of soil geochemical traverses were sampled.

Regional Prospecting and Rock Sampling Geologic “hammer prospecting” and rock sampling was carried out at several locations and zones throughout the Montemor concession, since the neighbourhood of the Boa Fé EML at East, till the western boundary of the Montemor concession. The focus of this work was based on a selection of areas perceived as prospective for gold, from the available geologic, geochemical, geophysical and mineral occurrence data (both historical and recently acquired Colt data). A total of in excess of 30 sites or zones were prospected and rock sampled, from where a total of more than 250 rock samples were taken from outcrop or float of nearby provenance (sub-outcrop) for gold and multi-element ICP analysis.

Detailed Exploration The following targets have been investigated through detailed exploration (from West to East), which for the most part locate along distinct shear corridors, which parallel the Boa Fé shear zone at southwest:

• Grou : Besides the soil geochemical survey referred to above, this target, underlain by an extremely sheared and sericitized leucocratic granite, with historical Sb artisanal mines, was investigated through reconnaissance geologic mapping, hammer prospecting and rock sampling. • Safira : This area, mostly underlain by the “Safira orthogneiss” and with a historical small Cu mine and several gold indications, was covered with geologic mapping, prospecting and rock sampling. • Mourel-North : This location, set in the “Safira orthogneiss” outcrop, with a historical Au-As soil anomaly and a historical trench with significant report gold grades, was investigated through trenching and one scout diamond drill hole.

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• Mourel : This location, underlain by low metamorphic grade rocks of the Escoural formation (“Serie Negra”), and with a historical Au-As soil anomaly and historical trenches with gold mineralization, was investigated through trenching and diamond drilling. • Água-todo-ano : This historical Au-As anomaly in soils, over the outcrop of the low- metamorphic Escoural formation, was tested by one single trench. • Regadia-Gamela : This 6 km strike-concordant zone underlain by the Monfurado Cambrian formation, some 4 km NW of the Monfurado deposit, was investigated through hammer prospecting and rock sampling, plus the excavation of one single trench at Regadia. • Monfurado : This site of iron mining in the early 20 th Century, where more recent historical trenching and drilling over a gold anomaly in soils indicated gold mineralization hosted by siliceous felsic meta-volcanics of the Monfurado formation, was investigated by Colt through trenching and diamond drilling. In addition the core of two historical holes (done by Government department SFM) was examined and sampled. • Malaca : This target, located circa 2 km SE of Monfurado, in the border zone between the Monfurado and Escoural formations, and where historical trenching over Au-As anomalies in soils indicated the presence of gold mineralization, was investigated through hammer prospecting, rock sampling and trenching. • Nogueirinha : This site of historical iron mining, located towards the southeast end of the outcrop of the Monfurado formation, was investigated through hammer prospecting and rock sampling. In addition the core of three historical holes (done by Government department SFM) was examined and sampled.

Figure 7-1: Location of Geophysical and Geochemical Surveys completed at Montemor and Boa Fé (coarse black dashed line= airborne survey; thin dashed line =ground magnetics survey; red lines= soil geochemistry traverses; red dashed lines= limits of soil geochemistry grids)

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7.1.5 Localised Surveys

Geophysical Survey In order to provide further data on the Banhos deposit zone, as well as on the nearby gold prospective areas of Azinhaga and Banhos-North, a ground magnetic survey was completed over the Banhos-Azinhaga zone NW of the Casas Novas deposit. This survey was carried out by a geophysicist of the Government geological department LNEG, and covered a total area of 6.6 km 2. In total 89 lines, NE-SW orientated, with an extension of 1500 m each, and separated by 50 m, were surveyed with virtually continuous magnetic readings (each 12 seconds) along this grid, totalling 133.5 line km of survey lines. Two magnetometers were utilized in the acquisition of the magnetic data: one fixed proton type magnetometer Geometrics model G-856 Portable Magnetometer, with a resolution of 0.1 nTesla, to operate as base; and another, mobile overhauser type magnetometer GEM Systems model GSM-19W Portable Magnetometer, with a resolution of 0.01 nTesla. The absolute precision of both magnetometers is approximately equal to 10 times their resolution. A GPS module integrated in the mobile magnetometer and its respective antenna allow a precision in the positioning of lesser than 1.5 m synchronized with the magnetometer readings, through the utilization of the European EGNOS group of secondary GPS satellites. The area covered by the Banhos-Azinhaga ground magnetic survey is shown in Figure 7-2. The Total Magnetic Intensity (“TMI”) map resulting from this survey is shown in Figure 7-7.

Figure 7-2: Location of Banhos-Azinhaga Area Covered with Ground Magnetic Survey, NW of Casas Novas

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Stream Sediment Surveys Two prospective areas were covered by stream sediment surveying, with average densities of around 1 sample/sq.km, comprising the collection from each sample site of pairs of samples comprising: (1) one large volume sample for panning in order to obtain a heavy mineral concentrate for gold colour counting; (2) a smaller geochemical sample for Au and multi- element ICP analysis. The stream sediment sampling and panning work, as well as the examination of the pan concentrates, were carried out by Colt’s own field personnel. Malaca – Nogueirinha Zone This zone, extending along the prospective belt of the Monfurado formation for 7 km to the southeast of the Monfurado deposit, was selected for sampling due to the local scarcity of data in the historical geochemical coverage. A total of 27 locations were sampled (pairs of geochemical + pan concentrate samples) along streams draining the outcrop of the Monfurado formation.

NW Extension of Boa Fé Shear Corridor After the confirmation, obtained from the aeromagnetic survey, of the continuation of the Boa Fé shear zone for a further 22 km NW beyond the Banhos deposit, and since the historical geochemical coverage of this area was considered as unsatisfactory, it was decided to cover it with a new stream sediment survey. A total of 116 pairs of samples (geochemical + pan concentrate) were taken from streams draining the geologic units adjacent at both sides of the Boa Fé shear zone extension.

Soil Geochemical Surveys

Malaca – Nogueirinha Grid In light of the prospective interest of the Monfurado Cambrian belt, and following-up the stream sediment survey, a soil geochemical survey was also carried out there, covering a ca. 6.3 km strike length at the Malaca-Nogueirinha zone (SW of the Monfurado deposit). This comprised twenty-one 300 m spaced, NE-SW orientated sampling traverses, varying from 1.1 km to 2.1 km in extension (in order to cover the whole width of the Monfurado outcrop as well as enclosing units both at north and south), with sampling sites spaced 25 m along each traverse. A total of 1,727 soil samples were taken from this wide-spaced grid, and analysed for Au and multi-element ICP.

Carvalhal – Fonte Santa Grid This area along the Boa Fé shear zone NW of the Banhos deposit was selected on the basis of favourable geologic and structural setting, as well as positive regional geochemical and geophysical indications. A total of 1,262 soil samples were taken from a 50 m x 50 m square grid, which were analysed for geochemical Au and multi-element ICP analysis.

Grou Grid High gold yields analysed in grab samples, both from historical data and recent Colt work, along with the favourable geologic and structural setting and a lack of multi-element geochemistry, led to select this area for detail soil sampling. The area was covered with a 50 m x 50 m square grid, from which a total of 470 soil samples were taken and analysed for geochemical Au and multi-element ICP analysis.

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Torre da Gadanha Traverses Two NE-SW trending, 100 m separated soil traverses were sampled across the Torre da Gadanha target, comprising a total of 163 soil samples.

Hammer Prospecting and Rock Sampling Due to the lack of overburden and thin development of the soil cover “hammer prospecting” has historically been a successful method for finding outcropping or sub-cropping gold mineralization throughout the Boa Fé and Montemor concession areas, provided that it is carried out by experienced geologists or prospectors. This work was focussed on selected zones or individual targets, based on several criteria, which included favourable geologic and structural setting, historical mineral occurrence data, regional or detail geochemical data, the airborne magnetic/radiometric data, etc. This work was extended mostly through the central and western zones of the Montemor concession, with much lesser work done within the Boa Fé EML. It was concentrated in particular in the following targets. In the Boa Fé EML:

• the Fonte Santa Au-As anomalous area, a couple of kilometres to the NW of the Banhos deposit; • the Banhos-North large As anomaly in soils, within 1 km north of the Banhos deposit; and • the Azinhaga Au-As anomaly in soils, between the Banhos and Casas Novas deposits. In the Montemor concession:

• the belt of the Monfurado formation, including the Monfurado gold deposit, the Malaca- Nogueirinha zone at SE, and the Regadia-Gamela zone at NW; • the outcrop of the “Safira orthogneiss”, including the occurrences of Safira, Gouveia, Mourel-North, Regadia-North; • the southern belt of the low metamorphosed Escoural formation, including Agua-todo-ano, Mourel, Torre da Gadanha, etc.; • the area of the Grou sheared and sericitized leucocratic granite, towards the western limit of the Montemor concession. During this work a total of 276 rock samples were taken from either outcrop or float (sub-crop) from throughout the Montemor area for verification analysis (Au assay plus multi-element ICP analysis).

Trenching and Channel Sampling Trenching and channel sampling work at Boa Fé EML were carried out at the following two sites, from NW to SE:

• Banhos-North: 2 trenches were excavated and channel sampled, totalling 101.5 m in length, 82 channel samples taken and analysed; • Chaminé-Ligeiro gap: 9 trenches, totalling 1,064 m in length were excavated, from which a total of 562 channel samples were taken and analysed; and • Vacas Gap: one 171 m long trench was excavated at the Vacas gap between the Covas and Caras gold deposits, 92 channel samples were taken for analysis. Trenching and channel sampling work were carried out at the following exploration targets within Montemor concession, from NW to SE:

• Mourel-North: 3 trenches excavated for a total length of 230 m, from which 160 channel samples were taken and analysed;

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• Mourel: 7 trenches excavated for a total length of 642.5 m, from which 448 channel samples were taken and analysed; • Água-todo-ano: 1 single trench excavated, 25 m long, 15 channel samples taken and analysed; • Regadia: 1 single trench excavated, 41 m long, 28 channel samples taken and analysed; • Monfurado: 7 trenches were excavated with a total length of 377.5 m, from which 204 channel samples were taken and analysed; and • Malaca: 5 trenches excavated totalling 323 m in length, from which a total of 170 channel samples were taken for analysis. Trench excavation has been done by a local back-hoe excavator contractor under direction and supervision by Colt’s personnel; whereas trench cleaning, mapping and sampling has been done by Colt’s own field personnel.

Exploration Drilling Apart from the mineral deposit evaluation diamond drilling, which has been extensively carried in the Boa Fé EML (described in detail in Section 8 below), exploration diamond drilling has been carried out so far on the following targets:

In the Boa Fé EML: • Banhos-North: 6 holes drilled totalling 670.0 m in length, 608 core samples cut and analysed; and • Ligeiro-South: 2 holes drilled totalling 264.35 m in length, 221 core samples cut and analysed.

In the Montemor concession: • Mourel-North: 1 hole drilled inclined -45º to SW, 61.8 m in length, 47 core samples cut and analysed; • Mourel: 2 holes drilled, both inclined -45º to SW, totalling 219.4 m in length, 179 core samples cut and analysed; and • Monfurado: 12 holes drilled totalling 1,305.8 m in length, including eleven vertical and one inclined -60º; a total of 1,165 core samples cut and analysed. 7.1.6 Procedures and Parameters Guidelines set out in Colt’s standard operational procedures revised March 2012 were used by the field geologists. This set of guidelines governs all aspects of its field programs from sampling methodology through to how it processes its data. This is managed on 3 levels:

• Database Management; • Organizational Management; and • Operational Management. Drill pads were levelled and prepared using a CAT D6 and JCB3X to dig sump pits for circulation of water. Collars were marked with a stake and flagging tape with 2 to 3 more pickets all aligned along the azimuth of the proposed hole for inclined holes. The azimuth was sighted using a Brunton compass or Silva TM SurveyMaster and fined-tuned by the geologist during set up of the rig. Twin holes from Colt’s validation program were collared within 5 m of the conjugate historic hole. Once the rig was set up a 20 m2 zone was flagged off using danger tape and the site designated an industrial zone according to CE standards. Drill core was delivered from the core barrel to a 3 m metal v-tray at the end of each run and the core transferred to a wooden core box by the geologist. A daily check on the condition of

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the rig and support vehicles was made and recorded according to the H&S policy. Driller sheets in duplicate were collated from the previous day’s shift and the drillers’ records (stick up books) checked so as to correlate with the Progress Log of Drilling (PLOD). Regular checks in the field were made by geologists to ensure core boxes were correctly labelled and v-trays washed to prevent cross-contamination. On completion of the hole and downhole survey the collar was capped with a 0.5 m2 cement plug with the borehole stamped with its ID number. Processing of drill core was carried out at Colt’s compound in Santiago do Escoural, according to the flowsheet shown in Figure 7-3 where applicable.

Figure 7-3: Conceptual Flowsheet for Logging of Diamond Core

Sample intervals were nominally one meter each with sample lengths adjusted to break at lithological boundaries from a minimum of 0.5 m to a maximum of 2.0 m in visually barren intervals. The entire length of the drillhole was sampled. For the twin holes, samples were taken as close as possible to the original sample interval from the historic hole, adjusted to variations in lithological boundaries. The core was marked for sampling down the centre line of the core intersecting the axial trough of mineralization. Core was racked in Santiago do Escoural, and bagged samples sent by courier for the laboratory sample preparation facility. Data entry and capture was made on Excel spreadsheets, with information summarized at the end of the week. Data was transferred to Colt’s main office at Beloura from site for further processing.

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7.2 Significant Results and Interpretation The results obtained from the exploration work carried out until the end of February 2013 at the Boa Fé and Montemor concessions are summarized as follows: 7.2.1 Geophysical

Airborne magnetic and radiometric survey A helicopter-borne magnetic and radiometric survey was conducted by SkyTEM Surveys ApS, Denmark in cooperation with INAER Helicopter Portugal during the period of May 16, 2012 to May 27, 2012 on behalf of International Geophysical Technology SL, Spain. The survey was flown over the Client’s exploration and experimental mining licensed areas. The purpose of acquiring high resolution magnetic data was to map the geophysical characteristics of the geology and especially the magnetic anomalies and concentrations of natural radioactive elements (K, Th, U) in an effort to provide an insight into geologic settings and distinguish geological units and alterations associated with mineralizing systems in the survey area. Flight lines were orientated generally in an NE-SW direction, at a nominal spacing of 100 m for traverse lines and 1,000 m for control lines oriented generally in NW-SE direction, flown at a nominal survey height for the magnetic sensor of 30 m above ground level. A total of 2,951.0 line km of data were acquired (Figure 7-4).

Figure 7-4: Final Air Borne Survey The results of the total magnetic intensity (“TMI”) survey (Figure 7-5) shows the tectonic complexity of the area, with a large number of important faults, some of them associated with important horizontal displacements. It is also possible to visualise the location of the Boa Fé shear zone, materialised as the dark blue band towards the NW edge of the survey area, following the contact between the metasedimentary units and the high metamorphic grade terrains to the NW. Figure 7-6 shows the location of the most important gold deposits/anomalies within the Boa

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Fé EML license in relation with the total count survey. Their locations can be seen to be in close relation with medium intensity anomalies (orange-red) bordering a radiation area (dark blue) within the Boa Fé shear zone. Further detail of the total magnetic intensity and total count survey are shown Appendix B.

Figure 7-5: Total Magnetic Survey

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Figure 7-6: Total Count Survey The ongoing assessment of these results and their applications on the exploration program at Montemor and Boa Fé has thus far:

• Indicated an extension of the Boa Fé shear corridor for another 17 km to the NW of the last known Au-As anomaly/mineral occurrence (Carrascal), thus turning this area into gold prospective ground; • Confirmed the location of other, previously interpreted, parallel shear corridors which also host gold mineralization; • Helped in detailing and correcting the boundaries of some units in the compilation geologic map, in particular with regards to gold prospective units or lithologies; • Confirmed some, and revealed new cross-cutting, oblique structures (shears, faults or major fractures) as well as flexures in the shear corridors, which are now taken into consideration in the focus of exploration as they may control and/or displace gold mineralization; and

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• Led to identify a number of dipole magnetic anomalies throughout the survey area, interpreted as resulting of presence of concentrations of strongly magnetic minerals (magnetite and pyrrhotite), which warrant detail investigation since two such dipole magnetic anomalies are located near to the Banhos and Monfurado gold deposits.

Banhos-Azinhaga Ground Magnetic Survey While the results of this survey are still under assessment, a preliminary interpretation already allowed to improving the detail of the main structural features in the Banhos-Azinhaga zone, which may control mineralization. These include the Boa Fé shear zone and some cross cutting fault zones, which are well evidenced by this survey. The survey has also confirmed the presence of some, high intensity anomalies (Figure 7-7) which are most likely caused by concentrations of strongly magnetic minerals, such as magnetite and pyrrhotite.

Figure 7-7: Total Magnetic Intensity Map of Banhos-Azinhaga Ground Magnetic Survey

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7.2.2 Geochemical

Pilot Soil Geochemical Traverses The results obtained from this orientation work were assessed with the aid of multivariate analysis mathematical methods, in order to try and identify indicator elements for geochemical exploration for gold deposits in the several distinct geologic settings of Boa Fé and Montemor. This assessment led to the conclusion that the best pathfinder to gold mineralization is the soil contents in gold itself. But two main elements are also good pathfinders for gold deposits through soil geochemistry in most cases, namely arsenic and bismuth. This was verified by the soil traverses done across the deposits of Banhos, Braços, Casas Novas and Chaminé. However, at the Monfurado deposit, which is located at a distinct shear corridor and in a low metamorphic grade area, no correlation was found between either of these two elements and gold. Here, the only element apparently correlated with gold in soils is tellurium.

Stream Sediment Surveys

Malaca-Nogueirinha Zone Of the 27 pan concentrate samples taken from the Malaca-Nogueirinha survey, gold colours were seen in a total of 15; of which 4 have a number of colours considered as anomalous. Based on both the pan-concentrate colour counting and the analytical results for Au and well some likely associated elements, a total of 10 anomalous catchments were selected for follow-up investigation through hammer prospecting, rock sampling and soil geochemistry (Table 7-1).

Table 7-1: Anomalous Catchments Selected for Follow-up from the Malaca- Nogueirinha Stream Sediment Survey Gold Other anomalous Sample ID X Y Au (ppb) As (ppm) colours elements MSS-1001 574368 4266374 5 4,4 13,05 Ag, Hg MSS-1002 574460 4266425 0 6,7 30,10 Sb, Te, W MSS-1004 575377 4266463 0 5,4 14,00 W MSS-1015 577532 4265109 0 7,9 13,50

MSS-1016 577535 4265099 2 10,9 22,20 Hg MSS-1020 572646 4267702 3 18,3 17,00 Mo MSS-1021 573108 4267531 4 7,3 120,00

MSS-1022 573051 4267488 5 30,7 50,30 Mo, Te MSS-1023 573209 4267428 6 9,8 46,10

MSS-1024 573214 4267157 3 5,1 45,70 Cu, Mo, Zn

NW Extension of Boa Fé Shear Corridor Of the 116 stream catchments sampled during this stream sediment survey, a total of 20 anomalous catchments were selected for follow-up, based on either the gold colour counts on the pan concentrates and/or the gold and multielement (particularly arsenic) analytical results (Table 7-2). Follow-up investigation of these anomalous catchments has been proceeded through prospecting and rock sampling, and locally soil geochemistry.

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Table 7-2: Anomalous Catchments Selected for Follow-up from the Stream Sediment Survey covering the NW Extension of the Boa Fé Shear Zone Gold Other anomalous Sample ID X Y Au (ppb) As (ppm) colours elements MSS-1028 572064 4270680 13 1,7 53,60 W MSS-1029 572105 4270933 2 10,2 257,00 Hg, Mo, W MSS-1030 572161 4271137 1 0,1 122,00 MSS-1031 572324 4271022 16 0,8 136,50 W MSS-1032 572495 4270936 1 15,9 90,80 MSS-1046 570242 4271645 1 6,0 4,05 Bi, Cu, W MSS-1065 563086 4274714 0 10,1 13,20 MSS-1069 559810 4275994 0 6,9 16,60 MSS-1071 564955 4275963 4 4,4 16,65 Mo, W MSS-1074 564778 4276335 1 5,8 12,10 Mo, Pb, Zn MSS-1077 562071 4277669 3 32,8 125,00 Mo MSS-1091 556568 4275035 0 18,9 14,80 Cu MSS-1094 555423 4274928 1 6,9 43,00 Hg, Pb, Zn MSS-1095 554968 4275201 1 5,2 65,20 Cu, Sb MSS-1096 554316 4275496 2 14,0 16,05 Sb MSS-1100 553812 4275637 1 2,4 54,80 Bi, Sb MSS-1104 559079 4274251 0 32,9 14,80 Bi, Cu, W MSS-1109 570829 4271810 3 7,4 79,80 MSS-1122 565872 4274615 4 7,7 26,50 Tl, Zn MSS-1139 564289 4276331 5 3,6 11,90 Mo, Pb, Zn

Soil Geochemical Surveys

Malaca – Nogueirinha Grid The soil geochemical results from this wide spaced grid indicated:

• Several low-grade formational anomalies of As and Bi along the whole grid area; and • One Au anomaly located towards the NW end of the grid, which does not have correlated As or Bi values; this corresponds with the area surrounding the previously known Malaca prospect, already under investigation by Colt. However, since the traverses of this grid are very widely spaced (300m), it is considered that some parts of the grid merit further, infill soil geochemical sampling.

Figure 7-8: Carvalhal – Fonte Santa Soil Grid with Modelled Results of Au (left) and Bi (right)

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Carvalhal – Fonte Santa Grid The results obtained from this soil geochemical grid indicated four significant Au anomalies (though with weak Au contents in soils), two at Carvalhal in the NW and another two at Fonte Santa in the SE; plus a number of single point anomalies (Figure 7-8). The element Bi shows anomalies correlated with those of Au; whereas element As is only partly correlated with Au in the NW part of the grid (Carvalhal), but essentially devoid in the SE part (Fonte Santa). Follow-up investigation of these anomalies has already been started through geologic reconnaissance, prospecting and rock sampling; trenching is planned.

Grou Grid The analytical results for 470 soil samples taken from the Grou geochemical grid indicate significant Au anomalies in soils (Figure 7-9), locally with associated anomalous values of As; whereas Sb anomalous values have been found, but are not directly correlated with gold. Follow-up investigation of these anomalies was started through geologic mapping, prospecting and rock sampling; further investigation by trenching is planned.

Figure 7-9: Grou Soil Grid Showing Modelled Results of Au

Torre da Gadanha Traverses The analytical results received for the 163 soil samples taken from the two traverses done across this target did not indicate any significant anomaly, hence no further work is planned for this location.

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7.2.3 Prospecting

Hammer Prospecting and Rock Sampling This work led to the discovery of potential gold mineralization at a number of locations in outcrop or from float (sub-crop), of which a total of 276 rock samples (mostly grab) were taken for verification, through gold assay and multi-element ICP analysis. From the analytical results received, 129 of these samples (47% of total) indicate gold contents equal or in excess of 0.1g/t Au, of which 65 (24% of total) show gold equal or in excess of 1g/t Au, up to a maximum of 90.8g/t Au. A selection of the best results obtained from Boa Fé EML is listed in Table 7-3, and of the best results from the Montemor concession on Table 7-4 .

Table 7-3: Selected Rock Sample Results from the Boa Fé EML Field ID Prospect Easting Northing Description Occurrence Au (g/t) JG-3009 Fonte Santa 574538 4269633 quartz vein with pyrite and arsenopyrite Float 1.93 PA-4040 Banhos-North 575441 4269097 semi-massive arsenopyrite Float 4.81 felsic schist with aspy veins and quartz PM-5024 Azinhaga 576718 4267533 Outcrop 2.66 with aspy PM-5025 Azinhaga 576805 4267473 felsic schist with aspy veins Outcrop 2.79 PM-5029 Azinhaga 577085 4267327 quartz with aspy and scorodite Float 5.12

The fact that there are less samples and lower gold contents from the Boa Fé EML is simply a result from the fact that the large majority of prospecting and rock sampling was carried out at the Montemor concession, with work at Boa Fé being restricted to a few satellite prospects with regards to the known gold deposits.

Table 7-4: Selected Rock Sample Results from the Montemor Concession Au Field ID Prospect Easting Northing Description Occurrence (g/t) Leptite w.solution cavities, layered JG-3024 Mourel-N 564761 4272134 float 16.55 dissem.aspy & scor. JG-3025 Gamela 566900 4271112 Tourmalinite with py, gossan-FeOx outcrop 16.80 Brecciated tourmalinite with py, high Si, JG-3026 Gamela 566864 4271143 sub-crop 67.70 FeOx, cavities JG-3044 Gamela 566922 4271078 Brecciated tourmalinite, silicified, sulphides sub-crop 44.10 JG-3060 Regadia 565524 4271710 Leptite with tourmaline veins, locally oxidized sub-crop 7.18 Breccia tourmalinite, highly silicified, with JG-3063 Regadia 565696 4271394 sub-crop 57.40 felsic clasts JG-3065 Regadia 565704 4271332 Breccia tourmalinite with felsic clasts sub-crop 14.25 JG-3093 Grou 554619 4271755 Massive aspy and possible Sb float 29.80 JG-3094 Grou 554589 4271783 Massive aspy and possible Sb sub-crop 8.89 JG-3097 Safira 559664 4274191 Breccia with abundant malachite float 12.55 Gossanous breccia w.abund. limonite & JG-3098 Safira 559719 4274195 float 6.11 malachite JG-3099 Grou 554545 4272053 Silicified breccia with abundant aspy and py float 90.80 Massive aspy and scorodite in gneissic JG-3124 Regadia-N 566367 4271719 float 5.10 granite JG-3133 Gouveia 563188 4272917 Gneissic granite with aspy and scorodite sub-crop 16.30 PA-4044 Safira 559663 4274195 Gossan with malachite and azurite float 18.90 PA-4048 Grou 554669 4271772 Felsic rock with Sb, aspy and quartz float 30.70 PA-4050 Grou 554523 4272065 Granitic rock with aspy and Sb float 9.48 PM-5006 Carvalhal 570939 4271736 Felsic rock with aspy and scorodite sub-crop 8.60 PM-5012 Grou 554746 4271992 Quartz/Felsic rock with aspy outcrop 13.35 Contact zone felsic rock w.qz, aspy, py & PM-5015 Freiras 574322 4268056 float 17.10 epid Porous gossan with Fe oxides and RM-1020 Monfurado-S 571022 4268743 float 6.57 hydroxides

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Trenching and Channel Sampling

Boa Fé EML One of the trenches excavated at the Banhos-North arsenic anomaly in soils intersected narrow, low grade gold mineralization assaying 1.32 g/t Au over 1.0 m; whereas the other trench had a best sample of only 0.12 g/t Au over 1.0 m. Of the 9 trenches excavated at the Chaminé-Ligeiro gap, all but one indicated the presence of low grade gold mineralization (>0.1 g/t Au) with 3 of these with Au>1 g/t (Table 7-5).

Table 7-5: Selected trench results from the Chaminé-Ligeiro gap (Boa Fé EML) Trench # Significant Sample Intervals BFLGT-12-001 0.63 g/t Au over 6.50 m, incl. 1.21 g/t Au over 2.0 m BFLGT-12-004 1.24 g/t Au over 2.0 m BFLGT-12-009 1.21 g/t Au over 2.5 m

The channel samples taken from the twin trench excavated at the Vacas gap (between Covas and Caras deposits) produced scarce low gold values, with only 3 samples above 0.1 g/t Au and a highest value of 0.24 g/t Au. The best mineralised section revealed 0.19 g/t Au over 2.9 m. Therefore, the significant mineralization reported from the historical trench at this location could not be reproduced.

Montemor concession Two of the three trenches excavated at Mourel-North have exposed gold mineralization hosted by arsenopyrite veining and breccias which cut through the “Safira orthogneiss” country rock (Table 7-6).

Table 7-6: Best trench results from Mourel-North (Montemor concession) Trench # Significant Sample Intervals MOMRT-12-003 0.37g/t Au over 15.2m incl. 1.20 g/t Au over 2.0 m MOMRT-12-007 0.94g/t Au over 12.7m incl. 3.78 g/t Au over 2.8 m

At Água-todo-ano, the single, 25 m long trench excavated indicated a best sample assaying only 0.13 g/t Au over 1.20 m. Six of the seven trenches excavated at Mourel exposed low-grade gold mineralization, in some cases over wide intervals, disseminated in deeply sheared, graphitic and siliceous mylonitic schists, the best results being listed in Table 7-7.

Table 7-7: Best trench results from Mourel (Montemor concession) Trench # Significant Sample Intervals MOMRT-12-001 0.31g/t Au over 6.0m incl. 0.79 g/t Au over 2.0 m MOMRT-12-004 0.71g/t Au over 15.4m incl. 0.98 g/t Au over 8.0 m MOMRT-12-005 0.38g/t Au over 18.0m incl. 1.05 g/t Au over 5.0 m MOMRT-12-006 1.00g/t Au over 6.9m incl. 5.45 g/t Au over 1.0 m

At Regadia, the single, 41 m long trench excavated indicated a best sample assaying 0.59 g/t Au over 0.50 m.

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The channel sampling results for all seven trenches excavated at Monfurado indicated low grade gold mineralization, often over wide intervals, hosted by either felsic meta-volcanics or calcsilicate rocks of the Monfurado Cambrian formation. A selection of the best trench results is reproduced in Table 7-8.

Table 7-8: Best trench results from Monfurado (Montemor concession) Trench # Significant Sample Intervals MOMFT-12-002 0.51 g/t Au over 9.4 m MOMFT-12-003 0.55 g/t Au over 21.5 m incl. 1.73 g/t Au over 5.5 m MOMFT-12-004 0.24 g/t Au over 10.0 m MOMFT-12-005 0.51 g/t Au over 31.0 m incl. 1.27 g/t Au over 5.0 m MOMFT-12-006 0.54 g/t Au over 11.3 m incl. 1.55 g/t Au over 2.0 m

At Malaca, the channel sample results indicate the presence of low-grade gold mineralization in all five trenches excavated, hosted by sheared schistose rocks of the Escoural formation near to the contact with amphibolites of the Monfurado formation. A selection of channel sample results is reproduced in Table 7-9.

Table 7-9: Best trench results from Malaca (Montemor concession) Trench # Significant Sample Intervals MOMAT-12-001 1.25 g/t Au over 7.7 m incl. 1.55 g/t Au over 4.7 m MOMAT-12-003 0.43 g/t Au over 7.4 m incl. 0.93 g/t Au over 2.0 m MOMAT-12-004 0.45 g/t Au over 14.0 m incl. 1.66 g/t Au over 1.4 m MOMAT-12-005 0.63 g/t Au over 4.7 m incl. 2.42 g/t Au over 0.9 m

Exploration Drilling

Boa Fé EML Of the six diamond drill holes completed at the Banhos-North arsenic anomaly, two are totally barren, whereas the other four intersected low gold grades in the 0.1-0.5 g/t Au range, over narrow intervals of 1 m to 2 m. These drilling results, further to the trench results described above, indicate that besides the presence of arsenic mineralization hosted by schistose rocks of the same setting as the Casas Novas deposit, this mineralization is not accompanied but very weakly by gold. No further exploration work is therefore planned for the Banhos-North arsenic anomaly. One of the two holes drilled at Ligeiro-South (in the gap between Ligeiro and Caras deposits) intersected 2 separated gold mineralised intervals, namely 4.19 g/t Au over 1.00 m, and 2.03 g/t Au over 1.45 m, with 20 m of barren schist between. Whereas the second hole did not intersect more than 0.23 g/t Au over 1.00 m.

Montemor concession The single hole drilled at Mourel-North, inclined -45º underneath the best trench, confirmed a depth continuation of the gold contents yielded by arsenopyrite vein and breccia mineralization within the “Safira orthogneiss” country rock. The best interval in this drill hole averaged 3.02 g/t Au over 1.65 m, at depth interval 20.20 m to 21.85 m. The two holes drilled at Mourel, underneath the best trenches, confirmed a depth extension of the gold mineralization exposed by the latter, however with much lower grades and over narrower widths. The best of these two holes intersected 0.42 g/t Au over 6.07 m, including 1.13 g/t Au over 2.07 m.

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Gold mineralization was intersected over significant widths by all holes drilled at Monfurado, which is either hosted by the felsic metavolcanic unit or the calcsilicate and carbonate unit underneath it. A selection of the best drill intersections is shown in Table 7-10.

Table 7-10: Best drill intersections at Monfurado (Montemor concession) Hole # Significant Sample Intervals MOMF-12-004 3.13 g/t Au over 13.20 m incl. 9.82 g/t Au over 3.76 m MOMF-12-005 2.80 g/t Au over 10.08 m incl. 12.83 g/t Au over 1.68 m MOMF-12-006 4.70 g/t Au over 1.32 m MOMF-12-007 1.07 g/t Au over 16.63 m incl. 10.4 g/t Au over 0.96 m MOMF-12-011 1.59 g/t Au over 4.86 m incl. 2.49 g/t Au over 2.85 m

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8 DRILLING

8.1 Summary of Previous Drilling Previous drilling at the Boa Fé/Montemor Projects occurred in a series of phases:

• Riofinex and BP Minerais drilled 235 diamond drill holes totalling 23,971.2 m from 1984 to 1990. These companies dug a series of 382 trenches totalling 23,686.75 m across the various Iodes to test geochemical anomalies; • ln the mid 1990's, the Portuglobal-MRI joint-venture drilled 47 diamond drill holes totalling 3,161.6 m, 24 RAB holes totalling 387.0 m and excavated 72 trenches for a total of 3,826.0 m; and • Iberian Resources drilled 34 diamond drill holes totalling 6,283.6 m, 10 holes commenced with RC tops and completed with diamond tails totalling 2,028.7 m, 153 RC drill holes totalling 10,147.0 m, and 653 open hole percussion holes totalling 15,490.2 m and 48 trenches totalling 3,703.8 m between 2005 and 2008. A summary of all holes and trenches at the Boa Fé/Montemor Projects is provided in Table 8-1. Trenching crosses the mineralised horizon at around 90° to the strike of the mineralization on the surface. The majority of the drill holes cross the mineralization at around 60° to the dip. Not all drill holes and trenches in tersected mineralization.

Table 8-1: Summary of Previous Drilling and Trenching at the Boa Fé/Montemor Gold Projects Sample Type Number Meters Diamond Drill Holes 316 33,414.5 Trench 502 31,216.6 Reverse Circulation Drill Holes (RC) 153 10,147.0 Open Hole Percussion Holes 653 15,490.2 Rotary Air Blast Holes (RAB) 24 387.0 Other 10 2,028.7 Total 1,658 92,683.9

8.2 Summary of Drilling by Colt Resources Since November 2011 Colt has drilled a total of 192 diamond drill holes in the Boa Fé/Montemor Projects, 177 in the Boa Fé EML and 15 in the Montemor Exploration Concession (“EC”). The drilling campaign includes evaluation holes; twin validation holes; metallurgical holes, geotechnical holes and some additional prospecting drill holes. A summary of these holes drilled up to November 2012 is provided in Table 8-2, Table 8-3 and Table 8-4.

Table 8-2: Summary of Drilling and Trenching by Colt Resources within the Boa Fé EML Sample Type Number Meters Diamond Drill Holes Evaluation 138 17,686.20 Diamond Drill Holes Validation 20 2,391.50 Diamond Drill Holes Metallurgical 4 262.35 Diamond Drill Holes Geotecnical 15 406.60 Trench 12 1,305.60 Total 189 22,052.25

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Table 8-3: Summary of Drilling and Trenching by Colt Resources within the Montemor EC Sample Type Number Meters Diamond Drill Holes Evaluation 12 1,306.51 Diamond Drill Holes Prospecting 3 281.21 Trench 24 1,637.20 Total 39 3,224.51

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Table 8-4: Summary of validation holes drilled by Colt Resources Collar Coordinates (m) Orientation Date Date Final Hole ID Deposit Zone Twin Eastings Northings Elevevation Inclination Bearing Started Complete depth (m)

BFCH-11-002 Chaminé 579298.84 4266446.96 282.72 -45 84 2011-11-23 2011-12-05 190.05 CHD-001 BFCH-11-005 Chaminé 579265.20 4266478.38 282.28 -45 85 2011-11-07 2011-12-16 175.70 T096 BFCH-12-004 Chaminé 579241.38 4266532.42 290.76 -54 85 2012-01-11 2012-01-25 254.15 CHRCD-010 BFCH-12-030 Chaminé 579315.11 4266359.31 283.51 -45 84 2012-04-18 2012-05-11 122.34 T047 BFCN-12-001 Casas Novas 578527.01 4266839.62 223.65 -45 30 2012-01-18 2012-02-10 157.55 T147 BFCN-12-002 Casas Novas 578568.62 4266868.84 235.70 -45 30 2012-02-11 2012-02-28 181.20 T136 BFCN-12-003 Casas Novas 578335.88 4266916.44 248.76 -45 30 2012-03-06 2012-03-22 152.60 MHCN-002 BFCN-12-004 Casas Novas 578366.65 4266933.64 243.53 -45 30 2012-03-23 2012-03-31 125.20 T171 BFCN-12-005 Casas Novas 578427.52 4266926.96 238.87 -45 30 2012-05-16 2012-05-24 61.37 MHCN-007 BFBH-12-001 Banhos 574763.27 4269033.08 402.74 -45 60 2012-04-02 2012-04-30 128.95 MH023 BFBH-12-002 Banhos 574827.00 4269019.28 398.77 -45 58 2012-05-01 2012-05-16 110.80 T170 BFBH-12-003 Banhos 574952.77 4268790.40 394.15 -45 44 2012-04-25 2012-05-10 150.75 T218 BFLG-12-001 Ligeiro 579706.61 4265980.20 299.59 -90 2012-01-24 2012-01-30 65.10 LG014

BFLG-12-002a Ligeiro 579705.38 4265963.40 298.09 -90 2012-02-08 2012-02-22 94.30 T052

BFBR-12-001 Braços 580889.17 4260452.25 188.56 -90 2012-03-03 2012-04-11 52.65 MH001

BFBR-12-002 Braços 580927.15 4260404.60 189.25 -90 2012-04-12 2012-04-19 66.75 MH005

BFBR-12-003 Braços 580882.03 4260414.30 187.35 -45 80 2012-05-08 2012-05-16 69.80 T004 BFBR-12-004 Braços 580861.02 4260453.25 189.00 -45 65 2012-05-17 2012-05-24 70.00 T024 BFCO-12-001 Covas 580251.07 4261383.89 208.55 -46 76 2012-05-16 2012-06-05 103.05 Twin of T012 BFCO-12-002 Covas 580200.00 4261177.00 206.00 -63 48 2012-06-07 2012-06-14 59.20 Twin of RC10

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8.3 Type and Extent RiofinEx drillholes were oriented with either Riofinex in-house surveyors (T prefixes) or Compass and GPS (CHD prefixes). Final collar location was similarly either in house surveyors or sub-meter DGPS using contract surveyors GeoGlobal. All Iberian Resources drill collars (including RC but excluding Open Hole) and any surviving historical collars were surveyed using DGPS. Open Holes were surveyed by handheld GPS. Colt Resources collars were set up in the field using a Garmin 60™ hand-held GPS in WGS84 coordinates and captured later using a DGPS. Down-the-hole surveys were taken by Colt using a Reflex™ Gyro Multi-shot CLT at 10m intervals and a Devico Deviflex™ non-magnetic at 4 m intervals. Colt used five different contractors for drilling at Boa Fé using a mixture of conventional and wireline rigs (Figure 8-1). Two rigs were supplied by the state sponsored drilling company, LNEG. A ROLATEC™ RL600 and Atlas Copco Mustang 4F1 were supplied by Geoplano Lda. Texeira Duarte, one of Portugal's largest construction companies, supplied a conventional coring rig and two Christensen CS 14 Rig. The aforementioned contractors are all Portuguese entities, a Spanish contractor was also employed, the CGS – Compañia General de Ingeniería e Sondeos S., who supplied a single Acker rig. During the third quarter of 2012, a Turkish contractor was employed, the Spektra Joetek A.S., who supplied three rigs D150. The quality of recovery was adequate, and the rate of penetration go’s from 5 m to 10 m per shift in the case of LNEG and Geoplano until 25 m per shift in the case of Spektra. Colt’s evaluation and twin holes were either drilled HQ (63.5 mm) or NQ (47.6 mm) diameter between -45º to -90º inclination. The maximum hole depth to date is 505.10 m depth in the southern part of Chaminé deposit. The metallurgical holes were all drilled at HQ diameter. Holes were prefixed according to the following naming convention:

• BFXY-YR-000 • where: BF = Boa Fé XY = 2 letter code for the deposit i.e. 'CH' for Chaminé and 'CN' for Casas Novas YR = 2 digit code for year, i.e., '11' for 2011 and '12' for 2012 000 = sequential id number for the drill hole

Figure 8-1: Location of Colt’s Drillhole collars at Chaminé

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8.4 Procedures Colt's aim for its most recent drilling campaign to the end of November 2012 was to achieve the following:

• Validate 10% of previous drilling used in former resource estimates to ensure that the integrity of data from previous drilling was acceptable and the data as such suitable to be included in the current resource estimate; • To drill different orientations to resolve potential bias in the interpretation of the geological model arising from much of the previous drilling orientated -50 0 to -60 0 north-west at Chaminé, Casas Novas, and Banhos deposits; • To increase confidence in the resource near surface on a 25 m grid pattern and an irregular grid pattern to infill some gap´s in Chaminé and Casas Novas deposits. The grid pattern used in Banhos deposit was initial on a 50 m spaced and later on a 50 m by 100 m, to make the resource amenable to open pit mining and fast-track conversion into open-pittable reserves; and • Start to investigate the possibility of deep mineralization occurrences beneath the known near surface deposits. Guidelines set out in Colt's standard operational procedures revised March 2012 were used by the field geologists. This set of guidelines governs all aspects of its field programs from sampling methodology through to how it processes its data. This is managed on 3 levels:

• Database Management; • Organizational Management; and • Operational Management. Drill pads were levelled and prepared using a TEREX 860sx to dig sump pits for circulation of water. Collars were marked with a stake and flagging tape with 2 to 3 more pickets all aligned along the azimuth of the proposed hole for inclined holes. The azimuth was sighted using a Brunton compass or Silva ™ SurveyMaster and fined-tuned by the geologist during set up of the rig. Twin holes from Colt's validation program were collared within 5 m of the conjugate historic hole. Once the rig was set up a 20 m2 zone was flagged off using danger tape and the site designated an industrial zone according to CE standards. Drill core was delivered from the core barrel to a 3 m metal v-tray at the end of each run and the core transferred to a wooden core box by the geologist. A daily check on the condition of the rig and support vehicles was made and recorded according to the H&S policy. Driller sheets in duplicate were collated from the previous day's shift and the drillers' records (stick up books) checked so as to correlate with the PLOD. Regular checks in the field made by geologists to ensure core boxes were correctly labelled and v-trays washed to prevent cross- contamination. On completion of the hole and downhole survey the collar was capped with a 1 2 /2 m cement plug with the borehole stamped with its ID number. Processing of drill core was carried out at Colt's compound in Escoural according to the flowsheet shown in Figure 7-3 where applicable. Sample intervals were nominally one meter each with sample lengths adjusted to break at lithological boundaries from a minimum of 0.5 m to a maximum of 2.0 m in visually barren intervals. The entire length of the drillhole was sampled. For the twin holes samples were taken as close to the original sample interval from the historic hole as possible adjusted to variations in lithological boundaries. The core was marked for sampling down the centre line of the core intersecting the axial trough of mineralization, and all core was cut using a diamond saw. Core was racked in

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Escoural and bagged samples sent by courier for preparation. Data entry and capture was made on Excel spreadsheets with information collect from paper sheets, this paper sheets summarized the datacollect for every drill hole, trench or work done, then data was transferred to Colt's main office at Beloura, from site, for further processing. 8.5 Interpretation and Relevant Results The historical work conduct on site was made by reputable contractors, using industry standard techniques and procedures, and has defined several zones of anomalous gold mineralization hosted within schistose rocks as disseminations and veins, spatially associated with the Boa Fé Shear zone. The mineralization is interpreted to follow two principal conjugate shear orientations controlled by schistosity, structure and quartz veins. The drillholes are arranged in a variety of orientations with most drilled at an angle to and from the northeast and east. Based on the range of mineralization orientations and drillhole orientations, most of the drill sample lengths do not represent true thickness of mineralization. During the period November 2011 to the end of November 2012 Colt's drilling campaigns conduct a series of drilling programs in most of the know gold deposits. Table 8-5, Table 8-6, Table 8-7, Table 8-8, Table 8-9, and Table 8-10 represent the best significant results from Colt's diamond drilling evaluation programs at Chaminé, Casas Novas, Banhos and Monfurado deposits until end November 2012.

Table 8-5: Significant results from Diamond Drilling at Chaminé deposit Hole_ID Depth From (m) Depth To (m) Interval (m) Au g/t BFCH-11-002 27 43.4 19.4 9.98 BFCH-11-002 54.35 64.2 9.85 11.02 BFCH-11-004 7.85 33.36 25.51 2.93 BFCH-11-005 45.9 75.3 29.4 2.6 BFCH-11-005 56 66.4 10.4 3.86 BFCH-11-007 9.7 20.5 10.9 11.96 BFCH-11-007 10.6 14 3.4 31.07 BFCH-12-001 40.2 45.2 5.1 3.3 BFCH-12-003 20.8 34.3 13.5 4.23 BFCH-12-003 30.8 34.3 3.5 7.71 BFCH-12-004 106.5 120.4 14 1.9 BFCH-12-004 114 118 4 3.76 BFCH-12-006 26.8 34.8 8 1.88 BFCH-12-009 38.8 54.2 15.4 5.28 BFCH-12-009 43.1 46.6 3.5 9.71 BFCH-12-009 50.8 54.2 3.4 9.99 BFCH-12-010 106.5 118.2 11.7 6.78 BFCH-12-010 114.8 118.2 3.4 8.23 BFCH-12-010 128.9 134.4 5.5 2.61 BFCH-12-012 31.5 48 16.5 4.11 BFCH-12-012 43.3 48 4.7 9.71 BFCH-12-013 64.3 69.6 5.3 1.89 BFCH-12-013 95.9 97.1 1.2 1.56 BFCH-12-016 60.5 75.4 15 1.89 BFCH-12-016 60.5 65 4.6 3.05 BFCH-12-017 14.3 18.1 3.8 5.53 BFCH-12-017 16.9 18.1 1.2 11.75 BFCH-12-018 19.2 56.4 37.2 3.75 BFCH-12-018 24.3 32 7.7 12.17 BFCH-12-018 64.5 74.1 9.6 1.36 BFCH-12-019 18 21 3 5.02

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Table 8-6: Significant results from Diamond Drilling at Chaminé deposit (con’t) Hole_ID Depth From (m) Depth To (m) Interval (m) Au g/t BFCH-12-019 31.1 47.1 16 1.62 BFCH-12-019 31.1 32.8 1.7 5.65 BFCH-12-020 30.5 38 7.5 3.37 BFCH-12-020 30.5 32.6 2.1 7.38 BFCH-12-021 6.7 21.2 14.5 6.96 BFCH-12-021 6.7 12.3 5.6 16.96 BFCH-12-021 17.2 21.2 4 2.03 BFCH-12-022 36.3 39.2 2.9 4.81 BFCH-12-023 13.7 37.3 23.6 5.42 BFCH-12-023 29.7 37.3 7.6 11.6 BFCH-12-025 17 43.8 26.8 1.83 BFCH-12-025 17 29.1 12.1 2.58 BFCH-12-026 36 39.4 3.4 3.1 BFCH-12-026 37.7 38.5 0.8 10.85 BFCH-12-027 10.1 51.8 41.7 1.5 BFCH-12-027 43.8 51.8 8.1 4.48 BFCH-12-028 3.7 15.7 12 2.94 BFCH-12-028 5.5 8.5 3 4.19 BFCH-12-028 32.8 41.4 8.7 1.07 BFCH-12-028 40.5 41.4 0.9 6.62 BFCH-12-029 43.4 52.3 9 3.09 BFCH-12-029 45.3 47.9 2.6 10.09 BFCH-12-032 8.63 16.55 7.92 1.35 BFCH-12-032 54.50 59.63 5.13 3.52 BFCH-12-033 46.61 52.05 5.44 4.84 BFCH-12-035 11.05 16.50 5.45 4.72 BFCH-12-036 0.00 15.16 15.16 2.78 BFCH-12-037 24.30 29.40 5.10 6.91 BFCH-12-037 223.10 226.00 2.90 1.73 BFCH-12-037 303.00 317.85 14.85 0.60 BFCH-12-038 211.25 216.80 5.55 0.68 BFCH-12-039 137.87 138.90 1.03 25.60 BFCH-12-039 208.10 222.30 14.20 1.59 BFCH-12-040 54.02 70.00 15.98 1.14 BFCH-12-040 72.00 80.75 8.75 7.13 BFCH-12-040 172.75 176.10 3.35 5.46 BFCH-12-041 36.75 40.50 3.75 9.40 BFCH-12-041 72.30 76.60 4.30 4.33 BFCH-12-041 434.35 456.10 21.75 2.07 BFCH-12-041 451.17 456.10 4.93 4.69

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Table 8-7: Significant results from Diamond Drilling at Casas Novas deposit Hole_ID Depth From (m) Depth To (m) Interval (m) Au g/t BFCN-12-001 57.7 77.3 19.6 4.46 BFCN-12-001 57.7 61.1 3.4 14.92 BFCN-12-002 12.7 17.9 5.2 1.76 BFCN-12-002 43.9 44.9 1 36.6 BFCN-12-003 58.3 70.3 12.1 1.77 BFCN-12-003 80 89.6 9.6 8.4 BFCN-12-003 82.1 84.2 2.2 31.7 BFCN-12-004 24.5 28.2 3.7 2.41 BFCN-12-004 49 51.6 2.6 5.44 BFCN-12-005 10.45 21 10.55 5.99 BFCN-12-005 26.76 32.82 6.06 1.73 BFCN-12-006 62.75 63.84 1.09 1.14 BFCN-12-007 116.65 118.80 2.15 1.76 BFCN-12-008 64.10 68.80 4.70 0.78 BFCN-12-008 83.8 84.95 1.15 1.20 BFCN-12-009 25.30 47.78 22.48 1.00 BFCN-12-009 78.67 88.34 9.67 1.77 BFCN-12-011 30.40 32.80 2.40 1.21 BFCN-12-011 39.75 40.75 1.00 2.11 BFCN-12-013 131.53 136.75 5.22 0.72 BFCN-12-014 19.80 23.27 3.47 13.06 BFCN-12-014 42.70 44.70 2.00 8.14 BFCN-12-015 65.15 70.86 5.71 1.62 BFCN-12-015 74.76 83.35 8.59 1.09 BFCN-12-015 98.95 120.25 21.30 1.19 BFCN-12-016 28.00 28.95 0.95 2.14 BFCN-12-016 38.00 40.70 2.70 0.77 BFCN-12-017 64.86 66.55 1.69 1.24 BFCN-12-020 35.25 38.45 3.20 5.80 BFCN-12-021 66.55 67.45 0.90 2.13 BFCN-12-022 8.60 10.65 2.05 2.33 BFCN-12-022 66.50 68.65 2.15 0.97 BFCN-12-022 80.60 83.30 2.70 0.51 BFCN-12-022 101.90 104.65 2.75 1.10 BFCN-12-023 15.75 22.60 7.70 1.23 BFCN-12-023 68.20 76.35 8.15 1.26 BFCN-12-024 61.90 64.70 2.80 1.64 BFCN-12-026 93.35 102.17 8.82 1.97 BFCN-12-026 106.90 118.15 11.25 1.60 BFCN-12-027 33.65 38.88 5.23 2.27 BFCN-12-028 88.36 93.75 5.39 4.99 BFCN-12-028 120.80 125.55 4.75 3.48

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Table 8-8: Significant results from Diamond Drilling at Banhos deposit Hole_ID Depth From (m) Depth To (m) Interval (m) Au g/t BFBH-12-001 76.5 80.05 3.55 4.63 BFBH-12-002 48.85 58.5 9.65 8.19 BFBH-12-003 71.60 74.90 3.30 1.66 BFBH-12-003 90.00 96.65 6.65 1.45 BFBH-12-004 37.30 38.30 1.00 0.86 BFBH-12-005 16.48 41.75 25.27 1.27 BFBH-12-006 15.00 23.65 8.65 0.65 BFBH-12-007 41.30 45.70 4.40 3.59 BFBH-12-009 129.05 132.00 2.95 5.14 BFBH-12-009 144.80 150.70 5.90 1.02 BFBH-12-010 84.15 87.64 3.49 1.75 BFBH-12-011 47.10 48.55 1.45 6.72 BFBH-12-012 4.80 5.80 1.00 1.49 BFBH-12-013 67.70 76.95 9.25 2.31 BFBH-12-014 63.00 71.30 8.30 0.87 BFBH-12-017 93.45 97.45 4.00 1.15 BFBH-12-020 46.80 52.20 5.40 1.23 BFBH-12-021 77.10 82.60 5.50 1.22 BFBH-12-021 122.80 126.75 3.95 1.62 BFBH-12-022 139.20 141.20 2.00 3.00 BFBH-12-023 3.00 5.00 2.00 5.45 BFBH-12-024 111.95 115.70 3.75 3.24 BFBH-12-024 123.00 137.08 14.08 1.25 BFBH-12-025 134.38 135.58 1.20 2.50 BFBH-12-026 82.00 83.16 1.16 2.48 BFBH-12-027 5.00 25.80 20.80 1.33 BFBH-12-028 6.50 8.70 2.20 0.65 BFBH-12-031 65.40 80.50 15.10 1.05 BFBH-12-033 120.00 125.30 5.30 4.39 BFBH-12-035 34.50 50.50 16.00 0.76 BFBH-12-036 58.00 64.90 6.90 0.45 BFBH-12-037 58.30 62.10 3.80 1.05 BFBH-12-037 140.00 143.00 3.00 3.62 BFBH-12-038 60.40 61.40 1.00 2.08 BFBH-12-039 44.90 46.70 1.80 0.73 BFBH-12-039 97.85 101.45 3.60 0.61 BFBH-12-039 111.90 118.80 6.90 1.54 BFBH-12-040 55.91 60.90 4.99 0.69 BFBH-12-040 65.40 89.50 24.10 0.65 BFBH-12-041 69.50 71.55 2.05 1.30 BFBH-12-042 17.00 24.50 7.50 0.49 BFBH-12-043 62.50 64.16 1.66 1.61 BFBH-12-044 0.80 8.00 7.20 0.40 BFBH-12-045 59.00 66.40 7.40 0.63 BFBH-12-045 74.90 77.55 2.65 0.77 BFBH-12-047 2.07 8.95 6.88 8.39 BFBH-12-047 4.00 7.70 3.70 14.96 BFBH-12-048 29.80 31.50 1.70 33.20 BFBH-12-048 42.90 46.25 3.35 0.49 BFBH-12-050 5.25 9.00 3.75 1.28 BFBH-12-050 18.00 22.95 4.95 2.14 BFBH-12-050 52.85 55.85 3.00 1.06 BFBH-12-051 118.40 122.60 4.20 1.49 BFBH-12-053 129.08 130.15 1.07 0.57

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Table 8-9: Significant results from Diamond Drilling at Banhos deposit (con’t) Hole_ID Depth From (m) Depth To (m) Interval (m) Au g/t BFBH-12-054 28.60 32.30 3.70 0.80 BFBH-12-055 15.60 17.90 2.30 2.58 BFBH-12-056 99.50 101.15 1.65 1.24 BFBH-12-057 194.53 197.20 2.67 0.51 BFBH-12-058 79.20 81.20 2.00 0.99 BFBH-12-059 88.00 100.50 12.50 1.15 BFBH-12-060 152.20 159.80 7.60 2.42 BFBH-12-062 107.33 110.60 3.27 0.98 BFBH-12-063 82.35 84.70 2.35 0.60

Table 8-10: Significant results from Diamond Drilling at Monfurado deposit Hole_ID Depth From (m) Depth To (m) Interval (m) Au g/t MOMF-12-001 15.55 18 2.45 1.33 MOMF-12-002 20.6 25.5 4.9 1.05 MOMF-12-004 42.05 49.1 7.56 5.31 MOMF-12-005 82.44 92.52 10.08 2.8 MOMF-12-006 36.67 37.99 1.32 4.7 MOMF-12-007 106.35 116.50 10.15 1.46 MOMF-12-007 120.73 122.98 2.25 1.16 MOMF-12-008 51.75 53.69 1.94 0.52 MOMF-12-009 42.37 44.28 1.91 0.16 MOMF-12-010 68.38 70.90 2.52 0.53 MOMF-12-011 55.17 56.71 1.54 0.36 MOMF-12-011 83.45 88.31 4.86 1.59

No measurements for true width have been recorded for these drill holes due to the non- tabular nature of the mineralization. The samples are representative of typical grade distribution near surface for gold and arsenic. SRK is of the opinion that the drilling operations conducted by Colt in 2011/2012 and those conducted by predecessor companies during the period 1988-2008 (Riofinex, Portuglobal- MRI and Iberian Resources) were conducted by professionals, such that the RC chips and core were handled, logged and sampled in an acceptable manner by professional geologists, and that the results are suitable for use in resource estimation.

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9 SAMPLE PREPARATION, ANALYSIS AND SECURITY

Sample recovery in RC was generally good, and small or wet samples are noted on sample sheets. Mineralised intercepts from diamond drilling were all in mostly fresh rock with core recovery ranging from 38.1 to 100%. 9.1 Methods 9.1.1 Trench Sampling Trenches were excavated using back hoe excavator with a 60 cm wide bucket to a range depth of 0.5 to 1.5 m. The trenches were sampled by cutting a 2 cm wide channel, using hammer and chisel, between measured marks along a centre line. The trenches were treated as drill holes for the purpose of Resource estimation. The start of each trench was surveyed by Colt surveyors and a centre line marked and surveyed along the line of the trench. 9.1.2 RC Percussion Sampling RC samples were collected by cyclone as 1 m samples and split through a three tier riffle splitter to 1 kg. For all holes drilled from 2005 to 2006 a preliminary 4 m composite sample was taken from the bulk. This sample was then submitted for laboratory analysis. If any composite sample returned greater than 0.1 g/t Au then the four component 1 m samples were submitted for analysis. The practice for RC drilling from early 2007 was to have all 1 m samples submitted individually. 9.1.3 Diamond Core Sampling Diamond drill holes were sampled by half sawing core based on geological intervals and submitting half core for assay. The sample intervals were between 0.5 and 2.0 m. For Colt samples the sampled intervals were sawn down the centre line using a 33 cm diameter diamond saw and placed into plastic sample bags, then secured with plastic cable ties to provide security that samples were not tampered with once sealed. For metallurgical samples one half of the core was retained for testwork and the other half sawn into quarters with one quarter sent for assay and the second quarter retained in the core box for reference. Care was taken to ensure that the quarter sent for assay was cut such so as to be representative of the mineralization and not unduly biased. 9.2 Security Measures The warehouse and storage facility at Escoural is fully alarmed and the compound subject to 24 hr CCTV plus a security guard that verifies and guaranty the integrity of the facilities. Samples bags were sealed with single use plastic cable ties to prevent tampering. Sample batches were transported in 200 kg capacity lockable steel bins secured with a padlock which doubled as storage containers for coarse reject when returned from the laboratory. The wearing of gold rings and bracelets during work on the core was discouraged. Data is housed on Colt’s secure server at Beloura. Access is limited on a need to use basis. Data management is organized on a master-slave basis whereby slave terminals in the field can only update the master with oversight by the field data manager. Updated data for field use is obtained from the master to prevent the master database being overwritten by old data.

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9.3 Sample Preparation During the Riofinex exploration period, trench samples were sent to OMAC Laboratories in Longhrea, Republic of Ireland. Drill samples were analyzed at Anamet Services at Avonmouth, England. Initial analysis for gold was by aqua regia with Atomic Absorption determination, and Fire Assay of any samples greater than 0.5 g/t Au. Fire Assay used 100 g of split sample. At a later stage in the exploration, all samples were fire assayed and from March 1989 all samples underwent preparation at the Riofinex office in Escoural. Samples were weighed, dried, jaw crushed to less than 13 mm and mill rolled to less than 1 mm size before being split to a 500 g sample for transportation. The 500 g pulps were further pulverized at each laboratory to -70 µm before obtaining the final 100 g sample for fire assay. The detection limit was greater than 0.01 ppm. Samples from the Iberian Resources drilling were prepared in a purpose built laboratory at the Iberian Resources office in Escoural. After oven drying and crushing of the entire 1 kg sample from the RC drilling and the whole 1 m split core samples were reduced to a 200 g at less than 2 mm split sample. The 200 g samples were then transported to ALS Chemex, Perth, Australia where further drying of the samples (Quarantine treatment) and are pulverized to >85% passing 70 µm. A 30 g split was then taken for Fire Assay with Atomic absorption determination to 0.01 ppm Au detection limit. In order to test the quality of the Riofinex assays, a number of pulp umpire repeats between OMAC and ALS were conducted for selected intervals on CHD001 and found to be highly comparable with acceptable correlation between laboratories. Similarly duplicates from coarse reject material derived from CHD004 intervals and assayed at ALS on both occasions showed high correlation. Internal blanks, international standards and duplicates that were noted in some of the old reports were employed to ensure accuracy of the Riofinex data. Riofinex repeated 1 in 10 samples to verify assay quality between batches and preparation methods. Iberian Resources also repeated 1 in every 10 samples and used a series of Rocklabs Standards (SE19 and SE15) and blank diamond core (barren flysch overburden from the Aljustrel Mine) to monitor the quality of the determinations by ALS. In addition, ALS uses their own internal QA procedures developed for the Western Australian gold industry. Laboratory results for internal standards and duplicates from ALS in Perth have been obtained, and appear to be of acceptable standard. Samples from the Colt program have been prepared by ALS in Seville, Spain according to the standard preparation scheme outlined in Figure 9-1.

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Primary Duplicate Sample Sample

OVEN DRY, ~12HRS OVEN DRY, ~12HRS

Barren 1/2 CORE Core 1/2 CORE Local SAMPLE Storage SAMPLE Rock

JAW CRUSH TO -2 mm JAW CRUSH TO -2 mm JAW CRUSH TO -2 mm

-2mm SPLIT REJECT -2mm SPLIT BLANK 50/50 TO STORAGE 50/50 MATERIAL

MILL TO -200 mesh MILL TO -200 mesh MILL TO -200 mesh MILL TO -200 mesh

COMMERCIAL -200 mesh -200 mesh REJECT -200 mesh -200 mesh EXCESS LABORATORY 200g 200g -200 mesh TO 200g 200g MASS STANDARD SAMPLE SPLIT SAMPLE SPLIT STORAGE SAMPLE SPLIT SAMPLE SPLIT

5% STANDARDS 5% BLANKS PRIMARY SAMPLES 5% DUPLICATES 5% DUPLICATES 5% DUPLICATES

200g ASSAY 200g ASSAY 200g ASSAY 200g ASSAY 200g ASSAY 200g ASSAY SAMPLE FOR SAMPLE FOR SAMPLE FOR SAMPLE FOR SAMPLE FOR SAMPLE FOR EXPORT EXPORT EXPORT EXPORT EXPORT EXPORT

1 1 15 1 1 1

DHL EXPORT COURIER TO ASSAY LAB (BATCH SIZE = 20)

Figure 9-1: Schematic Representation of an Example Sample Stream for Diamond Drill Core 9.3.1 Laboratories The resulting pulps are shipped by ALS to their laboratory in Romania for gold assay and routine ICP multi-element analysis. Gold analysis for all samples is done via method “Au – AA23” (Au by fire assay and AAS, 30 g nominal sample weight). The detection limit for this method is 5 ppb. For every sample with Au values over 3 ppm, the pulp is re-analysed by method “Au – GRA21” (Au by fire assay and gravimetric finish, 30 g nominal sample weight). The detection range for this method is 0.05 to 1000 ppm. A set of standards and blanks has been inserted by Colt into the drill sample stream on a regular basis in addition to the laboratory’s own internal QA/QC standards and duplicates. External checks on a random 20% of splits of pulps from both OMAC and ALS were analysed by SGS facility in Ankara, Turkey using the same assay methods. No field duplicates of core were taken. 9.4 QA/QC Procedures The drilling, logging and sampling procedures described above combined with good recovery ensure that sample quality of the Boa Fé drilling is very good. The sample length is appropriate to accurately characterize the mineralization and to distinguish any zones internal to the mineralization, which may have anomalously high or low-grades.

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Colt has standard procedures for Quality Control sampling with analyses carried out by ALS Minerals certified laboratory in Romania. The Quality Assurance (“QA”) program aims to monitor the quality and integrity of the laboratory assay program and how it is performing. This is carried out through:

• The laboratory carrying out it its own internal checks on duplicate pulps ground to -200#; • An external laboratory carrying out checks on duplicate pulps, coarse reject or field duplicates (4 to 5% of samples of variable grade) using the same technique; • Insertion by Colt geologists of blanks to check for contamination during sample preparation (2 to 4% of samples); and • Insertion by Colt geologists of standards of known grade and mineralogy to check calibration of equipment and drift (2 to 4% of samples). The procedures include the introduction of standard reference materials (SRM) and blanks. Two control samples (one blank and one standard) are inserted randomly by Colt´s geologist during every 50 sample interval. Check samples (pulps) are submitted to a secondary certified laboratory to determine whether there is assay bias at the primary sampling. The data generated by these procedures is compiled and statistically analyzed by appropriate techniques. The validation of historic databases generated from previous sampling campaigns is achieved through twinning historic holes with new holes (within 5 m of original collar) for 10% of historic holes depending on whether there is good correlation between datasets. Correlation is carried out between twins through physically comparing distribution of data down the hole and also regression analysis to see if assays are statistically comparable. Paired data shows reasonable correlation at a variance of 2 standard deviations. Patterns in statistical distribution comparing with lithology and mineralogy are useful in being able to isolate rogue data where, as is normally the case, historic sample no longer exists to be re-assayed. It may be possible to selectively cut out rogue samples if there is enough evidence rather than disregard an entire dataset. 9.4.1 Standard Reference Materials The previous NI 43-101, from April 2013, has eight different samples of Standard Reference Materials (“SRM”) have been used for the Boa Fé – Montemor Project. These were obtained direct from WCM Minerals in Canada and are inserted at random by the Client’s geologist into the sample stream 1 per every 50 samples. The gold standards have a siliceous matrix and are prepared from a gold skarn, which is blended with a granitic rock and homogenized before it is sampled for assaying to provide a wider range of values. The gold skarn is derived from the Hedley area of British Columbia and the blank standard is produced from a granitic rock from the Squamish area near Vancouver. The standars ID, analysis time and number of samples used are shown in Table 9-1 and Table 9-2. Updates per deposit are carried out on a weekly basis and for easy presentation statistics from standards are presented per SRM from each deposit by different colours.

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Table 9-1: Used standards ID, period of time analysed and number of samples used (Chaminé, Casas Novas and Banhos)

Chaminé Casas Novas Banhos Standards Timeline # samples Timeline # samples Timeline # samples PM-413 24/12/2012 23/03/2012 9 15/03/2012 30/03/2012 3 PM-435 27/03/2012 20/06/2012 5 11/07/2012 14/07/2012 2 24/05/2012 01/07/2012 3 PM-440 23/03/2012 20/06/2012 9 30/03/2012 12/07/2012 5 PM-443 18/01/2012 09/04/2012 11 15/03/2012 30/03/2012 2 27/11/2012 27/11/2012 1 PM-445 18/01/2012 15/03/2012 12 30/04/2012 09/05/2012 PM-450 17/04/2012 05/06/2012 11 26/07/2012 07/08/2012 2 24/05/2012 24/05/2012 1 PM-452 4 27/08/2012 30/11/2012 32 PM-453 13/05/2012 28/12/2012 18 11/07/2012 05/12/2012 11 24/05/2012 30/11/2012 61 PM-455 1 09/10/2012 30/11/2012 36 PM-456 16/05/2012 28/12/2012 15 26/11/2012 26/11/2012 11 04/06/2012 17/12/2012 6 PM-458 05/12/2012 28/12/2012 12 17/06/2012 16/08/2012 17/12/2012 17/12/2012 1 PM-459 20/07/2012 26/11/2012 13 09/09/2012 30/11/2012 36

Table 9-2: Used standards ID, period of time analysed and number of samples used (Braços, Ligeiro and Monfurado)

Braços Ligeiro Monfurado Standards Timeline # samples Timeline # samples Timeline # samples PM-413 08/03/2012 19/03/2012 2 PM-435 01/05/2012 19/06/2012 3 15/06/2012 15/06/2012 1 PM-440 26/03/2012 03/05/2012 5 PM-443 29/05/2012 29/05/2012 1 PM-445 PM-450 10/05/2012 10/05/2012 1 15/04/2012 24/06/2012 4 29/05/2012 29/05/2012 1 PM-452 19/11/2012 21/11/2012 2 08/08/2012 04/11/2012 8 PM-453 10/05/2012 19/06/2012 2 19/11/2012 30/12/2012 3 29/05/2012 04/11/2012 5 PM-455 21/11/2012 21/11/2012 1 04/11/2012 04/11/2012 1 PM-456 30/12/2012 30/12/2012 1 20/07/2012 09/10/2012 3 PM-458 30/12/2012 30/12/2012 1 PM-459 19/07/2012 04/11/2012 6

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9.4.2 Blanks Blanks used in Boa Fé – Montemor Project are from two types: not certified and Standard Reference Material. Marble fragments (Mármore de Estremoz) from Estremoz, Alentejo, Portugal, as well as certified material from WCM Mineral in Canada are used as control samples to investigate possible contamination. Final data has to be interpreted in light of the fact that because of the origin of the non-certified samples some pieces/chips might not be totally barren. 9.4.3 First laboratory validation- Duplicate Pulps One of the actions included in data control program is the analysis by an external/secondary laboratory of duplicate pulps. Pulps were delivered by ALS at Colt warehouse at Escoural and 25% of the delivered material was selected to send Société Générale de Surveillance (“SGS”). Selected material was sent to a SGS facility in Portugal, where pulps were treated to be sent to SGS laboratory in Turkey. Pulps were shipped in the end of June, beginning of July 2012. Final results were delivered in October 2012. Results show good correlation between sample grades, which increases confidence in ALS methods and results. Comparison between results was done using absolute difference evaluation and correlation statistics. 9.4.4 Old Database Validation – Duplicate Drillholes Comparison of down-the-hole results includes the analysis of basic statistics of each twin population as well as their grade distribution. The behaviour of respective populations must be similar otherwise collar elevation data or laboratory results can be questioned and consequently the reliability of the data is affected. However, when considering grade distribution down the hole even between two closely – spaced drillholes results can show significant variation. In gold projects, as with the Boa Fé- Montemor Project, the variability of data is significant due to a high nugget effect, which may represent some variations when comparing the behaviour of two drill-hole populations. Another aspect that needs to be taken in consideration is differences in the analytical methods. Different assay methods produce different results when it comes to order of magnitude or the detection limit, which produces dissimilar behaviour. Local differences in lithology can also produce variance particularly if structures sub-parallel to the drillhole axis are being considered. The lack of repeatable data from old data bases is also a factor that influences the comparison between two drill-holes. The validation process needs to consider all these issues before determining the degree of confidence in the old data bases. The validation program for the deposits from Boa Fé – Montemor Project includes the following drill-holes, shown inTable 9-3. Results of comparison of twin sets of log-normalized data from the studied deposits show acceptable accuracy taking into consideration differences in detection limit (higher for the previous companies holes) compared with current analyses. Replication of individual assay intervals between twins is not consistent due to variance as mentioned above but the comparison of grade distribution across the mineralised intervals is within acceptable tolerance to suggest that there is no significant difference in collar elevation or distribution of mineralization between datasets.

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Table 9-3: List of twin validation holes for Boa Fé – Montemor project

Colt Resources Previous Companies

Drill -hole x y z Twin Drill -hole Chaminé Deposit BFCH-11-002 579298.84 4266446.96 282.72 CHD-001 BFCH-11-005 579265.20 4266478.38 282.28 T096 BFCH-12-004 579241.38 4266532.42 290.76 CHRCD-010 BFCH-12-030 579315.11 4266359.31 283.51 T047 Casas Novas Deposit BFCN-12-001 578527.01 4266839.62 223.65 T147 BFCN-12-002 578568.62 4266868.84 235.70 T136 BFCN-12-003 578335.88 4266916.44 248.76 MHCN-002 BFCN-12-004 578366.65 4266933.64 243.53 T171 BFCN-12-005 578427.52 4266926.96 238.87 MHCN-007 Banhos Deposit BFBH-12-001 574763.27 4269033.08 402.74 MH023 BFBH-12-002 574827.00 4269019.28 398.77 T170 BFBH-12-003 574952.77 4268790.40 394.15 T218 Braços Deposit BFBR-12-001 580889.17 4260452.25 188.56 MH001 BFBR-12-002 580927.15 4260404.60 189.25 MH005 BFBR-12-003 580882.03 4260414.30 187.35 T004 BFBR-12-004 580861.02 4260453.25 189.00 T024 Ligeiro Deposit BFLG-12-001 579706.61 4265980.20 299.59 LG-014 BFLG-12-002 579691.52 4265963.01 296.93 T052

9.4.5 QA/QC Actions No sample was considered to be a failure so no significant actions were taken. The Client establishes contact with ALS Minerals once statistically significant numbers of samples appear above warning limits, which allows potential problems to be identified and remedial action to be taken before the problems become significant. 9.4.6 Results Performance graphs of laboratory results for the SRM’s utilized with the recommended values for each of the standards is presented in Figure 9-2 through to Figure 9-8.

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Figure 9-2: Performance Graph for SRM PM -450

Figure 9-3: Performance Graph for SRM PM -452

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Figure 9-4: Performance Graph for SRM PM -453

Figure 9-5: Performance Graph for SRM PM -455

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Figure 9-6: Performance Graph for SRM PM -456

Figure 9-7: Performance Graph for SRM PM -458

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Figure 9-8: Performance Graph for SRM PM -459

Overall, all standard results are within acceptable tolerance. However, 12 of 316 total SRM samples were between warning and action levels which required additional attention. Each sample was studied carefully as well as the respective batch results. Before assessing whether to take any further action with these samples, the following aspects were taken into consideration:

i) Resul ts before and after the anomalous values; ii) Results from other standards and blanks included in the same batch; iii) QA/QC results from ALS Minerals; and iv) Overall population trend of the studied drill -hole.

Under these criteria, none of the samples was considered anomalous and based on the results to date, it is possible to affirm that the analysis method in use is suitable for the type of mineralization under study. Figure 9-9 and Figure 9-10 represent data for blank samples from Boa Fé -Montemor deposits in chronological order. The overall mean is acceptable for blank material, 0.004 g/t and standard deviation of blank results population is 0.005. Data reported in the previous NI 43 - 101 had some samples with values higher than 0.01 g/t, which were analyzed immediately after high grade samples. This indicated possible problems in the cleaning procedures from the laboratory. ALS was contacted and asked to review their procedures back then, and results improved significantly since previous report. Some samples occur as outliers from the average population, but they are considered to be within the acceptable levels of tolerance. Overall the conclusion is that the preparation process carried out by ALS Minerals, meets the expected controls regarding to co ntamination.

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Figure 9-9: Performance Results from the non certified blank samples used at the Boa Fé-Montemor Project

Figure 9-10: Performance Results fro m the certified blank samples used at the Boa Fé-Montemor Project

Regarding grade distribution down -the-hole between sets of twin boreholes all twinsets presented acceptable distribution behaviour when compared with the old data. Some twinsets have better comparisons than others mainly due to inconsistencies in logging, inability to replicate the old sample intervals exactly due to changes across lithological boundaries and high covariance leading to rapid changes of grade over short distances. However, an d even despite some intervals having some differences in values, the magnitude of those differences and the comparison of average grades over mineralise d widths allowed an acceptable degree of confidence in the historical databases.

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9.5 Opinion on Adequacy SRK has reviewed the sample preparation and analysis procedures as described above and considers these, for the most part, appropriate for the mineralization type and sampling methodology. One exception to this would be the splitting of the RC samples to 200 g for the 2005 to 2008 drilling program; in this case SRK considers that this sample size may have been too small prior to milling and thus may have led to higher variability of results. However, notwithstanding this based on a review of previous documents, SRK is of the opinion that sample preparation, analysis and chain of custody for the 2005 to 2008 drill programs were conducted in a professional manner, and are appropriate for use in Mineral Resource estimation reported herein. SRK has reviewed the QA/QC results for the 2011 and 2012 Colt drilling programs, and is of the opinion that the programs and procedures implemented by Colt meet or exceed industry accepted best practices. SRK notes that in general, the assay results from ALS on the 8 standards inserted into the sample stream are slightly biased high, based on the recommended values from the standard manufacturer. However, SRK did not observe any systematic bias over time, and finds the results to be within tolerance limits. SRK is of the opinion that the results of the QA/QC programs confirm that the data is of adequate precision and accuracy, and that the resulting assay database is suitable for use in resource estimation.

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10 DATA VERIFICATION

As a result of the prolonged exploration history and the number of different workers there is some level of inconsistency in how the data is recorded digitally. The current team is aware of this issue and it has been highlighted as a priority task moving forward. The drill hole collar position can be verified by GPS for around 50% of the historic holes, but the remaining historic hole collars have been destroyed by agricultural activity. All holes have down-hole surveys with the RC holes drilled by Iberian being surveyed by maxibore tool. The internal drill hole validation tools in the Gemcom GEMS software packages was used to validate all drill holes as part of the data checking process. Prior to this study a complete re - validation program was undertaken and no extra -ordinary errors were revealed. Assay data for arsenic in the database is recorded sometimes as ppm and at other times as ppb in the same field. The site geologists are aware of this problem and are working to resolve the issue. In general there is no risk apparent in the data that would cause a materi al risk to the project. The database structure and data flow are shown in Figure 10-1 and Figure 10-2.

Figure 10-1: Database structure

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Figure 10-2: Data flow

Previously SRK carried out independent sampling of selected drillcore in order to provide an independent verification of the historical assay results (pre -2008 drilling) Core was selected based upon assay results as reported in Colt assay.xls Database (31/08/2010). Horizons were chosen to refle ct a variety of sample results which had returned high, medium and low/nill returns for Au across the program. The core was presented for inspection to SRK prior to cutting for verification of sample intervals and interval identification. Previously sample d core (½ core) was the cut on site into ¼ core sections by the Colt field technicians, under the supervision of SRK and in the presence of the Geolog consultant geologist, Jose Borrego. Cut core was returned to the original core boxes. The cut core was th en selected by SRK and placed in sample bags and sealed, then double bagged (with sample ticket) and sealed again. All samples selected from the core boxes were consistently taken as right-hand samples (as viewed). Where competent core was lacking, 50% of the broken zone was recovered for assaying. Samples were shipped to the Stewart Group’s OMAC analytical facility in Co. Galway, Ireland for Fire Assay and ICP-MS assays to be conducted, results are presented in Table 10-1.

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Table 10-1: SRK Independent Re-assaying – Fire Assay Results Broken Resample SRK Core Sample BH ID Sample ID ID Orig (PPM) (PPM) (Y/N) Variance (PPM) CHD008 K02831 SRKES001 4.68 1.74 Y -2.94 CHD008 K02845 SRKES002 7.54 2.37 Y -5.17 CHD008 K02848 SRKES003 32.6 8.56 N -24.04 CHD008 K02866 SRKES004 2.66 6.08 N 3.42 CND4 K04054 SRKES006 53.7 60.16 Y 6.46 CND4 K04059 SRKES007 6.76 3.96 Y -2.80 CND4 K04149 SRKES008 5.92 1.80 N -4.12 CHD017 K03570 SRKES009 0.16 0.20 N 0.04 CHD017 K03628 SRKES010 0.32 0.17 Y -0.15 CHD017 K03694 SRKES011 2.15 1.85 Y -0.30 CHD017 K03695 SRKES012 3.59 0.73 N -2.86 CHD02 K00344 SRKES013 0.58 0.68 N 0.10 CHD02 K00531 SRKES016 0.91 0.26 Y -0.65 CHD014 K03262 SRKES017 -0.01 0.30 N 0.31 CHD019 K04518 SRKES018 0.1 0.14 N 0.04 CND006 K05060 SRKES019 0.19 0.23 N 0.04 CND002 K05304 SRKES020 0.26 0.42 N 0.16

The results received by SRK show both positive and negative variations when compared to the historic sampling results. The cause of this may be down to a number of factors, not limited to: “nugget effect” in the core; dip of mineralised structure; difference in accuracy of laboratory analytical methods; potential contamination during sampling process and use of different sampling equipment. Field duplicate are generally used to assess the natural variability of a mineral deposit by comparing the results from the two core splits from the same interval. Given the distribution of gold on the Boa Fé concession area, SRK considers that the results of the verification sampling are acceptable and do not suggest any assay bias, however the number of samples analyzed is not statistically significant. SRK has identified no material limitations to the database. 10.1 Opinion on Data Adequacy Based on the above comparisons, SRK is of the opinion that the error rates of the data checked are very low, and that the data are suitable for use in Resource estimation.

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11 MINERAL PROCESSING AND METALLURGICAL TESTING

A number of metallurgical testwork programs have been conducted on samples from the Boa Fé deposit. 11.1 AMMTEC The following section refers to the testwork carried out by AMMTEC in 2008. 11.1.1 Samples This testwork program was undertaken at AMMTEC in Perth, Australia on composite samples from the Casas Novas, Chaminé, and Braços deposits at Boa Fé as well as an oxide mineralisation composite. Comprehensive head analyses were carried out on these composites and are presented in Table 11-1.

Table 11-1: Montemor Test Composite Head Assays Parameter Unit Composite Sample Value Braços Chaminé Casas Novas Oxide Comp Comp #1 Comp #2 Comp #3 #4 Gold (Au) – Assay 1 g/t 3.31 4.91 6.28 3.26 Gold (Au) – Assay 2 g/t 5.61 5.73 3.91 3.57 Gold (Au) – Average g/t 4.46 5.32 5.10 3.42 Silver (Ag) g/t 0.4 <0.3 <0.3 <0.3 Copper (Cu) ppm 103 39 47 69 Arsenic (As) ppm 7311 9343 7330 5086 Lead (Pb) ppm <5 9 <5 <5 Zinc (Zn) ppm 31 31 55 53 Total Carbon % 0.19 0.11 0.15 <0.03 Organic Carbon % 0.03 <0.03 0.05 <0.03 Total Sulphur % 0.81 0.62 0.67 0.76 Sulphide Sulphur % 0.76 0.50 0.55 0.59

11.1.2 Gravity Recoverable Gold Test Testwork was conducted to determine the Gravity Recoverable Gold (“GRG”) content of each of the Primary ore composites. This test involved three stages of gravity separation using a

laboratory Knelson Concentrator, at three sequential grind sizes, namely P 80 s of 250, 125 and 75 µm. The gravity concentrate recovered at each stage, targeted at a mass recovery in each stage of approximately 3%, was subjected to amalgamation and intensive cyanidation of the amalgamation tailings, to determine the recoverable gold in each stage. The results of the GRG tests are summarised in Table 11-2.

Table 11-2: GRG Test Results

Composite P80 250 µµµm P80 125 µµµm P80 75 µµµm Total Con Au Con Con Au Con Con Au Con Con Au Con Grade Recovery Grade Recovery Grade Recovery Grade Recovery (g/t) (%) (g/t) (%) (g/t) (%) (g/t) (%) Braços 32.0 35.8 15.8 15.5 5.5 6.0 18.0 57.3 Chaminé 27.4 25.7 12.7 11.8 4.8 4.4 15.1 41.8 Casas Novas 28.4 29.8 10.3 12.2 3.8 4.1 13.9 46.2

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11.1.3 Gravity – Cyanidation Amenability Testwork Initial amenability testwork was conducted on each composite to assess gold recovery by gravity concentration followed by cyanidation of the gravity tailings over a range of different grind sizes. The results of this series of tests are summarised in Table 11-3 and demonstrate the following:

• Gravity recoverable coarse gold content was variable, being low to moderate at the

relatively coarse grind size of P 80 250 µm; and • Gold extraction by cyanidation increased with increasing fineness of grind. At the finest

grind of P 80 53 µm, overall gold recovery from the Casas Novas and Chaminé composites was 67.0% and overall gold recovery from the Braços composite was 80.1%.

Table 11-3: Gravity / Cyanide Amenability Test Results

Composite P80 (µµµm) Au Recovery (%) Reagent Consumptions (kg/t) Gravity + 48 Gravity Leach Gravity hr Leach NaCN Lime Braços 250 125 8.0 73.0 0.40 0.55 250 90 24.2 79.9 0.55 0.76 250 75 18.5 80.0 0.66 0.67 250 53 16.7 80.1 0.66 0.70 Chaminé 250 125 6.7 57.6 0.54 0.48 250 90 6.0 61.9 0.60 0.49 250 75 10.0 64.7 0.68 0.44 250 53 11.4 67.2 0.74 0.52 Casas Novas 250 125 15.8 60.2 0.46 0.50 250 90 15.2 63.5 0.57 0.54 250 75 14.2 66.7 0.63 0.57 250 53 11.3 67.0 0.74 0.61 Oxide 250 125 6.2 68.5 0.62 3.49 250 90 1.6 70.7 0.63 3.58 250 75 4.6 71.5 0.75 3.66 250 53 3.6 75.4 0.73 3.46

Diagnostic leach tests conducted on the cyanidation tailings indicated that between 34% and 63% of the remaining Au was locked in arsenopyrite, between 34% and 63% was locked in pyrite, and only 2 to 3% was locked in silicates. 11.1.4 Gravity / Flotation Amenability Testwork Tests were conducted at various grind sizes on the Chaminé and Casas Novas composites to evaluate gold recovery by gravity concentration followed by flotation of the gold contained in the gravity tailing into a bulk sulphide concentrate. The results of these tests are summarised in Table 11-4 and demonstrate the following:

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Table 11-4: Gravity / Flotation Amenability Test Results

Composite P80 (µµµm) Distribution to Overall Concentrate (%) Grav Au Grav + Fl Gravity Leach Wt Rec Au Rec As S Chaminé 250 125 5.7 10.6 91.8 83.4 98.5 250 90 6.1 5.1 92.2 86.8 98.4 250 75 6.1 6.0 94.0 87.2 98.4 Casas Novas 250 125 10.4 19.7 92.7 88.1 98.6 250 90 9.0 11.4 94.0 87.3 98.6 250 75 9.0 12.5 92.5 85.8 98.6

11.1.5 Bulk Gravity / Flotation with Flotation Concentrate Cyanidation

A 20 kg sub-sample of both the Chaminé and Casas Novas composites was ground to a P 80 of 250 µm and subjected to gravity concentration in a Knelson centrifugal concentrator followed by mercury amalgamation of the gravity concentrates to remove the coarse liberated gold. The amalgamation tailing and Knelson gravity tailing were then combined and reground

to a P 80 of 125 µm and subjected to bulk sulphide flotation to recover the contained gold values into a sulphide concentrate. These tests demonstrated that for the Chaminé composite 9.8% of gold could be recovered into a gravity concentrate and 82.5% could be recovered into a sulphide flotation concentrate for an overall recovery of 92.3%. Results for the Casas Novas composite were similar with 16.5% of gold recovered into a gravity concentrate and 77.0% of the gold recovered into a sulphide flotation concentrate for an overall gold recovery of 93.4%. These results were very similar to those from the smaller scale tests reported in Table 11-4.

Sulphide concentrates from each composite were then subjected to ultra-fine grinding to P 95

25 µm and P 95 10 µm and subjected to cyanidation to extract the contained gold. At a grind of

P95 25 µm, 80.0% and 82.1% of the gold was extracted from the Chaminé and Casas Novas

sulphide flotation concentrates respectively. At the finer grind of P 95 10 µm, the gold extractions increased to 88.8% and 92.3% respectively for the Chaminé and Casas Novas sulphide concentrates. The overall gold recoveries for this process route are summarized in Table 11-5.

Table 11-5: Summary of Gold Extraction for the Gravity-Flotation – Flotation Concentrate Cyanidation Process Route

Composite P80 (µµµm) Gold Extraction (%) Concentrate Concentrate Gravity Flotation Cyanidation Gravity Cyanidation Total Chaminé 250 125 25 10.3 65.2 75.5 250 125 10 10.1 72.8 82.9 Casas Novas 250 125 25 16.8 62.8 79.6 250 125 10 16.1 71.0 87.1

A diagnostic gold analysis of the residues from the concentrate cyanidation stage indicated that virtually all of the unleached gold was locked within sulphides. 11.1.6 Bulk Gravity with Concentrate and Tailings Cyanidation

A 10 kg sub-sample of both the Chaminé and Casas Novas composites was ground to P 80 250 µm and subjected to gravity concentration with a Knelson Concentrator to produce a

coarse gravity concentrate. The gravity tailings were then reground to P 80 90 µm and reprocessed through the Knelson Concentrator to produce a separate bulk gravity

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concentrate at a target mass yield of 5% to 10%. This resulted in 62.6% gold recovery from the Chaminé composite (5.6% into the coarse gravity concentrate and 57.0% into the bulk gravity concentrate), and 56.6% gold recovery from the Casas Novas composite (12.0% into the coarse gravity concentrate and 44.6% into the bulk gravity concentrate). The bulk gravity

concentrates were then subjected to ultrafine grinding to P 95 25 µm and P 95 10 µm and then cyanide leached to extract the contained gold values. Approximately 76% of the gold was extracted from Chaminé bulk gravity concentrate at both grind sizes. Gold extractions from

the Casas Novas bulk gravity concentrate ranged from 70.4% at the P 95 25 µm grind to 75.3%

at the P 95 10 µm grind. The gravity tailings were also leached, with recoveries reported of 65.9% for the Chaminé sample and 73.7% for the Casas Novas sample. A summary of the overall gravity concentration test results is provided in Table 11-6.

Table 11-6: Summary of Gold Extraction for the Gravity-Gravity Concentrate Cyanidation Process Route

Composite P80 (µµµm) Gold Extraction (%) Conc. Conc. Sub-Total Gravity Flotation CN Gravity CN Tails CN Total Chaminé 250 90 25 6.5 35.6 42.1 31.0 73.1 250 90 10 5.7 40.2 45.9 27.1 73.0 Casas Novas 250 90 25 9.6 34.6 44.2 30.4 74.6 250 90 10 9.6 37.0 46.6 30.4 77.0

Again, a diagnostic gold analysis of the residues from the concentrate cyanidation stage indicated that virtually all of the unleached gold was locked within sulphides. 11.2 Testwork Process Development The following section refers to the testwork carried out by Testwork Desenvolvimento do Processo Ltda (Testwork Process Development Ltd) in 2012-2013. 11.2.1 Samples This testwork was conducted on 210 kg of HQ diameter half core from Chaminé. The testwork was conducted by Testwork Desenvolvimento de Processo Ltda. in Nova Lima, Brazil. 11.2.2 Head Assay and Mineralogy The only head assays reported for the composite were 3.05 g/t Au and 0.66% S. A mineralogical analysis indicated that the gold is predominantly associated with arsenopyrite (79% of observed gold occurrences), and the average grain size of the observed gold grains was 2 µm. The sulphide species present were predominantly arsenopyrite (56%) and pyrite (42%). 11.2.3 Comminution Testwork The composite was subjected to a number of comminution and related tests. The results of these tests are summarised in Table 11-7.

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Table 11-7: Comminution Test Results Item Unit Value Bond Abrasion Index 0.26 Bond Crushing Work Index kWh/t 16.1 Bond Ball Mill Work Index kWh/t 14.9 Specific Gravity kg/m 3 2.60 Bulk Density kg/m 3 1.58

11.2.4 Direct Cyanidation

The sample was cyanide leached at two grind sizes, P 80 s of 106 and 75 µm. The leach tests were undertaken for 24 hours at 50% solids, pH 10.5-11.0 and with an initial addition of 1 kg/t of NaCN. The leach tests reported Au recoveries of 63.7-64.4%, at NaCN consumptions of 0.30 to 0.38 kg/t. 11.2.5 Gravity Concentration Gravity concentration tests, using a laboratory scale Knelson concentrator, were conducted at

four grind sizes – P80 s of 150, 106, 74 and 46 µm. For the coarser three grind sizes, a single pass through the Knelson Concentrator was used, however the finest sample was processed three times through the unit. The results of this testwork are shown in Table 11-8.

Table 11-8: Gravity Concentration Test Results

P80 No of Passes Wt Au S Recovery (µµµm) (%) Grade (g/t) Recovery (%) Grade (%) (%) 150 1 1.5 89.1 48.6 19.0 42.7 106 1 1.5 85.8 45.8 30.1 53.3 74 1 1.3 91.7 38.7 28.1 45.5 46 1 1.2 92.4 36.4 15.6 29.4 1-3 3.1 57.2 58.3 9.3 45.2

The concentrate from a further sample tested at a P80 of 106 µm was subjected to intensive cyanidation. This resulted in a leach recovery of 59.6% from the concentrate, or 20.0% from the overall sample. 11.2.6 Flotation

Initial flotation testwork was conducted on gravity tailings, at a range of grind sizes (P 80 s of 74, 125 and 150 µm) and using a combination of typical sulphide flotation collectors. The best result reported was a stage Au recovery (i.e. with respect to the gravity tailings as the head sample) of 61.6% with a S recovery of 74.2%. The mass recovery reported for these tests ranged from 1.8% to 4.2%. The highest grade concentrate was 49.8 g/t Au and 15.6% S. For the second stage of flotation testwork, higher levels of more powerful reagents (potassium amyl xanthate as the collector and copper sulphate as the activator) were used in order to achieve higher mass and Au recoveries. This testwork was also undertaken on gravity

tailings, at a single grind size of P 80 106 µm. The best result reported from this stage was a stage Au recovery of 93.9% with a S recovery of 96.1% at a mass recovery of 12.4%. This concentrate assayed 11.3 g/t Au and 3.4% S. The final stage of flotation testwork was conducted both on gravity tailings and on the as-

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received composite. This testwork was conducted at a single grind size of P 80 106 µm, and produced reported flotation responses at a range of mass recoveries. The best result reported from the as-received sample was a Au recovery of 91.0% with a S recovery of 96.1% at a mass recovery of 13.8%. This concentrate assayed 15.7 g/t Au and 4.6% S. The best result reported for the gravity tailings sample was a Au recovery of 93.5% with a S recovery of 97.3% at a mass recovery of 17.2%. This concentrate assayed 6.7 g/t Au and 2.2% S. The relationship between mass recovery and Au and S recovery from the third stage of flotation testwork is shown in Figure 11-1.

100

90 Au no gravity S no gravity Au wth gravity 85 S with gravity Linear (Au no gravity)

Au and and RecoveryAuS (%) 80 Linear (S no gravity) Linear (Au wth gravity) 75 Linear (S with gravity)

70 0 5 10 15 20

Mass Recovery (%)

Figure 11-1: Flotation Au and S Recovery vs. Mass Recovery

The flotation tests results show an increase in Au and S recovery with increasing mass recovery, and a slightly higher recovery for the gravity tailings than for the as-received sample. On the basis of this testwork, Testwork concluded that a mass recovery of the order of 16% was required in order to maximise the Au and S recovery. 11.3 Testwork Using Alternative Lixiviants Testwork was conducted at the laboratories of Drinkard Metalox in Charlotte, NC, USA, to assess the amenability of the Boa Fé ore to extraction using non cyanide lixiviants. The testwork was conducted on three samples of Chaminé ore, a low grade sample (0.7 g/t Au), a medium grade sample (2.3 g/t Au) and a high grade sample (33.0 g/t Au). Baseline cyanidation tests reported Au recoveries if 59% and 78%. Baseline leach tests using ammonium thiosulphate reported Au recoveries of between 47% and 63%. Both cyanide and ammonium thiosulphate leaching of residues following nitric acid digestion of the sulphide minerals reported Au recoveries generally in excess of 90%. Leach tests using halogen lixiviant reported Au recoveries in excess of 98%. A similar result was reported for a leach test using aqua regia.

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Further testwork focussed on the recovery of Au from the various leach solutions, and the precipitation of iron and arsenic from the leach solutions into potentially stable solid residues.

11.4 Sample Representativeness

The test composites used for the studies conducted to date, are considered characteristic of the respective deposits, and suitable for this level of study. As the project advances to the next level of study, test composites should be formulated to more closely represent each deposit area with respect to mineralisation type and mineralisation grade.

11.5 Significant Factors

There may be restrictions on the use of cyanide and the disposal of arsenic-bearing residues that may significantly affect the process route that is eventually selected.

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12 MINERAL RESOURCE ESTIMATE

12.1 Introduction The Client along with SRK conducted a Mineral Resource estimate of the Boa Fé-Montemor gold project deposits, namely Chaminé, Casas Novas, Banhos, Braços, Ligeiro and Monfurado in the previous 43-101 report, April 2013. The Mineral Resource estimate used the data from both the historic drilling and the Client’s drilling programs. A database was compiled using data from 1,897 core holes, RC holes and trench sample data, with collar, survey, geological and assay information, containing a total of 116,473.37 m of non-zero assayed intervals. In the process of completing the resource estimate update, SRK validated and verified the database, interpretation and available data. The block dimensions selected for the open pit models were 10.0 m x 10.0 m x 5.0 m (the exception to this was Monfurado, 25 m x 25 m x 5 m), and are based on the existing drilling pattern, spatial distribution and mine planning considerations. The Mineral Resource estimate was generated by ordinary kriging (“OK”) and Inverse distance (IDW), using Gemcom TM software. The optimised pit shells were generated by SRK using Indicated and Inferred resources. Various economic parameters such as mining and processing and general and administrative costs, gold recovery and pit slope angle were used in as input parameters for the resource pit shells. All open pit resources are stated above a 0.44 g/t Au cut-off. This section describes the work undertaken by the Client in conjunction with SRK and summarizes the key assumptions and parameters used to prepare the revised Mineral Resource models, for each of the studied deposits. 12.2 Drillhole Database A final sample database was provided to SRK by the Client’s geology personnel on November 31, 2012. This database consisted of text files for the all of the Project area deposits, and specific gravity analyses completed by the Client as well as all historic drilling data. A database was compiled using data from 1897 core holes, RC holes and trench sample data, with collar, survey, geological and assay information, containing a total of 116,473.37 m of non-zero assayed intervals. A summary table of the statistics of collar data for the Project deposit areas are provided in Table 12-1. Sample quantities and lengths for non-zero gold assay intervals for the Project areas are presented in Table 12-2.

Table 12-1: Drillhole Collar Statistics – All Zones Total Minimum Maximum Average Number of Area Length Length Length Length DDH/Trenches (m) (m) (m) (m) Chaminé 203 23424.33 17 505.1 115.39

Casas Novas 171 17676.38 12.8 270.4 103.37

Banhos 429 26285.8 4.4 279.8 61.27

Braços 217 11190.09 2.5 203.5 51.56

Ligeiro 75 5624.4 10 340 74.98

Monfurado 100 4733.71 4.4 204.25 44.33

All Other Areas 684 27538.66 4 203.5 40.26

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Table 12-2: Drillhole Assay Statistics – All Zones Total Minimum Sample Maximum Sample Average Sample Zone Samples Length (m) Length (m) Length (m) Chaminé 15476 0.1 9.9 1.39 Casas Novas 11212 0.05 18.8 1.47 Banhos 15539 0.07 15.3 1.63 Braços 4892 0.13 13 2.04 Ligeiro 2703 0.2 9.3 1.97 Monfurado 2400 0.4 9 1.86 All Other Areas 12056 0.08 24.9 2.16

12.3 Coordinate System All topography and drillhole data was provided to SRK by the Client in UTM coordinates Zone 29 North WGS84 (Figure 12-1). This system is standard on all hand -held GPS units. All survey work has been performed in this projection and datum by the contract surveyors Superficie from Lisbon. EPSG:32629 is the official reference code for this projection system and can be used to program many software GIS packa ges to minimize error. The definition for the system is as follows:

• WGS84 Bounds: -12.0000, 0.0000, -6.0000, 84.0000; • Projected Bounds : 166021.4431, 0.0000, 833978.5569, 9329005.1825; • Scope : Large and medium scale topographic mapping and engineering survey; • Last Revised: 1995-06 -02; and • Area: World - N hemisphere - 12°W to 6°W - by country. Older datasets containing relevant data have been converted from the Hayford -Gauss Datum 1973 or Hayford-Gauss Datum Lisboa 1934 systems to WGS84.

Figure 12-1: WGS 84 / UTM Zone 29N

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12.4 Topography Topography was provided to SRK by the Client’s personnel in Gemcom DTM format for the entire Boa Fé EML and Montemor Exploration concession areas. The source of this topography is Superfície Topografia Lda. of Rio Tinto Portugal, with survey information collected in local coordinate system Hayford Gauss Lisboa 1937 and converted to UTM WGS84 Zone 29 North. The survey was completed 29 December 2011. The survey covered an area of 46.78 km 2, and post processing of the data resulted in the construction of 2 m interval contour data for all areas. SRK manually compared several drillhole collar elevations with the provided topography surfaces, and found generally close agreement. 12.5 Geology and Grade Modelling The Client’s geology personnel provided gold grade wireframes for all mineralisation models, updating the previous from Chaminé and Casas Novas deposits and constructed new wireframes for Banhos; Ligeiro and Braços in the Boa Fé EML and Monfurado in the Montemor EC. The mineralised zone wireframe constructed by the Client’s geologists is based on a nominal 0.4 g/t Au grade cutoff and took into consideration the interpretation, geology and structural elements based on drill holes, trenches and mapping (historical and current work done by the Client). 12.6 Exploratory Data Analysis and compositing Exploratory data analysis was performed using raw and composite samples within the defined wireframes for each deposit. Basic statistical information was compared and analysed to choose an appropriate composite dimension. The composite process was conducted in the Gemcom TM Software, as well as samples extraction, with subsequent visual confirmation of interval coding by the wireframes. The short composites were checked to ensure no bias was introduced. Basic statistics for each deposit are presented in the Table 12-3 to Table 12-8. All populations show a positive skew and do not display a normal histogram. When transformed to natural logs, the populations move towards log-normality, but they are not strictly log-normal, being negatively skewed. The presented statistics support the choice of 1 m composite for all the deposits. The short composites with dimensions inferior to 10% of the composite length were excluded for the estimation process.

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Table 12-3: Basic statistics for Chaminé deposit using raw and composite samples. Population Solid # of Samples % Mean Min 2Q Median 3Q Max Variance St. Deviation Coef.Var. All 3836 1.932 0.003 0.08 0.261 1.05 424.37 112.76 10.619 5.495

CH1 3454 90.04 2.073 0.003 0.084 0.28 1.13 424.37 124.712 11.167 5.386 Original CH2 236 6.15 0.698 0.003 0.03 0.11 0.474 15.1 3.291 1.814 2.599 CH3 146 3.81 0.597 0.01 0.07 0.207 0.55 16.18 2.239 1.496 2.506 All 4579 1.574 0.003 0.092 0.289 0.972 424.37 64.718 8.045 5.111

CH1 4153 90.70 1.675 0.003 0.098 0.3 1.029 424.37 71.064 8.43 5.034 1m composite CH2 264 5.77 0.66 0.003 0.044 0.156 0.487 13.735 2.514 1.586 2.401 CH3 162 3.54 0.01 0.073 0.245 0.546 7.234 7.234 0.615 0.784 1.613 All 2376 1.529 0.003 0.11 0.326 1.043 212.22 35.837 5.986 3.914

CH1 2154 90.66 1.628 0.003 0.116 0.341 1.121 212.22 39.302 6.269 3.852 2m composite CH2 139 5.85 0.63 0.004 0.044 0.194 0.571 9.317 1.716 1.31 2.079 CH3 83 3.49 0.486 0.012 0.113 0.304 0.558 4.095 0.365 0.604 1.243

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Table 12-4: Basic statistics for Casas Novas deposit using raw and composite samples Population Solid # of Samples % Mean Min 2Q Median 3Q Max Variance St. Deviation Coef.Var. All 6231 0.81 0 0.02 0.06 0.26 290 33.813 5.815 7.18

CN1 4999 0.827 0 0.02 0.06 0.25 290 38.542 6.208 7.508

CN2 817 0.627 0.003 0.02 0.07 0.29 40.13 7.2 2.683 4.277

Original CN3 253 1.257 0.003 0.03 0.087 0.27 82.7 44.303 6.656 5.295

CN4 72 0.179 0.003 0.03 0.068 0.14 3.54 0.204 0.452 2.521

CN5 61 0.338 0.003 0.02 0.07 0.24 5 0.615 0.784 2.318

CN6 29 1.688 0.01 0.03 0.12 0.79 26.9 25.319 5.032 2.982

All 5703 0.817 0 0.04 0.12 0.45 103.649 13.758 3.709 4.541

CN1 4283 0.843 0 0.04 0.12 0.454 103.649 14.562 3.816 4.529

CN2 974 0.621 0 0.035 0.142 0.505 29.282 3.817 1.954 3.145

1m population CN3 284 1.268 0 0.04 0.09 0.307 80.38 40.33 6.51 5.008

CN4 76 0.162 0 0.04 0.088 0.2 1.6 0.049 0.221 1.36

CN5 75 0.317 0 0.02 0.07 0.265 4.524 0.49 0.7 2.205

CN6 17 2.851 0 0.54 0.706 1.753 26.9 39.164 6.258 2.195

All 5675 0.866 0.002 0.04 0.12 0.45 265.526 26.168 5.116 5.904

CN1 4260 0.846 0.002 0.04 0.12 0.454 103.649 14.638 3.826 4.523

CN2 970 0.897 0.003 0.035 0.143 0.506 262.526 76.1 8.724 9.729

2m population CN3 282 1.275 0.003 0.04 0.09 0.303 80.38 40.608 6.372 4.998

CN4 74 0.166 0.003 0.04 0.093 0.21 1.6 0.05 0.223 1.346

CN5 73 0.325 0.003 0.02 0.07 0.265 4.524 0.501 0.708 2.181

CN6 16 3.03 0.205 0.562 0.748 2.017 26.9 41.072 6.409 2.115

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Table 12-5: Basic statistics for Banhos deposit using raw and composite samples Population Solid # of Samples % Mean Min 2Q Median 3Q Max Variance St. Deviation Coef.Var. All 3123 0.673 0 0.03 0.08 0.297 123 20.232 4.498 6.681

BH1 622 19.92 1.155 0 0.03 0.072 0.25 123 71.853 8.477 7.34 BH2 55 1.76 0.267 0 0.042 0.09 0.352 3.11 0.227 0.476 1.78 Original BH3 72 2.31 0.351 0 0.061 0.11 0.335 3.21 0.412 0.642 1.83 BH4 553 17.71 0.572 0 0.04 0.086 0.25 70.81 14.789 3.846 6.726 BH5 693 22.19 0.464 0 0.026 0.066 0.334 19.73 1.705 1.305 2.81 BH6 1128 36.12 0.626 0 0.028 0.09 0.34 57.99 7.883 2.808 4.485 All 5070 0.509 0 0.04 0.097 0.292 70.81 6.528 2.555 5.019

BH1 1319 26.02 0.613 0 0.038 0.084 0.236 61.915 13.811 3.716 6.065 BH2 156 3.08 0.273 0 0.043 0.079 0.253 3.11 0.317 0.563 2.062 1m composite BH3 145 2.86 0.267 0 0.076 0.115 0.79 3.065 0.16 0.4 1.498 BH4 892 17.59 0.484 0 0.044 0.097 0.259 70.81 8.44 2.905 6.007 BH5 939 18.52 0.431 0 0.036 0.087 0.413 16.935 1.212 1.101 2.386 BH6 1619 31.93 0.511 0 0.035 0.115 0.346 37.721 3.773 1.942 3.804 All 2615 0.497 0 0.044 0.108 0.316 45.89 4.652 2.157 4.336

BH1 685 26.20 0.596 0 0.04 0.092 0.244 45.87 10.694 3.27 5.487 BH2 81 3.10 0.265 0 0.046 0.079 0.266 3.11 0.28 0.529 1.995 2m composite BH3 77 2.94 0.266 0 0.083 0.136 0.28 2.357 0.128 0.358 1.344 BH4 458 17.51 0.477 0 0.054 0.114 0.305 37.688 4.582 2.141 4.489 BH5 478 18.28 0.455 0 0.041 0.102 0.445 12.816 0.944 0.972 2.136 BH6 836 31.97 0.496 0 0.042 0.127 0.36 30.552 2.679 1.637 3.299

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Table 12-6: Basic statistics for Braços deposit using raw and composite samples Population Solid # of Samples % Mean Min 2Q Median 3Q Max Variance St Deviation Coef.Var. All 988 2.234 0 0.03 0.166 0.925 162.1 91.269 9.553 4.276

Original BR1 139 14.07 1.178 0 0.06 0.21 0.79 20.26 7.985 2.826 2.398 BR2 850 86.03 2.425 0 0.03 0.14 0.9 162.1 106.078 10.299 4.247 All 1355 1.307 0 0.024 0.09 0.562 108.228 29.392 5.421 4.148

1m composite BR1 207 15.28 0.738 0 0.06 0.173 0.57 16.35 3.335 1.826 2.476 BR2 1148 84.72 1.41 0 0.02 0.08 0.562 108.228 34.022 5.833 4.137 All 719 1.251 0 0.03 0.139 0.645 26.175 16.783 4.097 3.276

2m composite BR1 119 16.55 0.661 0 0.069 0.235 0.57 9.195 1.877 1.37 2.073 BR2 600 83.45 1.368 0 0.026 0.114 0.703 56.175 19.656 4.434 3.242

Table 12-7: Basic statistics for Ligeiro deposit using raw and composite samples Population Solid # of Samples % Mean Min 2Q Median 3Q Max Variance St. Deviation Coef.Var. All 440 1.109 0.003 0.042 0.16 0.62 37.33 13.518 3.677 3.316

LG1 62 14.09 1.445 0.01 0.04 0.19 0.61 30.65 26.264 5.125 3.545 Original LG2 293 66.59 1.106 0.003 0.06 0.2 0.7 25.4 9.823 3.134 2.835 LG3 85 19.32 0.875 0.007 0.02 0.09 0.5 37.33 16.822 4.101 4.687 All 577 0.839 0.003 0.049 0.15 0.536 25.4 6.269 2.504 2.983

LG1 80 13.86 0.937 0.01 0.04 0.105 0.47 18.935 9.701 0.105 3.325 1m composite LG2 401 69.50 0.886 0.003 0.053 0.169 0.59 25.4 6.584 2.566 2.897 LG3 96 16.64 0.564 0.008 0.024 0.1 0.459 9.893 2.003 1.415 2.508 All 308 0.793 0.007 0.056 0.196 0.578 14.956 3.88 1.97 2.484

LG1 45 14.61 0.85 0.01 0.058 0.145 0.52 14.956 6.679 2.584 3.041 2m composite LG2 213 69.16 0.84 0.007 0.068 0.211 0.624 14.25 3.95 1.9888 2.367 LG3 50 16.23 0.543 0.01 0.03 0.11 0.522 5.258 0.988 0.994 1.83

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Table 12-8: Basic statistics for Monfurado deposit using raw and composite samples

Population Solid # of Samples % Mean Min 2Q Median 3Q Max Variance St Deviation Coef.Var. All 279 0.817 0.003 0.061 0.244 0.63 20 4.406 2.099 2.569 MF1 204 73.12 0.773 0.005 0.06 0.234 0.626 20 3.903 1.976 2.554 MF2 27 9.68 0.205 0.003 0.013 0.11 0.397 0.952 0.057 0.239 1.167 Original MF3 48 17.2 1.347 0.03 0.172 0.455 1.285 17.3 8.488 2.913 2.162 All 475 0.682 0.005 0.068 0.248 0.643 20 2.629 1.622 2.378 MF1 401 84.42 0.649 0.005 0.066 0.226 0.63 20 2.384 1.544 2.38 MF2 28 5.89 0.192 0.005 0.023 0.128 0.33 0.659 0.032 0.178 0.93 1m composite MF3 46 9.68 1.27 0.031 0.248 0.505 1.155 15.156 5.852 2.419 1.905 All 258 0.634 0.005 0.069 0.219 0.605 14.167 1.985 1.409 2.22 MF1 216 83.72 0.609 0.005 0.068 0.202 0.599 14.167 1.92 1.386 2.275 MF2 15 5.81 0.182 0.01 0.04 0.174 0.273 0.49 0.023 0.151 0.832 2m composite MF3 27 10.47 1.09 0.04 0.127 0.507 1.315 9.304 3.269 1.808 1.659

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12.7 Assay Capping Statistical analysis of the composite data indicated that grade capping was not required since there were no extreme outliers encountered. Additionally, any isolated higher grade samples would be accounted for in the kriging process, which requires a minimum number of composites to estimate a block value. This dependence reduces the impact of individual high grades on the block values. 12.8 Specific Gravity Analysis A total of 1,383 determinations in core samples were conducted by the Client’s geology personnel in the recent drilling programs. These data were determined using the water immersion method. A dried length of core is first weighed in air, and then is weighed after submersion into a known volume of water, as is common industry practice. Considering the lithology and the grade distribution on the deposits, a classification was created based on the gold results by sample and a 0.4 g/t Au cut-off grade. A summary of the statistics is provided below in Table 12-9. In the specific case of Chaminé and Casas Novas deposits the specific gravity used take into consideration a representative percentage of the different lithologies that occur in those deposits. Based on this analysis, an average specific gravity was determined by deposit.

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Table 12-9: Specific gravity data per deposit for the Boa Fé-Montemor Project CHAMINÉ CASAS NOVAS BANHOS BRAÇOS LIGEIRO MONFURADO DEPOSIT DEPOSIT DEPOSIT DEPOSIT DEPOSIT DEPOSIT SPECIFIC SPECIFIC SPECIFIC SPECIFIC SPECIFIC SPECIFIC Nº GRAVITY Nº GRAVITY Nº GRAVITY Nº GRAVITY Nº GRAVITY Nº GRAVITY

Samples with assays 5885 3201 17 Samples with specific gravity measured 409 333 378 45 47 1 12 Grade < 0.4 g/t Au (WASTE/BARREN) 307 2.6997 270 2.7283 342 2.7277 21 2.7714 23 2.7779 9 2.9744 Grade >= 0.4 g/t Au (Mineralised) 102 2.7483 63 2.8101 36 2.8073 24 2.6561 24 2.7074 42 3.0629 Grade >= 0.4 g/t Au (Mineralised) (composite sample) 97 2.739 44 2.7641

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12.9 Variogram Analysis and Modelling Spatial analysis was undertaken only in 4 of the 6 studied deposits in Boa Fé-Montemor project. Variography at the Monfurado and Braços deposits did not provide any meaningful and interpretable experimental variograms. Variogram analysis was performed at the following deposits: Chaminé, Casas Novas, Banhos and Ligeiro. For all, directional variograms were obtained and validated accordingly with the geological conceptual model assumed for each deposit. Only the experimental variograms from Banhos deposit were obtained using the entire data set. Geological domaining of the deposits subdivided the modelled mineralisation into several solids, some of which still raise doubts as to its interpretation. Because of that, the experimental variograms for Chaminé deposit were obtained using data only from solid CH1, whereas variograms from Casas Novas were obtained with data from solid CN1, and variograms from Ligeiro were calculated from data from LG2. SRK notes that according to the geological interpretations for each of these deposits, the different solids that constitute the modelled mineralisation were emplaced during the same genetic episode. Each experimental variogram was fitted with a spherical model. Obtained variograms are presented below (Figure 12-2 to Figure 12-5).

bb) a)

Az ( ⁰) Dip ( ⁰) Tol ( ⁰) L g ( ) 0 C1 a range Model

a 0 0 1 0 1 1 3.651 3 [0;15] Sph

(N8W) b -8 0 0 10 1 3.651 15 [0;15] Sph

(5S8 W) c 82 5 23 5 1 3.651 22 [0;15] Sph

Figure 12-2: Directional semi-variograms and modelling results for Chaminé deposit

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a) b)

Az ( ⁰) Dip ( ⁰) Tol ( ⁰) Lag (m) 0 C1 a range Model

a) 0 0 180 2.091 5 [0;25] Sph

(N60W) b) - 0 41 1 1 15 [0 25] Sph

47S30W c) 30 47 15 5 1 2.091 28 [0;25] ph

Figure 12-3: Directional semi -variograms and modelling results for Casa Novas deposit

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a) b)

Az ( ⁰) Dip ( ⁰) Tol ( ⁰) g (m) 0 C ange M del

a) 0 0 180 1 0.1 . 4 [0;10] Sph

(N46W) b) -46 0 27 20 0.1 4 0;10] ph

(85N44E) c) 44 -85 35 11 0.1 0.544 45 [0;10] S h

Figure 12-4: Directional semi -variograms and modelling results for Banhos deposit

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b) a)

Az ( ⁰) Dip ( ⁰) Tol ( ⁰) Lag (m) C0 C ran e Model

a) 0 0 80 1 0.978 4 [0;10] Sph

(N0E) b) 0 0 30 2 .978 40 [0;10] Sph

(75S90W) c) 90 75 20 10 0.978 35 [0;10] Sph

Figure 12-5: Directional semi-variograms and modelling results for Ligeiro deposit

12.10 Block Model Construction For every deposit, except Monfurado, a block size of 10 m x 10 m x 5 m was chosen and is considered reasonable for the average drillhole spacing in the better drilled areas. In Monfurado a 25 m x 25 m x 5 m block dimension was chosen, accordingly with the same principles. Each block model was rotated (when necessary) so as to be aligned with the strike of the mineralization. Block model parameters are presented in Table 12-10.

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Table 12-10: Block model parameters for each of the studied deposits in the Boa Fé- Montemor gold project # of Rotation Deposit Dimension Origin Block size Blocks (° anti-clockwise) x 579263.172 10 24 Chaminé y 4266204.628 10 43 8 z 314 5 47 x 578782.584 10 29 Casas Novas y 4266605.038 10 70 60 z 268 5 43 x 575563.661 10 48 Banhos y 4267931.215 10 168 40 z 420 5 38 x 579636.869 10 12 Ligeiro y 4265851.187 10 22 0 z 316 5 26 x 580590 10 44 Braços y 4260000 10 62 0 z 225 5 26 x 571123.465 25

Monfurado y 4268967.117 25 50

z 406.24 5

12.11 Grade Estimation Methodology The deposits of Chaminé, Casas Novas, Ligeiro and Banhos were interpolated using three search passes and Ordinary Kriging (“OK”). At the deposits of Braços and Monfurado inverse distance square weighting (“IDW 2”) was used for interpolation. The search ellipsoids were defined based on the modelled ranges and orientation of the experimental variograms. Kriging parameters were set based on the results from kriging tests (quantitative kriging neighbourhood analysis). A minimum of 2 samples and a maximum of 75 samples were used for each pass during block estimation. The parameters used in the estimation process of each deposit are summarized in Table 12-11.

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Table 12-11: OK and IDW 2 parameters

Ellipsoid definition Variogram Ellipsoid range (m) Deposit Discretization (rotation ZYZ, degrees ⁰⁰⁰) range X Y Z X Y Z Pass 1 0 -5 0 22 15 3 1/3 of Chaminé 4x2x1 variogram Pass 2 0 -5 0 44 30 6 Pass 3 0 5 0 66 4 6 Pass 1 0 -47 0 28 15 5 Casas Novas Variogram 6x3x1 Pass 2 0 -47 0 56 3 0 Pass 3 0 -47 0 79 45 10 Pass 1 0 85 0 45 80 4 1/3 of Banhos 2x4x1 variogram Pass 2 0 85 0 90 160 5 Pass 3 0 85 0 135 240 8 Pass 1 0 75 0 35 40 4 1/3 of Ligeiro 4x5x1 variogram Pass 2 0 75 0 70 80 8 Pass 3 0 75 0 105 120 8 Solid BR1 Pass 1 60 -60 0 20 35 5 Braços Solid BR2 Pass 1 30 50 0 30 30 5

Monfurado Pass 1 0 40 0 35 35 5

Additionally to the interpolated gold grade, the estimation process by OK allowed the estimation of various kriging quality parameters to be included in the resultant block model. These included the slope of regression, average distance to composites, kriging variance, and the number of samples used. These parameters allow a better idea of the quality of the kriging to be assessed and are used as to aid in the application of classification criteria. 12.12 Model Validation The restaurant block models were validated by using several methods:

• Visual comparison of drill-hole composites with the block model grade; • Statistical comparison between block and composite data; • Swath plots; and • Slope of regression as an indication of estimation quality. 12.12.1 Visual comparison Visual comparison between the block grades and the underlying composite grades in perpendicular and longitudinal sections show acceptable agreement. Cross sections from some of the studied deposits are presented in Figure 12-6 to Figure 12-9.

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Figure 12-6: Section looking North-West of Chaminé deposit

Figure 12-7: Section looking North-West of Casas Novas deposit

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Figure 12-8: Section looking North-West of Banhos deposit

Figure 12-9: Section looking North-West of Ligeiro deposit

12.12.2 Mean block grade verses composite mean grade Statistical comparison between block and composite grades was done individually, per deposit (Table 12-12). To each, a cumulative function comparison was undertaken as well as a comparison of means, in order to determine if there is bias in the estimation process. When the mean is higher in the composite data it is likely due to the relative clustering of drilling in higher grade areas which has been declustered by the ordinary kriging estimation routine.

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Table 12-12: Comparison between block and composite average grade, for each deposit.

Composite data average Estimated data average Deposit Relative difference (%) grade – Au (g/t) grade – Au (g/t)

Chaminé 1.57 1.37 -13.20 Casas Novas 0.86 0.91 5.40 Banhos 0.51 0.50 -1.58 Ligeiro 0.84 1.00 19.15 Braços 1.31 1.05 -19.99 Monfurado 0.68 0.81 18.60

12.12.3 Swath Plots (Drift Analysis) As part of the validation process, the block model grades were compared with the composite grades within slices through the deposit. The results were displayed on graphs to check for visual agreement between grades averaged for sections cut in the X, Y and Z directions. An example is given in Figure 12-10.

Figure 12-10: Validation plots - Banhos deposit

12.13 Resource Classification Mineral Resource classification categories have been produced based on a number of factors primarily:

• Geological confidence based on the perceived validity of the geological wireframe models when compared to the structural model and drill coverage;

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• Validity of the drillhole logging information when comparing historic records with those from recent holes drilled in the vicinity of old holes; • Quality of the kriging estimate based on the Slope of Regression results produced during the kriging process. The classification outlines are estimated on a section by section basis by digitising zones of appropriate slope of regression values whilst taking cognisance of drill spacing and the geological confidence. There may be some areas where a lower Slope value is included in a higher classification category if it is felt that the geological confidence and continuity warrants the inclusion in the higher category. According to the guidelines set out in the NI 43-101 “ A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable ”. In order to report from the resource block model in such a way to fulfil this requirement, an optimised pit shell is generated in the Whittle® software using appropriate benchmarked costs and recovery assumptions and a gold price based on a 30% markup on the long term market consensus at the time of reporting. Figure 12-11 shows the Banhos deposit block model with the resource pit shell applied and the Mineral Resource statement will only report out those blocks which lie within the pit shell.

Figure 12-11: Example of block classification at Banhos showing Indicated (green) and Inferred (brown) category blocks and the $1,560 resource pit shell used for final Mineral Resource reporting

12.14 Mineral Resource Statement The Mineral Resources for the Boa Fé deposit have been estimated by SRK and the Client at 6.1 Mt grading 1.74 g/t classified in the Indicated Mineral Resource category and a further 1.6 Mt at 1.7 g/t in the Inferred Mineral Resource category. The total contained metal is reported at 340 koz (Au) in the Indicated Mineral Resource category and 84 koz (Au) in the Inferred Mineral Resource category. John Arthur from SRK was the qualified person for the March 2013 Mineral Resource Statement.

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Table 12-13: Mineral Resource Statement for the Boa Fé Gold Project, Alentejo Region, Southern Portugal: SRK Consulting, March 4, 2013*

Resource Quantity Average Grade Contained Metal Deposit Area Category Tonnes Au (g/t) Au Oz

Banhos 2,200,000 1.35 95,800

Braços - - -

Chaminé 1,390,000 2.05 91,700 Indicated Casas Novas 2,330,000 1.95 146,100

Ligeiro 148,000 1.42 6,730

Monfurado - - - Total Indicated 6,070,000 1.74 340,310

Banhos 172,000 1.97 10,900

Braços 380,000 1.91 23,300

Chaminé 5,000 4.67 730 Inferred Casas Novas 480,000 1.54 23,700

Ligeiro - - -

Monfurado 520,000 1.53 25,600 Total Inferred 1,554,000 1.69 84,200 Notes * • Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. • Resources stated as contained within a potentially economically mineable open pit above a 0.44 g/t Au cut-off. A variable specific gravity was used for each individual model. • Pit optimization is based on an assumed gold price of US$1,560/oz, metallurgical recovery of 90%, mining cost of US$2.00/t and processing and G&A cost of US$18.00/t. • Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.

12.15 Mineral Resource Sensitivity In order to assess the sensitivity of the Mineral Resources to changes in the cut off grade, the following tables and figures summarise the grade-tonnage curves for the combined deposits and sub-divided by classification category. It is clear that overall the relationship between cut- off grade and contained metal is relatively uniform with no major inflexions in either dataset.

Figure 12-12: Grade Tonnage curve for combined Boa Fé deposits – Indicated category

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Figure 12-13: Grade Tonnage curve for combined Boa Fé deposits – Inferred category

12.16 Relevant Factors There are no additional relevant factors that are material to the current Mineral Resource estimate. All Mineral Resources are reported within the USD 1,560/oz optimised pit shells and no modifying factors for mining dilution or mining recovery have been applied.

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13 MINERAL RESERVE ESTIMATE

There are currently no Mineral Reserve estimates at the Boa Fé EML / Montemor Exploration Concession.

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14 MINING METHODS

14.1 Mining The following sources were reviewed and provided the basis of the mining inputs for the PEA: • Boa Fé Mining Exploitation Project Descriptive Memorandum (“MEPDM”) completed by Contecmina consultoria en mineraçäo (“Contecmina”) in June 2012; • Boa Fé Gold Model 040213 (Euro) Conventional on site.xlsx financial model by Colt; • Boa Fé Gold Model 040213 (Euro) Conventional off site.xlsx financial model by Colt; • Boa Fé Gold Model 040213 (Euro) Drinkard Heap.xlsx financial model by Colt; and • Boa Fé Gold Model 040213 (Euro) Drinkard Halogen.xlsx financial model by Colt. The Boa Fé Project has three distinct mining areas: • Banhos (BH”); • Casas Novas (“CN”); • Chaminé (“CH”); • Ligeiro (“LG”); • Braços (“BR”); and • Monfurado (“MF”). SRK considers the orebody is amenable to standard open pit mining methods. Conventional truck and excavator extraction has been assumeded for all deposits. The underground potential of the deposit has not been evaluated in this study. 14.1.1 Pit Optimisation

Objectives The objective of the pit optimisations has been to: • provide four pit optimisations based on variable input parameters; • select the pit shells to take forward to life of mine planning; and • conduct a sensitivity analysis to identify the key components that affect the value of the project.

Approach Four pit optimisations were carried out in Gemcom’s Whittle software. Whittle uses the Lerchs- Grossmann 14 algorithm for determining the optimal shape for an open pit to be used as a basis for design. For the purposes of this study, SRK has considered Indicated and Inferred classified Resources in the optimisations. There were no Measured Resources identified in the block model. The pit optimisation results form the basis of the life of mine schedule.

Optimisation Model The pit optimisations carried out for the PEA are based on the six geological models provided by SRK’s geology team. The block models have the following dimensions (Table 14-1). All block models were split into a block size of 5 m x 5 m x 5 m for the optimisation.

14 The original paper which discusses this algorithm is “Optimum Design of Open-Pit Mines” by H.Lerchs and I.F.Grossmann, published in Transactions C.I.M, 1965, pp 17-24

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Table 14-1: Block Model Dimensions Dimension Origin Number of Blocks Block S ize (m) Chaminé X 578979.85 75 10 Y 4265993.14 100 10 Z 79.0 47 5 Azimuth 352.0 Casas Novas X 578814.19 50 10 Y 4266459.78 90 10 Z 53.0 60 5 Azimuth 300.0 Banhos X 575563.66 48 10 Y 4267931.21 168 10 Z 230.0 38 5 Azimuth 320.0 Braços X 580590.0 44 10 Y 4260000.0 62 10 Z 95.0 26 5 Azimuth 0.0 Ligeiro X 579576.87 30 10 Y 4265801.19 35 10 Z 186.0 26 5 Azimuth 0.0 Mofurado X 571355.04 40 25 Y 4268348.55 70 25 Z 186.24 44 5 Azimuth 310.0

The block model has been divided into the ore types shown in Table 14-2.

Table 14-2: Summary of Rock Types in the Block Model Units BH CN CH BR LG MF Measured t ------Indicated t 9,934,627 1,071,083 2,137,768 - 209,297 - Inferred t 1,892,290 6,192,528 212,960 698,076 83,196 1,868,855

Pit Optimisation Scenarios Four pit optimisation scenarios have assessed as part of the optimisation study (Table 14-3). Each one applied a different process route to the material.

Table 14-3: Pit Optimisation Scenarios Scenarios Description Option A Conventional Off-Site Option B Conventional On-Site Option C Drinkard Heap Leach Option D Drinkard Halogen

Pit Optimisation Parameters The pit optimisation parameters are shown in Table 14-4 and are based on: • an inter-ramp slope angle of 55° taken from the ME PDM Report with a 17 m ramp based on a 36 t haul truck; • the mining costs are based on the MEPDM Report and are consistent with similar operations in SRK’s opinion;

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• there have been no topographical constraints used in the optimisation; and • a benchmarking study of PEA reports submitted for gold projects in 2012 has been undertaken to determine the Au selling price.

Table 14-4: Pit Optimisation Parameters Parameter Unit Value Overall Slope Angle ° 51 Mining Ore Loss % 5 Mining Dilution % 5 Base Mining Cost USD/t 2.20 Incremental (Vertical) Mining Cost USD/t/5m 0.04 Selling Price USD/oz 1,350 Royalty % 4

The processing and product transporting costs along with the processing recoveries have been based on Colt’s financial models and are shown in Table 14-5.

Table 14-5: Processing & Transporting Costs Parameter Unit Option A Option B Option C Option D

Processing and Transport Cost USD/t ore 27.76 20.02 14.30 20.15 Processing Recovery % 85.5 85.5 73.0 95.0

The run of mine (“RoM”) ore transport costs have been derived using Caterpillar’s Fleet Production Cost (“FPC”) software for each deposit and are shown in Table 14-6. These costs are based on 18 t articulated trucks and a 2.3 m3 front end loader and have been estimated using Infomine’s 2012-2013 cost database 15 . Due to the proximity of the Chaminé and Ligeiro deposits to the processing facilities, no additional RoM haulage cost was added.

Table 14-6: RoM Transport Costs Deposit Units Option A Option B Option C Option D CH USD/t ore 0.00 0.00 0.00 0.00 CN USD/t ore 1.03 1.03 1.03 1.03 BH USD/t ore 1.90 1.90 1.90 1.90 BR USD/t ore 2.08 2.08 2.08 2.08 LG USD/t ore 0.00 0.00 0.00 0.00 MF USD/t ore 3.15 3.15 3.15 3.15

A discount rate of 10% has been used for a discounted cash flow (“DCF”) analysis when comparing the options. A production rate of 720 ktpa of ore has been considered to define the time limits of the discounted cash flow analysis for the incremental pit shells.

Results The ultimate pit results for the four scenarios analysed are summarised in Table 14-7 and in Figure 14-1. Expanded pit optimisation results can be found in Appendix C.

15 Infomine, 2012-2013. Equipment Cost Calculator . [online] Available at: [Accessed March 13, 2013].

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Table 14-7: Pit Optimisation Ultimate Pit Results Units Option A Option B Option C Option D Selling Price USD/oz 1,350 1,350 1,350 1,350 Total kt 18,744 20,934 20,055 24,437 BH kt 5,118 5,823 5,463 7,196 BR kt 848 979 925 1,039 CN kt 6,850 7,891 7,493 8,882 CH kt 3,403 3,519 3,529 3,784 LG kt 497 507 500 512 MF kt 2,029 2,214 2,145 3,025 Waste kt 15,234 16,486 15,417 19,380 BH kt 4,468 4,945 4,544 6,123 BR kt 622 706 650 741 CN kt 5,469 6,086 5,617 6,876 CH kt 2,419 2,378 2,335 2,577 LG kt 411 399 383 395 MF kt 1,844 1,971 1,888 2,669 Strip Ratio t:t 4.34 3.71 3.32 3.83 BH t:t 6.88 5.64 4.95 5.71 BR t:t 2.76 2.59 2.36 2.48 CN t:t 3.96 3.37 2.99 3.43 CH t:t 2.46 2.08 1.96 2.13 LG t:t 4.82 3.71 3.29 3.39 MF t:t 10.00 8.10 7.34 7.49 In -Situ Ore kt 3,510 4,448 4,638 5,057 BH kt 650 877 919 1,073 BR kt 226 273 275 299 CN kt 1,380 1,805 1,877 2,006 CH kt 984 1,141 1,194 1,207 LG kt 85 108 116 117 MF kt 184 243 257 356 In -Situ Au Grade g/t 2.86 2.47 2.38 2.31 BH g/t 3.07 2.56 2.44 2.31 BR g/t 2.68 2.40 2.37 2.27 CN g/t 3.01 2.54 2.46 2.39 CH g/t 2.63 2.39 2.31 2.31 LG g/t 1.98 1.74 1.66 1.67 MF g/t 2.80 2.40 2.28 2.04 RoM Ore kt 3,501 4,437 4,627 5,045 BH kt 648 875 917 1,070 BR kt 225 272 275 298 CN kt 1,377 1,801 1,872 2,001 CH kt 982 1,138 1,191 1,204 LG kt 85 107 116 116 MF kt 184 243 257 355 RoM Au Grade g/t 2.72 2.35 2.27 2.20 BH g/t 2.92 2.43 2.32 2.20 BR g/t 2.56 2.29 2.26 2.16 CN g/t 2.86 2.42 2.34 2.28 CH g/t 2.50 2.27 2.20 2.20 LG g/t 1.89 1.66 1.58 1.59 MF g/t 2.67 2.28 2.17 1.94 Total Au Output k oz 261.8 286.9 246.3 338.6 BH k oz 52.1 58.6 50.0 72.0 BR k oz 15.8 17.1 14.6 19.7 CN k oz 108.4 119.9 102.7 139.3 CH k oz 67.6 71.2 61.6 80.9 LG k oz 4.4 4.9 4.3 5.6 MF k oz 13.5 15.2 13.1 21.1

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45 Option A 8 45 Option B 8

40 7 40 7 35 35 6 6 30 30 5 5 25 25 4 4 20 20 3 3 Content (t) Content Content (t) Content 15 15 2 2 10 10 Strip Ratio Ratio Strip (t:t) : Au Grade (g/t) 5 1 Ratio Strip (t:t) : Au Grade (g/t) 5 1

0 0 0 0 Ore Quantity Quantity Ore (Mt) Waste :Quantity (Mt) :Au Ore Quantity Quantity Ore (Mt) Waste :Quantity (Mt) :Au 400 500 600 700 800 900 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700

Selling Price (USD/toz) Selling Price (USD/toz)

Ore Waste Au Content SR Au Grade Ore Waste Au Content SR Au Grade

45 Option C 8 45 Option D 8

40 7 40 7

35 35 6 6 30 30 5 5 25 25 4 4 20 20 Content (t) Content Content (t) Content 3 3 15 15 2 2 10 10 Strip Ratio Ratio Strip (t:t) : Au Grade (g/t) 1 Ratio Strip (t:t) : Au Grade (g/t) 5 5 1 Ore Quantity Quantity Ore (Mt) Waste :Quantity (Mt) :Au Ore Quantity Quantity Ore (Mt) Waste :Quantity (Mt) :Au 0 0 0 0 400 500 600 700 800 900 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700

Selling Price (USD/toz) Selling Price (USD/toz) Ore Waste Au Content SR Au Grade Ore Waste Au Content SR Au Grade Figure 14-1: Optimisation Cashflow Results

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The ratio of Indicated to Inferred classified resources in the pit optimisation shells is shown in Table 14-8.

Table 14-8: Pit Optimisation Classification Results Units Option A Option B Option C Option D Selling Price USD/oz 1,350 1,350 1,350 1,350 Total Ore kt 3,510 4,448 4,638 5,057 Indicated kt 2,807 3,515 3,678 3,913 Inferred kt 703 933 961 1,145 Indicated % 80 79 79 77 Inferred % 20 21 21 23

The ore feed as a function of the selling price for the six scenarios are shown below in Figure 14-2. The key findings from the ore tonnage curves are:

• Option D produces the most amount of ore at any Au price; • Option B and C are fairly similar until an Au price of USD 1,200/oz is achieved, after which Option C produces more ore; and • Option A produces the least amount of ore at any Au price.

3 Ore QuantityOre (Mt) 2

0 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700 Au Price (USD/toz)

Option A Option B Option C Option D

Figure 14-2: Optimisation Results – Ore Tonnage

The recovered product as a function of the Au price is shown in Figure 14-3. The key findings from the recovered metal curves are:

• Option D recovers the most recovered metal at any Au price, followed by Option B; and • Option A and Option C recover similar metal quantities until a price of USD 950/oz is achieved, where Option A surpasses Option C.

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400

350

300

250

200

150 Recovered Metal (k toz) (k Metal Recovered 100

0 400 500 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400 2,500 2,600 2,700

Au Price (USD/toz)

Option A Option B Option C Option D

Figure 14-3: Optimisation Results – Recovered Metal

The undiscounted cashflow as a function of recovered metal is shown in Figure 14-4. The key findings of the cashflow curves are:

• Option D provides an additional USDm 42.0 of undiscounted cashflow over Option B at an Au price of USD 1,350/oz; and • Options A and C provide similar undiscounted cashflow per recovered Au metal.

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300

250

200

150

100 Undiscounted Cashflow (USDm) Cashflow Undiscounted 50

0 100 125 150 175 200 225 250 275 300 325 350 375 400 Recovered Metal (k toz)

Option A Option B Option C Option D

Figure 14-4: Optimisation Results – Undiscounted Cashflow by Recovered Metal

Slope Angle Sensitivity Section 14.2 recommends producing slope sensitivities for 54° and 52° inter-ramp slope angles. A sensitivity analysis was run using the most conservative case of 52°, which resulted in an overall slope angle (“OAS”) of 48°. The diffe rence in results for Option B is shown in Table 14-9.

Table 14-9: Slope Angle Sensitivity Units Option B (OSA 51°) Option B (OSA 48°) Differe nce Selling Price USD/oz 1,350 1,350 Total t 20,933,683 21,609,592 675,909 Waste t 16,485,746 17,260,111 774,365 Strip Ratio t:t 3.71 3.97 0.26 In-Situ Ore t 4,447,937 4,349,481 -98,456 Au Grade g/t 2.47 2.49 0.02 Processed Ore t 4,436,817 4,338,607 -98,210 Au Grade g/t 2.35 2.37 0.02 Total Au Output oz 286,912 282,531 -4,381

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14.1.2 Life of Mine Schedule

Objectives The life of mine schedules based on the pit optimisation results were required to;

• progress the understanding of the mine planning from a conceptual stage; • provide a pit development basis for the site infrastructure designs; • select a pit development strategy; and • provide life of mine schedule scenarios for the four processing options for input into the financial model.

Approach Revenue factor 1.0 (USD 1,350/oz) pit shells for all four scenarios have been selected to carry forward to the life of mine schedule for comparison purposes. No modifications have been made to optimised shells for engineering ore loss or added waste. Modification factors remain the same as the optimisation at 5% ore loss and 5% mining dilution. Gemcom’s Whittle software was used to create life of mine schedules based on the following:

• annual Run of Mine (“RoM”) ore production of 450 ktpa in the first year and 720 ktpa for every year afterwards; • the schedules aim to provide an smooth production profile to evenly distribute trucking requirements; • a stockpiling strategy was used to provide higher grade material in the initial years of production. A Cut off Grade (“CoG”) of 1.0 g/t Au was used for all deposits and all scenarios to distinguish between high grade (“HG”) and (“LG”). Low grade material has been initially stockpiled and sent to the processing facility in the later years; and • no material was stockpiled from the Braços, Ligeiro and Monfurado deposits, as they are mined in the final years of production.

Results The scheduling results for all four options are shown in Table 14-10. The mine schedules produced the following results:

• Option A has the shortest mine life (6 years), while Option D is longest (8 years) due to the size of the optimised pit shells; • all four scenarios resulted in similar production and grade profiles, with high grade material produced in the early years and lower grades fed towards the end of the mine life; and • total material movement ranges from 4 to 5 Mtpa for all options.

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Table 14-10: Life of Mine Schedule Results

Units Totals Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Option A Total kt 19,132 1,799 3,947 4,114 4,167 4,533 573 Waste kt 15,234 1,290 3,144 3,292 3,375 3,745 389 Total RoM kt 3,501 450 720 720 720 720 171 Au Grade g/t Au 2.72 2.83 2.56 3.27 2.46 2.69 2.01 Au koz Au 306 41 59 76 57 62 11 LG to stockpile kt 75 15 22 23 13 3 HG to RoM kt 3,426 450 720 720 720 720 96 LG to RoM kt 75 75 Stripping Ratio t:t 4.3 2.9 4.4 4.6 4.7 5.2 2.3 Option B Total kt 21,955 1,762 4,127 4,310 4,461 3,710 2,763 822 Waste kt 16,486 1,198 3,175 3,340 3,483 2,870 2,006 414 Total RoM kt 4,437 450 720 720 720 720 720 387 Au Grade g/t Au 2.39 2.79 2.54 3.34 2.14 2.62 1.46 1.63 Au koz Au 341 40 59 77 50 61 34 20 LG to stockpile kt 675 71 171 169 207 57 1 HG to RoM kt 3,761 450 720 720 720 720 354 77 LG to RoM kt 675 366 309 Stripping Ratio t:t 3.2 2.8 4.6 4.9 5.1 4.1 2.8 1.1 Option C Total kt 21,276 1,744 4,094 4,094 4,220 3,515 2,629 980 Waste kt 15,403 1,155 3,098 3,078 3,163 2,653 1,876 381 Total RoM kt 4,624 450 720 720 720 720 720 574 Au Grade g/t Au 2.30 2.78 2.55 3.35 2.12 2.66 1.33 1.27 Au koz Au 341 40 59 77 49 62 31 23 LG to stockpile kt 891 96 215 215 286 78 1 HG to RoM kt 3,734 450 720 720 720 720 329 75 LG to RoM kt 891 391 499 Stripping Ratio t:t 2.8 2.8 4.6 4.6 4.8 3.8 2.6 0.7 Option D Total kt 25,791 1,594 4,507 4,123 4,338 5,154 4,698 1,095 282 Waste kt 19,380 1,022 3,488 3,146 3,265 4,236 3,873 349 Total RoM kt 5,045 450 720 720 720 720 720 720 275 Au Grade g/t Au 2.20 2.85 2.66 3.36 2.21 2.19 1.82 1.08 0.77 Au koz Au 356 41 62 78 51 51 42 25 7 LG to stockpile kt 993 77 235 176 299 144 61 HG to RoM kt 4,052 450 720 720 720 720 615 107 LG to RoM kt 993 105 613 275 Stripping Ratio t:t 3.2 2.4 5.2 4.6 5.0 6.1 5.5 0.5

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14.1.3 Operating Strategy

Objectives The operating strategy is based on the mine schedules to provide:

• a preliminary estimate of mining equipment requirements; • a preliminary estimate of mining personnel; and • a basis of the mine cost estimate.

Fleet Requirements Equipment requirements have been determined using the following methods:

• 260 workings days per year and 8 working hours per day;; • truck and excavator requirements were calculated based on productivities and cycle times determined using Caterpillar’s FPC software; • haulage requirements have been based on estimated ex-pit haulage of ore and waste, and bench haulage estimates based on the revenue factor 1.0 pit shells; • two distinct fleets have been used for waste and ore, with smaller equipment used in the ore to provide more selectivity; • 4 m3 capacity excavators and 36 t trucks have been assumed for waste movement and 2.3 m3 capacity excavators and 18 t trucks for ore; • drilling requirements has been based on 5 m benches with 102 mm blasthole drills; • ancillary equipment has been based on material movement and primary fleet requirements; • it has been assumed that the ore from Casas Novas, Banhos, Braços and Monfuardo will transported to the processing facility by the use of a 2.3 m3 wheel loader and 18 t trucks • The equipment requirements for all four options are shown on an annual basis in Table 14-11.

Personnel Requirements

Personnel requirements have been based on: • material movements; • equipment requirements; and • preliminary estimates from the Client.

An estimate of the maximum personnel required for the life of mine of the four options is shown in Table 14-12.

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Table 14-11: Equipment Requirements by Option Equipment Fleet Requirements MAX Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Option A Main Fleet Excavator (4m 3) 4 2 4 4 4 4 4 Excavator (2.3m 3) 2 1 2 2 2 2 2 Truck (36t) 23 6 22 23 20 18 16 Truck Art. (18t) 7 3 6 7 7 5 5 Drill (102mm) 7 3 6 6 7 7 6 Track Dozer (310hp) 2 1 2 2 2 2 2 Grader (138hp) 2 1 2 2 2 2 2 Wheel Loader (2.5m 3) 1 1 1 1 1 1 1 Rockbreaker 1 1 1 1 1 1 1 Water Truck (19m3) 2 1 2 2 2 2 2 Fuel/Lube Truck 1 1 1 1 1 1 1 Light Vehicle 16 13 16 16 16 15 15 Ore Transport Wheel Loader (2.3m 3) 2 1 2 2 2 1 Truck Art. (18t) 19 4 10 13 19 4 Option B Main Fleet Excavator (4m 3) 5 2 4 4 4 4 3 5 Excavator (2.3m 3) 2 1 2 2 2 2 1 2 Truck (36t) 25 6 22 25 21 14 9 21 Truck Art. (18t) 9 3 7 9 9 5 2 6 Drill (102mm) 7 3 6 7 7 6 4 7 Track Dozer (310hp) 2 1 2 2 2 2 1 2 Grader (138hp) 3 1 2 2 2 2 1 3 Wheel Loader (2.5m 3) 2 1 1 1 1 1 1 2 Rockbreaker 1 1 1 1 1 1 1 1 Water Truck (19m 3) 2 1 2 2 2 2 1 2 Fuel/Lube Truck 1 1 1 1 1 1 1 1 Light Vehicle 16 13 16 16 16 15 13 16 Ore Transport Wheel Loader (2.3m 3) 2 1 2 2 2 1 1 Truck Art. (18t) 19 4 10 13 19 13 9 Option C Main Fleet Excavator (4m 3) 4 2 4 4 4 3 3 4 Excavator (2.3m 3) 2 1 2 2 2 2 1 2 Truck (36t) 23 6 21 23 19 13 9 20 Truck Art. (18t) 9 3 7 9 9 5 2 6 Drill (102mm) 7 3 6 6 7 6 4 7 Track Dozer (310hp) 2 1 2 2 2 2 1 2 Grader (138hp) 4 1 2 2 2 2 1 4 Wheel Loader (2.5m 3) 2 1 1 1 1 1 1 2 Rockbreaker 1 1 1 1 1 1 1 1 Water Truck (19m 3) 2 1 2 2 2 2 1 2 Fuel/Lube Truck 1 1 1 1 1 1 1 1 Light Vehicle 16 13 16 16 16 14 13 16 Ore Transport Wheel Loader (2.3m 3) 2 0 1 2 2 2 1 2 Truck Art. (18t) 20 0 4 9 13 20 12 12 Option D Main Fleet Excavator (4m 3) 5 2 4 4 4 5 5 3 Excavator (2.3m 3) 2 1 2 2 2 2 2 2 Truck (36t) 25 5 24 25 21 20 19 14 Truck Art. (18t) 9 3 8 9 9 6 4 6 Drill (102mm) 8 3 7 6 7 8 7 5 Track Dozer (310hp) 2 1 2 2 2 2 2 2 Grader (138hp) 3 1 2 2 2 2 2 3 Wheel Loader (2.5m 3) 2 1 1 1 1 1 1 2 Rockbreaker 1 1 1 1 1 1 1 1 Water Truck (19m 3) 2 1 2 2 2 2 2 2 Fuel/Lube Truck 1 1 1 1 1 1 1 1 Light Vehicle 16 13 16 16 16 16 15 15 Ore Transport Wheel Loader (2.3m 3) 2 0 1 2 2 2 2 2 1 Truck Art. (18t) 20 0 5 8 13 20 17 11 7

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Table 14-12: Personnel Requirements by Option Option A Option B Option C Option D Mine Operations 0 0 0 0 Mine Manager 1 1 1 1 Supervisor Operations 1 1 1 1 Shotfirer 2 2 2 2 Truck Operator 30 34 32 34 Shovel Operator 6 7 6 7 Dozer Operator 2 2 2 2 Grader Operator 2 3 4 3 Aux Equipment Operators 4 5 5 5 Drillers 7 7 7 8 Drilling Assistant 4 4 4 4 Services Assistant 2 2 2 2 Total Mine Operations 61 68 66 69 Mine Maintenance 0 0 0 0 Mechanical Engineer 1 1 1 1 Mechanical Supervisor 1 1 1 1 Mechanic (Heavy Vehicle) 1 1 1 1 Mechanic (Light Vehicle) 3 3 3 3 Electrician 1 1 1 1 Maintenance Crew 4 4 4 4 Lubricator 2 2 2 2 Tire Fitter 2 2 2 2 Tire Fitter Assistant 2 2 2 2 Total Mine Maintenance 17 17 17 17 Technical Services 0 0 0 0 Senior Mining Engineer 1 1 1 1 Mining Technician 1 1 1 1 Mine Surveyor 1 1 1 1 Surveying Assistant 2 2 2 2 Senior Mine Geologist 1 1 1 1 Geology Technicians 1 1 1 1 Sampler 2 2 2 2 Administrative Assistant 1 1 1 1 Total Technical Services 10 10 10 10 TOTAL 88 95 93 96

14.1.4 Conclusion Based on a scoping level of study the following conclusions can be made:

• The ratio of Indicated to Inferred classified resources from the optimisation results ranges from 77% to 80% Indicated to 20% to 23% Inferred for the different options; • The optimisation results show that Option D produces the most amount of ore at any Au price, while Option A produces the least amount of ore at any Au price; • The optimisation results show that Option D recovers the most Au metal at any Au price, followed by Option B; • The optimisation results show that Option D provides an additional USDm 42.0 of undiscounted cashflow over Option B at an Au price of USD 1,350/oz; • The optimisation sensitivity shows that a 3° decre ase in overall slope angle results in a 98 kt decrease in ore, 4.4 k oz decrease in Au metal and 774 kt increase in waste; • Option A has the shortest mine life (6 years), while Option D is longest (8 years) due to the size of the optimised pit shells; • all four schedule scenarios resulted in similar production and grade profiles, with high grade material produced in the early years and lower grades fed towards the end of the

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mine life; and • total material movement ranges from 4 to 5 Mtpa for all options. The following recommendations should be undertaken in the next phase of the project:

• re-run the optimisation with the results of the financial analysis of the PEA; • select a pit shell from the optimisation results based on the preferred processing method identified from the PEA results and a DCF analysis; • evaluate alternative methods for transporting the ore from the Casas Novas, Banhos, Braços and Monfuardo, such as larger trucks or contractors to reduce capital and operating costs; • review the cut off grade used for the stockpiling strategy for the selected scenario; • review the practicality of mining low grade and high grade separately; and • evaluate the standard mining unit to validate mining recovery and dilution factors. 14.2 Geotechnical Assessment 14.2.1 Approach A review of the available data for the Boa Fé Project was undertaken to ascertain whether or not the geotechnical slope criteria given by the geotechnical report supplied by the client was suitable. In addition, a brief stability analysis was undertaken. As the geotechnical data for the deposits at Boa Fé is limited, the pit slope stability analysis concerned itself upon the Chamine and Casas Novas pits. The bulk of the data is related to these two pits. Where data is limited it was combined and applied to the analysis of both pits. At the time of the geotechnical study, 3D wireframes of the complex geology were not finalised. The geotechnical data was therefore combined as one rock mass (bar overburden and weathered rock). No information on large scale features (faults) was available. The pit slope configurations reported can be applied to the other pits at this stage of the study. Subsequent studies should encompass each pit separately when there is sufficient data to do so. 14.2.2 Available Data and Confidence

Reports A report named ‘Estudo Geotecnico Reconhecimento Geológico’ was made available by the Client. The executive summary was made available in English however the main report was in Portuguese. Basic English translations were made into English using a translation software program. Whilst not exclusively concerned with pit slope geotechnics, the report covered the pit slope design parameters and the various laboratory testing that was undertaken. The initial pit slope configuration is shown below:

• Bench height: 10 m; • Berm width: 5 m; • Bench Angle: 80°; and • Inter ramp slope angle: 55°. These values were used as the initial basis for the pit slope stability analysis.

Logging Data Logging data was provided as a database (DrillDB_Mentemor_New.xlsm). The data that was used for the geotechnical analysis was the under the ‘geotechnical’ and ‘structural’ tabs. The orientations of the boreholes at Boa Fé primarily run perpendicular to the strike of the orebody for each pit. This introduces a drilling bias; geotechnical features that run parallel to the

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drillholes are underrepresented in the geotechnical data.

Geotechnical Data The geotechnical data included drilling interval logging covering; recovery, RQD, weathering, estimated intact rock strength (“IRS”), and a count of the joints. Of the 160 holes logged only 15 holes (14 CH and 1 at CN) had a complete set of geotechnical data to be able to calculate rock mass rating (“RMR”) values. The bulk of the logged interval data, whilst having RQD values, did not have joint count data. To provide robust RMR values the characteristics of the joints is required; this data was not logged, however an assumption was made of the likely jointing conditions and this was universally applied to each interval. The intervals were logged to coincide with each drilling run; this is known to miss potentially geotechnically significant features. Intact rock data, also required to calculate RMR, were logged as a range for each interval. The lower boundary of the range was used in subsequent analysis (Table 14-13).

Table 14-13: Intact rock strength logging codes and conversions. Code Range (MPa) Value Used (MPa) R6 +250 200 R5 100 - 250 100 R4 50 - 100 50 R3 25 - 50 25 R2 5 - 25 5 R1 1 - 5 1 R0 0.25 - 1 0.25

The core photos for the 15 holes were reviewed and the bulk of the logged data matched that seen in the core. A number of logging mistakes were corrected. A small proportion of the intervals underestimated the number of fractures seen in the core photos. These and other errors in the interval data (e.g RQD percentage of greater than 100%) were edited to better reflect what was seen in the core.

Structural Data The structural data tab of the geotechnical database had alpha and beta information of discontinuities which are used to provide orientation data for the structures in the rock mass. Of the 1,2935 discontinuities logged for orientation, only 503 have both alpha and beta values that allow for the orientation of the discontinuities to be calculated. Of these 503 data points, only schistosity, lithological boundaries and veins were available. None of the joints/fractures recorded had both alpha and beta angles. There was no indication on the confidence of the orientation lines used to measure the alpha and beta angles. As such a small proportion of the structural data has beta values measured it is assumed that the orientation lines were problematic to define (due to core spin, core breakage, or lack of core orientation tools available). As there is so little data, the 503 data points are assumed to be representative of the orientations of the discontinuities in the rock mass at Boa Fé; although there is little confidence in this assumption. Of the 503 points, 237 are from CN, 232 are from CH and 34 are from BH. The BH data is disregarded for the analyses as there is too little data to draw robust conclusions.

Lab Data The laboratory results were provided within the geotechnical report. Results of triaxial rock, tensile and shear tests were made available. It is understood that the laboratory tests were undertaken to international standards. There were some interpretation issues with the main report due to the Portuguese to English translation.

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Data specific to the CH and CN pits was collated and used in the analyses. Where data was limited, it was combined and applied to both pits. 14.2.3 Rock Mass Characterisation

Geotechnical Domains The rock mass was split into overburden, weathered and fresh rock domains. This was undertaken by assessing the depths of these zones as seen in the core photos. Examples are shown in Figure 14-5 and Figure 14-6. The depths of the overburden and weathered zones are shown in Figure 14-5. The data shows that the overburden and weathered zones are not particularly thick when compared to other similar deposits.

Figure 14-5: Example of overburden (yellow) and weathered core (remainder of box)

Figure 14-6: Example of weathered core transitioning into fresh rock

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Table 14-14: Overburden and Weathering Zone Thicknesses. BHID Overburden Thickness (m) Weathered Zone Thickness (m) BFCH-11-001 2.8 6.5 BFCH-11-002 1 12.5 BFCH-11-003 2.6 9 BFCH-11-004 2.7 7 BFCH-11-005 1.5 13 BFCH-11-006 2.15 12.8 BFCH-11-007 2.2 7.5 BFCH-12-001 1 12 BFCH-12-002 4.35 16 BFCH-12-003 0.6 10.5 BFCH-12-004 4.9 23.15 BFCH-12-005 0.5 5 BFCH-12-006 2 15.75 BFCH-12-007 2 10 BFCN-12-001 0.5 1 Average 2.1 10.8

Rock Mass Ratings and Strength Review of the RMR data shows that the major lithologies do not vary in RMR value greatly (Table 14-15). Combining them into one domain for subsequent analyses is appropriate at this level of study. Due to the lack of geotechnical data the lithologies at Boa Fé have to be combined into one rock mass to produce one RMR value. This is then split into overburden, weathered and fresh rock. Table 14-16 shows the RMR values for each domain, split into pit (CH and CN). As the majority of the RMR data is from CH (only one hole is available for CN), the CN data was split out from the results. The CN RMR values are slightly higher for the fresh rock.

Table 14-15: RMR values from CH; split by lithology code. Lithology code Weighted RMR Percentage of logged core APP 48 7.0% BMX 50 47.2% CBX 50 0.2% FEX 39 0.5% GND 45 0.8% GNG 31 0.1% GNT 55 1.6% MAF 52 3.6% QZV 47 0.4% SBX 50 28.6% SSR 50 2.9% UNX 37 7.0%

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Table 14-16: RMR values by domain split by pits Zone RMR Weighted Max Min StdDev OVB CH 32 37 23 5 WEATH CH 39 85 26 8 CN 29 29 29 - FRESH CH 50 90 26 10 CN 58 100 37 9

The overburden is made up of very weak rock and clay like soil with gravel and large fragments of rock, so it produces a low rock mass rating (the values in Table 14-16 are only for the rock fraction). As it is such a thin layer (2.1 m average thickness) it is not thought to require separate geotechnical slope design criteria. The weathered zone is typically brown in colour and weak where the rock mass has degraded. The fracturing is more intense than the fresh rock below (hence the lower RMR value). The average thickness of the weathered zone is 11 m. As it is a thin layer (it should only make up a proportion of one bench face) it is not thought to require separate geotechnical slope design criteria. The fresh rock is moderately jointed and shows schistosity in the metamorphosed lithologies. They are not always open, but seem to part easily due to drilling induced stresses. The RMR value for fresh rock (CH) is 50; this denotes the rock mass as ‘fair’ rock mass (RMR = 41-60). The standard deviation of 10 shows that the rock mass varies between a ‘poor’ and a ‘good’ rock mass in places. It must be noted that the RMR value for the fresh rock include intervals that were logged as faults and breccias. As there is no information on the exact location and geometry of these intervals in the rock mass they are included in the total calculation.

Discontinuity Characteristics

Orientation As no joints/fracture orientations were available, limited analysis could be completed to ascertain potential discontinuity sets. Structural orientation sets concerned only the general orientation of the schistosity. Analysis of the data showed that the schistosity of the rock mass was orientated sub parallel to the footwall of each pit (CH and CN). Stereonets showing the schistosities are shown in Figure 14-7 and Figure 14-8 respectively.

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Figure 14-7: Stereonet showing schistosity of CH pit

Figure 14-8: Stereonet showing schistosity of CN pit

Strength Laboratory test data indicates that the joint strength of the CH and CN pits are those shown in Table 14-17. As there was no joint strength data from the logging, laboratory data was used in the analyses. As cohesion is not considered to act with the minimal normal stresses occurring at the bench scale cohesion is assumed to be 0 kPa. The friction angle is set to be 30° for the subsequent kinematic analysis.

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Table 14-17: Cohesion and Friction Angles of Joints at CH pit and CN pit Pit Cohesion (kPa) Friction Angle ( °) CH 120 30.45 CN 20 30.74

14.2.4 Kinematic Analysis – Bench Scale

Introduction From a strictly kinematic standpoint, rock failures in an open pit are often classified into three basic failure types. These failure types include toppling, sliding and wedge failure. As the schistosities are orientated sub parallel to the footwall of the pit slopes there is a potential for planar and toppling instabilities. No data is available for the other discontinuity sets so analysis upon wedge failures (combination of 2 joint sets) cannot be completed at this stage. The basic concepts behind these failure mechanisms are discussed below. A key parameter in any kinematic analysis is discontinuity persistence; as they are schistosities, they are assumed to be continuous. As there is structural data for both CH and CN, and the pits follow slightly different orientations to one another, they are analysed separately. A friction angle of 30° was used for the analysis (sourced from laboratory data); 0 kPa cohesion was used for kinematic analysis. Table 14-18 shows the input parameters used for the kinematic analysis.

Table 14-18: Input parameters for kinematic analysis Pit Friction Cohesion HW Dip FW Dip Lateral Bench Angle Direction Direction Limits Face Angle (°) (kPa) (°) (°) (°) (°) CH 30 0 255 075 +/- 20 70 & 80 CN 30 0 200 020 +/- 20 70 & 80

Toppling Toppling analysis involves plotting a plane, representing the bench face slope angle and a slip limit; the latter is defined as a plane with a dip direction parallel to the pit slope, and a dip equal to the bench face angle, minus the joint friction angle (e.g. 75° (BFA) – 30° (friction angle) = 45° (slip limit)). The confined toppling r egion indicates where toppling failure is likely located. By comparing the number of joint and major structure poles within the confined zone with the total number of poles in the parent cluster, it is possible to determine the qualitative probability for toppling failure for a given rock type and pit slope orientation. Toppling is considered to have an impact range of ±20° from the midpoint of the selected feature pole, subject to increase if spread of poles is significant. Table 14-19 shows the toppling results. An example of the toppling analysis is shown in Figure 14-9. The results show that there will be a moderate risk of toppling at CH on the footwall regardless of a bench face angle decrease. A high risk of toppling failure is likely at CN on the footwall which also does not vary with a decrease in bench face angle. The hangingwall slopes at CH have a low risk of toppling failure, where the risk of toppling failure on the hangingwall of CN is moderate. A change of bench face angle will not affect the likelihood of toppling failure at CN or CH.

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Table 14-19: Toppling kinematic results for CH and CN Hangingwall Footwalll

Pit Bench Angle (°) Risk Bench Angle (°) Risk

70 Low 70 Moderate CH 80 Low 80 Moderate 70 Moderate 70 High CN 80 Moderate 80 High

Figure 14-9: Stereonet toppling analysis for CN hangingwall 70° bench face angle

Planar Sliding Planar Sliding failure is characterised by slip on a pre-existing near-planar surface that dips out of the rock face. Depending on the excavation geometry, there may be releasing planes on either side of the failure and a tension joint behind the failure. The pre-existing structure upon which sliding occurs could be a fault plane, a fracture, or a discontinuity set, but is very often layering-parallel (sedimentary or metamorphic) jointing/partings that dip into the excavation at angles greater than the friction angle of the said surface. It is quite common in open pits for layering on one side of the pit to be unfavourably orientated and to create a sliding type slope stability problem on a single side of the pit. Planar failure analysis is undertaken by employing a friction cone and a daylight envelope to test for combined frictional and kinematic scenarios where planar sliding is possible. Any poles falling within the envelope are kinematically free to slide, if frictionally unstable. Any pole falling outside of the frictional cone represents a plane that could slide if kinematically possible. The crescent shaped zone formed by the daylight envelope and the pole friction circle therefore encloses the region of planar sliding, where planes are free to slide both frictionally and kinematically. Again, by comparing the number of poles in the parent cluster, it is possible to determine the qualitative probability of planar failure for a given rock type and pit slope orientation.

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Table 14-20 shows the planar results. An example of the planar analysis is shown in Figure 14-10. The results show that there will be a low risk of planar failure at CH and CN on the footwall regardless of a bench face angle decrease. The hangingwall slopes at CH have a low risk of planar failure when the bench face angle is decreased from 80° to 70°. A reduction of planar instability risk, from high to moderate is achieved at CN when the bench face angle is reduced from 80° to 70°. A change of bench face ang le from 80° to 70° will act to reduce the likelihood of planar failure at CN or CH.

Table 14-20: Planar Kinematic Results for CH and CN Hangingwall Footwalll

Pit Bench Angle (°) Risk Bench Angle (°) Risk

70 Low 70 Low CH 80 Moderate 80 Low 70 Moderate 70 Low CN 80 High 80 Low

Figure 14-10: Stereonet Planar Analysis for CH Hangingwall 70° Bench Face Angle

Bench Geometry The bench face angle was recommended to be reduced from 80° to 70° (from the previous section); this will reduce kinematic risk. The pit most affected by planar failure, CN, was used for bench geometry analysis. To ascertain the berm width required to hold any potential failures, an assessment of the likely failure volumes was undertaken. To do this a software program called Rocplane (Rocscience Inc.) was used. It assumes the orientation of the failure plane, the schistosity, is parallel to the slope face. Average values of the failure plane dip minus 1 standard deviation value are used to calculate the failure volume formed by the intersection of the bench face and the inclined failure plane.

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The results are shown in Figure 14-11. The results show that a berm width of 3.2 m is required to hold a failure volume formed by the intersection of the 70° bench face angle and average failure plane minus one standard deviation (82° - 15° = 67°). As the failure surface is assumed to be linearly infinite, an arbitrary 5 m failure width was used to enable calculation of the weight and cross sectional area of the failed mass. A swell factor of 1.3 and a rill angle of 45° are also assumed.

Bench Scale Stability Analysis

Pit Wall Data Pit CN Wall FW Wall Orientation 200 Face Height 10 Face Angle 70

Joint Data Failure Plane 67 °

Cohesion 0 kPa Friction Angle 30

Analysis Results Wedge Weight 41.5 tonnes

Berm Width Calculations Weight 41.5 tonnes Density 2.75 tonnes/m3 Swell Factor 1.3 Vol 19.61818 m3 Width 5 m CSA of failed material 3.92 m2 Max Berm Width 3.2 m

Figure 14-11: Berm width analysis results

Slope Stability Analysis

Model Geometry A schematic model was set up using the 2D limit equilibrium analysis software Slide (Roscicence Inc) to reflect the deepest section of all of the pits at Boa Fé (CH). The deepest section is 150 m; it is understood that a 30 m wide ramp will be placed on the slope so an inter ramp slope height of 100 m was modelled. The slope geometry was set to the initial values stated by the geotechnical report provided by the client. The bench heights were set to 10 m, bench widths to 5 m and the bench face angles to 80°; the original report stated that the inter ramp angle, using these criteria, is 55°. The se criteria actually produce a 55.9° inter- ramp angle. It is considered that there will be little material effect upon the stability results; the results may be slightly more conservative. The kinematic and slope stability analyses were run concurrently, so the updated 70° bench face ang le resulting from the kinematic analysis was not incorporated into the slope geometry. The thicknesses of the overburden and weathered material were modelled horizontally at 2 m and 11 m thicknesses respectively. A

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blast zone of 15 m was modelled so that the disturbance due to blasting and stress relief could be delineated. The model geometry is shown in Figure 14-12.

Figure 14-12: Geometry of Slope Stability Model

Acceptance Criteria A slope failure in one of the walls of one of the pits mined at Boa Fé would be critical to the operation. Additionally, the study is at an early stage and not all of the material properties are fully understood and defined. For these reasons the slope stability acceptance criteria for the inter ramp scale is set to a minimum Factor of Safety (“FOS”) of 1.3 and a maximum Probability of Failure (“POF”) of 10%.

Input Parameters

Material Input Parameters The overburden material was modelled as Mohr Coulomb as it is thought to behave more like a soil. The Mohr Coulomb cohesion and friction angles that are produced by the Hoek Brown inputs (using RocData, RocScience Inc.) indicate that a friction angle of 240 kPa and a friction angle of 57° should be used. This was based on the rock fraction of the domain. The strengths were reduce to 8 kPa cohesion and 42° fri ction angle for the analysis as it is known that some portions of the overburden has degraded to soil. The weathered and fresh materials were modelled using the Hoek Brown Criterion. The GSI was calculated from the RMR data from the geotechnical logging (GSI = RMR - 5). The mi value was calculated using the triaxial data from the laboratory testing (using RocData, RocScience Inc.). The UCS values, in the absence of lab data, were collated from the intact rock strengths taken during the geotechnical logging. Two disturbance factors were used; one to simulate the effect of close proximity blasting (D=1) and once to simulate the more pervasive, yet low disturbance of stress relief due to mining (D=0.3). As the schistosity is known to exist within the rock mass an anisotropic strength was applied to the fresh rock mass. The cohesion and the friction angle of the schistosity were taken from the lab data and the dip angle (and range) was taken from the structural logging results. Table 14-21 shows the material input parameters used for modelling. A seismic load was applied as the region has experienced minor earth movements (Figure 14-13). A peak ground acceleration of 1.6 m/s² equates to a seismic acceleration of 0.018 g.

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Table 14-21: Material Input Parameters Used for Slope Stability Modelling Standard Material Parameter Average Deviation Minimum Maximum Cohesion (kPa) 8 - - - Overburden Phi (°) 42 - - - Unit Weight (kN/m³) 25 - - - Hoek-Brown Disturbance 0.3 - - - Hoek-Brown GSI 34 8 20 80 Weathered Hoek-Brown mi constant 19 - - - UCS (MPa) 25 18 0.25 100 Unit Weight (kN/m³) 27.5 - - - Hoek-Brown Disturbance 1 - - - Hoek-Brown GSI 34 8 20 80 Weathered Blast Zone Hoek-Brown mi constant 19 - - - UCS (MPa) 25 18 0.25 100 Unit Weight (kN/m³) 27.5 - - - Hoek-Brown Disturbance 0.3 - - - Hoek-Brown GSI 45 10 21 85 Fresh Hoek-Brown mi constant 19 - - - UCS (MPa) 92 25 0.25 200 Unit Weight (kN/m³) 27.5 - - - Hoek-Brown Disturbance 1 - - - Hoek-Brown GSI 45 10 21 85 Fresh Blast Zone Hoek-Brown mi constant 19 - - - UCS (MPa) 25 18 0.25 100 Unit Weight (kN/m³) 27.5 - - - Affective Angle (°) - - 70 80 Cohesion (kPa) 120 - - - Schistosity Phi (°) 30.5 - - - Unit Weight (kN/m³) 27.5 - - -

Figure 14-13: Earthquake Hazard Map for Portugal (10% chance in 50 years).

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Hydrogeological Input Parameters Data relating to permeability values and water levels were input into the modelling program (Slide, Rocscience Inc). These input parameters were received by the SRK hydrogeology team after review of the available data from the Client. An average permeability of 3 x 10 - 8 m/s was used. It is known that the waterways in proximity to the pits are to be relocated. The position of the relocated waterway was 250 m away from the pit slope with a head 10 m from surface (238 m in the model coordinates). A recharge (due to precipitation) was assumed to be 60 mm/year (equal to approximately 10% of Mean Annual Precipitation). The modelling program is able to simulate the likely draw down and values of pore pressures due to mining. This information was used to assess the effect of pore pressures in the slope stability analysis. A schematic of the model is shown in Figure 14-14, the boundary conditions on the left are present (500 m from pit, 238 m head), but the image has been cropped for better viewing.

Figure 14-14: Hydrogeological Model and Boundary Conditions

Results The results are shown in Figure 14-15. They show that the deterministic (use of average values) results in a Factor of Safety of 1.43 for the inter ramp slope. This satisfies the acceptability criteria. The Probability of Failure was calculated to be 5.7%; this also is within acceptability limits.

Figure 14-15: Slope Stability Results

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14.2.5 Conclusions

Slope Design Criteria The pit slope configurations reported can be applied to the other pits at this stage of the study. The kinematic analysis recommends changing the bench face angle from 80° to 70°. The slope stability analysis results show that an inter ramp slope angle of 55° can be supported by inter ramp slope heights of 100 m. At any portion of the slope which exceed 100 m a geotechnical berm of 30 m should be placed. The following slope design criteria can be adopted for the PEA:

• Bench Face Angle: 70°; • Bench Height: 10 m; • Berm Width: 3.4 m; • Resulting Inter Ramp Slope Angle: 55°; and • Maximum Inter Ramp Slope Height: 100 m. It is considered that the 55° inter ramp angle is a t the upper end of the potential angles that the rock mass can support. Due to the uncertainty in the geotechnical data, it is recommended that economic sensitivity of the deposits to inter ramp angles of 54° and 52° should be tested. There is a lack of structural data concerning the jointing in the rock mass at Boa Fé; the only data that has orientation values is schistosity (as well as some lithological boundaries and veins). The structural analysis is therefore incomplete and will have missed joint set intersections that may affect slope stability. There is little data available of the compressive strength of the rocks at Boa Fé; these were collated from field logging measurements, which are known not to be highly accurate. These values were directly used in the slope stability analysis. At the time of the geotechnical study, 3D wireframes of the complex geology were not finalised. Because of this the geotechnical data was combined as one rock mass. This acted to ‘average out’ the rock mass data. Potentially weaker lithologies would be overlooked. Because of this, schistosity was modelled to pervade the entire rock mass; this is an over simplification and the rock mass may not be as adversely affected by schistosity.

Recommendations The uncertainty in the geotechnical data should be addressed in further studies. Specific geotechnical boreholes should be drilled at varying angles to remove the drill bias. These holes should be logged on intervals based upon geotechnical parameters. The current technique of measuring geotechnical intervals according to drilling run can have the effect of missing critical geotechnical features, e.g. if a 3 m drilling run through good rock was logged, but it had a 10 cm shear zone running through the centre, the interval logged data based on drilling interval would not pick this up. A better logging technique involves picking the geotechnical intervals according to the condition of the core; splitting out weaker intervals from the strong. To address the lack of orientation data, subsequent studies should look at the use of using acoustic televiewer (“ATV”) logging to measure joint structures. The ATV can provide orientation data from boreholes that struggle to produce reliable orientation data using traditional core orientation techniques. If relic holes are open an ATV can also be used to measure structures in those holes. Subsequent studies should look to identify and separate out the major geotechnical features

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such as lithologies and faults. This will be helped by further drilling, providing better understanding of the discontinuity orientations and the use of 3D lithological wireframes. 14.3 Hydrological and Hydrogeological Related Issues 14.3.1 Slope stability, Dewatering and Pore Pressure Monitoring There have not yet been any hydrogeological tests performed in regard to the proposed open pit areas. Hydrogeological parameters such as the hydraulic conductivity, storativity and pore pressure are necessary in order to assess slope stability and mine dewatering design, which in turn enables costs to be defined within appropriate confidence intervals. Lugeon tests have been carried out to quantify the permeability of shallow bedrock (20mbgl) at the proposed TMF location. The available hydrogeological data is sufficient for very rough estimates when conceptualising the mine layout. In order to take the study to the next level it is essential that a hydrogeological field programme is initiated that will meet the requirements dewatering, geotechnical and mine closure evaluations. Recommended tests and installations for hydrogeological site characterization are as follows:

• Packer tests (e.g. Lugeon tests) • Borehole flow logging • Small pump tests (airlift tests with rig if possible) • Pore pressure monitoring systems The hydrogeological testing requirements should be built into the future resource and geotechnical drilling programmes to ensure this data is collected in the most costs effective manner. The data will be evaluated together with additional geotechnical and geological field campaign results in order to make further assessments on costs and design with respect to mine designs, water management plans and mine dewatering. It is recommended to install the pore pressure monitoring system as early as possible in order to perform a comprehensive base-line data collection before possible activities commence, e.g. advanced dewatering or excavation activities. Baseline monitoring programs benefit the evaluation and update of geotechnical and hydrogeological models to assess additional safety measures and costs issues related to slope stability, mine water management and mine dewatering at an early stage of mine development. 14.3.2 Stream Diversion and Associated Risks S.B.S. – Engenharia, Lda completed a study of stream diversion regarding stream lines intercepting Casas Novas open pit area. Two streams merge at the exact location of the Cosas Novas open pit area. Figure 14-16 shows a schematic of the mine site layout including stream diversions (light blue and turquoise line), mine area main stream passage (dark blue), soil permeability samples (circles), boreholes used for Lugeon tests (stars) and pit areas (yellow polygons), optional pit sizes (maroon), Tailings Management Facility (Purple polygon), and Rock Waste Dump (green polygon). The smaller tributary is diverted along the ridge next to the west of the pit (light blue). The larger tributary (turquoise) is diverted in-to the site’s main stream (dark blue) a nearby stream eventually passing next to the south pit slope. Figure 14-17 shows a schematic of the mine site layout with the local geology including approximate stream diversions based on pictures from S.B.S (light blue and turquoise line), mine area main stream passage (dark blue), soil permeability samples (circles), boreholes used for Lugeon tests (stars) and pit areas (yellow polygons), Tailings Management Facility (Purple polygon), and Rock Waste Dump (green polygon).

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Figure 14-16: Schematic Mine Site Layout

Figure 14-17: Schematic Mine Site Layout with Geology 16

The report’s focus is mainly on dimensions for flood return periods and natural preservation. The diversions are designed to have similar attributes as existing streams that most likely will give rise to infiltration which in turn will have an impact on dewatering measures and slope stability. Likely faults and fracture networks in the area may cause possible dewatering issues if they intercept the natural or diverted stream. It is therefore recommended that the suggested stream diversions are complemented in terms of estimated potential infiltration and additional measures to reduce infiltration for specific stream sections e.g. lining, geotextiles or

16 Source: Iberian Resources.

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concrete foundations. It may also be necessary to excavate channels, or construct levees from waste rock, to ensure overbank flow does not discharge to the pit during peak flood events. The suggested path of the south west stream diversion and the naturally kept stream close to the Cocas Novas open pit may intrude on the future pit designs. Additional stream diversion studies may be required to support the Casas Novas deposit valuation. As expected at this level of study, a complete engineering design does not yet exist. It is noted that the suggested location and proposed steeply sloped design are likely to give velocities that may potentially need reinforcement on the left stream bank of the existing stream to prevent scouring as water exits the channels. Suggested stream diversions have been reviewed and found reasonably sized to cope with the adopted peak. Even so, additional hydraulic modelling will be needed to reach PFS/FS level in the assessment of potential flood risks posed by nearby streams. 14.3.3 Tailings Water Management Golder completed a conceptual TMF and waste rock dump design in June 2008, updated in 2011. A preliminary water balance was constructed which highlights a likely need for a small water storage dam of 150,000m 3 to keep the process plant fully operational during dry periods (Golder, 2011). Four TMF cases were tested. Inflows to the TMF water balance model were; water from disposed tailings, rainfall directly on the tailings facility and surface run-off from natural land within the catchment area. Water from mine dewatering activities, stream water abstraction (most likely dry in summers) and development of groundwater wells was not used as input in the TMF’s water balance. All base case models assumed water recycling to the process plant (450,000m 3/year) from the TMF’s seepage sumps. All cases indicate years of water supply deficit to some extent and start up water supply was difficult in some scenarios. The model is preliminary and very sensitive to the run-off coefficient that was modelled between 5 to 20% and the report suggest that further studies are undertaken at the next design stage. Collection of baseline surface water flow data is strongly recommended by SRK to give confidence in the selected runoff coefficients. The run off coefficient is likely to be over-estimated for early simulated years as the rock waste dump will initially absorb the runoff water. It is recommended that additional water supply aspects (water from mine dewatering activities, stream and surface water reservoir abstraction and development of groundwater wells) are taken into account as soon as a site wide hydrogeological characterization has been completed and a water management program has been developed. Figure 14-18 shows a schematic of the mine site layout with local streams (blue lines) and catchment area dividers (thick black lines) including approximate Tailings Management Facility (Purple polygon), and Waste Rock Dump (green polygon), soil permeability samples (circles), and boreholes used for Lugeon tests (stars).

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Figure 14-18: Schematic Mine Site Layout with Streams 17

14.3.4 Hydrogeological Tests and Dewatering To date, only shallow tests have been performed regarding rock and soil permeability. Lugeon tests to approx. 20mbgl have been performed at the proposed TMF location, site 4, and 6 permeability tests has been carried out together with trial pits to determine the permeability of the saturated soil at TMF Site 2 and 4 down to approximately 1.8 mbgl. Further hydrogeological site investigations down to the open pit target depths are necessary to appreciate mine dewatering cost and increased confidence intervals of slope angles. Such investigations will also be beneficial from an operational perspective, mapping possible occurrences of high yield fracture zones that can act as an additional water supply source. Operational safety benefits and cost savings will also be realised if advanced dewatering of the pit is viable. Further hydrogeological studies combined with core logging in the proposed pit areas are expected to deliver assessments on: advanced pit dewatering that could potentially act as a start-up water supply or advanced build-up of such a supply; radius of influence and drawdown caused by dewatering activities; the nature of surface water-groundwater interaction; mapping of high yield faults; and specific aquifer depths and productivity. 14.3.5 Environmental Impacts and Water Supply Availability Two aquifers are known in the area; one sub-superficial aquifer mostly comprised of altered rock zones and alluvium deposits and one deep aquifer in form of fracture and fissure networks within the bedrock. There are very little data on the exact depths and the hydrogeological characteristics of these aquifers which adds to the importance of further hydrogeological works in the proposed pit areas and surroundings to make an accurate

17 Source: Iberian Resources.

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assessment on the open pits’ effects on groundwater tables and aquifers. A review of the EIA (2012) suggests a sufficient available capacity of surface water and groundwater in the region for planned mine operations. A hydrological and hydrogeological site wide characterization will however be needed to properly assess water supply availability in terms of near site groundwater well development and actual runoff volumes available for abstraction. 14.3.6 Mine Closure Mine closure plans will not be possible without previously mentioned field campaigns and additional geochemical characterization of excavated material. Acid rock drainage and the impacts of seepage from waste rock dumps and the TMF on groundwater and surface water will be require further assessment once the geochemical testwork has been completed. A study of the open pit flow regime will also be necessary develop a sustainable pit remediation plan with respect to water quality aspects.

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15 RECOVERY METHODS

The Client has presented four processing options for consideration for the PEA:

• Option A: Production of a combined gravity and flotation concentrate, with Au recovery from the concentrate in an off-site facility. Au recovery from the concentrate would be by ultrafine grinding followed by intensive cyanidation; • Option B: Production of a combined gravity and flotation concentrate, with on-site recovery of the Au using the same process as for Option A; • Option C: Heap leaching using thiosulphate as the lixiviant. SRK understands that the recovery for this option provided by Colt is based on an initial gravity recovery step, with heap leaching of the tailings from gravity recovery; and • Option D: Leaching using a halogen lixiviant. SRK understands that the choice of processing options is based largely on the understanding that either the use of cyanide is banned in the EU, or that a project proposing the use of cyanide is likely to face difficulties in being permitted. Colt has presented the following recovery estimates for the process options:

• Option A: 85.5%; • Option B: 85.5%; • Option C: 73%; and • Option D: 95%. SRK believes that, with the possible exception of Option D, the flowsheets as proposed have not been tested at laboratory scale in the precise configurations as proposed, and that therefore the proposed Au recovery figures are not supported, or directly supported, by the metallurgical testwork reported in Section 11. Specifically:

• Options A and B are based on a mass recovery to the flotation concentrate of 6%. Based on the Testwork results, especially as shown in Figure 11-1, the Au flotation recovery at such a mass recovery is of the order of 89% for gravity tailings, for which a gravity recovery of the order of 45% was reported for a gravity separation mass recovery of approximately 1.5%. This gives an overall recovery to the combined gravity and flotation concentrate of approximately 94%, or approximately 95% to a total concentrate (i.e. gravity and flotation combined) of 6%. • Intensive cyanidation testwork conducted by AMMTEC (as part of the GRG analysis) and by Testwork, have reported Au recoveries ranging from 60% to 84% on unground gravity concentrates. Conventional cyanidation testwork on finely ground concentrates by AMMTEC, reported Au recoveries ranging from 70% to 76% for gravity concentrates, and 81% to 92% for flotation concentrates. • The proposed Au recovery figure for Options A and B of 85.5% is therefore at the upper end of the range of figures reported – indirectly – in the testwork. Much lower values have also been reported. • SRK understands that the recovery figure for Option C is based on a gravity recovery of 45%, based on the AMMTEC and Testwork work, and a thiosulphate leach recovery of 50% based on the Drinkard work. SRK notes that the gravity recovery testwork was

conducted on samples that had been ground to a P 80 of 250 µm or finer. If this process were to be followed in practice, then the gravity tailings would need to be agglomerated

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following the gravity separation stage, and given the fine size, this process would probably have to involve the use of an inert substrate to agglomerate the ground ore on to. The recovery estimate also assumes that the two processes, tested so far in isolation, are additive, i.e. that a recovery by thiosulphate leaching of 50% would apply equally to gravity tailings as it did to the whole ore as tested. • SRK notes that only a single halogen lixiviant has been tested in the Drinkard work for which a successful solution recovery stage was also tested. SRK therefore believes that a significant program of further testwork is required in order to verify the technical feasibility of the proposed process options, and then to confirm the recovery figures assumed for this PEA.

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16 PROJECT INFRASTRUCTURE

16.1 Power The Contecmina Report estimated that the electric power demand from the electrical power supply company will be approximately 1,750 kW for 360 ktpa of ore throughput. The current production rate is assumed to be 720 ktpa of ore, which has therefore been assumed to require 3,500 kW of power. 16.2 Pipelines The pipeline designs for the industrial facilities were estimated based on similar projects. High Density Polyethylene (“HDPE”) pipelines will be used in all possible areas for ease of installation and to reduce capital costs. 16.3 Stockpiles All ore (high grade and low grade) from Casas Novas, Banhos, Braços and Monfurado will be stockpiled close to the pit edge. It will then be transported to the processing facility with a separate mining fleet. Separate low grade stockpiles will be required for Chaminé, Casas Novas and Banhos deposits to allow high grade material to be processed in the early years. 16.4 Roads It has been assumed that the existing roads will be used to transport the ore from Casas Novas, Banhos, Braços and Monfurado to the processing facility. The practicality of this assumption should be investigated to determine whether the type, size and frequency of the trucks will be allowed on these public roads. 16.5 Proposed Waste Dump Locations Waste dump locations have been identified based on the location of the optimised pit shells for each deposit. The largest pit shells were used (Option D) with a 200 m offset for the waste dumps. The proposed locations are shown in Figure 16-2 to Figure 16-4. The proposed locations have been identified for surface area estimates. Further site investigation is required for the proposed locations to determine their suitability. More detailed topographical data is required for the Monfurado deposit for detailed waste dump designs.

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Figure 16-1: Proposed Ligeiro Waste Dump

Figure 16-2: Proposed Banhos Waste Dump

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Figure 16-3: Proposed Braços Waste Dump

Figure 16-4: Proposed Monfurado Waste Dump

16.6 Tailings Storage 16.6.1 Introduction The mining option studies for the Boa Fé – Montemor Project indicate four development open pit options that require further investigation during the Pre-Feasibility Study (“PFS”) stage.

• Option A (Base Case option): This has been currently planned at a rate of 0.7 Mtpa from an orebody of 3.5 Mt with production of 15.2 Mt of waste rock; • Option B: at rate of 0.7 Mtpa from an orebody of 4.4 Mt with production of 16.5 Mt of waste rock; and • Options C and D at rate of ore production approximately as above from an orebody of 4.6 Mt and 5.1 Mt for each option respectively. The previous study by Golder contained in the Report on Conceptual Design Tailings Management Facility, Montemor Gold Project, Portugal, 2011 suggested Site 4 as the most appropriate site for storage of the tailings waste. SRK support this selection as most appropriate at this stage. The Tailings Storage Facility (“TSF”) will be valley type of facility enclosed by the main (downstream) and saddle (upstream) embankments. The selected site option allows the expansion of the tailings storage beyond the tonnage indicated in all mining options. 16.6.2 Tailing Characteristics No specific tailings characterisation test work has been undertaken. The unit mass of the ore rock is expected to be about 2,700 kg/m 3. The porosity of the tailings will likely vary between 0.4 to 0.5, depending on the deposition method and the consolidation conditions. A bulk dry

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density of 1,300 kg/m 3 was selected for the tailings material, which corresponds to a porosity value of 0.52. The total volume of tailings would therefore be about 2.7 Mm 3 for Option A and up to 3.9 Mm 3 for the other three options. 16.6.3 Geotechnical Setting Based on Golder’s report Site 4 has been investigated by excavation of 10 test pits. Site 4 has good foundation conditions; consisting of clays, silts and sands with the varying thickness between 0.5 to 0.9 m. Below surficial soils, there is a layer of schist with varying degree of weathering. No field permeability testing has been performed for the schist materials as it is assumed at this stage that all inundated tailings storage areas will be lined with the synthetic geo-membrane. 16.6.4 Design Considerations This mine site is located in a high seismic area which has important implications for the design of the tailing dam. The dams are assigned side slope of 2.5H:1V for the purpose of this scoping report but further analysis of the dynamic loading will be required during the PFS. For Option A (3.5 Mt), the main embankment and the saddle embankment will be 21 m and 19 m high, respectively.

• SRK proposes that the containment embankment be built in stages rather than in one stage as proposed in the Golder’s conceptual design; • The containments will be predominantly constructed from the waste rock from the economic mine pit. The provision should be made, however for the pre-production period to allow for some borrow material from outside the economic pit; • 2 mm thick HDPE liner will be installed on the upstream slopes of the confining embankments and the entire inundation area. The membrane will be installed on the suitable subgrade with adequate filtration layer to prevent piping failure in case of the membrane rupture. The liner will be protected by the geotextile. In addition the upstream perimeter of the tailings storage will be supported with the upstream tailings beach constructed and maintained above water at all times with the minimum width of 150 m; • The water balance has been addressed in Section 14.3, however the TSF will be designed as tailings storage, not water storage facility, with minimum area of effluent pond; and • The TSF will be equipped with spillway capable of handing the probable maximum flood (1 in 10,000 years); 16.6.5 Additional Options for Tailings Disposal Studies SRK has carried out a high level study into the location for tailing facilities as part of this PEA. The base case however relies on the Site 4 selected in the Golder’s study which favoured this external facility for the life of mine as the most appropriate. SRK recommends a further study of the in pit disposal alternatives. The existence of the multiple pits which will be mined in sequence may create the opportunity to cut the sustaining capital, operating and closure cost for the TSF. This study should consider an evaluation of the long-term impacts on surface and groundwater quality, as in-pit disposal may prove to be more favourable option from environmental perspective. The in pit tailings disposal may only be implemented when space is available so for purpose of the scoping level study the capital costs will be the same regardless whether the external or external and in pit option is considered in the PFS.

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16.6.6 Main and Saddle Dam Embankments For the base case (3.5 Mt) the final tailings dams will be built to elevation 307 m to accommodate 2.8 Mm 3 of tailings waste. As mentioned before the main and saddle embankments should be built in stages: pre -production and in years 1 and 3. The cross- section of the starter and final main tailings dam is shown Figure 16-5. Table 16-1 shows the basic storage parameters.

Figure 16-5: Cross-section of Main Dam with Starter Dam to elevation 297 m

Table 16-1: Storage Parameters Main Main Saddle Saddle Embankment Embankment Embankment Embankment Units (Starter Dam) (Final Dam) (Starter Dam) (Final Dam) Elevation m 297 307 297 307 Height m 11 21 9 19 Length m 290 510 216 459 Embankment footprint m2 11,290 33,470 4,100 20,200 Volume m3 55,000 264,300 8,000 106,500 Surface area of liner m2 140,300 305,900 X X

16.6.7 Recommendations Additional design and investigative work will be required if the project proceeds to the next stage. The design of the tailing dam or the co -storage impoundment will require various studies in the following fields:

• Tailings alternative assessment to includ e the potential in pit disposal; • Hydrogeology: groundwater condition at and near the tailing impoundment and dam; • Geochemistry: geochemical properties of the tailings and the leachate originating from the tailings. The behaviour of the waste rock / tailing s mixture needs to be better understood; • Geotechnical: conditions of the dam foundations and properties of the tailings; • Borrow source investigation; and • Engineering. The hydrology aspects are linked to the site water management. It will require precipitat ion data that would be representative of the site. The analysis of the site precipitation patterns and the development of the site storm scenarios will require a dataset over 50 years. The Golder’s report has already some water balance study included but a t PFS this study will need to be enhanced. The hydrogeological investigation will consist of characterising the hydraulic properties of the

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overburden and bedrock primarily at the dam and along the perimeter on the tailings impoundment. This will include the drilling several boreholes that will be used to perform in situ hydraulic conductivity testing and to install monitoring wells/piezometers for monitoring groundwater quality and levels. Groundwater samples would be recovered as part of the characterisation work. Six to ten boreholes would typically be part of the hydrogeological investigation. Geochemical investigations would need to consist of performing laboratory tests on samples that would be representative of the tailings and waste rock that would be produced once the mine is in operation. The laboratory program would consist of static tests, kinetic tests, mineralogy and the related chemical analyses. This information is essential for assessing the potential impacts on the receiving environment. The geotechnical investigation will involve reviewing the structural geology in the vicinity of the dam, performing geophysical testing, and developing trial pit and drilling programs. The trial pit program will be used to characterise the shallow overburden and recover soil bulk samples. The trial pits would also be used for the borrow source investigation. About 15 to 25 trial pits would be required for the dam and probably a similar quantity would be required for the borrow source investigation. The drilling program would consist of drilling about 5 to 10 boreholes along the alignment of the proposed dam. Representative soil and rock samples would be recovered and selected samples would be tested in the laboratory. Piezometers would be installed in those boreholes for monitoring piezometric levels and water quality. The design of the tailing facilities will rely on the data provided by the hydrologists, the hydrogeologist, the geochemist and the geotechnical engineer. It will require the analysis of groundwater movement through the structure(s) and the foundations. It will also require detailed analysis of slope stability and deformation of the dam under static and dynamic loads. The seismic conditions of the region combined with the proximity of the local people would justify a detailed stability analysis that would then feed into the project’s risk assessment.

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17 MARKET STUDIES AND CONTRACTS

There are currently no market studies or contracts for the Boa Fé – Montemor Project.

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18 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT

18.1 Introduction The environmental and social input to this PEA is based on a desktop review of the following documents:

• NI 43-101 Technical Report Boa Fé/Montemor Gold Project Alentejo Region of Southern Portugal prepared for Colt Resources (SRK, 2012); • Projecto de Exploração Mineira Boa Fé Estudo de Impacte Ambiental - Environmental Impact Assessment (Geomega, 2012); • Projecto de Exploração Mineira Boa Fé Estudo de Impacte Ambiental Aditamento - Addendum to Environmental Impact Assessment (Geomega, 2013); • Plano Ambiental e de Recuperação Paisagística – Environmental and Landscape Recovery Plan (Geomega, 2012); • Plano Conceptual de Encerramento da Barragem de Rejeitados Projecto de Exploração Mineira de Boa-Fé - Conceptual Closure Plan (Universidade de Porto, 2011); • Boa Fé Mining Exploitation Project Descriptive Memorandum (Contectmina, 2012); • Metallurgical Testwork conducted upon Samples of Ore from Montemor Gold Deposit for Iberian Resources Portugal – Recursos Mineralis Unipessoal Lda (AMMTEC, 2008); • Relatorio Final Testes Metallurgicos com Minerio do Projeto Boa Fé (Testwork, 2013); and • European Parliament Website Parliamentary Questions Subject: Gold prospecting at a Natura 2000 site in the Alentejo (Portugal) Last updated: 27 February 2013 18 . Portions of the Portuguese documents were translated by SRK using an online translation tool when English documents were unavailable. 18.2 Environmental and Social Setting The Boa Fé Project is located 120 km east of Lisbon, in the Alentejo region of southern Portugal and municipality of Evora. The project is located 15 km southeast from the town of Montemor, 15 km west from the town of Évora, and 1 km south from the village of Nossa Senhora da Boa Fé. Smaller communities that surround the licence area are Casas Novas, Foros da Carvalha and Sao Brissos, which are 0.1 km northwest, 1 km west and 0.5 km southwest of the licence boundary. The estimated population around the area is about 3,000 people, generally living in small settlements or isolated farms. The two biggest centres of populations are Nossa Senhora de Boa Fé and Sao Brissos. No houses or settlements are located within the areas of proposed infrastructure development, although the ecology study indicates there is a rural building within the proposed limits of the Casas Novas pit. Land within the concession is used for a mix of arable and pastoral agriculture, mainly crops of cork and olives. The project is located in the north-eastern corner of the regional Rio Sado basin that drains to the Atlantic Ocean to the west. The concession area drains to smaller catchments of the Ribeira de São Brissos in the west and the Ribeira de Valverde in the east, which converge and become the Ribeira de Alcáçovas 7km from the project. The proposed project infrastructure is located entirely within the catchment of the Ribeira de São Brissos; the Casas

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Novas pit is located to the west of the main channel and the Chaminé pit and remainder of the infrastructure are located to the east, close to the catchment divide with the Ribeira de Valverde. A tributary of the Ribeira de São Brissos runs through the proposed Casas Novas pit location. The main use of surface water in the area is for irrigation. In hydrogeological terms, the study area is within the Massif Old Undifferentiated Aquifer System, specifically in the sub-unit Ossa Morena Zone (“OMZ”), mainly consisting of igneous and meta-sedimentary geological formations. Groundwater depth largely follows local topography but varies seasonally and by location; in the wet season groundwater is 9 mbgl at Chaminé and 8 mbgl at Casas Novas increasing to 14 mbgl and 10 mbgl in the dry season. On the valley floor, groundwater may emerge as spring lines, seeps or base flow direct into the stream channel. A total of 21 groundwater wells have been identified in the study area, most of them either abandoned or used for livestock. Part of the project, specifically the proposed Casas Novas open pit, is located within the Monfurado protected area (Plano de Intervenção no Espaço Rural do Sítio Monfurado, or PIERSM), which is part of the Natura 2000 network. The site has a number of priority habitat types and important populations of bats. On Jan 31, 2011 a new regulation was announced in the official gazette (Aviso nº 3305/2011, DR 2ª série, (Nº 21), allowing surface mining within the PIERSM area under the condition that the disturbance does not affect protected plant or animal species. 18.3 Environmental and Social Approvals Colt Resources has an experimental mining licence for the Boa Fé project, which covers operations up to five hectares in size and/or less than 150,000 ktpa of ore. In accordance with mining law 88/90 of 16 March 1990, an application for a full mining licence requires the submission of a Mine Feasibility Study that includes an EIA. The application requires approval from the Direcção-Geral de Energia e Geologia (DGEG) and the Agencia Portuguesa de Ambiente (Portuguese Environmental Agency) (APA). The EIA process is administered by the APA and includes the following procedural steps:

• Screening; • Scope definition and scoping report; • EIA report; • Evaluation of the EIA by an evaluation committee and public consultation; and • Decision. An environmental scoping report was issued to APA in July 2010. An EIA for the mining of the Casas Novas and Cheminé pits was prepared by Geomega Consultants and submitted to the APA in August 2012. The EIA submission also included the following documents:

• Plano Ambiental e de Recuperação Paisagística (“PARP”) (Environmental and landscape recovery plan); • Plano Conceptual de Encerramento (Conceptual closure plan); • Plano de Contingência da Barragem de Rejeitados Projecto de Exploração Mineira de Boa-Fé (Contingency plan); and • Desvio das Linhas de Água Interceptadas pela Corta de Casas Novas (Diversion of water intercepted by the Casas Novas pit). Comments were received from APA in November 2012 and an EIA addendum was prepared by Geomega in response to the comments and submitted in January 2013. According to the Client, the EIA report has been approved by the APA.

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The Banhos, Ligeiros, Braços and Monfurado deposits are not included in the EIA reviewed. SRK understands that the Client intends to focus on the exploitation of the Chaminé and Casas Novas deposits and subsequently permit and develop the other deposits. 18.4 Approach to Management No information is available in the documentation provided about on-going environmental or social management activities currently being undertaken at the site. The approved EIA report uses primary and secondary data to evaluate impacts and determine appropriate management measures for each impact. The EIA report but does not contain a project-wide Environmental Management Plan. At the request of the APA, as documented in Section 1.6 of the EIA (Geomega 2012), the Environmental Management Plan will be prepared at a later stage of the project planning and approvals process. The EIA includes a monitoring programme for water resources, soils, air quality, noise, vibrations, ecology, industrial waste and stability of the waste rock dump and tailings dam. The monitoring location figure was not available for review. The EIA also includes an environmental and landscape recovery plan that documents the rehabilitation techniques that will be implemented at the site. 18.5 Stakeholder Engagement Although stakeholder engagement is part of the formal EIA process, no information is available in the documentation about the meetings held and the issues raised during the process. Correspondence and meetings held with regulatory authorities in 2009 and 2010 about permitting the exploration phase of the project is described in the EIA (Geomega, 2012) as background to the project, however this pre-dates the EIA process. SRK understands discussions have been held between the Client and landowners and tenants of the farms that host the gold deposits about the possible use of and compensation for land required for mining purposes. No information on these discussions is provided in the documents reviewed. Due to the absence of stakeholder opinion on the project in the documentation, SRK conducted an internet search. In November 2012, questions were asked to the European Commission about open pit mining activities within the Monfurado Natura 2000 site. A technical response to the questions has not yet been provided 19 . 18.6 Key Issues Potential key environmental and social issues for the Boa Fé project are as follows:

• Phased permitting approach : The approved EIA evaluates the mining and processing of the Casas Novas and Chaminé deposits. The EIA report does not refer to the other four smaller deposits included in this PEA (Banhos, Ligeiros, Covas and Braços). SRK understands from Colt Resources that future permitting of the four smaller deposits will be undertaken once the initial project has been approved and is in operation. It cannot be assumed that approvals for these deposits will be obtained in a fast-tracked manner. • Accurate identification and management of environmental risks : The approved EIA has been prepared in accordance with the requirements of the Portuguese regulations. However, further monitoring will be required to obtain site-specific primary data to quantify potential environmental risks, particularly relating to impacts on surface and groundwater

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resources. This will be required to ensure that risks are accurately identified and management measures are appropriate for the anticipated impact. • Environmental risk from TSF and WRD : The geochemical testwork reviewed is considered to be lacking in content and detail but indicates that flotation tailings material has the potential to be acid generating. Leachate from the TSF could also contain heavy metals at concentrations likely to impact the environment, particularly arsenic, zinc, copper and lead. The data also suggests there may be some, although limited, potential for acid generation and arsenic leaching from the WRD and a potentially acidic pit lake may form at closure. The data therefore suggests there is a potential need to manage seepage water from the TSF and WRD, which will collect along the liner in seepage management ponds in the case of the TSF. This could involve treatment through a lime-HDS plan or passive treatment cells. This is not currently included in the project description but should be considered in future design phases. Although the TSF is proposed to be lined, some defects will occur and so it is essential that numerical predictive calculations be undertaken to evaluate impact from a small volume of seepage water on groundwater. • Location of the project within the Monfurado protected area : The EIA report contains site- specific ecological surveys that characterise the baseline conditions of the project-affected area within the Monfurado site. The EIA describes the expected impacts on the important bat populations and proposed management and monitoring measures appear to be appropriate for the defined impacts. • The cork trees present in the area are protected by law and special permissions are also required for their removal. Legal requirements govern the compensation process for landowners and SRK understands that Colt Resources is in the process of discussing the compensation process with landowners. No documentation on these discussions was available for review. • Traffic impacts on residents of local villages : The Casas Novas pit is 500 m southeast of the village of Casas Novas and 1 km southwest of Nossa Senhora de Boa Fé. As stated in the impact assessment it is likely to be affected by heavy traffic travelling to and from the site. The current project design includes the passage of trucks through the centre of Nossa Senhora de Boa Fé. In accordance with the management measure identified for this impact in the EIA it is strongly recommended to find an alternative access route to the main road to avoid the village. • Unclear stakeholder opinion : The lack of information on stakeholder engagement activities and stakeholder feedback in the documentation results in an unclear picture of public opinion on the project. The results of an internet search suggest that opposition may be present due to perceived impacts on the Monfurado protected area. Significant opposition, if it exists, could slow the project approvals process and create delays to the project schedule. Further information would be needed to evaluate the likelihood of this.

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19 CAPITAL AND OPERATING COSTS

19.1 Exchange Rates The cost estimates have been completed in USD. An exchange rate of USD 1.30/EUR was used in this cost estimate. 19.2 Mining 19.2.1 Approach The mine schedules, equipment and labour requirements for the four options were used to develop mine operating and capital costs. 19.2.2 Equipment The mining equipment cost estimates have been developed using the unit cost data shown in Table 19-1.

Table 19-1: Supply Quotes Quotes Units Cost Diesel USD/L 1.63 Oils/Lubricants USD/L 3.20

The consumption rates and mining equipment capital and operating costs are based on the 2012-2013 Infomine cost database 20 . The equipment capital costs and unit operating costs are shown in Table 19-2.

Table 19-2: Equipment Unit Operating Costs Total Purchase Operating Overhaul Maintenance Wear Tire Fuel Lube Equipment Cost Cost Parts Parts Parts Cost Cost Cost USD USD/hr USD/hr USD/hr USD/hr USD/hr USD/hr USD/hr Excavator (4m 3) 1,156,100 114.05 7.63 11.44 3.98 0.00 94.6 4.1 Excavator (2.3m 3) 611,380 74.71 4.48 6.72 2.78 0.00 62.9 2.3 Truck (36t) 776,325 75.80 2.24 4.16 0.00 8.57 60.0 3.0 Truck Art. (18t) 378,769 34.11 1.22 2.25 0.00 3.75 26.6 1.5 Drill (102mm) 623,150 109.38 7.54 6.17 17.23 0.00 81.1 4.9 Track Dozer (310hp) 889,158 88.09 4.89 7.33 13.74 0.00 64.1 2.9 Grader (138hp) 335,500 35.30 2.15 4.00 0.80 1.25 28.1 1.1 Wheel Loader (2.5m 3) 193,325 35.13 1.18 2.19 0.29 4.07 27.8 0.8 Rockbreaker 360,030 42.42 3.29 4.79 2.32 0.00 34.0 1.3 Water Truck (19m 3) 278,300 45.18 2.05 3.81 0.00 3.59 36.7 1.1 Fuel/Lube Truck 91,025 17.64 0.58 1.08 0.00 0.54 15.6 0.4 Light Vehicle 36,300 23.48 0.23 0.43 0.00 0.23 22.1 0.7 Wheel Loader (2.3m 3) 193,325 35.13 1.18 2.19 0.29 4.07 27.8 0.8

19.2.3 Labour The labour rates for the cost estimate include payroll burdens and have been provided by the Client. The monthly salaries and the labour costs to the Client are shown in Table 19-3.

20 Infomine, 2012-2013. Equipment Cost Calculator. [online] Available at: [Accessed November 26, 2012].

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Table 19-3: Salary Rates Monthly Salary Client Cost Position EUR/mo. EUR/yr Mine Operations Mine Manager 4,500 97,000 Supervisor Operations 1,200 26,000 Shotfirer 1,300 28,000 Equipment Operator 1,250 27,000 Drilling Assistant 750 16,250 Services Assistant 750 16,000 Mine Maintenance Mechanical Engineer 3,500 76,000 Mechanical Supervisor 1,400 30,000 Mechanic 1,250 27,000 Electrician 1,250 27,000 Maintenance Crew 750 16,333 Lubricator 1,000 21,500 Tire Fitter 1,000 21,500 Tire Fitter Assistant 750 16,000 Technical Services Senior Mining Engineer 3,500 76,000 Mining Technician 1,400 30,000 Mine Surveyor 1,400 30,000 Surveying Assistant 750 16,000 Senior Mine Geologist 3,000 65,000 Geology Technicians 1,400 30,000 Sampler 1,000 21,500 Administrative Assistant 700 15,000

19.2.4 Blasting It has been assumed that all charging and blasting activities will be conducted by the owner. The unit costs shown in Table 19-4 have been obtained from the Client.

Table 19-4: Blasting Unit Costs Cost Parameter Units Cost Bulk Explosive EUR/t 2,129 Primer EUR/unit 3.45 Detonator EUR/unit 1.83 Surface Delay EUR/unit 2.97 Other Blasting Accessories % of blasting cost 5

19.2.5 Unit Operating Costs The average unit operating costs by category are shown in Table 19-5. Diesel, blasting and labour are the largest contributors to the operating costs.

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Table 19-5: Average Unit Operating Costs by Category Category Units Option A Option B Option C Option D Labour USD/t moved 0.74 0.73 0.74 0.68 Diesel USD/t moved 1.03 1.01 0.99 0.98 Oil/Lubricants USD/t moved 0.05 0.05 0.05 0.05 Tyres USD/t moved 0.08 0.08 0.07 0.07 Wear Parts USD/t moved 0.06 0.06 0.06 0.06 Maintenance USD/t moved 0.14 0.14 0.14 0.14 Blasting USD/t moved 0.75 0.73 0.72 0.72 Total (Excluding Ore Transport) USD/t moved 2.86 2.88 2.90 2.81 Ore Transport Cost USD/t ore 2.38 2.47 2.48 2.61

19.3 Processing The Client has presented the following capital and operating cost estimates for the four processing options.

Table 19-6: Process Plant Capital and Operating Cost Estimates Option Capital Cost Operating Cost (EURm) (EUR/t) A 41.0 21.35* B 41.0 15.40 C 18.0 11.00 D 39.8 15.50 *includes concentrate transport to off-site facility

The process plant capital cost estimate for Options A and B are based on a conceptual estimate prepared by Testwork in 2013 for a 360 ktpa plant, scaled to the proposed production rate of 720 ktpa. The remaining capital cost estimates, and the operating cost estimates, are for the most part single line item figures provided by the Client. The capital cost estimates for Options A and B appear to be reasonable based on benchmark data available to SRK. Given the developmental nature of the flowsheets for Options C and D, and the absence of detail provided for the cost estimates, SRK is not able to independently verify the capital cost estimates, other than to say that they generally appear to be of an appropriate order of magnitude. Having said that, should Option C require even coarse grinding ahead of the gravity separation stage, and agglomeration after it ahead of heap leaching, as the process description provided by the Client indicates (see Section 15, the estimated capital cost shown in Table 19-6 may be too low. As with the capital cost estimates, the operating cost estimates for Options A and B appear to be reasonable based on benchmark data available to SRK, but again, given the developmental nature of the flowsheets for Options C and D, SRK is not able to independently verify the operating cost estimates, other than to say that they generally appear to be of an appropriate order of magnitude. SRK does note that the operating costs for the proposed processes for Options C and D, with the use of thiosulphate and halide respectively as the leach reagents, are highly dependent on the efficient recycle and reuse (thiosulphate) and regeneration of these reagents. Should the recycle, reuse and regeneration of these reagents not be maximised, then the operating costs could be significantly higher than the values shown in Table 19-6.

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19.4 Dewatering Dewatering costs for dewatering boreholes, sump pumps and pipework to the processing facility are estimated at a total of USDm 5. These costs are broken down to USDk 250 required annually for two years prior to production and USDm 1.5 annually for the next 3 years. 19.5 Tailings The capital costs for the project are estimated at EURm 2.83 and shown in Table 19-7.

Table 19-7: Capital and Sustaining Capital Costs Capital (Pre - Su staining Capital Units production) (Year 1 and 3) Ground clearance including pumping out existing water EURk 300 300 Earthworks EURk 630 461 Installation and cost of liner EURk 1,400 1,660 Pumps and pipelines, road and powerline EURk 500 0 Total (no pre liminaries, general items nor any contingency) EURk 2,830 2,421

The capital cost to construct the TSF is estimated at about EURm 2.83 based on a unit cost of EUR 10/m3 for the dam material when fill material is to be gained from the separate borrow source. When fill construction material is gained from the economic mine pit then the cost is reduced to EUR 1.5/m3. SRK notes that the cost could be substantially higher if long overhaul distances are involved. A key consideration is whether waste rock from the mine can be used or whether material needs to be quarried expressly for the purpose of constructing the facility. The operating cost will be in large part controlled by the pumping and the related infrastructure used to transport the tailings. For the budgeting purpose it has been assumed that the OPEX costs should be around EUR 0.7/m3 of tailings waste. 19.6 Waste Dumps The cost for clearing the waste dumps has been estimated from Golder’s report at EURk 845. 19.7 Land Acquisition The land acquisition cost has been provided by the Client at EURm 2.5. 19.8 Environment SRK anticipates that on-going environmental monitoring prior to project implementation and permitting of the remaining deposits would require approximately USDk 500 to USDk 750. Mine water treatment is unlikely to be necessary due the Mediterranean climate which will result in low seepage rates and a negative site water balance. However, due to the preliminary nature of the hydrological studies a provision for water treatment costs has been included within this PEA. For the purposes of PEA costing a high density sludge treatment plant with a design throughput of 8 l/s has been assumed. A capital cost of USDm 1 has been allowed, with an average annual operating expenditure of USD 252,288, which is based on a treatment cost of USD 0.50/m 3.

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19.9 General and Administrative

A General and Administrative (“G&A”) cost of EUR 3/t ore has been assumed as provided by the Client. 19.10 Closure The Plano Ambiental e de Recuperação Paisagística (Rehabilitation Plan) includes a description of activities and costs for three phases of rehabilitation; Phase 1 prior to operations, Phase 2 during operations and Phase 3 at closure. The Phase 3 closure activities include general descriptions for the dismantling of facilities, rehabilitation of soils, revegetation activities, management and monitoring of the revegetated areas. The costs associated with the rehabilitation activities is EUR 776,282 (approximately USDm 1). The closure of the tailings impoundment could probably be achieved by placing a soil cover over the entire footprint. The cost of the closure should be assumed at EURm 1.7 (approximately USDm 2.2). The combined cost of closure from these two estimates is USDm 3.2. SRK considers that this cost could be low on the basis of experience of closure costs for similar types of operations in similar environments. In particular, the closure activities and costs do not include an evaluation of potential risks from acid rock drainage and metal leaching from the TSF and waste rock dumps, long-term water management and the possibility of a potentially acid pit lake at closure. SRK suggests more detailed work is conducted on the acid rock drainage and metal leaching potential of the material to evaluate suitable closure designs for each facility. 19.11 Engineering Studies Table 19-8 represents a high level summary of the work program and budget for upcoming studies, not including studies already mentioned in the previous sections (Environment).

Table 19-8: Planned Budget for Studies Activity Description Total Cost (USD) Infill/Stepout Drilling and Delineation of additional resources/upgrading 1,000,000 Assaying of current resources (based on USD 250/m for a 4,000 m program) Geotechnical Studies & Drilling Geotechnical relogging and lab testwork 200,000 Metallurgical Studies Testwork in support of resource declaration 400,000

Metallurgical Design work Plant Design work leading to optimal plant 400,000 identification and sizing. Hydrology/Hydrogeology Analysis of existing data/collection of additional 200,000 Studies data during next drilling campaign

Feasibility Study 1,000,000 Total 3,200,000

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19.12 Capital and Operating Cost Summary A summary of the total capital and operating costs for the four options is shown in Table 19-9. The main findings from the capital and operating costs are summarised below:

• Mining costs vary with the size of the pit (smallest for Option A and largest for Option D); • Processing costs show the most variation between the options, with Option C having the lowest processing costs and Option D the highest; and • Option C has the lowest total capital and operating costs, while Option D has the highest.

Table 19-9: Capital and Operating Costs Summary Units Option A Option B Option C Option D Operating Expenditure Mining USDm 53.6 60.2 58.0 68.6 Ore Transport USDm 5.8 7.9 8.2 9.7 Processing USDm 55.5 70.4 66.1 101.7 Tailings USDm 2.1 2.7 3.0 3.3 Conc. Transport USDm 6.7 - - - Processing - Conc USDm 34.9 18.5 - - G&A USDm 13.7 17.3 18.0 19.7 Water Treatment USDm 0.8 0.9 0.9 1.0 Dewatering USDm 2.2 1.8 1.8 2.2 Total Operating Costs USDm 174.5 179.6 156.1 206.1 Capital Expenditure Mining USDm 42.5 46.5 44.7 48.6 Land USDm 3.3 3.3 3.3 3.3 Plant (On-Site) USDm 41.6 41.6 19.5 47.8 Plant (Off-Site) USDm 7.8 7.8 - - Environment/Closure USDm 3.8 3.8 3.8 3.8 Tailings/WRD USDm 11.1 11.1 11.1 11.1 Dewatering USDm 5.0 5.0 5.0 5.0 Water Treatment USDm 1.0 1.0 1.0 1.0 Engineering/Studies USDm 3.2 3.2 3.2 3.2 Total Capital Expenditure USDm 119.3 123.2 91.5 123.8

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20 ECONOMIC ANALYSIS

20.1.1 Introduction The economics analysis for the Boa Fé project is based on the production schedules presented in section Table 20-1. and the cost structure outlined in section Table 20-2. An economic analysis has been undertaken for all four project options. 20.1.2 Metal Price A flat gold price of USD 1,425/oz used in the evaluation is based on the Client’s internal estimates. This compares with the current gold price, which ended May 3 rd 2013 at USD 1,464/oz. SRK relies on Consensus Economic® as a source of consensus market forecasts, the medium long-term forecast prices for gold are shown in Table 20-1.

Table 20-1: SRK Consensus Market Forecast for Gold Q2 2013 Commodity Units Spot 2013 2014 2015 2016 2017 LTP Apr 15, 2013 Gold (USD/oz) 1,374 1,620 1,530 1,450 1,290 1,240 1,160

The study aims to identify the potential opportunities for the development of the Boa Fé project based on limited geological and technical information. A USD 1,425/oz price is therefore considered appropriate when considering the current stage, however sensitivities around this metal price should be considered. 20.1.3 Royalties The Company has entered into a royalty agreement with the Portuguese government with the following royalty structure:

• 4% royalty payable on revenues less any selling costs; or • a 10% to 20% sliding scale royalty on net profit which is applied when the metal price ranges from 2 to 4 times operating costs. It is SRK understanding that the selection the applied royalty option is at the discretion of the Portuguese government. The 4% royalty rate on revenue has been applied in SRK’s economic model. 20.1.4 Corporate Income Tax The corporate income tax has been assessed using a 25% state and 2.5% municipal tax rate. Amortisation has been applied on a straight line basis with the designations and annual rates shown in Table 20-3.

Table 20-2: Amortisation Designations and Rates Designation Rate (%) Buildings/Land 5 Plant/Machinery 15 Heavy Equipment 20 Development Projects 33

20.1.5 Contingencies No contingencies have been applied in the financial model over the estimated operating and capital expenditures

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20.1.6 Financial Model A discounted cashflow (“DCF”) model has been developed based on the production schedules and costs discussed above. The summary results from each production scenario are shown in Table 20-3 while the detailed financial models can be found in Appendix E.

Table 20-3: Project Scenario Comparison Economic Model Summary Units Option A Option B Option C Option D Production Rock Mined (kt) 18,735 20,923 20,028 24,425 Ore Processed (kt) 3,501 4,437 4,624 5,045 (g/t Au) 2.7 2.4 2.3 2.2

(koz Au) 306 341 341 356

Recovered Metal (koz Au) 262 291 249 339 Financial Metal Price (USD/oz Au) 1,425 1,425 1,425 1,425 Revenue (USDm) 373 415 355 482 Operating Expenditure (USDm) (175) (180) (156) (206) Royalty (USDm) (15) (17) (14) (19) Operating Profit (USDm) 184 219 185 257 Net Profit (USDm) 164 193 159 220 Capital Expenditure (USDm) (119) (123) (92) (124) Cashflow (USDm) 44 69 68 97 Pre-Tax Reporting NPV @ 5% (USDm) 39.9 62.7 65.5 92.8 NPV @ 10% (USDm) 22.7 39.8 45.9 64.3 NPV @ 15% (USDm) 10.6 23.7 31.8 43.9 IRR (%) 21.4 28.1 42.9 39.6 Post-Tax Reporting NPV @ 5% (USDm) 24.4 42.4 45.5 64.3 NPV @ 10% (USDm) 10.6 23.9 30.1 41.8 NPV @ 15% (USDm) 0.9 11.1 19.2 25.8 IRR (%) 15.6 21.4 32.7 30.2 Cash Cost

Cash Cost (USD/t ore ) 54.11 44.22 36.82 44.68 (USD/oz) 724 674 683 666

SRK notes that the economic assessment is preliminary in nature and the production schedules are inclusive of Inferred classified Mineral Resources that are considered too geologically speculative to have economic considerations applied to them that would enable them to be classified as Mineral Reserves. There is no certainty that the preliminary economics assessment will be realised.

The sensitivities of the NPV 5% relative to various financial and physical parameters are shown

in Figure 20-1. The sensitivities of the NPV 5% relative to metal price is show in Table 20-4. This evaluation demonstrates that the production schedules are most sensitive to metal price followed by operating costs. SRK notes that impact of changes to the processing recovery can be assessed based on the results of the metal price sensitivity curve.

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Figure 20-1: Project Scenario Sensitivity Analysis

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Table 20-4: Project Scenario Metal Price Sensitivity Analysis

Units

Metal Price USD/oz 800 900 1,000 1,100 1,200 1,300 1,425 1,500 1,600 1,700 1,800 1,900 2,000

NPV 5%

Option A USDm (86) (66) (45) (25) (9) 6 25 37 52 67 82 97 111 Option B USDm (75) (52) (30) (10) 7 24 44 56 72 88 105 121 137 Option C USDm (52) (32) (15) 1 15 30 47 57 71 85 99 113 127 Option D USDm (65) (39) (17) 4 24 43 66 81 99 118 137 155 174

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20.1.7 Conclusion

The project options demonstrate a positive NPV 5% ranging between USDm 24 and USDm 64, IRR between 16% and 33% and cash costs between 666 and 724 USD/oz. The project is most sensitive to gold price and a reduction in the gold price of between USD 1,100/oz to USD 1,200/oz may results in marginal project economics. Operating costs also have a significant role in the project economics, and additional work should be undertaken to support these parameters for any preferred case taken forward. Based on the limited technical work that has been undertaken and the assumptions which underlie this economic analysis, SRK concludes that there is potential for economically viable project options for the deposit. The positive financial indicators suggest that further studies and field work for this project are justified.

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21 ADJACENT PROPERTIES

There are no known properties currently under development or exploitation for precious or base metals adjacent to the Montemor project area.

22 OTHER RELEVANT DATA AND INFORMATION

There is no other relevant data or information which would materially impact the conclusions of this report.

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23 INTERPRETATION AND CONCLUSIONS

23.1 Geological Setting and Mineralisation Gold mineralisation at Boa Fé – Montemor is considered to conform to the orogenic gold model and occurs in association with several NW-SE trending shear corridors, which make part of the wide Montemor shear zone. Most of the gold deposits outlined to date locate along the northernmost of such shear corridors, referred to as the Boa Fé shear corridor. Gold mineralisation identified to date is hosted in either silicified schist or felsic meta- volcanics. While there are variations amongst the deposits, there are a number of common characteristics, which point to a common genesis. 23.2 Exploration Exploration on the Boa Fé experimental license area is extensive, with the latest drilling results extending the Mineral Resources on the six currently defined deposits to greater depths than previously estimated. The much larger exploration Montemor concession appears to hold significant potential, given the postulated extension of the currently defined Boa Fé shear zone in the experimental mining license area. The potential to extend the strike length and down-dip extension of known mineralised zones, as well as the discovery of new host structures and potential mineralised zones beneath cover exists. 23.3 Mineral Processing and Metallurgical Testwork Initial metallurgical testwork has demonstrated that gold is recoverable from Boa Fé – Montemor mineralized material using a combination of gravity, flotation and cyanidation technologies. Of the processing alternatives presented, the most conventional processing strategy would be onsite gold recovery into gravity and flotation concentrates that could be transported offsite for regrinding and cyanidation to recover the gold as a final doré’ product. SRK recommends additional process amenability testwork, which would include assessment of alternative processing technologies to alleviate the issues of arsenic recovery and disposal. 23.4 Mineral Resource Estimate The Mineral Resources for the Boa Fé deposit have been estimated by SRK and the Client at 6.1 Mt grading 1.74 g/t classified in the Indicated category and a further 1.6 Mt at 1.7 g/t in the Inferred category. The total contained metal is reported at 340 k.oz (Au) in the Indicated category and 84 k.oz (Au) in the Inferred category. SRK considers that, in addition to the potential for definition of additional deposits in the licence area, there is a more immediate potential to increase the Mineral Resource estimates for the six currently defined deposits which are the subject of this report. In particular, a concentration on targeted infill drilling and extension of drilling along strike and at depth will, SRK consider, have the effect of both increasing the overall Mineral Resource tonnage and improving the quality of the Mineral Resource estimates leading to upgrading of resource classification categories. 23.5 Mining The following conclusions can be made from the work carried out for the PEA:

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price, while Option A produces the least amount of ore at any Au price; • The optimisation results show that Option D recovers the most Au metal at any Au price, followed by Option B; • The optimisation results show that Option D provides an additional USDm 42.0 of undiscounted cashflow over Option B at an Au price of USD 1,350/oz; • The optimisation sensitivity shows that a 3° decre ase in overall slope angle results in a 98 kt decrease in ore, 4.4 k oz decrease in Au metal and 774 kt increase in waste; • Option A has the shortest mine life (6 years), while Option D is longest (8 years) due to the size of the optimised pit shells; • All four schedule scenarios resulted in similar production and grade profiles, with high grade material produced in the early years and lower grades fed towards the end of the mine life; and • Total material movement ranges from 4 to 5 Mtpa for all options. 23.6 Geotechnical Assessment The following conclusions can be made from the work carried out for the PEA:

• The pit slope configurations reported can be applied to the other pits at this stage of the study; • The kinematic analysis recommends changing the bench face angle from 80° to 70°; • The slope stability analysis results show that an inter ramp slope angle of 55° can be supported by inter ramp slope heights of 100 m. At any portion of the slope which exceed 100 m at geotechnical berm of 30 m should be placed; • The following slope design criteria can be adopted for the PEA: o Bench Face Angle: 70°; o Bench Height: 10 m; o Berm Width: 3.4 m; o Resulting Inter Ramp Slope Angle: 55°; and o Maximum Inter Ramp Slope Height: 100 m. 23.7 Hydrological and Hydrogeological Related Issues Groundwater levels indicate that dewatering will be required from the start of operations and advanced dewatering will be preferable if borehole yields are sufficiently high to allow advanced dewatering. Two streams merge at the exact location of the Cosas Novas open pit area. The suggested path of the south west stream diversion and the naturally kept stream close to the Cocas Novas open pit may intrude on the future pit designs. Additional stream diversion studies may be required to support the Casas Novas deposit valuation. Suggested stream diversions have been reviewed and found reasonably sized to cope with the adopted peak. Currently, the available water supplies from regional sources are designated to the local community and agricultural sector. The assumption is that a water reservoir will be required and once in operation the majority of the water required for the mill operation will be reclaimed from the tailings pond. A preliminary water balance model highlights a likely need for a small water storage dam of 150,000m 3 to keep the process plant fully operational during dry periods (Golder, 2011). Ongoing seasonal variations in water availability also need to be considered, and a source of make-up water may be required in the dry summer months. Dewatering discharge may be used to provide this make-up water but further investigations into the quantity and timing of dewatering discharge is required.

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23.8 Project Infrastructure The following results have been concluded from the work carried out for the PEA:

• Power requirements are estimated at 3,500 kW per year; • High grade stockpiles will be required at Casas Novas, Banhos, Braços and Monfurado, their distance from the processing facility requires a separate fleet to transport the ore; • Low grade stockpiles will be required at Chaminé, Casas Novas and Banhos deposits to allow high grade material to be processed in the early years; • The existing roads will be used to transport ore from Casas Novas, Banhos, Braços and Monfurado to the processing facility; • Waste dump locations have been proposed for all the deposits based on the largest optimised pit shells (Option D); • A 3.5 Mt tailings storage facility will require a 21 m main embankment and a 19 m saddle embankment; and • The tailings facility will be built in stages and will be constructed predominately from waste from the pits (except for the initial facility). 23.9 Environmental Studies, Permitting and Social or Community Impact The following conclusions can be made from the work carried for the PEA:

• Colt Resources has an experimental mining licence for the Boa Fé project, which covers operations up to five hectares in size and/or less than 150,000 ktpa of ore; • In accordance with mining law an application for a full mining licence requires the submission of a Mine Feasibility Study that includes an EIA; • An EIA for the mining of the Casas Novas and Cheminé pits was prepared by Geomega Consultants and submitted to the APA in August 2012 and according to the Client, the EIA report has been approved; and • The Banhos, Ligeiros, Braços and Monfurado deposits are not included in the EIA reviewed. SRK understands that the Client intends to focus on the exploitation of the Chaminé and Casas Novas deposits and subsequently permit and develop the other deposits. 23.9.1 Capital and Operating Costs The main findings from the capital and operating costs are summarised below:

The project options demonstrate a positive NPV 5% ranging between USDm 24 and USDm 64, IRR between 16% and 33% and cash costs between 666 and 724 USD/oz. The project is most sensitive to gold price and a reduction in the gold price of between USD 1,100/oz to USD 1,200/oz may results in marginal project economics. Operating costs also have a significant role in the project economics, and additional work should be undertaken to support these parameters for any preferred case taken forward. Although Option D yielded the highest NPV there is greater uncertainty surrounding the Drinkard Halogen processing method, therefore more conventional methods (Options B and C) should not be discarded at this stage.

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Based on the limited technical work that has been undertaken and the assumptions which underlie this economic analysis, SRK concludes that there is potential for economically viable project options for the deposit. The positive financial indicators suggest that further studies and field work for this project are justified.

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24 RECOMMENDATIONS Based on the work carried out for this PEA, SRK recommends the following:

• Geology o SRK recommends that the Client continues to conduct the regional exploration program on the larger exploration concession area to identify continuations of known structure and mineralization and to locate and prove up previously unknown buried targets; o SRK also recommends that the Client conduct a comprehensive resource expansion program across the known mineralised targets within the experimental mining license, targeting extension of mineralization both along strike and at depth. The work will involve detailed 3D structural interpretation, as well as targeted infill and step-out drilling programs to confirm existing results and expand known mineralised zones. Additional verification drilling and modelling of historical drilling and updating of resource estimates would also form part of this work; • Exploration o Given the nature of the mineralisation, it is highly probable that further mineralisation along the known structures will not be cropping out at surface, thus targeting will need to include both the intelligent use of ground geophysics and detailed structural interpretational work; o Ground based geophysics should be conducted, initially on a wide spacing to delineate the location of the projected Boa Fé shear zone and cross cutting structures, and then followed up by tighter spacing once areas of interest are identified; o The structural geology of the Boa Fé shear zone is quite complex, and the existing conceptual structural model is likely not adequate for use in drill targeting. SRK recommends a detailed reassessment of the available data, followed by integration with new geophysical data and a refinement of the exploration model; • Drilling o SRK recommends that additional confirmation/step-out drilling be conducted in other known deposit areas, in order to allow additional verification of these historic data, as well as to infill drill the previously explored areas; o SRK also recommends that a number of these holes be extended to test for mineralization at depth; • Mineral Processing and Metallurigcal Testing o Of the four processing options presented, the production of a combined gravity and flotation concentrate for Options A and B is relatively parameterised by the testwork undertaken to date. However, the final gold recovery stage, i.e. by intensive cyanidation of the combined gravity / flotation concentrate, requires further testwork in order to optimise the extraction of Au from this concentrate; o Given the developmental nature of the Option C and D flowsheets, significant further testwork is required in order to verify the technical feasibility of these proposed process options, and then to confirm the recovery figures assumed for this PEA for these process options; • Surface Rights Acquisition o SRK recommends that Colt begin the process of acquiring surface rights over the Boa Fé concession immediately;

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o Additional surface rights will also be required over areas in the Montemor exploration concession area, following approval of this license; • Mining o Re-run the optimisation with the results of the financial analysis of the PEA; o Select a pit shell from the optimisation results based on the preferred processing method identified from the PEA results and a DCF analysis; o Evaluate alternative methods for transporting the ore from the Casas Novas, Banhos, Braços and Monfuardo, such as larger trucks or contractors to reduce capital and operating costs; o Review the cut off grade used for the stockpiling strategy for the selected scenario; o Review the practicality of mining low grade and high grade separately; o Evaluate the standard mining unit to validate mining recovery and dilution factors; • Geotechnical o Due to the uncertainty in the geotechnical data, it is recommended that economic sensitivity of the deposits to inter ramp angles of 54° and 52° should be tested; o Specific geotechnical boreholes should be drilled at varying angles to remove the drill bias. These holes should be logged on intervals based upon geotechnical parameters; o To address the lack of orientation data, subsequent studies should look at the use of using acoustic televiewer (“ATV”) logging to measure joint structures; o Subsequent studies should look to identify and separate out the major geotechnical features such as lithologies and faults. This will be helped by further drilling, providing better understanding of the discontinuity orientations and the use of 3D lithological wireframes; • Hydrological and Hydrogeological Related Issues o There is insufficient data to support a dewatering assessment at present and a hydrogeological field programme is required to provide the data to support the dewatering system design. Pit slope depressurisation will also require further evaluation following completion of the field programme; o Hydrogeological sites investigations are also required to provide baseline groundwater information around the tailings area and waste rock dumps; o Open pit closure water balance and water quality assessments are required, and a geochemical testwork programme is required to support this; o Baseline surface water flow data is very limited and flow monitoring should be carried out to give confidence in the assumptions used in the site water balance and water supply assessments; o The surface water diversion around the Casas Novas pit is very close to the east wall of the pit. This will need to be considered during the mine planning process, and further evaluation of diversion options will be required if the pit has the potential to expand further to the east. • Project Infrastructure o Suitable locations for the high grade and low grade stockpiles should be investigated; o The practicality of using existing roads for transporting ore from Casas Novas, Banhos, Braços and Monfurado to the processing facility should be investigated to determine whether the type, size and frequency of the trucks will be allowed on these public roads; o The proposed waste dump locations should be investigated to determine their practicality;

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o Conduct a tailings alternative assessment including potential in pit disposal; o Conduct a hydrogeological investigation of the groundwater condition at and near the tailings impoundment and dam; o Carry out a hydrology study of the precipitation data representative of the site, including analysis of the site precipitation patterns and the development of the site storm scenarios for over 50 years; o Conduct a geochemical study on the geochemical properties of the tailings and the leachate originating from the tailings; o Perform a geotechnical investigation into the condition of the dam foundations and properties of the tailings; o Conduct borrow source investigation; o Carry out engineering designs of the TSF; • Environmental Studies, Permitting and Social or Community Impact o Further monitoring will be required to obtain site-specific primary data to quantify potential environmental risks, particularly relating to impacts on surface and groundwater resources. This will be required to ensure that risks are accurately identified and management measures are appropriate for the anticipated impact; o Further studies are required to investigate the need to manage seepage water from the TSF and WRD; o In accordance with the management measure identified for this impact in the EIA it is strongly recommended to find an alternative access route to the main road to avoid passage of trucks through the centre of Nossa Senhora de Boa Fé; o Further information is required on stakeholder engagement and feedback to ensure there are no delays to the project approval process; • Capital and Operating Costs o Manufacturer quotes should be obtained for major mining and processing equipment and blasting components to validate the assumptions used in this cost estimate; o Detailed studies should be conducted to confirm the cost estimates made for dewatering, tailings, waste dump clearance, water treatment and closure plans; • Economic Analysis o Based on the limited technical work that has been undertaken and the assumptions which underlie this economic analysis, SRK concludes that there is potential for economically viable project options for the deposit. The positive financial indicators suggest that further studies and field work for this project are justified.

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For and on behalf of SRK Consulting (UK) Limited

Jurgen Fuykschot, Mike Beare, Principal Consultant (Mining Engineering), Corporate Consultant (Mining Engineering), SRK Consulting (UK) Limited SRK Consulting (UK) Limited

Colleen MacDougall, Senior Consultant (Mining Engineering), SRK Consulting (UK) Limited

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25 REFERENCES

Data in Digital Format GIS and Excel data files are held in the central database.

References Agência Portuguesa do Ambiente (APA) – Atlas do Ambiente. [online] Available at: AMMTEC (2006). Metallurgical Testing Conducted upon Montemor Gold Project Samples.

AMMTEC (2008). Metallurgical Testing Conducted upon Montemor Gold Deposit.

Associação Portuguesa dos Recursos Hídricos (APRH). [online] Available at: Cassidy K.F. and. Hagemann S.G. (2001). World-class Archean orogenic gold deposits, eastern Yilgarn Craton: Diversity in timing, structural controls and mineralization styles. Geoscience Australia 2001.

Comissão de Coordenação e Desenvolvimento Regional do Alentejo (CCDRA). [online] Available at: Contecmina – Projecto de Exploração Mineira Boa Fé – Memorial Descritivo, Maio 2012.

Contecmina – Projecto de Exploração Mineira Boa Fé – Relatório de Lavra.

Crispini L., Capponi G, Federico. L, and Talarico F (2007). Gold bearing veining linked to transcrustal fault zones in the Transantarctic Mountains (northern Victoria Land, Antarctica). U.S. Geological Survey and the National Academies; USGS OF-2007-1047, Extended Abstract 212.

De Oliveira D.P.S., Yao Y. And Robb L.J. (2002). Remobilization of gold mineralization in the Sao Martinho prospect, Tomar Cordoba Shear Zone (TCSZ), East Central Portugal: Constraints from fluid inclusions. Economic Geology Research Institute Information. Circular No. 364, University of the Witwatersrand.

Direcção – Geral de Energia e Geológia (DGEG) – Estatísticas de Recursos Geológicos. [online] Available at: Drinkard Metalox, Inc – Boa Fé – Montemor Gold Project for Aurmont Resources: Batch Test Results, 2013.

European Parliament Website Parliamentary Questions Subject: Gold prospecting at a Natura 2000 site in the Alentejo (Portugal) Last updated: 27 February 2013 21 .

Faria A.F., Chichorro M.A. and Amaral P.K. (1997). Montemor Gold Project (Southern Portugal) - Geologic Evaluation Report June 1997. Report prepared for Montemor Resources Inc.

Geomega – Projecto de Exploração Mineira Boa Fé – Estudo de impacto ambiental – Volume II – Relatório Síntese Maio (Environmental Impact Assessment), 2012.

Geomega – Projecto de Exploração Mineira Boa Fé – Estudo de impacto ambiental – Volume III – Relatório Síntese Maio (Addendum to Environmental Impact Assessment), 2012

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Golder and Associated (UK) Limited (2008). Draft Report on Conceptual Design Tailings Management Facility, Montemor Gold Project, Protugal. Golder Report No. 07514150215/2. Report prepared for Iberian Resources Portugal Minerais Unipessoal Lda.

Groves D.I., Goldfarb R.J., Gebre-Mariam M., Hagemann S.G. and Robert, F. (1998).

Iberian Resources Portugal Minerais Unipessoal Lda, Conceptaul Design tailings Management Facility, Montemor Gold Project, Portugal, September 2008.

Iberian Resources Limited (2004). Iberian Resources Prospectus. 68 page.

Iberian Resources Portugal (2005). Area de Montemor. Relatorio dos trabalhos efectuados durante o primeiro semester de 2005. Volume 1, Volume 2 y anexos.

Infomine, 2012-2013. Equipment Cost Calculator. [online] Available at: [Accessed November 26, 2012].

Instituto da Água (INAG): Estudo dos Recursos Hidricos do Alentejo. [online] Available at: Lindsay, N.M., Iberian Resources-Portugal Recursos Minerais Unipessoal LDA, (2008), Technical Report, Montemor Gold Project (Proposed Boa Fé Gold Mine) Located in the Alentejo Region of Southern Portugal.

Madrid, R.J., VP Exploration, Victoria Gold Corp., Geological Society of Nevada, Great Basin Evolution and Metallogeny, 2010 Symposium. Extracts from workshop SC-4 - Structural Systematics: Applications for Exploration. May 2010.

Martins L. and Borralho V. (1998). Mineral potential of Portugal. Instituto Geologico e Mineiro (IGM), Ministerio de Economia. 60 pag.

Martins L. and de Oliveira D. (2000). Portugal Exploration and Mining. Instituto Geologico e Mineiro (IGM), Ministerio de Economia. 20 pag.

Lourenço, M. J.; Nunes, A. M.; Sampaio, T.; Varela, M. C.; Chambel, M. R.; Faria, C., Pereira, J. S. e Almeida, M. H. – Ensaios de Proviência de Sobreiro (Quercus suber) – Resultados aos Cinco Anos. Lisboa. Institutot Superior de Agronomia, 2005.

Naik, P.; Ushamalini e Somashekar – Impact of dust pollution on the growth response and dry matter production of the vegetation in and around stone quarry area. Eco. Env & Cons. Volume 13, N .º 2 (2007), p.409 – 410.

Office of Surface Mining – Mineral Resources. Part 816, Permanent Program Performance Standards, Surface Mining Activities. 1983.

Olofsson, S. O. – Applied Explosives Technology for Construction and Mining. Arla: NB, 1988.

Riofinex (1991). Projecto Mineiro Aurifero de Montemor-o-Novo. Sociedade Minera Rio Aretezia Lda.

SBS – Engenharia Civil, Hidráulica eAmbiente, Lda. – Projecto de Exploração Mineira de Boa Fé – Desvio das Linhas de Água intersectadas pela corta de Casas Novas. Porto, 2011.

Singh, R.B. – Monitoring of dust pollution by higher groups of plants around dust polluted habitats in Sonebhadra, Uttar Pradesh. Ind. J. Env. & Ecoplan. Volume 3, N.º 1 (2000), p.163 – 166.

SRK – NI 43-101 Technical Report Boa Fé/Montemor Gold Project Alentejo Region of Southern Portugal prepared for Colt Resources, 2012.

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Testwork Desenvolvimento de Processo LTDA – Relatorio Final Testes Matelurgicos com Minerio do Projeto Boa Fé, 2013.

Tornos F., Inverno C.M.C., Casquet C., Mateus A., Ortiz G. And Oliveira V. (2004). The metallogenic evolution of the Ossa-Morena Zone. Journal of Iberian Geology, N° 30, pp. 143- 181.

Universidade de Porto – Plano Conceptual de Encerramento da Barragem de Rejeitados Projecto de Exploração Mineira de Boa-Fé (Conceptual Closure Plan), 2011.

U.S. Council on Environmental Quality – National Enviromental Policy Act – Regulations. Federal Register, N.º 43 (1978).

Valente, T. M. F. – Modelos de Caracterização de Impactoe Ambital para Escombreiras Reactivas – Equilibrio e Evolução da Residuos de Actividade Extractiva. Tese de Doutoramento, Universidade do Minho, 2004.

Walter, D. A. e Everett, K. R. – Road dust and its environmental impact on Alaskan tiga and tundra. Artic and Alpine Rearch. Volume 19, N.º 4 (1987), p.479 – 489.

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26 GLOSSARY

26.1 Mineral Resources The mineral resources and mineral reserves have been classified according to the “CIM Standards on Mineral Resources and Reserves: Definitions and Guidelines” (November 27, 2010). Accordingly, the Resources have been classified as Measured, Indicated or Inferred, the Reserves have been classified as Proven, and Probable based on the Measured and Indicated Resources as defined below. A Mineral Resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological and grade continuity to be reasonably assumed. A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity. 26.2 Mineral Reserves A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined. A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in some circumstances a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.

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A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. 26.3 Definition of Terms The following general mining terms may be used in this report.

Table 26-1: Definition of Terms Term Definition Assay The chemical analysis of mineral samples to determine the metal content. Capital Expenditure All other expenditures not classified as operating costs. Composite Combining more than one sample result to give an average result over a larger distance. Concentrate A metal-rich product resulting from a mineral enrichment process such as gravity concentration or flotation, in which most of the desired mineral has been separated from the waste material in the mineralisation. Crushing Initial process of reducing particle size to render it more amenable for further processing. Cut-off Grade (CoG) The grade of mineralised rock, which determines as to whether or not it is potentially economic to recover its gold content by further concentration. Dilution Waste, which is unavoidably mined with mineralised material. Dip Angle of inclination of a geological feature/rock from the horizontal. Fault The surface of a fracture along which movement has occurred. Footwall The underlying side of a deposit or stope. Gangue Non-valuable components of the mineralisation. Grade The measure of concentration of gold within mineralised rock. Hangingwall The overlying side of a deposit or slope. Haulage A horizontal underground excavation which is used to transport mined material. Hydrocyclone A process whereby material is graded according to size by exploiting centrifugal forces of particulate materials. Igneous Primary crystalline rock formed by the solidification of magma. Kriging An interpolation method of assigning values from samples to blocks that minimizes the estimation error. Level Horizontal tunnel the primary purpose is the transportation of personnel and materials. Lithological Geological description pertaining to different rock types. LoM Plans Life-of-Mine plans. LRP Long Range Plan. Material Properties Mine properties.

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Milling A general term used to describe the process in which the extracted material is crushed and ground and subjected to physical or chemical treatment to extract the valuable metals to a concentrate or finished product. Mineral/Mining Lease A lease area for which mineral rights are held. Mining Assets The Material Properties and Significant Exploration Properties. Ongoing Capital Capital estimates of a routine nature, which is necessary for sustaining operations. Ore Reserve See Mineral Reserve. Pillar Rock left behind to help support the excavations in an underground mine. RoM Run-of-Mine. Sedimentary Pertaining to rocks formed by the accumulation of sediments, formed by the erosion of other rocks. Shaft An opening cut downwards from the surface for transporting personnel, equipment, supplies, mineralisation and waste. Sill A thin, tabular, horizontal to sub-horizontal body of igneous rock formed by the injection of magma into planar zones of weakness. Smelting A high temperature pyrometallurgical operation conducted in a furnace, in which the valuable metal is collected to a molten matte or doré phase and separated from the gangue components that accumulate in a less dense molten slag phase. Stope Underground void created by mining. Stratigraphy The study of stratified rocks in terms of time and space. Strike Direction of line formed by the intersection of strata surfaces with the horizontal plane, always perpendicular to the dip direction. Sulphide A sulfur bearing mineral. Tailings Finely ground waste rock from which valuable minerals or metals have been extracted. Thickening The process of concentrating solid particles in suspension. Total Expenditure All expenditures including those of an operating and capital nature. Variogram A statistical representation of the characteristics (usually grade).

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26.4 Abbreviations The following abbreviations may be used in this report. Abbreviation Unit or Term A ampere AA atomic absorption A/m 2 amperes per square meter ANFO ammonium nitrate fuel oil Ag silver Au gold AuEq gold equivalent grade °C degrees Centigrade CCD counter-current decantation CIL carbon-in-leach CoG cut-off grade cm centimeter cm 2 square centimeter cm 3 cubic centimeter cfm cubic feet per minute ConfC confidence code CRec core recovery CSS closed-side setting CTW calculated true width ° degree (degrees) dia. diameter EIS Environmental Impact Statement EMP Environmental Management Plan EURm million EUR EURk thousand EUR FA fire assay ft foot (feet) ft 2 square foot (feet) ft 3 cubic foot (feet) g gram gal gallon g/L gram per liter g-mol gram-mole gpm gallons per minute g/t grams per tonne ha hectares HDPE Height Density Polyethylene hp horsepower HTW horizontal true width ICP induced couple plasma ID2 inverse-distance squared ID3 inverse-distance cubed IFC International Finance Corporation ILS Intermediate Leach Solution

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Abbreviation Unit or Term kA kiloamperes kg kilograms km kilometer km 2 square kilometer koz thousand troy ounce kt thousand tonnes ktpd thousand tonnes per day ktpa thousand tonnes per annum kV kilovolt kW kilowatt kWh kilowatt-hour kWh/t kilowatt-hour per metric tonne L liter L/sec liters per second L/sec/m liters per second per meter lb pound LHD Long-Haul Dump truck LLDDP Linear Low Density Polyethylene Plastic LOI Loss On Ignition LoM Life-of-Mine m meter m2 square meter m3 cubic meter masl meters above sea level MARN Ministry of the Environment and Natural Resources MDA Mine Development Associates mg/L milligrams/liter mm millimeter mm 2 square millimeter mm 3 cubic millimeter MME Mine & Mill Engineering Moz million troy ounces Mt million tonnes Mtpa million tonnes per annum MTW measured true width MW million watts m.y. million years NGO non-governmental organization NI 43-101 Canadian National Instrument 43-101 OSC Ontario Securities Commission oz troy ounce % Percent PLC Programmable Logic Controller PLS Pregnant Leach Solution PMF probable maximum flood ppb parts per billion

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Abbreviation Unit or Term ppm parts per million QA/QC Quality Assurance/Quality Control RC rotary circulation drilling RoM Run-of-Mine RQD Rock Quality Description SEC U.S. Securities & Exchange Commission sec second SG specific gravity SPT standard penetration testing st short ton (2,000 pounds) t tonne (metric ton) (2,204.6 pounds) t/h tonnes per hour t/d tonnes per day t/y tonnes per year TSF tailings storage facility TSP total suspended particulates USDm million USD USDk thousand USD µm micron or microns V volts VFD variable frequency drive W watt XRD x-ray diffraction y year

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APPENDIX

A CERTIFICATE & CONSENT OF AUTHOR

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CERTIFICATE AND CONSENT

To Accompany the report entitled: “ A Preliminary Economic Assessment on the Boa Fé Gold Project, Portugal” , effective date 7 th May 2013, I, Jurgen Fuykschot, residing at 26 Maes Yr Annedd, Canton, Cardiff, UK, CF5 1GR do hereby certify that: 1) I am a Principal Consultant (Mining Engineering) with the firm of SRK Consulting (UK) Ltd (“SRK”) with an office at Churchill House, 17 Churchill Way, Cardiff, UK CF10 2HH; 2) I am a graduate of Delft University of Technology, The Netherlands in 1991 (MSc Mining Engineering), and qualified with an MBA from Deakin University, Melbourne, Australia in 2001. I have practiced my profession continuously since 1992, initially as a mini ng engineer based in the Netherland and Australia from 1995 until joining SRK (UK) in 2006 where I have worked extensively on technical studies on metal projects. My main areas of expertise are mine design and scheduling; 3) I am registered with the Aus tralian Institute of Mining and Metallurgy and have achieved ‘Competent Person’ status. (membership number 306269); 4) I have personally inspected the subject project between the 27 th and 29 th of March 2013; 5) I have read the definition of “qualified person” set out in National Instrument 43-101 and certify that by virtue of my education, affiliation to a professional association and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of National Instrument 43-101; 6) I, as a qualified person, I am independent of the issuer as defined in Section 1.5 of National Instrument 43-101; 7) I have had no prior involvement with the subject property; 8) I have read National Instrument 43-101 and confirm that this technical report has been prepared in compliance therewith; 9) I have not received, nor do I expect to receive, any interest, directly or indirectly, in the Boa Fé Gold Project or securities of Aurmont Resources or Colt Resources Inc.; 10) That, as of t he date of this technical report, to the best of my knowledge, information and belief, this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading; 11) I consent to t he filing of the technical report with any stock exchange and other regulatory authority and any publication for regulatory purposes, including electronic publication in the public company files on their websites accessible to the public of extracts from the technical report; and 12) I confirm that I have read the news release dated 7th May 2013 in which the findings of the technical report have been disclosed publically and have no reason to believe that there are any misrepresentations in the information derived from the report or that the press release dated 7 th May 2013 contains any misrepresentations of the information contained in the report.

______Jurgen Fuykschot (MAusIMM(CP) MSc, MBA) Cardiff UK 7th May 2013

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APPENDIX

B EXPLORATION

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Geophysical Surveys – Total Magnetic Intensity

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Geophysical Surveys – Total Count Survey

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APPENDIX

C MINING METHOD

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Pit Optimisation Results – Option A In-Situ Processed Output Price Total Waste SR Ore IND INF Au IND INF Ore IND INF Au IND INF Au USD/oz kt kt t:t kt kt kt g/t g/t g/t kt kt kt g/t g/t g/t k oz 400 2,130 1,472 2.24 658 600 59 5.59 5.60 5.47 657 598 59 5.32 5.33 5.21 96.0 450 2,289 1,580 2.23 709 639 70 5.44 5.46 5.19 707 637 70 5.18 5.20 4.95 100.7 500 2,922 2,040 2.31 882 809 73 5.05 5.04 5.13 880 807 73 4.81 4.80 4.89 116.2 550 3,440 2,371 2.22 1,069 971 98 4.65 4.64 4.72 1,066 969 98 4.43 4.42 4.50 129.8 600 3,800 2,642 2.28 1,158 1,028 130 4.51 4.53 4.31 1,156 1,026 130 4.29 4.32 4.10 136.4 650 4,047 2,810 2.27 1,237 1,084 153 4.39 4.43 4.08 1,234 1,081 153 4.18 4.22 3.88 141.7 700 4,829 3,344 2.25 1,484 1,286 198 4.03 4.06 3.84 1,481 1,283 197 3.84 3.87 3.66 156.3 750 6,383 4,603 2.58 1,781 1,563 218 3.77 3.78 3.74 1,776 1,559 218 3.59 3.60 3.56 175.4 800 6,653 4,777 2.55 1,876 1,641 235 3.68 3.69 3.62 1,872 1,637 235 3.51 3.52 3.45 180.4 850 6,822 4,897 2.54 1,926 1,679 247 3.64 3.65 3.56 1,921 1,675 246 3.46 3.48 3.39 182.9 900 7,054 5,054 2.53 2,000 1,742 258 3.57 3.58 3.50 1,995 1,738 257 3.40 3.41 3.33 186.5 950 8,310 6,079 2.72 2,231 1,915 316 3.41 3.43 3.31 2,226 1,911 315 3.25 3.27 3.15 198.9 1,000 9,477 6,977 2.79 2,500 2,132 369 3.24 3.26 3.13 2,494 2,126 368 3.08 3.10 2.98 211.4 1,050 9,822 7,237 2.80 2,585 2,205 380 3.19 3.20 3.09 2,578 2,199 379 3.03 3.05 2.95 215.1 1,100 10,567 7,834 2.87 2,733 2,327 405 3.10 3.12 3.01 2,726 2,322 404 2.96 2.97 2.86 221.5 1,150 12,999 10,071 3.44 2,928 2,500 428 3.05 3.07 2.93 2,921 2,494 427 2.91 2.93 2.79 233.5 1,200 13,306 10,310 3.44 2,996 2,539 457 3.02 3.05 2.84 2,989 2,533 456 2.87 2.90 2.71 236.2 1,250 14,996 11,804 3.70 3,192 2,685 506 2.94 2.98 2.74 3,184 2,679 505 2.80 2.84 2.61 245.3 1,300 18,326 14,888 4.33 3,438 2,770 668 2.89 2.94 2.64 3,430 2,763 667 2.75 2.80 2.52 259.1 1,350 18,744 15,234 4.34 3,510 2,807 703 2.86 2.92 2.59 3,501 2,800 701 2.72 2.78 2.46 261.8 1,400 19,091 15,528 4.36 3,563 2,845 718 2.84 2.90 2.56 3,554 2,838 717 2.70 2.77 2.44 263.8 1,450 19,830 16,194 4.45 3,636 2,892 744 2.81 2.89 2.52 3,627 2,885 742 2.68 2.75 2.40 266.9 1,500 20,395 16,698 4.52 3,697 2,910 787 2.79 2.88 2.47 3,688 2,903 785 2.66 2.74 2.35 269.4 1,550 21,189 17,427 4.63 3,761 2,938 824 2.77 2.86 2.44 3,752 2,930 822 2.64 2.73 2.32 272.3 1,600 22,530 18,707 4.89 3,823 2,966 856 2.76 2.85 2.46 3,813 2,959 854 2.63 2.72 2.34 275.9 1,650 22,700 18,859 4.91 3,841 2,977 864 2.76 2.85 2.45 3,832 2,970 862 2.63 2.71 2.33 276.5 1,700 23,937 20,015 5.10 3,923 3,034 889 2.73 2.82 2.43 3,913 3,026 886 2.60 2.69 2.32 280.0 1,750 24,631 20,638 5.17 3,993 3,061 931 2.71 2.81 2.39 3,983 3,054 929 2.58 2.67 2.27 282.4 1,800 24,995 20,972 5.21 4,024 3,086 937 2.70 2.80 2.38 4,013 3,079 935 2.57 2.66 2.27 283.5 1,850 26,317 22,225 5.43 4,092 3,102 990 2.68 2.79 2.36 4,081 3,094 987 2.56 2.66 2.25 286.9 1,900 26,881 22,762 5.53 4,120 3,125 994 2.68 2.78 2.36 4,109 3,117 992 2.55 2.65 2.24 288.0 1,950 27,126 22,992 5.56 4,134 3,134 1,000 2.67 2.78 2.35 4,124 3,126 998 2.55 2.64 2.24 288.6 2,000 27,657 23,497 5.65 4,159 3,156 1,003 2.67 2.77 2.35 4,149 3,148 1,001 2.54 2.63 2.24 289.5 2,050 28,094 23,914 5.72 4,180 3,168 1,012 2.66 2.76 2.34 4,170 3,160 1,009 2.53 2.63 2.23 290.2 2,100 28,717 24,505 5.82 4,211 3,188 1,023 2.65 2.75 2.33 4,201 3,180 1,020 2.52 2.62 2.22 291.3 2,150 28,952 24,734 5.86 4,218 3,190 1,028 2.65 2.75 2.33 4,207 3,182 1,026 2.52 2.62 2.22 291.6 2,200 29,879 25,629 6.03 4,251 3,221 1,030 2.64 2.74 2.33 4,240 3,213 1,027 2.51 2.61 2.21 292.6 2,250 30,671 26,395 6.17 4,276 3,242 1,034 2.63 2.73 2.32 4,266 3,234 1,032 2.51 2.60 2.21 293.7 2,300 32,641 28,308 6.53 4,333 3,291 1,043 2.62 2.71 2.32 4,322 3,282 1,040 2.50 2.59 2.21 296.5 2,350 32,936 28,597 6.59 4,340 3,294 1,046 2.62 2.71 2.32 4,329 3,286 1,043 2.49 2.58 2.21 296.8 2,400 33,332 28,984 6.67 4,348 3,297 1,050 2.62 2.71 2.32 4,337 3,289 1,048 2.49 2.58 2.21 297.0 2,450 33,640 29,285 6.72 4,355 3,300 1,055 2.61 2.71 2.31 4,344 3,292 1,052 2.49 2.58 2.20 297.3 2,500 34,281 29,913 6.85 4,368 3,305 1,063 2.61 2.71 2.31 4,357 3,297 1,061 2.49 2.58 2.20 297.8 2,550 34,562 30,187 6.90 4,374 3,311 1,064 2.61 2.71 2.31 4,364 3,302 1,061 2.49 2.58 2.20 298.1 2,600 35,393 30,997 7.05 4,396 3,315 1,081 2.61 2.70 2.30 4,385 3,307 1,078 2.48 2.58 2.19 299.0 2,650 36,294 31,877 7.22 4,417 3,319 1,098 2.60 2.70 2.30 4,406 3,311 1,095 2.48 2.57 2.19 300.2 2,700 36,495 32,075 7.26 4,420 3,321 1,099 2.60 2.70 2.30 4,409 3,313 1,096 2.48 2.57 2.18 300.3

UK5525 Boa Fé PEA Report FINAL 20130507.docx May, 2013 Page C2 of C5 SRK Consulting Boa Fé PEA – Technical Appendix C

Pit Optimisation Results – Option B In-Situ Processed Output Price Total Waste SR Ore IND INF Au IND INF Ore IND INF Au IND INF Au USD/oz kt kt t:t kt kt kt g/t g/t g/t kt kt kt g/t g/t g/t k oz 400 2,911 1,928 1.96 984 909 75 4.64 4.61 5.03 981 907 75 4.42 4.39 4.79 119.2 450 3,036 1,986 1.89 1,049 966 83 4.52 4.49 4.84 1,047 964 83 4.30 4.27 4.61 123.7 500 3,524 2,308 1.90 1,216 1,110 107 4.26 4.25 4.40 1,213 1,107 106 4.06 4.05 4.19 135.4 550 4,025 2,642 1.91 1,383 1,230 152 4.04 4.05 3.96 1,379 1,227 152 3.84 3.85 3.77 145.7 600 4,655 3,026 1.86 1,629 1,424 206 3.73 3.76 3.57 1,625 1,420 205 3.56 3.58 3.40 158.9 650 6,416 4,405 2.19 2,011 1,776 235 3.46 3.45 3.53 2,006 1,772 235 3.30 3.29 3.36 181.8 700 6,651 4,554 2.17 2,097 1,841 256 3.39 3.39 3.41 2,092 1,836 256 3.23 3.23 3.25 185.9 750 6,992 4,785 2.17 2,207 1,935 272 3.31 3.31 3.34 2,202 1,931 271 3.16 3.15 3.18 191.0 800 7,400 5,044 2.14 2,356 2,048 308 3.21 3.22 3.16 2,350 2,043 307 3.06 3.06 3.01 197.4 850 9,106 6,328 2.28 2,778 2,417 361 2.98 2.97 3.05 2,771 2,411 360 2.84 2.83 2.90 216.1 900 9,658 6,729 2.30 2,929 2,514 414 2.91 2.91 2.90 2,921 2,508 413 2.77 2.77 2.76 222.3 950 10,373 7,260 2.33 3,113 2,669 444 2.82 2.83 2.81 3,105 2,662 443 2.69 2.69 2.67 229.5 1,000 11,211 7,911 2.40 3,300 2,805 495 2.75 2.76 2.69 3,292 2,798 494 2.62 2.63 2.56 236.8 1,050 13,698 10,166 2.88 3,532 2,997 535 2.70 2.72 2.61 3,523 2,990 534 2.58 2.59 2.49 249.4 1,100 15,078 11,350 3.05 3,727 3,154 573 2.65 2.67 2.54 3,718 3,146 572 2.52 2.54 2.42 257.6 1,150 17,003 13,017 3.27 3,986 3,262 724 2.58 2.62 2.38 3,976 3,254 722 2.45 2.49 2.27 268.2 1,200 19,172 14,988 3.58 4,184 3,372 812 2.54 2.58 2.37 4,173 3,363 810 2.42 2.46 2.26 277.8 1,250 19,374 15,138 3.57 4,236 3,395 842 2.53 2.57 2.33 4,226 3,386 840 2.41 2.45 2.22 279.4 1,300 20,091 15,763 3.64 4,328 3,449 879 2.50 2.56 2.28 4,317 3,440 877 2.38 2.44 2.17 282.8 1,350 20,934 16,486 3.71 4,448 3,515 933 2.47 2.53 2.23 4,437 3,506 931 2.35 2.41 2.12 286.9 1,400 21,430 16,927 3.76 4,503 3,541 962 2.46 2.52 2.22 4,492 3,532 960 2.34 2.40 2.11 289.0 1,450 22,086 17,502 3.82 4,584 3,583 1,001 2.44 2.51 2.18 4,572 3,574 998 2.32 2.39 2.08 291.7 1,500 24,612 19,822 4.14 4,790 3,684 1,106 2.40 2.48 2.14 4,778 3,675 1,103 2.28 2.36 2.04 300.1 1,550 25,137 20,272 4.17 4,865 3,733 1,132 2.38 2.46 2.12 4,853 3,724 1,129 2.27 2.34 2.02 302.3 1,600 25,528 20,620 4.20 4,908 3,758 1,150 2.37 2.45 2.11 4,896 3,748 1,147 2.26 2.33 2.01 303.6 1,650 25,775 20,827 4.21 4,948 3,783 1,165 2.36 2.44 2.09 4,936 3,774 1,162 2.25 2.32 2.00 304.6 1,700 27,579 22,488 4.42 5,092 3,858 1,233 2.33 2.41 2.07 5,079 3,848 1,230 2.22 2.30 1.97 309.9 1,750 27,989 22,862 4.46 5,127 3,886 1,241 2.32 2.40 2.07 5,115 3,876 1,238 2.21 2.29 1.97 311.0 1,800 28,238 23,091 4.49 5,147 3,893 1,254 2.32 2.40 2.06 5,134 3,883 1,251 2.21 2.29 1.96 311.6 1,850 29,073 23,856 4.57 5,217 3,946 1,271 2.30 2.39 2.05 5,204 3,936 1,268 2.19 2.27 1.95 313.7 1,900 29,895 24,591 4.64 5,304 4,028 1,276 2.28 2.36 2.04 5,290 4,017 1,273 2.17 2.24 1.95 316.0 1,950 30,648 25,287 4.72 5,361 4,066 1,295 2.27 2.34 2.03 5,348 4,056 1,291 2.16 2.23 1.93 317.6 2,000 30,941 25,559 4.75 5,382 4,078 1,304 2.26 2.34 2.02 5,369 4,068 1,301 2.16 2.23 1.93 318.2 2,050 32,950 27,465 5.01 5,485 4,173 1,312 2.25 2.32 2.02 5,471 4,162 1,309 2.14 2.21 1.92 321.9 2,100 33,588 28,068 5.08 5,521 4,195 1,326 2.24 2.31 2.01 5,507 4,185 1,322 2.13 2.20 1.92 322.9 2,150 34,061 28,519 5.15 5,542 4,200 1,342 2.24 2.31 2.00 5,529 4,190 1,339 2.13 2.20 1.91 323.7 2,200 34,465 28,903 5.20 5,562 4,211 1,352 2.23 2.31 2.00 5,548 4,200 1,348 2.13 2.20 1.90 324.3 2,250 34,707 29,136 5.23 5,571 4,213 1,357 2.23 2.31 1.99 5,557 4,203 1,354 2.12 2.20 1.90 324.6 2,300 35,027 29,443 5.27 5,584 4,222 1,362 2.23 2.30 1.99 5,570 4,211 1,358 2.12 2.20 1.90 325.0 2,350 35,324 29,731 5.32 5,593 4,224 1,369 2.23 2.30 1.99 5,579 4,214 1,365 2.12 2.19 1.89 325.3 2,400 36,243 30,618 5.44 5,625 4,236 1,390 2.22 2.30 1.99 5,611 4,225 1,386 2.12 2.19 1.89 326.6 2,450 37,213 31,560 5.58 5,653 4,246 1,407 2.22 2.30 1.98 5,639 4,235 1,404 2.11 2.19 1.89 327.8 2,500 37,583 31,919 5.64 5,663 4,251 1,413 2.22 2.30 1.98 5,649 4,240 1,409 2.11 2.19 1.89 328.1 2,550 37,870 32,201 5.68 5,669 4,253 1,416 2.22 2.30 1.98 5,655 4,243 1,413 2.11 2.19 1.89 328.3 2,600 38,228 32,549 5.73 5,678 4,256 1,422 2.22 2.30 1.98 5,664 4,245 1,419 2.11 2.19 1.88 328.6 2,650 38,348 32,666 5.75 5,682 4,258 1,424 2.22 2.30 1.98 5,668 4,247 1,421 2.11 2.19 1.88 328.7 2,700 38,484 32,799 5.77 5,685 4,260 1,425 2.21 2.29 1.98 5,671 4,249 1,422 2.11 2.19 1.87 328.8

UK5525 Boa Fé PEA Report FINAL 20130507.docx May, 2013 Page C3 of C5 SRK Consulting Boa Fé PEA – Technical Appendix C

Pit Optimisation Results – Option C In-Situ Processed Output Price Total Waste SR Ore IND INF Au IND INF Ore IND INF Au IND INF Au USD/oz kt kt t:t kt kt kt g/t g/t g/t kt kt kt g/t g/t g/t k oz 400 2,791 1,778 1.75 1,014 937 76 4.49 4.46 4.92 1,011 935 76 4.28 4.25 4.69 101.6 450 3,063 1,960 1.78 1,103 1,018 85 4.37 4.34 4.75 1,100 1,015 85 4.16 4.13 4.52 107.4 500 3,539 2,264 1.78 1,275 1,165 110 4.12 4.11 4.30 1,272 1,162 110 3.93 3.91 4.10 117.2 550 3,967 2,460 1.63 1,507 1,383 124 3.80 3.77 4.12 1,503 1,380 124 3.61 3.59 3.92 127.5 600 4,461 2,797 1.68 1,664 1,490 174 3.65 3.63 3.74 1,660 1,486 174 3.47 3.46 3.56 135.2 650 6,377 4,286 2.05 2,091 1,853 238 3.36 3.35 3.45 2,086 1,848 238 3.20 3.19 3.29 156.7 700 6,620 4,447 2.05 2,173 1,915 258 3.30 3.30 3.37 2,167 1,910 258 3.15 3.14 3.21 160.1 750 6,943 4,639 2.01 2,304 2,033 271 3.21 3.20 3.30 2,298 2,028 270 3.06 3.05 3.14 164.9 800 7,486 5,003 2.02 2,483 2,160 322 3.10 3.10 3.07 2,476 2,155 322 2.95 2.95 2.92 171.4 850 8,540 5,708 2.02 2,832 2,482 350 2.90 2.89 2.99 2,825 2,476 350 2.76 2.75 2.85 183.3 900 9,581 6,517 2.13 3,064 2,642 422 2.81 2.81 2.83 3,057 2,636 421 2.67 2.67 2.69 191.9 950 10,384 7,102 2.16 3,282 2,825 457 2.72 2.71 2.74 3,274 2,818 456 2.59 2.58 2.61 198.9 1,000 11,049 7,602 2.20 3,448 2,939 509 2.65 2.66 2.62 3,439 2,932 508 2.53 2.53 2.50 204.1 1,050 11,471 7,927 2.24 3,544 3,022 523 2.62 2.62 2.60 3,536 3,014 521 2.50 2.50 2.47 207.1 1,100 12,352 8,646 2.33 3,706 3,118 588 2.57 2.58 2.49 3,697 3,110 587 2.45 2.46 2.37 212.3 1,150 15,372 11,332 2.80 4,040 3,427 613 2.51 2.52 2.44 4,030 3,418 611 2.39 2.40 2.33 225.8 1,200 17,104 12,798 2.97 4,306 3,517 789 2.44 2.48 2.26 4,295 3,508 787 2.33 2.36 2.16 234.5 1,250 18,188 13,736 3.09 4,452 3,618 834 2.41 2.46 2.21 4,440 3,609 832 2.30 2.34 2.10 239.3 1,300 19,580 15,033 3.31 4,547 3,644 903 2.41 2.45 2.23 4,536 3,635 901 2.29 2.33 2.13 243.9 1,350 20,055 15,417 3.32 4,638 3,678 961 2.38 2.44 2.18 4,627 3,668 958 2.27 2.32 2.07 246.3 1,400 21,062 16,297 3.42 4,765 3,770 995 2.35 2.41 2.14 4,753 3,760 992 2.24 2.30 2.04 250.2 1,450 21,303 16,492 3.43 4,811 3,791 1,019 2.34 2.40 2.11 4,799 3,782 1,017 2.23 2.29 2.01 251.3 1,500 21,919 17,015 3.47 4,904 3,857 1,047 2.32 2.38 2.09 4,891 3,848 1,044 2.21 2.27 1.99 253.6 1,550 23,616 18,516 3.63 5,100 3,962 1,138 2.28 2.35 2.04 5,087 3,952 1,135 2.17 2.24 1.94 259.3 1,600 25,275 20,041 3.83 5,234 4,041 1,192 2.26 2.32 2.04 5,221 4,031 1,189 2.15 2.21 1.95 263.8 1,650 25,563 20,298 3.86 5,264 4,057 1,207 2.25 2.32 2.04 5,251 4,047 1,204 2.15 2.21 1.94 264.6 1,700 26,259 20,886 3.89 5,373 4,141 1,232 2.23 2.29 2.02 5,359 4,131 1,229 2.12 2.18 1.92 267.0 1,750 26,543 21,139 3.91 5,404 4,157 1,247 2.22 2.29 2.01 5,390 4,147 1,243 2.12 2.18 1.91 267.8 1,800 26,815 21,390 3.94 5,425 4,172 1,253 2.22 2.28 2.00 5,411 4,161 1,250 2.11 2.17 1.91 268.4 1,850 28,768 23,208 4.17 5,560 4,249 1,311 2.20 2.26 2.00 5,546 4,238 1,307 2.10 2.15 1.90 272.8 1,900 29,997 24,306 4.27 5,691 4,363 1,327 2.17 2.23 1.99 5,677 4,353 1,324 2.07 2.12 1.89 275.8 1,950 30,605 24,858 4.33 5,747 4,396 1,351 2.16 2.22 1.97 5,733 4,385 1,348 2.06 2.11 1.88 276.9 2,000 30,867 25,101 4.35 5,766 4,409 1,357 2.16 2.22 1.97 5,752 4,398 1,354 2.06 2.11 1.87 277.4 2,050 31,280 25,483 4.40 5,797 4,433 1,363 2.15 2.21 1.96 5,782 4,422 1,360 2.05 2.10 1.87 278.2 2,100 33,363 27,433 4.63 5,929 4,551 1,378 2.13 2.19 1.96 5,914 4,539 1,375 2.03 2.08 1.86 281.9 2,150 33,623 27,674 4.65 5,949 4,560 1,389 2.13 2.18 1.95 5,934 4,548 1,386 2.03 2.08 1.86 282.3 2,200 33,844 27,881 4.68 5,963 4,566 1,397 2.13 2.18 1.94 5,948 4,554 1,394 2.02 2.08 1.85 282.6 2,250 34,152 28,172 4.71 5,979 4,576 1,404 2.12 2.18 1.94 5,965 4,565 1,400 2.02 2.07 1.85 283.0 2,300 34,517 28,519 4.75 5,998 4,586 1,411 2.12 2.18 1.94 5,983 4,575 1,408 2.02 2.07 1.84 283.5 2,350 34,834 28,820 4.79 6,013 4,593 1,420 2.12 2.17 1.93 5,998 4,581 1,417 2.02 2.07 1.84 283.9 2,400 35,095 29,071 4.83 6,024 4,597 1,427 2.12 2.17 1.93 6,009 4,586 1,423 2.02 2.07 1.84 284.2 2,450 35,555 29,511 4.88 6,044 4,611 1,433 2.11 2.17 1.93 6,029 4,600 1,429 2.01 2.07 1.84 284.7 2,500 36,590 30,511 5.02 6,079 4,623 1,456 2.11 2.17 1.92 6,063 4,611 1,452 2.01 2.06 1.83 285.9 2,550 36,942 30,850 5.06 6,092 4,631 1,461 2.11 2.17 1.92 6,077 4,619 1,458 2.01 2.06 1.83 286.2 2,600 37,293 31,187 5.11 6,106 4,635 1,471 2.10 2.16 1.92 6,091 4,624 1,467 2.00 2.06 1.81 286.5 2,650 37,363 31,255 5.12 6,108 4,636 1,472 2.10 2.16 1.92 6,093 4,625 1,468 2.00 2.06 1.81 286.6 2,700 38,179 32,046 5.23 6,133 4,641 1,492 2.10 2.16 1.92 6,118 4,630 1,488 2.00 2.06 1.81 287.5

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Pit Optimisation Results – Option D In-Situ Processed Output Price Total Waste SR Ore IND INF Au IND INF Ore IND INF Au IND INF Au USD/oz kt kt t:t kt kt kt g/t g/t g/t kt kt kt g/t g/t g/t k oz 400 3,219 2,068 1.80 1,151 1,048 103 4.30 4.28 4.41 1,148 1,045 103 4.09 4.08 4.20 143.5 450 3,489 2,258 1.84 1,231 1,126 105 4.20 4.18 4.37 1,227 1,123 105 4.00 3.98 4.17 149.9 500 3,971 2,591 1.88 1,379 1,221 158 4.01 4.03 3.83 1,376 1,218 158 3.82 3.84 3.64 160.5 550 4,660 2,983 1.78 1,677 1,460 217 3.65 3.68 3.44 1,673 1,456 217 3.48 3.51 3.27 177.6 600 6,462 4,377 2.10 2,086 1,833 253 3.37 3.37 3.38 2,080 1,828 252 3.21 3.21 3.22 204.1 650 6,675 4,504 2.07 2,171 1,904 268 3.31 3.31 3.30 2,166 1,899 267 3.15 3.15 3.14 208.4 700 7,184 4,842 2.07 2,342 2,031 311 3.19 3.21 3.10 2,336 2,026 311 3.04 3.06 2.95 217.0 750 8,403 5,670 2.08 2,732 2,389 343 2.96 2.95 3.00 2,725 2,383 342 2.82 2.81 2.86 234.6 800 9,473 6,509 2.20 2,965 2,539 426 2.86 2.87 2.83 2,957 2,532 425 2.73 2.73 2.70 246.2 850 9,890 6,769 2.17 3,121 2,665 456 2.79 2.80 2.74 3,113 2,658 454 2.66 2.66 2.61 252.5 900 10,794 7,437 2.22 3,356 2,862 494 2.69 2.70 2.65 3,348 2,855 493 2.56 2.57 2.52 262.3 950 13,321 9,671 2.65 3,649 3,126 524 2.63 2.63 2.59 3,640 3,118 522 2.50 2.51 2.47 277.9 1,000 15,110 11,174 2.84 3,936 3,336 600 2.54 2.56 2.46 3,926 3,328 598 2.42 2.44 2.35 290.6 1,050 17,169 12,932 3.05 4,236 3,470 767 2.47 2.51 2.31 4,226 3,461 765 2.35 2.39 2.20 303.6 1,100 19,227 14,785 3.33 4,441 3,588 854 2.44 2.47 2.29 4,430 3,579 852 2.32 2.35 2.18 314.1 1,150 19,631 15,099 3.33 4,532 3,626 906 2.41 2.46 2.23 4,521 3,617 904 2.30 2.34 2.13 317.2 1,200 20,648 15,992 3.44 4,656 3,701 955 2.39 2.44 2.18 4,644 3,692 952 2.27 2.32 2.08 322.3 1,250 21,056 16,328 3.45 4,728 3,750 979 2.37 2.42 2.17 4,717 3,740 976 2.25 2.31 2.06 324.8 1,300 21,805 16,987 3.53 4,819 3,781 1,037 2.35 2.41 2.12 4,806 3,772 1,034 2.24 2.30 2.02 328.4 1,350 24,437 19,380 3.83 5,057 3,913 1,145 2.31 2.37 2.09 5,045 3,903 1,142 2.20 2.26 1.99 338.6 1,400 25,108 19,961 3.88 5,147 3,971 1,176 2.29 2.35 2.07 5,134 3,961 1,173 2.18 2.24 1.97 341.6 1,450 25,531 20,320 3.90 5,211 4,009 1,202 2.27 2.34 2.05 5,198 3,999 1,199 2.16 2.23 1.95 343.6 1,500 27,191 21,786 4.03 5,405 4,120 1,286 2.23 2.30 2.02 5,392 4,109 1,283 2.13 2.19 1.92 350.2 1,550 27,912 22,440 4.10 5,472 4,162 1,310 2.22 2.29 2.00 5,458 4,152 1,306 2.11 2.18 1.90 352.6 1,600 28,199 22,690 4.12 5,509 4,182 1,327 2.21 2.28 1.98 5,495 4,172 1,324 2.11 2.18 1.89 353.7 1,650 28,498 22,966 4.15 5,533 4,200 1,332 2.21 2.28 1.98 5,519 4,190 1,329 2.10 2.17 1.89 354.5 1,700 29,723 24,042 4.23 5,681 4,321 1,360 2.18 2.24 1.96 5,667 4,310 1,356 2.07 2.14 1.87 358.7 1,750 30,268 24,532 4.28 5,736 4,368 1,368 2.16 2.23 1.96 5,722 4,357 1,365 2.06 2.12 1.87 360.3 1,800 30,863 25,079 4.34 5,784 4,395 1,389 2.16 2.22 1.95 5,769 4,384 1,385 2.05 2.12 1.85 361.8 1,850 32,922 27,000 4.56 5,922 4,523 1,400 2.13 2.19 1.94 5,907 4,511 1,396 2.03 2.09 1.85 366.6 1,900 33,245 27,294 4.59 5,951 4,541 1,410 2.13 2.19 1.93 5,936 4,530 1,407 2.03 2.08 1.84 367.4 1,950 33,883 27,897 4.66 5,986 4,554 1,432 2.12 2.19 1.92 5,971 4,543 1,428 2.02 2.08 1.83 368.6 2,000 34,296 28,290 4.71 6,007 4,567 1,439 2.12 2.18 1.92 5,992 4,556 1,436 2.02 2.08 1.83 369.4 2,050 34,689 28,661 4.75 6,028 4,576 1,451 2.12 2.18 1.91 6,013 4,565 1,448 2.02 2.08 1.82 370.1 2,100 35,152 29,101 4.81 6,051 4,593 1,458 2.11 2.18 1.91 6,036 4,582 1,455 2.01 2.07 1.82 370.8 2,150 36,102 30,018 4.93 6,083 4,603 1,480 2.11 2.17 1.91 6,068 4,592 1,477 2.01 2.07 1.82 372.2 2,200 37,158 31,039 5.07 6,119 4,618 1,501 2.11 2.17 1.91 6,104 4,607 1,497 2.00 2.07 1.82 373.8 2,250 37,517 31,384 5.12 6,133 4,626 1,507 2.10 2.17 1.90 6,118 4,615 1,503 2.00 2.06 1.81 374.2 2,300 37,867 31,719 5.16 6,148 4,632 1,516 2.10 2.17 1.90 6,133 4,620 1,512 2.00 2.06 1.81 374.7 2,350 38,177 32,021 5.20 6,156 4,636 1,520 2.10 2.17 1.90 6,140 4,624 1,516 2.00 2.06 1.81 375.0 2,400 38,405 32,240 5.23 6,165 4,640 1,525 2.10 2.16 1.89 6,149 4,628 1,521 2.00 2.06 1.80 375.2 2,450 39,075 32,880 5.31 6,195 4,661 1,534 2.09 2.16 1.89 6,179 4,649 1,530 1.99 2.06 1.80 376.0 2,500 39,259 33,058 5.33 6,201 4,663 1,538 2.09 2.16 1.89 6,186 4,651 1,534 1.99 2.06 1.80 376.2 2,550 39,401 33,198 5.35 6,203 4,664 1,538 2.09 2.16 1.89 6,187 4,653 1,535 1.99 2.06 1.80 376.3 2,600 39,685 33,473 5.39 6,212 4,671 1,541 2.09 2.16 1.88 6,196 4,659 1,537 1.99 2.05 1.79 376.5 2,650 39,774 33,560 5.40 6,214 4,672 1,542 2.09 2.16 1.88 6,198 4,661 1,538 1.99 2.05 1.78 376.6 2,700 39,880 33,664 5.42 6,216 4,673 1,543 2.09 2.16 1.88 6,201 4,662 1,539 1.99 2.05 1.78 376.6

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APPENDIX

D CAPITAL AND OPERATING COSTS

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Capital and Operating Costs – Option A Units Total Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Operating Expenditure Mining USDm 53.6 - - 5.4 11.5 12.1 11.7 11.6 1.4 - - Ore Transport USDm 5.8 - - - 0.5 1.2 1.6 2.2 0.3 - - Processing USDm 55.5 - - 7.1 11.4 11.4 11.4 11.4 2.7 - - Tailings USDm 2.1 - - 0.3 0.4 0.4 0.4 0.4 0.1 - - Conc. Transport USDm 6.7 - - 0.9 1.4 1.4 1.4 1.4 0.3 - - Processing - Conc USDm 34.9 - - 4.5 7.2 7.2 7.2 7.2 1.7 - - G&A USDm 13.7 - - 1.8 2.8 2.8 2.8 2.8 0.7 - - Water Treatment USDm 0.8 - - 0.1 0.1 0.1 0.1 0.1 0.1 - - Dewatering USDm 2.2 0.0 0.0 0.1 0.2 0.3 0.3 0.3 - - - Total Operating Costs USDm 174.5 0.0 0.0 20.1 35.6 37.0 37.0 37.4 7.3 - - Capital Expenditure Mining USDm 42.5 - - 13.2 21.7 3.6 1.8 2.3 - - - Land USDm 3.3 - 3.3 ------Plant On-Site USDm 41.6 - 41.6 ------Plant Off-Site USDm 7.8 - 7.8 ------Environment/Closure USDm 3.8 0.3 0.3 - - - - - 3.2 - - Tailings/WRD USDm 11.1 - 4.8 3.1 - 3.1 - - - - - Dewatering USDm 5.0 0.3 0.3 1.5 1.5 1.5 - - - - - Water Treatment USDm 1.0 - 1.0 ------Engineering/Studies USDm 3.2 3.2 ------Total Capital Expenditure USDm 119.3 3.8 59.0 17.9 23.2 8.3 1.8 2.3 3.2 - -

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Capital and Operating Costs – Option B Units Total Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Operating Expenditure Mining USDm 60.2 - - 5.3 11.9 12.8 12.4 9.9 6.6 1.3 - Ore Transport USDm 7.9 - - - 0.5 1.2 1.5 2.2 1.4 1.0 - Processing USDm 70.4 - - 7.1 11.4 11.4 11.4 11.4 11.4 6.1 - Tailings USDm 2.7 - - 0.3 0.4 0.4 0.4 0.4 0.4 0.2 - Conc. Transport USDm ------Processing - Conc USDm 18.5 - - 1.9 3.0 3.0 3.0 3.0 3.0 1.6 - G&A USDm 17.3 - - 1.8 2.8 2.8 2.8 2.8 2.8 1.5 - Water Treatment USDm 0.9 - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 - Dewatering USDm 1.8 0.0 0.0 0.1 0.2 0.3 0.3 0.3 0.3 - - Total Operating Costs USDm 179.6 0.0 0.0 16.6 30.4 32.2 32.0 30.2 26.2 12.0 - Capital Expenditure Mining USDm 46.5 - - 13.2 22.0 6.2 1.1 2.3 - 1.7 - Land USDm 3.3 - 3.3 ------Plant On-Site USDm 41.6 - 41.6 ------Plant Off-Site USDm 7.8 - 7.8 ------Environment/Closure USDm 3.8 0.3 0.3 ------3.2 - Tailings/WRD USDm 11.1 - 4.8 3.1 - 3.1 - - - - - Dewatering USDm 5.0 0.3 0.3 1.5 1.5 1.5 - - - - - Water Treatment USDm 1.0 - 1.0 ------Engineering/Studies USDm 3.2 3.2 ------Total Capital Expenditure USDm 123.2 3.8 59.0 17.9 23.5 10.8 1.1 2.3 - 4.9 -

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Capital and Operating Costs – Option C Units Total Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Operating Expenditure Mining USDm 58.0 - - 5.2 11.7 12.2 11.8 9.4 6.4 1.3 - Ore Transport USDm 8.2 - - - 0.5 1.2 1.5 2.2 1.3 1.5 - Processing USDm 66.1 - - 6.4 10.3 10.3 10.3 10.3 10.3 8.2 - Tailings USDm 3.0 - - 0.3 0.5 0.5 0.5 0.5 0.5 0.4 - Conc. Transport USDm ------Processing - Conc USDm ------G&A USDm 18.0 - - 1.8 2.8 2.8 2.8 2.8 2.8 2.2 - Water Treatment USDm 0.9 - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 - Dewatering USDm 1.8 0.0 0.0 0.1 0.2 0.3 0.3 0.3 0.3 - - Total Operating Costs USDm 156.1 0.0 0.0 14.0 26.1 27.4 27.4 25.7 21.7 13.7 - Capital Expenditure Mining USDm 44.7 - - 13.2 21.3 4.4 2.1 2.7 - 1.1 - Land USDm 3.3 - 3.3 ------Plant On-Site USDm 19.5 - 19.5 ------Plant Off-Site USDm ------Environment/Closure USDm 3.8 0.3 0.3 ------3.2 - Tailings/WRD USDm 11.1 - 4.8 3.1 - 3.1 - - - - - Dewatering USDm 5.0 0.3 0.3 1.5 1.5 1.5 - - - - - Water Treatment USDm 1.0 - 1.0 ------Engineering/Studies USDm 3.2 3.2 ------Total Capital Expenditure USDm 91.5 3.8 29.1 17.9 22.8 9.0 2.1 2.7 - 4.3 -

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Capital and Operating Costs – Option D Units Total Y-2 Y-1 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Operating Expenditure Mining USDm 68.6 - - 4.9 12.8 12.5 12.3 12.9 11.8 1.4 - Ore Transport USDm 9.7 - - - 0.6 1.0 1.6 2.2 1.9 1.5 0.9 Processing USDm 101.7 - - 9.1 14.5 14.5 14.5 14.5 14.5 14.5 5.5 Tailings USDm 3.3 - - 0.3 0.5 0.5 0.5 0.5 0.5 0.5 0.2 Conc. Transport USDm ------Processing - Conc USDm ------G&A USDm 19.7 - - 1.8 2.8 2.8 2.8 2.8 2.8 2.8 1.1 Water Treatment USDm 1.0 - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Dewatering USDm 2.2 0.0 0.0 0.1 0.2 0.3 0.3 0.3 0.3 0.3 - Total Operating Costs USDm 206.1 0.0 0.0 16.3 31.6 31.7 32.1 33.4 32.0 21.2 7.8 Capital Expenditure Mining USDm 48.6 - - 12.8 26.5 2.5 1.9 4.4 - 0.5 - Land USDm 3.3 - 3.3 ------Plant (On-Site) USDm 47.8 - 47.8 ------Plant (Off-Site) USDm ------Environment/Closure USDm 3.8 0.3 0.3 ------3.2 Tailings/WRD USDm 11.1 - 4.8 3.1 - 3.1 - - - - - Dewatering USDm 5.0 0.3 0.3 1.5 1.5 1.5 - - - - - Water Treatment USDm 1.0 - 1.0 ------Engineering/Studies USDm 3.2 3.2 ------Total Capital Expenditure USDm 123.8 3.8 57.4 17.5 28.0 7.1 1.9 4.4 - 0.5 3.2

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APPENDIX

E ECONOMIC ANALYSIS

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Financial Model – Option A Calendar Year Units Totals 2013 2014 2015 2016 2017 2018 2019 2020 2021 Mining Rock (kt) 18,735 0 0 1,755 3,885 4,035 4,107 4,468 485 0 Ore (kt) 3,501 0 0 450 720 720 720 720 171 0 (g/t Au) 2.7 0.0 0.0 2.8 2.6 3.3 2.5 2.7 2.0 0.0

(koz Au) 306 0 0 41 59 76 57 62 11 0

Sales Recovered Metal (koz) 262 0 0 35 51 65 49 53 9 0 Metal Price (USD/oz) 1,425 0 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 Revenue (US Dm) 373 0 0 50 72 92 69 76 14 0 Operating Expenditure Mining (USDm) (53.6) - - (5.4) (11.5) (12.1) (11.7) (11.6) (1.4) - Ore Transport (USDm) (5.8) - - - (0.5) (1.2) (1.6) (2.2) (0.3) - Processing (USDm) (55.5) - - (7.1) (11.4) (11.4) (11.4) (11.4) (2.7) - Tailings (USDm) (2.1) - - (0.3) (0.4) (0.4) (0.4) (0.4) (0.1) - Conc. Transport (USDm) (6.7) - - (0.9) (1.4) (1.4) (1.4) (1.4) (0.3) - Processing - Conc (USDm) (34.9) - - (4.5) (7.2) (7.2) (7.2) (7.2) (1.7) - G&A (USDm) (13.7) - - (1.8) (2.8) (2.8) (2.8) (2.8) (0.7) - Water Treatment (USDm) (0.8) - - (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) - Dewatering (USDm) (1.5) (0.0) (0.0) (0.1) (0.2) (0.3) (0.3) (0.3) - - Operating Costs - Subtotal (US Dm) (174.5) (0.0) (0.0) (20.1) (35.6) (37.0) (37.0) (37.4) (7.3) - Royalty - Mine Gate (USDm) (14.9) - - (2.0) (2.9) (3.7) (2.8) (3.0) (0.5) - Working Capital (USDm) - 0.0 0.0 (2.8) (0.8) (1.6) 1.9 (0.5) 3.2 0.6 Operating Costs - Total (US Dm) (189.5) (0.0) (0.0) (24.9) (39.3) (42.3) (37.9) (41.0) (4.7) 0.6 Operating Profit (US Dm) 183.6 (0.0) (0.0) 24.9 32.8 50.0 31.5 35.0 8.8 0.6 Corporate Income Tax & Profit Royalty Profit tax (USDm) (19.9) - - - (2.7) (8.9) (3.7) (4.5) - - Effective Tax Rate (%) 10.8 - - - 8.2 17.8 11.8 13.0 - - Net Profit (US Dm) 163.7 (0.0) (0.0) 24.9 30.1 41.1 27.8 30.4 8.8 0.6 Capital Expenditure Mining (USDm) (42.5) - - (13.2) (21.7) (3.6) (1.8) (2.3) - - Land (USDm) (3.3) - (3.3) ------Plant (On-Site) (USDm) (41.6) - (41.6) ------Plant (Off-Site) (USDm) (7.8) - (7.8) ------Environment/Closure (USDm) (3.8) (0.3) (0.3) - - - - - (3.2) - Tailings/WRD (USDm) (11.1) - (4.8) (3.1) - (3.1) - - - - Dewatering (USDm) (5.0) (0.3) (0.3) (1.5) (1.5) (1.5) - - - - Water Treatment (USDm) (1.0) - (1.0) ------Engineering/Studies (USDm) (3.2) (3.2) ------Total Capital Expenditure (US Dm) (119.3) (3.8) (59.0) (17.9) (23.2) (8.3) (1.8) (2.3) (3.2) - Reporting Statistics Cashflow (USDm) 44.5 (3.8) (59.0) 7.0 6.9 32.9 26.1 28.2 5.6 0.6 Cumulative Cashflow (USDm) (3.8) (62.8) (55.7) (48.8) (16.0) 10.1 38.3 43.9 44.5

Discounted Cashflow (USDm) 24.1 (3.6) (53.5) 6.1 5.7 25.8 19.4 20.0 3.8 0.4 Cumulative Discounted Cashflow (USDm) (3.6) (57.1) (51.0) (45.4) (19.6) (0.2) 19.9 23.7 24.1 Total Cash Costs (USD/t ore ) 54.11 - - 49.19 53.47 56.51 55.20 56.23 45.88 - Total Cash Costs (USD/oz Au) 724 - - 633 761 628 816 759 829 -

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Financial Model – Option B Year Units Totals 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Mining Rock (kt) 20,923 0 0 1,719 4,066 4,229 4,410 3,647 2,361 491 0 Ore (kt) 4,437 0 0 450 720 720 720 720 720 387 0 (g/t Au) 2.4 0.0 0.0 2.8 2.5 3.3 2.1 2.6 1.5 1.6 0.0

(koz Au) 341 0 0 40 59 77 50 61 34 20 0

Sales Recovered Metal (koz) 291 0 0 35 50 66 42 52 29 17 0 Metal Price (USD/oz) 1,425 0 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 Revenue (US Dm) 415 0 0 49 72 94 60 74 41 25 0 Operating Expenditure Mining (USDm) (60.2) - - (5.3) (11.9) (12.8) (12.4) (9.9) (6.6) (1.3) - Ore Transport (USDm) (7.9) - - - (0.5) (1.2) (1.5) (2.2) (1.4) (1.0) - Processing (USDm) (70.4) - - (7.1) (11.4) (11.4) (11.4) (11.4) (11.4) (6.1) - Tailings (USDm) (2.7) - - (0.3) (0.4) (0.4) (0.4) (0.4) (0.4) (0.2) - Conc. Transport (USDm) ------Processing - Conc (USDm) (18.5) - - (1.9) (3.0) (3.0) (3.0) (3.0) (3.0) (1.6) - G&A (USDm) (17.3) - - (1.8) (2.8) (2.8) (2.8) (2.8) (2.8) (1.5) - Water Treatment (USDm) (0.9) - - (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) - Dewatering (USDm) (1.8) (0.0) (0.0) (0.1) (0.2) (0.3) (0.3) (0.3) (0.3) - - Operating Costs - Subtotal (US Dm) (179.6) (0.0) (0.0) (16.6) (30.4) (32.2) (32.0) (30.2) (26.2) (12.0) - Royalty - Mine Gate (USDm) (16.6) - - (2.0) (2.9) (3.8) (2.4) (3.0) (1.6) (1.0) - Working Capital (USDm) (0.0) 0.0 0.0 (3.0) (0.9) (1.8) 2.8 (1.2) 2.4 0.4 1.2 Operating Costs - Total (US Dm) (196.2) (0.0) (0.0) (21.5) (34.2) (37.7) (31.7) (34.4) (25.4) (12.6) 1.2 Operating Profit (US Dm) 218.9 (0.0) (0.0) 27.7 37.4 56.6 28.8 39.5 15.6 12.1 1.2 Corporate Income Tax Profit tax (USDm) (26.4) - - - (4.7) (10.5) (2.8) (5.7) (0.6) (2.0) - Effective Tax Rate (%) 12.1 - - - 12.6 18.6 9.9 14.3 3.8 16.8 - Net Profit (US Dm) 192.5 (0.0) (0.0) 27.7 32.7 46.0 26.0 33.9 15.0 10.1 1.2 Capital Expenditure Mining (USDm) (46.5) - - (13.2) (22.0) (6.2) (1.1) (2.3) - (1.7) - Land (USDm) (3.3) - (3.3) ------Plant (On-Site) (USDm) (41.6) - (41.6) ------Plant (Off-Site) (USDm) (7.8) - (7.8) ------Environment/Closure (USDm) (3.8) (0.3) (0.3) ------(3.2) - Tailings/WRD (USDm) (11.1) - (4.8) (3.1) - (3.1) - - - - - Dewatering (USDm) (5.0) (0.3) (0.3) (1.5) (1.5) (1.5) - - - - - Water Treatment (USDm) (1.0) - (1.0) ------Engineering/Studies (USDm) (3.2) (3.2) ------Total Capital Expenditure (US Dm) (123.2) (3.8) (59.0) (17.9) (23.5) (10.8) (1.1) (2.3) - (4.9) - Reporting Statistics Cashflow (USDm) 69.3 (3.8) (59.0) 9.8 9.1 35.2 24.8 31.6 15.0 5.2 1.2 Cumulative Cashflow (USDm) (3.8) (62.8) (52.9) (43.8) (8.6) 16.2 47.8 62.9 68.0 69.3

Discounted Cashflow (USDm) 41.7 (3.6) (53.5) 8.5 7.5 27.6 18.5 22.5 10.2 3.3 0.8 Cumulative Discounted Cashflow (USDm) (3.6) (57.1) (48.6) (41.1) (13.5) 5.0 27.5 37.6 41.0 41.7 Total Cash Costs (USD/t ore ) 44.22 - - 41.21 46.15 49.91 47.82 46.06 38.69 33.59 - Total Cash Costs (USD/oz Au) 674 - - 537 662 543 811 639 967 751 -

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Financial Model – Option C Year Units Totals 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Mining Rock (kt) 20,028 0 0 1,701 4,032 4,014 4,169 3,450 2,206 455 0 Ore (kt) 4,624 0 0 450 720 720 720 720 720 574 0 (g/t Au) 2.3 0.0 0.0 2.8 2.5 3.3 2.1 2.7 1.3 1.3 0.0

(koz Au) 341 0 0 40 59 77 49 62 31 23 0

Sales Recovered Metal (koz) 249 0 0 29 43 57 36 45 22 17 0 Metal Price (USD/oz) 1,425 0 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 Revenue (US Dm) 355 0 0 42 61 81 51 64 32 24 0 Operating Expenditure Mining (USDm) (58.0) - - (5.2) (11.7) (12.2) (11.8) (9.4) (6.4) (1.3) - Ore Transport (USDm) (8.2) - - - (0.5) (1.2) (1.5) (2.2) (1.3) (1.5) - Processing (USDm) (66.1) - - (6.4) (10.3) (10.3) (10.3) (10.3) (10.3) (8.2) - Tailings (USDm) (3.0) - - (0.3) (0.5) (0.5) (0.5) (0.5) (0.5) (0.4) - Conc. Transport (USDm) ------Processing - Conc (USDm) ------G&A (USDm) (18.0) - - (1.8) (2.8) (2.8) (2.8) (2.8) (2.8) (2.2) - Water Treatment (USDm) (0.9) - - (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) - Dewatering (USDm) (1.8) (0.0) (0.0) (0.1) (0.2) (0.3) (0.3) (0.3) (0.3) - - Operating Costs - Subtotal (US Dm) (156.1) (0.0) (0.0) (14.0) (26.1) (27.4) (27.4) (25.7) (21.7) (13.7) - Royalty - Mine Gate (USDm) (14.2) - - (1.7) (2.5) (3.2) (2.0) (2.6) (1.3) (1.0) - Working Capital (USDm) - 0.0 0.0 (2.5) (0.8) (1.5) 2.4 (1.2) 2.4 0.1 1.1 Operating Costs - Total (US Dm) (170.3) (0.0) (0.0) (18.2) (29.4) (32.1) (27.0) (29.4) (20.6) (14.6) 1.1 Operating Profit (US Dm) 184.9 (0.0) (0.0) 23.6 31.9 48.4 24.1 34.6 11.4 9.8 1.1 Corporate Income Tax Profit tax (USDm) (25.8) - - (0.3) (5.5) (9.7) (2.9) (5.6) (0.3) (1.5) - Effective Tax Rate (%) 13.9 - - 1.3 17.4 20.0 11.9 16.2 2.6 14.9 - Net Profit (US Dm) 159.2 (0.0) (0.0) 23.3 26.4 38.8 21.2 29.0 11.1 8.4 1.1 Capital Expenditure Mining (USDm) (44.7) - - (13.2) (21.3) (4.4) (2.1) (2.7) - (1.1) - Land (USDm) (3.3) - (3.3) ------Plant (On-Site) (USDm) (19.5) - (19.5) ------Plant (Off-Site) (USDm) ------Environment/Closure (USDm) (3.8) (0.3) (0.3) ------(3.2) - Tailings/WRD (USDm) (11.1) - (4.8) (3.1) - (3.1) - - - - - Dewatering (USDm) (5.0) (0.3) (0.3) (1.5) (1.5) (1.5) - - - - - Water Treatment (USDm) (1.0) - (1.0) ------Engineering/Studies (USDm) (3.2) (3.2) ------Total Capital Expenditure (US Dm) (91.5) (3.8) (29.1) (17.9) (22.8) (9.0) (2.1) (2.7) - (4.3) - Reporting Statistics Cashflow (USDm) 67.6 (3.8) (29.1) 5.5 3.6 29.7 19.1 26.4 11.1 4.1 1.1 Cumulative Cashflow (USDm) (3.8) (32.9) (27.4) (23.8) 5.9 25.0 51.4 62.4 66.5 67.6

Discounted Cashflow (USDm) 44.8 (3.6) (26.4) 4.7 3.0 23.3 14.2 18.7 7.5 2.6 0.7 Cumulative Discounted Cashflow (USDm) (3.6) (30.0) (25.3) (22.3) 1.0 15.2 34.0 41.5 44.1 44.8 Total Cash Costs (USD/t ore ) 36.82 - - 34.78 39.72 42.53 40.82 39.24 31.98 25.58 - Total Cash Costs (USD/oz Au) 683 - - 534 664 542 820 629 1,025 857 -

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Financial Model – Option D Year Units Totals 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Mining Rock (kt) 24,425 0 0 1,550 4,443 4,042 4,284 5,101 4,549 456 0 0 Ore (kt) 5,045 0 0 450 720 720 720 720 720 720 275 0 (g/t Au) 2.2 0.0 0.0 2.9 2.7 3.4 2.2 2.2 1.8 1.1 0.8 0.0

(koz Au) 356 0 0 41 62 78 51 51 42 25 7 0

Sales Recovered Metal (koz) 339 0 0 39 59 74 49 48 40 24 6 0 Metal Price (USD/oz) 1,425 0 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 1,425 Revenue (US Dm) 482 0 0 56 83 105 69 69 57 34 9 0 Operating Expenditure Mining (USDm) (68.6) - - (4.9) (12.8) (12.5) (12.3) (12.9) (11.8) (1.4) - - Ore Transport (USDm) (9.7) - - - (0.6) (1.0) (1.6) (2.2) (1.9) (1.5) (0.9) - Processing (USDm) (101.7) - - (9.1) (14.5) (14.5) (14.5) (14.5) (14.5) (14.5) (5.5) - Tailings (USDm) (3.3) - - (0.3) (0.5) (0.5) (0.5) (0.5) (0.5) (0.5) (0.2) - Conc. Transport (USDm) ------Processing - Conc (USDm) ------G&A (USDm) (19.7) - - (1.8) (2.8) (2.8) (2.8) (2.8) (2.8) (2.8) (1.1) - Water Treatment (USDm) (1.0) - - (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) - Dewatering (USDm) (2.2) (0.0) (0.0) (0.1) (0.2) (0.3) (0.3) (0.3) (0.3) (0.3) - - Operating Costs - Subtotal (US Dm) (206.1) (0.0) (0.0) (16.3) (31.6) (31.7) (32.1) (33.4) (32.0) (21.2) (7.8) - Royalty - Mine Gate (USDm) (19.3) - - (2.2) (3.3) (4.2) (2.8) (2.7) (2.3) (1.4) (0.4) - Working Capital (USDm) 0.0 0.0 0.0 (3.5) (1.2) (1.8) 3.0 0.1 0.9 1.2 1.1 0.2 Operating Costs - Total (US Dm) (225.4) (0.0) (0.0) (22.1) (36.1) (37.7) (31.9) (36.0) (33.4) (21.3) (7.0) 0.2 Operating Profit (US Dm) 257.1 (0.0) (0.0) 33.8 47.2 67.5 37.3 32.7 23.5 12.5 2.3 0.2 Corporate Income Tax Profit tax (USDm) (36.7) - - (0.8) (8.3) (13.6) (5.2) (3.7) (2.6) (2.5) - - Effective Tax Rate (%) 14.3 - - 2.3 17.6 20.1 13.9 11.2 11.1 20.4 - - Net Profit (US Dm) 220.4 (0.0) (0.0) 33.0 38.9 53.9 32.1 29.0 20.9 10.0 2.3 0.2 Capital Expenditure Mining (USDm) (48.6) - - (12.8) (26.5) (2.5) (1.9) (4.4) - (0.5) - - Land (USDm) (3.3) - (3.3) ------Plant (On-Site) (USDm) (47.8) - (47.8) ------Plant (Off-Site) (USDm) ------Environment/Closure (USDm) (3.8) (0.3) (0.3) ------(3.2) - Tailings/WRD (USDm) (11.1) - (4.8) (3.1) - (3.1) ------Dewatering (USDm) (5.0) (0.3) (0.3) (1.5) (1.5) (1.5) ------Water Treatment (USDm) (1.0) - (1.0) ------Engineering/Studies (USDm) (3.2) (3.2) ------Total Capital Expenditure (US Dm) (123.8) (3.8) (57.4) (17.5) (28.0) (7.1) (1.9) (4.4) - (0.5) (3.2) - Reporting Statistics Cashflow (USDm) 96.6 (3.8) (57.5) 15.5 11.0 46.8 30.2 24.6 20.9 9.4 (0.9) 0.2 Cumulative Cashflow (USDm) (3.8) (61.2) (45.7) (34.7) 12.1 42.3 66.9 87.8 97.3 96.3 96.6

Discounted Cashflow (USDm) 63.3 (3.6) (52.1) 13.4 9.0 36.7 22.6 17.5 14.2 6.1 (0.6) 0.1 Cumulative Discounted Cashflow (USDm) (3.6) (55.7) (42.3) (33.3) 3.4 26.0 43.5 57.6 63.7 63.1 63.3 Total Cash Costs (USD/t ore ) 44.68 - - 41.20 48.47 49.89 48.46 50.16 47.67 31.28 29.60 - Total Cash Costs (USD/oz Au) 666 - - 473 596 486 719 749 858 948 1,254 -

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