TECHNICAL REPORT ON THE COSCUEZ MINE, BOYACÁ DEPARTMENT, FOR FURA GEMS INC.

UTM Zone 18N – Datum WGS84 Centered at UTM: 593,500 E and 622,500 N map sheet Plancha 189 La Palma

prepared by

Harrison Cookenboo, Ph.D., P.Geo., Senior Associate Geologist Warren F. Boyd, B.Sc, FGA, Senior Associate Geologist/Gemmologist G. Ross MacFarlane, P.Eng., Senior Associate Mining and Metallurgical Engineer

Effective date: January 23, 2019 Toronto, Canada Geological and Mining Consultants

TABLE OF CONTENTS Page

1. SUMMARY ...... 1

2. INTRODUCTION ...... 4 2.1 TERMS OF REFERENCE ...... 6 2.2 SITE VISIT ...... 6 2.3 SOURCES OF INFORMATION ...... 7

3. RELIANCE ON OTHER EXPERTS ...... 8

4. PROPERTY DESCRIPTION AND LOCATION ...... 9 4.1 TERMS OF THE AGREEMENT ...... 9 4.2 SIGNIFICANT FACTORS OR RISKS ...... 11 4.3 LOCAL TRADITIONAL ARTISANAL MINERS ...... 12 4.4 COLOMBIAN MINING LAW SUMMARY ...... 12

5. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 14 5.1 ACCESS ...... 14 5.2 CLIMATE ...... 15 5.3 POWER ...... 17

6. HISTORY ...... 18 6.1 GREEN WARS ...... 18 6.2 MINING TITLE 122-95M ...... 18

7. GEOLOGICAL SETTING AND MINERALIZATION ...... 21 7.1 LOCAL AND PROPERTY GEOLOGY ...... 24 7.2 MINERALIZATION IN MINE TUNNELS ...... 28 7.3 REPORTED ZONES OF ARTISANAL MINER SUCCESS ...... 28

8. DEPOSIT TYPES ...... 31

9. EXPLORATION ...... 32 9.1 MAPPING MINE TUNNELS ...... 32 9.2 BULK SAMPLE ...... 33

10. DRILLING ...... 38

11. SAMPLE PREPARATION, ANALYSES AND SECURITY ...... 45

12. DATA VERIFICATION ...... 48

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13. MINERAL PROCESSING AND METALLURGICAL TESTING ...... 50

14. MINERAL RESOURCES ESTIMATES ...... 51 14.1 MINERAL RESOURCE CLASSIFICATION ...... 53 14.2 TARGET FOR FURTHER EXPLORATION ...... 58 14.3 BULK SAMPLE METHODS AND RESULTS ...... 60 14.4 ITOCO-2 3D ISO-SHELL MODEL ...... 61 14.5 EMERALD EVALUATION ASSUMPTIONS, METHODS AND PARAMETERS ...... 63 14.6 PREPARATION OF THE ROUGH ...... 63 14.7 PARCELS PRESENTED FOR EVALUATION BY BOYD ...... 64 14.8 REPRESENTATIVE CUT-OFFS FOR VALUATION PURPOSES ...... 64 14.9 EVALUATION METHOD OF ROUGH EMERALD ...... 64 14.10 CHAIN OF CUSTODY ON VALUATION SAMPLES ...... 66 14.10.1 SAMPLE A – 1,279 CARATS ...... 66 14.10.2 SAMPLE B – 7,620 CARATS ...... 67 14.10.3 SAMPLE C – 4,670 CARATS ...... 67 14.10.4 OVERALL ESTIMATED VALUES OF THE SAMPLE ...... 68 14.11 MINE PLAN ...... 68

15. MINERAL RESERVES – NOT APPLICABLE ...... 69

ITEMS 16 TO 22 ARE NOT APPLICABLE TO THIS INITIAL INFERRED MINERAL RESOURCE REPORT AND NOT FURTHER DISCUSSED HEREIN ...... 70

23. ADJACENT PROPERTIES ...... 71

24. OTHER RELEVANT DATA AND INFORMATION ...... 72 24.1 POLITICAL AND SOCIAL ISSUES LOCALLY NEAR THE MINE, AND BROADLY IN COLOMBIA...... 72

25. INTERPRETATION AND CONCLUSIONS ...... 74

26. RECOMMENDATIONS...... 75

27. REFERENCES ...... 77

DATE AND SIGNATURE PAGE ...... 79

CERTIFICATES OF QUALIFIED PERSON ...... 80

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LIST OF FIGURES

1. Location of the Coscuez Mine in the Eastern Cordillera, Colombia ...... 5 2. Mining title map...... 10 3. Weather averages for ...... 16 4. Coscuez Mine located in the Eastern Cordillera belt of the Colombian ...... 22 5. Coscuez Mine within the Early Cretaceous carbonaceous black (green brick pattern). ... 23 6. Structural setting of the western emerald belt, and Coscuez mine...... 25 7. Local geology...... 26 8. Formation – 3D oblique view. Red ellipses mark areas of unverified reports of historical emerald recovery...... 29 9. Itoco 2 bulk sample area...... 30 10. Mapped mine tunnels, with table of structures and lithologies...... 32 11. Position of bulk sample areas...... 34 12. Itoco-2 bulk sample areas showing individual blast samples, colour coded by grade...... 35 13. Drill map – oblique view with tunnels and topography...... 40 14. Oblique view of drill holes below the historic mine tunnels, showing simplified lithology...... 41 15. Drill sections 2018 program, holes FCDH001-18, FCDH002-18 and FCDH003-18...... 42 16. Drill sections 2018 program, holes FCDH004-18 and FCDH005-18...... 43 17. Drill sections 2018 program, holes FCDH004-18 ad FCDH003-18...... 44 18. 3D model of Coscuez Muzo formation, showing tunnels and reported artisanal mining success areas ...... 52 19. The Coscuez Mine – Muzo Formation and tunnels...... 59 20. Fura’s plan to continue work in the Itoco-2 area ...... 60 21. Itoco-2 iso-shell model...... 62

LIST OF PHOTOS

1. WGM authors from right to left, Harrison Cookenboo, Ross MacFarlane and Warren Boyd, and, standing in front of the Coscuez open cut mine face, to the left of Fura site manager Ashim Roy. 6 2. Coscuez Mine oblique view, showing exposed Muzo Fm (black) and local villages ...... 14 3. Local village Silencio near the Coscuez Mine site...... 15 4. Early photo of open cut mining operations at Coscuez Mine...... 19 5. Bulldozers active on the open cut face at Coscuez in 1986...... 20 6. Coscuez black shales...... 27 7. Handcart at entrance to La Paz tunnel...... 45 8. La Paz Wash plant recovery looking for emeralds...... 46 9. Bonanza tunnel wash plant...... 46

LIST OF TABLES

1. Claim title ...... 9 2. Active and inactive tunnels and their georeferenced entrances ...... 20 3. Bulk sample areas as of November 2018 ...... 33 4. Itoco-2 area mine faces and short access tunnels ...... 36 5. Bonanza bulk sample sub-divisions ...... 36 6. Drill hole parameters ...... 38 7. Processing procedures for emerald recovery in La Paz and Bonanza wash plants ...... 46

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8. Range of potential grades and per carat values ...... 57 9. WGM estimate of initial Inferred Mineral Resource at Coscuez ...... 57 10. Coscuez exploration target potential, subject to further results from Fura’s ongoing exploration program ...... 59 11. Chain of custody valuation ...... 66 12. Valuation of sample B by $/ct range ...... 67 13. Budget estimate recommended work in Phase 1 and Phase 2 ...... 76

- v - 1. SUMMARY

Coscuez Mine in the Colombian Andes is an important historical source of emeralds, with a recorded history stretching back more than 400 years and production extending even farther back to before the Spanish conquest. The mine is within Colombian mining title (#122-95M) covering 46.9 hectares in the lushly vegetated mountains of Boyacá Department, Colombia, 100 kms north of the capital city Bogotá.

Fura concluded a share purchase agreement with original title holder Esmeracol S.A. (now Coscuez S.A.) to acquire 76% interest in the Coscuez mining title in January 2018. Emporium HS S.A.S. (“Emporium”) holds 20.10% free carried interest in the Coscuez mining title, and the balance of 3.9% is held by unrelated third parties1.

Fura requested Watts, Griffis and McOuat Limited (“WGM”) evaluate the historical Coscuez Mine (the “Coscuez Mine Property”, the “Property”, “Coscuez”, or “Coscuez Mine”)and prepare a technical report on the geology and mining potential to the standards of Canadian National Instrument 43-101.

Emeralds occur at Coscuez within calcite veins and breccia units that cut Early Cretaceous carbonaceous black shales of the Muzo Formation, the same host rock as the Muzo Mine and other emerald occurrences in the region. Thrust faults, strike-slip faults and associated folds provide the structural setting for the emerald hosting calcite veins and breccias. The Coscuez Mine occurs on a southwest plunging anticline, where north-northeast strike slip motion of the relatively easily deformed black carbonaceous shales has resulted in stacked thrust fault slices, and complex folds.

Since acquiring the Coscuez mining title in January 2018, Fura has undertaken a mine modernization program to introduce modern standards of exploration, processing capacity, safety, and environmental controls while simultaneously retaining benefits for the local artisanal mining community. Fura Gems exploration program has focused on mapping more than 20 kms of underground tunnels, completing more than 1,700 m of core drilling, and bulk samples to recover emeralds for grade and value estimates.

Fura Gems Inc. is in the early stages of testing, but has already produced results sufficient for WGM to infer that a potentially economic resource of emeralds occurs at Coscuez. Material

1 The number rises to more than 1.100 minority shareholders.

- 1 - excavated from the Muzo Formation in order to improve access, during the period of the bulk sampling, remained unprocessed and assigned to stock pile when no emeralds were detected.

Authors Warren Boyd, Harrison Cookenboo and Ross MacFarlane visited Colombia and the Coscuez property April 2 to 6, 2018 to personally inspect the mine site and surrounding area. Cookenboo returned September 15 to 24, 2018 to further inspect operation of the bulk sample, and verify emerald production from recently blasted underground mine faces. Warren Boyd inspected emeralds produced from Coscuez in Fura’s offices in Bogotá in April 5 to 6 and in October 16 to 18, 2018.

As a result of this review, WGM has estimated an initial inferred mineral resource for the Coscuez Mine of a potential 3 million tonnes deemed likely mineable following Fura’s current mine plans, yielding 6 million carats of emeralds at an inferred grade of 2.0 carats per tonne. Note that Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration.

WGM Estimate of Initial Inferred Mineral Resource at Coscuez Grade Value per carat Tonnes Carats (ct/t) ($/ct) (t) 2.0 $200 3,000,000 6,000,000 Notes: Mineral Resources effective December 12, 2018. 1. WGM Senior Associate Geologist, Harrison Cookenboo, is the Qualified Person for this Mineral Resource estimate. 2. Mineral Resources are estimated using a conservative US$200 per carat average value, following a review of emeralds produced during Fura’s bulk sampling program. No cut-off was applied as all recovered emeralds were included. 3. A broad range of potential grades from 0.5 carats per tonne up to 4.5 carats per tonne are plausible. 2.0 carats per tonne is the most suitable for the inferred Mineral Resource estimate. 4. Estimated 105,000 tonnes per year over 30 years (i.e. approximately 3 million tonnes) in the Inferred Mineral Resource estimate, with an inference that such mining can be done for roughly US$50 per tonne. 5. Inferred Mineral Resources have a large degree of uncertainty as to their existence and whether they can be mined economically. It cannot be assumed that all or any part of the Inferred Mineral Resource will be upgraded to a higher confidence category. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 6. There are no known environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other relevant factors that could materially affect the above estimate of Mineral Resources other than those discussed in the report. 7. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category. 8. Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum standards on Mineral Resources and Reserves, definitions and guidelines prepared by the CIM Standing Committee on Reserve Definitions, adopted by CIM Council May 10, 2014. 9. S.G. of 2.4 tonnes/m3 was used for the entire Muzo Formation. 10. All currency in US$.

- 2 - The authors recommend Fura continue ongoing bulk sampling, with sites spread sufficiently through the Muzo Formation to inform geological grade continuity, as well as continued upgrade of infrastructure and community relations. Dependent on grade continuity from the continuing bulk sample, the authors recommend a second phase of exploration to include completion of a pre-feasibility report, and further upgrading of infrastructure including plant, and underground access.

Budget Estimate Recommended Work in Phase 1 and Phase 2 (dependent on results of Phase 1) Items Quantity units Cost/unit* Cost (US$) Phase 1: Year 2019 Continue bulk sampling, including community and 25,000 tonnes $150/tonne $3,750,000* infrastructure development Upgrade wash plants $450,000 Drilling - underground collars 2,000 m $125/m $250,000 Geological investigations, structure mapping and data $145,000 analysis Environmental studies $100,000 Evaluation and report to potentially upgrade resource $95,000 Phase 1 Total Estimate $4,790,000

Phase 2: Years 2020 to 2022 Begin building upgraded mine estimate: $10,500,000* Pre-feasibility report $150,000

Analysis, mine monitoring and reporting $525,000 Phase 2 Total Estimate $11,175,000

GRAND TOTAL PHASE 1 AND PHASE 2 (3 years) $15,965,000 * (bulk sample and drilling unit prices provided by Fura)

- 3 - 2. INTRODUCTION

Coscuez Mine in the Eastern Cordillera belt of the Colombian Andes is an important historical source of emeralds, with a recorded history stretching back more than 400 years (Figure 1). Local production extends even farther back to before the Spanish conquest, with the local Muzo Indian groups exploiting emeralds from the area perhaps as long as 1000 years ago (SMATCH Emeralds, 2017). Famous emeralds attributed to Coscuez include a portion of the treasures of the Atocha Spanish galleon, which was rediscovered in the 1980s, 400 years after it sank during a hurricane on its way to Spain, as well as the famous Crown of the Andes from colonial Colombia, now featured in the collection of the Metropolitan Museum in New York City. This extended history of emerald production has left the Coscuez Mine mountain perforated with tunnels and workings, including an open cut on its south face.

Fura Gems Inc. (“Fura”) gained control of the historical Coscuez Mine in January 2018 with the intention of taking it to a higher production level using modern mining methods and incorporating safety procedures. Since acquiring the Coscuez mining title in January 2018, Fura has undertaken a mine modernization program to introduce modern standards of exploration, processing capacity, safety, and environmental controls while simultaneously retaining benefits for the local artisanal mining community. Fura Gems exploration program has focused on mapping more than 20 kms of underground tunnels, completing more than 1,700 m of core drilling, and bulk samples to recover emeralds for grade and value estimates.

Fura Gems Inc. is in the early stages of testing, but has already produced results sufficient for WGM to infer that a potentially economic resource of emeralds occurs at Coscuez. Unprocessed material was excavated from the Muzo Formation during the period of the bulk sample, in order to improve access, and was assigned to stock pile, when no emeralds were detected.

- 4 - Last revision date: Thursday 17 January, 2019 FUR COL / FUR_01_Loc_Map.cdr 590000 605000 620000 635000

N 630000 630000

COSCUEZ PROPERTY 615000

Caribbean Sea 615000 COLOMBIA

VENEZUELA G

U

Y

A N Detail A Map ECUADOR Area

BRAZIL E A S T E R N C O R D I L L E R A

PERU South

BOLIVIA America P AR 600000 A G U A Y

URUGUAY 600000

C H I L E A Buenos Aires N I ATLANTIC T

N OCEAN PACIFIC E Figure 1. OCEAN G R FURA GEMS INC.

A Scale 1 : 300,000 Coscuez Emerald Mine Project 0 3 15

Boyacá Department, Colombia 585000 Kilometres Location Map UTM WGS84 Zone 18N

585000 Graphics by Watts, Griffis and McOuat Limited Geomatics, Cartography and GIS by Nikolay Paskalev M.Sc. After: JOG, Sheet NB18-11, Edition 1 (1992)

590000 605000 620000 635000

2.1 TERMS OF REFERENCE

Fura requested Watts, Griffis and McOuat Limited (“WGM”) to evaluate the historical Coscuez Mine and prepare a technical report on the geology and mining potential to the standards of Canadian National Instrument 43-101. WGM has estimated an initial Inferred Mineral Resource for the Coscuez Mine as described herein.

2.2 SITE VISIT

Authors Warren Boyd, Harrison Cookenboo and Ross MacFarlane visited the Coscuez property April 2 to 6, 2018 (onsite April 4 and 5) to personally inspect the mine site and surrounding area (Photo 1). Harrison Cookenboo returned September 15 to 24, 2018 to further inspect operation of the bulk sample operation, and verify emerald production from recently blasted underground mine faces to sealed packages for delivery to Fura’s Bogotá offices and inspection by WGM. Warren Boyd inspected and evaluated these and other emeralds produced from Coscuez for valuation purposes in Fura’s offices in Bogotá in October 16 to 18, 2018.

Photo 1. WGM authors from right to left, Harrison Cookenboo, Ross MacFarlane and Warren Boyd, and, standing in front of the Coscuez open cut mine face, to the left of Fura site manager Ashim Roy.

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2.3 SOURCES OF INFORMATION

Information in this report is sourced from government and academic publications, files and records provided by Fura Gems, published news reports and observations made by the authors during the site visits, as referenced herein. References are provided throughout the text, and detailed in the References heading later.

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3. RELIANCE ON OTHER EXPERTS

WGM used the Government of Colombia’s Mining Authority (ANM – Agencia Nacional de Minería) website for mining titles to verify the particulars reported in the “Property Description and Location” heading.

WGM has not verified the legal titles to the property nor any of the underlying agreement(s) that may exist concerning the licenses or other agreement(s) between third parties and offers no opinion thereon, but has relied on information provided by Fura and has no reason to doubt the veracity of the information provided.

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4. PROPERTY DESCRIPTION AND LOCATION

The Coscuez property is held under mining title 122-95M, and covers 46.9 hectares (Figure 2). The mining title 122-95M was originally awarded to Ecominas and Esmeracol S.A. in 1981, covering 73.4 hectares. It was renewed for 10 years in 1985, and again for 25 years in 1995. In 2002, mining title 122-95M was reduced to 46.94 hectares (Table 1; Padilla, 2016). The mining title is registered to Coscuez S.A., formerly “Esmeraldas y Minas De Colombia S.A.”; 60037914) and is valid to October 2020, and then must be extended or renewed.

TABLE 1. CLAIM TITLE Region Department Mining Mineral Status Effective Good Area Title Holder (Municipio) Title Date Standing (Ha) Number Date San Pablo de Boyacá 122-95 Emerald Active 29/11/1990 09/10/2020 46.94 (60037914) Borbur - Esmeraldas y Boyaca/ Minas de Colombia Otanche-Boyaca S.A.

Fura further reports they are currently finalizing documents including Financial, Works, and CSR plans, in order to present to the ANM and discuss the conditions of the extension of the mining contract before October, 2019. Such documents are applicable to both the extension and renewal options. Fura expects that the government will extend their mining license for another 25 years, as has happened recently with other emerald mines.

4.1 TERMS OF THE AGREEMENT

Fura concluded a share purchase agreement with original title holder Esmeracol S.A. (now Coscuez S.A.) to acquire a 76% interest in the Coscuez mining title in January 2018. Emporium HS S.A.S. (“Emporium”) holds 20.10% free carried interest in the Coscuez mining title, subject to a shareholders’ agreement containing restrictions on transfer of shares, a right of first refusal in favour of Coscuez S.A. in regards to sale of shares, as well as obligations to join Coscuez S.A. in the sale of their shares, under the conditions that the parties agree (“drag along rights”), plus other unspecified terms described as standard for an agreement of this nature”. The balance of 3.9% is held by more than 1,100 unrelated third parties.

- 9 - Last revision date: Thursday 17 January, 2019 FUR COL / FUR_02_Mining_License.cdr 593000 593500 594000 594500 595000 595500 74°9'30"W 74°9'0"W 74°8'30"W

La Paz Legend: Property outline 5°38'30"N N 122-95 Mining title ID number

Geological contact 5°38'30"N Exposed Muzo Formation 623500 Adit/tunnel

623500 La Peña Camp Village, village area

Farm

Road Trail 623000 623000

COSCUEZ 5°38'0"N PROPERTY 5°38'0"N 622500 Bonanza 622500

Camp 122-95 Silencio

Figure 2.

FURA GEMS INC. 622000 SA Coscuez Coscuez Emerald Mine Project 622000 Scale 1 : 12,500

Boyacá Department, Colombia 5°37'30"N 0 125 625 Mining Title Map Graphics by Watts, Griffis and McOuat Limited Metres

5°37'30"N Geomatics, Cartography and GIS by Nikolay Paskalev M.Sc. UTM WGS84 Zone 18N

74°9'30"W 74°9'0"W 74°8'30"W 593000 593500 594000 594500 595000 595500

Fura reports the share purchase agreement includes issue of common 363,872 shares and cash payments of US$10.0 million made over 36 months from the closing, as detailed below.

As part of the consideration, Fura has paid Emporium HS S.A.S. US$2.50 million on closing and issued 363,872 common shares. Also, under the terms of the share purchase agreement relating to the transaction, Fura has agreed to the following additional payments:

 US$2.00 million on the 12-month anniversary of the closing;  US$2.50 million on the 24-month anniversary of the closing; and,  US$3.00 million on the 36-month anniversary of the closing.

In addition, Fura will assume certain expenses of Esmeracol not exceeding US$5 million. If Esmeracol S.A., now Coscuez S.A., earns a net profit of US$17 million or more in a fiscal year, then Fura will pay to Emporium an additional one-off bonus of US$3 million.

The share purchase agreement was an arm’s length transaction for the purposes of the TSX.V policies and Fura has not paid any finder’s fee relating thereto.

Fura management reports there are no royalties, back-in rights, payments or other agreements or encumbrances to which the mining title is subjected other than mandatory Colombian royalties (1.5% of production), and those agreed as per mining contract.

4.2 SIGNIFICANT FACTORS OR RISKS

Current underground access to the property is via the main adits at La Paz and SA located outside the Coscuez concession and covered by two recently granted mining titles. These are significant for Coscuez S.A. future development plans. Fura management reports that these adits were included in the Company’s previous Works and Investment Plan (“PTI”) filed with ANM (Padilla, 2016). ANM has the authority to grant the easement in favor of Coscuez S.A., because those adits existed before the granting of these new mining tittles. The Company has legal rights to access the adits as they are well covered within the PTI permit and there has been no dispute with the other license holders.

La Paz waste dump is placed outside the boundary of the concession, but within the surface land where the company has possessory rights. Furthermore, Fura is currently conducting studies to identify an optimum location within mining title 122-95M that will satisfy its standards and planning, as well as guidelines by environmental license and applicable regulation.

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4.3 LOCAL TRADITIONAL ARTISANAL MINERS

The local villages include traditional (artisanal) miners have a very long history of mining and producing emeralds at Coscuez. Accommodation of these miners and their livelihoods is an essential part of Fura’s plans to improve and upgrade Coscuez. Local miners and other villagers are being hired in significant numbers by Fura, and given (often for the first time) extensive training, regular paychecks and benefits. WGM understands that continuing to address the local miner issues will be part of Fura’s negotiation of their mining license extension.

Fura management also reports that based on Coscuez S.A.’s due diligence, there is no environmental liability acknowledged, as of the effective date of the report. The Company is currently working on compliance of obligations as per the current environmental license and working with environmental authorities for follow up. WGM cautions that the hundreds of years of mining history and changing government mining regulations make environmental liabilities difficult to quantify confidently, but accepts Fura’s conclusion that no obvious liabilities have been identified that extend beyond issues being addressed under the current environmental license extension application. To the extent known by WGM, there exist no environmental liabilities beyond the situation described above, nor any other significant factors that may affect access, title, or the right or ability to perform work on the property.

Fura reports that the surface land is owned by the state, and the few local possessors have no legal surface rights. Furthermore, Coscuez S.A. can use the surface, because it has been there as long as the mining title has been granted and many years before that (since the Company was created in 1973), and has to be awarded he surface rights, according to Colombian legislation.

Only Coscuez SA has legal rights to recover emeralds from the tailings.

4.4 COLOMBIAN MINING LAW SUMMARY

A summary of Colombian mining law provided by Fura states:

The mining title 122-95M is under the regulation of Decree 2655, 1988, previous mining code2, and it is a contribution agreement, which means, most of its clauses are completely agreed between the parties.

Under Colombian regulation, the government grants the underground exploitation rights for a third party for a maximum period determined as per contract, under the

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conditions both parties had agreed. For the contribution agreement of mining title 122-95M the period was granted for 25 years, until October 2020, and it can be extended for successive terms for the same or longer extend of time. It will depend on the negotiation that Coscuez S.A. will carry out with the ANM.

As a matter of context, the Mining title 122-95M was firstly granted in 1981 for six- year term, then it was extended for ten years in 1985, and finally extended again for 25-year term in 1995.

Decree 1076 of 2015, main Decree of the environment and sustainable development sector, establishes that all the mining projects (precious stones) require an environmental license to perform their works.

Thus, in July 20122, Coscuez S.A. submitted the environmental impact assessment to the corresponding local authority, which is Corpoboyacá, requesting the granting of an environmental license for the project. In September that year, Corpoboyacá started the evaluation process through Act 2363 and requested additional information two times, in May and October 20153. Finally, in October 2015, the environmental license was granted through Resolution N° 3585.

The environmental license includes the following permits and authorizations:

 Water catchment;  Industrial water disposal permits;  Domestic water disposal permits; and  Construction and enhancements of two base camps.

As of the date, all necessary permits have been acquired to conduct the mining works proposed.

The mining and environmental authorities verify periodically the level of compliance of the mining obligations, as well as the environmental instrument. These visits can be done yearly or as per the authority schedule.

2 Sandro Gil Padilla; “Estudio de Impacto Ambiental y Plan de Manejo Ambiental”; April 2012 3 Sandro Gil Padilla; “Complementos y Aclaraciones al E.I.A. del Título 122-95M”; July 2015

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5. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 ACCESS

The Coscuez Mine Property is located in the western part of the Cordillera Oriental (Eastern Belt) of the Andes Mountains in Colombia. Topography is mountainous, with elevations ranging from 1,000 m to 1,360 m above sea level, and the lands are covered by thick tropical vegetation. The Coscuez Mine itself extends to near the top of the highest mountain, and the drainage descending south from the mountain forms the lowest spot on the Property (Photo 2).

Photo 2. Coscuez Mine oblique view, showing exposed Muzo Fm (black) and local villages (After Google earth view).

The Property can be accessed by paved highway 220 km north from Bogotá. The highway is in generally good condition, but most is two lane, with significant truck traffic slowing movements in the mountains north of Bogotá, and the latter half of the route is very steep and windy mountain road. A landing pad for helicopters has been developed at the mine camp.

Several villages occur within the immediate vicinity of the Property, where numerous inhabitants have a history of small scale artisanal mining at Coscuez (Photo 3). These villages supply a significant proportion of the mine workers, which already number in excess of 250 people, suggesting that the local areas should be sufficient for most future mining

- 14 - operations. Surface rights are held by the government, and sufficient for potential mining purposes, subject to appropriate permits, which Fura has acquired as described in the Property description and Location heading earlier.

Photo 3. Local village Silencio near the Coscuez Mine site.

The nearest larger population centre is Chiquinquirá, a city with a population of approximately 75,000 located about 100 kms away on the very winding mountain highway that first descends to 450 m elevation as it crosses the Rio Mineiro, and then rises to over 2,600 m as it approaches Chiquinquirá.

5.2 CLIMATE

The climate is tropical but the temperatures range is mild from cool average lows of 16°C to 19°C, and to warm average maximums from 25°C to 28°C in nearby Otanche. Two rainy seasons extend from April to May and October to November, with average monthly precipitation of about 22 cm, in both cases (Figure 3). Mining operations are somewhat easier outside the rainy seasons. Given the rainy climate, sufficient water for mining operations may not be a limitation but more detailed study is recommended.

- 15 - Figure 3. Weather averages for Otanche (www.weatherspark.com).

Given the mountainous terrain and relatively small size of mining license 122-95M, positioning tailings storage, waste disposal and wash plant is an immediate concern. Current tailings are piled near the La Paz adit entrance. Future mine plans point to accessing the underground operations from within license 122-95M, where larger wash plant(s) and tailing piles may need to be located. Fura is investigating these options as part of their license renewal discussions with the government. WGM cautions that future sites of tailings and wash plants are not yet clearly defined and might limit operation options.

The most potential for environmental impact of the existing and future operation relates to the escape of fines from either the washing operation or rainfall events. It is anticipated that sedimentation ponds and proper drainage controls will allow management of these impacts to be minimized to acceptable levels and what is normal with steeply sloping terrain. The drainage from the area has a natural high level of suspended solids in the fast flowing rivers and streams that make road construction and maintenance very challenging.

- 16 -

5.3 POWER

The Coscuez Mine is served by the electrification network of Boyacá which supplies energy to the mine. The Boyacá network supplies electricity to a substation where it is reduced from 13,200 volts to 4,160 volts and distributed from underground substations to 110, 220 and 440 volts to satisfy mine lighting, operation of hoists, hammers, ventilation, camps, among other activities (Padilla, 2016 and updated information from Fura). The Boyacá electricity is supported in turn by diesel generators as required.

- 17 -

6. HISTORY

The Coscuez Mine has a very long history of emerald production, extending back at least 500 years, and probably more than 800 years back into pre-colonial days. Coscuez is reputed to have produced some of the most famous emeralds, including some of the gems from the Spanish Galleon Atocha that was shipwrecked in the Florida keys during a hurricane in 1622, the 1,759 carat gem Guinness emerald Crystal belonging to the Banco Nacionale de la Republica in Bogotá (www.gemsociety.org), and some of the emeralds in the Crown of the Andes owned by the Metropolitan Museum of New York. https://www.gemsociety.org/article/worlds-largest-emeralds/

The first records of mining at Coscuez began before 1600 during the Spanish colonial administration of Antonio Gonzalez when it was considered part of the Muzo area mines. Underground mining developed over the first half of the 17th century, but ended around 1646 when a large cave-in killed many Spaniards and Indian workers (SMATCH International Emeralds, 2017). The mine was abandoned and then lost for 200 years until the mid-1800s (Ringsrud, 2009). By around 1900, the Colombian government sold mining access to European syndicates for 5 year periods (Ringsrud, 2009). Production numbers from Coscuez are first reported at 25,000 carats in 1963 (Ringsrud, 1986).

6.1 GREEN WARS

Emerald mining became controlled by two major players (patrones) from about 1960 to 1989, during the height of the Green Wars. The two patrones were Victor Carranza, who held Coscuez, and Gilberto Molina who controlled the Muzo mines. Then in 1989, a major assault was lead against Molina during his birthday party, killing him and 17 other guests, and leaving Carranza in control of Coscuez, Muzo and the other smaller mines in the area. Carranza led the mining communities against the Colombian drug traders attempted incursions into the area, which remained remote, until his death of natural causes in 2013. Renewed attacks between factions continued the Green Wars until about 2016, when Fura’s local investigations suggest the Green Wars finally may have ended.

6.2 MINING TITLE 122-95M

Mining at Coscuez has been focused on tunneling, with drifts used to follow emerald bearing veins for almost all its history. Numerous tunnels have been completed at all levels from about 800 to 1290 m. In the mid-1980s, heavy machinery became more available in the area, and open cut mining was active in the upper parts of the mine (Photo 4).

- 18 -

(source: Fura Gems Inc.) Photo 4. Early photo of open cut mining operations at Coscuez Mine.

In 1986, 5 bulldozers were reported to be working the open face, using dynamite for blasting (Ringsrud, 1986). WGM understands open cut mining began sometime in the 1960s and stopped in the 1990s (Photo 5).

Esmeracol began mapping more than 25 kms of mine tunnels in 2015 for geology, structure and position.

As of 2016, Fura reports 11 tunnels are currently active with geo-referenced entrance points, and 20 more are inactive (Table 2).

- 19 -

TABLE 2. ACTIVE AND INACTIVE TUNNELS AND THEIR GEOREFERENCED ENTRANCES (Padilla and Martinez, 2016).

(After Ringsrud, 1986) Photo 5. Bulldozers active on the open cut face at Coscuez in 1986.

- 20 -

7. GEOLOGICAL SETTING AND MINERALIZATION

The Coscuez Mine occurs in the Eastern Cordillera belt of the Colombian Andes, in a Cretaceous sedimentary basin approximately 120 kms north of Bogotá (Figure 4). Coscuez is among the emerald mines of the western belt of the Eastern Cordillera, including such other mines as Muzo and Peñas Blancas (Figure 4).

Rocks hosting the Coscuez emeralds were deposited as black carbonaceous clay-rich muds in a marine back-arc basin setting during the early Cretaceous (Figure 4). The basin sediments accumulated to thickness in excess of 5 km, based on pressures and temperatures from fluid inclusion analysis of the emeralds (Ordoñez and Shultz-Güttler, 1995), and lithified into shales (Figure 5). The black carbonaceous sequence is mapped as Muzo Formation of Early Cretaceous (Valangian or to age), within a thicker sequence of back-arc basin fill (Reyes, et al., 2006). The Muzo Formation occurs in the lower Cretaceous part of the basin fill sequence that extends upward to the Paleocene in the Tertiary. The Muzo Fm is conformably overlain by the Upper to lower Capotes Formation comprised of locally calcareous, interbedded claystones and siltstones (thick interbeds of metre scale), and conformably underlain by the Furatena Formation comprised of thin to thickly bedded carbonaceous siltstones and mudstones with penetrative foliation. Contacts can be gradational over 0.5 to 1.5 m.

Calcite veins and calcite cemented breccias host the emeralds within the carbonaceous shales of the Muzo Formation. The emerald hosting calcite veins are associated with structures formed during sediment accumulation and later deformation. The black carbonaceous shales of the emerald hosting Muzo Formation are relatively easily deformed, compared to the surrounding country rocks, which likely focusses faults, folds, late-stage veins and brecciation within the Muzo Formation. These structures can provide the open space for growing emeralds of significant size

Emerald mineralization is restricted to the carbonaceous shales of the Muzo Formation throughout the western emerald belt of the Eastern Cordillera in Colombia. Within the Muzo Formation, emerald mineralization is restricted to late-stage calcite veins and breccias. Distribution of these calcite veins and breccias is apparently structurally controlled.

- 21 - FUR COL / FUR_05_East_Cordillera_Belt.cdr Last revision date: Thursday 22 January, 2019

Santander

74º W Massif 72º W

Sierra Nevada del Cocuy

C e n t r a l C o r d I l l e r a

M i d d l e M a g d a l e n a B a s I n 6º N Peñas Blancas COSCUEZ PROPERTY Muzo Yacopi

Macanal

Chivor

Gachalá Villeta anticlinorium Bogotá

L i a n o s F o r e l a n d B a s I n

4º N N Girardot Quetame-Cocuy anticlinorium subbasin

0 25 125 Legend: Kilometres Tertiary Emerald deposits Upper Cretaceous Lower Cretaceous fold axis Figure 4. Triassic-Jurassic thrust Basement and plutons FURA GEMS INC. normal fault

strike-slip fault Coscuez Emerald Mine Project Boyacá Department, Colombia Eastern Cordillera Basin in Colombian Andes Graphics by Watts, Griffis and McOuat Limited Geomatics, Cartography and GIS by Nikolay Paskalev M.Sc. After: Pignatelli, et al., (2015) Last revision date: Thursday 22 January, 2019 FUR COL / FUR_03_Regional_Geology.cdr 74°30' 74° Legend: Conglomerates intercalated with medium to coarse grained sandstones and carbonaceous mudstones Shales, limestones, phosphorites, cherts and quartarenites. Predominance of fine grained facies to the North of Coscuez and sandy facies to the South COSCUEZ Gabbros PROPERTY Shales, limestones, sandstones, cherts N Otanche and phosphorites San Pablo Gypsiferous shales, cherts, limestones de Borbur and sandstones Chiquinquira Quartzarenites, feldspathic or lithic sandstones graded from fine grained to conglomeratic; rythmic intercalations of shales and limestones towards the top

Muzo

5°30' 5°30'

La Dorada

Figure 5. FURA GEMS INC. Scale 1 : 400,000 Coscuez Emerald Mine Project 0 4 20 Boyacá Department, Colombia Graphics by Watts, Griffis and McOuat Limited Geomatics, Cartography and GIS by Nikolay Paskalev M.Sc. Kilometres Regional Geology After: Servicio Geológico (ingeominas.gov.co), UTM WGS84 Zone 18N Mapa Geológico De Colombia (2007) 74°30' 74°

7.1 LOCAL AND PROPERTY GEOLOGY

Emeralds occur within calcite veins and breccia units that cut Early Cretaceous carbonaceous black shales. The black shales (carbonaceous claystones) reportedly belong to the Muzo Formation, the same host rock as the Muzo Mine and other occurrences in the region.

The main regional structural control is marked by the NE trending drainage of the Ribeiro Minero (River of the Miners; Figure 6), which is also the lowest topographic point in the area (450 m elevation; down from 3050 m on the drive up from Bogotá, and 1350 m at the top of the Coscuez mine site.). Most of the other emerald mines in the region reportedly occur associated with cross faults to this regional control. Coscuez appears to be uniquely off-set some 10 km or more northwest of the main Ribero Mineiro structural fault zone (Figure 6). Thrust faults and associated folds provide the structural setting for the emerald hosting calcite veins and breccias.

The Coscuez Mine property covers a southwest plunging anticline, where north-northeast strike slip motion of the relatively easily deformed black carbonaceous shales has resulted in stacked thrust fault slices, and complex folds (Figure 7). The Capotes Formation is exposed across near vertical contacts on both east and west sides of the Muzo Formation, which is in the center of the anticline fold.

The Capotes Formation overlies the Muzo Formation at Coscuez, and comprises thick bedded marine mudstones, Late Aptian – Early Albian in age, and locally calcareous near its base.

The Muzo Formation at Coscuez is exposed as black carbonaceous shale on an old open-cut mine face covering the southwest side of the mountain (Photo 6a). The black shales exhibit near vertical bedding, with bedding parallel foliation (Photo 6b). The bedding and foliation is strongly folded and cut by both vertical and horizontal calcite veins sets (Photo 6c).

Reportedly (from miners at the site), the vertical calcite veins sets are more likely to carry emeralds than the horizontal veins. Intersections between the vertical and horizontal sets are the best locations. Author Cookenboo speculates that where the vertical sets are parallel to bedding/foliation, then they may be the earlier vein set, and where the veins are sub- horizontal cutting bedding, they are likely later-stage.

- 24 - Last revision date: Thursday 22 January, 2019 FUR COL / FUR_06_Structural_Settings_Western_Emerald_Belt.cdr

Peñas Blancas Coscuez

SSW NNE

cline

Peñas Blancas fault Chapa anticline Coscuez fault Otanche Coscuez anti Alto de la Coscuez

C 0 100 500

Rio Minero fault zone Metres Rio Itoco

fault n

E D Quipama Muzo

Legend: Figure 6. Emerald deposits and occurrences N FURA GEMS INC. Anticlines Thrusts 0 1 5 Coscuez Emerald Mine Project

Tear faults Boyacá Department, Colombia Val. Hauterivian Barremia Hauterivian Val. Albian and Late Cretaceous Kilometres Structural Settings of the sediments Western Emerald Belt and Coscuez Mine Early Cretaceous Graphics by Watts, Griffis and McOuat Limited sediments Geomatics, Cartography and GIS by Nikolay Paskalev M.Sc. After: Pignatelli et al., (2015) and Rodriguez and Ulloa (1994) Last revision date: Thursday 17 January, 2019 FUR COL / FUR_04_Detailed_Geology.cdr 74°12'W 74°11'W 74°10'W 74°09'W 74°08'W 74°07'W 74°06'W Graphics by Watts, Griffis and McOuat Limited Geomatics, Cartography and GIS by Nikolay Paskalev M.Sc. After: Pignatelli et al., (2015) and Reyes et al. (2006)

N

5°39'N 5°39'N

5°38'N 5°38'N

Scale 1 : 50,000 0 500 2,500

5°37'N Metres 5°37'N UTM WGS84 Zone 18N

Figure 7. 5°36'N FURA GEMS INC. 5°36'N Coscuez Emerald Mine Project Boyacá Department, Colombia Local Geology

74°12'W 74°11'W 74°10'W 74°09'W 74°08'W 74°07'W 74°06'W

Photo 6. Coscuez black shales: a) The black carbonaceous shales of the Muzo Formation exposed on the Coscuez Mine hillside; b) detail showing tight folds and several old tunnel entrances; c) detail showing sub-horizontal and sub-vertical calcite veins.

- 27 -

7.2 MINERALIZATION IN MINE TUNNELS

Emerald mineralization occurs within calcite veins and breccias in the carbonaceous black shales of the Muzo Formation (Photo 6a, 6b, 6c). The most promising veins follow structures, and may have associated kaolin layers. Intersecting such veins in advancing tunnels may cause the miners to divert to follow the veins, especially when emeralds are encountered.

7.3 REPORTED ZONES OF ARTISANAL MINER SUCCESS

Fura geologists have identified more than 20 general areas of significant mineralization spread within the tunnels of Coscuez, based on verbal historical reports from the local artisanal miners. WGM has no way to verify these reports nor is there any specificity of recovery in terms of quantify of carts or relative value of emeralds. However, the extensive tunnels point to areas of emerald mineralization, and this distribution may offer at least a qualitative picture of what that historical distribution might look like. Some of these reported areas of historical success correspond to dense networks of small scale tunnels such as might be expected if miners were following emerald bearing veins (Figure 8).

More quantifiable emerald mineralization occurs within areas of Fura’s bulk sampling program. Two areas with the most significant bulk sampling tonnages and emerald recoveries are Itoco-2 (Figure 9), where 13,744 carats (94% of the bulk sample results) were recovered from 1,735 tonnes (73% of the bulk sample results) for a sample grade of 7.9 carats per tonne (cts/t).

The second biggest contributor is Bonanza where 471 tonnes (20%) were processed and 644 carats (4%) of emeralds were recovered for a sample grade of 1.6 cts/t. A more detailed description of the bulk sampling program and results is provided under the “Exploration” heading later.

- 28 -

Figure 8. Muzo Formation – 3D oblique view. Red ellipses mark areas of unverified reports of historical emerald recovery.

- 29 -

Figure 9. Itoco 2 bulk sample area.

- 30 - 8. DEPOSIT TYPES

Emeralds at the Coscuez Mine and elsewhere in the Eastern Cordillera of Colombia occur within calcite veins and breccias that occur in strongly deformed carbonaceous black shales. The black shales were deposited in marine basins and deeply buried before being deformed by strike slip and thrust faulting with associated folding. The calcite veins and breccias typically cut across original bedding, and in some cases appear to follow fault surfaces and fold axes. Hydrothermal fluids associated with emerald precipitation are relatively high temperature basinal fluids above 300°C, based on fluid inclusion studies in emeralds from the traditional mines (Ordeñez and Shultz-Güttler, 1995; Guiliani, et al., 2000).

The emeralds are significantly younger than the depositional age of the Muzo Formation (~130 Ma to 140 Ma), and maybe coeval or younger than much of the strike-slip and thrust fault deformation (before about 60 Ma). The emeralds themselves have been dated by Rb-Sr with an approximate age of 67 Ma in the western zone (Peñas Blancas, Coscuez and Muzo) and roughly 61 Ma for in the eastern emerald zone (Ordoñez, et al., 2000; Ordoñez, 1998). Green micas associated with emeralds in Coscuez, Muzo and some of the other western belt mines yield even younger 40Ar/39Ar ages of 31 to 38 million years age (Cheilletz et al,, 1994). Apparently, the emeralds formed after burial, compaction and either coeval with, or following, compressional and strike-slip deformation. This timing is consistent with the emeralds precipitating from high-temperature basinal fluids and requiring open spaces within the veins and breccias to be able to grow.

- 31 -

9. EXPLORATION

Fura has completed exploration work consisting of mapping of the position and geology of the extensive mine tunnel network; bulk samples to provide grade and emerald value data, and drilling to delineated extents beneath the deepest existing mine tunnels (described further under the next heading “Drilling”).

9.1 MAPPING MINE TUNNELS

Fura and its predecessor Esmeracol have mapped more than twenty-five mine tunnels at Coscuez for position and geology using hand-held GPS and compass. Five of those tunnels have been surveyed for precise positional information. Geological mapping has recorded lithology, structures and contacts (Figure 10), treating the tunnels somewhat analogous to horizontal drill cores.

Structure Structure Name F Fault B Breccia sB Shale Breccia cB Cauline Breccia SZ Shear Zone FR Fracture Fd Fold Cv Calcite Vein Qv Quartz Vein BC Broken Core FO Foliation DY Dyke W Wood protection CD Core destroyed Figure 10. Mapped mine tunnels, with table of structures and lithologies.

These maps are suitable for use as the basis for modelling the Muzo Formation and higher potential target areas when future bulk sample data becomes available to quantify different structures and lithologies.

- 32 - 9.2 BULK SAMPLE

Fura reports bulk sampling data updated through the end of November, 2018 which totals 2,381 tonnes of processed material from 238 mine faces (average 10.0 tonnes per face sample) and yielding 14,591 carats of separated emeralds. Another approximately 500 carats of emeralds were recovered within rocks (not separated at the mine site). In addition, a further approximately 1,666.9 carats were recovered from a prolific zone in January 2018 and February 2018, before the official start of bulk sampling in late March. These emeralds have been included in the evaluation of the emerald values, as described later.

Emeralds were recovered either at the mine face after blasting, or later during washing at the La Paz wash plant. Most of the emeralds, (including most of the largest crystals) are recovered at the mine face. Visible emeralds are pulled from the mine face by hand, or using a power drill or hammer in order to minimize breakage. Security personnel and an underground geologist are together for the first look at each new mine face after blasting. Smaller emeralds are recovered by hand at the wash plant under the watch of security personnel and cameras. Recovered emeralds are placed in a metal lock box, with a 1-way baffled entrance on top. Security personnel keep control of the lock box until it is opened and emptied in the emerald recovery room at Fura’s camp in the presence of senior staff.

The bulk sample has focused on the Itoco-2 area, accessed by the La Paz tunnel (Figure 11 and Figure 12). As of the end of November 2018, 1735 tonnes (73%) and 13,744 carats (94%) came from the Itoco-2 area (Table 3). The overall sample grade for the Itoco-2 area is 7.9 cts/t. The next largest contributor is Bonanza where 471 tonnes (20%) were processed and 644 carats (4%) of emeralds were recovered (Table 3).

TABLE 3. BULK SAMPLE AREAS AS OF NOVEMBER 2018

- 33 - Figure 11. Position of bulk sample areas.

- 34 - Figure 12. Itoco-2 bulk sample areas showing individual blast samples, colour coded by grade.

- 35 - Within the Itoco-2 area, Fura has sampled several different faces as well as creating short access tunnels. Most of the Itoco-2 area carats come from the SN3 face (9,823 carats or 70%), which was the productive face being followed during Cookenboo’s September site visit (see Figure 12). The next most important source in the Itoco-2 area was the SN2 face (2,833 carats or 20%) located roughly 5 to 10 m away. WGM understands Fura first encountered encouraging results in a vein/breccia system at “Itoco-2” (102 carats on April 10, 2018), and then descended ~6 m and worked their way back up (SN3) following the emerald- bearing vein system, as well as laterally on another nearby but less productive vein SN2.

TABLE 4. ITOCO-2 AREA MINE FACES AND SHORT ACCESS TUNNELS

Within the Bonanza area, there are two sub-divisions where bulk sampling (Table 5) has been completed with more or less equivalent results.

TABLE 5. BONANZA BULK SAMPLE SUB-DIVISIONS Total tonnes Total carats Average Bonanza area sample grade 470.7 643.5 1.4 Bonanza overall sample grade 270.3 408.6 1.5 Bonanza BP1/SNI/NV2 sample grade 180.6 230.5 1.3 Bonanza NV1/CH1 sample grade

The bulk samples are not considered representative of the average emerald content of the Muzo Formation. Bulk sampling is directed to follow emerald rich zones. Thus, multiple bulk samples in different areas of the body are required to increase confidence in potential continuity and grades.

- 36 - Overall, Fura’s exploration program has successfully mapped numerous historical mine tunnels, recovered in excess of 13,000 carats of emeralds for valuation, and established the existence of high-grade bulk sample sites.

- 37 - 10. DRILLING

Fura commenced underground drilling in 2018. WGM has reviwed drill core and logs for the first five drill holes have been completed for a total of 861 m, (Table 6) and yielding HQ size core. In total Fura reports completing over 1700m of drilling by the effective date of the report. The drill holes are collared in two excavated chambers within the Muzo Formation, below the level of historic mine tunnels (Figures 13 and 14). Author Cookenboo visited the underground collar location during drilling, and inspected drill core. All core has been logged, measured for recovery and rock quality (“RQD”), as well as photographed. A factor limiting the utility of drilling at Coscuez is the lack of demonstrated geochemical or lithological features in drill core that more or less directly correspond to emeralds grade, as for example assays for gold projects, or microdiamonds for diamond projects. This limits drilling’s primary importance to determining the extents of the Muzo Formation at this time. TABLE 6. DRILL HOLE PARAMETERS

The primary purpose of the drilling is to establish the continuity of Muzo Formation and favourable calcite veins and breccias below the level of historic mining. Contacts between Muzo and Capotes formations in drill core were observed to be gradational over 0.5 to 1.5 m. The contacts provide limits to the Muzo Formation with depth. Lithologies include calcite veins and breccias that appear visually comparable to emerald-bearing zones at Itoco-2 and elsewhere at Coscuez. The drill holes are displayed in sections with lithology (Figures 15, 16 and 17). Emeralds were found in drill core in one location which is a rare occurrence. The heterogeneous distribution of emerald mineralized zones is unlikely to be defined by drill cores.

- 38 - Geochemical measures have been attempted using handheld XRF, and are planned for samples to be extracted and sent to analytical laboratories. However, no clear geochemical signature has yet been demonstrated that could help prioritize specific drill intersections. Furthermore, the handheld XRF measurements appear to not be replicable. WGM does not use the drill hole geochemistry or XRF data for the Mineral Resource estimate detailed later. Because there is no known relation between geochemical or XRF results and emerald grade at this time, there can be no higher grade zones noted.

- 39 - Figure 13. Drill map – oblique view with tunnels and topography.

- 40 -

Figure 14. Oblique view of drill holes below the historic mine tunnels, showing simplified lithology.

- 41 - Figure 15. Drill sections 2018 program, holes FCDH001-18, FCDH002-18 and FCDH003-18.

- 42 -

Figure 16. Drill sections 2018 program, holes FCDH004-18 and FCDH005-18.

- 43 -

Figure 17. Drill sections 2018 program, holes FCDH004-18 ad FCDH003-18.

- 44 - 11. SAMPLE PREPARATION, ANALYSES AND SECURITY

Sample preparation, analyses and security steps are described below for the most important analytical data from Coscuez relevant to the resource estimate, which are the results of the bulk sample. Emeralds recovered from the bulk sample are the basis of the grade and value estimates used in the Mineral Resource estimate later. The emeralds are recovered on site, with no independent analytical laboratory involved.

The bulk sample is basically analyzed by mine advance one round at a time. Each advance is currently approximately 0.8 m, and 1.8 m tall by 1.8 m wide for an average of 10 tonnes. When a blast occurs, senior security personnel make the first inspection, after the dust settles. The security team wears recording “GoPro” cameras to discourage theft. As soon as security determines the area is clear, the site geologist approaches the new face and looks for exposed emeralds. When exposed emeralds are found on the new face, they are recovered, either by simply pulling them from the face (if they are weakly attached), or by gentle use of a hand hammer, or a power drill so as not to damage the gems. The geologist recovering the emerald hands the gem to the head of security, who places it directly in a lock box, with a one-way baffled top entry. Recovery of exposed emeralds continues until none can be seen, because any left exposed could be subject to theft. Most of the emeralds, and almost all of the larger gems, are recovered directly from the mine face.

The muck is shoveled into hand carts (Photo 7), each with a capacity of about 1/3 of a tonne. Each cart is recorded, sealed and photographed before being pushed down the tunnel to the outside. Once outside, the cart is taken to the wash plant. Currently two wash plants are operating, one at La Paz (Photo 8) and the other at the Bonanza tunnel entrance (Photo 9).

Photo 7. Handcart at entrance to La Paz tunnel.

- 45 - Photo 8. La Paz Wash plant recovery looking for emeralds. Photo 9. Bonanza tunnel wash plant.

The wash plants at both La Paz and Bonanza are simple (Table 7). The plants consist of only a table for visual searching by hand of the muck, and hammers to break up large pieces. At the wash plant, large blocks are removed and then the muck is passed through coarse screens, and piled onto tables, where two wash plant operators pass through the material rapidly recovering all the green stones (women only are employed in the wash plants). The removed blocks are examined individually, and maybe broken by hammer if judged to possibly be hiding further emeralds. Security personnel watch the women working, both in person and by camera from the office at Fura’s camp. The authors verified the security personnel in camp monitoring the wash plant in real time.

TABLE 7. PROCESSING PROCEDURES FOR EMERALD RECOVERY IN LA PAZ AND BONANZA WASH PLANTS 1 Delivery of Muzo Fm black shales by hand cart 2 Weighing of hand cart 3 Material from hand cart dumped into secure wash plant area 4 Material screened and dumped on recovery table 5 Experienced sorters pass rapidly through material extracting emeralds 6 Examined material disposed of at tailings pile

Security, wash plant and underground mine personnel are all working in separate divisions, to minimize the possibilities of conspiracy.

- 46 -

No standards are used to quantify recovery. An unverified story supports good recovery from the wash plants: local villagers are upset that the tailings piles where they used to find emeralds missed by the artisanal mining are no longer productive. WGM recommends Fura consider adding identifiable minerals (perhaps emeralds or aquamarines) as unknown standards to some batches of wash plant material to try and quantify recovery. However, recovery on the mine face where most of the valuable stones are recovered remains unquantifiable and inherently subject to theft, as is true for any coloured gemstone project in WGM’s experience.

Drill core is logged, photographed, measured and sampled for geochemical analyses.

The author believes that the sample preparation, analytical procedures and security were effective, appropriate and sufficient for the initial Inferred Mineral Resource estimate of the Coscuez project.

- 47 - 12. DATA VERIFICATION

WGM has undertaken various steps to verify data upon which the Inferred Mineral Resource estimate is based. The most important verification steps include: 1) emeralds were verified from collection from fresh underground mine faces immediately after a blast to being sealed in packages for shipment to Fura’s Bogotá offices by author H. Cookenboo; 2) emerald quality and value (including those witnessed by Cookenboo from the mine face) were determined in Fura’s Bogotá offices by author W. Boyd; and 3) all three authors observed the extents of underground mine tunnels, transport by hand truck of mined material to the wash plant, operation of the wash plant by visual recovery of emeralds, underground drilling underway in 4 m high chambers; as well as the limits to the mine site due to steep topography.

#1 Emerald Verification at the Mine Face. Author Cookenboo observed emeralds collected from the mine face in the Itoco-2 bulk sample area. The observed emeralds were recovered immediately after the blast dust settled and were placed into the lock box as they were removed by security personnel (Photo 10a and 10b). The author then observed the lock box being opened in Fura’s secure emerald handing room in the Coscuez Mine camp, again by security personnel and in the presence of senior geological staff members. The author subsequently signed and sealed these verified emeralds into numbered plastic envelopes for shipment to Fura’s Bogotá offices. In summary, Cookenboo was able to personally oversee the recovery of 1,279 carats of emeralds at either at the mine face or in the mine camp’s secure sorting room.

Photo 10. A) emerald in place (approximately 2 cm; field of view approximately 1.5 m across); b) emeralds recovered from fresh mine face, in glove for scale.

- 48 - #2 Emerald Quality and Valuation. Author Boyd verified the emerald values and quality for a parcel of 8,439 carats (see Mineral Resource heading later for details).

#3 Authors Cookenboo, Boyd and MacFarlane walked through and verified extensive active mining tunnels, especially the La Paz tunnel (1.4 km) and Bonanza. Numerous side tunnels, many blocked off for safety reasons, were witnessed while walking underground. The observations verify an extensive tunnel system, but only somewhat under 10% of Fura’s total reported mapped length was walked by the authors.

Data verification in a coloured gem deposit is inherently difficult to take to a high level of confidence, in WGM’s experience. Reasons include the wide range of individual stone values, and the very heterogeneous distribution of high grade accumulations (“pockets”) both in 3 dimensions across the body, and in time for recovery (e.g. 3,990 carats were recovered from only 3 days production with each prolific day separated about one month apart) from the bulk sampling.

Given the inferred status of the initial Inferred Mineral Resource estimated in this report, WGM believes the data verification completed is sufficient, but as more bulk sampling is completed, further steps should be attempted. For example, at the wash plant, recognizable small emeralds could be inserted as standards into one out of approximately 20 batches, to gauge recovery. Also, additional tunnels should be traversed by QPs, and geological mapping compared from one tunnel to the next.

- 49 -

13. MINERAL PROCESSING AND METALLURGICAL TESTING

Mineral processing consists of recovery of emeralds from the wash plants, and is very simple at this stage of bulk sampling. As described under the “Sample Preparation, Analyses and Security” heading earlier, the wash plant consists of women (Fura only hires women for this job for security reasons) who pass through screened mine rock looking for and extracting by hand any emeralds seen. The emeralds show up recognizably bright green against the mostly black carbonaceous shale and separate readily from the host rocks.

Fura reports they are purchasing new larger scale plants, with built in screening and conveyor belts for emerald recovery. The capacity of these two planned new plants should be 10 tonnes per hour. The recovery method remains visual identification and extraction of emeralds seen by hand. It is not clear that there will be variations in recovery efficiency from different parts of the mineralized body, and to the extent known currently, WGM does not expect such potential variations to be significant.

WGM recommends Fura investigate the optical sorting technologies currently operating in emerald mines in Russia, and possibly Zambia that may be more preferable for hands off highly secure wash plant recovery.

No metallurgical testing has been attempted or completed.

- 50 -

14. MINERAL RESOURCES ESTIMATES

Introduction: The Coscuez Mine is a historically important producer of valuable emeralds. Fura Gems Inc. is in the early stages of testing, but has already produced results sufficient for WGM to infer that a potentially economic Mineral Resource of emeralds occurs at Coscuez. The bulk sample has produced 15,864 carats (plus emeralds contained in rocks) from 2,242 tonnes processed through October, most from the Itoco-2 area within mineralized Muzo Formation containing calcite veins.

The initial Inferred Mineral Resource estimate for Coscuez Mine is dependent on grade, tonnage, value (of the emeralds) and mining method. WGM has estimated an Inferred Mineral Resource for Coscuez, based on our understanding of controls on these variables. Confidence in values for these variables ranges from reasonably good for tonnage, value of emeralds and mining method, but low for grade, which is entirely dependent on results from the ongoing bulk sample operated by Fura. The tonnage is controlled by the extents of the Muzo Formation. The contacts are reasonably well mapped in the tunnels, outcrop and drill holes to provide an overall volume for the body, which remains open with depth (Figure 18). Density is assumed at 2.4 tonnes per m3, which could be bolstered by a program of density measurements from tunnels, bulk samples and drill core but is judged by WGM to be reasonably controlled in light of other variables. The emerald value has been constrained by examination of 8,900 carats in the Bogotá offices of Fura by author W. Boyd. A controlled subset of these emeralds were recovered from newly blasted underground mine faces under the observation of author Cookenboo for chain of custody purposes. The mining method is reasonably constrained by WGM’s review of mine plans developed by Fura.

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Figure 18. 3D model of Coscuez Muzo formation, showing tunnels and reported artisanal mining success areas

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14.1 MINERAL RESOURCE CLASSIFICATION

The classification of mineral resources used in this report conforms with the definitions standards provided in the final version of National Instrument 43-101 (“NI 43-101”), which came into effect on February 1, 2001, as revised on December 11, 2005, and those adopted by the CIM Standing Committee on Reserve Definitions in 2014. The Definitions Standards includes further changes to maintain compatibility with the new version of NI 43-101, effective May 9, 2016. We further confirm that, in arriving at our classification, we have followed the guidelines and standards by the Canadian Institute of Mining Metallurgy and Petroleum (“CIM”) Council adopted on November 27, 2010. The relevant definitions for the CIM Standards/NI 43-101 are as follows:

“A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

“An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

“An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

“A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.

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“Modifying Factors are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors

“A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.

“A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.

“A Proven Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.”

Mineral Resource classification is based on measurement and continuity of geology and grades, and this is directly related to the bulk sample density for emeralds at Coscuez. Areas more densely sampled are usually better known and understood than areas with sparse sampling, which would be considered to have greater uncertainty, and hence lower confidence in predicted grade or continuity.

A number of factors result in gem deposits having a lower level of confidence than other commodities, based on WGM’s experience. For example, diamond mines in kimberlite may have grades of 0.2 to 4.5 ct/t (equivalent to 0.04 g/t to 1 g/t) with a very wide range of average and individual gem values. In the case of Coscuez emeralds, similar low grades and wide ranges of individual stone values are expected, and furthermore the emeralds are very heterogeneously distributed within particular calcite veins systems within the broader black shale of the Muzo Formation. In addition, there is no tested geochemical method, nor any equivalent to microdiamonds in kimberlite that are known to WGM to help ascertain grade. That limits grade estimates to bulk sample results, which are inherently restricted in their locations. WGM cautions the reader that the result of low grades, very wide range of individual emerald values, and heterogeneous distribution throughout the prospective Muzo Formation inevitably lead to lower confidence in resource estimation than might be expected for other commodities.

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Summary Mineral Resource Estimate Factors: To estimate the initial resource at Coscuez, WGM has assessed the following factors (all currency in US$):

2) Grade – Grade is the most broadly constrained factor, given the early stage and limited areal extents of bulk sampling. A broad range of potential grades from 0.5 carats per tonne up to 4.5 carats per tonne are plausible, with WGM inferring that the middle of the range at 2.0 carats per tonne is most suitable for the maiden Mineral Resource estimate. 3) Per carat value – Following review of emeralds produced during bulk sampling, WGM is using a conservative US$200 per carat average value, as well as a low case (reduced by 30% to $140/ct) and a high case (increased by 30% to $260/ct). 4) Tonnage – Based on review of extensive geological maps of tunnels, outcrops and drill core logs, WGM recognizes that the potentially mineralized Muzo Formation is more than sufficient in tonnage to support Fura’s preliminary and conceptual mine plan. 5) Conceptual mining plan – WGM accepts that Fura’s current mine plan aiming at 105,000 tonnes per year by underground methods is preliminary and may be improved as understanding of the rock mechanics and vein/breccia distribution increases. WGM assumes 105,000 tonnes per year over 30 years (i.e. 3 million tonnes) in the Mineral Resource estimate, with an inference that such mining can be done for roughly US$50 per tonne based on WGM’s experience.

Consideration of confidence in the constraint of important resource estimate factors: 1) Grade: low confidence. The grade estimate at Coscuez is very loosely controlled. WGM finds a broad range of grades from 0.5 ct/t up to 4.5 ct/t as plausibly representative of the average emerald concentration throughout the Muzo Formation. Emerald occurrence within the Muzo Formation is scattered within particular thin calcite veins and breccias (sometimes with kaolin layers). These vein systems are structurally controlled, and may have distinct geochemical and textural features. However, structural mapping to identify priority targets is at an early stage, and no known geochemical signatures have been established to predict with confidence which vein systems will carry emeralds. Thus, at this stage of exploration, identifying with confidence which calcite veins may be highly productive is not possible until a particular vein system is bulk sampled. Grade control is entirely based on bulk sampling, which is at an early stage, and spatially restricted. Furthermore, the bulk sampling has been focused on productive veins systems, once such have been shown productive, leading to enhancement of the results above average mineralization levels.

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Because of the limited, high-graded and spatially restricted bulk sampling to date, there remains a broad range of plausible grades. 2) Emerald valuation: moderate confidence. Warren Boyd has examined nearly 9,000 carats of emeralds produced from Coscuez in light of his knowledge of markets in the USA and in Bogotá. He recognized very high value gems and gave an average value result of US$260/ct (representing a 30% discount for conservatism). This prediction is reduced to about US$200 per carat when the remaining 4,600 carats he did not view are included at an arbitrary price of $25/ct. There are no rough sale results to measure Mr. Boyd’s estimate against proven market values of this rough. In the Colombian markets the sales of rough emerald is held in confidence between the privately owned mine owners and privately owned businesses who are cutters and traders. This mean there are no publically available rough sales data from active sales of Colombian emerald rough. There is also no spatial distribution evidence (i.e. where within the Muzo Formation did each highly valuable emerald come from), nor any further evidence as to how representative of the entire deposit thee 13,500 carats may prove. WGM chooses to model 3 cases: 1) low at $140/carat (30% below $200/ct); 2) medium ($200/ct (preferred); and 3) high ($260/ct (30% above $200/ct). 3) Tonnage: reasonably well constrained. The boundaries of the Muzo Formation are reasonably well constrained, based on extensive tunnel mapping and limited drilling. Within the drill core, the contacts appear gradational over roughly 0.5 to 1.5 m. The tonnage thus defined in the 3D modelling should be more than sufficient for the mine plan aiming for 150,000 tonnes per year. Tonnage of potential high grade zones or priority target areas cannot confidently be defined separately at this stage of exploration. 4) Conceptual mining method: reasonably constrained. WGM finds Fura’s current mining plan likely feasible, and sufficient to guide continued development. Limitations to the current plan merit further consideration, including new plant(s), tails disposition, access, social issues, rock mechanics, capital and operating costs, environmental issues, and potentially increasing the production target if further bulk sampling continues to support strong economic potential through the Muzo Formation.

Estimated Mineral Resource: In light of the above considerations, WGM has compiled a range of potential grades (from 0.5 to 4.5 ct/t), against per carat values ($140/ct, $200/ct, and $260/ct) and finds nearly all cases exceed likely mining costs by a factor of at least 2 times (Table 8). Only the lowest potential grade and value case (red in Table 1) is less than 2 times the expected roughly US$50/tonne mining cost. Blue values in Table 8 are 2 to 10 times expected mining costs, and black values are 10 to 20 times, or more.

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Despite the loose constraints on grade due to the early stage of bulk sampling, WGM considers the economic potential at Coscuez to be strong, given the high value of many of the emeralds and past mining history.

TABLE 8. RANGE OF POTENTIAL GRADES AND PER CARAT VALUES Range of potential $ 140 $ 200 $ 260 per carat grades 0.5 ct/tonne $ 70 $ 100 $ 130 per tonne 1.0 ct/tonne $ 140 $ 200 $ 260 per tonne 1.5 ct/tonne $ 210 $ 300 $ 390 per tonne 2.0 ct/tonne $ 280 $ 400 $ 520 per tonne 2.5 ct/tonne $ 350 $ 500 $ 650 per tonne 3.0 ct/tonne $ 420 $ 600 $ 780 per tonne 3.5 ct/tonne $ 490 $ 700 $ 910 per tonne 4.0 ct/tonne $ 560 $ 800 $ 1,040 per tonne 4.5 ct/tonne $ 630 $ 900 $ 1,170 per tonne

From the broad range of potential grade and per carat values, WGM infers that 2.0 carats per tonne, and $200/carat is the most reasonable and conservative case on which to estimate an initial Inferred Mineral Resource at Coscuez. WGM estimates the Inferred Mineral Resource at 3 million tonnes, and 6 million contained carats, based on the limits to tonnage provided by Fura’s mine plan, as we currently understand it (Table 9).

TABLE 9. WGM ESTIMATE OF INITIAL INFERRED MINERAL RESOURCE AT COSCUEZ Grade Value per carat Tonnes Carats (ct/t) ($/ct) (t) 2.0 $200 3,000,000 6,000,000 Notes: Mineral Resources effective December 12, 2018. 1. WGM Senior Associate Geologist, Harrison Cookenboo, is the Qualified Person for this Mineral Resource estimate. 2. Mineral Resources are estimated using a conservative US$200 per carat average value, following a review of emeralds produced during Fura’s bulk sampling program. No cut-off was applied as all recovered emeralds were included. 3. A broad range of potential grades from 0.5 carats per tonne up to 4.5 carats per tonne are plausible. 2.0 carats per tonne is the most suitable for the inferred Mineral Resource estimate. 4. Estimated 105,000 tonnes per year over 30 years (i.e. approximately 3 million tonnes) in the Inferred Mineral Resource estimate, with an inference that such mining can be done for roughly US$50 per tonne. 5. Inferred Mineral Resources have a large degree of uncertainty as to their existence and whether they can be mined economically. It cannot be assumed that all or any part of the Inferred Mineral Resource will be upgraded to a higher confidence category. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 6. There are no known environmental, permitting, legal, title, taxation, socio-economic, political, marketing or other relevant factors that could materially affect the above estimate of Mineral Resources other than those discussed in the report.. 7. The quantity and grade of reported Inferred Mineral Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Mineral Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category. 8. Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum standards on Mineral Resources and Reserves, definitions and guidelines prepared by the CIM Standing Committee on Reserve Definitions, adopted by CIM Council May 10, 2014. 9. S.G. of 2.4 tonnes/m3 was used for the entire Muzo Formation. 10. All currency in US$.

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WGM cautions that there is both considerable downside and upside in this maiden Inferred Mineral Resource estimate. On the downside, it is plausible that further bulk sampling will not support grades as high as considered in the estimate. As well, limitations to the site, the situation with artisanal miners, and government regulations may impact the Mineral Resource estimate negatively. On the upside, the size of the Muzo Formation may prove sufficient to support a significantly larger mining operation, and high grades may continue to be encountered at a greater frequency than assumed in this estimate. As well, the mining cost estimate may decrease as methods are refined.

14.2 TARGET FOR FURTHER EXPLORATION

The upside at Coscuez may be viewed as an exploration target of considerable potential (a “target for further exploration” in CIM usage). WGM notes that the entire body of Muzo Formation potentially encloses 30 million m3 of rock, as estimated by Fura from their 3D modelling based on tunnel and drill hole geology (Figure 19).

Using a density of 2.4 implies an overall potential of roughly 70 million tonnes. Applying a range of plausible and conservative grades between 0.5 and 2 cts/t points toward an exploration target potential for the entire Muzo Formation of between 35 million and 140 million total contained carats. Using an arbitrary reduction factors of 50% and 75% to conservatively account for mining recovery limits, WGM suggests that Coscuez holds the exploration target potential to host between roughly 10 million to 70 million carats (Table 10). WGM cautions that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the target being delineated as a Mineral Resource.

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Figure 19. The Coscuez Mine – Muzo Formation and tunnels.

TABLE 10. COSCUEZ EXPLORATION TARGET POTENTIAL, SUBJECT TO FURTHER RESULTS FROM FURA’S ONGOING EXPLORATION PROGRAM Potential Carats at Potential Carats at Potential Carats from Range of potential 75% tonnage 50% tonnage total Exploration grades reduction factor (~20 reduction factor target of total 70 million tonnes) (35 million tonnes) million tonnes 0.5 ct/tonne 9,000,000 17,500,000 35,000,000 1.0 ct/tonne 18,000,000 35,000,000 70,000,000 1.5 ct/tonne 27,000,000 52,500,000 105,000,000 2.0 ct/tonne 36,000,000 70,000,000 140,000,000 Note: The potential quantity and grade (above) is conceptual in nature, and there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the target being delineated as a mineral resource.

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Fura’s ongoing bulk sample is providing additional confidence to the geological understanding, emerald distribution and potential value of the stones, and as additional bulk sampling and drilling information is made available, WGM is of the opinion that the categorization of the current Inferred Mineral Resources will be upgraded. WGM expects the first area to be upgraded may likely be Itoco-2, where Fura’s bulk sampling has recovered 13,935 carats of emeralds from 1967 tonnes processed, as of the end of November 2018. Fura is continuing to bulk sample this area, and has defined plans to test down dip 45 m and upwards another 15 m, comprising a prospective block of 140,000 tonnes (Figure 20).

Itoco 2 Bulk Sampling Wire Frame

Figure 20. Fura’s plan to continue work in the Itoco-2 area

Section Min Max Difference Volume Metric Limits Elevation Elevation (m) (m3) Tons (m) (m) Itoco 2 BS 855 930 75 59,202 142,085 Level 855 and 15 m extrapolated above 915 Level

14.3 BULK SAMPLE METHODS AND RESULTS

Fura’s bulk sample program has yielded 15,864 carats (plus an estimated 500 carats of emeralds contained in rocks) from 2,242 tonnes of Muzo Formation processed as of the end of October 2018. The apparent grade of the processed bulk sample is 7.1 carats per tonne (not counting the carats in rocks). This apparent grade is not thought to be representative of an average grade, primarily because the bulk sample is targeted to follow potentially emerald bearing calcite veins and breccia systems, rather than being a random test of the Muzo Formation.

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As of the end of October 2018, most of the carats produced from the bulk sample are recovered from the Itoco-2 area, accessed 6 m below the La Paz tunnel. The Itoco-2 area features a calcite vein/breccia zone, with a kaolin layer inside, that appeared potentially favourable to host emeralds. When first tested, it yielded emeralds on the mine face, and when followed produced most of the recovered emeralds. For example, in October 2018, 1461 carats were produced from 241 tonnes processed from Itoco-2 (sample grade 6.1 ct/t), in comparison to only 41.7 carats from 119.4 tonnes from the Bonanza area (the other active bulk sampling area in October; sample grade 0.34 ct/t).

Also notable, in January 2018, Fura produced 1,269.7 carats of emeralds from 72.8 tonnes excavated from other areas elsewhere in the La Paz tunnel system separate from the Itoco-2 area. WGM understands that these emeralds followed up anecdotal reports of successful artisanal mining, and were collected before the bulk sample program actually commenced. These carats are included in Fura and WGM’s analysis as part of the bulk sample results.

Unprocessed material was excavated from the Muzo Formation during the period of the bulk sample, in order to create access tunnels. Other unprocessed material was assigned to stock pile, when no emeralds were detected on the mine face, due to the limited sample washing capacity. Fura reports that this material totals 9,737 tonnes (as of end of September 2018) from which no carats were recovered. Combined with the 2,242 tonnes processed material and 15,864 carats total attributed to the bulk sample yields an apparent overall sample grade of 1.3 ct/t. WGM cautions that this apparent sample grade may either overstate the actual average Muzo Formation grade because of the high-grading inherent in Fura’s bulk sample program, or understate the actual average grade, due at least in part to an unknown quantity of unrecovered emeralds that inevitably occur in the unprocessed material.

14.4 ITOCO-2 3D ISO-SHELL MODEL

WGM and Fura modelled the Itoco-2 bulk sample results using inverse weighting iso-shells to better understand the grade potential. The model examines a total of 1109 tonnes sampled from 109 blast faces that yielded 8,743.7 carats of emeralds, at an average sample grade of 7.89 ct/t (Figure 21). The 3D isoshell modelling created a solid containing this material (x=37 m; y=16 m; z=10 m) within a larger isoshell body enclosing 14,500 tonnes, and predicting containment of a total of 61,000 carats, for a predicted model sample grade of 4.2 ct/t (Figure 21). WGM finds this model a plausible representation of the occurrence of high- grade zones within the Muzo Formation. However, WGM cautions that the applicability of such a model can only be inferred to be reasonable until further bulk samples are completed in multiple areas of the Muzo Formation.

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Figure 21. Itoco-2 iso-shell model.

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14.5 EMERALD EVALUATION ASSUMPTIONS, METHODS AND PARAMETERS

Boyd personally visited the Coscuez Emerald mine site and Bogotá administrative offices on two occasions to prepare the review and evaluation of the rough emeralds produced from the bulk sampling operation.

The first trip was to the Coscuez Mine and at the administration office in Bogotá on April 2nd to April 6th, 2018 with all three authors of this report. At this time Boyd reviewed and assessed a small sample of approximately 1660 carat of emeralds recovered up to that time.

The second visit by Boyd was on October 12th and October 16th 2018 in Bogotá to complete the assessment and valuation of all of the rough emeralds that had been recovered to date. During this visit Boyd was able to assess and evaluate the entire 8900 carats including the original rough that was recovered up to April 2018.

14.6 PREPARATION OF THE ROUGH EMERALDS

The emeralds presented for valuation were handpicked from the underground mine faces and surface wash plant operations, as described in the Mineral Processing and Metallurgical heading of this report. The only method of cleaning the emeralds prior to valuation was washing in water and some cobbing of the rough. No oils, chemicals, or solvents were used in the preparation of the rough valued herein. Valuation of the rough would not be possible if the rough was treated or enhanced in any way. Cobbing is the use of special tool, similar to that used by tile layers, to break away waste rock from the gem crystals. Cobbing of rough emerald from mining operations is an accepted trade practice in all emerald mining operations observed by Boyd in Russia, Colombia, and Brazil.

The rough emeralds are more numerous in the small stones and the author requested on October 12, 2018 that the smaller rough be sieved to a series of standard sizes. The sieves used at the offices were as follows: 2mm, 4mm, 6mm, 8mm, 10mm, 12mm, 14mm, and 25 mm

The author did not value any size fractions less than 2mm as these very small stones have a negligible market value. Thus the categories for valuation on the cabochon grade and commercial quality rough were as follows:

+2 – 4mm; +4 – 6mm; +6 – 8mm; +8 – 10mm; +10 – 12mm; +12 – 14mm; and +14mm;

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Exceptional quality stones of high clarity and/or colour saturation within these categories were valued on an individual basis.

A smaller percentage of the rough emeralds presented for evaluation was still enclosed in the waste matrix and thus some of the emerald weights were estimated by Boyd on these ‘emeralds in rocks’.

14.7 PARCELS PRESENTED FOR EVALUATION BY BOYD

There were three lots of emeralds that were evaluated for the purposes of the Inferred Mineral Resource calculation. All of these were recovered during the bulk sample mining operation in 2018. These will be referred to as the controlled collection sample (Sample A) and the Fura recovered emeralds (Sample B) which were evaluated by Boyd and thirdly the Fura recovered emerald not evaluated by Boyd (Sample C). These emeralds represented approximately 1,279 carats, 7,621 carats, and 4,670 carats respectively. Total rough emeralds recovered during the bulk sampling operation, used for the purposes of this report by November 2018, was 13,569 carats.

14.8 REPRESENTATIVE CUT-OFFS FOR VALUATION PURPOSES

Within the cabochon and commercial quality assortments of sieved rough, Boyd took statistically representative cut-offs of larger parcels that included commercial and cabochon grade rough. A cut-off is a common practice used in gemstone rough valuation where large and relatively homogeneous parcels of rough are thoroughly mixed and statistically representative “cuts” are taken from the parcel. Evaluations are completed on this “cut” or cut-off and a value then assigned to the entire parcel of that particular size assortment. On large volume productions this is common practice on the smaller size assortments. Larger more valuable gems are individually evaluated.

14.9 EVALUATION METHOD OF ROUGH EMERALD

There are three main factors that affect the valuation of all gemstones including emeralds. Those are clarity, colour, and size. Clarity or absence of inclusions (jardin) is the main controlling factor in the valuation of diamonds whereas in the valuation of emeralds the most dominant factor is the intensity and saturation of colour. including the emeralds found at Coscuez, often have inclusions which is called jardin by gemologists’. It is almost impossible to find emerald without jardin. Exceptionally clean emeralds are exceedingly rare and very expensive. The amount of jardin within the emerald affects the

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price with the cleanest stones demanding the highest price. Almost all of the Coscuez emeralds valued had varying degrees of jardin and only a few small gems were free of jardin.

As mentioned, the colour in emeralds also affects the price. Light colour saturation and/or strong yellow overtones reduce the prices. Deep colour saturation and uniformity of that colour increases the price. Often emerald crystals are also strongly colour zoned with lighter crystal cores down the “C” Axis and deeper colour around the edge of the crystal. Thus the emerald cutters will often cut the emeralds in such a way that the deeper colours are in the bottom of the stone, or culet, so that the polished emerald faces up with a deep colour. These factors are taken into account with the valuation. Most of the Coscuez emeralds valued had observable colour zoning and varying degrees of colour saturation.

The size of the polished emerald that could be recovered from the rough emerald will also affect the valuation exercise. Large rough emeralds do not necessarily mean higher prices whereas the potential recoverable gems from that rough piece is critical to the valuation. Hence the value of a large piece of rough that could only generate poor quality gems or multiple smaller gems then the value of that rough would be lower on a per carat basis than a smaller piece of rough emerald that could generate finer and larger single gemstones.

In addition to the three factors mentioned above there are other less dominant factors affecting rough emerald valuation. For example, country of origin also affects the value. Emeralds originating from Colombia are in stronger demand by the market than emeralds originating from other global sources. Thus a fine polished Colombian emerald of 5 carats would be worth as much as 20% more than a fine Zambian emerald with all other factors being equal. Additionally the shape of the polished emerald also affects the value. For instance an emerald-cut emerald is in stronger demand than a pear-shaped emerald or an oval-shaped emerald. Also emerald valuation can be affected by fashion trends. If a famous member of royalty or a popular celebrity is seen wearing an emerald this also drives the demand and hence the market prices for this gemstone. Boyd had the opportunity to visit vendors and dealers in Colombian emeralds and often attends jewelry and gemstone trade shows in Hong Kong and the USA and was able to see many fine polished gems with asking prices from as little as US$150 per carat to as high as US$20,000 per carat.

Given the many factors noted above affecting the market price of emeralds, and the lack of sales by Fura at this point the authors have applied conservative values throughout the evaluation process.

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14.10 CHAIN OF CUSTODY ON VALUATION SAMPLES

14.10.1 SAMPLE A – 1,279 CARATS

During author Cookenboo’s visit to the mine site in September 2018 at Coscuez he was able to personally oversee the recovery of 1279 carats of emeralds at either at the mine face or in the mine camp’s secure sorting room (as described in further detail under the Data Verification heading earlier), representing 14.3% by weight of the sample that was subsequently valued by Boyd in the Bogotá offices. This sample collected by Cookenboo was sealed in tamper proof security bags and then subsequently evaluated by Boyd who personally opened the sealed security bags and valued the enclosed rough and some emerald in matrix. This Chain of Custody sample of 1279 carats has an estimated total value of US$18,500 and an average value of US$14.47 per carat. This sample represents 9.5% of the total carat weight evaluated, but only 0.7% of the total value. These results are summarized in Table 11.

TABLE 11. CHAIN OF CUSTODY VALUATION Lot No. Seal Date Total Wt (ct) Valuation US$/ct Total Val US$ KK01615402 18-Sep-18 68.60 4 240.10 KK01615404 19-Sep-18 34.40 7 240.80 KK01615403 20-Sep-18 235.98 7 1,651.86 KK01615405 22-Sep-18 254.82 7 1,783.73 KK01615405 22-Sep-18 60.35 7 422.45 KK01615405 22-Sep-18 58.30 7 408.10 KK01615405 22-Sep-18 49.30 7 345.10 KK01615403 20-Sep-18 190.50 8 1,600.20 KK01615402 18-Sep-18 12.93 11 135.77 KK01615405 22-Sep-18 38.60 14 540.40 KK01615404 19-Sep-18 12.94 18 226.45 KK01615405 22-Sep-18 47.50 28 1,330.00 KK01615405 22-Sep-18 117.40 35 4,109.00 KK01615403 19-Sep-18 80.60 42 3,385.20 KK01615403 19-Sep-18 13.43 84 1,128.12 KK01615403 19-Sep-18 0.74 140 103.60 KK01615403 19-Sep-18 3.10 280 868.00 Total 1,279.49 14.5 18,518.88

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14.10.2 SAMPLE B – 7,620 CARATS

The remaining bulk sample rough emeralds presented to Boyd for evaluation was collected by Fura geologists and engineers and carefully recorded in their notes as the bulk sample program progressed. This rough contained many fine and larger emerald crystals that generated the vast majority of the value (approximately US$2,439,500) attributed to the bulk sample representing approximately 99% by value. These results are summarized in Table 12.

TABLE 12. VALUATION OF SAMPLE B BY $/ct RANGE $/ct Range Totals per Range From To cts Total $ $3 $100 4,124 $95,544 $100 $300 1,559 $303,218 $300 $500 268 $106,148 $500 $1,000 700 $464,653 $1,000 $1,500 576 $672,190 $1,500 $2,000 244 $405,409 $2,000 $2,500 112 $248,445 $2,500 $4,500 37 $143,945

In this sample there were quite a few notable gems including one rough specimen in matrix of 114.53 carats (with contained emerald estimated to be 91.62 carats) with an estimated value of US$70,500, a 26.0 carat fine gem crystal with an estimated value of US$109,200, a fine gem crystal of 33.56 carat with an estimated value of US$75,174, and 6.80 fine gem crystal with an estimated value of US$13,328. Of course this lot also had a large volume of small emeralds with values as low as $2 per carat on small and low quality rough.

The average value on all the material evaluated by Boyd in Sample A and B is US$276 per carat (US$2,458,071 total).(approximately US$ 2.46 Million)

14.10.3 SAMPLE C – 4,670 CARATS

Fura reports that an additional 4,670 carats of “low to medium quality” emerald rough was at an oiling lab (Internacional de Gemas) in Bogotá during Boyd’s visit to Bogotá in October 2018, and was not presented to Boyd for valuation. Fura’s emerald experts reported an estimated valuation of US$70 to US$80 per carat for this parcel. To be conservative, WGM is assuming a value of US$50 per carat for these 4,670 carats (Approximately US$234,000 in total)

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14.10.4 OVERALL ESTIMATED VALUES OF THE SAMPLE

The total emerald weight (Samples A+B+C) valued is thus 13,569 carats. An estimated 500 carats remaining in rocks was not included in the estimate. The total value of the sample is approximately US$2,700,000, for an overall average value of US$200 per carat.

The five most valuable individual emeralds were estimated at US$109,000, US$79,000. US$75,000, US$71,000, and US$52,000 apiece of various weights. The highest valued 15 individual stones collectively weigh 514 carats, and are valued at US$735,000, representing 27% of the total sample value and 3.7% of the total carat weight, emphasizing the importance of rare high-quality stones to the overall Inferred Mineral Resource estimate.

WGM chooses to use US$200 per carat as our base case value in the initial Inferred Mineral Resource estimation. WGM also provides cases at 30% lower value (US$140/ct) and 30% higher value (US$260/ct) when considering the extent to which emerald values could materially affect Coscuez qualifying as a potentially producible deposit and an Inferred Mineral Resource.

14.11 MINE PLAN

It is premature to have anything other than a conceptual mine plan for Coscuez which can be refined as the project progresses to the definition of a Mineral Resource.

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15. MINERAL RESERVES – NOT APPLICABLE

No Mineral Reserves have been estimated for Coscuez and there is no assurance that the Inferred Mineral Resource can or will become Mineral Reserves in the future.

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ITEMS 16 TO 22 ARE NOT APPLICABLE TO THIS INITIAL INFERRED MINERAL RESOURCE REPORT AND NOT FURTHER DISCUSSED HEREIN

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23. ADJACENT PROPERTIES

WGM does not know of any adjacent properties the description of which would materially enhance the reader’s understanding of the Coscuez Mine.

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24. OTHER RELEVANT DATA AND INFORMATION

Fura reports that the mining title extension process is being carried out and Fura is under discussions with ANM about it. The official request for extension was filed on October 2018. The works to be performed Plan (“PTO” by its acronym in Spanish) is being finalized. Likewise, Fura has started the discussions of the terms for the contract to be signed for extension.

Fura further reports that they are working on any possible authorization that may be required for the access to the mine area through adits outside of the mining title (including the important La Paz tunnel), as it is within their obligations as per the SPA.

24.1 POLITICAL AND SOCIAL ISSUES LOCALLY NEAR THE MINE, AND BROADLY IN COLOMBIA.

Coscuez has for many decades been the source of a (usually) marginal living for local informal miners, and the transition to a modern more controlled mining project brings inherent risks of dissension (Cobb and Taylor, 2018). Such dissent and protests in response hampered the Muzo Mine’s program, where for example “In 2015, armed bandits attacked MTC’s Muzo mine, using explosives to blow off a tunnel’s steel doors and shooting a worker” (Cobb and Taylor, 2018). However, Fura has been responsive to the potential for local unrest since before the Coscuez project began in January, 2018, and now more than 96% of 270 workers are from local villages, and Fura expects employment to rise to more than 400 in the future. Training, a regular salary, and stability are the alternative to historical uncontrolled mining and appear so far to be well received, based on the onsite observations of WGM personnel. https://www.reuters.com/article/us-colombia-fura-gems-emeralds/company-walks-fine- line-to-revive-colombia-emerald-mine-idUSKBN1OB1LF

Nationally, Colombia has emerged from a long period of civil and gang warfare. This violence centred around both drugs (nationally) and emeralds (locally) with the emerald patrones actively fighting to keep the drug lords out of the mining region. The involving the Revolutionary Armed Forces of Colombia (FARC–EP) was brought to an official end in November 2016, when a peace accord was ratified by the Colombian government. However, implementation of the peace accord provisions has been slow, and coca production has soared in the past two years (Faioli, 2018). WGM cautions that the future of the peace accord is uncertain, and political risk remains a factor in Colombia nationally.

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Locally, Fura reports and WGM observes that the violence associated with emerald production in the Boyacá Department has receded. The involvement of traditional patron families in an ownership stake in the Coscuez mining license, and Fura’s extensive ongoing programs of hiring and training locals appear to be strong steps towards a peaceful and productive future, but WGM cautions that unquantifiable local political uncertainty and risk remains.

The author knows of no other relevant information needed for the purposes of this report, and believes that this report and its conclusions and recommendations are warranted, based on the information presented herein.

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25. INTERPRETATION AND CONCLUSIONS

The Coscuez Mine is an ancient source of high quality emeralds. Fura’s project of advancing Coscuez from an artisanal level mine of low capacity to modern levels of operation and safety has progressed well in its first year, producing sufficient results that WGM has confidence to estimate the initial inferred mineral resource, as described herein.

WGM is satisfied that the combination of conditions at Coscuez satisfy the definition of Inferred Mineral Resource in that there are reasonable prospects for eventual economic extraction of emeralds. The high quality of emeralds, with an average estimate of US$200 per carat, the long history of mining as evidenced by more than 40 tunnels over more than 400 m in elevation and bulk sample recovery of more than 15,000 carats all support WGM’s confidence in the eventual economic extraction by modern mining methods. However, the heterogeneous distribution and low concentration of emeralds combined with the early stage of bulk sampling reduces WGM’s confidence in quantities of recoverable emeralds to a level consistent with assigning an Inferred Mineral Resource. WGM expects there is strong potential to raise the confidence level to an Indicated Mineral Resource, with completion of further bulk sampling. Quantities of recoverable emeralds may also potentially increase, as better understanding of mine rock properties and emerald distribution are developed.

The authors have not identified any significant risks that could be reasonably expected to affect the reliability or confidence in the exploration information presented herein, beyond those described earlier.

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26. RECOMMENDATIONS

The authors recommend a two phase program for further evaluation and potential development, with Phase 2 dependent on satisfactory results from Phase 1. The recommended Phase 1 is continuation of ongoing bulk sampling, with sites spread sufficiently through the Muzo Formation to inform geological grade continuity, as well as continued upgrade of infrastructure and community relations (Table 13). Reporting of Phase 1 should upgrade confidence in grade and potentially lead to Indicated and/or Measured Mineral Resource in subsequent reporting for some part(s) of the deposit. Dependent mainly on support of grade continuity from the continuing bulk sample, the authors recommend Phase 2 include completion of a pre-feasibility report, and further upgrading of infrastructure including plant, and underground access.

1. Continued bulk sampling with two goals: 1) Open multiple work faces targeting new enriched emerald-bearing veins and structures, and 2) spread bulk sample sites sufficiently to measure geologic grade and establish the degree of grade continuity in different parts of the Muzo formation. 2. Investigate possibilities for open cast mining. 3. Investigate the rock mechanics of the Muzo formation. 4. Investigate and upgrade to new larger scale wash plants. 5. Continue to progress all site mining and related activity to control of Fura. 6. Density measurements for both material delivered to the wash plants, and excluded from the wash plants. Also, density measurements from core. 7. Market sales of emeralds in test cases when sufficient carats are available with WGM present, to add confidence to the existing valuation. 8. Investigate optical sorting equipment for hands-off recovery of emeralds in larger scale wash plants. 9. Continue mine development to increase production capacity. 10. Use the results of further bulk sampling that is spread at intervals across the Muzo Formation to upgrade confidence in the Inferred Mineral Resource estimate, potentially leading to an Indicated and/or Measured Mineral Resource estimate.

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TABLE 13. BUDGET ESTIMATE RECOMMENDED WORK IN PHASE 1 AND PHASE 2 (dependent on results of Phase 1) Items Quantity units Cost/unit* Cost (US$) Phase 1: Year 2019 Continue bulk sampling, including community and 25,000 tonnes $150/tonne $3,750,000* infrastructure development Upgrade wash plants $450,000 Drilling - underground collars 2,000 m $125/m $250,000 Geological investigations, structure mapping and data $145,000 analysis Environmental studies $100,000 Evaluation and report to potentially upgrade resource $95,000 Phase 1 Total Estimate $4,790,000

Phase 2: Years 2020 to 2022 Begin building upgraded mine estimate: $10,500,000* Pre-feasibility report $150,000

Analysis, mine monitoring and reporting $525,000 Phase 2 Total Estimate $11,175,000

GRAND TOTAL PHASE 1 AND PHASE 2 (3 years) $15,965,000 * (bulk sample and drilling unit prices provided by Fura)

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27. REFERENCES

Banks, D.A., Guiliani, G., Yardley, B.W.D., and Cheilletz, A., 2000. Emerald mineralisation in Colombia: fluid chemistry and the role of brine mixing. Minerallium Deposita, v. 35, p. 699-731.

Cheilletz, A., Feraud, G., Guilliani, G., and C. T. Rodriguez 1994. Time-pressure and temperature constraints on the formation of Colombian emeralds; an 40 Ar/ 39 Ar laser microprobe and fluid inclusion study Economic Geology v. 89 p. 361-380.

Cobb, S., and Taylor, S., 2018. Company walks fine line to revive Colombia emerald mine. Reuter world News, December 12, 2018.

Faioli, A., 2018. Two years after Colombia’s peace accord, the historic pact is in jeopardy. Washington Post, June 16, 2018.

Gomar, M., 2017. The Tears of Fura. Muzo mine. GIA Report 2185154015, GIA Laboratory. https://www.marcialdegomarcollection.com/5-the-tears-of-fura

Gómez, J., Montes, N.E., Nivia, Á., Tejada, M.L., Jiménez, D.M., Sepúlveda, M.J.,Osorio, J.A., Gaona, T., Diederix, H., Mora, M. and Uribe, H., compilers, 2007. Geological Map of Colombia 2007. Scale 1:1,000,000. INGEOMINAS. Bogotá

Guiliani, G., Cheilletz, A., Arboleda, C., Carrillo, V., Rueda, F., and Baker, J.H., 1995. An evaporitic origin of the parent brines of Colombian emeralds: fluid inclusion and sulphur isotope evidence European Journal Mineralogy 1995, 7, 151-165

Guiliani, G., France-Lanord, C., Cheilletz, A., Coget, P., Branquet, Y., and Laumonier, B., 2000. Sulfate Reduction by Organic Matter in Colombian Emerald Deposits: Chemical and Stable Isotope (C, O, H) Evidence. Economic Geology v. 95 p. 1129-1153.

Ordeñez, F.H.R. and Shultz-Güttler, R.A., 1995. Solid and Fluid-Inclusion data of Colombian Emeralds, Geología Colombiana, v. 19, p. 188-189.

Ordoñez, F.H.R., Schultz-Güttler, R.A., & Kogi, K. (2000) Geoquímica del rubidio-estrôncio y edad de las Esmeraldas Colombianas. Geología Colombiana, 25, 221-239.

Ordeñez, F.H.R., 1998. Esmeraldas Colombianas: Mineralogia, Geologia, e Gênese. Tese de Doutoramento. Universidade de São Paulo. 282p.

Ottaway T.L. (1991) The geochemistry of the Muzo emerald deposit, Colombia. Master’s thesis, University of Toronto, Canada.

Ottaway, T.L., Wicks, F.J., Bryndzia, L.T., Kyser, T.K., and Spooner, E.T.C., 1994. Formation of the Muzo hydrothermal emerald deposit in Colombia. Nature, v. 369, p. 552-554.

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Padilla, S.G., 2016. Actulizaciόn programa de Trabajos e inversions - PTI Quinquenio 2016 – 2020. Por Esmeraldas y Minas de Colombia Esmeracol, S.A., 145 p.

Padilla, S.G. and Martinez, V. M. F., 2016. Correcciones y Aclaraciones al Program do Trabajos e Inversione (PTI) Actulizaciόn programa de Trabajos e inversions 11 p..

Pignatelli, I., Guilliani, G., Ohnenstetter, D., Agrosì, G., Mathieu, S., Morlot, C., and Branquet, Y., 2015. Colombian Trapiche Emeralds: Recent Advances in Understanding Their Formation. Gems & Gemology, v. 51, p. 222-259.

Pogue, J.E., 1916. The Emerald Deposits of Muzo, Colombia, Transactions of the American Institute of Mining engineers, v. 4, p. 383-406.

Reyes, G., Montoya, D., Terraza, R., Fúquen, F., and Mayorga, M., 2006. Geología del Cinturόn Esmeraldífera Occidental, map 1:100,000. Instituto Colombian de Geología y Minería INGEOMINAS. 1 p.

Ringsrud, R., 1986. The Coscuez mine, a major source of Colombian emeralds. Gems & Gemology, 17(2), p. 67–79

Ringsrud, R., 2009. Emeralds: A Passionate Guide. Green View Press, Oxnard California, 382 p.

Ringsrud, R., and Boehm, E., 2013. Peñas Blancas: an historic Colombian emerald mine. The journal of gemology. V. 33, p. 187-199.

Rodriguez, E., and Ulloa, C., 1994. Plancha 189 La Palma, INGEOMINAS Geology Map at 1:100,000.

Smatch International emeralds, 2017. Welcome to the mines of Colombia. http://www.smatch-international.com/?p=261

Vasquez, G.F.N., and Sheng-Rong Song, 2017. Geochemical analysis of sedimentary emerald mineralization in the western emerald belt, Colombia. Poster, EGU presentation 1 p.

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DATE AND SIGNATURE PAGE

This report entitled ““Technical Report on the Coscuez Emerald Mine, Boyacá Department, Colombia for Fura Gems Inc.”, effective date January 23, 2019, was prepared and signed by the following authors:

Effective Date: January 23, 2019. Issue Date: January 23, 2019.

“signed by” “signed by”

Harrison Cookenboo, Ph.D., P.Geo. Warren Boyd, M.Sc., F.G.A. Vancouver, B.C. Oakville, Ontario

“signed by”

G. Ross MacFarlane, P.Eng. Toronto, Ontario

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CERTIFICATE OF QUALIFIED PERSON

I, Harrison Cookenboo, Ph.D, P.Geo, P.Geol., do hereby certify that:

1. I live at 278 West 5th Street, North Vancouver, B.C. Canada V7M 1K1.

2. I am a Senior Associate Geologist with Watts, Griffis and McOuat Limited, a firm of consulting engineers and geologists, which has been authorized to practice professional engineering by Professional Engineers Ontario since 1969, and professional geoscience by the Association of Professional Geoscientists of Ontario.

3. This certificate accompanies the report titled “Technical Report on the Coscuez Emerald Mine, Boyacá Department, Colombia for Fura Gems Inc.”, effective date January 23, 2019.

4. I graduated with a Bachelor of Science Degree (cum laude) in geology from Duke University (Durham, North Carolina) in 1981, a Masters of Science in geology from the University of British Columbia in 1989, and a Ph.D. in geology from the University of British Columbia in 1994. I have practised my profession since 1981.

5. I am a licensed Professional Geoscientist of the Association of Professional Engineers and Geologists of British Columbia (Member #23483); a member of the Association of Professional Engineers and Geoscientists of Saskatchewan (Member #27847), a Licensee of the Northwest Territories and Nunavut Association of Professional Engineers and Geoscientists (#L1028); and, a Fellow of the Geological Association of Canada.

6. I have read the definition of “qualified person” set out in the National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I visited the Coscuez Mining Property from April 4 to 6, 2018, and again September 15 to 24. I have done no work on the property prior to this report.

8. I am responsible for preparation of all sections of this report, and jointly responsible for Section 14 with Warren Boyd, and Ross MacFarlane.

9. I am independent of the issuer as described in Section 1.5 of NI 43-101.

10. My relevant experience includes more than 30 years examining, evaluating and reporting diamond, precious and base metal commodities, as well as nickel, copper, PGE, potash, lithium and various other commodities including hydrocarbons in many parts of the world including the NWT, Nunavut, Ontario, Quebec, the U.S.A., Guyana, Costa Rica, Russia, Argentina and Brazil.

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11. I have read NI 43-101, Form 43-101F1 and the technical report and have prepared the technical report in compliance with NI 43-101, Form 43-101F1 and generally accepted Canadian mining industry practice.

12. As of the date of the technical report, to the best of my knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

“signed and sealed”

Harrison Cookenboo, Ph.D., P.Geo. January 23, 2019 Vancouver, B.C.

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CERTIFICATE OF QUALIFIED PERSON

I, Warren F. Boyd, B.Sc, FGA, FCGmA, FGAC do hereby certify that:

1. I live at Suite 546, 109 Thomas Street, Oakville, Ontario L6J 7R4.

2. I am a Senior Associate Geologist/Gemmologist with Watts, Griffis and McOuat Limited, a firm of consulting engineers and geologists, which has been authorized to practice professional engineering by Professional Engineers Ontario since 1969, and professional geoscience by the Association of Professional Geoscientists of Ontario.

3. This certificate accompanies the report titled “Technical Report on the Coscuez Emerald Mine, Boyacá Department, Colombia for Fura Gems Inc.”, effective date January 23, 2019.

4. I graduated with a B.Sc. (Honours) Geology, University of Toronto (1975), and have practised my profession since that time.

5. I am a Diploma Graduate Gemmologist and Fellow of the Gemmological Association and Gem Testing Lab of Great Britain-GemA (F.G.A - D4406); and Diploma Graduate Gemmologist, Past President, and Fellow of the Canadian Gemmological Association (F.C.Gm.A – 1984 No. A8). I am a Corporate Member of the: American Gem Trade Association (AGTA – Potentate Mining LLC). I am on the Board of Directors, and am a Member of the International Colored Gemstone Association-ICA. I am a member of the Prospectors and Developers Association of Canada (#22727). I am a Fellow of the Geological Association of Canada (FGAC – March 1982). I am the Managing Director of Algonquian Diamond Counsellor International (ADCi ) and active rough diamond valuator team member under contract with the Government of Quebec valuing rough diamond productions in the Province of Quebec for royalty assessment purposes.

6. I have read the definition of “qualified person” set out in the National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliations with professional associations (as defined in NI 43-101) and past relevant work and gemstone trading experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I visited the Coscuez mining property from April 4 to 6, 2018, and the corporate offices of Fura in Bogota again on October 12th to 17th 2018 I have done no work on the property prior to this report.

8. I am responsible for the preparation of Section 14 of this report, and jointly responsible for Sections 1 to 27 with Harrison Cookenboo, and Ross MacFarlane.

9. I am independent of the issuer as described in Section 1.5 of NI 43-101.

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10. My relevant experience includes over 35 years in valuation of gemstones with particular experience in coloured gemstone mining operations in Brazil, Mexico, Greenland, USA, Canada, and elsewhere. I haves directed marketing for an emerald mining operation in Russia, am currently directing marketing for a sapphire mining operation in Montana and coloured gemstone mining operations in Arizona. I have coloured gemstone marketing experience in the USA, Mexico, Canada, Hong Kong, Thailand, Japan, and India. I have been involved in the valuation of rough diamonds from Canada’s diamond mines in the Northwest Territories on behalf of the Government of Canada. I am currently involved in the valuation of the rough diamond productions in the Province of Quebec under contract with Revenu Quebec for royalty assessment purposes. I have valuation experience in the valuation of rough diamonds and rough coloured gemstones from numerous other Canadian and foreign rough gemstone occurrences. I am an experienced rough diamond valuator and I have assisted in the implementation of marketing programs for small-scale rough diamond producers in and Africa. I am an expert rough diamond and coloured gemstone buyer and an experienced processor of coloured gemstone and diamond rough. I have extensive marketing experience to the North American jewellery trade in the sales of coloured gemstones, diamonds, gold and platinum jewellery.

11. I have read NI 43-101, Form 43-101F1 and the technical report and have prepared the technical report in compliance with NI 43-101, Form 43-101F1 and generally accepted Canadian mining industry practice.

12. As of the date of the technical report, to the best of my knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

“signed and sealed”

Warren Boyd, B.Sc., F.G.A. January 23, 2019 Oakville, Ontario

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CERTIFICATE OF QUALIFIED PERSON

I, G. Ross MacFarlane, P.Eng. do hereby certify that:

1. I live at 208 Queens Quay West, Suite 902, Toronto, ON L6M 1V5.

2. I am a Senior Associate Mining and Metallurgical Engineer with Watts, Griffis and McOuat Limited, a firm of consulting engineers and geologists, which has been authorized to practice professional engineering by Professional Engineers Ontario since 1969, and professional geoscience by the Association of Professional Geoscientists of Ontario.

3. This certificate accompanies the report titled “Technical Report on the Coscuez Emerald Mine, Boyacá Department, Colombia for Fura Gems Inc.”, effective date January 23, 2019.

4. I am a graduate with from The Technical University of Nova Scotia with a B.Eng. in Mining Engineering in 1973. I have worked as a Mining and Metallurgical Engineer continuously since my graduation from university.

5. I am a licensed Professional Engineer and Member of Professional Engineers Ontario (#28062503).

6. I have read the definition of “qualified person” set out in the National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.

7. I visited the Coscuez Mine property on April 4 to 6, 2018.

8. I am jointly responsible for the preparation of Sections 1, 14, 25 and 26 of this report, with Harrison Cookenboo, and Warren Boyd.

9. I am independent of the issuer as described in Section 1.5 of NI 43-101.

10. My relevant experience includes over 45 years in the mining industry with particular expertise in metallurgy, and extensive experience in various commodities such as iron, gold, silver, nickel, uranium, copper, lead, zinc, platinum group minerals and industrial minerals. Worked in North America, Europe, Asia and South America.

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11. I have read NI 43-101, Form 43-101F1 and the technical report and have prepared the technical report in compliance with NI 43-101, Form 43-101F1 and generally accepted Canadian mining industry practice.

12. As of the date of the technical report, to the best of my knowledge, information and belief, the technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading.

“signed and sealed”

G. Ross MacFarlane, P.Eng. January 23, 2019 Toronto, Ontario

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