Alecto Minerals Plc Competent Person's Report

ALECTO MINERALS PLC

COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

August 2017 Wardell Armstrong International Baldhu House, Wheal Jane Earth Science Park, Baldhu, Truro, Cornwall, TR3 6EH, United Kingdom Telephone: +44 (0)1872 560738 Fax: +44 (0)1872 561079 www.wardell-armstrong.com

DATE ISSUED: 10 August 2017 JOB NUMBER: ZT61-1601 VERSION: V6.0 REPORT NUMBER: MM1131 STATUS: Final

ALECTO MINERALS PLC

COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

AUGUST 2017

PREPARED BY: Phil Newall Managing Director, Mining Geologist-Competent Person Nick Szebor Principal Resource Geologist Mark Mounde Technical Director, Mining Engineer Philip King Technical Director, Mineral Processing Engineer Alison Allen Associate Director, Environmental Specialist Mark Kenwright Associate Director Geologist Veronika Luneva Senior Financial Analyst

APPROVED BY: Phil Newall Managing Director

This report has been prepared by Wardell Armstrong International with all reasonable skill, care and diligence, within the terms of the Contract with the Client. The report is confidential to the Client and Wardell Armstrong International accepts no responsibility of whatever nature to third parties to whom this report may be made known.

No part of this document may be reproduced without the prior written approval of Wardell Armstrong International.

ENERGY AND CLIMATE CHANGE ENVIRONMENT AND SUSTAINABILITY INFRASTRUCTURE AND UTILITIES Wardell Armstrong is the trading name of Wardell Armstrong International Ltd, Registered in England No. 3813172. LAND AND PROPERTY MINING AND MINERAL PROCESSING Registered office: Sir Henry Doulton House, Forge Lane, Etruria, Stoke-on-Trent, ST1 5BD, United Kingdom MINERAL ESTATES UK Offices: Stoke-on-Trent, Cardiff, Carlisle, Edinburgh, Greater Manchester, London, Newcastle upon Tyne, Sheffield, Taunton, Truro, West Bromwich. International Offices: Almaty, Moscow WASTE RESOURCE MANAGEMENT

Wardell Armstrong International Baldhu House, Wheal Jane Earth Science Park, Baldhu, Truro, Cornwall, TR3 6EH, United Kingdom Telephone: +44 (0)1872 560738 Fax: +44 (0)1872 561079 www.wardell-armstrong.com

The Directors The Directors Alecto Minerals Plc African Alliance 47 Charles Street, illovo Edge Office Block, London, Building 4, W1J 5EL Cnr Harries and Fricker roads, illovo, 2196 RSA

10 August 2017

Competent Person’s Report on the Mineral Assets Held by Alecto in Africa

Scope and purpose of the CPR Wardell Armstrong International (“WAI”) of Baldhu House, Wheal Jane Earth Science Park, Baldhu, Truro, Cornwall, TR3 6EH, has been commissioned by Alecto Minerals Plc (“Alecto”, the “Company”, or the “Client”), to complete a Competent Person's Report (the “CPR”) on the assets held by the Company in Africa.

This process has been triggered by the conditional acquisition of Cradle Arc Investments (Proprietary) Limited (“Cradle”) by Alecto, a company incorporated in Botswana, which owns the Mowana Copper Mine (“Mowana” or the “Mine”) in north eastern Botswana.

The Company is intending to list by placement on the Botswana Stock Exchange Main Board (“BSE”). Therefore, in terms of Section 12 of the BSE Listings requirements, the CPR is provided for the BSE Listings Committee’s review, as well as any other potentially affected parties (such as potential investors in the pre-ceding private placement etc.).

A copy of the CPR will be made available on Alecto’s website.

The CPR has been prepared by WAI as of 19 June 2017 based on information and data supplied by the Company.

The CPR has been prepared under the requirements of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, as published by the Joint Ore Reserves Committee of the Australian Institute of Mining & Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia.

Consultants and interests WAI is an internationally recognised, independent minerals industry consultancy. All consultants used in the preparation of this report are employed directly by WAI and have relevant professional experience.

Details of the principal consultants involved in the preparation of this CPR are as follows:

Dr Newall is Managing Director at WAI.

Dr Phil Newall, BSc (ARSM), PhD (ACSM), CEng, FIMMM, Phil is a mining geologist with over 30 years’ experience of providing consultancy services to minerals companies throughout the world, with particular specialisation in CIS, Europe, and Africa. He has a Mining Geology degree from Royal School of Mines in London, and a PhD in Exploration Geochemistry from Camborne School of Mines in Cornwall, UK. During his long career as a consulting geologist, Phil has undertaken a large variety of exploration and mining-related contracts, from project management through to technical audits of both metalliferous (specifically gold and base metals) and industrial mineral deposits. He has also acted as an Expert Witness in a number of high profile mining related legal cases. From a corporate standpoint, Phil is a Partner in the Wardell Armstrong Group as well Managing Director of WAI where he has responsibility for the Company’s Mining Division and international offices in Moscow and Almaty.

Phil is a fellow of the IMMM The Institute of Materials, Minerals and Mining 297 Euston Road London NW1 3AD Tel: +44 (0)20 7451 7300 (main switchboard) Fax: +44 (0)20 7839 1702

Independence WAI is independent of the Company and Cradle Arc, its directors, senior management and its advisers.

Neither WAI, its directors, employees or company associates (the “WAI Parties”) have any commercial interest, either direct, indirect or contingent in the Group nor in any of the assets reviewed in this report nor hold any securities in the Company, its subsidiaries or affiliates nor have the WAI Parties:

i. received, directly or indirectly, any securities from the Company within the twelve months preceding the application for admission to BSE; ii. entered into contractual arrangements (not otherwise disclosed in the Appendix) to receive, directly or indirectly, from it on or after admission and of the following:

ZT61-1601/MM1131 Final V6.0 Page 2 August 2017

• fees totalling £10,000 or more; • securities in the Company where these have a value of £10,000 or more calculated by reference to the issue price or, in the case of an introduction, the expected opening price; or • any other benefit with a value of £10,000 or more at the date of admission.

WAI Remuneration The only commercial interest WAI has in relation to the Company is the right to charge professional fees to the Company at normal commercial rates, plus normal overhead costs, for work carried out in connection with the preparation of the CPR. The payment of fees to WAI is in no way contingent upon conclusions contained in the CPR, the success of the Company’s Admission, the value of the Company at Admission, or on the success or otherwise of the Company’s own business dealings.

Disclaimer/Reliance on Experts WAI has critically examined the information provided by the Company and made its own enquiries and applied its general geological competence. WAI has not independently checked title interests with Government or licence authorities.

The evaluation presented in the CPR reflects our informed judgement based on accepted standards of professional investigation, but is subject to generally recognised uncertainties associated with the interpretation of geological, geophysical and subsurface data. It should be understood that any evaluation, particularly one involving exploration and future minerals developments, may be subject to significant variations over short periods of time as new information becomes available.

Consent and Confirmations

The CPR has been prepared in accordance with, and satisfied the content requirements of, the Section 12 of the BSE Listings requirements, as issued by the Botswana Stock Exchange.

WAI accepts responsibility for the CPR and has taken all reasonable care to ensure that the information contained in this letter and the CPR is in accordance with the facts and there is no omission likely to affect its import.

Based on the information provided to WAI and to the best of its knowledge, WAI has not become aware of any material change or matter affecting the validity of the CPR.

Yours faithfully,

ZT61-1601/MM1131 Final V6.0 Page 3 August 2017

Dr Phil Newall Managing Director WAI

ZT61-1601/MM1131 Final V6.0 Page 4 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

CONTENTS

EXECUTIVE SUMMARY ...... 1 Botswana...... 1 Zambia ...... 11 Mali ...... 18 1 TERMS OF REFERENCE ...... 21 1.1 Introduction ...... 21 1.2 Project Description ...... 21 1.3 Independent Consultants...... 28 1.4 Data Reviewed ...... 29 1.5 Personal Inspections ...... 29 1.6 Units and Currency ...... 30 1.7 Curriculum Vitae of the Directors ...... 30 2 RELIANCE ON OTHER EXPERTS ...... 33 2.1 Introduction ...... 33 3 BOTSWANA - THE MOWANA PROJECT ...... 34 3.1 Location, Access and Infrastructure...... 34 3.2 Topography & Climate ...... 35 3.3 Botswana Summary Information ...... 36 3.4 Regulatory Environment & Mineral Tenure ...... 37 3.5 Project History ...... 40 3.6 Geology & Mineralisation ...... 43 3.7 Mineral Resource Estimation ...... 50 3.8 Mining ...... 63 3.9 Mineral Processing ...... 78 3.10 Environment, Social, Health & Safety ...... 93 3.11 Economic Appraisal ...... 98 4 ZAMBIA ASSETS ...... 109 4.1 Location, Access and Infrastructure...... 109 4.2 Topography & Climate ...... 110 4.3 Zambia Summary Information ...... 111 4.4 Regulatory Environment & Mineral Tenure ...... 112 4.5 Project History ...... 114 4.6 Geology & Mineralisation ...... 117 4.7 Exploration ...... 125 4.8 Mineral Resource Estimation ...... 128 4.9 Mining ...... 143 4.10 Mineral Processing ...... 153 4.11 Environment, Social, Health & Safety ...... 165 5 MALI ASSETS ...... 173 5.1 Introduction ...... 173 5.2 Location, Access and Infrastructure...... 173 5.3 Topography & Climate ...... 176

ZT61-1601/MM1131 Final V6.0 Page i August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.4 Mali Summary Information ...... 176 5.5 Regulatory Environment & Mineral Tenure ...... 178 5.6 Exploration History ...... 180 5.7 Geology and Mineralisation ...... 181 5.8 Exploration and Drilling ...... 191 5.9 Mineral Resource Estimation ...... 200 5.10 Environment, Social, Health & Safety ...... 202 5.11 Summary ...... 204 6 GLOSSARY ...... 205

TABLES

Table 1.1: Alecto’s Botswana Mineral Assets ...... 23 Table 1.2: Alecto Mineral Resource ...... 24 Table 3.1: Botswana GDP Forecast (2016-2020) ...... 37 Table 3.2: Alecto’s Botswana Mineral Assets ...... 40 Table 3.3: Extracts from African Copper Plc’s Published Financial Statements ...... 42 Table 3.4: Mowana Mine (South) Mineral Resources (after Golder Associates, 2015) ...... 61 Table 3.5: Mowana Mine (North) Mineral Resources (after Golder Associates, 2014)...... 61 Table 3.6: Mowana Slope Angles ...... 65 Table 3.7: Mowana Equipment Recently Added ...... 68 Table 3.8: Mowana Projected Equipment by December 2018 ...... 69 Table 3.9: Makala Operating Costs ...... 75 Table 3.10: Makala Capital Costs ...... 75 Table 3.11: Heavy Liquid Pre-Concentration Test Results ...... 80 Table 3.12: Supergene Heavy Liquid Test Results at 6mm ...... 80 Table 3.13: Grade and Recovery of Rougher Concentrates ...... 82 Table 3.14: Project Mining Operating Costs (LOM, Real Values) ...... 99 Table 3.15: Open Pit Mining Cost (Bell & CAT Quotations) ...... 99 Table 3.16: Project Operating Processing Costs (LOM, Real Values) ...... 100 Table 3.17: Plant Operating Cost (Monthly, Real Values) ...... 101 Table 3.18: Project G&A Costs (US$’000 LOM, Real Values) ...... 101 Table 3.19: Initial Capital Costs ...... 102 Table 3.20: Processing Inputs and Concentrate Production Summary ...... 102 Table 3.21: Nominal Conversion Factors and Project Cu Price ...... 103 Table 3.22: Project Realisation Costs ...... 103 Table 3.23: Project Net Revenue Calculation (LOM) ...... 103 Table 3.24: Real vs. Nominal Cash Flows Summary ...... 105 Table 3.25: Nominal Cash Flow Model Results (US$) ...... 106 Table 4.1: Zambia Economic Forecast (2016-2020) ...... 112 Table 4.2: Concession Area Coordinates ...... 113 Table 4.3: Ownership and Exploration Summary ...... 116 Table 4.4: Domain Composite Statistics (Au g/t) ...... 130 Table 4.5: Block Model Parameters ...... 132

ZT61-1601/MM1131 Final V6.0 Page ii August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.6: Dry Bulk Density ...... 132 Table 4.7: Matala Gold Deposit Mineral Resource Summary ...... 135 Table 4.8: Block Model Construction Parameters (UTM Grid Coordinates) ...... 139 Table 4.9: Dunrobin Block Model Bulk Densities ...... 139 Table 4.10: Dunrobin Mineral Resource Statement (Coffey Mining, 2012) ...... 143 Table 4.11: Summary Optimisation Parameters (after PenMin, 2016) ...... 144 Table 4.12: Matala Pit Design Parameters ...... 144 Table 4.13: Dunrobin Pit Design Parameters ...... 145 Table 4.14: Summary Mine Production Schedule ...... 148 Table 4.15: Equipment Capital Cost (after PenMin, 2016) ...... 149 Table 4.16: Matala Underground Equipment ...... 152 Table 4.17: Matala Composite Head Sample Analyses ...... 154 Table 4.18: Matala Composite Detailed Chemical Analyses ...... 154 Table 4.19: Gravity and Gravity Tailings Leach Test Results ...... 155 Table 4.20: Gravity-Leach Grind Optimisation Testwork ...... 155 Table 4.21: Bond Rod and Ball Mill Work Index Results ...... 156 Table 4.22: Dunrobin Composite Testwork Head Analyses ...... 157 Table 4.23: Dunrobin Composite A Gravity/Gravity Tails Leach Testwork ...... 158 Table 4.24: Bond Rod and Ball Mill Work Index Results ...... 158 Table 4.25 : Dunrobin Gravity Separation/Cyanidation Time Leach Testwork ...... 159 Table 4.26: Dunrobin Flotation Testwork ...... 159 Table 4.27: Process Plant Capital Cost Estimate Summary ...... 164 Table 5.1: Mali Economic Forecast ...... 178 Table 5.2: Summary of Sample Data ...... 191 Table 5.3: Gourbassi Mineral Resource Estimate (Unconstrained) ...... 201 Table 5.4: Gourbassi Mineral Resource Estimate (Constrained) ...... 201

FIGURES

Figure 1.1: Location Map of Mowana ...... 22 Figure 1.2: Zambia Map ...... 25 Figure 1.3: Kossanto East (Farikounda) Permit Area ...... 26 Figure 1.4: Kossanto West Permit Area ...... 28 Figure 3.1: Location Map of Mowana Project, Northeastern Botswana ...... 34 Figure 3.2: Regional Geology and Mineral Deposits of Botswana ...... 43 Figure 3.3: Local Geology and Cross Section of the Mowana Deposit ...... 45 Figure 3.4: Resource Potential Within the License Areas ...... 50 Figure 3.5: Mowana Deposit Plan ...... 51 Figure 3.6: Mowana North Mineral Resource Classification (Golder Associates, 2015) ...... 59 Figure 3.7: Pit Shape @ US$1.85/lb Cu ...... 66 Figure 3.8: Cross Section @ US$1.85/lb Cu ...... 67 Figure 3.9: Pit Shape @ US$2.15/lb Cu ...... 67 Figure 3.10: Cross Section @ US$2.15/lb Cu ...... 67 Figure 3.11: Proposed 22 Month Production Schedule ...... 71

ZT61-1601/MM1131 Final V6.0 Page iii August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 3.12: Production by Ore Type for the 22 Month Schedule ...... 72 Figure 3.13: Thakadu / Makala with Indicated Decline Development...... 73 Figure 3.14: Makala/ Thakadu with Indicated Cu Grades ...... 74 Figure 3.15: Makala/ Thakadu with Indicated Ag Grades ...... 74 Figure 3.16: Mowana Plant Modified Flowsheet ...... 91 Figure 3.17: Sensitivity Report for NPV ...... 108 Figure 4.1: Location of Project Area, Zambia ...... 109 Figure 4.2: Locality Map of Project ...... 110 Figure 4.3: Concession Area, Showing the Historic Matala and Dunrobin Mines ...... 114 Figure 4.4: Regional Geological Map of Zambia Showing the Luiri Hill Tenement Area ...... 117 Figure 4.5: Map Showing Gold and Gold/Copper Occurrences ...... 119 Figure 4.6: Geological Map of the Matala Dome and Surrounding Area ...... 121 Figure 4.7: Plan View of Mineralised Domains (Coffey Mining, 2012) ...... 129 Figure 4.8: Matala Resource Model above 850mRL (Coffey Mining, 2012) ...... 134 Figure 4.9: Dunrobin Mineralisation Interpretation ...... 137 Figure 4.10: Dunrobin Cross Section Outlining Zonal and Domain Coding ...... 137 Figure 4.11: Oblique View of Dunrobin Mineral Resource Classification ...... 142 Figure 4.12: Matala Pit ...... 147 Figure 4.13: Dunrobin Pit ...... 148 Figure 4.14: Dunrobin Plant Flowsheet ...... 161 Figure 5.1: Location Map of the Kossanto Project ...... 173 Figure 5.2: Kossanto East Project ...... 174 Figure 5.3: Kossanto West Project ...... 175 Figure 5.4: Map of Mali ...... 177 Figure 5.5: Kossanto East and West Licence Areas ...... 180 Figure 5.6: Geology of Mali ...... 182 Figure 5.7: Regional Geological Map of the Kenieba Inlier ...... 183 Figure 5.8: Minerals Occurrences in Mali ...... 184 Figure 5.9: Geological Map of Gourbassi East ...... 186 Figure 5.10: Geological Map of Gourbassi West ...... 187 Figure 5.11: Kossanto West, comprising the Kobokoto East and Koussikoto ...... 190 Figure 5.12: Gourbassi East Drilling Highlights ...... 192 Figure 5.13: Gourbassi East Drilling Highlights ...... 193 Figure 5.14: RC drilling at Massakama Central ...... 195 Figure 5.15: Drill Hole Location Plan Map of the “Big Pit” Prospect ...... 196 Figure 5.16: Drill Hole Location Plan Map of the Goreba Prospect ...... 197 Figure 5.17: RC Drilling at Rhyolite Hill ...... 198 Figure 5.18: RAB Drilling and Channel Sampling at Toukwatou ...... 199

PHOTOS

Photo 3.1: Topography Around the Mowana Pit ...... 35 Photo 3.2: Typical Brecciated, Carbonate-rich Oxidised Ore ...... 46 Photo 3.3: Looking South from North Pit Showing Large Graphitic Mass in Centre ...... 47

ZT61-1601/MM1131 Final V6.0 Page iv August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.4: Mining Previously Blasted Material, South end of North Pit ...... 63 Photo 3.5: Drilled Bench and ADT, North Pit ...... 64 Photo 3.6: Dewatering the South Pit ...... 65 Photo 3.7: Mowana South, Looking North with Waste Dumps on Western Pit Rim ...... 69 Photo 3.8: RC Rig on the Saddle Between North and South Pits ...... 72 Photo 3.9: ADT Tipping into Primary Jaw Crusher ...... 83 Photo 3.10: Crushing Plant ...... 84 Photo 3.11: Fine Ore Stockpile ...... 85 Photo 3.12: Mowana Flotation Plant ...... 86 Photo 3.13: Mowana Tailings Impoundment Area ...... 87 Photo 3.14: Adroit Process Control System ...... 87 Photo 4.1: Dunrobin Mineralised Core ...... 124 Photo 4.2: Coreshed ...... 127 Photo 4.3: RC Chip Storage and RC Chip Trays ...... 127

ZT61-1601/MM1131 Final V6.0 Page v August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

EXECUTIVE SUMMARY

This Competent Person’s Report presents information pertaining to the assets held by Alecto Minerals Plc in Africa. These comprise the recently acquired and re-opened Mowana Mine in Botswana, the Matala and Dunrobin properties in Zambia, and other Joint Ventured assets in Mali.

Phil Newall, BSc (ARSM), PhD (ACSM), CEng, FIMMM, Managing Director of WAI, Phil King, BSc (Eng) Mineral Technology (Hons), Technical Director, and Mark Mounde BEng, CEng, MIMMM, Technical Director conducted a personal inspection of the Mowana Project between 11 to 12 January 2017, whilst over the same time period, Mark Kenwright, BSc, MSC, CP (Geo), FAusIMM, Associate Director visited the Zambian property.

More recently (5th April 2017), Phil Newall has re-visited the Mowana operations to observe the re- opened mine and plant.

As WAI has previously worked on the Malian assets, no recent site visits were required, as WAI had completed site visits in 2013.

Botswana

General

As per recent press releases, PenMin has purchased the assets of Mowana Mine out of liquidation, and sold this to Alecto for an approximate amount of GBP7.6m. The mine has now recommenced operations and is producing copper concentrate.

This CPR assessment has focussed on evaluation of the underlying data extant of the Mowana Mine, the business strategy of re-opening the mine and existing plant, as well as upgrading the process plant to incorporate the use of Dense Media Separation (“DMS”) pre-concentration, and the processes required to bring the operations in line with internationally accepted standards.

The shortfalls in the quality of supporting data in terms of resources and reserves are being addressed by an extensive program of core relogging, mineralogical and metallurgical characterisation testwork and assays, which will culminate in the re-modelling of the resource to fill in the identified shortfalls of the mine planning.

Indicative DMS testwork has supported the potential for upgrading the ores prior to milling and flotation, further works to qualitatively and quantitatively support the proposed upgrade project has been commenced by the PenMin team. A DMS process route also has the potential for handling the carbonate mineralisation, which at present has been excluded from the Mineral Resources reported, providing a potential increase to the Mineral Resource base. As such, although there are underlying historical shortfalls in data generation, as well as the poor management and control of all processes by previous owners, WAI believes that these can be readily rectified. The Company has gone a long

ZT61-1601/MM1131 Final V6.0 Page 1 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

way towards this through the proper implementation of data systems and controls which has enabled Alecto to bring the Mowana mine back into operation.

History

Previously known as the Dukwe Copper Project, the Mowana Mine is located in northeastern Botswana, some 120km northwest of Francistown, the second largest city in Botswana. As the mine only went into care and maintenance in 2015, all the existing infrastructure in terms of power, water and communications are still present.

The recent history of the project involved African Copper PLC, an AIM quoted company, who acquired the project and undertook additional drilling and metallurgical testwork which was compiled into a NI 43-101 Compliant Feasibility Report by Read, Swatman and Voight (“RSV”), relying on geological modelling by Caracle Creek (“CCIC”), mine design by Turgis Consulting and plant design by Senet Projects. This new mine plan relied on recovering copper rich concentrates through flotation, and these concentrates would be sold on to smelter companies. Construction of the project occurred in 2006/2007, with commissioning in 2008.

The following data is sourced from financial statements published by African Copper:

Mowana, under African Copper’s ownership, was profitable and cash generative at an operating level in the years ending 31 March 2013, 2014, and in the half year ending 30 September 2014. This information is the latest available published financial reports for African Copper, prior to the cessation of production in 2015. However, African Copper owed ZCI US$96M and had net liabilities of almost US$60M at 30 September 2014, as shown from the extracts from African Copper plc’s published financial statements, as shown in the table below:

Extracts from African Copper Plc’s Published Financial Statements Year ended 31 Year ended 31 March Six months ended 30 September March 2013 2014 (audited) US$’000 2014 (unaudited) US$’000 (audited) US$’000 Turnover 60,464 58,735 30,830 Operating profit from mining 13,712 12,714 3,966 operations before impairment and administrative expenses Operating profit/(loss) 5,447 (20,788) (489) Loss after tax (12,967) (32,639) (5,414) Total non-current assets 72,635 50,910 61,531 Net current liabilities (86,417) (96,933) (105,529) Total non-current liabilities (16,149) (8,601) (16,008) Total equity (29,931) (54,624) (60,006) Net cash inflow from operating 8,703 13,712 9,330 activities

ZT61-1601/MM1131 Final V6.0 Page 2 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

In 2015, African Copper expected to end production at the nearly exhausted Thakadu mine, and move production to the Mowana pit, incurring significant capital costs. The Mowana pit was expected to achieve lower grades than Thakadu, and at the same time copper prices were falling.

Furthermore, African Copper had had a series of problems with mining contractors which had meant production falling behind schedule, and requiring more working capital in the short term. Accordingly, African Copper’s financial position was under pressure from a combination of factors, including: a high level of debt, rising working capital requirements, rising costs and falling copper prices.

In May 2015, African Copper announced proposals to cancel its admission to trading on AIM as a cost saving measure, which became effective in June 2015. In November 2015, ZCI, the major shareholder and creditor in African Copper, announced the provisional liquidation of Messina Copper (Botswana) Pty Ltd, the African Copper subsidiary which held the Mowana assets.

Following the acquisition, Alecto has re-opened the Mowana open pit (as per the acquisition requirements), with initial production coming from previously blasted ore in the North pit and stockpiled material. At the time of the second site visit conducted by Dr Phil Newall, (early April 2017), a bench has been drilled and is awaiting an explosives license to proceed. The plant has been restarted and is working efficiently.

In time, the Company may also be looking to install a DMS plant at Mowana and is considering development of an underground operation at Makala (the underground extension to Thakadu).

Clearly this process is somewhat fluid, but Alecto is taking every measure to address the main areas of concern that hampered previous mining operations at Mowana.

Geology & Mineralisation

The Mowana Copper Project is hosted within north-northeast striking, steeply east dipping carbonaceous and argillaceous metasediments of the Matsitama Metasedimentary Group which are enclosed within foliated granitoids of the Mosetse Complex.

Previous open pit mining exploited oxide ores from the Mowana Main (North and South pits), although the ore zone continues to the north into Mowana North and Conical Pit.

Hypogene sulphide mineralisation occurs within sub-vertical epithermal quartz-calcite vein breccias containing predominantly chalcopyrite + pyrite ± galena and sphalerite mineralisation. Hypogene mineralisation is capped by secondary oxide and supergene copper enrichment up to depths of approximately 50m and 150m below surface respectively. Ore zone thicknesses can be several hundred metres related to the geometry of the Bushman Shear which hosts the orebodies.

ZT61-1601/MM1131 Final V6.0 Page 3 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA been identified. Only the second vein generation bears Cu, Pb & Zn sulphides. Areas of intense vein stockworks have been termed breccias and form the copper deposits.

The presence of graphite within the metasediments that enclose the mineralisation has historically been a problem for processing. In terms of the current Mowana pit, evidence suggests that the South Pit has a higher copper grade, less graphite, but the sulphide mineralisation is deeper, whilst the North Pit has a lower grade, but with more graphite, although the sulphides are nearer surface. However, the very visual nature of the graphite should allow avoidance of the worst of this material during mining.

Therefore, in summary, the near surface tenor of the orebody at Mowana is characterised by the mixed nature of oxide and supergene enrichment. With increasing depth supergene chalcocite mineralisation continues and dominates with a nominal transition to chalcopyrite-bearing hypogene mineralisation at around 150m below surface.

Mineral Resources

Mineral Resource Estimates for the Mowana deposit have been carried out by Golder Associates according to the guidelines of the JORC Code (2012) and the SAMREC Code. The modelling and estimation works were carried out in two phases with the southern Mowana Mine, and Mowana North areas estimated separately. In September 2014, Golder Associates issued the report “Geological Modelling and Resource Estimation of the Mowana North Project” on behalf of African Copper, the previous owners of the project. A second report “Geological Modelling and Resource Estimation Update of the Mowana South Project” was issued in June 2015 by Golder Associates.

The Mineral Resources for Mowana Mine South as reported by Golder Associates as of June 2015, at a cut-off grade of 0.25% CuTotal is provided in the table below.

Mowana Mine South Mineral Resources (after Golder Associates, 2015) Tonnage Classification Cu (%) Pb (%)* Zn (%)* Ag_ppm Au_ppm (000) Measured 14,725 1.00 0.04 0.02 0.58 0.005 Indicated 26,308 0.88 0.04 0.03 1.30 0.002 Measured + 41,033 0.92 0.04 0.02 1.05 0.003 Indicated Inferred 23,976 0.71 0.03 0.03 1.57 0.00001 Notes: *Typographical error in the Golder Associates report records the units for Pb and Zn as being ppm.

The Mineral Resources for Mowana Mine North as reported by Golder Associates as of September

2014, at a cut-off grade of 0.25% CuTotal is provided in the table below.

Mowana Mine North Mineral Resources (after Golder Associates, 2014) Classification Tonnage (000) Cu (%) Pb (%) Zn (%) Ag_ppm Indicated 31,060 1.00 0.02 0.01 1.50 Inferred 75,802 0.78 0.0006* 0.0009** 2.08 Notes: *Reported in Golder Associates report as 6.19ppm Pb. **Reported in Golder Associates report as 9.06ppm Zn

ZT61-1601/MM1131 Final V6.0 Page 4 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI has carried out a review of the Golder Associates Mineral Resource reports along with the corresponding block models, wireframes and sample data. Overall the modelling approach adopted by Golder Associates is appropriate and in line with industry best practice, and the grade estimates are a fair representation of the sample data on which the estimates are based. WAI has, however, identified a few areas that require additional work, as detailed below.

One of the most notable risks to the Mineral Resource Estimate was the lack of detail pertaining to the oxide, supergene and hypogene zonation within the deposit and the associated copper speciation.

WAI is aware that previous mining operations have faced challenges regarding the handling of different oxidation and mineral species through the process plant. For robust mine planning, it is key that the Mineral Resource model on which the mine plan is based contains sufficient detail to understand how material will behave when it is passed through the processing plant.

WAI is aware that the Alecto geologists are currently completing remedial action in terms of capturing missing core logs, and undertaking metallurgical characterisation. These additional works will allow a more accurate domaining of the block model. As such, WAI is aware that the Alecto database is being updated with these missing logs, and recognises that these logs will add considerable value to the understanding of the geological model.

The historic lack of detailed geological logging and limited number of acid soluble copper assays (Cuacid) impacts on robustly defining the redox zonation at Mowana. Whilst the oxide, supergene and hypogene zones have been modelled at Mowana Mine (South), no such zones have been modelled at

Mowana North. The limited numbers of Cuacid assays that were used by Golder Associates in the

Mineral Resource database, has resulted in no Cuacid estimates into the Mineral Resource block models. WAI understands that there are an additional 156 vertical holes with CuAcid assays, which have been omitted from the Mineral Resource Estimates.

This information is being compiled by Alecto and will be a good basis for improving the definition of mineralisation domains. The incorporation of CuAcid assays into the models is important when trying to ascertain the proportion of copper oxides in relation to copper sulphides and silicates.

The current lack of domaining for the oxide, supergene, and hypogene mineralisation at Mowana North, and the limited support for the interpretation of these domains at Mowana Mine is a key feature of the geological interpretation that requires improvement. Given the implication of these domains on the processing of ore, and likely recoveries, it is paramount that future estimation works improve the domaining within the modelling.

To address this, WAI is aware that Alecto has commenced the process of re-evaluating the data to better model the mineralisation and with the updated database and domaining, which will add value to any re-estimation.

Golder Associates has carried out two separate resource estimates for Mowana Mine (South) and Mowana North, however, both these areas are part of the same mineralised structure. WAI has noted

ZT61-1601/MM1131 Final V6.0 Page 5 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA that there is a degree of overlap between the two models in the central part of the deposit. WAI estimates the degree of overlapping to be in the order of 10Mt at a cut-off grade of 0.25% CuTotal. Whilst this overlap impacts upon the current Mineral Resources, WAI is aware that Alecto has combined the models for internal mine planning purposes, thus rectifying the overlap. Future Mineral Resource Estimates should be undertaken over the whole deposit yielding a single block model, thus resolving the overlaps and ensuring consistency in the estimation methods.

WAI has noted that the Mineral Resource Estimates currently exclude the carbonate mineralisation, as Golder Associates considered this material to be non-recoverable. Ongoing DMS testwork by Alecto shows this is a potentially erroneous assumption. Subject to confirmation by the DMS testwork, the carbonate mineralisation could be reported under future Mineral Resource Estimates.

Lastly, the Mineral Resources have been reported in their entirety, whilst under the JORC Code (2012) there is a requirement to demonstrate reasonable prospects for eventual economic extraction. Standard industry practice is to carry out a pit optimisation on the Mineral Resource Estimate (“MRE”) using realistic, albeit uplifted, pricing, to demonstrate which portion of the Mineral Resource has prospects for extraction.

Alecto has carried out a series of their own internal pit optimisations, and whilst these do not have a bearing on the officially reported JORC Mineral Resources, they show a commitment by Alecto to best practice and will assist in constraining future Mineral Resource Estimates. Any future Mineral Resource updates will require such pit optimisations to be carried out and this may potentially lead to the omission of some of the currently reported Mineral Resources.

Therefore, as WAI understands, optimisations, Life of Mine plan and designs were completed in MineSight, with medium and short-term planning, designs and scheduling completed in DataMine, by PenMin, which has been independently reviewed by Sound Mining.

Thus, given the rapidity with which Alecto has acted upon to rectify the issues, which WAI has highlighted above, WAI does not consider any of the above items fatal flaws.

Mining

The open pit Mowana Mine was commissioned in 2008 by its previous owner (Messina Copper Botswana (Pty) Ltd ). The mine operated at a mining rate of 100kptm and a 1.2Mtpa processing plant. Operations at its sister Thakadu mine were suspended in June 2015 as the operation neared the end of its scheduled mine life.

Mining operations were undertaken from two pits within a contiguous part of the deposit (the North and South pits) and continued down to 65m below surface.

The previous mining operation used mining contractors and Alecto has contracted a mining contractor (Giant) who arrived on site mid-February with two excavators and 5 ADT’s for general clean-up where

ZT61-1601/MM1131 Final V6.0 Page 6 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA some 300kt of material were moved. Since that time, further equipment has been added, see table below.

Item February March April Total Bell L2706E FEL 1 1 JCB 467 FEL 1 1 Komatsu PC 850 Excavator 2 2 Komatsu PC220 Excavator/Rock Breaker 1 1 Bell TLB 1 1 CAT 740B ADT 5 4 9 Bell B30D ADT 2 2 Komatsu 315 Dozer 1 1 Bell 670G Grader 1 1 18,000l Water Bowser 1 1 Diesel Bowser 200l 1 1

Since January, pit dewatering has been progressing which has allowed access to some previously blasted ore at the south end of the North pit which is now providing feed for the mill with additional stockpile material.

In addition, the Company has instigated a RC drilling grade control programme with holes on a 10m spacing, drilled at 60-80o angle and to a depth sufficient to cover four benches (10m benches). These data, coupled with blast hole samples from the ore zone, and 1m outside the ore in waste from outside the main ore zones should provide more detail for the short-term model.

Following this, a bench has been drilled for blasting (approximately 70kt) with a second on-going, and as of 12th April 2017, the explosives permit had been granted, with a blast undertaken on Saturday 29th April 2017.

For the short-term mine plan (22-month plan) which takes the operation to January 2019, this sees some 3.7Mt of ore mined at 0.91% Cu using a cut-off of 0.25% Cu. Beyond this, two options are being considered – a base case whereby production remains at the 1.2Mt per year as per the short-term plan, or utilising DMS to increase production. A preliminary financial assessment of the DMS route does seem to indicate better overall project economics.

Notwithstanding the above, for the base case, from consideration of the previous mining operations, as well as the plant configuration, WAI believes that this production schedule is achievable given the proper level of study required to justify the parameters, work which is currently on-going.

Current mine planning has used a copper price of US$1.85 per lb to define the pit shell to be used for the mine design as this provides a higher-grade shell with which to start up the operations. WAI believes that this copper price is conservative and provides significant upside to the project for the longer-term mine life.

ZT61-1601/MM1131 Final V6.0 Page 7 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The scheduling of the mine is currently being undertaken by a contractor “Sound Mining” using Datamine. Sound Mining has further been appointed to perform the life of mine scheduling and revise the short-term plan, also using Datamine.

As reviewed by WAI, the capital and operating cost rates put forward in the PenMin study are within the range expected for this type of operation.

WAI is aware that Pre-feasibility level engineering works will be completed by PenMin and Alecto prior to the project upgrade.

PenMin’s recommissoning strategy, at the time of the site visit, was based on assessments of historic technical data and operating costs taken from analogous operations and projects. In justification of the processing strategy to process sulphide material, mine planning has excluded the most strongly oxidised material.

Mineral Processing

The Mowana plant was constructed in 2006-2007, with commissioning taking place in 2008. Only oxide ore was treated for periods during 2009-10 before the plant feed was switched to Thakadu ore.

Mowana oxide ore was then treated for a few months during 2015 after the Thakadu ore was exhausted and before production was stopped. The plant was not able to efficiently recover the Mowana copper oxide minerals and also experienced problems with graphite, particularly from the North Pit, which significantly lowered the final concentrate grades.

In their review of the operations, PenMin, outlined the key reasons that the mine failed as being:

• Inefficient Geological and Mining Understanding and Management; • Inefficient control of processing; • Low commodity prices; • Management and control; and • Inappropriate technology.

The current management (PenMin) intends a base case processing throughput of around 1.2Mtpa (with an optional higher throughput using DMS pre-concentration), fixing the various plant bottlenecks and adding an appropriate level of automation and control.

To this extent, the mill commenced operations on 14th March 2017, although a bearing problem (which was solved on-site) caused a delay. Since then, the plant is now up and running with a functioning process control system and with the primary change from the previous operations being the use of a different collector – xanthate has been replaced by H88L which appears to reduce the problem of graphite.

ZT61-1601/MM1131 Final V6.0 Page 8 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Presently, some 100t per day of copper concentrate is being produced (approximately 14% Cu) from the low-grade ores (0.7% Cu) which is transported off site by Fujax as part of the off-take agreement.

The current mine plan involves treating only <25% acid soluble copper ore in the future. However, currently, there may not be sufficient chemical and mineralogical knowledge of the orebody to fully understand the ore type definitions or their location in the deposit. A thorough review of the block model data and relogging of all cores available has commenced. In addition, WAI recommends that a more detailed analysis is made of any available, or future samples, using a diagnostic leaching (copper speciation) technique. This will allow the chemical and mineralogical knowledge of the orebody and the ore type definitions and their location in the deposit to be more fully understood.

Flotation testing has indicated that the supergene ore type contains significant levels of oxidised copper minerals. It may therefore be necessary to mine into the lower depths of the supergene zone in order to achieve the <25% acid soluble target for the mill feed. The flotation response of the sulphide ore was excellent, with high concentrate grades achieved at copper recoveries greater than 90%.

Previous DMS results for the sulphide ore type are encouraging, but some of the metallurgical balances of the tests undertaken on the oxide and supergene ores are inaccurate and the overall DMS balances, including fines, are not clearly presented.

WAI is aware that a testwork protocol on all potential ores has been commenced, and is currently being supervised by both the Alecto Competent Person (Mike Ware) as well as the Oxflo representatives, who are providing flotation reagents and consulting services in this field. The testwork includes mineralogical characterisation, DMS response, and flotation response, in both a natural sulphide float environment and sulphidation with NaSH.

WAI understands that the company is actively evaluating the feasibility of DMS though a rigorous programme of heavy liquid testing. These samples should include the correct levels of mining dilution as this will be an important factor when assessing the viability of DMS.

As discussed, the plant is lacking in certain areas of process control and it is planned to install an On Stream Analyser (“OSA”) when treating the less refractory ores in the future. Treating the more sulphide rich ore types will be significantly less onerous, and may not require the same degree of process control. As such, an OSA, although desirable, may not be essential provided that the copper minerals treated are predominantly sulphides with significant levels of secondary (copper rich) minerals.

A detailed scoping study has been completed by Minero Consulting and SENET (Pty) Ltd, a leading South African project management and engineering company, for the introduction of a new DMS pre- concentration process and upgraded crushing plant that is designed to increase throughput to 2.6 million tonnes per annum and achieve increased copper production of circa 22,000 tonnes of saleable Cu per annum. A DMS process route also has the potential for handling the carbonate mineralisation,

ZT61-1601/MM1131 Final V6.0 Page 9 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA which at present has been excluded from the Mineral Resources reported, providing a potential increase to the Mineral Resource base.

As previously announced by Alecto in December last year, the study shows enhanced economics with the NPV at a 10% discount rate moving up to US$245m and the IRR at 55%.

Once a feasibility study is completed, the process route upgrades will be funded through an existing agreement with Fujax Minerals and Energy Limited and Northern Heavy Industries Group Company Limited.

Further works to qualitatively and quantitatively support the proposed upgrade project has been commenced by the PenMin team, but as the work completed to date is at scoping level, WAI can only confirm that the costs and parameters quoted in the study are broadly in line with projects of a similar nature and that more work is required to ensure the value previously announced by the company can be achieved.

Environmental and Social Issues

Alecto’s Botswana assets are considered in compliance with local legislation and requirements prior to being placed into Care and Maintenance. The current licences, permits and associated documentation will require updating based on the revised project description.

WAI reviewed the environmental and social performance of Alecto’s assets in Botswana. Whilst some environmental and social management actions were developed for the site under its previous ownership regimes and a 2014 Scoping Study, including a 2006 Environmental Impact Assessment and Environmental Management Plan, these would have to be updated by Alecto in order for the project’s development to gain international finance.

To gain international finance, it is recommended that Alecto support previous studies by carrying out a full internationally compliant environmental and social impact assessment (“ESIA”) for the Mowana asset. The updated ESIA would be based on new baseline studies across all relevant aspects, including hydrogeology, air quality, biodiversity, noise, socioeconomic and cultural heritage impacts.

To action this, WAI is aware that Alecto has appointed Environmental and Social Technical staff to address this issue.

Economic Appraisal

The financial model presented by the Client for the Mowana Project has been developed to a reasonable standard. The general model structure is integral and consistent and provides an appropriate level of detail required for the project valuation.

ZT61-1601/MM1131 Final V6.0 Page 10 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

For the purposes of this CPR, WAI has only considered the non-DMS scenario (base case) for the LOM, although preliminary indications are that if the DMS can be proven to work successfully, this will improve overall project economics.

For the base case, a detailed 22-month model sets out the parameters in detail, whilst the 11-year LOM model provides a project overview.

Financial highlights are presented in the table below:

Nominal Cash Flow Model Results (US$) Gross Revenue 908,995,871 Less: Off-mine Cost (168,464,323) Less: Royalty (20,852,453) Less: Sales Commission (19,505,041) Net Revenue 700,174,054 Less: Operating Cost (420,802,609) Less: Closure Cost Provision (3,265,481) Less: Capital Maintenance (3,597,086) Cash from operations 272,508,879 Interest Received 16,305,417 Profit Before Tax 288,814,295 Less: Taxation Paid 64,272,420 Profit After Tax 224,541,875 Less: Working Capital Movement 3,605,870 Less: Capital Cost (20,679,968) Debt & Equity Draw Down 22,000,000 Debt Repayment (26,234,819) Net Project Cash Flow 203,232,959 NPV (Leveraged) 87,485,182 UNLEVERED IRR 56%

WAI believes that the costs and parameters used in the Financial Model are broadly in line with other projects of a similar nature and that the assumptions made are fair and reasonable. Furthermore, future utilisation of DMS does provide a significant upside to the project.

Zambia

General

The Matala and Dunrobin Gold Projects (previously called the Luiri Hill project) are located in south- central Zambia, approximately 120km west-northwest of the Zambian capital of Lusaka in the Mumbwa District.

The projects are included in a mining lease (8074-HQ-LML formerly issued as LML48) which is owned 100% by Luiri Gold Mines Ltd, a fully owned subsidiary of Luiri Gold Limited, which in turn is a wholly owned subsidiary of Alecto.

ZT61-1601/MM1131 Final V6.0 Page 11 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Alecto is focused on capitalising on the near-to-mid-term production potential at the historic Matala and Dunrobin Gold Mines, with a PenMin Feasibility Study, focused on the evaluation of commencing operations at the Matala Deposit on the oxide and transitional ores, allowing for a low cost start-up of the project, and then progressing to the Dunrobin oxidised ores.

WAI has utilised the information provided by Alecto, namely a previous Mineral Resource Estimate completed by Coffey Mining, engineering works undertaken for Luiri Gold Limited in 2013, and a Feasibility Study Report completed by PenMin (Pty) Ltd in 2015/16.

Geology & Mineralisation

The Matala and Dunrobin project is located in an area of south-central Zambia that is dominated by the Mwembeshi Shear Zone. A significant number of south-central Zambia’s gold and gold-copper occurrences are located within, or close to this regionally significant structural zone.

The Mwembeshi Shear Zone defines the boundary between the late Proterozoic Katanga Supergroup basinal sediments to the north, and the more intensely deformed Zambezi Metamorphic Belt terrain to the south.

The project area incorporates a prominent and geologically complex area known as the Matala Dome. The Dome is located approximately 5km east-northeast of the main body of the Hook Granite and it appears to be located within or is just north of the Mwembeshi Shear Zone. The Dome is elongated in an east-northeast direction and is parallel or subparallel to the trend of the shear. The Matala Dome is host to the most important gold occurrences so far identified within the project area. Unconformably or disconformably overlying the basement rocks of the Matala Dome are limestones and dolomitic marbles of the Lusaka Formation (of the Katanga Supergroup).

At the historic Matala mine, gold mineralisation is characterised by strong stratigraphic disruption (deformation), shearing and the presence of quartz-dolomite-pyrite-tourmaline-albite-sericite alteration and vein stockworks. Reportedly, chalcopyrite is replaced by chalcocite proximal to and within the ore zones. The alteration directly above the ore zone in the hangingwall is characterised by strong quartz-sericite and disseminated pyrite with minor jarosite staining (yellow). The quartz- dolomite-pyrite-tourmaline-albite-sericite mineralised assemblage occurs in a steep, south-dipping stockwork as highlighted in the PenMin FS report, and observed during the WAI site visit.

Gold mineralisation at Dunrobin occurs in two principal styles, ferruginous (hematite) gossans within the dolomites (observed in the open pit by WAI) and limestones with associated quartz veining; and quartz veins and quartz vein stockworks within the quartz-mica schists of the underlying basement.

Mineral Resources

The following Mineral Resource statement has been disclosed by Coffey Mining for the Matala deposit. The statement is reported as of 20 January 2012, and has been constrained by the surface

ZT61-1601/MM1131 Final V6.0 Page 12 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA topopgraphy and at depth by the 750mRL. A summary of the Coffey Mining Matala Mineral Resource Estimate is provided in the table below:

Matala Gold Deposit Mineral Resource Summary (after Coffey Mining, 2012) Lower Cut-Off Average Grade (g/t Gold Metal (‘000 Classification Tonnes (‘000) Grade (g/t Au) Au) ozs) 0.4 4,150 2.2 300 0.5 4,015 2.3 298 Indicated 0.7 3,727 2.4 292 1.0 3,204 2.7 278 1.5 2,334 3.2 243 0.4 7,649 1.5 360 0.5 7,200 1.5 354 Inferred 0.7 6,106 1.7 333 1.0 4,525 2.0 290 1.5 2,600 2.6 213 Note: Mineral Resources reported above 750mRL

Coffey Mining also produced a Mineral Resource Estimate for the Dunrobin deposit. The statement is reported as of October 2012, and has been constrained by the surface topography and open pit. Bulk density values were adjusted using a void factor of 0.94 for the model above the 1040mRL to represent the stope depletion and karst voids, in the absence of detailed stope surveys.

A summary of the Coffey Mining Dunrobin Mineral Resource Estimate is provided in the table below:

ZT61-1601/MM1131 Final V6.0 Page 13 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Dunrobin Mineral Resource Statement (Coffey Mining, 2012) Lower Total Measured Indicated Inferred Cut-Off (Measured+Indicated+Inferred) Grade Tonnes Au Metal Tonnes Au Metal Tonnes Au Metal Tonnes Metal Au (g/t) (g/t Au) (kt) (g/t) (koz) (kt) (g/t) (koz) (kt) (g/t) (koz) (kt) (koz) Zonecode=120 (Main Mineralised Zone) 0.6 1,465 2.0 94 1,606 1.6 83 1,543 1.3 63 4,614 1.6 240 0.8 1,196 2.3 88 1,306 1.8 76 1,091 1.5 53 3,592 1.9 216 1.0 978 2.6 81 1,063 2.0 69 763 1.8 43 2,804 2.1 193 1.2 830 2.9 76 843 2.2 61 547 2.0 35 2,220 2.4 172 1.4 717 3.1 71 670 2.5 54 403 2.2 29 1,790 2.7 154 Note: • Reported as of October 2012; • MIK derived SMU model using a 10m x 5m x 5m SMU; • Coffey Mining preferred cut-off of 1.0g/t Au; • Depleted to the approximated underground workings, and nominally dated January 2012; and • 0.94 void factor applied to the block model above the 1040mRL.

In the case of both the Matala and the Dunrobin estimates, Coffey Mining has utilised a Multiple Indicator Kriging (“MIK”) approach to the grade estimates. Overall the estimation method is reasonable providing a fair representation of the composite data on which the estimates are based. WAI would query the benefit of using the MIK method, over other methods such as Ordinary Kriging (“OK”) given the style of mineralisation and the log normal grade distributions encountered at the deposits.

At both Matala and Dunrobin a degree of underground mining has taken place, in both cases there is a distinct lack of detailed underground surveys. At Matala the depletion of the block model has been based on a long section of the mined-out areas, whilst this approach is valid given the lack of survey data, WAI would recommend future works include detailed underground surveys.

The Dunrobin underground depletion presents a more complex picture, whilst some development survey wireframes have been provided to Coffey Mining for depletion, there are no stope surveys to accurately deplete the model. To account for the stopes as well as possible karst voids, Coffey Mining has applied a 0.94 void factor to the density values at elevations >1,040mRL. The lack of detailed depletion wireframes for the stopes presents a material impact to the project. Whilst the void factor applied to the model by Coffey Mining tries to account for the loss of tonnage it does not account for the impact on contained metal and grade. The Dunrobin Mineral Resource Estimate contains Measured resources in the near surface area where there has been infill drilling in 2012. As the Measured material is above the 1,040mRL, WAI would question the allocation of the Measured classification. Given the lack of certainty in what has been mined, this can present a material impact on the tonnage and grade of resources being reported in this area.

A total of 485 density measurements from chip and drill core samples has been used by Coffey Mining to assign density values to the Mineral Resource block model based on lithology and oxidation state. Coffey Mining has highlighted that density determinations of the gossan have been problematic with high degrees of variation between results. Other density issues highlighted include the influence of massive sulphide, giving high density values. No density measurements using drill core have been carried out above the 1,130mRL which includes the overburden material, Coffey Mining therefore applied nominal density values to the >1,130mRL domain. Given the density measurement issue

ZT61-1601/MM1131 Final V6.0 Page 14 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA noted, particularly in the near surface parts of the deposit, and the lack of detailed surveys of the underground workings, WAI is of the opinion that there is a material risk to the reported tonnage and grades, particularly in the areas classified as Measured.

Mineral Resources at Matala and Dunrobin have been reported in their entirety, however, under the JORC Code (2012) there is a requirement to demonstrate reasonable prospects for eventual economic extraction. Standard industry practice is to carry out a pit optimisation using realistic, albeit uplifted, pricing, to demonstrate which portion of the Mineral Resource has prospects for extraction.

If an underground Mineral Resource is to be reported then a minimum mining width with appropriate dilution needs to be applied to the model, and the reported Mineral Resource should be at a cut-off grade in line with typical underground mining economic cut-off grades.

Both deposits have been reported at a preferred cut-off grade of 1.0g/t Au. WAI considers the cut-off grade of 1.0g/t Au to be low for an underground mining operation, and without a mining dilution being applied, would likely include material that would not be considered economic for an underground operation.

From an open pit perspective, the cut-off grade of 1.0g/t Au maybe considered too high and a lower cut-off might be more applicable. Any future Mineral Resource updates will require such pit optimisations to be carried out and this may potentially lead to the omission of some of the currently reported Mineral Resources.

Mining

The open pits will be mined by conventional truck and excavator mining methods. Development at Matala involves a single-phase pushback to pit depth, whereas Dunrobin has previously been mined and so design parameters have been based on prior experience at the deposit. The mining operations and maintenance will be undertaken on a contractor basis so the parameters and costs presented within the cashflow should be considered at a Scoping Study level.

The bulk of the Matala pit has dimensions of approximately 700m x 250m and the Dunrobin starter pit has dimensions of approximately 230m x 230m. Mining is to commence at Matala and then transition to Dunrobin as Matala is exhausted.

A detailed scoping study was completed by Coffey Mining in 2012 for the suitability of the Matala deposit towards underground mining methods to a depth of 300m, since amended by PenMin. The Matala underground mineral inventory can be summarised as 2,037,400t at 3.00g/t Au.

Underground mining at Matala will start at the bottom of the pit and progress east and west of the pit along strike, with a portal and decline established at the western side of the pit above the bottom bench. Longhole open stoping has been identified as a suitable mining method, although this should be finalised in further studies before design progresses. WAI would also expect a detailed underground geotechnical assessment to be undertaken in order to better determine the stoping

ZT61-1601/MM1131 Final V6.0 Page 15 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA method best suitable for the deposit and also any likely backfill requirements. A crown pillar study should also be undertaken to determine the most suitable dimensions to ensure stability but maximise recovery.

Although the work undertaken by PenMin broadly addresses the issues that will be involved in underground mining, this work is to a Scoping Study level and so considerably more detail will be required before a definitive mine plan can be formulated.

Mineral Processing

Test results undertaken on four Matala Composite samples, designated A-D and representing mineralisation at increasing depth, indicated that the Matala ore is predominantly non-refractory, with significant levels of free gold. The ore types may be treated efficiently by gravity leaching, albeit with moderately high cyanide consumptions, and the deeper Composite C and D ore types may also be processed by flotation to produce saleable copper/gold concentrates.

In a similar test programme for Dunrobin, Composites A and C both gave satisfactory recoveries of gold using a conventional gravity-leach process route. Composite A gave a recovery of 94.8% and Composite C a recovery of 94.7%, whilst composite B and D gave recoveries of 65.7 and 71.4% respectively.

Only Composite A gave levels of cyanide consumption that would be regarded as economically viable – with values of 1.6 to 2.6kg/t. Cyanide consumptions for Composites B, C and D were typically 4kg- 6kg/t which is attributable to the high levels of cyanide soluble copper present. Consequently, the sulphidisation, acidification, recycling and thickening process (“SART”) which is an industry standard process was recommended to recover both copper and cyanide from process solutions.

Two process development studies were undertaken in 2016 on the treatment of the Matala and Dunrobin ores. The first, by Deswick/PenMin, considered treating 200,000tpa of Dunrobin ore using gravity, cyanidation and SART technology. The capital cost estimate for such a plant was predicted to be US$10.32 million which WAI considers is exceptionally low for a 200,000tpa plant using SART technology. The process operating cost was predicted to be US$24.6 per tonne of ore.

A second study by PenMin in 2016 considered a 400,000tpa operation treating the Matala oxide and transitional ores and then progressing to the Dunrobin oxidised ores. An Engineering, Procurement, Construction (“EPC”) proposal was obtained from Xinhai Mining Machinery Company Limited (China) for US$14.4 million which WAI considers very low. The total operating cost was estimated at US$23.3/t, which WAI considers to be reasonable.

Environmental and Social Issues

WAI reviewed the environmental and social performance of Alecto’s assets in Zambia (Matala and Dunrobin).

ZT61-1601/MM1131 Final V6.0 Page 16 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The Environmental Permit granted by the Zambian authorities in 2013 was based on an Environmental Impact Assessment (“EIA”) which covers the entire mining block, although the scope of this was restricted to a 150Ktpa (ore) open pit mine and processing plant located solely around the Dunrobin site.

Currently, the Alecto plan is to mine 400Ktpa (ore) starting at Matala (open pit Phase 1) for 3 years, then at Dunrobin (open pit Phase 2) whilst the underground mining infrastructure is prepared and equipped at Matala (Phase 3).

As this is a departure from the original 150tpa plan, the Department of Mines has asked for a new Development Plan to be submitted. This will be done once financing is finalised, and the detailed engineering design is completed for the mine and plant, with the development schedule known with some accuracy. WAI is aware that Alecto has accepted WAI’s recommendations, and Alecto has received proposals for these works.

In addition, the new plan to start mining at Matala, with the construction of a new haul road to the larger Dunrobin Plant, requires an amendment to the Environmental Permit through the Zambia Environmental Management Agency (“ZEMA”).

Recent discussions with the Director of Mines’ Safety, (a Department of the Ministry of Mines and the most significant consultee to ZEMA on environmental applications), has indicated the appropriate way forward. They have suggested that, on the basis that a Mining Licence and Environmental Permit have already been approved, that the most efficient way to include the new proposals is to upgrade the existing Environmental Permit. This should typically take some 6-8 weeks and cost +/US$15K to prepare.

The only legislative requirement, in the case of an existing Environmental Permit, for when an EIA is mandatorily required, is if ore is required to be hauled >10km. The planned route between Matala and the Dunrobin plant is reported as 8km, and so a full EIA is not required.

WAI understands that in 2013 Luiri Gold Mines reached agreement to resettle members of households living in close proximity to the project. These agreements were enacted in 2016, but these along with further economic and physical displacement should be verified and formalised within an internationally compliant Livelihood Restoration Plan. This plan should also include hydrogeology, air quality, biodiversity, noise, socioeconomic and cultural heritage impacts. Best practice also recommends the development of an Environmental and Social Action Plan, formalising the delivery of mitigation measures over time.

To comply with, and in effect to “start” the Environmental Permit, in October 2016 Alecto cleared and fenced the proposed plant site, and resettled 5 families who were required to leave. The resettlement process and compensation was agreed historically through the local traditional leadership. The families were paid (ZMW10,000 each) and left amicably, thereby maintaining the company’s good will in the local community.

ZT61-1601/MM1131 Final V6.0 Page 17 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Alecto has recently updated the local chief as well as the Minister of Mines of the items above, and the government is fully supportive of the company’s efforts.

WAI has been provided with copies of the relevant mining and environmental licences and permits, according to domestic laws, which were provided for review, and currently, WAI foresees no concerns regarding these licences.

Economic Appraisal

The project has excellent potential to be developed into production in the near to mid-term considering the presence of a renewable mining licence, an associated environmental permit, and an advanced JORC Code compliant Mineral Resource Estimate which reportedly demonstrates approximately 750koz of Au over the two projects, as stated in the PenMin Feasibility Study.

Alecto has identified the potential to develop a low-cost, profitable 400,000tpa annum open-pit mine at Matala and satellite deposits, targeting the oxide and transitional ore and using a simple crushing, milling and gravity circuit with subsequent direct cyanidation. An updated scoping study for Matala, completed by Alecto, indicates the potential to generate cash flows and strong economics at an assumed gold price of US$1,150 and a discount rate of 10% through an initial three-year open pit operation at Matala.

A summary of the Alecto findings from the PenMin Feasibility Study are as follows:

• Indicative IRR of 52%; • Indicative NPV (8%) of US$28.6 million; and • Low initial capital cost of approximately US$14.4 million.

The positive economics have been delivered in part due to the good regional infrastructure with access, power and water available. The Alecto Board believes that considerable upside potential exists to target further high-grade underground ores and thereby further extend the life of mine, with the known resource at Matala open at depth, as well as sulphide ores at Dunrobin and Chosa (which was a historic mine close to Dunrobin). The Company plans to use the resultant surplus cash flow from production at Matala to develop these.

Mali

General

Alecto and its predecessor African Mineral & Exploration (“AME”), have been actively exploring their gold projects in Mali for more than six years.

The Kossanto Project consists of 3 exploration licences, covering a total area of 204.8km2 in the Kayes administrative district in Western Mali. The licences are all 100% owned by Alecto. The Kossanto Project is comprised of Kossanto East (Gourbassi East, Gourbassi West, and Gourbassi Northeast) and

ZT61-1601/MM1131 Final V6.0 Page 18 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Kossanto West (Massakama, Goreba, Big Pit etc). The Kossanto Project is situated within the world- famous Kenieba inlier which hosts numerous other gold deposits.

Exploration on the Kossanto Project has been conducted by Bureau de Recherches Géologiques et Minières (“BRGM”), Randgold Resources (“Randgold”), Caracal Gold (“Caracal”), AME, and presently Alecto who have completed trenching, drilling, mapping and a Maiden Mineral Resource Estimate for the projects.

Recently, Alecto has decided to develop these projects by way of JV partners, (see details below) to free themselves up to concentrate on their Zambian and Botswana projects.

Joint Ventures

Alecto has recently entered into two Joint Venture agreements on the Kossanto East and West assets which has seen the Company transfer exploration management to Ashanti Gold and Randgold respectively.

At Kossanto West, Caracal Gold Mali SARL, Alecto’s wholly owned subsidiary, has entered into a joint venture agreement with Randgold Resources (Mali) Limited (“Randgold”) for the exploration and development of Alecto’s 137km2 Kossanto West Gold Project in western Mali comprising the Kobokoto East and Koussikoto exploration permits. On completion of the Joint Venture, Randgold will fund all costs up to and including the completion of a Pre-Feasibility Study (‘PFS’) on the Project and will hold 65% and Alecto will retain a 35% participating interest in the Permits, with the Government also holding 10%.

Mineral Resources

A Maiden Mineral Resource estimate for the Gourbassi East deposit was undertaken by WAI in 2013 for Alecto Minerals. The effective date of this Mineral Resource estimate was 17 April, 2013.

Following the completion of further drilling in 2013 and 2014, WAI completed an updated Mineral Resource estimation for Gourbassi East and a Maiden Mineral Resource for Gourbassi West in May 2014, see table below.

ZT61-1601/MM1131 Final V6.0 Page 19 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Gourbassi Mineral Resource Estimate 2014 (Mineral Resources not limited by optimised open pit shell) Cut-Off Grade (g/t) Resource 0.3 0.5 0.7 Area Au Classification Year 2013 2014 2013 2014 2013 2014 Tonnes (kt) 3,248 4,274 2,350 3,080 1,823 2,332 Gourbassi Au (g/t) 1.14 1.03 1.42 1.27 1.66 1.49 Inferred East kg 3,694 4,391 3,338 3,919 3,025 3,475 Metal koz 119 141 107 126 97 112 Tonnes (kt) - 5,442 - 3,638 - 2,488 Gourbassi Au (g/t) - 0.82 - 1.03 - 1.24 Inferred West kg - 4,457 - 3,754 - 3,074 Metal koz - 143 - 121 - 99 Tonnes (kt) 3,248 9,716 2,350 6,717 1,823 4,820 Au (g/t) 1.14 0.91 1.42 1.14 1.66 1.36 Total Inferred kg 3,694 8,848 3,338 7,673 3,025 6,549 Metal koz 119 284 107 247 97 211 Notes: 1. Mineral Resources are not reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility study. 2. Mineral Resources are reported inclusive of any reserves. 3. Grade represents estimated contained metal in the ground and has not been adjusted for metallurgical recovery. 4. Mineral Resources are quoted based on a 2.5m mining selectivity 5. Reported Mineral Resources have not been limited by an optimised pit shell 6. Numbers may not add due to rounding

Environmental and Social Issues

WAI reviewed the environmental and social performance of Alecto’s assets in Mali (Kossanto East and West). Whereas some environmental and social management actions were previously developed for the site under its previous ownership regimes, these would have to be updated by Alecto in order for the Project’s development to gain international finance. Further, it is recommended that Alecto carry out a full internationally compliant environmental and social impact assessment for the Kossanto assets, based on updated baseline studies across relevant aspects, including hydrogeology, air quality, biodiversity, noise, socioeconomic and cultural heritage impacts.

In 2013, WAI noted that artisanal miners were active in the area, though as WAI understands, very few artisanal miners are active presently in 2016/2017.

WAI was given copies of the exploration licences, and as WAI understands, no environmental permits are currently required for the ongoing exploration activities.

ZT61-1601/MM1131 Final V6.0 Page 20 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

1 TERMS OF REFERENCE

1.1 Introduction

Wardell Armstrong International (“WAI”) was commissioned by Alecto Minerals plc (the “Company” or “Alecto”) to prepare a Competent Person’s Report (“CPR”) on the material assets held by the Company in Botswana, Zambia and Mali.

In detail, the assets comprise:

• Botswana – the Mowana copper mine; • Zambia – the recently acquired Matala historic underground mine and the former open pit, heap leach Dunrobin mine; and • Mali – Kossanto East (now in a JV with Ashanti), and Kossanto West (managed by Randgold).

This CPR process has been triggered by the recent proposed acquisition by Alecto of Cradle Arc Investments (Proprietary) Limited (“Cradle”), a company incorporated in Botswana, which owns the Mowana Copper Mine (“Mowana”) in northeastern Botswana through its 100% holding in Leboam Holdings (Pty) Ltd. Mowana was previously operated by African Copper plc.

The Vendor of the Mowana Copper Mine, PenMin (Botswana), is a Botswana registered company wholly owned by PenMin, a South African company performing Design, Build and Operate contracts within the mining sector in Africa, and is ultimately controlled by Kevin van Wouw. PenMin has been appointed by Leboam to operate the Mowana Copper Mine and Mr van Wouw will be appointed as a director of Alecto on Admission.

Alecto is an Africa-focused gold and base metal exploration and development company. The acquisition of Mowana is in line with Alecto’s strategy to become a major metals producer in Africa.

Alecto has encountered challenges in providing adequate security to raise debt financing, which has delayed the development of the Matala Gold Project in Zambia. It is expected that by acquiring a near- term producing asset (Mowana) Alecto will be able to provide the necessary security and raise finance to develop the Zambian assets.

Therefore, this CPR considers the geology, mineralisation, mineral resources, mining, processing and environmental and social issues.

This CPR will be valid for 6 months from the completion date.

1.2 Project Description

1.2.1 Botswana

ZT61-1601/MM1131 Final V6.0 Page 21 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Following the acquisition process, since mid-March 2017, the Company has re-opened the mine and re-commissioned the plant and is currently producing approximately 100t per day of low grade copper concentrate as a lead up to full production in the next few months.

The Mowana mine is located 120km northwest of the regional hub of Francistown along the A3 national road, while the Thakadu and Makala projects are located 100km west of Francistown and 70km from Mowana (Figure 1.1).

MOWANA MINE

Figure 1.1: Location Map of Mowana

African Copper PLC was the 100% holding company of Messina Copper Botswana (Pty) Ltd (“MCB”) which was a copper concentrate producer from its 100% owned major asset, the Mowana Copper Mine in northeast Botswana. The Mowana mine was commissioned in 2008, with open pit mining at a rate of 100,000t/month and a 1.2Mtpa processing plant. Operations at its sister Thakadu mine were suspended in June 2015 as the operation neared the end of its scheduled mine life.

ZT61-1601/MM1131 Final V6.0 Page 22 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

MCB had total copper resources of more than 100Mt at an average grade of 0.94% Cu, with higher grade zones within the extensive ore body. This includes a Measured resource at Mowana of 14Mt at 1% Cu.

Between the period from 2012 to 2015, MCB sourced the majority of its feed requirements from its 100% owned higher-grade Thakadu mine. The Mowana Mine was re-opened in 2014 to supplement the Thakadu ore, but MCB was placed in liquidation on 13 November 2015, following an application to the High Court of Botswana by creditors of MCB. All mining and processing activities ceased at this point and a structured wind-down and care and maintenance program was implemented. On 15 December 2015 MCB was put in final liquidation.

A summary of the Company’s mineral assets in Botswana is presented in Table 1.1 below:

Table 1.1: Alecto’s Botswana Mineral Assets Interest Concession Concession Asset Holder Status Comment (%) Expiry Date Area (units) Mowana Production re- Leboam 100% Production 2031 32.7km² (ML2006/53L) started March 2017 Planned Thakadu Leboam 100% Development 7 Dec 2017 28.5km² underground (ML2010/96L) operation at Makala Further North 30 November PL 180/2008 Leboam 100% Exploration 65.2km² extension of 2017 Mowana 30 November North extension of PL 33/2005 Leboam 100% Exploration 76.5km² 2017 Mowana

WAI is aware that Leboam shall be making applications to the Ministry of Mines, before the expiry of ML2010/96L, for a new underground mining licence at Makala, or an extension of the existing licence, depending on the results of a future feasibility study for Makala.

Significant Mineral Resources remain at Mowana due to the problems of the previous owner trying to treat the oxide mineralisation. Details are provided in Table 1.2 below. The Mineral Resources were classified as Indicated and Inferred and reported in accordance with the 2012 Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code (2012)).

ZT61-1601/MM1131 Final V6.0 Page 23 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 1.2: Alecto Mineral Resource Cu Tonnes Cu Metal Deposit Cut-off Category Grade (kt) (kt) (%) Measured 14,725 1 147 Mowana South* 0.25% Cu Indicated 26,308 0.88 232 Inferred 23,976 0.71 170 Total 65,009 0.84 549 Indicated 31,060 1 311 Mowana North Conical Pit** 0.25% Cu Inferred 20,720 0.89 184 Total 51,780 0.96 495 Mowana North Extension ** 0.25% Cu Inferred 55,082 0.74 408 Total 55,082 0.74 408 Measured 14,725 1 147 Total Mowana Indicated 57,368 0.94 539 Inferred 99,778 0.76 758 Grand Total 171,871 0.84 1,445 Indicated 2,268 1.11 25 Thakadu*** 0.25% Cu Inferred 5,380 0.63 34 Total 7,648 0.77 59 Notes: * Reported by Golder and Associates. Effective June 2015 ** Reported by Golder and Associates. Effective September 2014 *** Reported by Golder and Associates. Effective November 2014

Currently, no Ore Reserves are defined at Mowana or Thakadu.

1.2.2 Zambia

The Matala project (previously called the Luiri Hill Project) is comprised of the historic Matala and Dunrobin mines that are located in Central Province of Zambia, approximately 120km northwest of the capital Lusaka, see Figure 1.2 below.

ZT61-1601/MM1131 Final V6.0 Page 24 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 1.2: Zambia Map

The project has excellent potential to be developed into production in the near to mid-term considering the presence of a renewable mining licence, an associated environmental permit, and an advanced JORC Code Mineral Resource Estimate which demonstrates approximately 750koz of Au over the two projects, as stated in the PenMin feasibility study.

Alecto has identified the potential to develop a low-cost, profitable 400,000tpa open-pit mine at Matala and satellite deposits, targeting the oxide and transitional ore and using a simple crushing, milling and gravity circuit with subsequent direct cyanidation. An updated scoping study for Matala, completed by Alecto, indicates the potential to generate cash flows and strong economics at an assumed gold price of US$1,150 and a discount rate of 10% through an initial three-year open pit operation at Matala.

A summary of the Alecto findings from the PenMin feasibility study are as follows:

• Indicative IRR of 52%; • Indicative NPV (8%) of US$28.6 million; and • Low initial capital cost of approximately US$14.4 million.

ZT61-1601/MM1131 Final V6.0 Page 25 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA known resource at Matala open at depth, as well as sulphide ores at Dunrobin and Chosa. The Company plans to use the resultant surplus cash flow from production at Matala to develop these.

Full details of the Zambia assets are given in Section 4 of this CPR.

1.2.3 Mali

Alecto currently holds licences in Mali, namely the Kossanto East and Kossanto West projects, see details below.

Kossanto East

The Kossanto East permit, has been the exploration focus of Alecto Minerals since its acquisition in 2013, see Figure 1.3 below. The project has an independent Inferred Mineral Resource Estimate of 6.72Mt grading at 1.14g/t for an aggregate of 247,000 ounces Au (at a cut-off grade of 0.5g/t Au), reported in accordance with the guidelines of the JORC Code (2012) by Wardell Armstrong International in June 2013. This has been delineated across the Gourbassi East and West targets within this project.

Figure 1.3: Kossanto East (Farikounda) Permit Area

ZT61-1601/MM1131 Final V6.0 Page 26 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Kossanto West

Adjacent to the Kossanto East project is Alecto’s wholly owned 137km² Kossanto West exploration project, see Figure 1.4 below, comprising the permits of Kobokoto East and Koussikoto. This expansive project area has recently undergone permit consolidation and renewals in order to maximise the exploration potential at what is considered to be one of the most prospective terrains in western Mali, allowing for exploration activities to continue to 2022.

Kossanto West has been subject to soil geochemical sampling, pitting, trenching and scout drilling since Alecto acquired the project in 2013, and the results have been extremely encouraging, demonstrating high-grade gold mineralisation (peak intercepts shown in Figure 1.4 below) over a significant area of the regionally significant Main Transcurrent Shear Zone (“MTZ”).

The MTZ is considered to be one of the major controls on gold mineralisation in western Mali and eastern Senegal, and an important control at several major gold deposits such as Sabodala (3Moz - Teranga Gold), Massawa (3Moz - Randgold), Makabingui (1Moz - Bassari Resources), and Sadiola and Yatela. The area has been a centre for significant artisanal mining activity that has uncovered some previously unknown gold occurrences that also highlight the area’s potential.

ZT61-1601/MM1131 Final V6.0 Page 27 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 1.4: Kossanto West Permit Area

Full details of the Mali assets are given in Section 5 of this CPR.

1.3 Independent Consultants

WAI, formerly CSMA Consultants, is part of Wardell Armstrong LLP, an independent British, partner- owned engineering and environmental consultancy, established in 1837. The company has 12 offices in the UK with around 500 staff.

WAI provides the mineral industry with specialised geological, mining, processing and environmental expertise from our main offices in Truro, Cornwall, as well as Russia and Kazakhstan. The office in Truro, at the old Wheal Jane mine site, includes an extensive mineral assaying, processing and pilot plant testing facility.

ZT61-1601/MM1131 Final V6.0 Page 28 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

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

• Any rights to subscribe for shares in Alecto Minerals Plc either now or in the future; • Any vested interests in any concessions held by Alecto Minerals plc; • Any rights to subscribe to any interests in any of the concessions held by Alecto Minerals plc either now or in the future; • Any vested interests in either any concessions held by Alecto Minerals plc or any adjacent concessions; or • Any right to subscribe to any interests or concessions adjacent to those held by Alecto Minerals plc, either now or in the future.

WAI’s only financial interest is the right to charge professional fees at normal commercial rates, plus normal overhead costs, for work carried out in connection with the investigations reported here. Payment of professional fees is not dependent on the success of the Admission or linked to the value of the Company.

1.4 Data Reviewed

For the CPR, WAI has downloaded all data provided by the Client and has used this along with observations made during the site visits to prepare the report.

For Botswana and Zambia, much of the data are historic, reflecting that Zambia is a brownfield site and Botswana was a care and maintenance operation. A more complete data collection exists for Mali, helped by the fact that WAI has had an input to some of these studies, in providing the Mineral Resource Estimates.

Notwithstanding the above, the author has relied upon this information covering the areas of previous exploration, geology, mining, infrastructure, processing, financial and environmental and social matters, all in good faith. As a general comment, the quality of the exploration data including drill logs, sections and plans is acceptable under the guidelines of the JORC Code (2012).

It should be noted that WAI has not taken any independent samples, nor independently verified the legal status of the operations, though in terms of the Zambian and Malian Licences WAI has had sight of either legal letters or mineral license documentation, and as such, is of the view that these do not represent fatal flaws to the relevant projects. WAI has been provided with, and has reviewed, the independent legal opinions from the relevant jurisdictions that confirm the validity and standing of each of the licences.

1.5 Personal Inspections

ZT61-1601/MM1131 Final V6.0 Page 29 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA whilst over the same time period, Mark Kenwright, MSC, BSc, CP (Geo), FAusIMM, Associate Director visited the Zambian property.

More recently (5th April 2017), Phil Newall has re-visited the Mowana operations to observe the re- opened mine and plant.

As WAI has previously worked on the Malian assets, no recent site visits were required, as WAI had completed site visits in 2013.

These visits primarily covered the geology, exploration, existing mining activity, infrastructure layout, construction schedule, costs and environmental and social review.

1.6 Units and Currency

All units of measurement used in this report are metric unless otherwise stated. Tonnages are reported as metric tonnes (“t”), precious metal values in grams per tonne (“g/t”) or parts per million (“ppm”), base metal values are reported in weight percentage (“%”) or parts per million (“ppm”). Other references to geochemical analysis are in parts per million (“ppm”) or parts per billion (“ppb”) as reported by the originating laboratories.

Unless otherwise stated, all references to currency or “$” are to United States Dollars (“US$”).

1.7 Curriculum Vitae of the Directors

The Curriculum Vitae of the Directors, proposed directors and Management are as follows:

1.7.1 Toby David Howell, aged 41 (Non-Executive Chairman) Mr Howell is a corporate finance professional with 17 years’ experience in the financial services industry and has specific natural resources experience on AIM. He began his career at UBS Warburg and went on to hold positions at firms including ARM Corporate Finance Ltd and Hichens, Harrison & Co plc. He is currently a director of Nash & Co Capital Limited, a corporate finance business focused on M&A, SME finance and asset backed lending. He is an officer in the British Army Reserve with operational leadership experience, a graduate of Newcastle University and holds the CISI diploma.

1.7.2 Mark Christopher Jones, aged 57 (Chief Executive Officer) Mr Jones is a mining engineer with over 35 years’ experience in mining production and associated businesses, 25 years of which have been spent in Africa. He has specific expertise in gold and base metals in Africa, Europe and the Former Soviet Union. Mark was founder and CEO of African Mining and Exploration plc (now named Savannah Resources plc) that sold the Malian assets to Alecto. Previous positions include CEO of Aurum Mining plc and Expert Explosives (Pty) Ltd and Mark was formerly a non-executive director of Antracor Mining Ltd. Mr Jones is a graduate of the Camborne School of Mines and holds an MBA.

ZT61-1601/MM1131 Final V6.0 Page 30 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

1.7.3 Dominic James Doherty, aged 38 (Operations Director) Mr Doherty is a retired British Army Office with a Law Degree from the University of Exeter. He has spent over 20 years’ working in Africa where he has forged strong bonds and a close network of relationships within some of the most inhospitable environments. With over 10 years’ experience in commodity trading, mining and exploration he acted as Country Manager for African Mining and Exploration plc (now named Savannah Resources plc) in Mali and was responsible for the selection and acquisition of the Kossanto projects. At Alecto he has managed operations on the ground throughout its portfolio of assets and handled M&A matters relating to the Company’s joint ventures and recent acquisitions in Zambia and Botswana.

1.7.4 Roger Alyn Williams, aged 54 (Non-Executive Director) Mr Williams is a Chartered Accountant with over 20 years’ international experience in mining finance and an honours degree in French and Spanish. He was previously CFO of Randgold Resources Limited and part of the management team that transformed Randgold Resources Limited from an exploration and development company into a major gold producer. He then went on to become CFO of JSE-listed AECI Limited. His other experience includes directorships and interim executive appointments with various mining and mining services companies. Mr Williams is currently a Non-Executive Director of Sylvania Platinum Limited and interim Commercial Executive for Digby Wells and Associates, an environmental and social consultancy to the resources sector in Africa.

Proposed Director

1.7.5 Kevin John Ludolph van Wouw, aged 53 (Non-Executive Director) Mr van Wouw has over 30 years’ experience in the mining industry and is currently the Managing Director of PenMin. Prior to PenMin, Mr van Wouw was the General Manager, Operations at FLSmidth (Pty) Ltd, where he introduced both the project management and risk management systems. Before this, he founded Minero Consulting, working as Project Director on numerous African mining projects, and was also Projects Director at LionOre Mining International Limited where he was directly responsible for the commercialisation of its ActivoxTM technology, as well as conceptualising and implementing the Commercial DMS application for Tati Nickel Mining Company (Pty) Ltd, in Botswana. He was also Senior Project Manager for the Ngezi and Mimosa Platinum Projects while working for DRA International (Pty) Ltd. He has in-depth knowledge of the development of projects across many different currencies and sovereign regions, and the macroeconomic impact of African projects. Mr van Wouw holds an Honours degree in Metallurgy from Pretoria University and is a Fellow of the South African Institute of Mining and Metallurgy.

ZT61-1601/MM1131 Final V6.0 Page 31 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Proposed senior management/technical team:

1.7.6 David Swan (Chief Financial Officer) Mr Swan is a Chartered Accountant with a career focus on the natural resource industries. He joined Arthur Andersen after graduating in 1977, and from 1991-1996 acted as Chief Financial Officer or Finance Director for a number of ASX listed mining companies. He returned to the accounting profession in 1996 as Group Leader of the Mining and Resource Group at Ernst & Young in Sydney. After relocating to the UK in 2001 he continued his involvement in the natural resources industry including the position as Chief Financial Officer of Oriel Resources plc undertaking the IPO, TSX listing and reverse take-over of a major smelting business, until its eventual sale to the Mechel Group for US$1.4 billion. He is currently a Non-Executive Director of AIM quoted companies, Sunrise Resources plc and Central Asia Metals plc.

1.7.7 Sebele Molalapata (Acting General Manager, Mowana) Sebele Molalapata is a Professional Mining Engineer with over 28 years' experience in Mining, of which 15 years is at Senior Management and executive levels. Mr Molalapata has extensive experience in both surface and underground mining having worked for De Beers/Debswana Diamond Company and Norilsk Nickel/Tati Nickel Mining Company in Botswana. Mr Molalapata has a Bachelor of Mining Engineering, from the Technical University of Nova Scotia, a Certificate in Mining Engineering from Mount Allison University in New Brunswick and a Diploma in Business Management from the European School of Business Studies in Paris.

1.7.8 Thuso Cecil Dikgaka, (Botswana Country Director) Mr Dikgaka is a mining engineer with over 35 years’ experience in the mining industry, with expertise across a number of commodities including base metal production with Botswana Copper Limited and Tati Nickel, diamond production with Debswana Diamond Company, and coal at Morupule Colliery. Mr Dikgaka spent a number of years working in Canada and South Africa, and has worked extensively in Botswana holding senior positions at Orapa and Letlhakane Mines; Burrow Binnie Botswana and the Botswana Department of Mines in legislative and regulatory capacities. Mr Dikgaka is graduate of the Haileybury School Of Mines and the Technical University of Nova Scotia.

ZT61-1601/MM1131 Final V6.0 Page 32 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

2 RELIANCE ON OTHER EXPERTS

2.1 Introduction

This technical report has been prepared by WAI for Alecto and WAI has wholly relied upon the data presented in formulating its opinion. The information, conclusions, opinions, and estimates contained herein are based on:

• Information made available to WAI by Alecto at the time of preparing this CPR, and • Assumptions, conditions, and qualifications as set forth in this CPR.

The competent person has not carried out any independent exploration work, drilled any holes or carried out any sampling and assaying at the project area.

The majority of technical data, figures and tables used in this report are taken from reports prepared by others and provided to WAI by Alecto.

Whilst WAI has endeavoured to validate as much of the information as possible to ensure that the information contained in the CPR is, to the best of its knowledge and belief, factually accurate without omission that would otherwise materially affect the import of the document, WAI cannot be held responsible for any omissions, errors or inadequacies of the data received. WAI has not conducted any independent verification or quality control sampling, or drilling.

Alecto and Strand Hanson were provided a final draft of this report and requested to identify any material errors or omissions prior to its lodgement.

WAI has not undertaken any accounting, financial or legal due diligence of the assets or the associated company structures and the comments and opinions contained in this report are restricted to technical and economic aspects associated with principally the proposed project.

WAI has not undertaken any independent testing, analyses or calculations beyond limited high level checks intended to give WAI comfort in the material accuracy of the data provided. WAI cannot accept any liability, either direct or consequential for the validity of information that has been accepted in good faith.

ZT61-1601/MM1131 Final V6.0 Page 33 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3 BOTSWANA - THE MOWANA PROJECT

3.1 Location, Access and Infrastructure

Previously known as the Dukwe Copper Project, the Mowana Mine was re-named during the first quarter of 2007. It is located in north eastern Botswana, some 120km northwest of Francistown, the second largest city, with its centre on co-ordinates 20o31’38”S and 26o35’46”E (Figure 3.1).

Figure 3.1: Location Map of Mowana Project, Northeastern Botswana

It is accessed by a 12.5km private road off the main Francistown-Maun paved road. Driving time is approximately 1½ hours from Francistown.

As the mine only went into care and maintenance in 2015, all the existing infrastructure in terms of power, water and communications are still present.

ZT61-1601/MM1131 Final V6.0 Page 34 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The area is a flat semi desert with scrub-bush vegetation that slopes gently from east to west, and which drains into the Sua Pan salt flats of the Makgadikgadi basin.

3.2 Topography & Climate

The area is generally very flat with little or no relief (Photo 3.1).

Photo 3.1: Topography Around the Mowana Pit

In terms of climate, in general the summer season lasts from November to March with usually very high temperatures. It also witnesses a lot of rain, which brings down the temperatures for a short period. The winter season lasts from May to August. This is also the dry season when there is almost no rainfall.

The rainy season lasts from October to April. January and February are generally the peak months for rain. The mean annual rainfall varies from a maximum of 650mm+ in the extreme northeast area of the Chobe District to a minimum of less than 250mm in the extreme southwest part of Kgalagadi District.

In the Mowana area, the climate is warm and dry, and the annual rainfall is less than 250mm. The temperature varies from 7°C winter night time lows to summer highs of 40°C.

ZT61-1601/MM1131 Final V6.0 Page 35 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.3 Botswana Summary Information

The Republic of Botswana is a landlocked country located in Southern Africa. It is bordered by South Africa to the south and southeast, Namibia to the west and north, and Zimbabwe to the northeast. Its border with Zambia to the north near Kazungula is poorly defined, but at most is a few hundred metres long.

Botswana is the world's 48th-largest country with a surface area of 581,730km2. The country lies between latitudes 17° and 27°S, and longitudes 20° and 30°E.

A mid-sized country of just over 2 million people, Botswana is one of the most sparsely populated nations in the world. Around 10% of the population lives in the capital and largest city, Gaborone.

Botswana is predominantly flat, tending toward gently rolling tableland. Botswana is dominated by the Kalahari Desert, which covers up to 70% of its land surface. The Okavango Delta, one of the world's largest inland deltas, is in the northwest. The Makgadikgadi Pan, a large salt pan, lies in the north.

The Limpopo River Basin, the major landform of all southern Africa, lies partly in Botswana, with the basins of its tributaries, the Notwane, Bonwapitse, Mahalapswe, Lotsane, Motloutse and the Shashe, located in the eastern part of the country. The Notwane provides water to the capital through the Gaborone Dam. The Chobe River lies to the north, providing a boundary between Botswana and Namibia's Zambezi Region.

Over the past half-century political stability, good governance and prudent economic and natural resource management helped to secure robust economic growth, supported by the discovery of diamonds. Botswana is now an upper-middle income country, after being one of the poorest countries in Africa with a GDP per capita of about US$70 per year in the late 1960s.

The economy is dominated by mining, cattle, and tourism. Botswana boasts a GDP (purchasing power parity) per capita of about US$18,825 per year as of 2015, which is one of the highest in Africa. Its high gross national income (by some estimates the fourth-largest in Africa) gives the country a modest standard of living and the highest Human Development Index of continental Sub-Saharan Africa.

The https://tradingeconomics.com/ Website, 2017 (“Trading Economy”) has projected Botswana GDP Forecasts of which mining has been estimated at 10,970 BWP Million by the end of this quarter (Q2/2017). Headline GDP rates are provided in Table 3.1.

ZT61-1601/MM1131 Final V6.0 Page 36 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.1: Botswana GDP Forecast (2016-2020) Botswana GDP Last Q2/17 Q3/17 Q4/17 Q1/18 2020 GDP Growth Rate (%) 0.1 0.95 1.2 1.59 1.61 1.18 GDP Annual Growth Rate (%) 4.2 4.8 5 5 4.9 5.5 GDP (US$billion) 14.39 14.3 13.86 13.43 13.62 13.59 Source: https://tradingeconomics.com

Mining activities have been taking place in Botswana since the nineteenth century with the advent of the gold rush in the northern part of the country. Diamonds have been the leading component of the mineral sector since large-scale diamond production began. In 2016, Botswana was the world’s second leading producer of diamonds by value. The country also produces coal, cobalt, copper, gold, nickel, platinum-group metals (PGMs), salt, sand and gravel, semiprecious gemstones, and silver.

Botswana has an estimated 822Mt of uranium and 200Bt of coal. The uranium reserves have been recently discovered, while the coal resources require exploitation to convert to revenue.

Currently, the country has one active coal mine, the Morupule mine, owned by Debswana – a 50/50 joint venture by the Botswana government and mining company De Beers. It has also granted only one uranium exploration licence to Australian exploration company A-Cap Resources.

Notable mining activities included the gold mines around Francistown, copper mines at Matsitama, manganese mines at Kgwakgwe hills in Kanye and asbestos mines at Moshaneng.

Mining production in Botswana increased 13.4% year-on-year in the third quarter of 2016, following a downwardly revised 12.9% fall in the previous quarter.

In the long-term, the Botswana GDP From Mining is projected to trend around 11114 BWP Million in 2020.

Despite being landlocked, Botswana has a well-developed infrastructure in comparison to other countries in the region. The country’s road sector remains strong, benefitting from many years of careful planning and investment, although more funding will need to be made available for routine and periodic maintenance. There are prospects for expansion of the railway network, particularly as a means to export coal from the Mmamabula coal fields through Namibia. The country has a thriving mobile telecommunications industry with one of the highest penetration levels in Africa. Botswana has 971km of rail lines, 18,482 km of roads (23% of which are paved) and 92 airports (12 of which have paved runways). The national airline is Air Botswana, which flies domestically, and to other African countries.

3.4 Regulatory Environment & Mineral Tenure

3.4.1 Regulatory

MMEWr oversees the operations and development of the energy, water and minerals sector in Botswana. Mining activities are chiefly administered under the Mines and Minerals Act, 1999. The ZT61-1601/MM1131 Final V6.0 Page 37 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA legislation allows the government to acquire a minority stake (generally 15%) in mining projects as a partner and seek participation in the mining projects by having representation in their boards. The act regulates the issuance of exploration and mining licenses and tries to reach a balance between mining activity and environmental impact.

The act states the following:

• All rights of ownership of minerals are vested in the republic of Botswana subject to the provisions of mineral rights in the Tribal Territories Act; • The right to prospect or to mine minerals can be acquired and held only in accordance with the provisions of this act, and no person is allowed to prospect or mine minerals except as provided in this act; • The Minister of MMEWr is responsible for the most efficient, beneficial and timely investigation and exploitation of mineral resources of the country; and • No right to explore or produce petroleum (as defined in section 2 of the Petroleum Exploration and Production Act) may be granted or exercised under this act.

The following are the licenses and permits granted under this act.

3.4.2 Prospecting License

It enables the holder to intentionally look for minerals in the prospecting area and determine their extent and economic value. The holder of a prospecting license shall:

• Commence prospecting operations within three months of the date of issue of his license or a period as the minister may allow; • Carry on prospecting operations in accordance with the program of prospecting operations; • Notify the minister of the discovery of the mineral to which his prospecting license relates within a period of 30 days of such discovery; and • Notify the minister of the discovery of any mineral deposit of possible economic value within a period of 30 days of such discovery.

A prospecting license is valid for such period as the applicant has applied for and cannot exceed three years. The holder of a prospecting license can apply for a renewal three months before the expiry of his license and specify the period for which the renewal is sought. An applicant is entitled to the grant of not more than two renewals, each for the period applied for and not exceeding two years in either case. The licence also provides a right of retention over a prospecting area.

The holder of a prospecting license can apply for a retention license in relation to the area and a mineral covered by his license, a retention license is granted if:

ZT61-1601/MM1131 Final V6.0 Page 38 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• The applicant has carried out a feasibility study of the deposit in accordance with good industry practice, and the study has established that the deposit cannot be mined on a profitable basis at the time of the application; • The approved prospecting programs of the area applied for has been completed; and • The applicant is not in default.

The holder of a retention license is entitled to:

• Retain the retention area to which the retention license relates for future mining operations; • Carry on prospecting operations in the retention area from time to time to determine the prospect of mining any mineral to which the retention license relates on a profitable basis; • Remove any mineral or sample of a mineral for any purpose other than sale or disposal in the course of prospecting operations to any other place within Botswana or outside Botswana with the permission of the director of mines; and • Carry on investigations and operations from time to time to determine the prospect of mining any mineral to which the license relates on a profitable basis.

3.4.3 Mining License

The holder of a prospecting license, retention license or a waiver (issued by the minister once being satisfied that the area over which a mining license is required has been sufficiently prospected and that no other person has exclusive rights to that area) can apply for a mining license for an area in respect of which the waiver has been issued, or for an area within his prospecting area or retention area.

The holder of a mining license may enter any land to which his mining license relates and:

• Take all reasonable measures on or under the surface to mine the mineral for which a mining license has been granted; • Erect the necessary plant, equipment and buildings for the purposes of mining, transporting, dressing, treating, smelting or refining minerals recovered by them during mining operations; • Dispose of any mineral product recovered; • Prospect within his area for the mineral for which he holds a mining license or any other mineral; and • Stack or dump any mineral or waste product in a manner approved by the director of mines.

A mining license is valid for a period not exceeding 25 years. The government has the option of acquiring up to 15% working interest participation in the proposed mine upon the issuance of a mining license. ZT61-1601/MM1131 Final V6.0 Page 39 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.4.4 Mineral Tenure

A summary table of Alecto’s mineral assets in Botswana is shown in Table 3.2 below.

Table 3.2: Alecto’s Botswana Mineral Assets Interest Concession Concession Asset Holder Status Comment (%) Expiry Date Area (units) Mowana Production re- Leboam 100% Production 2031 32.7km² (ML2006/53L) started March 2017 Planned Thakadu Leboam 100% Development 7 Dec 2017 28.5km² underground (ML2010/96L) operation at Makala Further North 30 November PL 180/2008 Leboam 100% Exploration 65.2km² extension of 2017 Mowana 30 November North extension of PL 33/2005 Leboam 100% Exploration 76.5km² 2017 Mowana

3.5 Project History

The history of the Mowana project can be traced back to the early 20th century with the discovery of the Dukwe Copper Project as it was then known.

The Bechuanaland Geological Survey conducted geological mapping, geophysical surveying and several drill holes on the Dukwe Copper Project in 1953. This was followed by a first major period of exploration by Bamangwato Concessions Limited (“BCL”), a subsidiary of Rhodesian Selection Trust.

This work occurred in the periods from 1959 to 1963 and from 1972 to 1974 included limited diamond drilling and substantial percussion drilling leading to the re-discovery of the oxide resource. They reopened the underground workings, developed a short winze, and completed a property wide geochemical and prospecting programme along the 25km length of the Bushman lineament.

BCL mineral rights in the area lapsed at the end of 1976 and Falconbridge Explorations Limited (“Falconbridge” or “FEB”) subsequently applied to the Botswana Government for a prospecting licence covering the Matsitama area, including the Dukwe Copper Project. This licence, State Grant 7/77 (Matsitama), was first approved on June 15, 1977. Falconbridge held the licences until 1993 at which time they were allowed to lapse.

FEB undertook a major exploration programme on the Dukwe property, between 1977 and 1982, to evaluate the deeper chalcopyrite resources for development of a possible underground mine and concentrator. Falconbridge identified a mineral inventory (not NI 43-101 compliant) of about 13Mt at a grade of 3.85% Cu. That was set out in a comprehensive in-house pre-feasibility study in 1982, and updated in 1987 and in 1992. Their work also included reopening the first two levels of the original underground workings, underground chip sampling, extensive diamond drilling, geophysical surveys and percussion holes for exploration and water resources.

ZT61-1601/MM1131 Final V6.0 Page 40 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Minvest through its Botswana subsidiary Messina Copper Botswana (“MCB”) acquired the Dukwe property in 1992 and completed metallurgical sampling and permitting for a proposed underground mine, concentrator and smelter. MCB acquired the property in 1996 and commenced a drilling program designed to test the concept that the chalcopyrite was overlain by a potential leachable oxide blanket. MCB undertook a limited RC and diamond drilling programme in 2001-2002. This work was concentrated on the oxide and supergene environments to a depth of 150m below surface. The drill program consisted of some 6,800m of diamond core and RC drilling culminating in resource estimation and pit optimisation studies. It confirmed the existence of the mixed copper oxide-copper carbonate cap, and identified an extensive and thick zone of secondary copper enrichment as a supergene chalcocite blanket at intermediate depths between the shallow mixed copper oxide-copper carbonate and the deeper chalcopyrite hypogene zone.

In January 1996, Mortbury acquired the property through an agreement with Minvest. Between July and December 1996, MPH Consulting Ltd managed an exploration programme on the property on behalf of Mortbury.

In 1999, Mortbury estimated the leachable copper Mineral Resource at a lower cut-off grade based on an open pit, heap-leach, SX-EW operation. In early 2000, A.C.A. Howe International prepared a base case order-of-magnitude estimate of mining costs and designed some preliminary pit outlines.

In July 2000, Mortbury compiled key information on the project and began soliciting proposals from consulting companies to complete a bankable feasibility study in October 2000.

In April 2002, SNC-Lavalin Engineers and Constructors Inc. (“SNC-Lavalin”) completed a feasibility study report for Mortbury on the Dukwe Copper Project. This report analysed the technical and economic viability of a conventional open pit and SX-EW copper processing plant for the oxide copper zone at Dukwe. The SNC-Lavalin report was complemented by specialist reports on resources/reserves by Roscoe Postle and Associates Inc. (“RPA”), as well as environmental impact assessment, archaeological assessment and water resources reports, all by Water Surveys (Botswana) (Pty) Ltd.

Subsequent to that report, additional technical information through an additional study by MDMFerroman (Pty) Ltd. of South Africa in July 2004 and changes in economics, indicated an economically viable project.

In 2004, African Copper PLC, an AIM quoted company, acquired the project, following which much of the more recent drilling and metallurgical testwork was compiled into a NI 43-101 Compliant Feasibility Report (2008) by Read, Swatman and Voight (RSV), relying on geological modelling by Caracle Creek (“CCIC”), mine design by Turgis Consulting and plant design by Senet Projects. This new mine plan relied on recovering copper rich concentrates through flotation, and these concentrates would be sold on to smelter companies.

Construction of the project occurred in 2006/2007, with commissioning due to commence in 2008.

ZT61-1601/MM1131 Final V6.0 Page 41 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The following data is sourced from financial statements published by African Copper:

Table 3.3: Extracts from African Copper Plc’s Published Financial Statements Year ended 31 Year ended 31 March Six months ended 30 September March 2013 2014 (audited) US$’000 2014 (unaudited) US$’000 (audited) US$’000 Turnover 60,464 58,735 30,830 Operating profit from mining 13,712 12,714 3,966 operations before impairment and administrative expenses Operating profit/(loss) 5,447 (20,788) (489) Loss after tax (12,967) (32,639) (5,414) Total non-current assets 72,635 50,910 61,531 Net current liabilities (86,417) (96,933) (105,529) Total non-current liabilities (16,149) (8,601) (16,008) Total equity (29,931) (54,624) (60,006) Net cash inflow from operating 8,703 13,712 9,330 activities

WAI Comment: The Mowana Project is very well situated in northeastern Botswana and is well served by infrastructure, including power, water and communications. However, the history of the mine has been blighted by both low metal prices and a poor understanding of the mineralogical characteristics of the various ore types leading to poor plant recoveries. In addition, the choice to mine and process ore clearly identified as oxides, was apparently not in line with the African Copper business model. ZT61-1601/MM1131 Final V6.0 Page 42 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.6 Geology & Mineralisation

3.6.1 Regional Geology

The Archean-age “basement” rocks in eastern Botswana (Figure 3.2) are divided into three major units. These units are the Kaapvaal Craton in the south, the Zimbabwe Craton in the northeast and the inter-cratonic Limpopo Mobile Belt in between. Each of these terrains is comprised of granitoids and supra-crustal lithologies.

The greenstones and gneisses of the Kaapvaal Craton are older than those of the Zimbabwe Craton, although some degree of temporal overlap is apparent. On the Zimbabwe Craton the Mosetse Complex is of particular interest for the project described here. This unit comprises supracrustal rocks, the Matsitama Metasedimentary Group, together with widespread granitoids and gneisses with various compositions that enclose amphibolite sheets in places.

Figure 3.2: Regional Geology and Mineral Deposits of Botswana (Bushman = Mowana)

The Bushman lineament, or shear, is a major zone of cataclastic deformation trending north-northeast from the northern margin of the Matsitama belt. This lineament consists of mylonitised granitic rocks of the Mosetse Complex with relict sedimentary lenses in which copper mineralisation is located. This metasedimentary sequence differs in lithological composition from typical Archean greenstone belts with volcano-sedimentary associations in that it is poor in mafic and ultramafic components, and rich in carbonates.

ZT61-1601/MM1131 Final V6.0 Page 43 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Collision between the Kaapvaal and Zimbabwe Cratons commenced in the Late Archean with major consequent deformation in the Limpopo Mobile Belt. Subsequent to this collision, these three Archean terrains have acted as a single crustal or cratonic block through to the present day. This enlarged block is sometimes known as the Kalahari Craton.

Late Archean and early to mid-Proterozoic, largely sedimentary platform sequences succeed and cover the basement rocks of the Kaapvaal-Zimbabwe Craton, usually unconformably.

The Phanerozoic Karoo Supergroup succession covers a large part of the Archean and Proterozoic rocks of central and western Botswana. These Karoo rocks comprise undeformed sediments and coal bearing formations, culminating with the Stormberg basaltic lavas.

More recently, the Kalahari beds comprise a thin veneer of continental aeolian, fluvial and lacustrine sediments of post-Cretaceous age, which cover some 75% of the area of Botswana.

3.6.2 Project Geology & Mineralisation

3.6.2.1 Mowana

Hypogene sulphide mineralisation occurs within sub-vertical epithermal quartz-calcite vein breccias containing predominantly chalcopyrite + pyrite ± galena and sphalerite mineralisation. Hypogene mineralisation is capped by secondary oxide and supergene copper enrichment up to depths of approximately 50m and 150m below surface respectively. This in turn is overlain by Phanerozoic Karoo Supergroup siltstones, conglomerates and local tillite over the north and west areas of the deposit with depths varying from 1 to 90m. Regolith cover over the southern extent of the deposit generally consists of shallow (1 – 3m) clay rich black soils.

The metasediments hosting the deposit occur parallel to and within the northern extent of the 200km long north-northeast trending regional Bushman lineament exhibiting thicknesses variable between 200 to 400m mostly due to large scale pinch and swell amplitudes of up to 600m. However, the contact between the footwall sediments and the western granitoid has not been intersected in any of the historical or recent drilling.

ZT61-1601/MM1131 Final V6.0 Page 44 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 3.3: Local Geology and Cross Section of the Mowana Deposit

Four deformation periods have been interpreted within the project area, the strongest and most significant with regards to veining and mineralisation being the deformation that initiated the regional scale Bushman lineament. A final post mineralisation deformation event produced a number of ZT61-1601/MM1131 Final V6.0 Page 45 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA northeast trending parallel faults transecting the mineralised breccia at a low angle into three main zones of roughly equal length. From north to south, they are Mapanipani North, Mapanipani and Bushman sections.

The footwall argillaceous metasedimentary rocks exhibit alteration mineralogy and textures of retrograde regional greenschist metamorphism from either a higher grade lower amphibolite facies or arguably a more localised thermal metamorphic hornfels. In the Mapanipani and Bushman sections, localised but well developed talc/serpentine alteration from metasomatism occurs within dolomitic lithologies.

Sulphide bearing veins are generally spatially associated with carbonaceous (graphitic) argillites and are composed of quartz+calcite ± K feldspar in varying ratios with three stages of quartz veining having been identified. Only the second vein generation bears Cu, Pb & Zn sulphides. Areas of intense vein stockworks have been termed breccias and form the copper deposits. Photo 3.2 shows a block of typical brecciated oxidised ore.

Fluorite and barite are rare but locally evident. Pyrite + chalcopyrite occur mostly as semi-massive patches and coarse aggregates. Galena±sphalerite occurs locally usually associated with fluorite in discreet zones generally separate from chalcopyrite mineralisation which it slightly post-dates.

Photo 3.2: Typical Brecciated, Carbonate-rich Oxidised Ore

Regarding veining and mineralisation, the graphitic argillite (Photo 3.3) is the most significant lithology of the metasedimentary assemblage.

ZT61-1601/MM1131 Final V6.0 Page 46 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.3: Looking South from North Pit Showing Large Graphitic Mass in Centre

It is moderately to strongly graphitic, fine to very fine grained, black to very dark grey, laminated to fissile. The unit may grade into both cleaner limestones and more argillaceous pelitic rocks. Lamination is at a mm-scale ranging from planar to highly contorted and it commonly hosts fine grained pyrite in disseminations and small irregular stringers. Most of the intervals identified as carbonaceous phyllite or graphite schist form either the immediate wallrocks to the mineralised breccias and/or host moderate to high density veining forming a graphitic breccia.

The distribution of this unit is somewhat irregular, since it can form a relatively thick envelope to the breccias, be absent or entirely replaced by the breccia units up to their contact with the host limestone. This is also evident in cross section where the graphitic unit may occur in the upper part of a section and is absent lower down and/or vice versa. This is probably due to the unit having a pod like or lensoidal nature both along strike and down dip throughout the metasedimentary assemblage due to deformation. Its highly ductile nature would have led to this unit absorbing a lot of the strain under deformation.

Similar juxtapositions are seen with other lithologies in that, in the North Pit, limestone is on the hangingwall side of the orebody, whereas in the South Pit it is on the footwall.

In terms of the current Mowana pit, evidence suggests that the South Pit has a higher copper grade, less graphite, but the sulphide mineralisation is deeper, whilst the North Pit has a lower grade, but with more graphite, although the sulphides are nearer surface. In essence, the graphite is a problem

ZT61-1601/MM1131 Final V6.0 Page 47 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA for processing (although the use of a different collector may reduce this affect), but the very visual nature of it should allow avoidance of the worst of this material during mining.

Therefore, in summary, the near surface tenor of the orebody at Mowana is characterised by the mixed nature of oxide and supergene enrichment extending from surface to a maximum depth of approximately 70m. With increasing depth supergene chalcocite mineralisation continues and dominates with a nominal transition to Chalcopyrite-bearing hypogene mineralisation at around 150m below surface.

3.6.2.2 Thakadu Geology and Mineralisation

The Thakadu Copper Project is hosted within the Matsitama Metasedimentary Group, comprising carbonaceous and argillaceous metasediments which are enclosed within foliated granitoids of the Mosetse Complex. The Matsitama Metasedimentary Group lies in structural contact or unconformably over the granite/gneisses and forms two main areas of outcrop; the Matsitama Belt (which hosts the Thakadu and Makala deposits) and the arcuate “Bushman Belt” to the north where the Thakadu Mine is situated. The Matsitama Metasedimentary Group consists of greenschist to amphibolite facies metamorphic rocks with the following types of rocks identified: calcareous sandstones, conglomerates, pelites, arkoses, quartzites, volcanic tuffs and agglomerates, amphibolites, limestones, banded ironstones and serpentinites.

The copper mineralisation is broadly strata-bound and hosted by a complexly folded sequence of felsic sedimentary rocks, about 50-150m thick. The felsic metasedimentary sequence includes siliceous carbonates, biotite schists, calcareous pelites and graphitic carbonates. The stratigraphy above and below the felsic package is dominated by amphibolite derived from mafic/intermediate intrusives, volcanic and volcaniclastic rocks.

Hypogene sulphide mineralisation is predominantly hosted by quartz and quartz-carbonate rich arenites and to a lesser extent in biotite schists. Chalcopyrite is the dominant Cu-sulphide with minor bornite. Pyrrhotite is present in some zones and the sulphides generally occur as irregular stringers and disseminations in the quartz-carbonate rich units and in irregular quartz-carbonate veined zones.

Pyrite is common throughout the sequence and galena and sphalerite mineralisation is poorly and sporadically developed. Hypogene mineralisation is capped by secondary oxide and minor supergene copper mineralisation at depths of approximately 45m to 55m below surface.

The Thakadu mineralisation has been traced from surface to approximately 420m below surface and over a strike length of some 600m. The deposit dips at approximately 44⁰ on 224⁰ (dip and dip direction) with increased deformation and steepening dips up to 70⁰ locally in the east of the deposit.

The copper mineralisation is generally hosted by two quartz-carbonate units near the base of the felsic metasedimentary package and the footwall amphibolite unit is distinct from the hangingwall amphibolite unit. Copper mineralisation also occurs in other quartz-carbonate beds, but is not as

ZT61-1601/MM1131 Final V6.0 Page 48 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA laterally extensive. Where mineralisation is well developed, it often spreads into the surrounding (predominantly biotite) schist units.

The Thakadu Copper Project hosts various different styles of mineralisation, but is dominated by hypogene sulphides (chalcopyrite ± bornite) hosted within the quartz-carbonate units with lesser near surface oxide zone. There has been some secondary supergene alteration and enrichment but it is sporadic and poorly developed.

The copper mineralisation is preferentially developed within two of the quartz carbonate units towards the base of the felsic sequence and locally quartz-carbonate rich veins. It often transgresses from the quartz-carbonate unit into adjacent biotite schists or graphitic conglomerates where well developed. The mineralised zone varies in thickness from about 35m at the eastern near surface end of the Thakadu Copper Project, to less than a metre thick further to the west and as it pinches down toward the base.

3.6.3 Exploration Potential

The location of the Bushman Lineament has been known for many years as has the prevalence of copper (and gold to a lesser extent) mineralisation along its length. However, copper distribution appears to be localised by dilation and lithological controls. This has led to an uneven distribution of copper mineralisation along the zone.

The Mowana area clearly represents one such area of dilation. To test the full depth extent of the mineralisation, a 1.27km deep hole was drilled which passed in and out of the copper mineralisation to a depth of around 1,000m. This hole and others usually to around a maximum of 450m clearly showed that the mineralisation is heterogeneous particularly where supergene copper mineralisation is present in proximity to the more common breccia type.

In terms of surrounding potential, drilling to the south of the South Pit has intersected gold mineralisation which appears to be part of the same system, although more work is needed to understand the importance of this. Mineralisation also continues to the north of the North Pit into Mowana North and Conical Pit, both of which are likely to feature in any future mine plan.

Taken together, the potential of the area is good, and Figure 3.4 places into context the known resources in the area.

ZT61-1601/MM1131 Final V6.0 Page 49 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 3.4: Resource Potential Within the License Areas

WAI Comment: The Mowana and nearby Thakadu deposits are relatively well known through detailed exploration and previous mining at both. The latter has been mined to exhaustion by open pit, although the underground potential of the Makala orebody which can be accessed from the Thakadu pit remains undeveloped, but does feature within Alecto’s mine plan. Notwithstanding this, the Mowana Mine has suffered through a poor understanding of the mineralogical characteristics of the various ore types leading to poor plant recoveries. In addition, the choice to mine and process ore clearly identified as oxides, coupled with low metal prices combined in premature mine closure. However, this has presented a significant opportunity for Alecto in that the majority of the Mowana orebody is still insitu and therefore through careful management, further studies particularly related to the variability in ore types, and an overall better understanding of the project should deliver a viable mining operation.

3.7 Mineral Resource Estimation

3.7.1 Introduction

The Mowana deposit is a shear hosted epigenetic gold type exhibiting a quartz-carbonate- chalcopyrite-pyrite vein stockwork system. The deposit has a strike length of approximate 4.7km and has been subdivided into two areas, Mowana Mine (Mowana South) and Mowana North. Although the deposit has been classified as two separate areas, both Mowana Mine and Mowana North form part of the same continuous mineralised structure as shown in Figure 3.5.

ZT61-1601/MM1131 Final V6.0 Page 50 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 3.5: Mowana Deposit Plan

Mineral Resources have been estimated by Golder Associates, with separate estimates carried out for Mowana North and Mowana Mine. In September 2014, Golder Associates issued the report “Geological Modelling and Resource Estimation of the Mowana North Project” on behalf of African Copper, the previous owners of the project. A second report “Geological Modelling and Resource Estimation Update of the Mowana South Project” was issued in June 2015 by Golder Associates. WAI has been provided with copies of both reports, in addition to the corresponding Mineral Resource block models, the models provided comprise:

• Mowana North: mwn_201407_v3c • Mowana South: GA_Combinedmodel_0515

The following sections summarise the WAI review of the Mowana Mineral Resource Estimates.

3.7.2 Topography

WAI has been provided with topographic Digital Terrain Models (“DTM”) of the Mowana surface topography with dates of August 2014 and January 2015. Open pit mining has been carried out in the south at Mowana Mine (North and South pits), but no mining has taken place at Mowana North.

The topographic surveys for the Mowana Mine open pit appear detailed and suitable, the topographic surveys to the north and periphery of the site appear to be based on very broad surveys. Drill hole collar surveys correlate with the topographic DTM including the more broadly spaced surveyed area ZT61-1601/MM1131 Final V6.0 Page 51 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA in the north, WAI is therefore of the opinion that the topographic survey is suitable for use in a Mineral Resource Estimate.

3.7.3 Database Compilation

Multiple database drill hole files have been provided in the data package supplied to WAI, including Microsoft Excel and Datamine formats. For the purpose of this review, WAI has used the Datamine drill hole file “Totalmw_dd.dm” which appears to be the most recent and complete drill hole database, and the one used in the Mineral Resource Estimates.

The sample database “Totalmw_dd.dm” represents a more simplified version of the data available for the project and contains the information considered by Golder Associates to be the most relevant for the Mineral Resource Estimation, the information includes:

• Assays CuTotal, Cuacid, Pb, Zn, Ag, Au; • Lithology code; • Drill type; • Ore code; • Density; and • Hole diameter.

WAI notes from additional drill hole data provided that multi element assays have been completed for 61 other elements, which may be of use in defining zones within the deposit with differing mineralogical or processing characteristics.

Mineralisation at Mowana comprises hypogene, supergene and oxide, given the differences in grade, mineralisation, processing and recovery characteristics between these zones, the definition of these domains in a Mineral Resource block model is of great importance. Definition of these zones is often based on visual alteration and mineralogical logging and/or grade characteristics. According to the reports provided to WAI, the degree of oxidation and weathering has been logged, however, limited logging information appears to have been recorded in the sample databases.

Understanding the copper speciation within a deposit is of intrinsic importance when assessing the proportion of copper that can be recovered. Projects typically assay for Total Copper (“CuTotal“) and

Acid Soluble Copper (“Cuacid“) providing information on the proportion of copper oxides in relation to copper sulphides and silicates. The Cuacid assays can be used to define the oxide and supergene horizons.

The Mowana databases used by Golder Associates shows approximately a third of CuTotal assays have a corresponding Cuacid assay. For a project with this style of mineralisation, WAI would expect all samples to have been assayed for both CuTotal and CuAcid. WAI is aware that Alecto has been reviewing the available information for the Project and have noted that a total of 156 vertical holes with depths ranging between 10-150m containing CuAcid assay results were omitted from the Mineral Resource Estimates by Golder Associates. The rational for omitting the vertical holes is due to the holes not ZT61-1601/MM1131 Final V6.0 Page 52 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA intercepting the waste ore contacts, having been drilled entirely in the mineralisation. WAI is of the opinion that such an omission of the samples is erroneous. The presence of other drill holes which do define the mineralisation extents nulls the argument for removing the vertical holes. By leaving the vertical holes out of the Mineral Resource database, Golder Associates has removed assay data, particularly CuAcid assays which is of value in defining the copper speciation through the deposit.

Alecto has compiled the 156 vertical drill holes into a more complete database to aid in developing a more detailed geological block model.

WAI has also noted that the bulk of the sample database comprises absent assays, with sample intervals having been chosen by the site geologist based on areas logged as mineralised. Some absent grade values have been noted by Alecto in the vertical drill hole records, however, checks of the original hard copy files show that grades are available for these absent entries, and Alecto are updating the database accordingly. Alecto has provided WAI with the current updated database, along with PDF scans of the original log sheets demonstrating how the database is being brought into a more complete and robust format. WAI recommends that for any outstanding absent values, the selection of samples be verified to ensure any potential mineralisation has been adequately assayed.

3.7.4 Geological Interpretation

Only the wireframes corresponding to the Mowana North estimation (Golder, 2014) have been provided to WAI. Whilst the wireframes include an interpretation for the Mowana Mine (South) area, there are a few minor differences between the wireframe in this area and the “GA_Combinedmodel_0515.dm” block model.

Wireframes of the mineralisation for both Mowana South and Mowana North were constructed by

Golder Associates based on the drill hole database with wireframes constructed to a 0.1% CuTotal cut- off grade. In reviewing the wireframes against the drill hole database, WAI notes that the wireframes encompass nearly all the samples assayed; samples should ideally be sampled into the waste rock on either side of the mineralised intercepts to ensure the mineralisation is adequately delineated.

WAI notes that the Golder Associates Mineral Resource Estimates have reported only the breccia mineralisation as ore, with the carbonate mineralisation recorded as waste. WAI is aware that Alecto is currently in the process of investigating Dense Media Separation (“DMS”) at Mowana, which subject to DMS testwork confirmation, would make copper mineralisation from the carbonates recoverable. Therefore, this has the potential for the carbonate mineralisation to be included in future Mineral Resource Estimates.

The bases of the oxide and supergene wireframes have been provided for the Mowana Mine (South) area in the data package to WAI. The block model for this area also contains a redox code (“MINZONE”) which defines the oxide, supergene, and hypogene zonation. The redox code in the model differs from the wireframes provided, suggesting that the wireframes were superseded. No details have been provided in the Mineral Resource reports, to quantify how the redox horizons were defined by Golder Associates, possibly it could have been either through alteration logging, or from

ZT61-1601/MM1131 Final V6.0 Page 53 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

the limited Cuacid assays. From the lack of alteration logging, and the limited numbers of Cuacid assays, WAI would question the veracity of the different modelled oxide, supergene, and hypogene horizons.

No oxide, supergene, or hypogene codes have been assigned to the Mowana North model, indicating that the lack of information in the north has precluded its use in modelling.

WAI Comment: The lack of domaining in the Golder Associates interpretations for the oxide, supergene, and hypogene mineralisation at Mowana North, and the limited support for the interpretation of these domains at Mowana Mine is a key feature of the geological interpretation that requires improvement. Given the implication of these domains on the processing of ore, and likely recoveries, it is paramount that future estimation works improve the domaining within the modelling. Alecto has undertaken its own revision of the Golder Associates block models to improve the level of geological information in the models to aid in the mine planning. Both the Golder Associates Mowana Main (South), and Mowana North models have been combined by Alecto into a single block model. WAI has been provided with a copy of the combined block model, however, this updated model has not been audited in detail.

WAI Updated Comment: Subsequent to the review by WAI, as a result of the ongoing works being completed by Alecto, WAI is now aware that 156 of the drill holes completed at Mowana

do have CuAcid values. WAI is also aware that, as Alecto drill new RC holes and blast holes, these too will be used in future modelling for improved understanding and confidence.

3.7.5 Sample Data Processing

3.7.5.1 Mowana North

As part of the Mowana North Mineral Resource model, a total of 10 different mineral domains were defined by Golder Associates. Samples within these 10 domains were selected and assigned the corresponding domain code. Based on the average sample length, samples were composited to 1m prior to top-cutting.

The Golder Associates report (Golder, 2014) notes that the data was reviewed statistically for each grade field (CuTotal, CuAcid, Pb, Zn, Ag, Au) for the mineralised domains, as well as waste rock types. To prevent the undue influence of high grade outliers, Golder Associates top cut samples from 8 of the 10 domains.

WAI has reviewed the composite length and top-cuts used by Golder Associates at Mowana North, and is of the opinion that the statistical work undertaken is suitable.

A total of eight mineralised domains were defined by Golder Associates for the Mowana Mine Mineral Resource Estimation, with domain codes allocated as 41-48. Samples were selected within the mineralised domains and assigned the corresponding domain code. Based on the average sample length, samples were composited to 1m prior to top-cutting.

ZT61-1601/MM1131 Final V6.0 Page 54 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.7.5.2 Mowana Mine (South)

Unlike the Mowana North estimation, no top-cuts have been used for the mineralised domains. WAI has carried out a decile analysis of the mineralised samples, and is of the opinion that there are some higher-grade outliers which may influence the grade estimates, resulting in localised grade overestimations.

3.7.6 Variography

3.7.6.1 General

WAI has not carried out its own variographic assessment, but has relied on the variogram outputs reported by Golder Associates.

Variography has been carried out by Golder Associates for each grade field (CuTotal, CuAcid, Pb, Zn, Ag, Au), for each separate domain, with down hole and anisotropic variograms reported.

3.7.6.2 Mowana North

The experimental variograms reported in the “Geological Modelling and Resource Estimation of the Mowana North Project” (Golder, 2014) typically show poorly structured variogram results. The poorly structured variograms are due to the limited number of sample pair nodes. Broader drill hole spacing at Mowana North, compared to Mowana South, reduces the amount of sample data which can be used in the variography which precludes defining robust variogram structures.

WAI is of the opinion that whilst the variograms for Mowana North lack structure, this is a function of the drill hole spacing and not necessarily grade continuity. The current variogram results at Mowana North prevent adequate support for grade continuity, a key consideration when it comes to assigning Mineral Resource classifications. Given the style of mineralisation at Mowana, WAI would expect additional infill drilling at Mowana North would result in similar variogram results as seen at Mowana South, and WAI recommends that such infill works be carried out.

3.7.6.3 Mowana Mine (South)

A greater degree of variography appears to have been undertaken at Mowana Mine (North), including the use of variogram continuity fans, this may be a reflection of the denser coverage of sample spacing at Mowana Mine (South).

Unlike the experimental variogram results for Mowana North, the results at Mowana Mine have a greater number of sample pairs at a range of lags, this has resulted in reasonable variogram structures being defined.

ZT61-1601/MM1131 Final V6.0 Page 55 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The down hole variogram results show a low nugget effect with overall ranges of 5-10m. Anisotropic variogram results show a very rapid increase in variance over a small distance (<20m) before attaining a slight spherical structure, ranges appear to be in the order of 20-40m.

Overall the variographic studies appear to be suitable and carried out in line with industry standard practice.

3.7.7 Volumetric Block Model

For Mowana Mine (North) and Mowana Mine (South), 15m x 5m x 10m (X/Y/Z) parent cell block models have been used by Golder Associates.

3.7.8 Density

Density measurements have been taken for each assayed interval, from a selection of drill holes considered to be representative across the deposit, with measurements taken for holes on approximately every 1 in 4 drill profile line. Measurements were made using the Archimedes water immersion method, the results were recorded and imported into Micromine software. A comparison was made of the density results against the lithology and oxidation state.

For the Mowana Mine (South), block model average density values from the testwork have been applied to the model based on the lithology, mineralised domain, and oxidation state. In contrast density values have been estimated into the Mowana North block model using the assay values within the drill hole file to estimate values into the block model.

Density values have only been estimated into the southern extent of the Mowana North block model (central part of the overall Mowana deposit), due to an absence of density measurements for the bulk of the Mowana North Area. No details have been provided regarding the density measurements Golder Associates have chosen to apply to the bulk of the Mowana North model. In reviewing the density values reported, there appears to be a correlation with the areas of Mowana that have been sampled.

WAI Comment: WAI is of the opinion that the quantity and distribution of density measurements taken at Mowana Mine (South) is suitable for reliably determining density for a Mineral Resource Estimate. The approach adopted by Golder Associates for applying the density measurements to the Mowana Mine (South) block model is suitable. The lack of density measurements at Mowana Mine (North) provides a lower confidence in the application of density values to the block model, and therefore a lower confidence in the estimates of the contained Mineral Resource tonnage. Further density measurements are required at Mowana North in order to provide the same level of support and confidence as a Mowana Mine (South).

ZT61-1601/MM1131 Final V6.0 Page 56 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.7.9 Grade Estimation

Grade estimation for both the Mowana Mine (South) and Mowana Mine (North) models has been carried out using Ordinary Kriging (OK), with estimates run using a three pass approach with the search ellipse radii increasing on each successive pass.

Based on the Golder Associate variography results for Mowana Mine (South), the choice to use OK as the principal estimation method appears reasonable. However, WAI is of the opinion that the search radii adopted for the Mowana Mine (North) estimates are too long and that the initial two estimation passes should have adopted radii more in line with the variogram results.

Some blocks in the Mowana Mine model were not estimated during the OK estimation works, due to their distance from samples, or the lack of samples within that domain. Golder Associates decided that where blocks were not estimated, a default grade would be applied to the block based on the average grade value of all the samples within that domain. WAI is of the opinion that this approach may result in a grade over, or underestimation, of these blocks, as it fails to take into account spatial grade variability. If blocks were not estimated, then either the estimation parameters should be revised to enable grades to be estimated into these areas, or these areas should be omitted from the estimation due to a lack of data support.

Ordinary Kriging relies on robust variogram models for the purpose of weighting samples during the grade estimation. Given the lack of robust variogram models for Mowana North, WAI is of the opinion that Inverse Power Distance (“IPD”) would have been a more preferable estimation method. As with the Mowana Mine (South) estimation, the search radii used appear to be too large for the initial estimation runs, and this may result in excessive grade smoothing in the block model.

3.7.10 Validation

3.7.10.1 Introduction

Following the grade estimations, Golder Associates carried out a series of validations on the estimation results including visual comparison of samples and the block model, average grade comparison and a grade profile plot analysis (swath plots). Grade profile plots are a graphical display of the grade distribution derived from a series of bands, or swaths, generated in several directions through the project. The plot compares the grade within these bands of the composite samples and the block estimated grades for the different methodologies used. Where the composite grades and the estimated grades show a good correlation, greater confidence can be placed on the estimate.

3.7.10.2 Mowana Mine (South)

Golder Associates concluded from their validation work that the average grade conformance between the estimates and the sample data was acceptable. As part of this CPR, WAI has carried out an independent validation of the model using a swath analysis and global grade comparison. WAI is of

ZT61-1601/MM1131 Final V6.0 Page 57 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA the opinion that the validation results appear reasonable, indicating that the model is a fair representation of the sample data.

3.7.10.3 Mowana North

As with the Mowana Mine (South) validation work, Golder Associates carried out visual, global grade, and swath analysis checks of the block model. Golder Associates noted in the global grade comparison that there are areas with high differences between the composites and the blocks. It is the opinion of Golder Associates that the differences may be due to the high variability and spatial distribution of copper grades, and/or the lack of samples. Golder Associates have also stated that it may be a function of insufficient top cutting of higher grade samples, or the angle of intercept of the drill hole relative to the mineralisation, resulting in a bias in the estimation.

WAI Comment: WAI has carried out an independent validation of the model relative to the composite sample data. A swath analysis and global grade comparison was carried out by WAI indicating the potential for excessive grade smoothing resulting in overestimation in areas. WAI is of the opinion that the Golder Associates views on possible sources of bias are valid, and that in addition, the excessive search radii and the use of poorly defined variogram models in the grade estimation may have had a bearing on the resultant estimation results.

3.7.11 Mineral Resource Classifications

3.7.11.1 Mowana Mine (South)

Golder Associates has stated that the Mineral Resources for Mowana Mine (South) have been reported in accordance with the JORC Code (2012) and the South African SAMREC code. The Mineral Resource classifications were applied based on the sample spacing and grade estimation search radii. The following classification criteria has been applied by Golder Associates:

• Measured, areas of the model above the 835mRL with a drill spacing of <60m; • Indicated, areas of the block model estimated in the second search ellipse; and • Inferred, all other areas of the model not falling within the criteria for Measured or Indicated.

Under the JORC Code (2012) “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.”

WAI Comment: The proportion of copper oxide relative to total copper plays an important role in understanding what proportion of the mineralisation can realistically be processed and

recovered. Given the lack of Cuacid estimates in the model, WAI is of the opinion that at present the Mineral Resource model does not fulfil the JORC (2012) requirements for disclosing

Measured Mineral Resources. The lack of Cuacid grades results in a model for which there is ZT61-1601/MM1131 Final V6.0 Page 58 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

insufficient detail on grades, to sufficiently enable the application of modifying factors to support a detailed mine plan. WAI is of the opinion that the portion of the Mineral Resource classified as Measured, be considered more in line with an Indicated Mineral Resource.

Alecto has identified 156 vertical holes which were omitted by Golder Associates from the

Mineral Resource Estimates which contain CuAcid grades, which attain depths of between 10- 150m, and extend the strike length of the deposit. Future Mineral Resource Estimates should incorporate these drill holes, with the aim of improving the understanding what proportion of the mineralisation can realistically be processed and recovered.

3.7.11.2 Mowana North

Golder Associates has stated that the Mineral Resources for Mowana North have been reported in accordance with the JORC Code (2012) and the South African SAMREC code. The following Mineral Resource classifications have been applied:

• Indicated, the southern extent of the Mowana North block model above the 600mRL that was estimated using the first search radii, as shown in Figure 3.6. This area correlates with a drill spacing of approximately 60m and covers the area of the model for which density measurements have been taken; and • Inferred, all other areas of the model not falling within the criteria for Indicated.

Figure 3.6: Mowana North Mineral Resource Classification (Golder Associates, 2015)

Overall WAI considers the Mineral Resource classification for Mowana North to be suitable.

3.7.12 Reasonable Prospects for Eventual Economic Extraction

Under the JORC Code (2012), a Mineral Resource needs to demonstrate a reasonable prospect for eventual economic extraction for it to be reported. For deposits such as Mowana, which is likely to ZT61-1601/MM1131 Final V6.0 Page 59 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA be mined through open pitting, the standard industry approach is to carry out a pit optimisation using realistic, albeit uplifted, pricing, to demonstrate which portion of the Mineral Resource has prospects for extraction.

The Mineral Resources currently reported by Golder Associates are reported in their entirety. No pit optimisation works have been carried out to constrain the Mineral Resource to that portion which has realistic prospects for eventual economic extraction.

WAI understands that as part of the current work being undertaken by Alecto, a series of pit optimisations have been undertaken to define potential mineable material. These optimisations are of internal use by Alecto and therefore do not pertain to the above comment regarding the constraining of the Golder Associate Mineral Resource statement. However, such an approach shows the adoption by Alecto of best practice and this will help form the foundation for suitably constraining future Mineral Resource Estimates based on reasonable prospects for eventual economic extraction.

WAI Comment: in order to meet the reporting requirements of the JORC Code (2012), WAI recommends that future Mineral Resource Estimates be constrained by pit optimisations in line with the work being undertaken internally by Alecto. The pit optimisation works will result in a reduction of the Mineral Resources currently reported, however, until such an exercise is undertaken the amount of Mineral Resources to be omitted is unknown.

WAI Comment: As WAI understands, optimisations, LOM plan and designs have been completed in MineSight, with Medium and short-term planning, designs and scheduling completed in DataMine, by PenMin, and has been independently reviewed by Sound Mining. Going forward, any updated MRE should have a pit optimisation applied to demonstrate the economic prospects for extraction, Alecto has agreed with this approach suggested by WAI.

3.7.13 Golder Associate Mineral Resource Statements

3.7.13.1 Introduction

The following Mineral Resource statements have been disclosed by Golder Associates for the Mowana Mine (North) and Mowana Mine (South) models. It should be noted that due to the approach taken by Golders in modelling the two areas of Mowana, there is a degree of overlap between the two models resulting, if both models are taken into consideration, a degree of over reporting. WAI estimate the degree of over reporting due to the overlapping models to be in the order of 10Mt at a cut-off grade of 0.25% CuTotal. Alecto has combined the two models for the purpose of internal mine planning, therefore the impact on the internal Alecto mine plan and schedule is negated. Future Mineral Resource Estimates should carry out the estimation of Mowana Mine (South) and Mowana North as a single estimation, this will provide consistency in the estimation methods, and remove the overlap in reporting.

ZT61-1601/MM1131 Final V6.0 Page 60 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.7.13.2 Mowana Mine (South)

The Mineral Resources for Mowana Mine (South) as reported by Golder Associates as of June 2015, at a cut-off grade of 0.25% CuTotal is provided in Table 3.4 below.

Table 3.4: Mowana Mine (South) Mineral Resources (after Golder Associates, 2015) Tonnage Classification Cu (%) Pb (%)* Zn (%)* Ag_ppm Au_ppm (000) Measured 14,725 1.00 0.04 0.02 0.58 0.005 Indicated 26,308 0.88 0.04 0.03 1.30 0.002 Measured + 41,033 0.92 0.04 0.02 1.05 0.003 Indicated Inferred 23,976 0.71 0.03 0.03 1.57 0.00001 Notes: *Typographical error in the Golder Associates report records the units for Pb and Zn as being ppm.

WAI has noted that for the purpose of reporting, Golder Associates has considered the carbonate mineralisation to be waste and unrecoverable. Alecto are currently evaluating a DMS process route which should make the carbonate mineralisation recoverable. Based on the Golder Associate model for Mowana Mine (South), the proportion of additional carbonate mineralisation at a 0.25% CuTotal cut- off grade to be circa 50Mt with an average grade of 0.60% CuTotal.

3.7.13.3 Mowana Mine (North)

The Mineral Resources for Mowana Mine (North) as reported by Golder Associates as of September

2014, at a cut-off grade of 0.25% CuTotal is provided in Table 3.5 below. As with the Mowana Mine (South) mode, there appears to be some confusion in the reporting of Pb and Zn grades. The Pb and Zn units in the Golder Associates report are stated as ppm, however, whilst the Inferred Mineral Resources are reported correctly in ppm, the Indicated Pb and Zn values are actually reported in percent.

Table 3.5: Mowana Mine (North) Mineral Resources (after Golder Associates, 2014) Classification Tonnage (000) Cu (%) Pb (%) Zn (%) Ag_ppm Indicated 31,060 1.00 0.02 0.01 1.50 Inferred 75,802 0.78 0.0006* 0.0009** 2.08 Notes: *Reported in Golder Associates report as 6.19ppm Pb. **Reported in Golder Associates report as 9.06ppm Zn

3.7.14 Conclusions

Overall, the modelling approach adopted by Golder Associates is appropriate and in line with industry best practice, and the grade estimates are a fair representation of the sample data on which the estimates are based. WAI has, however, identified a few areas of risk.

One of the most notable risks to the Mineral Resource estimate is the lack of detail pertaining to the oxide, supergene and hypogene zonation within the deposit, and the associated copper speciation. A lack of detailed geological logging and limited number of acid soluble copper assays (Cuacid) impacts on robustly defining the redox zonation at Mowana.

ZT61-1601/MM1131 Final V6.0 Page 61 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The choice by Golder Associates to omit 156 vertical holes for which there are Cuacid assays is inappropriate, limiting the assay data available to define the deposit zonation and copper speciation. Whilst the oxide, supergene and hypogene zones have been modelled at Mowana Mine (South), no such zones have been modelled at Mowana Mine (North). The removal of 156 vertical holes from the

Mineral Resource database by Golder Associates has resulted in no Cuacid estimates being undertaken into the Mineral Resource block models. This is important information when trying to ascertain the proportion of copper oxides in relation to copper sulphides and silicates.

The lack of domaining for the oxide, supergene, and hypogene mineralisation at Mowana Mine (North), and the limited support for the interpretation of these domains, is a key feature of the geological interpretation that requires improvement.

Golder Associates has carried out two separate estimates for Mowana Mine (South) and Mowana Mine (North), however, both these areas are part of the same mineralised structure. WAI has noted that there is a degree of overlap between the two models in the central part of the deposit. WAI estimate the degree of overlapping to be in the order of 10Mt at a cut-off grade of 0.25% CuTotal. Alecto has combined the Golder Associate block models into a single block model for use internally, and for planning purposes this solves the overlap issue. For future Mineral Resource Estimation works, the deposit should be modelled as a single entity ensuring no overlaps and consistency in the estimation methods. As new geological and metallurgical testwork becomes available, it is proposed to incorporate this information and develop a more detailed model for mine planning.

The Mineral Resources reported by Golder Associates excludes the carbonate mineralisation on the premise that it is not recoverable. Current works by Alecto on DMS processing shows this is potentially an incorrect assumption. Subject to confirmation from the DMS testwork, future Mineral Resource Estimates should include the carbonate mineralisation providing a marked increase in the overall Mineral Resource base.

Lastly, the Mineral Resources have been reported in their entirety, under the JORC Code (2012) there is a requirement to demonstrate reasonable prospects for eventual economic extraction. Standard industry practice is to carry out a pit optimisation using realistic, albeit uplifted, pricing, to demonstrate which portion of the Mineral Resource has prospects for extraction. Whilst Alecto has carried out a series of their own internal pit optimisations, these have not been applied in an official capacity to the currently reported JORC Code Mineral Resource Estimates. Any future Mineral Resource updates will require such pit optimisations to be carried out, and this may potentially lead to the omission of some of the currently reported Mineral Resources.

WAI Comment: As WAI understands, pit optimisations have been completed by PenMin using MineSight software. Going forward, any updated MRE should have a pit optimisation applied to demonstrate the economic prospects for extraction, Alecto has agreed with this approach

suggested by WAI. Also, WAI is aware that the recently rediscovered CuAcid sample values are being captured into the site database, which could allow a remodelling of the block model,

with CuTotal and CuAcid values being estimated. Finally, WAI understands that the Alecto geologists are currently completing remedial action in terms of capturing missing core logs,

ZT61-1601/MM1131 Final V6.0 Page 62 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

and studying metallurgical characterisation. These additional works (currently ongoing and not yet complete) will allow a more accurate domaining of the block model.

3.8 Mining

3.8.1 Overview

The Mowana Mine is an open pit that was commissioned in 2008 by its previous owner (Messina Copper Botswana (Pty) Ltd (“MCB”). The mine operated at a mining rate of 100kptm and a 1.2Mtpa processing plant. Operations at its sister Thakadu mine were suspended in June 2015 as the operation neared the end of its scheduled mine life.

Mining operations were undertaken from two contiguous pits (the North and South pits) and continued down to 65m below surface. Currently, approximately 65,000t of blasted ore is lying at the base of the North pit which is being extracted (Photo 3.4), and there is also a quantity of mixed ore on a stockpile located at the ROM pad. There is also a large amount of low grade (0.5%-0.65%) mixed ore in surrounding stockpiles.

Photo 3.4: Mining Previously Blasted Material, South end of North Pit

The previous operation used mining contractors for the mining operation and Alecto has followed the same route. At the time of the April site visit, extraction of previously blasted ore was taking place as well as blasthole drilling and a programme of RC holes had also been instigated. Although one bench containing approximately 70kt had been drilled (Photo 3.5), delays with the explosives license had

ZT61-1601/MM1131 Final V6.0 Page 63 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA prevented this from being blasted. However, the explosives permit has now been granted (12th April 2017) which should allow the mine to move forward.

WAI Comment: WAI is very pleased to see production re-commencing from the North Pit at Mowana, and although a blast has not yet taken place, previously blasted ore and stockpile material are providing low-grade feed to the plant. Furthermore, the inclusion of RC drilling for grade control measures is a positive step.

The production rate of the Mowana Mine is planned at 1.2Mtpa and the Makala underground mine is planned for 1Mtpa.

Photo 3.5: Drilled Bench and ADT, North Pit

As the processing plant will be focusing on processing primarily the sulphide material, the majority of the oxide material from the open pits shall be stockpiled at the ROM pad.

WAI Comment: PenMin report that the non-recoverable oxide material will be mined as waste, but stockpiled in a separate area to the waste dump for potential future processing (potentially ammonia heap leach).

3.8.2 Hydrogeology

Water is present within the two pits which are currently being dewatered (Photo 3.6). However, data as to how much of this water is estimated to have come from rainwater or groundwater is not known.

ZT61-1601/MM1131 Final V6.0 Page 64 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

PenMin report that the water table is approximately 100m below ground level and that there is possibly a water bearing structure that lies within the open pit.

A hydrogeological investigation is planned for when the mine is operational, although no further details have been developed as to the extent of the study. However, PenMin did comment that if a water bearing system of sufficient recharge quantity had been found within the extents of the licence area, then this water could be used for the process water.

WAI Comment: Whilst no detailed hydrogeology has been undertaken by any consultancies, currently PenMin report that there is little indication of any significant water inflow into any of the holes drilled within the footprint of the open pits.

Photo 3.6: Dewatering the South Pit

3.8.3 Geotechnical

The slope angles within the mine design are summarised in Table 3.6 below.

Table 3.6: Mowana Slope Angles Karoo 40 West Weathered 51 Fresh 55 Karoo 50 East Weathered 51 Fresh 55

ZT61-1601/MM1131 Final V6.0 Page 65 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

In 2015 Open House Management Solutions, a third party consultancy, reviewed the slope angles presented above and concluded that “the likelihood of failure occurring is however remote, given the high Factor of Safety and low Probability of Failure”.

On the basis of the conclusions above, PenMin report that the slope angles are likely to be steepened once all of the data has been studied and better identification of the rock types have been completed and their geotechnical characteristics are defined.

However, the slope angles of the current pit appear to be stable with no failures in evidence; some spalling has occurred in the benches although this could be attributed to weathering.

3.8.4 Mine Design

A mine design has been undertaken using MineSight and Datamine software, based on optimisation parameters considered appropriate for the level of study presented. The optimisation parameters will be developed as actual operating data become available.

The mine has been developed in two phases with the first phase based on the pit shell developed with a copper price of US$1.85 per lb, and a second phase with a copper price of US$2.15 per lb, so that the higher-grade material is mined first.

The optimised pit shells and cross sections for the US$1.85 /lb Cu, and US$2.15/lb Cu pits, are shown below in Figure 3.7 to Figure 3.10.

Figure 3.7: Pit Shape @ US$1.85/lb Cu

ZT61-1601/MM1131 Final V6.0 Page 66 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 3.8: Cross Section @ US$1.85/lb Cu

Figure 3.9: Pit Shape @ US$2.15/lb Cu

Figure 3.10: Cross Section @ US$2.15/lb Cu

Slope angles have been designed based on available geotechnical knowledge and a target COG of 0.25% Cu with a strip ratio of 3.5 (t:t) has been set.

This assumes a bench height of 10m, ramp width of 17m, ramp gradient of 10%, catch berm width of 2.5m and safety berm width of 1.5m.

WAI Comment: A copper price of US$1.85 per lb has been used to define the pit shell to be used for the mine design as this provides a higher-grade shell with which to start up the operations. WAI believes that this copper price is conservative and provides long term mine life upside to the Project. As WAI understands, optimisations, LOM plan and designs were completed in MineSight, with Medium and short-term planning, designs and scheduling completed in DataMine, by PenMin, and has been independently reviewed by Sound Mining.

ZT61-1601/MM1131 Final V6.0 Page 67 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Sound Mining has further been appointed to perform the life of mine scheduling and revise the short-term plan, using Datamine.

For the longer-term view on the mine, it is not decided whether the mineral processing plant will be installing a Dense Medium Separation (“DMS”) Plant, whereby the mining operation can take a more bulk mining approach, as opposed to the lower production rate selective mining approach which will be the situation with the base case 1.2Mtpa. As such, dilution has been assumed at 10% for the pit optimisation. WAI would recommend that when the mine servers are accessed by PenMin, the past production records should be analysed to establish if dilution has been calculated previously, and if this value is found, then a revised pit optimisation and production schedule is produced.

WAI Comment: Alecto report that as they will use a contractor responsible for drilling and blasting, with blast engineers full time on site, these measures should help reduce this dilution.

3.8.5 Mining Equipment

The current operations are now using a contractor (Giant) who arrived on site mid-February with two excavators and 5 ADT’s (40t capacity) for general clean-up where some 300kt of material were moved. Since that time, further equipment has been added, see Table 3.7 below. Further equipment will be added as the mine ramps up to full capacity, see Table 3.8 below.

Table 3.7: Mowana Equipment Recently Added February March April Total Bell L2706E FEL 1 1 JCB 467 FEL 1 1 Komatsu PC 850 Excavator 2 2 Komatsu PC220 Excavator/Rock Breaker 1 1 Bell TLB 1 1 CAT 740B ADT 5 4 9 Bell B30D ADT 2 2 Komatsu 315 Dozer 1 1 Bell 670G Grader 1 1 18,000l Water Bowser 1 1 Diesel Bowser 200l 1 1

A list of the equipment expected on site by December 2018 is given in Table 3.8 below.

ZT61-1601/MM1131 Final V6.0 Page 68 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.8: Mowana Projected Equipment by December 2018 Item Number PC 850 excavator at 650tph 3 60t ADT at 200tph/truck 14 Drill rigs at 23.6mph/drill 3 Track dozers 3 Grader 2 Water bowser 2 FEL 2 30t ADT 2 100mH pumps @650lph 2 PC 850 excavator at 650tph 3

3.8.6 Waste Dumps

The single mine waste dump is located on the western side of the Mowana open pits (Photo 3.7) and its current eastern edge lies approximately 50m from the ultimate pit edge of the US$2.15/lb Cu pit shell. PenMin report that given the configuration of the deposit, no waste movement is required within the current life of mine.

The dumping strategy will to extend the western side of the waste dump in the future mining operations, in order to not sterilise any ore within the northern section of the Mowana open pit.

Photo 3.7: Mowana South, Looking North with Waste Dumps on Western Pit Rim

ZT61-1601/MM1131 Final V6.0 Page 69 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.8.7 Production Schedule

As part of the re-opening process, the Company has focussed on the next 22 months as a key time for the mine. A detailed production schedule as presented within the Financial Model which excludes the potential DMS is shown in Figure 3.11 below.

This provides a detailed breakdown of the tonnages coming from the Very Low Grade (“VLG”) ores, Low Grade (“LG”) and High Grade (“HG”) as well as the total waste produced. A breakdown of the different ore types by month is shown in Figure 3.12 below.

This shows that mining gets into the sulphide ores towards the end of 2017 when better recoveries and higher grade concentrates are expected.

Beyond January 2019, the mine is projected to continue to produce some 1.2Mtpa until 2027, although the amounts of waste material to be stripped (including some of the oxide material) varies year-on-year dependent on the pushback scenario adopted.

WAI Comment: From consideration of the previous mining operations as well as the plant configuration, WAI believes that this production schedule is achievable given the proper level of study required to justify the parameters.

ZT61-1601/MM1131 Final V6.0 Page 70 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Row Labels HG CU% CUT LG CU% CUT VLG CU% CUT TOTAL ORE >0.5%CU CU% CUT >0.5%CU TOTAL ORE CU% CUT WASTE TOTAL MINED STRIPN RATIO Apr-17 14,373 1.64 235.41 29,628 0.65 192.54 61,667 0.37 229.31 44,001 0.97 428 105,668 0.62 657 426,105 531,773 4.03 May-17 35,242 1.69 594.99 39,948 0.69 274.46 64,944 0.38 244.70 75,190 1.16 869 140,134 0.80 1,114 454,291 594,425 3.24 Jun-17 31,967 1.95 624.74 43,996 0.66 290.97 39,461 0.38 149.46 75,963 1.21 916 115,424 0.92 1,065 692,967 808,391 6.00 Jul-17 50,233 1.75 877.61 70,248 0.68 478.15 81,106 0.37 296.10 120,481 1.13 1,356 201,587 0.82 1,652 635,675 837,262 3.15 Aug-17 41,235 1.70 700.11 66,983 0.68 458.22 56,967 0.38 215.85 108,218 1.07 1,158 165,185 0.83 1,374 672,077 837,262 4.07 Sep-17 67,690 1.73 1,171.56 86,484 0.68 592.00 80,676 0.36 293.11 154,174 1.14 1,764 234,850 0.88 2,057 544,671 779,521 2.32 Oct-17 53,166 1.49 792.38 55,371 0.68 378.10 88,431 0.35 305.70 108,536 1.08 1,170 196,967 0.75 1,476 611,424 808,391 3.10 Nov-17 69,649 1.80 1,253.00 64,054 0.70 450.35 57,961 0.37 212.91 133,703 1.27 1,703 191,663 1.00 1,916 313,971 505,635 1.64 Dec-17 92,387 1.57 1,453.66 90,276 0.73 660.97 101,899 0.35 361.14 182,664 1.16 2,115 284,563 0.87 2,476 221,072 505,634 0.78 Jan-18 71,870 1.93 1,385.22 77,632 0.72 560.73 38,028 0.36 137.08 149,502 1.30 1,946 187,530 1.11 2,083 96,500 284,029 0.51 Feb-18 18,496 1.52 281.45 21,161 0.70 148.02 44,126 0.37 163.04 39,657 1.08 429 83,783 0.71 593 200,247 284,029 2.39 Mar-18 58,909 1.80 1,061.50 53,659 0.67 359.20 36,458 0.39 140.77 112,568 1.26 1,421 149,027 1.05 1,561 165,434 314,461 1.11 Apr-18 59,145 1.73 1,025.73 57,577 0.69 398.26 68,314 0.35 241.10 116,722 1.22 1,424 185,035 0.90 1,665 119,282 304,317 0.64 May-18 25,347 1.79 452.57 84,061 0.72 607.05 46,463 0.40 186.34 109,409 0.97 1,060 155,872 0.80 1,246 158,589 314,461 1.02 Jun-18 60,549 1.83 1,108.45 49,975 0.70 350.15 33,673 0.37 123.66 110,525 1.32 1,459 144,198 1.10 1,582 160,119 304,317 1.11 Jul-18 44,200 1.78 785.12 51,704 0.70 362.48 48,678 0.38 183.06 95,905 1.20 1,148 144,583 0.92 1,331 169,878 314,461 1.17 Aug-18 44,421 1.66 736.24 74,075 0.70 516.96 70,769 0.40 286.21 118,496 1.06 1,253 189,265 0.81 1,539 100,692 289,957 0.53 Sep-18 62,696 1.51 945.59 57,217 0.75 430.33 61,433 0.38 230.67 119,913 1.15 1,376 181,346 0.89 1,607 63,244 244,590 0.35 Oct-18 63,236 1.71 1,081.70 38,321 0.74 284.72 14,487 0.40 58.33 101,557 1.35 1,366 116,044 1.23 1,425 97,677 213,720 0.84 Nov-18 57,261 1.67 954.48 97,367 0.72 703.58 49,054 0.37 182.36 154,629 1.07 1,658 203,683 0.90 1,840 100,634 304,317 0.49 Dec-18 48,333 1.70 824.03 77,241 0.70 539.72 45,215 0.37 167.86 125,574 1.09 1,364 170,789 0.90 1,532 8,303 179,093 0.05 Jan-19 72,537 1.75 1,270.73 60,179 0.74 444.53 22,508 0.36 81.00 132,716 1.29 1,715 155,224 1.16 1,796 55,846 211,070 0.36 Grand Total 1,142,941 1.72 19,616 1,347,159 0.70 9,481 1,212,321 0.37 4,490 2,490,099 1.17 29,098 3,702,421 0.91 33,588 6,068,697 9,771,118 1.64 Figure 3.11: Proposed 22 Month Production Schedule

ZT61-1601/MM1131 Final V6.0 Page 71 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

ORE TYPE-ROM

300,000

250,000

200,000

150,000

100,000

50,000

- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

OXIDE ORE MIXED ORE SUPERGENE ORE SULPHIDE ORE

Figure 3.12: Production by Ore Type for the 22 Month Schedule

3.8.8 Grade Control

The Company has instigated a RC drilling grade control programme using a rig contracted from Maquana Explorations, Botswana (Photo 3.8).

Photo 3.8: RC Rig on the Saddle Between North and South Pits

ZT61-1601/MM1131 Final V6.0 Page 72 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The present bench which is prepped for blasting has been tested by RC holes on a 10m spacing, drilled at 60-80o angle and to a depth sufficient to cover four benches (10m benches). These data, coupled with blast hole samples from the ore zone and every other blast hole from outside the main ore zones should provide more detail for the short-term model.

3.8.9 Ore Reserves

Under the JORC Code (2012), to be able to report an Ore Reserve the information contained within the presented data must be to a minimum of a Pre-Feasibility Study level of engineering. Whilst the mine design has used slope angles that have been used within the pit previously, the level of engineering behind the other factors within the pit optimisation parameters are, in WAI’s opinion, at a Scoping Study level.

As such, an Ore Reserve cannot be reported for either the Mowana or the Makala Mines

3.8.10 Makala Underground Mine

3.8.10.1 Overview

The Financial Model reports that ore will be sourced from an adit driven from the base of the Thakadu Open pit, into the Makala deposit, with ore being produced in early 2018. A retreat open stoping mining method has been proposed, although at the time of the site visit, no stope designs have been developed to sequence the required haulage developments and ore extraction.

The location of the Makala underground portion is indicated below in Figure 3.13 and lies approximately 600m to the north of the Thakadu open pit.

Figure 3.13: Thakadu / Makala with Indicated Decline Development ZT61-1601/MM1131 Final V6.0 Page 73 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI notes that the grades at the Makala deposit for both Cu and Ag are much better than at the Thakadu deposit (Figure 3.13 and Figure 3.14).

Figure 3.14: Makala/ Thakadu with Indicated Cu Grades

Figure 3.15: Makala/ Thakadu with Indicated Ag Grades

3.8.10.2 Makala Operating Costs

The estimated mining cost for the Makala Mine is shown below in Table 3.9. These costs have not been derived from first principles and based on stope designs, so should be considered conceptual at this stage of the process.

ZT61-1601/MM1131 Final V6.0 Page 74 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.9: Makala Operating Costs Item Unit Rate (US$/t moved) Mining Equipment Opex 6.00 Mining Labour 4.69 Reef Development Consumables 0.22 Slot Raises Consumables 0.10 Stoping Consumables 2.46 Engineering Labour 2.85 Admin and Management Labour 1.92 Technical Services 1.08 Contingency @ 1% 0.15 Grand Total 19.46

3.8.10.3 Capital Costs

The capital cost estimate presented is based on PenMin’s proposed mine design and is depicted in Table 3.10. The mining capital expenditure estimate has been estimated at US$10.9 million. Mining related equipment has been estimated at US$8.54 million, which is based on two development crews and one stoping section. The decline development was estimated at US$0.8 million including consumables and ventilation at US$1.69 million. However, PenMin propose to contract the provision of the mining equipment, thereby reducing the working capital to the required ventilation and on strike development costs. In WAI’s opinion therefore these costs should be considered conceptual only.

Table 3.10: Makala Capital Costs Item Cost (US$ million) Mining Equipment 8.47 Decline development 0.76 Ventilation holes 0.87 Ventilation Fans 0.82 Total 10.93

3.8.11 Mowana Mine Infrastructure

3.8.11.1 Mining Workshop

A single covered workshop is located on the northern side of the open pit and is serviced by electricity.

There is a water supply, with the boreholes supplying water to the workshop being re- commissioned/re-established.

3.8.11.2 Diesel Storage

Diesel storage of 200,000 litres is proposed which will come in the form of an additional three storage bunkers. The current capacity is 83,000 litres with an additional 2 x 83,000 litre storage tanks to be mobilised end of April 2017.

ZT61-1601/MM1131 Final V6.0 Page 75 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI Comment: WAI is aware that Vivo Energy has signed a contract to supply fuel, create bunding, provide fuel management systems, and has started to mobilise to site to attend to these issues.

3.8.11.3 Mine Accommodation

Located 15km from the mine site, in the Motese Village, is a fenced housing complex with 50 (three or four bedroom) houses for the management and their families. As the workers are to be sourced from the local villages, no dedicated accommodation is provided for these workers.

3.8.11.4 Electrical Power Supply

Electrical power is supplied via a 20MVA power line from the national grid network. Whilst there are generation capacity issues within Botswana, PenMin report that the governmental position on load shedding is that mining operations should not be affected, and as such power supply is assumed to be reliable. PenMin also report that there is sufficient capacity within the line to meet the increased power demand with the DMS and sulphide plant retrofitting.

The Mowana Mine has a 500kV diesel generator on site that could provide sufficient back up generating capacity to maintain the vital components of the processing plant if mains power is not available.

3.8.11.5 Process Water Supply

Process water is supplied from five boreholes in a dedicated borehole field located 7km from the mine site; PenMin report that there are an additional 3 boreholes that are currently non-operational and can be re-established if required. Additional amounts of process water will be required as the process plant transfers from processing oxide material to the primary sulphide material. PenMin report that sufficient water is available within the borehole field, although WAI has not validated this statement.

3.8.11.6 Value of Plant

WAI has been requested to comment on the value of the plant and equipment on the project currently in use for mining.

WAI has reviewed the Aon Risk management (Pty) Ltd report for African Copper Mining dated August 2014, and notes that the findings of the Gross Replacement value of BWP 680,147,000 (valued at +/- US$65.7M) appears reasonable, (see report in appendix).

ZT61-1601/MM1131 Final V6.0 Page 76 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.8.12 Management Structure

The operating philosophy of the Mowana mine will be to operate the main functions under a contractor basis, whereby the main areas indicated below will be run under a discreet contract:

• Drill and Blast; • Ore and Waste Load and Haul; • Mineral processing; and • Tailings Storage Facility.

The Mowana Mine will be managed by Alecto, with the Process Plant managed by Penmin and Mining managed by Digmin.

In addition to the general management facilities, PenMin shall be responsible for the following functions:

• Geological Exploration and Mine Planning; • Financial Management and Stores; • Security; and • Safety Health and Environmental.

PenMin envisage that a staff of ten people shall cover the mine management roles over two shifts which are shown below:

• Mine manager; • Mine Superintendent; • Engineer; • Mine foreman; • Engineering Foreman; • Geologist; • Technician; • Administration; and • Shift Boss.

3.8.13 Summary

Excellent progress is being made by PenMin in addressing the main issues that will be required for mine development, although as production ramps up, more detail is required before a definitive mine plan can be formulated.

Notwithstanding this, many of the issues highlighted in this report are being addressed by PenMin on what is a rapidly changing project as the mine advances.

ZT61-1601/MM1131 Final V6.0 Page 77 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.9 Mineral Processing

3.9.1 Introduction

Construction of the Mowana plant was undertaken in 2006-2007, with commissioning in 2008. However, due to the various detrimental factors discussed elsewhere in this report, production from Mowana was only short-lived and the oxide ores were initially treated only between September 2009 and Q1 2011.

The plant switched back to treating Mowana ores for a few months during 2015, but then production was stopped. It was verbally reported that concentrate grades were 22-23% Cu at recoveries of 70- 75%. The plant was able to treat up to 100kt per month.

The plant has experienced problems with graphite, particularly from the North Pit which significantly lowers final concentrate grades.

Although the base case is for 1.2Mtpa plant throughput with a similar configuration to that used prior to liquidation, the company is also considering installing Dense Medium Separation (“DMS”) as a means of rejecting both mining waste and carbon ahead of flotation. A further expansion may consider increasing capacity to 2.4Mtpa by upgrading the crushing plant and using the oxide flotation circuit to treat sulphide ore.

In their review of the operations, PenMin, outlined the key reasons that MCB ran into difficulty as:

• Inefficient Geological and Mining Understanding and Management - The presence of significant oxidized material, down to 300m depth in the orebody, meant that the mining operations could not correctly identify the ore types to be processed, and ore type grades and volumes were highly variable. Additionally, the presence of significant levels of graphite had a deleterious effect on downstream efficiencies; • Inefficient control of processing - Due to the complex geology and hence mineralogy, processing always resulted in variable recoverable grades and reagent mixes in the processing facility. The lack of on-line measurement and control mechanisms resulted in low processing recoveries. De-bottlenecking was not accentuated due to higher commodity prices, thus allowing the project to limp forward with these inefficiencies; • Low commodity Prices - The project was commissioned into a higher overall commodity pricing environment, and as such many inefficiencies were not properly identified and corrected; • Management and Control - The application of the above shows clear lack of management and control of the overall operations. It must be noted that the geological characteristics of the ores means this is a difficult project to manage and operate, and will require close supervision and application of skills to ensure its success; and

ZT61-1601/MM1131 Final V6.0 Page 78 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• Inappropriate Technology - It has been shown that right from the outset, the proper use of pre-concentration, mining and processing controls will simplify the operations of this project, even in low commodity price environments.

Taking into consideration the above difficulties, PenMin has now brought the plant back into production with the assistance of a number of consultants such as SENET and Oxflo with a view to reaching steady-state production, fixing the bottlenecks and adding an appropriate level of automation and control. Concomitant with this is the redesign and sizing of the mining operations based on a re-logging of the drill cores and a geological remodelling exercise to better define the ore types.

3.9.2 Previous Testwork

3.9.2.1 Introduction

There has been a reasonable amount of metallurgical testwork undertaken on the Mowana project although much of it appears to be either of a “fire-fighting nature” that was undertaken during production, or not directly relevant to the current processing plan.

Initially, the work was centred on investigating acid leaching as a means of recovering copper. Although reasonable leach recoveries were achieved on the oxide ore (up to 90%), the recoveries on the supergene were lower (61%) at a pH of 1.80. The high levels of carbonate in the ore resulted in very high acid consumption (up to 200kg/t) and therefore acid leaching was considered not to be economically viable at the acid prices prevailing at the time.

3.9.2.2 Dense Medium Separation (“DMS”)

One of the options the Company is considering involves pre-concentrating the transition/sulphide ores using DMS. This involves crushing the ore, screening out the fine material (-1.0mm) and subjecting the coarser fraction to a density separation to remove waste material, whilst minimising losses of copper to this product.

The advantages of DMS are increased flotation plant throughput, reduced fine tailings production, the ability to mine lower grade ore, and the ability to reject carbon ahead of flotation.

In 2006 heavy liquid tests were undertaken by SGS on a sample of low grade sulphide copper ore (0.3% Cu). The results were encouraging, with a 57% mass rejection (overall) with a copper loss to floats of only 6.4% at a 15mm crush size. Further testing on a higher-grade sample (1.2% Cu) at the same crush size gave a 50% mass rejection with copper losses of 10.3%.

ZT61-1601/MM1131 Final V6.0 Page 79 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The Report “DMS Plant Leach and SX-EW Project” dated 2007, contains test results relating to pre- concentration undertaken at Lakefield and Mintek. Work at Lakefield was undertaken at a crush size of 1.7mm, which is too fine for DMS pre-concentration. Another programme was undertaken at Mintek on samples of Oxide, Supergene and Sulphide ore at a crush size of 20mm. The provenance of the samples is unknown. The results are given in Table 3.11.

The oxide sample gave a high weight rejection (81%), but with stage copper losses of 47% which is clearly not viable. The tests were undertaken at a separating density of 2.65g/cc which is very low and the high mass rejection to “floats” possibly suggests very porous mineralisation (or a wrongly reported separating density). The tests should be repeated at a lower density. The back calculated head grade for total copper appears to be wrongly calculated, being lower than the acid soluble figure.

The supergene sample also gave a high mass rejection (46%) and also gave unacceptably high copper losses to floats (46%). The head grade was rather low at 0.89% CuTOT, which is surprising for a zone that should be elevated in copper grade. Table 3.11: Heavy Liquid Pre-Concentration Test Results Oxide Heavy Liquid Test Results at 20mm Assay % Distribution % Product Mass % CuSOL CuTOT CuSOL CuTOT Floats 81.15 1.44 1.57 46.65 46.89 Sinks 18.85 7.06 7.65 53.35 53.11 Head 100 2.72 2.06 100.0 100.0 Supergene Heavy Liquid Test Results at 20mm Assay % Distribution % Product Mass % CuSOL CuTOT CuSOL CuTOT Floats 74.97 0.48 0.55 44.51 45.85 Sinks 25.03 1.79 1.93 55.49 54.15 Head 100 0.81 0.89 100.0 100.0 Sulphide Heavy Liquid Test Results at 20mm Assay % Distribution % Product Mass % CuSOL CuTOT CuSOL CuTOT Floats 58.26 0.33 0.31 13.35 12.38 Sinks 41.74 2.95 3.06 86.65 87.62 Head 100 1.42 1.46 100.0 100.0

The sulphide sample gave a reasonable response, with a stage mass rejection of 58% and copper losses of 12%. The copper head grade was 1.46% of which 1.42% was acid soluble, which is not in keeping with primary sulphide mineralisation.

The test on the Supergene sample was repeated at a crush size of 6mm, the results are given in Table 3.12.

Table 3.12: Supergene Heavy Liquid Test Results at 6mm Assay % Distribution % Product Mass % CuSOL CuTOT CuSOL CuTOT Floats 57.8 0.4 0.2 14.6 6.9 Sinks 42.2 3.2 3.7 91.0 95.8 Head 100 2.6 2.6 100 100

ZT61-1601/MM1131 Final V6.0 Page 80 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

At the 6mm crush size, mass rejection was 57.8% with copper losses of 7%. The back calculated head was higher at 2.6% Cu (both total and acid soluble) suggesting that a different sample was used and that all of the copper was acid soluble. There appears to be errors in the distribution calculations.

The heavy liquid testwork gave variable results and clearly needs to be repeated on representative samples which reflect the current Mine Plan. Of the samples tested, the sulphide sample gives the most encouraging response, and does indicate that the ore type may be amenable to pre- concentration. The fact that the analyses indicate that the sulphide sample contained predominantly acid soluble copper does undermine the results.

The supergene sample gave mixed results, showing poor amenability at 20mm at a head grade (0.89%) lower than the proposed ROM head grade. Significantly improved results were achieved with the sample crushed to pass 6mm, although the size is too fine for DMS, and would have resulted in a significant proportion of fines which bypass the DMS. WAI Comment: The DMS pre-concentration testwork is preliminary in nature and needs to be repeated on more representative samples. The results achieved so far have been mixed and do not conclusively prove that the Supergene and Sulphide ore types are amenable to DMS. The Oxide ore does not appear to be amenable to pre-concentration.

The results do show that increased liberation, between 10-15mm would be better for the Supergene sample, as indicated by work done at 6mm. It is noted that the design criteria is for DMS treating 15mm, and supporting DMS work has been started on the ores and samples being generated.

3.9.3 Flotation Testing

3.9.3.1 Flotation Testing on Head Samples

Supergene - Flotation tests undertaken during the initial plant design studies predicted that a ‘sulphide’ concentrate containing 40% copper could be produced at an overall copper recovery of 65%, and an ‘oxide’ concentrate containing 24% copper could be produced at an overall recovery of 17%. Combining the two concentrates gives a ‘supergene’ concentrate of 34% Cu grade at 83% copper recovery. It therefore appears that the Supergene material may contain significant levels of oxidised copper minerals.

Sulphide Ore - As part of the initial plant design, testing by SGS on a sulphide composite gave a concentrate grading 33.7% Cu at a recovery of 91.9%.

3.9.3.2 Flotation Testing on DMS “Sinks” Products

As part of the Mintek DMS testwork, rougher flotation testing was undertaken on the DMS “sinks” products. It does not appear that the fines were added to the DMS sinks to fully simulate the process. The results are summarised in Table 3.13.

ZT61-1601/MM1131 Final V6.0 Page 81 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.13: Grade and Recovery of Rougher Concentrates Grade % Distribution Ore Type Mass % CuTOT CuSOL CuSUL CuTOT CuSOL CuSUL Oxide 9.2 29.7 23.2 6.5 44.6 39.1 90.4 Supergene 11.8 20.1 2.5 17.6 79.1 46.1 88.0 Sulphide 22.9 10.2 1.1 9.1 95.3 93.5 95.5

The supergene sample responded moderately well and gave a rougher recovery of 79% to a concentrate grade of 20% Cu. The sulphide sample gave a high stage recovery, but to a concentrate grading of only 10.2% Cu. The oxide sample gave a low 45% copper recovery to a high grade concentrate of 29.7% Cu.

WAI Comment: The flotation testwork undertaken on the DMS products is very preliminary in nature and further work is currently being undertaken. The overall recoveries, which will take into account both the DMS and flotation recoveries need to be evaluated. 3.9.4 Current Process Plant

3.9.4.1 Introduction

The plant was designed and constructed by SENET and began processing in 2009. The plant consists of a conventional three stage crushing plant followed by single stage ball milling to achieve a product grading 80% passing 150 microns.

The copper flotation is also a conventional circuit consisting of a sulphide rougher and cleaning circuit followed by an oxide rougher and cleaning circuit. The flotation tailings were initially filtered and stacked as a filter cake, but were later pumped to settlement dams.

The plant restarted operations on 14th March 2017, although a broken bearing early on caused a temporary stoppage. Since then, the plant has been working continuously under the supervision of SENET personnel.

3.9.4.2 Stockpile and Crushing

ROM ore is trucked to a stockpile where it can be blended before being fed into a 350t ROM bin. The ore is recovered using an apron feeder to an Osborne jaw crusher (Photo 3.9), where it is reduced in size from a nominal 600mm to 150mm.

ZT61-1601/MM1131 Final V6.0 Page 82 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.9: ADT Tipping into Primary Jaw Crusher

The jaw crusher is rated at 350tph, but can do up to 400tph. The crushed product is transported via three conveyors, fitted with metal detectors and magnets, a distance of some 900m to a 30kt coarse ore stockpile.

The coarse ore is reclaimed via two of three sub-level feeders, and is conveyed to a double deck screen fitted with 38 and 15mm mesh. The screen undersize is conveyed to the fine ore stockpile and the oversize gravitates to a secondary Osborne 38 cone crusher. The crushed product is conveyed to one of two 16mm screens in parallel, and the screen oversize gravitates to an Osborn 38 tertiary crusher. The crushing plant is shown in Photo 3.10.

ZT61-1601/MM1131 Final V6.0 Page 83 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.10: Crushing Plant

The final product is approximately -16mm and is conveyed to a 20kt fine ore stockpile (Photo 3.11). The two cone crushers were installed new in 2012, replacing the second-hand machines that were originally installed.

The crushing circuit was designed to operate 12 hours per day, but generally worked 18 hours due to operational issues.

3.9.4.3 Grinding

The crushed ore is conveyed to a FL Smith rubber lined overflow ball mill. The mill is 4.6 x 6.7m and is fitted with 2.5MW motor. The maximum capacity of the mill was stated to be 160tph, depending on ore hardness and is currently the bottleneck to current and future processing operations.

ZT61-1601/MM1131 Final V6.0 Page 84 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.11: Fine Ore Stockpile

The mill discharge is pumped to two of three cyclones, the underflow is returned to the mill and the overflow, at 80% passing 150 microns, passes to flotation.

3.9.4.4 Flotation

There are two separate circuits for sulphide and oxide flotation. Rougher flotation takes place at natural pH (i.e pulp ‘as-is’ i.e. with no modification) in six 20m3 Bateman flotation cells. The rougher concentrate is cleaned in a cleaner scavenger circuit consisting of 4+1 5m3 cells. The first cleaner concentrate is further cleaned in two 10m3 cells.

The cells have automatic air and level controls. The flotation plant is shown in Photo 3.12.

The final concentrate is pumped to a high rate thickener, and the thickener underflow is pumped via a stock tank, to a Larox pressure filter, rated at 250tpd. The filtered concentrate is loaded into 2t Bulka Bags and transported from site by 30t road truck by Fujax as per the off-take agreement.

ZT61-1601/MM1131 Final V6.0 Page 85 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.12: Mowana Flotation Plant

3.9.4.5 Tailings

The flotation tailings are pumped to a 20m diameter thickener and overflow water is returned to the process plant. The thickened tailings are pumped via a 200mm plastic pipeline approximately 1km to an unlined tailings impoundment area. Due to the flat nature of the terrain, the impoundment area is surrounded by a continuous embankment some 3-4m in height. There is only sufficient capacity for another one year’s deposition and a new tailings area has been identified some 2km to the southwest of the site offices. Scott Wilson has prepared a preliminary design study. The tailings impoundment area is shown in Photo 3.13.

Water is decanted and reclaimed via a pontoon mounted pump and returned to the process water pond.

3.9.4.6 Process Control

The Company has taken some steps towards process control through the introduction of the Adroit software system (Photo 3.14) which the Company believes now controls approximately 50% of systems, although considerable work is still required to render this system fully functional.

ZT61-1601/MM1131 Final V6.0 Page 86 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 3.13: Mowana Tailings Impoundment Area

Photo 3.14: Adroit Process Control System

ZT61-1601/MM1131 Final V6.0 Page 87 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.9.5 Laboratory

A laboratory is located on site, equipped with a range of sample preparation equipment (LabTech Essa and Rocklabs) including drying ovens, jaw crushers, Tema mills and sample splitters. The lab is equipped with a Varian ICP and a Varian AAS. It should be relatively easy to re-commission the laboratory and expand its capability to undertake the copper speciation analysis recommended by WAI.

The laboratory also includes a small metallurgical testing facility.

3.9.6 Previous Metallurgical Performance

It is apparent that generally poor metallurgical performance was achieved when treating Mowana oxide ore. The original feasibility study was based on treating oxide ore for four years. However, it should be remembered that the majority of the ore treated originated from the Thakadu mine.

Oxide ore flotation is usually difficult and often laboratory test results, on which a plant is designed, are significantly better than in plant practice, due to the build-up and break down of sulphidising reagents during full scale processing. Alternatively, the ore mineralogy between the original laboratory testing and the plant operations may have been different.

Whatever the reason for the failure of the Mowana plant to efficiently treat oxide ore, the company has made the decision that only a portion (<25% acid soluble copper) of the oxide ore will be treated in the future, the remainder will be stockpiled.

Carbon has also proved an issue in the past. There are two options when treating carbon rich ore:

• A pre-float to remove the carbon ahead of copper flotation; and • Adding reagents to prevent the carbon from floating.

It has been found that the carbon pre-float was unsuccessful due to the high losses of copper into the pre-float concentrate. The use of reagents (depressants) was tried and was successful, but the reagent used (Aero 633) is expensive and high dosages would probably be required.

The metallurgical staff report that the ROM ore contained up to 7% organic carbon which would render the production of a saleable concentrate impossible, no matter what reagent regime was used. It was also reported that the design figure was 3% carbon, which is extremely high compared with other operations, but this level was reported to be “manageable”.

To overcome the carbon issue after start-up, it is intended to mine primarily from the South Pit, which has lower levels of carbon.

ZT61-1601/MM1131 Final V6.0 Page 88 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.9.7 Future Plans

As of the April 2017 visit, operations had commenced with low-grade (14%) Cu concentrate being produced. During the WAI site visit of January 2017, management were preparing to recommence operations by the end of the month and to complete a programme of plant upgrades by the end of the year. The strategy is based on treating only ores which contain <25% acid soluble copper and essentially stockpiling the oxide ores.

To successfully achieve this, it will be necessary to review the geological database to determine exactly where the non-oxide ore types are in the orebody. It is essential that acid soluble copper data is available for all of the orebody in order to be able to achieve this.

It is understood that the “acid soluble” analytical method refers to dilute sulphuric acid. This method is extremely sensitive to grind size, temperature and duration of leach. More importantly, dilute sulphuric acid will also leach some secondary copper minerals, and therefore will be an unreliable method upon which to define the ore types.

Further drilling may be required to better define the location of the copper mineralogy within the orebody, and WAI recommends that any samples currently available, or those produced from future drilling, should be subjected to copper speciation, in order to gain a greater understanding of the mineralogy of the ore body. This will include:

• Acetic acid soluble (oxides and carbonates); • Dilute sulphuric acid soluble; • Cyanide soluble; and • Total.

There are plans to install a DMS circuit, including a fines dewatering section, although given the very preliminary nature of the testwork, this may be premature.

WAI Comment: WAI is aware that further work has already commenced with a view to having resolved the geological model issues and testwork characterisation of DMS and flotation on the ores, to support the decision to proceed with the upgrades to the process plant. In addition, experimentation with different collectors (H88L) is showing good results with regard to negating the graphite issue, which in turn might make more amenable to treatment, although this is still at the trial stage.

The throughput of the plant will be increased by fundamental changes to the crushing circuit involving:

• Replacing the double deck screen with a single deck secondary screen cutting at 40mm; • Secondary screen oversize passing to secondary crushing; • Screen undersize to two new double deck tertiary screens, fitted with 15mm and 1mm decks; ZT61-1601/MM1131 Final V6.0 Page 89 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• Secondary crusher product is conveyed to the tertiary screens; • Tertiary screen undersize (-1mm) is conveyed to Elutriation and then the mill; • The tertiary screen oversize is returned to the tertiary crusher; and • The -15+1mm fraction passes to DMS.

In addition, mobile crushers will be utilised to reduce the circulating load within the tertiary crushing section.

The -1mm product is pumped to a thickener (new) and the underflow is pumped to the flotation via the ball mill discharge sump.

The proposed modifications are shown in Figure 3.16. When used in conjunction with an efficient DMS process, if viable, this will have the effect of substantially increasing the plant throughput, although additional concentrate thickening capacity is also required. With these process options, it is anticipated that production could be increased to 2.4Mtpa. The maximum throughput of the plant could be as high as 3.0Mtpa, assuming 85% utilisation of a 400tph crushing plant operating 360 days per year. The feed rate to flotation cannot exceed 1.2Mtpa and therefore this will only be achievable if the DMS section is capable of rejecting 60% of the ROM.

ZT61-1601/MM1131 Final V6.0 Page 90 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 3.16: Mowana Plant Modified Flowsheet

ZT61-1601/MM1131 Final V6.0 Page 91 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.9.8 Conclusions

The current Mowana plant has been generally well engineered but has suffered, as far as the Mowana orebody is concerned, by not being able to efficiently treat the oxide copper ore. It should be remembered that for the majority of the project’s life, the ore treated has come from the Thakadu mine.

However, as of April 2017, the plant has been re-commissioned and is producing in the order of 100t per day of low-grade copper concentrate with feed coming from low-grade ore from the south end of the North pit and previously stockpiled material.

The base case scenario sees a steady ramp up to approximately 11kt per month through the plant without DMS, although testwork is on-going to see if this is a viable option moving forward.

The future processing strategy is based on treating only ores which contain <25% acid soluble copper and essentially stockpiling the oxide ores. To successfully achieve this, it will be necessary to review the geological database to determine exactly where the low copper oxide ore types are in the orebody. It is essential that acid soluble copper data is available for all of the orebody in order to be able to achieve this.

WAI Comment: WAI is aware that a testwork protocol on all potential ores has been commenced, and is currently being supervised by both the Alecto Competent Person (Mike Ware) as well as the Oxflo representatives, who provide flotation reagents and consulting services in this field. This testwork includes mineralogical characterisation, DMS response, and flotation response in both a natural sulphide float environment, and including sulphidation with NaHS.

A review of the acid soluble method used in the past should be undertaken, and future copper analysis should be more detailed and include copper speciation to gain a greater understanding of the copper mineral distribution throughout the orebody.

It is understood that the “acid soluble” analytical method used previously refers to dilute sulphuric acid. This method is extremely sensitive to grind size, temperature and duration of leach. More importantly, dilute sulphuric will also leach some secondary copper minerals, and therefore will be an unreliable method on which to define ore type definition.

Flotation testing undertaken by SGS indicated that the supergene material may contain significant levels of oxidised copper minerals. It may therefore be necessary to mine into the lower depths of the supergene zone in order to achieve the <25% acid soluble target for the mill feed. The sulphide ore type gave an excellent concentrate grade (33.7% Cu) at recoveries in excess of 90%.

If a decision is made to include DMS as part of the process, this will require further investigation as the information obtained to date is preliminary. Some of the metallurgical balances, particularly for the oxide and supergene ore types are inaccurate and the overall DMS balance, including fines, is not

ZT61-1601/MM1131 Final V6.0 Page 92 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA clearly presented. The tests undertaken do generally confirm that the sulphide ore is amenable to pre- concentration by DMS.

The samples tested in the future should include the correct levels of waste material as this will be an important factor when assessing the viability of DMS.

The plant is lacking in certain areas of process control and it is planned to install an On Stream Analyser (OSA) when treating the less refractory ores in the future. Treating the more sulphide rich ore types will be significantly less onerous, and may not require the same degree of process control. As such, an OSA, although desirable, may not be essential provided that the copper minerals treated are predominantly sulphides with significant levels of secondary (copper rich) minerals.

As previously announced by Alecto in December last year, the study shows enhanced economics with the NPV at a 10% discount rate moving up to US$245m and the IRR at 55%.

Once a feasibility study is completed, the process route upgrades will be funded through an existing agreement with Fujax Minerals and Energy Limited (“Fujax”) and Northern Heavy Industries Group Company Limited (“NHI”)

3.10 Environment, Social, Health & Safety

3.10.1 Introduction

This review of the environmental and social performance of Alecto Minerals Plc assets in Botswana (Mowana) is based on a brief desk-based survey of existing documentation, primarily a Scoping Study developed in 2014.

ZT61-1601/MM1131 Final V6.0 Page 93 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA that was not seen, or variations in interpretation of the available data that could not be explored further.

This review was carried out to comply in form and content with the requirements of BSE Rules. Recommendations and guidance also take into account international best practice including World Bank/International Finance Corporation guidelines and standards.

The main documents inspected for this report were:

• Scoping Study – Mowana Mine Upgrades MC1408, Minéro Africa (Pty) Ltd, October 2014; • Environmental Liability Fund – costing spreadsheet; • Environmental Statement, Environmental Impact Assessment – Final Report on Changes to the EIA and EMP, Water Surveys Botswana Ltd. (September 2006); • Licenses and permits – Messina Copper: Mining License (2006); Enlargement of Mining License (2006); Approval of Mining License (2006); Agreement to Lease (2007); Conditional Impact Permit (2005); Approval of Impact Assessment of Access Road (2006); Agreement of Grant to Lease Business Plots Mosetse and Dukwi (both 2007); First Renewal of Prospecting License (2005); Water Rights (2006); Water Abstraction Permit (2006); Impact Permit – Wellfield and Pipeline, Dukwi Mine (2005); Water Supply Report – Dukwi Mine (2006); Electricity Supply Agreement (2006); First Renewals of Prospecting License (2004-5); • Environmental Management Plan for Dukwe Copper Project (2006) and separate chapters for the following aspects: Hydrocarbon Storage & Recycling; Management of Stock Piles; Management of Waste Rock Dumps; Natural Vegetation; Noise Prevention and Management; Sanitation Management; Storage & Use of Hazardous Chemicals; Vehicle & Workshop Management; Water Use and Conservation; and • Archaeological Impact Assessment, Bushman Mines (2002); Archaeological Management Plan (2006).

3.10.2 Environmental & Social Setting and Context

Details of the project setting are given in Section 3.5 above.

An Environmental Impact Assessment (EIA) was undertaken for the project and approved in 2006 which assesses the environmental conditions and some socio-economic aspects associated with the project. The report, prepared by Water Surveys (Botswana) (Pty) Ltd. (“WSB”) was approved by the Government of Botswana in November 2006. The report covers environmental and social aspects and summarises the potentially significant impacts of development as the following:

• Positive socioeconomic benefits to the local community, the region and the country; • Impacts on local land users: no land user would be displaced but grazing areas would be lost in communal areas; increase in nuisance (disturbance) to community; increase in probability of conflict due to sharing of access road; ZT61-1601/MM1131 Final V6.0 Page 94 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• Impacts on surface water quality: risk of spillage and contamination; risk of silt eroding or being blown into watercourses; greater risk of contaminants reaching watercourses in the Wellfield recharge area; • Impacts on hydrogeology: spillage and contamination; leaching of contaminants from waste dumps, greater risk of contamination of watercourses; drawdown of local boreholes; drawdown of Dukwi wellfield boreholes; • Impacts on ecosystems: loss of environmental interest and diversity within area of operations; potential for degradation of soils and vegetation by elevated PH of tailings dump; • Visual and topographical issues: potential for considerable visual and topographic impact; and • Positive impacts on local aquatic resources and animal life (birds and possibly elephants).

Based on the EIA, an Environmental Management Plan (“EMP”) was developed in 2006 for Messina Copper (Botswana) Limited for land around the Project area. The purpose of this EMP was to achieve proactive management of environmental impacts and risks that could arise from the project. The EMP provides a summary of significant objectives and key performance indicators for each phase of the project.

WAI Comment: The 2006 EIA provides an environmental and social impact assessment to Botswana standards, including extensive reporting on potential environmental impacts and associated mitigation measures. In order to comply with international best practice, it is understood that Alecto are currently seeking consultants to update this existing EIA and support previously developed mitigation measures based on the most recent project description. In particular, existing impact assessments will more closely align with international best practice if they further develop understanding of the Project’s social impacts complemented by appropriate mitigation measures. The extensive EMP from 2006 should be updated accordingly.

An Environmental Permit was granted in November 2006. This document supported the application to the Commissioner of the Botswana Ministry of Minerals Energy and Water Affairs (“MMEWA”) for a Mining Licence for the Project. It also supported an application to the Lands Board - Bamangwato Tribal Administration for the Application for Surface Rights. The Mining Licence was granted in late 2006 and the surface rights were granted in early 2007.

WAI Comment: WAI has reviewed a number of other environmental licenses and permits held by the Project in 2005-2007 (see list of documents consulted).

A Water Abstraction Permit was approved in 2006 to supply the mine and requires an annual update in accordance with Botswanan legislation. Once a suitable Consultant has been identified, these will require updating for the current project.

ZT61-1601/MM1131 Final V6.0 Page 95 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

An Electricity Supply Agreement was previously signed (2006) between Botswana Power Corporation and Messina Copper Ltd for a supply of electricity in bulk. WAI has been informed that a new agreement has been signed by Alecto with Botswana Power Corporation.

3.10.3 Relevant Legislation

Mining law in Botswana is primarily governed by the Mines and Minerals Act, CAP 66:01 of the Laws of Botswana (the “MMA”) and subsidiary legislation and the Environmental Assessment Act, CAP 65:07 of the Laws of Botswana (which relates to the environmental impact assessment of prospecting and mining activities).

The Mines, Quarries, Works and Machineries Act, CAP 44:02 of the Laws of Botswana (the “MQWM”) relates to the health and safety of employees involved in prospecting, mining and quarrying operations.

WAI General Comments: it is recommended that in addition to local requirements, environmental and social aspects of the project are developed in compliance with international requirements, for example those stipulated within the International Finance Corporation (IFC) Sustainability Framework (Performance Standards). This includes development of an IFC-compliant Environmental & Social Impact Assessment (ESIA) documenting predicted impacts of the project in the context of recent environmental and social baseline data. It is also recommended that Alecto develop a Livelihood Restoration Plan, focusing on the economic and physical displacement of Affected Communities as a result of the project. Additional best practice guidelines include:

• The Equator Principles (EPs) • The IFC’s Environmental, Health and Safety (EHS) guidelines • The International Cyanide Management Code (ICMI)

3.10.4 Archaeology and Cultural Heritage

An Archaeological Impact Assessment (AIA) was developed in 2002 as part of the Bushman Feasibility Study. The AIA was written in compliance with Botswana Law, in particular the 2001 Monuments and Relics Act, which protects all archaeological sites and artefacts dating to before 1902 as well as any historic structures and objects since 1902 that have been proclaimed a historic monument, historic landscape or recent artefact, as well as natural features that have been proclaimed a natural monument.

The 2002 AIA found prehistoric copper mines present at Malokojwe and Mapanipani and these were the focus of an Archaeological Management Plan (“AMP”) issued in 2006. The Development Permit issued to Messina Copper Ltd in 2006 was conditional on measures of preservation and mitigation relating to, in particular, three well-preserved prehistoric copper mine complexes of national significance and 14 prehistoric ore processing/smelting sites.

ZT61-1601/MM1131 Final V6.0 Page 96 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI Comment: WAI believes Archaeology and Cultural Heritage is well documented for the project area as part of these previous studies. For international compliance purposes it is recommended that Alecto continue to develop a Chance Finds Procedure which formalises methods in case the project encounters further objects of potential interest.

3.10.5 Conclusions

Environmental Aspects

Alecto’s Botswana assets are considered in compliance with local legislation and requirements prior to being put in Care & Maintenance. The current licences, permits and associated documentation will require updating based on the updated project description. It is understood Alecto is in the process of obtaining a consultant to review the previous works. It is recommended that the 2006 EIA is updated to international requirements at the same time as Botswanan local requirements.

The existing Environmental Liability Fund should be continuously updated to reflect changes to the project description.

Social Aspects

International best practice requires that stakeholders are mapped in order to support sustainability standards, including employment creation and ensuring the protection of fundamental rights of workers and members of the local community. Although this was carried out previously for the 2006 EIA, these aspects should be updated to reflect the updated project description.

On the basis of existing documentation, previous owners of the project appear to have a positive relationship with the local population. Nevertheless, Alecto should ensure that potential conflicts with local communities are mitigated by engaging with stakeholders whenever possible, formalising interactions within a Social Community Management Programme (SCMP) to international best practice standards. The increased volume of traffic on roads and resulting potential conflicts with local populations was flagged previously and should continue to be monitored.

The 2006 EIA suggests economic and physical displacement as a result of the project will be negligible. This aspect should continue to be monitored and, if shown to have potentially negative impacts, Alecto should develop a Livelihood Restoration Plan.

To further support development of stakeholder engagement activities, a grievance mechanism should also be established, allowing workers and members of local communities to communicate directly with Alecto’s management.

It is recommended that Alecto develop a list of past, current and future social initiatives and community development to include the most recent initiatives and stakeholder engagement activities.

ZT61-1601/MM1131 Final V6.0 Page 97 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.11 Economic Appraisal

3.11.1 Introduction

WAI has reviewed the technical financial model developed by the Client and outlined a summary of the key findings in the section below. The base case model is without the inclusion of the DMS which may be considered in the future.

The Company has developed a detailed 22-month plan as well as the life-of-mine schedule on which this financial appraisal is based.

The basic strategy for this Financial Model Review is to examine the Financial Model structure and ensure its integrity from both technical and economic perspective as well as verify consistency of the input parameters and assumptions used.

The financial models that have been reviewed by WAI are presented in excel format in the files:

C0152 MCB Financial Model Rev ALO RTO 0 7.2 – Without DMS.xlsx Copy of MOWANA 22 MONTHS PLAN (APRIL 2017-JANUARY 2019.xlsx

3.11.2 Financial Model Structure and Key Input Parameters

The Financial Model has been developed to demonstrate the potential viability of the Mowana Copper Mine project which relies on open pit extraction from two pits – North and South.

The financial model has been built with first production in 2017, and comprises a project life of 12 years, with 11 years life of mine. Financial results are presented in both nominal and real values.

All numbers are reported in US Dollars, unless otherwise specified.

The Model is represented on a number of Microsoft Excel sheets with the main parts as follows:

• Assumptions; • Summary; • Annual and monthly cash flow models (in Real and Nominal Cash Flows); • Operating, Capital Costs, Mining Schedule and Funding requirements presented on the individual sheets; and • Financial Statements.

3.11.3 Input Assumptions

3.11.3.1 Production Schedule

ZT61-1601/MM1131 Final V6.0 Page 98 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The Financial Model is built on 11 years mine life with the maximum production capacity of 1.2Mtpa (of mined ore) and average Cu grade of 1.16% (LOM). A separate, detailed 22 month model is also presented.

3.11.3.2 Operating Costs (Real Values)

The overall life of mine operating cost was estimated at US$373.7.5M, or US$30.56/t ROM (in real terms).

Mining

The LOM costs have been estimated as US$174.0M, or US$14.23/t ROM.

The open pit production (base case) is presented on a monthly basis, showing grade variation. The costs associated with open pit operations are estimated from first principles with the relevant breakdown provided.

A summary of the total mining operating costs is shown in Table 3.14 below.

Table 3.14: Project Mining Operating Costs (LOM, Real Values) Description US$ Waste Mined 82,708,148 Ore Mined 12,230,000

Labour 16,267,600 Equipment Owning 25,123,436 Equipment Operation 20,658,515 Fuel 19,299,308 Miscellaneous 319,143 Drill & Blast 70,365,921 Margin 4,653,615 Subtotal 174,026,324 Total US$ per ROM tonne 14.23 US$ per total tonne rock mined 1.83

Operating mining costs related to the open pit operations have been based on the Bell CAT hard coded quotations dated March 2017. There is no link between the specified quotations and related mining capacity, nor there are any details on the mineable tonnage available for open pit production.

WAI recommends that the model is revisited with more recent quotations obtained.

A summary of these costs is provided below (Table 3.15). Table 3.15: Open Pit Mining Cost (Bell & CAT Quotations) BELL & CAT QUOTES CAPEX Monthly CAPEX OPEX (DRY) (Monthly Operating Rate CAPEX (ZAR) (Annual, USD) (ZAR) Rate, USD) (USD) Liebherr R980 Excavator 9,227,935 404 904,699.51 US$18,561 US$12,753

ZT61-1601/MM1131 Final V6.0 Page 99 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Cat 390 excavator 10,114,026 490 991,571 US$20,344 US$15,452 HX310 Excavator 2,676,012 310 262,354 US$5,383 US$9,785 CAT 777G (90 ton) 17,896,061 640 1,754,516 US$35,997 US$20,202 Bell B50 E 5,451,749 387 534,485 US$10,966 US$12,216 Liebherr PR754 Dozer 5,160,125 344 505,895 US$10,379 US$10,859 CAT D7 Dozer 6,100,000 357 462,121 US$9,481 US$11,258 Bell 770G Motor Grader 2,887,471 228 283,085 US$5,808 US$7,199 Bell 315SL TLB 825,259 195 80,908 US$1,660 US$6,155 Bell B30E Water Tanker 3,603,298 380 353,265 US$7,248 US$11,995 LDV 687,500 67,402 US$1,383 US$719 Bell B25E Diesel Tanker 3,207,099 335 314,421 US$6,451 US$10,588 Powerstart Service Truck 2,095,732 188 205,464 US$4,215 US$5,934 Water pump 1,732,500 169,853 US$3,485 US$1,708 Bell 220A Tyre Handler 1,957,561 191,918 US$3,937 US$1,575 Minibus 687,500 67,402 US$1,383 US$719 Crane truck 1,188,000 116,471 US$2,390 US$1,673 Light Plant 274,390 26,901 US$552 US$276 Bell L2706 Wheel Loader 2,995,394 152 293,666 US$6,025 US$4,798 * Note: ZAR: USD 13.2

However, the mine is now operational and has opted for the contract mining route as well as contract drill & blast and as such, much of the information in Table 3.15 is for guidance only.

Processing

Plant operating costs are based on a 1.2Mtpa throughput capacity. WAI notes that plant operating costs have been derived from first principles with total LOM being estimated at US$149M, or US$12.15/t ROM (Table 3.16). A summary of these costs with a monthly rate breakdown is provided below in Table 3.17.

Table 3.16: Project Operating Processing Costs (LOM, Real Values) US$/t ROM US$’000 LOM Plant Operating Costs 12.15 148,648 Fixed 2.19 26,796 Variable 9.55 116,782 Sustaining Capex 0.25 3,038 Tailings 0.17 2,032

ZT61-1601/MM1131 Final V6.0 Page 100 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.17: Plant Operating Cost (Monthly, Real Values) Item Contingency [%] Total Monthly Cost [US$] Manpower 2.5 US$194,873 Power 2.5 US$206,510 Water 5.0 US$5,000 Reagents 5.0 US$125,822 Grinding Media 5.0 US$36,120 Mill Liners 5.0 US$18,060 Crusher Liners 5.0 US$22,917 Platework Liners 5.0 US$18,500 Maintenance Spares 10.0 US$116,550 E&I Spares 10.0 US$33,300 Piping and Valves 5.0 US$24,864 Laboratory 5.0 US$15,900 Miscellaneous 5.0 US$140,000 Contingency Value US$95,849 Estimated Opex US$1,054,264 Plant Cost per ton ROM US$10.54

G&A

General and Administration cost was estimated at US$51.1M for the life of mine, or US$4.18/t ROM. A summary of the life of mine G&A costs is shown in Table 3.18.

Table 3.18: Project G&A Costs (US$’000 LOM, Real Values) Head Office Costs 51,061 General Management 41,098 Project Management 2,467 Closure & Rehabilitation Costs 2,836 Insurance Costs 4,661

3.11.3.3 Capital Costs (Real Values)

Total LOM cost was estimated at US$20.5M, with initial cost of purchase estimated at US$20M (see Table 3.19 below) and upgrade contract of US$469,000.

ZT61-1601/MM1131 Final V6.0 Page 101 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.19: Initial Capital Costs Description % Machinery & Equipment Costs in US$ Earthworks 10% 468,103 Civils 2,149,773 Structural Steel 374,033 Platework 543,363 Machinery & Equipment 4,681,025 Piping 12% 561,723 Electricals 1,264,235 Instrumentation 14% 655,344 Transport 15% 702,154 Infrastructure - Plant Buildings 5% 234,051 Plant First Fills 156,000 Spares Operational 2.5% 117,026 Spares Insurance (Strategic) 3.5% 163,836 Vendor Services 2% 70,215 Construction Labour (SMPP) 39% 1,848,043 Construction Labour (E&I) 16% 767,831 EPCM 1,460,076 TSF (incl EPCM) 202,115 DMS Plant (excluded from financial model 2,186,410 SUB TOTAL 18,605,356 Contingency 1,394,644 TOTAL PROJECT 20,000,000

No mining costs were included under project capital costs, as the Client is using a mining contractor (Giant).

3.11.3.4 Revenue

In the Financial Model the Revenue is generated by the Cu concentrate sales. A summary of the LOM feed tonnages and key recovery parameters is given below (Table 3.20).

Table 3.20: Processing Inputs and Concentrate Production Summary Area Unit Amount Ore to Processing (Flotation Feed) t 12,230,000 Cu to Processing t 143,564 Ore Grade to Processing % 1.17% Flotation Recovery % 91% Total Recovery % 91% Concentrate Tons t 522,481 Recovered Cu t 130,620

The project uses the following Cu forward prices (Table 3.21).

ZT61-1601/MM1131 Final V6.0 Page 102 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.21: Nominal Conversion Factors and Project Cu Price 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Depreciation Term 5 US$ Inflation 2.50% Interest 2.00% 0.50% Forward Curve on 2.60 2.70 2.79 2.88 2.98 3.08 3.18 3.29 3.40 3.52 Cu (nominal) US$/lb Implied Forward 2.60 2.63 2.66 2.68 2.70 2.72 2.75 2.84 2.94 3.04 Curve (real) US$/lb

As expected, calculations of revenue from concentrate realisation consider payability factors, and treatment charges. Concentrate shipping cost has also been included in the model (Table 3.22).

Table 3.22: Project Realisation Costs Concentrate Shipping Costs (US$/t) 118.93 Concentrate Sales Commission Franchise Loss 2.50% Treatment & Refining Charges Loss 3.50% Concentrate Treatment Cost (US$/t concentrate) 97.50 Concentrate Refining Cost (US$/t recovered Cu) 0.10 Penalties (US$/t Cu) 0

The LOM Gross Revenue was estimated at US$909M with realisation costs being estimated at US$200M. The Net Revenue calculation resulted in US$709M (Table 3.23)

Table 3.23: Project Net Revenue Calculation (LOM) Cu Price (LOM average) US$/lb 3.17 Gross Revenue US$'000 908,996 Sales Commission (Franchise Loss) US$'000 (19,505) Logistics US$'000 (62,139) Treatment Charge US$'000 (50,942) Refining Cost US$'000 (28,077) TC/RC Loss US$'000 (27,307) Royalty Cost US$'000 (20,852) Net Revenue US$'000 708,529

3.11.3.5 Discount Rate

Selection of the discount rate is a subjective decision based on the individual expectations of the potential investor and therefore WAI recommends that a sensitivity analysis is undertaken to demonstrate project behaviour subject to various discount rates.

The nominal base case discount rate was assumed by the Client at 12.5% (real discount rate at 10% adjusted for inflation).

ZT61-1601/MM1131 Final V6.0 Page 103 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

3.11.4 Financial Model Results

The Financial Model contains both real and nominal cash flow models. Each of the models is presented on the individual sheets, providing monthly and annual cash flow breakdown.

WAI notes that there is an inconsistency in the production schedule utilisation (see Monthly Cash Flow (R) sheet), and therefore the Concentrate tonnages in do not match. Also, logistics cost, treatment charge and refining costs have not been adjusted for the inflation rate in the Nominal Cash Flow model. Furthermore, no escalation has been applied to the Debt calculations in the Nominal Cash Flow Model.

Table 3.24 below shows a comparison of Real and Nominal values, and Table 3.25 demonstrates financial results estimated in Nominal Cash Flows (“LOM”).

ZT61-1601/MM1131 Final V6.0 Page 104 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.24: Real vs. Nominal Cash Flows Summary Nominal (Adjusted for Units Real Inflation) Waste Mined t 107,821,118 107,821,118 Ore Mined t 12,230,000 12,230,000 Cu Grade Mined t 1.16% 1.16% Ore to Processing (Flotation Feed) t 12,230,000 12,230,000 Cu to Processing t 143,564 143,564 Ore Grade to Processing t 1.17% 1.17% Concentrate Tons t 522,481 522,481 Recovered Cu t 130,620 130,620 Cu Price US$/lb 2.84 3.17 Gross Revenue US$’000 780,202 908,996 Sales Commission (Franchise Loss) US$’000 (19,505) (19,505) Logistics US$’000 (62,139) (62,139) Treatment Charge US$’000 (50,942) (50,942) Refining Cost US$’000 (28,077) (28,077) TC/RC Loss US$’000 (27,307) (27,307) Royalty Cost US$’000 (17,182 ) (20,852) Interest Received US$’000 16,305 Net Revenue US$’000 567,100 708,529

Capital Costs US$’000 20,469 20,680 Purchase Price US$’000 20,000 20,209 Upgrade Contract US$’000 469 471 Mining Costs US$’000 174,026 198,674 Fleet Owning Cost US$’000 25,123 28,120 Monthly P&G US$’000 19,634 22,621 Variable Costs US$’000 97,268 111,087 Contractor Margin US$’000 4,654 5,375 Fuel Cost US$’000 27,347 31,471 Plant Operating Costs US$’000 148,648 170,483 Fixed US$’000 26,796 30,674 Variable US$’000 116,782 133,877 Sustaining Capex US$’000 3,038 3,597 Tailings US$’000 2,032 2,335 Head Office Costs US$’000 51,061 58,508 General Management US$’000 41,098 47,173 Project Management US$’000 2,467 2,727 Closure & Rehabilitation Costs US$’000 2,836 3,265 Insurance Costs US$’000 4,661 5,342 TOTAL COSTS US$’000 394,204 448,423

ZT61-1601/MM1131 Final V6.0 Page 105 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 3.25: Nominal Cash Flow Model Results (US$) Gross Revenue 908,995,871 Less: Off-mine Cost (168,464,323) Less: Royalty (20,852,453) Less: Sales Commission (19,505,041) Net Revenue 700,174,054 Less: Operating Cost (420,802,609) Less: Closure Cost Provision (3,265,481) Less: Capital Maintenance (3,597,086) Cash from operations 272,508,879 Interest Received 16,305,417 Profit Before Tax 288,814,295 Less: Taxation Paid 64,272,420 Profit After Tax 224,541,875 Less: Working Capital Movement 3,605,870 Less: Capital Cost (20,679,968) Debt & Equity Draw Down 22,000,000 Debt Repayment (26,234,819) Net Project Cash Flow 203,232,959 NPV (Leveraged) 87,485,182 UNLEVERED IRR 56%

3.11.4.1 Sensitivity Analysis

A sensitivity analysis has been performed by the Client using a Monte Carlo simulation method via software @Risk 6.2. This software is an add-in to Microsoft Excel, with 10,000 iterations run in the simulation. Each of the input variables is randomly varied within the defined probabilistic distributions.

The purpose of running the Monte Carlo Simulation is to determine the likely range of operational parameters that will be experienced, by adjusting the key variation inputs to the financial analysis. A sensitivity analysis was performed on key parameters within the financial model to assess the impact of changes upon Net Present Value of the project. These parameters are as follows:

• Copper Forward Price; • Flotation; • DMS Recovery; • Mining Cost; • Processing Cost; • Concentrate Treatment Cost; • Diesel Price; • Concentrate Refining Cost; • DMS Yield; and • Drill and Blast Cost / Ton Waste.

A 90% range of NPV and IRR performance that is achieved has been derived, as each of the variables is adjusted, best reflecting a real-world scenario where the actual inputs achieved on a particular day

ZT61-1601/MM1131 Final V6.0 Page 106 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA would in all likelihood vary per the operating ranges expected. This has the effect of testing the robustness of the project against real world scenario’s where design rates are perhaps not achieved at the same time.

It is common that the key metrics of revenue as determined by the metal price and the process plant recovery will dwarf the operating cost variances, but using these inclusive variables will therefore test the project robustness even in such scenarios as low metal prices and recoveries with poor performance on the cost drivers.

A summary of the input and output results for NPV and IRR is presented in Figure 3.17 below.

The sensitivity analysis results demonstrate that the project is mostly sensitive to commodity price, followed closely by the process plant recovery, and relatively less sensitive to change in operating costs.

3.11.5 Recommendations

Overall, WAI finds the Model to be developed to a reasonable standard. The general model structure is integral and consistent and provides an appropriate level of detail required for the project valuation.

In order to improve the financial analysis of the Project, WAI recommends that the Company review nominal cash flow model inputs and validate that all inputs are adjusted for inflation.

Furthermore, preliminary studies indicate that the inclusion of a DMS plant into the LOM does improve the project economics, although additional work is required to demonstrate the viability of the DMS process.

ZT61-1601/MM1131 Final V6.0 Page 107 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Simulation Summary Information Workbook Name C0152 MCB Financial Model Rev ALO RTO 0 7.2 - Without DMS.xlsx Number of Simulations 1 Number of Iterations 5000 Number of Inputs 27 Number of Outputs 2 Sampling Type Latin Hypercube Simulation Start Time 11/04/2017 16:35 Simulation Duration 00:03:33 Random # Generator Mersenne Twister Random Seed 1366345572

Summary Statistics for NPV Statistics Percentile Minimum $ 15,091,471 5% $ 44,256,824 Maximum $ 143,035,940 10% $ 49,433,950 Mean $ 76,800,989 15% $ 54,471,587 Std Dev $ 20,800,081 20% $ 58,868,217 Variance 4.32643E+14 25% $ 62,025,889 Skewness 0.123987819 30% $ 64,753,374 Kurtosis 2.594789822 35% $ 67,810,387 Median $ 76,070,036 40% $ 70,672,117 Mode $ 82,403,621 45% $ 73,470,069 Left X $ 44,256,824 50% $ 76,070,036 Left P 5% 55% $ 78,875,266 Right X $ 112,199,350 60% $ 81,666,664 Right P 95% 65% $ 84,680,016 Diff X $ 67,942,527 70% $ 87,721,491 Diff P 90% 75% $ 91,162,339 #Errors 0 80% $ 95,101,201 Filter Min Off 85% $ 99,959,426 Filter Max Off 90% $ 105,374,283 #Filtered 0 95% $ 112,199,350

Change in Output Statistic for NPV Rank Name Lower Upper 1 Copper Forward Price$ 45,904,525 $ 109,284,806 2 Flotation $ 60,674,512 $ 89,228,368 3 Processing Cost $ 72,014,858 $ 81,151,509 4 Drill and Blast Cost$ / Ton73,490,135 Waste $ 79,244,876 5 Mining Cost $ 73,661,322 $ 79,189,478 6 Concentrate Treatment$ 73,424,167 Cost $ 78,815,780 7 BPC Price / kW/h $ 74,858,821 $ 78,151,844 8 Concentrate Refining$ 75,289,956 Cost $ 78,521,225 9 Drill and Blast Cost$ / Ton74,804,444 Ore $ 77,971,622 10 Diesel Price $ 75,240,677 $ 78,324,753

Figure 3.17: Sensitivity Report for NPV

ZT61-1601/MM1131 Final V6.0 Page 108 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4 ZAMBIA ASSETS

4.1 Location, Access and Infrastructure

The Matala and Dunrobin Gold Project (also referred to as the Luiri Hill project) is situated approximately 120km west-northwest of the Zambian capital of Lusaka in Zambia’s Central Province. The central Province is located between longitudes 27˚E and 31˚E and latitudes 13˚S and 16˚S, occupying an area of approximately 93,374km² and shares borders with eight other Zambian provinces, in addition to the international border with the Democratic Republic of Congo (“DRC”) to the northwest. The province is divided into five administrative districts. The Luiri Hill Project is situated the Mumbwa District. The Mumbwa township is located 25km northwest of the Dunrobin mine area.

The site can be accessed from the capital, where an international airport is located, by vehicle within two hours via the M9 road and then south for 5km along a gravel road (Figure 4.1).

Figure 4.1: Location of Project Area, Zambia

There is a power line between Nampundwe and Mumbwa see Figure 4.2 below, which crosses the project area from southeast to northwest. The power line is 90km long, built for a capacity of 88kV, but is operated at 33kV. When operated at 33kV, the existing power line cannot deliver more than 2.3MW without deterioration of voltage. As of the publication of the 2013 EIA, the Mumbwa town power requirements approached 3MW at peak times, resulting in low voltage.

ZT61-1601/MM1131 Final V6.0 Page 109 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI Comment: WAI is aware that the Nampundwe OHL connects to the Sanje substation which provides power to Mumbwa. WAI has been provided with a copy of a letter that Alecto received in December 2016, which indicates that the substation will be upgraded in Q1/2017 and will be able to supply the planned Alecto mine.

Figure 4.2: Locality Map of Project

4.2 Topography & Climate

The licence area is situated in an area where the dominant landforms are gently rolling hills of limestone with little surface drainage. The terrain, which is referred to as “sandveldt plateau” stands between 1,065m and 1,220m above sea level.

The regional land surface of the project is generally covered by colluvial and alluvial material with scattered outcrops along ridge tops. The drainage is directed southwards and comprises a network of seasonal creeks and streams flowing into the Nangoma stream, which then connects with the Kafue River to the south.

The vegetation is typically savannah but varies according to the drainage, soil-depth and bedrock. There is considerable contrast between the northern and southern areas. The mature soils in the north of the project area support undulating woodlands interspersed with broad semi-alluvial areas (dambos) supporting dense growths of grass. The central part is covered by soils containing variable proportions of residue and colluvial soils and clays. This soil supports widespread belts of high-grass woodland. The dambos are replaced by shallow, fertile valleys. In the extreme south, the valley and floodplain grasslands are abundant in the dark grey colluvial soils and clays of the Kafue Flats.

ZT61-1601/MM1131 Final V6.0 Page 110 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Although within the tropics, the climate is tempered by an altitude of just over 1,200m. The year is divided into wet and dry seasons. The wet season continues from mid-November to late March, during which time it rains almost daily.

The climate imposes no restriction on the length of the field operating season. The maximum temperature occurs in October, the coolest in July when frosts can occur.

Annual expected rainfall is about 1,000mm. The length of the day changes little through the year being about twelve hours.

4.3 Zambia Summary Information

The Republic of Zambia is a landlocked country surrounded by eight countries in Southern Africa and. These are the Democratic Republic of the Congo to the north, Tanzania to the northeast, Malawi to the east, Mozambique, Zimbabwe, Botswana and Namibia to the south, and Angola to the west. The country lies mostly between latitudes 8° and 18°S, and longitudes 22° and 34°E.

Zambia is the 39th-largest country in the world covering an area of 752,614km2. The current population of Zambia is 17 million based on the 2017 United Nations estimates.

The capital city of Lusaka is located in the south-central part of Zambia. The population (over 2 million) is concentrated mainly around Lusaka in the south and the Copperbelt Province to the northwest, the core economic hubs of the country.

The climate of Zambia in Central and Southern Africa is tropical modified by altitude. The country consists mostly of high plateaus with some hills and mountains, dissected by river valleys. Zambia is drained by two major river basins: the Zambezi/Kafue basin in the centre, west and south covering about three-quarters of the country; and the Congo basin in the north covering about one-quarter of the country. A very small area in the northeast forms part of the internal drainage basin of Lake Rukwa in Tanzania.

The country attained macroeconomic stability for more than a decade (2000-2010) and achieved impressive real growth averaging 7.7% per annum and lifting Zambia above the threshold of lower Middle Income Countries.

However, following the peak of copper prices in 2011 and the recent rising fiscal deficits, the economy has slowed down. It is believed that growth will largely be subdued by the energy crisis. The 2015 agriculture season saw a decline in maize output by 21%, leading to a slowdown in growth in the sector. Zambia ranked 97 of 189 in the 2016 Doing Business Report moving 6 places down due to decline in trading across borders. Zambia scored 3.60 points out of 7 on the 2016-2017 Global Competitiveness Report published by the World Economic Forum. Competitiveness Index in Zambia averaged 3.60 Points from 2007 until 2017, reaching an all-time high of 3.87 Points in 2016 and a record low of 3.16 Points in 2007.

ZT61-1601/MM1131 Final V6.0 Page 111 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Economic Forecast (2016-2020) by Trading Economy is summarised in Table 4.1.

Table 4.1: Zambia Economic Forecast (2016-2020) MARKETS Actual Q2/17 Q3/17 Q4/17 Q1/18 2020 Currency 9.44 9.75 9.84 10.13 10.04 11.58 GDP GDP Annual Growth Rate 3.6 3.8 3.8 3.8 4.4 5 percent GDP 22.06 24.3 22.8 21.31 20.8 17.45 USD Billion GDP Constant Prices 183381 199527 202231 204935 210179 285545 ZMW THO GDP per capita 1607.36 1637 1634 1631 1635 1675 USD GDP per capita PPP 3602.33 3677 3682 3686 3690 3814 USD LABOUR Unemployment Rate 13.3 13.98 14.02 14.07 14.23 15.34 percent Population 15.47 62.2 62.31 62.42 74.57 267 million TRADE Balance of Trade -998.8 -741 -728 -734 -733 -733 ZMK Million Exports 4818.8 4986 4986 4986 4986 4986 ZMK Million Imports 5817.6 6048 6054 6055 6056 6056 ZMK Million Current Account -107.2 -162 -169 -172 -168 -168 ZMK Billions Current Account to GDP -3 -1.33 -2.38 -3.44 -3.03 -2.49 percent Terrorism Index 0 0 0 0 0 0

Zambia is known for its copper, but it is also a great gold producer with number of active mines.

Mining in 2015 maintained the same output level as in 2014 at 710kt. In 2017, it is estimated that Zambia’s copper production will double due to production in Kalumbila copper mine, a new project by Glencore.

4.4 Regulatory Environment & Mineral Tenure

4.4.1 Regulatory

On 22 November 2015, Alecto Minerals PLC acquired 100% of the Luiri Gold Mines Ltd company which owned the Matala and Dunrobin assets.

Both assets are incorporated within one tenement within south-central Zambia, focused on the historic Matala and Dunrobin mines. The Dunrobin and Matala mines fall under the previously named Mining Lease LML48 which was renamed 8074-HQ-LML in 2008. Mining Lease 8074-HQ-LML is set to expire in 2028, and covers a total area of 32km².

4.4.2 Tenure

8074-HQ-LML extends approximately 10.9km in an east-northeast direction by 2.9km in a north- northwest direction covering 31.39km². The centre of the lease is located at approximately 27º 14’ east, 15º 9.5’ south.

ZT61-1601/MM1131 Final V6.0 Page 112 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The concession area is bounded by the coordinates shown in Table 4.2 below. WAI notes that the concession coordinates are presented in LML48 Coordinate Listing UTM Arc 1950 Zone 35S coordinates system. A plan of the concession area is shown in Figure 4.3 below.

Table 4.2: Concession Area Coordinates (LML48 Coordinate Listing UTM Arc 1950 Zone 35S) No Easting Northing No Easting Northing No Easting Northing 1 520771 8325407 19 522917 8322640 37 529726 8326872 2 520771 8325222 20 522917 8322824 38 529725 8326687 3 519696 8325223 21 523991 8322823 39 528472 8326689 4 519696 8325039 22 523991 8323007 40 528472 8326505 5 519159 8325039 23 525066 8323006 41 527397 8326506 6 519158 8324302 24 525066 8323191 42 527397 8326322 7 519337 8324302 25 526140 8323189 43 526323 8326323 8 519337 8323749 26 526140 8323374 44 526323 8326138 9 519516 8323749 27 527215 8323372 45 525248 8326140 10 519516 8323196 28 527215 8323557 46 525248 8325955 11 519695 8323196 29 528289 8323556 47 524174 8325956 12 519694 8322458 30 528289 8323740 48 524173 8325772 13 519873 8322458 31 529364 8323739 49 522920 8325773 14 519873 8322274 32 529364 8323923 50 522920 8325589 15 520768 8322273 33 530080 8323922 51 521845 8325590 16 520768 8322457 34 530082 8325028 52 521845 8325406 17 521842 8322456 35 530261 8325028 53 520771 8325407 18 521843 8322641 36 530263 8326871

The corner beacons of the lease/concession boundaries were surveyed in November 2015 by the Government Cadastre and a pegging certificate has been issued, additionally, WAI has located one of the licence beacons as part of the recent site visit.

ZT61-1601/MM1131 Final V6.0 Page 113 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 4.3: Concession Area, Showing the Historic Matala and Dunrobin Mines

4.5 Project History

An ownership and exploration summary covering the period prior to Luiri’s acquisition of the project in 2003 is provided in Table 4.3 below.

LML48 was originally granted to Luiri on 13th November 2003 for a period of 10 years. In 2008 with the introduction of the cadastre system under the Mining Act 2008, Luiri had to reapply for LML48 and was subsequently granted LML48 until 2028 under the original provisions and conditions set out in the annexure to the original grant on 13th November 2003.

On June 14th 2010, Luiri Gold Mines announced that they had received a letter from the Director of Mines in Zambia alleging that the company was in default of provisions made in the granting of Mining Licence LML48 at the Luiri Hill Gold Project. This was followed by an announcement on 28th July 2010 that the company had received a letter from the Director of Mines rejecting the response to the earlier letter of default and informing the company that LML48 had been cancelled. Luiri Gold Mines announced that they had lodged an appeal to the Minister of Mines.

On the 29th July 2010, Luiri Gold Mines received a letter from the Minister of Mines in Zambia in which he has upheld the decision of the Director of Mines to cancel the mining license LML48. In accordance with the provision of the Mines and Minerals Development Act of 2008, the company then lodged an appeal with the High Court of Zambia on 1st October 2010.

ZT61-1601/MM1131 Final V6.0 Page 114 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

On 7th September Luiri Gold Mines was granted an order in the High Court of Zambia for the stay of the decision of the Minister of Mines and Minerals Development to cancel its Large Scale Mining Licence pending the hearing of a High Court appeal lodged by Luiri.

After negotiations, on the 15th September 2011, a consent settlement order was filed in the High Court Principal Registry which extinguished the cancellation notice and restored the rights over LML48 which Luiri enjoyed prior to the issuance of the cancellation notice.

Luiri obtained legal opinion that it has full security of Tenure over 8074-HQ-LML. In terms of the consent order, Luiri undertook to commence construction of a large-scale mining operation by 29th December 2013

ZT61-1601/MM1131 Final V6.0 Page 115 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.3: Ownership and Exploration Summary Luiri Hill Gold Project, Ownership and Exploration Summary 1912 Gold discovered in the Matala area Dunrobin mine exploited. The deposit was reported to consist of a large black iron-oxide surface 1927-1941 expression, which was mined initially by open cast methods and then by underground methods down to a depth of 75m below the surface before flooding closed the mine in 1941. 1928 Mining starts at the Matala mine, initially producing 49.48oz Au. 1929-1941 Matala mine along with several other localities pegged. 1920s-1930s Rhodesia Mineral Concession Company carries out detailed geological investigations in the area. Col. Stevens a prospector, repegged four locations of which “Mining Title 20” represented the Matala 1944 mine. The claims were abandoned in 1959 after an unsuccessful attempt to rework the old tailings. Matala Gold Mining Co. commenced a 500 tonne per day operation using a stamp mill with 1959-1962 amalgamation and cyanide recovery processes. Mindeco Small Mines Unit (a department of the Zambian Mines Department) was unsuccessful in its 1969-1970 attempt to rehabilitate the old mine workings at Matala. Mumbwa Gold Fields Ltd. re-examined the Matala mine, and reported near surface and underground 1970 reserves but no mining ensued. Dunrobin mine was re-opened, with the underground workings dewatered by the Zambian Government’s Mindeco Small Mines Unit (Mindex). A fifth level was developed with the intention of 1973-1976 examining the down-plunge extensions of the orebody. A limited amount of ore was delineated but further work was abandoned due to flooding of the workings. Mindex Department (Mindeco), conducted detailed regional geological work over the Matala Dome, 1976 concentrating on known gold occurrences and further broadening the area to the whole of the surrounding region. 1983-1984 Mindex conducted a detailed trench sampling program along the Matala “dyke”. 1985-1986 24,000t of mill sands and slimes, at Dunrobin, were treated in a CIP percolation leach plant. 1987 Mindex sampled the Matala dumps. ZCCM applied for a 40 hectare PL over Matala and commenced an underground rehabilitation and 1988 sampling program. PL 589 was granted to AGIP Miniere. The PL covered the Matala Dome area except for the ground 1988 around the Matala and Dunrobin mines. Field work carried out included geological mapping, soil and rock sampling, geophysics and diamond drilling. At Dunrobin 31,000t of slimes (0.6g/t Au) and 37,000t of sands (~1.0g/t Au) were treated using a 1988-1990 simple percolation leach plant similar to that used in the 1930s. COGEMA/ZCCM sign a joint venture agreement over the Matala mine. COGEMA’s work concentrated 1989 on the 40 hectare area around the Matala mine and included diamond drilling. 1992 COGEMA/JCI Ltd sign a JV agreement. Reunion Mining Ltd re-opened the Dunrobin mine and carried out preliminary investigations at Matala. The gossanous deposit at Dunrobin was mined by open cut on an initial resource estimate of 1997-1999 2.3Mt at 1.3g/t Au. An initial estimate of a resource at Matala indicated 469,219t at 8.34g/t in the western zone and 832,887t at 6.08g/t in the eastern zone. The average vein width was said to be 3.4m. Sutherland Services acquired Dunrobin and appointed Caledonian Minerals to manage. It completed a resource estimate for Dunrobin and surrounding deposits. An undocumented amount of mining is 1999 - 2000 understood to have taken place from the base of Reunion’s open pit at Dunrobin with ore processed via a heap leach operation. Mukoti acquired two PLs surrounding the Dunrobin and Matala mines. Mukoti assessed the regional 2000 - 2003 geology and compiled previous exploration data. 2003 - 2005 Luiri Gold acquired the Dunrobin ML in 2003, along with Mukoti’s interest in the surrounding PLs.

On 22 November 2015, Alecto Minerals PLC acquired 100% of the Luiri Gold Mines Ltd company, and as part of this acquisition undertook to revert with a Feasibility Study (FS), contingent on the state- owned power company (“ZESCO”) providing adequate power supply to the mine site.

ZT61-1601/MM1131 Final V6.0 Page 116 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

As part of this acquisition, a letter from the Director of Mines, Zambia, notified that an extension to the date of mine construction has been granted. This FS shall outline the new development schedule, which will in turn define the government’s new position on development.

4.6 Geology & Mineralisation

4.6.1 Geology of Zambia

The regional geology of Zambia can be broadly divided into five principal supergroups, of which three; the Basement, Muva and Katanga Supergroups are Proterozoic in age. The Basement Supergroup represents the oldest succession and consists mostly of granitic gneiss, migmatites and amphibolites which are evident throughout eastern, central and southern Zambia (Figure 4.4). Overlying the Basement Supergroup is a sequence of metamorphosed pelites, quartzites and schists of the Muva Supergroup, which is best represented by the Irumide and Zambezi belts of central Zambia.

Figure 4.4: Regional Geological Map of Zambia Showing the Luiri Hill Tenement Area Straddling the Mwembeshi Shear ZT61-1601/MM1131 Final V6.0 Page 117 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The Katanga Supergroup overlies the Basement and Muva sequences within northwestern and northern Zambia, where it forms the economically significant Lufilian Arc. The Katanga Supergroup may be further divided into the Roan, Mwashia and Kundelungu Groups in part reflecting a change from continental to marine to glacial sedimentation.

The Roan Group forms the basal sequence of the Katanga Supergroup and comprises a lower sequence of conglomerate, sandstone and argillites (Roan is not present in the Luiri Hill Project area) which progressively grade into a predominantly dolomite-argillite sequence.

The overlying Mwashia Formation consists of carbonaceous shales, argillites and minor carbonate rocks. After a prolonged hiatus, glacial sediments of the Kundelungu were deposited and include dolomitic limestones, shale and tillite.

These Proterozoic rocks are largely overlain in the east, south and west of the country by Phanerozoic sedimentary and volcanic units of the Karoo and Kalahari Supergroups. The Karoo sedimentary succession is best exposed within the Luangwa and Zambezi rift valleys of eastern Zambia and comprises clastic sediments, coal, tillites and minor basalts of Carboniferous to Cretaceous-age. The overlying Kalahari Supergroup is best represented by extensive aeolian sands and minor epiclastic sediments of Quaternary to Present-age, which are evident over much of western Zambia.

The Muva and Katanga Supergroups are intruded by several granitoid bodies, the most prominent of which is the Hook Granite within south-central Zambia (Figure 4.4 above and Figure 4.5 below).

ZT61-1601/MM1131 Final V6.0 Page 118 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 4.5: Map Showing Gold and Gold/Copper Occurrences in North-Central and South-Central Zambia

Zambia is underlain by a complex network of Proterozoic orogenic belts located along the margin of the stable Archaean-age Congo, Zimbabwe-Kaapvaal and Tanzanian Cratons. The geological evolution of Zambia is largely the result of a protracted history of differential movement between these cratons. At least five major deformational events are evident within the country’s geological record including extensive folding and thrusting which has culminated in the juxtaposition of various geological terrains along major structural discontinuities.

ZT61-1601/MM1131 Final V6.0 Page 119 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

One such structure is the regional-scale, east-northeast trending Mwembeshi Shear Zone of central Zambia, which separates rocks of the Zambezi Belt to the southeast, from those of the Lufilian Arc to the northwest.

A significant proportion of the gold and copper-gold occurrences within southern Zambia are spatially associated with the Hook Granite and thrust faults related to the Mwembeshi Shear Zone. The Luiri Gold Mines license area is just to the North of this shear, and is located to the east of the main body of the Hook Granite.

4.6.2 Regional Geology

The Luiri Hill Project is located in an area of south-central Zambia that is dominated by the well-known and important Mwembeshi Shear Zone (Figure 4.5). A significant number of south-central Zambia’s gold and gold-copper occurrences are located within or close to this regionally significant structural zone.

Regional geological studies suggest that the Mwembeshi Shear Zone defines the boundary between the late Proterozoic Katanga Supergroup basinal sediments to the north, and the more intensely deformed Zambezi Metamorphic Belt terrain to the south. These rocks have been classified as the Muva and Basement Supergroups.

Associated with the Mwembeshi Shear Zone are late granitoid intrusions and thrust faults. The Hook Granite, the main body of which is located about 30km west of the Luiri Hill Project, is one of the largest of these granites. Small stocks and plugs of granite, syenite and quartz diorite, which intrude the project area, are believed to be related to the Hook Granite.

4.6.3 Project Geology

The geological setting of the Luiri Hill Project is illustrated on Figure 4.5 and Figure 4.6. The southern part of the project area (Figure 4.6) incorporates a prominent and geologically complex area known as the Matala Dome. The Dome is located approximately 5km eastnortheast of the main body of the Hook Granite and it appears to be located within or is just north of the Mwembeshi Shear Zone. The Dome is elongated in an east-northeast direction and is parallel or subparallel to the trend of the shear. The Matala Dome is host to the most important gold occurrences so far identified within the project area.

The Matala Dome apparently comprises two adjacent doubly plunging anticlinal structures with long axes striking towards the east-northeast. It is cored by quartz schists and various gneissic metamorphic rocks that have been classified as Mpande Formation of the Basement Supergroup, as well as Muva Supergroup rocks.

The rocks of the Dome are reported to be extensively altered to greisen and now consist of a range of schists made up of varying proportions of quartz - muscovite - biotite - feldspar - sericite. Overlying the Basement, and appearing to act as a rim to the Dome, is a distinct “layer” comprising quartzite,

ZT61-1601/MM1131 Final V6.0 Page 120 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA kyanite schist and metamorphosed conglomerates. These rocks have been included as part of the Basement on Figure 4.6. Small stocks and plutons of Hook Granite have intruded the Basement and Muva Supergroup rocks of the Matala Dome.

Figure 4.6: Geological Map of the Matala Dome and Surrounding Area

Gold and gold/copper occurrences hosted by Katanga Supergroup dolomites and Basement rocks respectively are identified.

Unconformably or disconformably overlying the Muva and Basement rocks of the Matala Dome are limestones and dolomitic marbles of the Lusaka Formation (of the Katanga Supergroup) which are in turn stratigraphically overlain by argillaceous and calcareous sandstones.

The Lusaka Formation marbles are grey, white and pink with occasional thin argillaceous horizons. Disseminated pyrite is reported to be abundant within the contact zone between the Lusaka

ZT61-1601/MM1131 Final V6.0 Page 121 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Formation and the underlying Basement. These rocks appear to underlie most or all of the project area away from the Matala Dome (Figure 4.6).

It is evident from Figure 4.6 that the former Matala mine is located within the Basement rocks of the Matala Dome, on or close to its axial plane trace. The old Dunrobin mine is located within the dolomite and limestone rocks immediately overlying the Basement in the hinge of the west-southwest plunging Matala Dome anticline. The apparent concentration of gold mineralisation along the axial zone of the Matala Dome anticline is noteworthy.

4.6.4 Local Geology and Mineralisation

4.6.4.1 Gold Mineralisation in Zambia

Work by Coffey and PenMin has identified that the majority of Zambian gold deposits and occurrences are lode-style bodies that appear to be associated with basement domes, large crustal-scale shear zones and syn-orogenic granite and syenite intrusions. The Mwembeshi Shear Zone, and to a lesser extent, the broadly contemporaneous Kapiri Mposhi–Mkushi Shear Zone, appear to be important controlling features. The clusters of gold deposits and occurrences tend to fall within or near these structurally disturbed zones, particularly in the vicinity of the Hook Granite (Figure 4.5).

All gold mineralisation so far discovered within the Luiri Hill Gold Project occurs within the Matala Dome or in the rocks immediately peripheral to it. The most intensively studied mineralisation occurs within the former Matala and Dunrobin mine areas.

4.6.4.2 Gold Mineralisation - Matala Mine Area

Work by Coffey and PenMin has identified that at the Matala mine, gold mineralisation is characterised by strong stratigraphic disruption (deformation), shearing and the presence of quartz- dolomite-pyrite-tourmaline-albite-sericite alteration and vein stockworks.

Apart from the presence of non-visible gold, chalcopyrite is replaced by chalcocite proximal to and within the ore zones. The alteration directly above the ore zone in the hangingwall is characterised by strong quartz-sericite and disseminated pyrite with minor jarosite staining (yellow).

The quartz-dolomite-pyrite-tourmaline-albite-sericite mineralised assemblage occurs in a steep, south-dipping stockwork. The stockwork is reported to be variable in terms of intensity, fabric and composition along strike and down dip.

WAI Comment: This mineralisation is typical of gold mineralisation, and was observed in the DD core examined briefly during the site visit.

According to past mining and observations made by WAI during the site visit, WAI would agree that the mineralised zone is oxidised to a depth of approximately 50m below surface and comprises pseudomorphs of limonite and chrysocolla, cuprite, malachite and azurite. A transitional zone of

ZT61-1601/MM1131 Final V6.0 Page 122 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA partially oxidised iron and copper sulphides occurs below the oxidised zone, and such mineralisation was observed in the in pit ore dumps.

4.6.4.3 Gold Mineralisation - Dunrobin Mine Area

The PenMin review of the available literature on the gold mineralisation at Dunrobin indicates that there are two principal styles, notably ferruginous (hematite) gossans within the dolomites and limestones with associated quartz veining, and quartz veins and quartz vein stockworks within the quartz-mica schists of the underlying Basement.

Quartz Veining

As reported in the PenMin FS, in both styles of mineralisation, quartz veining is evident and attests to the hydrothermal nature of the primary gold mineralisation. Quartz veining is reported by Luiri to be associated with the Basement schist - dolomite contact, but shows particular concentration in the basal part of the dolomite sequence.

The “vein horizon” within the dolomites is described by Coffey Mining as ranging in width from 1m to 4m in thickness, comprising a number of parallel or subparallel sheets of vein quartz. Coffey Mining has noted that one of the well-developed veins in the dolomites at Dunrobin strikes at approximately 120° and dips 30° to the southwest.

Quartz Vein Hosted Mineralisation in the Basement

Early underground mining at Dunrobin (mostly prior to 1941) appears to have exploited gold mineralised quartz veins and vein stockworks within the Basement. Luiri has noted old records describing the mineralisation as occurring in a 0.5m to 0.75m thick quartz vein within a shear that was traced over a 140m strike length. The quartz vein reportedly contained auriferous pyrite and minor chalcopyrite, bismuthinite, sphalerite and pyrrhotite. The full extent of the Basement hosted quartz veining remains to be established.

WAI Comment: WAI examined the location of the old shaft to the south of the open pit, and this would have provided access to the deeper underground ore.

Dolomite Hosted Mineralisation

The gold mineralisation exploited during open pit mining by Reunion and subsequently by Caledonian in the period 1997 to 2000 occurs within “gossanised dolomite” in association with a quartz vein system immediately above the Basement unconformity/disconformity. The gossanised dolomite appears to reflect the occurrences of a deeply oxidised (weathered) halo of pyrite enriched dolomite with hematite alteration. The pyrite appears to occur within an alteration zone associated with the quartz veins which are also pyrite enriched.

ZT61-1601/MM1131 Final V6.0 Page 123 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The gossan consists primarily of hematite, limonite pyrite and quartz. The gossan zone appears to dip in conformance with the quartz veins at a shallow angle to the southwest. The gossanous rock sequence is estimated to be generally about 10m to 20m in thickness, but drilling has returned some intervals in excess of 30m.

WAI Comment: WAI observed the gossanous material and the dip and dip direction of the orebody.

Gossanous ore and its associated quartz veins was the principal type of mineralisation mined by Reunion during the period 1997 to 1999. The latest round of drilling (undertaken by Luiri) has shown that the primary source of the gossan is the weathering of second generation pyrite, whereas the primary disseminated sulphidation represents the bulk of mineralisation at depth, see Photo 4.1 below taken by Mark Kenwright during the recent WAI site visit.

Photo 4.1: Dunrobin Mineralised Core

Based on the Dunrobin findings, economic concentrations of gold were trapped at the nose of a large west plunging fold, in the lower sequences of limestone above a meta-sandstone-siltstone sequence. In the Dunrobin scenario, the fold nose (and hingeline) is the locus for circulating hydrothermal fluids, a thrust fault is the pathway and the limestone cover sequence acted as both a physical and chemical barrier to relatively acid hydrothermal solutions. The Dunrobin mineralised system is a carbonate hosted gold deposit, and a number of other localities about the Matala Dome have similar lithology and geometric relationships, and will provide suitable targets for Alecto’s future exploration program.

ZT61-1601/MM1131 Final V6.0 Page 124 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.7 Exploration

4.7.1 Initial Exploration

As reported in the PenMin FS, between 2002 and 2008 all exploration work was carried out under the management of RSG Global (now merged with Coffey Mining Pty Ltd), the geological and mining consulting firm appointed by Luiri to manage its exploration at Luiri Hill. Thereafter, Luiri managed its own exploration programme from 2009.

Since acquiring the Luiri Hill Project in 2002, Luiri’s principal exploration focus was directed towards the exploration drilling of the old Matala and Dunrobin mine areas. Other work undertaken, included field mapping around the Matala Dome (2007), alteration studies of the Matala and Dunrobin core, geochemical soil sampling programs across the Matala Dome (2006 and 2007) and the excavation (or re-excavation) of shallow trenches across the Matala deposit, and other prospects such as Eclipse and Matala West Extension (2007).

An RC drilling programme was undertaken during the first quarter of 2008. This drilling programme tested prospective lithologies and soil anomalies both along strike and in similar lithological and structural settings to those present at Matala and Dunrobin, on a number of previously identified prospects.

The overall comments from Coffey were that the data gathered for the two projects were fit to be used in the Mineral Resource estimation process.

WAI Comment: In WAI’s opinion, the exploration programme completed is reasonable and logical.

4.7.2 Drilling

As reported in the PenMin works, several Diamond and RC drilling programmes have been completed at Luiri projects, mainly Matala and Dunrobin. Data collection can be subdivided into two distinct periods of exploration; prior to 2000 and then 2005 onwards.

The first period relates to data collected as part of JCI and Reunion’s, and Cogema’s exploration management at Matala and Dunrobin respectively.

The second period relates to data collected under work programmes conducted by Luiri. As such, further comments are directly attributed to each company grouping.

Coffey Mining reviewed all the available historical data pertaining to Diamond core/RC chip boards, etc, of pre 2005 data, and utilised these data as part of their QA/QC review of the Mineral Resource Estimate.

ZT61-1601/MM1131 Final V6.0 Page 125 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

According to these reviews:

• Luiri’s first drilling programme at Dunrobin was carried out in January and February 2005, with a total of 30 RC holes drilled for 2,861m; • In February and March 2005, Luiri drilled 12 RC holes at Matala with the objective of verifying the previously completed COGEMA drilling results and in-fill drilling areas of the Matala deposit that were previously defined by very wide-spaced holes, with a total of 1,322m drilled; • Furthermore, in 2006/2007, Luiri drilled 15 RC holes at Dunrobin for 2,077m, and 18 (RC and DD) holes at Matala for 2,076m, as a follow up on the previous drilling programme; • A subsequent drill programme in 2007 was undertaken at both Matala and Dunrobin. This consisted of 16 DD holes at Dunrobin for a total of 3,495m and 30 DD holes at Matala for a total of 8,683m; • A further subsequent drill programme in 2010 was undertaken at Dunrobin. This consisted of 4 diamond drillholes at Dunrobin for a total of 296m; and • In 2012, RC drilling programmes were undertaken at Matala West (950m), Eclipse (620m), Shadreck (672m), Chosa (1,708,) and Dunrobin (3,298m).

4.7.3 WAI Observations

As part of the WAI site visit by Mark Kenwright, undertaken from the 9th January 2017, WAI was able to briefly examine the following DD Holes and RC chips at the coreshed located at the offices on the Dunrobin site. At Matala, MTL103A, MTLRC53D and MTLDDH57, at Dunrobin, DUNDD121 and DUNDD119, and RC chips Dunrobin, DUNDRC128 and DUNDDH103.

The consensus from the inspection was that the core had been collected properly and that high grade intersections (from assay) did appear to correlate with the core in the boxes. Moreover, the aluminium boxes were stored properly (Photo 4.2) had distance markers and were annotated.

After comparing the logging, assay sheets, storage, and marking of the core and plastic markers, overall WAI is satisfied that the logging practices are to an international standard, and the logging is of sufficient quality to be used in a Mineral Resource Estimate.

ZT61-1601/MM1131 Final V6.0 Page 126 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Photo 4.2: Coreshed

In addition, RC chip storage was also examined (Photo 4.3) which was also in good condition.

Photo 4.3: RC Chip Storage and RC Chip Trays

ZT61-1601/MM1131 Final V6.0 Page 127 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.8 Mineral Resource Estimation

4.8.1 Matala

4.8.1.1 Introduction

The Matala deposit is situated within the Luiri Hill Gold Project area, along with the adjacent Dunrobin deposit. Gold mineralisation at Matala is shear hosted and characterised by a quartz-dolomite-pyrite- tourmaline-albite-sericite alteration assemblage. The mineralisation strikes east-west for approximately 1,300m, and dips approximately 70° to the south.

Coffey Mining Pty Ltd (Coffey Mining) has produced a Mineral Resource Estimate in accordance with the JORC Code (2012) for the Matala deposit, dated 23 December 2011. As WAI understands, Maxwell GeoServices validated the drill hole database prior to Coffey commencing their Mineral Resource Estimation. For the purpose of this review, WAI has been provided with the Coffey Mining estimation report “Dunrobin and Matala Gold Deposits Resource Estimation” (Coffey Mining, 2012).

In addition to the Mineral Resource report, WAI has also been provided with the block model “mdmatdeplfac_client.dm”, as well as the corresponding wireframes and drill hole database.

The following sections summarise the WAI review of the Matala Mineral Resource Estimate.

4.8.1.2 Database Compilation

Coffey Mining carried out the Mineral Resource Estimation using the exploration drill hole database that had been compiled by Maxwells GeoServices. The database was reviewed and validated by Maxwell Geoservices prior to commencing the resource estimation study. The sample database comprises trenching, and drilling results from diamond core and Reverse Circulation (RC) drilling methods. Coffey Mining has stated (Coffey Mining, 2012) that the diamond drilling procedures are equivalent to the best international industry standards. Coffey Mining has also stated that the RC drill procedures are in line with industry standard practice, with the exception of using drilling fluid to return cuttings to surface rather than compressed air.

WAI has reviewed the sample database and compared the sample populations for the diamond and RC drilling, as well as the trenching results. The drill hole sample populations show comparable distributions. The trenching assay results show higher grade results compared to the drill hole samples, possibly indicating either a sampling bias or possible enrichment in the upper surface layer. No details quantifying the deviation between drilling and trenching sample population is provided by Coffey Mining in the “Dunrobin and Matala Gold Deposits Resource Estimation” report. The sample database comprises results for only four trenches so the influence of the trenching samples on the Mineral Resource Estimate is low.

According to Section 14.2.1 of the “Dunrobin and Matala Gold Deposits Resource Estimation” report, ‘Samples were composited to 2m downhole lengths with residual intervals less than 1m length being

ZT61-1601/MM1131 Final V6.0 Page 128 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA deleted from the composite file’. WAI has not been able to ascertain the rationale behind omitting the smaller sample intervals, or whether the samples were composited to 2m lengths before the geological interpretation. Standard industry practice is to carry out the geological interpretation on the raw unadjusted sample data, with samples falling within the wireframes selected and subsequently composited. Compositing samples prior to the interpretation poses a risk of grade smearing resulting in over or under reporting the true mineralised thickness. In addition, samples should not be omitted due to their sample length, but only in those instances where there is a lack of confidence in the quality of the sample data.

4.8.1.3 Geological Interpretation

Mineralisation was modelled by Coffey Mining based on a 0.3g/t Au cut-off grade, resulting in a main ore body striking east-west and dipping to the south at approximately 70°, and which has been classed by Coffey Mining as Zone 100. A second small lens of mineralisation at the eastern end of the deposit has also been modelled and classed as Zone 200. Coffey Mining has used a minimum mineralised intercept width of 3m.

All sample data (Diamond/RC/Trenching) was used for the purpose of defining the mineralised envelopes, however, the trenching data was excluded from the subsequent grade estimations due to concerns surrounding its quality.

A plan view of the Coffey Mining geological interpretation is provided in Figure 4.7: below.

Figure 4.7: Plan View of Mineralised Domains (Coffey Mining, 2012)

Oxidation at Matala has been recorded to depths of 50m below surface, with a transitional zone situated beneath the oxide. Both the oxide and the transitional material has been defined by Coffey Mining.

ZT61-1601/MM1131 Final V6.0 Page 129 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI Comment: WAI has reviewed the Matala geological interpretation and is of the opinion that the resultant wireframes are robust and suitable for use in a Mineral Resource Estimate.

4.8.1.4 Statistical Analysis

Coffey mining selected samples within the mineralised wireframes and assigned the samples the corresponding domain code (Zone 100 and Zone 200). The Coffey Mining report states that the sample lengths were reviewed statistically to ascertain a suitable composite length. The statistical review identified that 16% of the samples had a length of <1m, 62% of the samples had 1m sample lengths, 4% between 1m and 2m, 2% of the samples had 2m intervals, with the remainder sampled at intervals >2m. Based on the statistical sample length review, Coffey Mining opted to composite the sample data to 2m lengths.

The Coffey Mining report mentions compositing at two stages of the report, once prior to the geological interpretation and a second time after the samples were selected within the wireframe envelopes. WAI is therefore unclear as to exactly at what stage the samples were composited and any impact this may have on interpretation of mineralised intercept widths. The choice of a 2m sample length also appears unusual given that the bulk of the sample data (62%) is of a 1m sample length. Whilst WAI would recommend a 1m sample length for future estimation works, it is of the opinion that the use of a 2m composite would have little impact on the overall Mineral Resource Estimate.

The 2m composite samples were reviewed by WAI statistically for each of the two domains (Zone 100 and Zone 200), the results of which are shown in Table 4.4.

Table 4.4: Domain Composite Statistics (Au g/t) Number of Std Domain Min Max Mean Median Variance CV Composites Dev Zone 100 1,429 0 66 1.96 0.7 4.46 19.86 2.27 Zone 200 11 0.01 2.81 0.79 0.4 0.83 0.69 1.06 All Domains 1,440 0 66 1.95 0.7 4.44 19.72 2.27

The sample data displays a single log normal distribution for both domains. WAI note that no statistical review of the sample data was carried out based on oxidation state. Areas of oxidation can sometimes yield different grade characteristics compared to sulphide mineralisation, and may warrant domaining separately for grade estimates. Although the single log normal distribution indicates the lack of any discernible changes in grade characteristics between oxidation horizons, WAI recommends that future works carry out a more detailed statistical evaluation.

An evaluation to assess the need for top cutting of high grade samples was conducted by Coffey Mining. Based on this work, Coffey Mining applied a 30g/t Au top-cut to the sample data. WAI has reviewed the top-cut applied by Coffey Mining and is of the opinion that the top-cut level is appropriate. It was noted by Coffey Mining that the top-cut sample data was used for the variography only, sample data without top-cuts applied, was used in the actual Multiple Indicator Kriging (MIK) estimation.

ZT61-1601/MM1131 Final V6.0 Page 130 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

For the MIK estimation approach, the data set was coded with indicator values according to a series of grade ranges, in total 12 grade indicators were used by Coffey Mining.

WAI Comment: WAI is unsure as to the decision to use an MIK estimation methodology on a deposit that essentially comprises one ore body which displays a log normal grade distribution. MIK is often the preferred method for estimating deposits with grade populations that are strongly skewed, enabling a more representative estimation of grades without requiring excessive top-cutting. Given the geological and grade characteristics at Matala, WAI is of the opinion that Ordinary Kriging (OK) would be perfectly suitable as the principal estimation method.

4.8.1.5 Variography

WAI has not carried out its own variographic assessment, but has relied on the variogram outputs reported by Coffey Mining.

Coffey Mining carried out the variography using the geostatistical software, Isatis. Variography was conducted on gold grades as well as the MIK indicators.

It was reported by Coffey Mining that variography was carried out on six of the indicator thresholds. Variograms were carried out along the principal ore body orientations, along strike (085°), down dip (175°/70°) and across strike (355°/30°), with results plotted as experimental correlogram’s. The variogram results show a slightly high nugget, indicative of a high small scale grade variability. Coffey Mining defined gold grade variogram ranges in Zone 100 as 90m, 60m and 6m for the major, semi- major, and minor axis respectively.

Correlograms for the MIK indicators were reported by Coffey Mining to display nugget effects in the range of 25% to 70%.

WAI Comment: Overall WAI considers the variography performed by Coffey Mining to be suitable.

4.8.1.6 Block Modelling

For Matala, an un-rotated model with 25m x 5m x 10m (X/Y/Z) parent cells has been used by Coffey Mining. The block model was coded according to the mineralised domain (Zone 100 and Zone 200) as well as oxidation state and lithology. Table 4.5 summarises the block model parameters used.

ZT61-1601/MM1131 Final V6.0 Page 131 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.5: Block Model Parameters East North Elevation Origin 527,000 832,4500 500 Extent (m) 2,000 700 700 Parent Block Size (m) 25 5 10 Minimum Sub-Block Size 5 1 1 (m) Number of Blocks 80 140 70 (Parent)

4.8.1.7 Density

Density measurements have been carried out initially using RC chips before switching to drill core using the Archimedes water immersion method. The density measurements were correlated with lithology and oxidation state. Coffey Mining has defined three density groupings based on depth, which correlates with the depth of oxide, transition and fresh material.

The average bulk density for each depth subdivision is summarised in Table 4.6. These density values were applied to the block model.

Table 4.6: Dry Bulk Density DBD Depth Below Surface t/m³ 0 – 45m 2.11 45m – 75m 2.53 >75m 2.65

WAI Comment: WAI considers the application of density measurements to the Mineral Resource block model to be suitable.

4.8.1.8 Grade Estimation

Grade estimation for the Matala deposit has been carried out using Multiple Indicator Kriging (“MIK”) as the principal estimation method. Coffey Mining also carried out Ordinary Kriging (“OK”), Inverse Distance Squared (“IDW2”) and Nearest Neighbour (“NN”) estimates for comparison purposes.

WAI Comment: given the log normal grade characteristics of the deposit WAI questions the requirement to use MIK as the main estimation method. The MIK introduces a greater degree of complexity to the estimation method and a greater potential for an error to be introduced during the estimation process. The resultant block model will also require adjustment to an average block grade in order for the model to be used for mine planning, any error in the calculation of the average block grades may impact on subsequent mine planning results.

4.8.1.9 Validation

ZT61-1601/MM1131 Final V6.0 Page 132 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA section, and a statistical grade check of the E-type block grade and the sample composite grade. Grade profile plots were also carried out to check the veracity of the grade estimation.

Overall Coffey Mining concluded that the estimates correlate with the composite data.

WAI has also carried out a number of validation checks.

WAI Comment: WAI is of the opinion that whilst the choice of MIK as the principal estimation method may not be wholly warranted for the Matala deposit, adding a lot more complexity to the estimation than may be warranted, the overall grade estimates appear reasonable.

4.8.1.10 Depletion

Mining via underground methods has been carried out at Matala, and is disclosed in the Coffey Mining report (2012) as being in the order of 25,000 tonnes for production of approximately 8,254ozs Au (inferring a head grade of approximately 10g/t Au). Due to a lack of a detailed underground mine surveys, Coffey Mining has used a digitised long section of the underground workings to code and deplete the Matala block model in the Zone 100 domain.

WAI Comment: WAI is of the opinion that the depletion method used is appropriate given the lack of detailed underground surveys.

4.8.1.11 Resource Classification

Coffey Mining has stated that the Mineral Resources at Matala have been reported in accordance with NI43-101 guidelines. The Mineral Resources have been classified based on the sample spacing relative to the search radii of the grade estimation. The following classification criteria has been applied by Coffey Mining:

• Indicated, blocks estimated in the first search radii (<60m), with the nearest samples located at <25m from the block centroid, and a minimum of 12 samples used from at least 3 drill holes; and • Inferred, blocks estimated in the second search radii (120m) and above the 850mRL.

ZT61-1601/MM1131 Final V6.0 Page 133 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The resultant classifications are shown in Figure 4.8.

Figure 4.8: Matala Resource Model above 850mRL (Coffey Mining, 2012) Red=Indicated, Green=Inferred, Blue=Unclassified

4.8.1.12 Reasonable Prospects for Eventual Economic Extraction

Under the CRIRSCO group of reporting codes, there is a requirement for a Mineral Resource to demonstrate a reasonable prospect for eventual economic extraction for it to be reported. If a deposit is to be considered for open pit mining methods, then standard industry practice is to carry out a pit optimisation using realistic, albeit uplifted, pricing, to demonstrate which portion of the Mineral Resource has prospects for extraction.

If an underground Mineral Resource is to be reported, then a minimum mining width with appropriate dilution needs to be applied to the model, and the reported Mineral Resource should be at a cut-off grade in line with typical underground mining economic cut-off grades.

WAI Comment: WAI is aware that Coffey undertook a Feasibility Study published 5 November 2013 which reported reasonable prospects for eventual economic extraction and upgraded part of the Mineral Resource to a Probable Reserve.

The Mineral Resources have been reported at a range of cut-off grades, with the preferred cut-off grade defined by Coffey Mining set at 1.0g/t Au. WAI considers the cut-off grade of 1.0g/t Au to be low for an underground mining operation, and without mining dilution applied likely includes material that would not be considered economic for an underground operation. From an open pit perspective, the cut-off grade of 1.0g/t Au maybe considered too high, and a lower cut-off maybe more applicable.

Any future Mineral Resource updates will require an adequate assessment of the potential for economic extraction, this may result in a reduction in the quantity of reported Mineral Resources.

4.8.1.13 Coffey Mining Mineral Resource Statement

The following Mineral Resource statement has been disclosed by Coffey Mining for the Matala deposit. The statement is reported as of 20 January 2012, and has been constrained by the surface topography and at depth by the 750mRL. A summary of the Coffey Mining Matala Mineral Resource Estimate is provided in Table 4.7.

ZT61-1601/MM1131 Final V6.0 Page 134 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.7: Matala Gold Deposit Mineral Resource Summary (after Coffey Mining, 2012) Lower Cut-Off Average Grade Classification Tonnes (‘000) Gold Metal (‘000 ozs) Grade (g/t Au) (g/t Au) 0.4 4,150 2.2 300 0.5 4,015 2.3 298 Indicated 0.7 3,727 2.4 292 1.0 3,204 2.7 278 1.5 2,334 3.2 243 0.4 7,649 1.5 360 0.5 7,200 1.5 354 Inferred 0.7 6,106 1.7 333 1.0 4,525 2.0 290 1.5 2,600 2.6 213 Note: Mineral Resources reported above 750mRL

4.8.2 Dunrobin

4.8.2.1 Introduction

The Dunrobin gold deposit is situated adjacent (±8km) to the Matala deposit. Dunrobin comprises two styles of gold mineralisation, a ferruginous gossan within the dolomites and limestone with quartz veining, and a second style of quartz veins and stockworks hosted within quartz-mica schists.

Coffey Mining Pty Ltd (Coffey Mining) has produced a Mineral Resource Estimate for the Dunrobin deposit, dated October 2012. For the purpose of this review WAI has been provided with the Coffey Mining estimation report “Dunrobin Resource Estimation” (Coffey Mining, 2012).

A previous Mineral Resource Estimate for Dunrobin was carried out in December 2011 by Coffey Mining. The October 2012 update builds upon the previous estimate to include infill drilling conducted in 2012.

4.8.2.2 Database Compilation

As with the Matala deposit the Dunrobin Mineral Resource estimate is based on the available exploration drill hole database which was compiled by Maxwells GeoServices. In addition to the sample data used in the December 2011 Mineral Resource estimate, infill drilling conducted in 2012 was also used for the Mineral Resource update. Coffey Mining note in the “Dunrobin Resource Estimation” report (Coffey Mining, 2012), that percussion drill holes DUNPD1-DUUNPD44 were excluded from the estimation due to concerns regarding sample smearing and contamination.

Sample data was selected by Coffey Mining below the existing open pit, any sample data above the open pit appears to have been excluded from the estimation process. WAI would typically advise that the depletion of a model for mining activities be conducted after the Mineral Resource Estimate. By constraining the modelling with the open pit at such an early stage reduces the quantity of sample

ZT61-1601/MM1131 Final V6.0 Page 135 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA data available to define the grade continuity, can impede the geological interpretation, and prevents estimates being carried out in mined out areas for reconciliation purposes.

The database has been reviewed and validated by Coffey Mining prior to commencing the Mineral Resource Estimation study. A number of absent assay records were present in the sample database, where samples have been considered as waste and not sampled, or where the sample intercept was poor, such as where voids were encountered. If absent values were due to the presence of a void, then the assay interval was left as absent. Where absent assays are where material is considered waste, a zero gold grade was assigned.

4.8.2.3 Geological Interpretation

Geological and mineralised wireframes were constructed by Coffey Mining using Vulcan software. Three geological units were defined by Coffey Mining based on the regolith logging. The units modelled comprise a surface overburden REGOL=20, a gossan modelled based on the lithology logs in the sample database using the REGOL=25 code, and material below the gossan classed as REGOL=999. Coffey Mining note that the regolith logging is questionable, and therefore the regolith interpretation is rudimentary.

The mineralisation interpretation has been produced based on a 0.3g/t Au cut-off grade and a minimum thickness of 3-4m. Figure 4.9 below shows an oblique view of the Coffey Mining interpretation of the Dunrobin mineralisation. The mineralisation wireframes are overlain by the regolith horizons providing coding for the sample and block model data, based on mineralisation and regolith, as shown in Figure 4.10.

As can be noted in Figure 4.10, Coffey Mining has allocated three domains to represent the vertical oxidation profile at Dunrobin (DOMAIN 1, 2 and 3). The domains have been defined based on a fixed elevation due to a lack of detail in the sample database on which to more robustly define these horizons.

Overall WAI considers the geological interpretation of the Dunrobin deposit to be reasonable based on the information available. However, in line with Coffey Mining’s own recommendations, WAI would advise that further works be conducted to better define the oxidation domains.

ZT61-1601/MM1131 Final V6.0 Page 136 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 4.9: Dunrobin Mineralisation Interpretation (Coffey Mining, 2012)

Figure 4.10: Dunrobin Cross Section Outlining Zonal and Domain Coding (Coffey Mining, 2012)

ZT61-1601/MM1131 Final V6.0 Page 137 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.8.2.4 Statistical Analysis

Samples falling within the mineralised wireframes were selected and coded according to the mineralisation zone code (ZONECODE), the regolith domain (REGOL), and the oxidation domain (DOMAIN).

The selected sample data was composited to 2m sample lengths to provide samples with an equal level of support. As with the Matala project, the choice of a 2m sample length appears unusual given that the bulk of the sample data is of a 1m sample length. Whilst WAI would recommend a 1m sample length for future estimation works, WAI is of the opinion that the use of a 2m composite would have little impact on the overall Mineral Resource Estimate.

The selected and composited sample data was reviewed based on the mineralised zone field which defines the ore and waste. Coffey Mining outline that the results show a positively skewed grade distribution for the mineralisation, with a mean declustered grade of 1.32g/t Au, and a coefficient of variation of 2.47. In reviewing the statistical results, WAI considers the population to be log normal.

With two types of gold mineralisation encountered at Dunrobin, gossan and quartz veins/stockwork, WAI would expect a statistical analysis to have been carried out on these domains to ascertain if there are different grade populations encountered, and a requirement to estimate each zone separately. WAI would recommend that such a study be conducted as part of any future Mineral Resource updates.

An evaluation to assess the need for top cutting of high grade samples was conducted by Coffey Mining which concluded that the mineralised sample data should be top-cut at 30g/t Au. WAI considers the top-cut level chosen by Coffey Mining to be reasonable. It was noted by Coffey Mining that the top- cut sample data was used for the variography only, sample data without top-cuts applied was used in the actual Multiple Indicator Kriging (“MIK”) estimation.

As with the Matala Mineral Resource Estimate, the Dunrobin estimation used MIK as the principal estimation method.

WAI Comment: Given the log normal grade distribution at Dunrobin, and the style of the mineralisation, WAI is unsure whether the use of MIK has a material benefit compared to Ordinary Kriging (OK), and whether the use of MIK adds a level of complexity that is not warranted.

4.8.2.5 Variography

WAI has not carried out its own variographic assessment, but have relied on the variogram outputs reported by Coffey Mining.

Coffey Mining carried out the variography using the geostatistical software, Isatis. Variography was conducted on both gold grades as well as for 6 of the MIK indicators. Variograms (correlograms) were

ZT61-1601/MM1131 Final V6.0 Page 138 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

constructed for the principal along strike (125°), down dip (215°/-27°) and across strike directions. The grade variogram results show a nugget of approximately 45%. The major axis is reported to be down dip and attained variogram ranges of 80-120m, the semi-major along strike variograms showed ranges of 75-90m, whilst the across strike variograms had ranges in the order of 5-27m.

WAI Comment: Overall WAI considers the variography performed by Coffey Mining to be suitable.

4.8.2.6 Block Modelling

For Dunrobin, an un-rotated model with 20m x 20m x 5m (X/Y/Z) parent cells has been used by Coffey Mining. The block model was coded according to the mineralisation, regolith and oxidation domains.

Table 4.8 summarises the block model parameters used.

Table 4.8: Block Model Construction Parameters (UTM Grid Coordinates) Origin Extent Parent/Sub Block

(m) (m) Size Easting 519,700 1,200 20/0.5 Dunrobin Northing 8,322,800 1,300 20/0.5 Gold Deposit RL 850 400 5/0.0006

4.8.2.7 Density

Coffey Mining has applied bulk densities to the Mineral Resource block model based on 485 density measurements according to mineralised and non-mineralised material, by the regolith logging and oxidation state. A summary of the density measurements applied by Coffey Mining is shown in Table 4.9.

Table 4.9: Dunrobin Block Model Bulk Densities (after Coffey Mining, 2012) ZONECODE=120 ZONECODE=999 ZONECODE=120 ZONECODE=999 REGOL=999 (non ZONECODE=999 REGOL=25 (non REGOL=25 REGOL=999 Domain gossan REGOL=20 mineralized (mineralized (background mineralized (Overburden) gossan) gossan) waste) material) 3 (>1130mRL) 2.74 2.70 2.20 2.70 1.70 2 (>1040mRL 2.825 2.76 2.71 2.70 n/a <1130mRL) 1 (<1040mRL) 2.85 2.76 2.89 2.70 n/a

Density testwork has been carried out in several phases and has included testing of large chip samples as well as drill core. Within the Coffey Mining “Dunrobin Resource Estimation” (Coffey Mining, 2012) report, it is highlighted that density determinations of the gossan have been problematic with high degrees of variation between results. Other density issues highlighted includes the influence of massive sulphide, to account for this Coffey Mining capped the density measurements at 4t/m3. No density measurements using drill core has been carried out above the 1,130mRL which includes the

ZT61-1601/MM1131 Final V6.0 Page 139 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA over burden material, Coffey Mining therefore applied nominal density values to the >1,130mRL domain. Within the mineralised material the density values have also been adjusted with a void factor of 0.94 to account for any karst voids.

Having robust density measurements is key for reporting tonnage values for Mineral Resources, given the problems outlined above with density measurements, this presents a moderate risk to the Mineral Resources reported.

4.8.2.8 Grade Estimation

Grade estimation for the Dunrobin deposit has been carried out using Multiple Indicator Kriging (“MIK”) as the principal estimation method as well as Ordinary Kriging (“OK”) for comparison purposes, and to ensure the resultant E-Type grade was derived correctly.

The grade estimation was carried out for the mineralisation only (ZONECODE 120) using a two pass estimation. The initial search radii comprised 60m x 60m x 10m (down dip, along strike, across strike).

WAI Comment: Overall WAI considers the search parameters and estimation method to be suitable. However, WAI would question the need for applying MIK to the Dunrobin deposit, and whether the use of such a method adds a level of complexity to the estimation process that is not required.

4.8.2.9 Validation

Following the grade estimation, Coffey Mining carried out a series of validation checks on the grade estimates including a visual comparison of samples and the block model in cross section, plan and long section, and a statistical grade check of the E-type block grade and the sample composite grade.

WAI Comment: WAI is of the opinion that the Dunrobin estimates appear to validate well against the composite data on which the estimates are based.

4.8.2.10 Depletion

The Mineral Resource block model was depleted by Coffey Mining for the existing open pit based on an up to date mine survey in the UTM co-ordinate system. In addition, underground mining activities have been carried out historically at Dunrobin, with Coffey Mining depleting the model using shaft and drive development wireframes supplied by the then owners of the project, Luiri Gold.

Coffey Mining note in the “Dunrobin Resource Estimate” report that historical stoping has not been surveyed and accounted into the wireframes for depletion. To try to account for the stoping, Coffey Mining has applied a 0.94 void factor to the mineralised model above the 1,040mRL. The lack of detailed depletion wireframes for the stopes presents a material impact to the project. Whilst the void factor applied to the model by Coffey Mining tries to account for the loss of tonnage it does not account for the impact on contained metal and grade. Mining activities often focus on the higher

ZT61-1601/MM1131 Final V6.0 Page 140 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA grade areas of a deposit and the stopes may have a greater influence on the grade than the overall tonnage. The lack of detailed surveys will also impact on the veracity of any mine planning.

4.8.2.11 Resource Classification

Coffey Mining has stated that the Mineral Resources at Dunrobin have been reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, published by the Joint Ore Reserves Committee (JORC) 2004. The Mineral Resources have been classified based on the sample spacing relative to the search radii of the grade estimation. Measured, Indicated and Inferred classifications have been applied to the deposit by Coffey Mining based on:

• Geostatistical distance to the nearest sample used in the estimate; • Search pass used (first or second) for the estimate; • Number of samples used in the estimate; • Confidence in the interpretation of the individual zones; and • Assumptions regarding mining methods for reporting purposes (i.e reported cut-off grade of 1g/t Au).

No specific details have been reported by Coffey Mining regarding the exact application of classifications to the Dunrobin model. Measured Mineral Resources have been reported where the denser RC infill drilling from 2012 was carried out. Looking at the estimation, WAI believes that Indicated Mineral Resources have been reported for areas covered under the first estimation run in a 60m search ellipse, and with the distance to the nearest sample 25m. Inferred Mineral Resources appear to correlate with the second pass of estimates with a search radius of 180m along strike and down dip.

The resultant classifications are shown in Figure 4.11 below.

ZT61-1601/MM1131 Final V6.0 Page 141 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 4.11: Oblique View of Dunrobin Mineral Resource Classification (Coffey Mining, 2012)

4.8.2.12 Reasonable Prospects for Eventual Economic Extraction

Under the CRIRSCO group of reporting codes (including the JORC Code, 2012) there is a requirement for a Mineral Resource to demonstrate a reasonable prospect for eventual economic extraction for it to be reported. If a deposit is to be considered for open pit mining methods, then standard industry practice is to carry out a pit optimisation using realistic, albeit uplifted, pricing, to demonstrate which portion of the Mineral Resource has prospects for extraction. If an underground Mineral Resource is to be reported, then a minimum mining width with appropriate dilution needs to be applied to the model, and the reported Mineral Resource should be at a cut-off grade in line with typical underground mining economic cut-off grades.

The Dunrobin Mineral Resources reported by Coffey Mining have not been adjusted for reasonable prospects of eventual economic extraction. Mineral Resources have been reported at a range of cut- off grades, with the preferred cut-off grade defined by Coffey Mining set at 1.0g/t Au. WAI considers the cut-off grade of 1.0g/t Au to be low for an underground mining operation, and without mining dilution applied, likely includes material that would not be considered economic for an underground operation. From an open pit perspective, the cut-off grade of 1.0g/t Au maybe considered too high, and a lower cut-off maybe more applicable.

Any future Mineral Resource updates will require an adequate assessment of the potential for economic extraction, this may result in a reduction in the quantity of reported Mineral Resources.

ZT61-1601/MM1131 Final V6.0 Page 142 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.8.2.13 Coffey Mining Mineral Resource Statement

The following Mineral Resource statement has been disclosed by Coffey Mining for the Dunrobin deposit, and has been reported according to the guidelines of the JORC Code (2012). The statement is reported as of October 2012, and has been constrained by the surface topography and open pit. Bulk density values were adjusted using a void factor of 0.94 for the model above the 1,040mRL to represent the stope depletion and karst voids, in the absence of detailed stope surveys.

A summary of the Coffey Mining Dunrobin Mineral Resource Estimate is provided in Table 4.10.

Table 4.10: Dunrobin Mineral Resource Statement (Coffey Mining, 2012) Lower Total Measured Indicated Inferred Cut-Off (Measured+Indicated+Inferred) Grade Tonnes Au Metal Tonnes Au Metal Tonnes Au Metal Tonnes Au Metal (g/t Au) (kt) (g/t) (koz) (kt) (g/t) (koz) (kt) (g/t) (koz) (kt) (g/t) (koz) Zonecode=120 (Main Mineralised Zone) 0.6 1,465 2.0 94 1,606 1.6 83 1,543 1.3 63 4,614 1.6 240 0.8 1,196 2.3 88 1,306 1.8 76 1,091 1.5 53 3,592 1.9 216 1.0 978 2.6 81 1,063 2.0 69 763 1.8 43 2,804 2.1 193 1.2 830 2.9 76 843 2.2 61 547 2.0 35 2,220 2.4 172 1.4 717 3.1 71 670 2.5 54 403 2.2 29 1,790 2.7 154 Note: • Reported as of October 2012; • MIK derived SMU model using a 10m x 5m x 5m SMU; • Coffey Mining preferred cut-off of 1.0g/t Au; • Depleted to some approximated underground workings nominally dated January 2012; and • 0.94 void factor applied to the block model above the 1040mRL. • In accordance with the guidelines of the JORC Code (2012)

4.9 Mining

4.9.1 Mine Design

Open pit optimisations for Matala and Dunrobin were undertaken by PenMin based on the following parameters (Table 4.11:), using Gemcom Whittle software.

ZT61-1601/MM1131 Final V6.0 Page 143 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.11: Summary Optimisation Parameters (after PenMin, 2016) FINANCIAL OPERATIONAL Gold Forward Price US$1,200 Surface Stockpiles Tonnages 100,000 ZAR: USD 15.00 Surface Stockpiles Grade 2.83 KWACHA: USD 10,980 Plant Recovery 85% BRITISH POUND: USD 1.49 Gold Shipping Costs (USD/Oz) 2.09 RMB: USD 6.49 Plant Operating Tonnage 400,000 Tax Rate 30% SG of Ore and Waste(Oxide) 2.11 Royalty 6% SG of Ore and Waste(Transition) 2.53 Starting TAX Credit 18,476,000 SG of Ore and Waste(Sulphide) 2.65 Senior Debt Interest Rate 7% Mining Utilization 85% Debt Term 3 Overland Haul Cost/ton 1.20 Post Tax NPV Discount Rate 8% Tailings Handling 20,697.60 Finance Guarantee Costs (Vendor 2% Zesco Price / kW/h 0.14 Financing) Zesco Supply Discount / Ton Opening Cash Balance - 5.95 processed Plant Annual Depreciation Rate 10% Drill and Blast Cost / Ton 1.00 DSCR 1.50 Diesel Price 0.77 Contribution to Environment & Social 1% Rehabilitation (% of Net Revenue)

Detailed pit designs have been developed for both the Matala and Dunrobin pits based on a US$1,200/t gold forecast.

The development plan for Matala involves a single phase pushback to pit depth. A central access ramp will be mined concurrently through each bench as the mine deepens. Design parameters are shown in Table 4.12: below, targeting a 55o inter ramp angle.

Table 4.12: Matala Pit Design Parameters (after PenMin, 2016) Area Parameter 70º Pit Wall Parameters Batter Face Angle 75º 5.7m Safety Berm Width 4.3m Berm Spacing 10m Dual Lane Width NA Haul Road Design Single Lane Width 5.7m Gradient 0.1 Minimum Radius of Turning Circle 10m Minimum Cutback Width 10m

Dunrobin has previously been mined as a small open pit, and so pit design parameters have been based on prior experience at the deposit and geotechnical recommendations made by African Mining Consultants (AMC). Design parameters are shown in Table 4.13 below, targeting a 35o to 50o inter ramp angle depending on the lithology.

ZT61-1601/MM1131 Final V6.0 Page 144 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.13: Dunrobin Pit Design Parameters (after PenMin, 2016) Area Parameter Saprolite Fresh Pit Wall Parameters Batter Face Angle 70º 75º Berm Width 10.6m 4.3m Berm Spacing 10m Dual Lane Width NA Haul Road Design Single Lane Width 8m Gradient 0.1 Minimum Radius of Turning Circle 10m Minimum Cutback Width 30m

WAI Comment: WAI considered the gold price reasonable, but notes that current (February 2016) exchange rates are 13 ZAR: 1 USD, 9.75 Kwacha: 1 USD (was 9,750 before redenomination in 2013), 0.80 GBP: 1 USD, 6.85 RMB: 1 USD. WAI would recommend an updated financial analysis to take these variations into account.

The pit slope angles provided by PenMin appear reasonable, although WAI has not seen any background geotechnical analysis to add confidence. As Dunrobin has been previously mined, it can be assumed that further extraction will take cognisance of pit stability assessments during previous operations.

4.9.2 Mining Method and Equipment

4.9.2.1 General

The mining operations and maintenance will be undertaken on a contractor basis. The designed pits will be mined through conventional truck and excavator mining methods.

For both the Matala and Dunrobin open pits, the ROM mineralised material will be loaded in pit with an excavator equipped with a 5.2m³ bucket and transported by 41t articulated dump trucks (ADTs) to the plant/ROM pad estimated to be 1,000m from the pit ramp. For the Matala open pit, the overburden material is planned to be loaded utilising two 5.2m³ bucket excavators and transported by up to six 41t ADTs to the overburden stockpile area located approximately 500m away. For the Dunrobin open pit a single excavator is likely to suffice in association with three ADTs.

For both open pits, a 5m bench height is planned for the mineralised and overburden material. PenMin consider these bench heights appropriate for the selected loading equipment.

4.9.2.2 Drill and Blast

Designs for both the Matala and Dunrobin open pits have been based on the following drill and blast assumptions, as noted by PenMin. The benches are planned 5m high and mining blocks are 50m by 20m. Drilling is based on top-hammer percussion drill rigs utilising emulsion explosives with a drill hole

ZT61-1601/MM1131 Final V6.0 Page 145 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA size of 89mm for mineralised material and 115mm for waste. A powder factor of 0.5kg/m3 is used for both mineralised material and waste material with a hole-loading factor of 67%.

A blast pattern based on a 3.1m burden with 3.1m spacing has been assumed for the blast design for the mineralised material and a 3.7m burden by 3.7m spacing has been used for the waste material. The blast holes are planned to be 5.6m deep inclusive of a 0.6m sub-drill for mineralised material and 5.7m deep inclusive of a 0.7m sub-drill for waste. It is assumed that 100% of the rock will be blasted. Emulsion will be used in all holes and explosive supply costs are based on an inclusive rate with drilling per BCM up to US$2.14 USD/BCM.

Based on the drill penetration rate and time allowed for tramming, levelling and collaring, a single drill will be required for mining operations and will be shared between mineralised material and waste material. A drill penetration rate of 14.6m/hr has been assumed for the mineralised material and a drill penetration rate of 16.8m/hr for overburden material.

Drill and Blast activities will be undertaken by contractors.

WAI Comment: The mining method appears feasible, based on tried and tested practice. Drill and blast will be undertaken by contractors so the parameters and costs suggested by PenMin above are indicative only.

4.9.2.3 Load and Haul

PenMin has estimated the excavator fill factor as 80% with a truck fill factor of 85%. The availability and utilisation of the mining equipment has been estimated to be 85% due to the new equipment and close access to the major town of Lusaka, improving the ability to service the equipment.

Peak requirements for the mining machinery at the Matala open pit are quoted by PenMin as follows. The 5.2m³ excavator operating on ROM will be utilised for approximately 830 hours per annum and each of the two 5.2m³ excavators operating on waste (overburden) material will be utilised for approximately 4,200 hours per annum supporting a peak annual ROM production of 400ktpa at an overall stripping ratio of 5.92:1(w:o).

Peak requirements for the mining machinery at the Dunrobin open pit are quoted by PenMin as follows. The 5.2m³ excavator operating on ROM will be utilised for approximately 1,300 hours per annum and the 5.2m³ excavator operating on waste (overburden) material will be utilised for approximately 3,920 hours per annum supporting a peak annual ROM production of 400ktpa at an overall stripping ratio of 3.58:1 waste to ore (w:o).

WAI Comment: Loading and hauling will be undertaken by contractors so the parameters suggested by PenMin above are indicative only.

ZT61-1601/MM1131 Final V6.0 Page 146 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.9.2.4 Ground Water

A ground water influx of 1,428 litres per minute for the Matala pit, and 540 litres per minute for Dunrobin pit has been assumed by PenMin, based on average influx for open pits of equivalent size. It has been assumed all water collected from the pits will be pumped to the existing storage facilities, and after settling, will be used for processing purposes or for haul road dust suppression.

Water generated from seasonal weather will be collected before entering the pit and diverted to a nearby riverbed. No allowance has been made in the mining costs for the external pit dewatering borehole installation, operation or maintenance. Further detailed work has been budgeted to better understand the geohydrology associated with the Matala and Dunrobin open pits, however PenMin report that the proposed Matala pit sits above the water table. The Dunrobin water table is below the open pit but the exact level is unknown.

4.9.3 Mine Design and Production Schedule

Pit designs for the two mines are provided in the PenMin Feasibility Study and reproduced in Figure 4.12 and Figure 4.13 below.

Figure 4.12: Matala Pit (after PenMin, 2016)

ZT61-1601/MM1131 Final V6.0 Page 147 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 4.13: Dunrobin Pit (after PenMin, 2016)

A mine production schedule was developed by PenMin based on the pit designs described above, targeting an annual mill feed production of 400,000t. The mine production schedule is based on bench by bench mining of the material inventory calculated within the individual pits. In order to achieve a mill feed target of 400ktpa a vertical advance rate of 55m per annum is required. The bulk of the Matala pit has dimensions of approximately 700m x 250m, and the Dunrobin starter pit has dimensions of approximately 230m x 230m. Mining is to commence at Matala and then transition to Dunrobin as Matala is exhausted.

Table 4.14 depicts the combined mines production schedule assuming 95% mining recovery and no dilution. Over the six-year life of mine, 2.0Mt of ore will be mined at a head grade of 2.63g/t.

Table 4.14: Summary Mine Production Schedule (after PenMin, 2016) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Production Ore tonnes 29,593 382,912 387,490 390,459 399,996 218,617 1,809,067 Stockpile tonnes 25000 17088 12509 9541 4 181,383* 245,527 Total Ore tonnes 54,593 400,000 400,000 400,000 400,000 400,000 2,054,593 Grade g/t 2.10 2.32 3.19 2.60 2.87 2.72 2.63 Total Ounces oz 5,308 29,606 40,175 34,376 36,304 22,310 168,080 Total Waste tonnes - 3,208,884 2,209,078 2,444,650 666,318 104,109 8,633,039 Strip Ratio o:w - 8.02 5.52 6.11 1.67 0.26 4.20 Total BCM m³ 14,025 181,475 175,777 149,047 150,942 82,497 753,763 *Stockpiled tonnes in Year 6 are Production ROM tonnes carried over from Year 5 when the Dunrobin Open Pit is in full production

WAI Comment: The Matala pit design shown in Figure 4.12 (above) appears conceptual with no evidence of haul roads, berms or detailed design. WAI would expect to see a detailed pit design to correctly delineate the mineable tonnes of ore and waste from the pit. The Dunrobin pit design shown in Figure 4.13 appears to have a more thorough design.

ZT61-1601/MM1131 Final V6.0 Page 148 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The production schedule appears to be reasonable, although in order to improve confidence as the project goes forward WAI would like to see a detailed production schedule based on an Ore Reserve estimate in accordance with the guidelines of the JORC Code (2012).

4.9.4 Capital Costs

Capital expenditure and operating costs have been reported by PenMin. An initial capital expenditure of US$14.439 million is required for the project, with all additional costs over the remaining life of the mine covered by revenue (starting in year 1). US$1.1 million has been budgeted for the mobilisation and initiation of the Dunrobin open pit in year 4.

A 12km haul road between Matala and the Dunrobin Mill will need to be established, and in addition the Dunrobin haul road will require rehabilitation. The balance of infrastructure, as well as all ancillary equipment required for the start-up of the project has been calculated on a capital basis. This figure includes all engineering, project management, construction and commissioning of the process plant, electrical supply and other related infrastructure.

Capital expenditure on mining equipment is quoted by PenMin in Table 4.15 below.

Table 4.15: Equipment Capital Cost (after PenMin, 2016) Equipment Capital Cost Qty Total Cat 390 Excavator US$739,394 2 US$1,478,788 Cat 340D Excavator US$257,576 1 US$257,576 CAT 75C ADT (41 ton) US$395,152 8 US$3,161,216 Cat D9T Dozer US$675,758 2 US$1,351,516 Cat 140k Grader US$200,000 1 US$200,000 CAT 416F TLB US$59,394 1 US$59,394 CAT 740B C/W plus 25kl Water Tanks US$363,636 1 US$363,636 LDV US$41,667 6 US$250,002 Cat 725 Diesel Truck US$303,030 1 US$303,030 Cat 730 Service Truck US$272,727 1 US$272,727 Water Pump US$105,000 1 US$105,000 Telehandler US$175,000 1 US$172,000 Minibus US$41,667 1 US$41,667 Crane Truck US$72,000 1 US$72,000 Light Plant US$12,500 4 US$50,000 Cat986H Wheel Loader US$503,030 3 US$1,509,090 Total US$9,650,642

WAI Comment: The costs quoted above are indicative only, as PenMin note that mining and maintenance will be carried out by contractors. The equipment list consists of CAT equipment which is recognised as of good quality.

ZT61-1601/MM1131 Final V6.0 Page 149 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.9.5 Operating Costs

Operating costs for the mining operations are reported as between US$11.84 and US$31.75 per ROM tonne mined. The costs are largely influenced by the stripping ratio, with the higher costs associated with Matala (stripping ratio 5.92:1) and lower costs associated with Dunrobin (stripping ratio 3.58:1). Mining equipment operating rates and productivity assumptions calculated by PenMin are based on typical operating parameters under normal operating conditions.

The financial modelling is based on a fully contracted mining fleet, with a separate overland haul contract at US$1.20/ton. PenMin has assumed power will be supplied off the local grid at a cost of US$0.14 per kWh. Diesel fuel has been estimated at US$0.77 per litre.

WAI Comment: The costs quoted by PenMin are likely to be indicative only, as mining will be operated by contractor. A detailed mining cost model based on first principles should be developed to add confidence to the figures quoted.

4.9.6 Matala Underground Mine

4.9.6.1 Overview

The relatively long strike and relatively steep dip of the Matala ore deposit lends itself to a long hole open stoping mining method. A detailed scoping study was completed by Coffey Mining in 2012 for the suitability of the Matala deposit towards underground mining methods to a depth of 300m, which has since been amended by PenMin. The Matala underground material inventory can be summarised as 2,037,400t at 3.00g/t Au.

4.9.6.2 Mining Method

Longhole open stoping has been identified as a suitable mining method, either based on modified Avoca open stoping, or Radial-in-Reef longhole open stoping. For either method, longholes will be developed by advancing ore drives along the bottom of the planned stopes.

For modified Avoca, longhole drilling will consist of drilling rings upwards into the stope above, retreating backwards towards the level access, whilst Radial-in-Reef requires drilling rings upwards into the stope above and downwards into the stope below. Radial-in-Reef is well suited to areas of the reef where the orebody widens significantly, but requires additional development of a secondary sublevel extraction ore drive beneath the stoping level, whilst modified Avoca allows for a single ore drive acting as both the production and extraction level.

Diesel, rubber tyre Load Haul Dump machines (LHDs) will extract the ore from the stopes to stockpiles located on the level access for loading into trucks. Remote loading will be necessary to safely maximise ore recovery from the stopes. Stopes will be silled out to full width, to allow better stope wall control by permitting the longhole drill to drill parallel to the final planned wall, mitigating blast damage and minimising dilution.

ZT61-1601/MM1131 Final V6.0 Page 150 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Underground mining at Matala will start at the bottom of the pit, and progress east and west of the pit along strike, with a portal and decline established at the western side of the pit above the bottom bench to allow sufficient holding capacity for an extended, significant rainfall event. This will enable mining to be carried out during these periods and a secondary stage for underground dewatering.

A mining extraction rate of 85% has been applied to all stoping tonnes, which considers all operational mining losses and planned pillar losses. Overbreak tonnes (dilution) of 15% has been added to the Mineral Resources. A hanging wall grade of 0.9g/t Au and a footwall grade of 0.5g/t Au have been used to estimate the grade and tonnage of the mineable package.

A crown pillar is left in place at the bottom of the open pit. This is necessary from a geotechnical standpoint as stability of the pit could be jeopardized without it. Different methods can be employed to allow extraction of the crown pillar if the resource contained warrants it.

Where possible, waste will be backfilled into depleted stopes, reducing haulage costs and reducing geotechnical stress.

WAI Comment: The underground mining method planned by PenMin appears feasible. The two stoping methods outlined are similar, but should be finalised in a detailed study before further design progresses. WAI would also expect a detailed underground geotechnical assessment to be undertaken in order to better determine the stoping method best suitable for the deposit and also likely backfill requirements. A crown pillar study should also be undertaken to determine the most suitable dimensions to ensure stability but maximise recovery.

4.9.6.3 Underground Access and Development

Decline gradient for Matala will be a standard 1:8 allowing the best trade-off between necessary development and haulage costs. Decline and level development sizing will be 4m by 4m, developed with a twin boom development drill. These dimensions should allow the continued use of the surface ADTs (modified for underground use) with adequate room to run the ventilation bag and two stage fans up to 40kW capacity.

Decline development will be three months ahead of production areas, allowing for delays in development, and any acceleration in stope production. The first 1,000m of decline will be completed in advance of any stoping to allow ventilation to be established.

4.9.6.4 Ground Support

A field investigation will be required at Matala to collect additional data for kinematic analysis, rock mass quantification and ground water in order to better understand ground support requirements for the mine.

ZT61-1601/MM1131 Final V6.0 Page 151 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Ground support is necessary to reduce risk to mining personnel and equipment. A mixture of industry systems will be used dependent upon recommendations from the site geotechnical engineer. Critical areas such as store rooms, refuelling areas and the decline will be designed with an enhanced safety factor. Temporary openings such as ore drives will have minimal ground support due to their short duration and to reduce unwanted metal in the ore feed. Further studies will establish the definitive ground support program for each opening type.

WAI Comment: Along with the geotechnical assessment for ground support, WAI would expect geotechnical input towards finalising mining method, stope sizing and development dimensions.

4.9.6.5 Equipment Selection

Where possible, the Matala underground will make use of the same fleet of vehicles as that used in the open pits to reduce the capital requirements for the purchase of new units. The main underground equipment is summarised in Table 4.16 below.

Table 4.16: Matala Underground Equipment (after PenMin, 2016) Use Manufacturer Model Number Specs Development drill - 2 booms, drift size Development, Sandvik DD420-40 1 class ground support 4 x 4 m 38 m hole length, 51 - 64 mm Production drilling Sandvik DL310 2 diameter LHD Sandvik LH410 2 4.0 - 5.4 m3 bucket Haul trucks Caterpillar 745C ADT 2 41 tonne capacity Grader Caterpillar 140K 1 19’ tight turning wheel radius Services, vent Mobile, solid, elevated Volvo IT 1 hanging safe work platform Ammonia Nitrate Fuel Oil (ANFO) Charmec Blasting Normet 1 loaded for both development and 1610 B production Transportation Toyota Landcruiser 3 2 m wide, 2.5 m high, Rockbreaker BTI TM12 HD 1 9.2 m long, 4.8 m reach

Raise drilling will be conducted by contractors. The development drill will be responsible for drive development as well as ground support. During instances when quick development is necessary to allow for production to provide mill feed, air drills can be used to bolt the backs and provide ground support.

WAI Comment: The underground equipment PenMin plans to use is good quality, although WAI assumes that the underground mining will be operated by contractor, along the same lines as the open pit, and so the list above is likely to be indicative only.

ZT61-1601/MM1131 Final V6.0 Page 152 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.9.6.6 Ventilation

An exhaust fan located in a 2.1m diameter raise will ventilate the mine, pulling fresh air in through the decline. Final location of the ventilation raise is dependent on any open pit developments, but will be within the pit if possible to reduce shaft development costs. PenMin report that the final primary ventilation for exhaust air will include two separate shafts, which will allow the ventilation to be established to the upper and mid-levels before stope production at those locations start.

Blind headings will be ventilated to within 10m of the face by secondary ventilation from 40kW auxiliary fans and vent bag.

4.10 Mineral Processing

4.10.1 Matala Testwork

4.10.1.1 Introduction

A program of metallurgical testwork was carried out on composites of copper-gold ore from Matala by ALS Ammtech in 2010. AMMTEC was supplied with several samples of drill core and specific samples were selected by the client to be utilised for analysis and variability leach testing.

Selected samples were subsequently combined to produce the following composites for testing:

• Matala Composite A; • Matala Composite B; • Matala Composite C; and • Matala Composite D.

WAI Comment: It is not clear from the ALS testwork exactly what ore types or domains the four composite samples represent, although the A - D progression represents an increase in depth from oxide to primary ore.

4.10.1.2 Composite Head Analysis

The Composite head analyses are given in Table 4.17.

A sub-sample of each of the four main testwork composites was submitted for detailed analysis and a summary of selected results is presented in Table 4.18.

ZT61-1601/MM1131 Final V6.0 Page 153 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.17: Matala Composite Head Sample Analyses Head Assay - Analyses Variability Au Ag Cu As Acid CN STOT Composite Identity (g/t) (g/t) (ppm) (ppm) Sol. Cu Sol. Cu (%) (ppm) (ppm) Matala Composite A Variability Composites MTL 082 32.2-38.8 m 4.40/4.17 <2 187 120 <0.02 50 17 MTL 083 16.0-31.6 m 1.38 <2 75 277 0.05 46 13 MTL 103D 21.0-29.6 m 0.80 <2 78 312 0.04 39 11 Matala Composite B Variability Composites MTL 057 67.0-75.0 m 1.12 4 3052 95 1.11 249 1303 MTL 100D 64.0-86.6 m 3.09 <2 805 153 0.08 357 733 MTL 100A 35.0-53.0 m 1.23 <2 133 159 3.71 38 18 MTL 103A 50-56 m+61-68 m 4.30 <2 71 295 0.24 16 6 Matala Composite C Variability Composites MTL 101D 105.0-110.7 m 3.14 <2 32 416 5.62 8 31 MTL102D 84.0-102.0 m 2.53 <2 1677 241 1.79 495 1670 MTL 104D 84.0-97.0 m 1.72/1.58 <2 1318 169 3.10 239 899 Matala Composite D Variability Composites MTL 090 118.5-129.0 m 3.38 3 664 366 8.12 101 445 MTL 093 146.1-178.5 m 1.98 <2 276 787 10.5 46 221 MTL 096 132.6-137.9 m 1.39 <2 170 58 0.53 84 148 MTL 102D 108.0-121.0 m 18.50 17 5877 585 12.8 1464 5436

Table 4.18: Matala Composite Detailed Chemical Analyses Analyte Unit Composite A Composite B Composite C Composite D Au g/t 0.99/1.46 1.77 2.41 8.56 Ag g/t <2 <2 <2 6 As ppm 245 180 230 572 Cu ppm 108 447 1,671 2,095 Acid Sol. Cu ppm 102 40 408 604 CN Sol. Cu ppm 15 337 1,291 1,673 Fe % 6.65 5.48 6.07 16.2 Ni ppm 31 43 56 75 STOT % 0.05 1.28 2.78 10.3 SiO2 % 68.9 68.6 65.9 49.2 Te ppm 0.4 <0.2 0.7 0.7 Zn ppm 147 115 99 202

The sample head grades ranged from 0.99 to 8.56ppm Au. Total sulphur grades ranged widely, from 0.05% to 10.3%. Composite C and D contained elevated levels of copper, of which a significant proportion was acid soluble.

4.10.1.3 Gravity Separation/Cyanidation Time Leach Testwork: Variability Samples

Gravity separation followed by direct cyanidation time leach testwork was carried out on Composites

A and B, the more oxidised ore types, at a nominal grind size of P80 150µm. The results are given in Table 4.19.

ZT61-1601/MM1131 Final V6.0 Page 154 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.19: Gravity and Gravity Tailings Leach Test Results Grind % Au Extraction Consumption Sample Identity Size P80 @ Hours (kg/t) (µm) Gravity 2 4 8 24 48 Lime NaCN Comp A MTL 082 64.51 76.30 81.82 85.64 95.25 97.82 0.49 1.57 Comp A MTL 083 150 40.35 83.00 86.45 88.01 89.90 94.80 0.67 1.59 Comp A MTL 103D 36.57 73.41 82.08 84.66 89.96 93.97 0.52 1.35 Comp B MTL 100A 54.54 80.75 85.94 86.83 90.12 92.40 0.89 1.74 Comp B MTL 100D 150 48.55 72.33 81.28 82.93 87.30 93.31 0.39 2.36 Comp B MTL 103A 42.74 70.54 80.35 84.77 89.75 93.56 0.73 2.14

Gravity gold recoveries were generally high, ranging from 36.57% to 64.51%. Gold leach recoveries from the gravity tailings were also high, resulting in overall recoveries ranging from 92.4% to 97.82%. Cyanide consumptions were high, ranging from 1.35kg/t to 2.36kg/t.

A programme of grind optimisation gravity-leach testwork was undertaken on the four composites. The results are given in Table 4.20.

Table 4.20: Gravity-Leach Grind Optimisation Testwork Grind % Au Extraction Consumption Composite Identity Size P80 @ Hours (kg/t) (µm) Gravity 2 4 8 24 48 Lime NaCN 212 35.97 65.47 71.86 76.91 82.79 89.35 0.47 1.50 Composite A 150 48.02 80.23 86.49 90.04 92.19 95.64 0.46 1.44 106 59.38 86.48 89.71 92.65 93.93 96.49 0.45 1.75 212 34.29 58.83 65.86 74.72 82.61 89.73 0.47 1.69 Composite B 150 42.20 73.17 80.46 85.49 90.00 93.64 0.44 2.42 106 58.81 69.79 77.40 80.96 89.73 93.58 0.45 1.61 212 50.95 60.45 63.67 66.21 70.35 75.82 0.44 2.91 Composite C 150 60.98 68.45 70.27 71.79 72.82 80.96 0.30 2.67 106 76.14 86.43 89.63 89.69 92.01 94.14 0.29 2.86 212 36.58 43.25 48.50 53.08 57.72 65.93 0.27 3.58 Composite D 150 45.92 50.89 54.08 56.84 64.87 76.51 0.30 3.85 106 66.24 68.42 73.90 77.89 80.41 84.57 0.29 3.77

Overall gold recoveries were high, in excess of 93% for Composites A - C, but lower, at 84.6% for

Composite D. Composites A and B could be efficiently processed at a grind d80 of 150µm, whereas Composites C and D required a finer grind of 106µm.

Cyanide consumptions were again high with all four samples, particularly so for Composites C and D which reportedly represented the deeper mineralisation.

4.10.1.4 Matala Grindability Tests

Matala SMC Testwork

SMC testwork was undertaken on the Matala Main Composites B, C and D only. The SMC test generates a relationship between specific input energy (kWh/t) and the proportion of ZT61-1601/MM1131 Final V6.0 Page 155 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA fragmented/broken product passing a specified sieve size. The Axb values ranged from 80.8 (Comp B), 44.9 (Comp C) and 35.1 (Comp D).

Matala Bond Rod and Ball Mill Work Indices

The results of Bond Road and Ball Tests are given in Table 4.21.

Table 4.21: Bond Rod and Ball Mill Work Index Results Composite Bond Rod Wi Bond Ball Wi B 12.4 12.7 C - 15.3 D 14.9 13.2

The results indicate the samples were in the “moderately hard” category.

4.10.1.5 Flotation Testing

Flotation testing was undertaken on composites with the objective of maximizing copper and gold recoveries to a saleable concentrate. Composite C gave a copper concentrate grading 17% Cu and 334ppm Au, at copper and gold recoveries of 91.9% and 85.9% respectively. Composite D gave a copper concentrate grading 18.2% Cu and 934ppm Au, at copper and gold recoveries of 94.2% and 88.6%.

4.10.2 Dunrobin Testwork

4.10.2.1 Introduction

A defined program of metallurgical testwork was carried out on composites of copper-gold ore from the Dunrobin deposit by ALS Ammtech in 2010. AMMTEC was supplied with several samples of drill core and specific samples were selected to be utilised for analysis and variability leach testing.

The selected samples were subsequently combined to produce the following composites for testing:

• Dunrobin Composite A; • Dunrobin Composite B; • Dunrobin Composite C; • Dunrobin Composite D; and • Dunrobin Master Composite.

WAI Comment: It is not clear from the ALS testwork exactly what ore types or domains the four composite samples represent although the A - D progression represents an increase in depth from Oxide to Primary ore.

ZT61-1601/MM1131 Final V6.0 Page 156 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.10.2.2 Head Sample Analysis

The results of the head sample analyses are given in Table 4.22.

Table 4.22: Dunrobin Composite Testwork Head Analyses Head Assay – Analytes Variability Au Ag Cu As Acid CN Composite STOT (g/t) (g/t) (ppm) (ppm) Sol. Cu Sol. Cu Identity (%) (ppm) (ppm) DUNROBIN COMPOSITE A VARIABILITY COMPOSITES DUNDD 119 2.46/2.62/ < 2 1,454 12,900 0.05 151 55 0-12 m 1.48 DUNDD 120 2.13/2.24/ 3 970 11,300 0.07 130 42 3–36 m 6.22 DUNROBIN COMPOSITE B VARIABILITY COMPOSITES DUNDD 120 1.32/0.73 2 619 2,401 0.04 222 80 45–50 m DUNDD 121 2.13/2.31/ 38 12,300 45,200 18.0 2,846 1,030 62–75 m 2.08 DUNDD 122 4.86/4.43/ 6 611 10,100 5.69 225 375 32–65 m 4.51 DUNROBIN COMPOSITE C VARIABILITY COMPOSITES DUNDD 121 0.95/1.24 3 16 586 4.01 23 22 75–87 m DUNDD 122 1.31/1.45 < 2 3,125 1,885 0.03 1,716 3,272 75–82 m DUNROBIN COMPOSITE D VARIABILITY COMPOSITES DUNDD 103 1.60/1.53/ 7 2,785 12,200 10.4 998 2,611 115-143.9 m 1.41 DUNDD 108 2.38/2.03/ 13 2,403 42,800 14.5 443 1,655 140-159.5 m 2.30 DUNDD 112 2.73/1.20/ 11 1,780 3,264 12.8 955 1,849 140.8-167.3 m 1.22

Gold head grades ranged from 0.73 to 4.86ppm Au. Copper, arsenic and sulphur grades were variable and often high with values of up to 12,300ppm Cu, 45,200ppm As and 18.0% STOT. Levels of cyanide soluble copper were also significant.

4.10.2.3 Gravity Separation/Cyanidation Time Leach Testwork

Gravity separation followed by direct cyanidation time leach testwork was carried out on Composite

A samples at a grind P80 of 150µm. The results are given in Table 4.23.

ZT61-1601/MM1131 Final V6.0 Page 157 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.23: Dunrobin Composite A Gravity/Gravity Tails Leach Testwork Grind % Au Extraction Consumption Sample Size P80 @ Hours (kg/t) Identity (µm) Gravity 2 4 8 24 48 Lime NaCN Composite A 150 50.14 70.01 75.80 82.80 88.87 92.64 0.97 2.31 DUNDD 119 0-12 m Composite A 150 42.52 79.67 83.22 86.64 89.91 92.56 0.99 2.83 DUNDD 120 3-36 m

Gravity gold recoveries were 50.1% and 42.5%. Gold recoveries from gravity tails were also high at 92.6% for each sample.

4.10.2.4 Dunrobin Grindability Tests

Dunrobin SMC Testwork

SMC testwork was undertaken on the Dunrobin Composites B and D only. The SMC test generates a relationship between specific input energy (kWh/t) and the proportion of fragmented/broken product passing a specified sieve size. The Axb values were 75.5 (Comp B) and 82.0 (Comp D).

Bond Abrasion Index

Dunrobin Composites B and D were subjected to Bond Abrasion tests and values of 0.1339 and 0.1502 were obtained.

Dunrobin Composites B and D were subjected to Bond Rod and Ball Mill work index tests. The results are given in Table 4.24.

Table 4.24: Bond Rod and Ball Mill Work Index Results Composite Bond Rod Wi Bond Ball Wi B 12.2 11.6 D 12.4 11.1

The results indicate the the samples were in the “moderately hard” category.

4.10.2.5 Gravity Separation/Cyanidation Time Leach Testwork: Main Composites

Sub-samples of each of the four Dunrobin Composites were utilised for grind optimisation gravity separation/cyanidation leach testwork, to ascertain the effect of grind size on gold, silver, arsenic and copper extraction. The results are given in Table 4.25.

ZT61-1601/MM1131 Final V6.0 Page 158 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.25 : Dunrobin Gravity Separation/Cyanidation Time Leach Testwork Grind % Au Extraction Consumption Composite Size P80 @ Hours (kg/t) Identity (µm) Gravity 2 4 8 24 48 Lime NaCN 212 43.64 82.43 85.93 90.24 92.46 92.90 1.22 1.68 150 44.83 79.69 82.44 86.37 88.27 95.10 1.45 2.62 Composite A 106 51.40 86.28 88.62 91.62 93.31 96.01 1.44 2.43 75 49.57 86.51 88.15 90.15 94.80 96.12 1.69 2.26 212 5.57 17.64 31.06 48.97 63.98 70.53 1.06 6.02 150 19.96 28.71 44.65 57.44 61.93 67.31 0.57 6.18 Composite B 106 24.46 32.64 47.71 60.47 60.70 63.66 0.53 5.52 75 22.62 28.79 42.53 59.29 63.23 65.71 0.71 5.92 212 36.87 66.49 71.36 78.66 85.96 88.64 0.68 4.05 150 47.98 77.38 81.48 86.44 88.57 93.69 0.83 3.54 Composite C 106 54.23 80.54 83.75 87.12 89.42 94.52 0.86 4.43 75 59.47 83.79 85.05 86.22 91.50 94.69 0.96 4.19 212 17.93 35.07 40.96 50.60 57.34 60.06 0.72 4.19 150 25.85 40.96 47.68 56.38 61.95 65.72 0.51 4.02 Composite D 106 25.94 36.90 42.76 50.20 59.04 63.82 0.44 4.33 75 36.22 46.58 55.90 68.56 71.18 71.39 0.55 4.88

Gravity recoveries were generally reasonable and increased with fineness of grind. Gold extractions from gravity tailings also increased, with fineness of grind and resulted in recoveries in excess of 94 % for Composites A and C. Overall recoveries were significantly lower for Composite B (65.7%) and Composite D (71.4%).

4.10.2.6 Dunrobin Flotation Testing

Flotation testing was undertaken with the objective of maximizing copper and gold recoveries to a saleable concentrate. The results are summarized in Table 4.26.

Table 4.26: Dunrobin Flotation Testwork Assay Distribution % Composite Grind d80 Cu% Au ppm Cu Au B 75 18.0 44.5 69.6 31.2 C 106 13.8 178 74.8 62.3 D 75 18.6 73 46.9 21.2

The results were generally poor with low grade copper concentrates with moderate to poor recoveries of copper. Gold recoveries to the copper concentrate were high with Composite C but low with Composite B and C. Rejection of pyrite was not readily achieved and the low gold recoveries with Composite B and C suggest an association between gold and pyrite.

ZT61-1601/MM1131 Final V6.0 Page 159 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.10.2.7 SART Testwork 2012

The high cyanide consumption and significant levels of copper in the leach solutions merited the investigation of sulphidisation, acidification, recycle, thickening technology (“SART”) to be investigated. The technology would enable both cyanide and copper to be recovered from the leach solutions, thus reducing cyanide consumptions and enabling a copper rich product to be sold.

Samples from the previous ALS Dunrobin test programme were used to investigate the suitability of the SART process.

Cyanide leach tests were conducted using conditions established from the previous testwork. The cyanide leach tests were primarily conducted to provide leach solutions containing gold values and copper cyanide species for subsequent SART tests. Composites B, C and D contained appreciable amounts of cyanide soluble copper, hence relatively high cyanide dosages were required during leaching to obtain satisfactory gold recoveries.

Composite A contained a relatively low amount of cyanide soluble copper and high gold extraction had been achieved with relatively low cyanide addition.

The SART testwork demonstrated that approximately 90% of the copper could be recovered from the leach solution at pH 3.5 and using near stoichiometric additions of Sodium hydrosulfide (NaSH). A final bulk test conducted on a composite leach sample included a carbon contact step on the barren SART solution.

4.10.2.8 Geometallurgy Tests

A programme of testing on over 600 drill core samples in 2012 determined that a significant proportion of the gold in the Dunrobin orebody is cyanide leachable (93.5%) provided that sufficient cyanide is added. The particle size used in the tests is not reported, and was probably not determined, so care must be taken when interpreting this data set into process conclusions. The results do however indicate the non-refractory nature of the Dunrobin ore, and suggest that the low recoveries on the Composite B and D samples in the ALS testwork may have been due to insufficient cyanide being added.

4.10.3 Deswick 2013 Feasibility Study Process Design

4.10.3.1 Design Treatment Rate and Ore Parameters

Following numerous reviews and studies, it was decided to initially process the Dunrobin ore. In their 2013 Feasibility Study, Deswick developed a process plant design on the following assumptions:

• The ore processing facilities were designed to treat 200,000 tonnes of ore per annum;

ZT61-1601/MM1131 Final V6.0 Page 160 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• It was anticipated that the crushing section would operate for about 5,000 hours per year on a three shifts per day basis, for 6 days per week, 50 weeks per year (40t/h for 16.7 operating hours per day); and • The milling, leach, filtration and solution management circuits would operate for about 7,500 hours per year, on a 7 days per week, 50 weeks per year basis.

4.10.3.2 Process Route

The first stages in the gold recovery process were conventional crushing and grinding followed by cyanide leaching. The product from these processes is a finely ground slurry of the ore with the gold and soluble copper dissolved in cyanide.

A review of the recent technical literature on copper gold plant operations indicated that the SART (sulfidisation, acidification recycle & thickening) process appeared to be the best option for precipitation of soluble copper and liberation of associated cyanide. The SART process is applicable to solution rather than slurry streams, so some form of solids liquid separation is required. The flowsheet is shown in Figure 4.14.

Figure 4.14: Dunrobin Plant Flowsheet

The process consists of the following sections:

• Crushing and grinding. This stage reduces the ore to fine slurry containing 45% to 50% solids. Run of mine ore is fed to a two stage semi-mobile crushing plant. Crushed ore and alkaline process water are then fed to a ball mill operating in closed circuit with a cyclone. The ore is ground to an 80% passing size of 106 microns; • Cyanide leaching in agitated tanks. Slurry from the mill cyclone overflow flows through a series of six agitated leach tanks with a total residence time of 24 hours. Oxygen is

ZT61-1601/MM1131 Final V6.0 Page 161 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

sparged into the tanks to ensure dissolved oxygen levels of >7ppm for efficient gold dissolution; • Belt filtration and washing. In this module gold in solution is separated from the slurry solids by vacuum filtration. The barren filter cake discharges from the filter and is then repulped with alkaline process water and pumped to the tailings neutralisation and water recovery module; • Gold recovery using carbon columns. The solution is pumped through a series of up- flow fluidised-bed columns containing activated carbon. Gold is adsorbed onto the carbon; • Carbon elution and regeneration. The carbon is acid washed to remove calcium. The gold is then eluted from the carbon using a hot caustic cyanide solution. Metallic gold is recovered from the solution by electrowinning. The carbon is then regenerated in a steam atmosphere at 550°C to restore gold recovery activity before it is returned to the carbon columns; • Gold bar production. Steel wool loaded with metallic gold from electrowinning is first calcined to oxidise the iron. The calcined product is then melted with fluxes in a small furnace before being cast into gold bars; • Copper Recovery. In this module, copper is precipitated from the barren solution by the addition of sulfuric acid and sodium hydrogen sulphide (“NaHS”) solution. This

causes copper to precipitate as the mineral chalcocite, Cu2S. The precipitate is settled in a thickener, and most of the settled material is recycled back to precipitation. This recycle provides solids for nucleation sites, and promotes the formation of a coarse and easily settled precipitate. The tailings solution from copper recovery is mildly acidic at pH4; • Cyanide recovery. In this module, cyanide is recovered from copper precipitation tailings solution. The first step is to volatilise the cyanide from the solution as hydrogen cyanide (HCN) gas. The mildly acidic (pH 4) solution from volatilisation is then pumped to the tailings neutralisation and water recovery module. The HCN gas is then absorbed by a caustic soda solution to form sodium cyanide; and • Tailings neutralisation and water recovery. Solution from cyanide recovery is mixed with the repulped belt filter cake and lime is added to ensure an alkaline pH. The resulting slurry goes to the tailing thickener for process water recovery. Thickener underflow is pumped to the tailings storage facility.

4.10.3.3 Water Supply

Raw water will be supplied from boreholes, which currently supply the Zambian Air Force (“ZAF”) Base, which are 2km away from the plant. Alecto has already a supply agreement with ZAF and process water make-up is supplied from the raw water source as well as from the existing return water dam at the exploration camp.

The plant will receive ore at 3% moisture and produce tailings at about 40% moisture. This will require a make-up water rate of 0.37m3 per dry tonne of ore processed. For 200,000 tonnes milled, the annual

ZT61-1601/MM1131 Final V6.0 Page 162 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA water consumption in the plant will be 74,000m3. Daily water consumption for 350 operating days per year will average 212m3/day.

4.10.3.4 Electricity Supply

Power will be supplied from the 33kV overhead line from Zambia Electricity Supply Authority (“ZESA”) which runs approximately 1km from the plant. Sufficient power is available to meet the plant requirement of approximately 2MW, as well as an additional (small amounts) of power for mining operations. It is assumed that power will be available from ZESA 24 hours per day for the entire year.

A 1,200kVA emergency generator has been included in the plant design to ensure the milling circuit and subsequent operations can operate in the case power interruptions occur.

4.10.3.5 Costs

Capital Cost

Process plant capital cost was determined to include the up-front design, construction and commissioning of the Luiri project, together with the required facilities to allow processing of ore. This includes establishment of a processing plant, site infrastructure, preproduction costs and construction of a facility for storage of process tailings. Key aspects of the capital cost estimate for the process plant are as follows:

• Based on Q3-2013 in United States dollars (US$) – Exchange rate 9.1 Rand : USD (Note 2017 rate Q1 =13.2); • Estimated to an overall accuracy of ±15 to 20%; • Significant levels of Chinese equipment utilised; and • Estimated based on an EPC execution strategy using Consulmet Metals for the engineering design and construction.

A summary of the process plant capital cost estimate is given in Table 4.27.

ZT61-1601/MM1131 Final V6.0 Page 163 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 4.27: Process Plant Capital Cost Estimate Summary Cost Category Item Cost US$M Direct Costs Process plant capital cost 8.60 Chinese Importation Costs / SA Delivery Costs to Zambia 0.15 Total Direct Costs 8.75 Indirect Costs EPC 0.38 First Fill – Consumables 0.19 Operational Spares 0.30 Critical Spares for Equipment 0.23 Other indirect costs 0.25 Laboratory 0.22 Total Indirect Costs 1.56 Grand Total 10.32

WAI Comment: The total cost was predicted to be US$10.32M which is exceptionally low for a 200,000tpa plant using SART technology.

Process Operating Costs

The process operating cost is predicted to be US$24.57 per tonne of ore treated, including US$20 per tonne variable costs.

4.10.4 PenMin Study 2016

PenMin studied the feasibility of commencing operations at the Matala Deposit on the oxide and transitional ores, allowing for a low cost start-up of the project and then progressing to the Dunrobin oxidised ores.

The principle of plant design was based on a ROM feed rate of 400,000tpa or nominal 50t/h processing plant. ROM ore with a maximum size of 500mm is fed via a hopper to a Jaw crusher, screen and secondary cone crusher installation, where the size is reduced to -20mm for feed to the Ball Mill.

The Milling circuit included jigging as the means of gravity concentration with upgrading of the gravity concentrates by two stages of shaking tables. This gravity tailing product (P80 = 106um) is then subjected to a cyanide leach in the presence of activated carbon with a maximum residence time of 24hrs. The thickened slimes are filtered and washed before being combined with crushed waste material to form a dry-stackable waste product. This waste is co-disposed with the ROM waste materials produced.

The counter-current flow of activated carbon is passed through a desorption system, where the loaded gold is recovered into solution and then precipitated. The spent carbon is re-activated in a kiln before recycling to the leach plant.

The gold slimes, together with the gravity concentrates are subjected to acid washing before smelting, allowing for the refining of the gold to 99.5% Au bars and 95% Ag bars.

ZT61-1601/MM1131 Final V6.0 Page 164 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The Xinhai Mining Machinery Company Limited (Xinhai), of Yantai in Shandong Province, China, were approached to perform the manufacture and supply, construction and engineering of the process plant on an EPC basis.

An EPC proposal was obtained from Xinhai which included Project Management, design, manufacture, supply, construct and commissioning of the overall process plant, including all civil design, mechanical and steelwork design and supply, electrical design, and supply and all installation and commissioning of the entire process plant.

The capital cost was estimated at US$7.73 million.

WAI Comment: The capital cost is very low and WAI cannot comment of the suitability of the selected equipment, quality of construction and the long term reliability of the overall process facility offered by Xinhai. WAI notes that the cost of a similar facility built under western conditions would be in the order of US$30 million. PenMin calculated process operating costs based on continuous operation of the plant on a 24/7 basis, with three shift rotation with a 4th shift for changeover. The total operating cost was estimated at US$23.3, which WAI considers to be reasonable.

4.11 Environment, Social, Health & Safety

4.11.1 Introduction

This review of the environmental and social performance of Alecto’s assets in Zambia (Matala and Dunrobin) is based on a brief desk-based survey of existing documentation and information gained from a 2016 site visit by WAI.

In the short time available, it is only possible to have an overview of the project and the way that the company manages its health, safety, environmental and social obligations across its sites. Whilst WAI believes it has gained insight into the key issues and performance, there may be additional information that was not seen, or variations in interpretation of the available data that could not be explored further. The Alecto Minerals Plc assets covered in this report are:

• Zambia – the recently acquired Matala historic underground mine and the former open pit, heap leach Dunrobin mine

The main documents inspected for this report were:

ZT61-1601/MM1131 Final V6.0 Page 165 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• Resource Estimation, Coffey Mining Pty Ltd, January 2012; • Luiri Gold Project – Environmental Impact Assessment, African Mining Consultants Limited, March 2013; • Luiri Gold Limited – Technical Note, Research and Development Work Undertaken for the Zambian Gold Project, 20 March 2014; • Dunrobin Gold Project – Scoping Study, Coffey Mining Ltd, May 2012; • Matala Gold Project – Scoping Study, Coffey Mining Ltd, May 2012; and • Luiri Hill Project Dunrobin Deposit Feasibility Study, Coffey Mining Ltd, November 2013.

4.11.2 Environmental & Social Setting and Context

4.11.2.1 Mining and EIA Legacy

Gold was discovered in the Matala area in 1912. The Dunrobin mine was first exploited in 1927 and the Matala mine was first opened in 1928. Mining operations at both mines persisted on and off throughout the 20th century. For more details, see the Luiri Hill Gold Project Resource Estimation Report from 2012.

As part of the license agreement for the mining lease, an Environmental Impact Assessment (“EIA”) was carried out by African Mining Consultants Limited and published in March 2013. The EIA applied to the Luiri Gold Project at the old Dunrobin mine in Mumbwa and Luiri accepted environmental liability for the area. The study was commissioned in July 2009 and was updated between March- August 2012.

As part of the large scale mining right application, a biophysical and social environment baseline study of the Luiri Hill Gold Project area was conducted by a Zambian company, African Mining Consultants Limited (“AMC”) between 2009 and 2010. Luiri Gold retained AMC to conduct a 2013 Environmental Impact Assessment (EIA) for the Luiri Gold Project.

The following are some of the 2013 EIA’s principal findings:

• The flora in the Luiri project area is composed of the following types – Chipya woodland, Miombo woodland (plateaux and hill), Thickets, Acacia woodland, Scrub- land, and Grasslands; • The predominant soil type in the project area is Ferrisols – leached red brown loamy soils with inert clay and low base saturation due to leaching by excessive rainfall; • Sulphur dioxide ambient air quality is 0.37μg/m3 (WHO guideline limit is 12.5μg/m3); • Three key forms of land use exist in the project area – farming, settlements and mining; • Quality of the surface water in the Matala stream is within the Zambian Drinking Water Standards except for Faecal Coliform in the rainy season;

ZT61-1601/MM1131 Final V6.0 Page 166 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

• Average maximum allowable noise quality is 46dB (IFC/World Bank guideline is 55dB); and • There is no endangered fauna that will be displaced by the project implementation.

The project was predicted to have the following significant positive impacts:

• It will contribute to the central and provincial governments by remitting statutory taxes; • The project will generate approximately 80 and 150 direct and indirect employment opportunities for Zambian locals; • It will increase local and national economic development by creating business opportunities for contractors and service providers; and • It will provide skills training opportunities for unskilled staff.

To mitigate potential negative impacts, management plans were developed in terms of:

• All plant effluents will be settled in Return Water Dam and Storm Water Dam and pumped to the processing plant for re-use; • Encasing noise sources and providing noise protection equipment; • Constructing a sustainable tailings dam and disposing of tailings and other solid waste at the waste disposal site; • Supporting the local government by helping to provide social and health services; and • Educating workers on the dangers of HIV/AIDS and providing Voluntary Counselling and HIV Testing.

WAI Comment: WAI has not reviewed the 2013 Management Plans, which were developed as a result of the EIA published that year. In accordance with international best practice, updated environmental and social baseline studies should be carried out in order to update previous impact assessment results, including updated Management Plans.

4.11.2.2 Land Use and Hydrogeology

Previous EIAs suggest that three key forms of land use are noticeable in the area around the Dunrobin and Matala mines: farming, settlements and mining. Generally, land has been converted from its original use of forest stand to cultivation and grazing land.

The land tenure system within the project area is predominantly traditional/customary, where Chiefs, through village headmen, provide pieces of land to families and clansmen without title. The Chief and his/her clansmen communally own land.

The drainage from the project area is directed southwards and comprises a network of seasonal creeks and streams flowing into the Nangoma stream, which then connects with the Kafue River to the south.

ZT61-1601/MM1131 Final V6.0 Page 167 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI Comment: WAI has not reviewed any documents relating to the project’s stakeholder engagement strategies, including the gathering of information around land use and ownership. It is recommended that Alecto carry out consultations with local communities in order to ascertain the potential for economic and physical displacement as a result of the project. In particular, it is important to understand the impact of the project on any artisanal mining activity in the area, if applicable, as well as the effect of potential land take on other local businesses, including agriculture and farming.

4.11.2.3 Socioeconomic Aspects

A socioeconomic baseline of the local area was developed in January-February 2010, including a review of relevant literature, a field visit to the project area and surrounding settlements, and interviews with local people. The population of Mumbwa district was registered as 158,861 in 2000. The population of the area of the project was recorded at 2,121, including the settlements of Stephen Village, 85% of Shanaobe Village and the whole area constituting Luiri market. The market plays a significant role in the economy of the area with commercial activities in all forms, including retail outlets as well as bars and taverns.

As is common in Zambia, the medical infrastructure at the project site is poor, and the facility is in need of upgrading, in particular if the population is anticipated to increase once the mining project commences.

As of 2013, no documented sites of archaeological significance were reported in the project area.

A 2012 Scoping Study flagged a medium risk in terms of the recruitment process at the Dunrobin and Matala projects because of the short-term nature of the jobs required and therefore the potential difficulties that could be encountered in attracting high quality personnel.

As of November 2013, Luiri operated with a Local Labour and Economic Development Plan, which aimed to promote employment of Zambian citizens, contribute to the transformation of the Zambian mining industry and to ensure that holders of large-scale mining rights contribute to socioeconomic development of the areas in which they are operating. Within this context, Luiri initiated several social development projects in affected areas as well as establishing a Trust for social and community development (2002, The Shakumbila Trust). Further details about the Trust and Luiri’s initial Corporate Social Responsibility activities can be found in the November 2013 Feasibility Study.

Also as of November 2013, the operator had committed to a number of job creation and skills development initiatives for members of local communities. To this end, the company developed the ‘Job Creation and `Skills Development’ strategy in a manner that supported its own corporate objectives as well as those of the community, district, province and country that it operates in. The strategy is aligned to the Zambian 6th national development plan for 2012-2015, and its strategic objectives or education and skills development. Further details can be found in the 2013 Feasibility Study. It is unclear whether Alecto will continue to develop these programmes.

ZT61-1601/MM1131 Final V6.0 Page 168 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

As of 2012, it was reported that the Matala Underground Project would be staffed with 124 mining and mining-related maintenance personnel to support mining operations. This figure includes 15 workers within Management & Supervision roles (of which 1 Health & Safety Officer), 12 Technical Staff, 15 engineers and 82 Stoping and Development staff. The same figures for the Dunrobin mine were not reported. Staff numbers for forthcoming operations have not been reviewed by WAI.

WAI Comment: An updated social baseline would serve as a starting point for Alecto to develop updated stakeholder engagement strategies as well as to gain an understanding of the positive and negative social impacts the Project is likely to have on local communities. WAI has not reviewed any documentation related to these issues dated after 2013.

4.11.2.4 Permitting and Licenses

The Project is located within one tenement of 32km2 constituting the Luiri Gold Mines Luiri Hill Project. The Dunrobin and Matala tenements comprise the previously named Mining Lease 8074-HQ_LML, renamed “LML48” in 2011. LML48 is set to expire in 2028 under the original provisions and conditions set out in the annex of the original grant from 2013. The tenements together have a total area of 277km2.

In line with its stated Mining Policy, the Government of Zambia enacted new legislation, the Mines and Minerals Development Act (2008). Government policy is not to participate in exploration or other mining activities as a shareholder. Relevant licenses include the following:

• Prospecting Permit (small scale, 5 years, non-extendable, granted by Director of Geological Survey); • Prospecting License (large scale, 2 years, extendable, granted by Director of Geological Survey); and • Large Scale Mining License (25 years, extendable, granted by Director of Mines.

In addition, a number of Acts of Parliament are relevant to the Project. These include the Environmental Management act (No 12, 2011), the Mines and Minerals Development Act (“MMDA”; No. 7, 2008) and a number of other acts detailed within the 2013 Environmental Impact Assessment report.

WAI Comment: As of the 2013 Feasibility Study, in terms of Zambian environmental permitting, no contentious issues were identified, no agricultural land will be lost nor are there archaeological interests in the area. These aspects need to be verified in an updated ESIA. In 2013, the conditions attached to an Environmental Permitting decision were that the operator at the time (Luiri) resettle 4 families living in close proximity to the proposed processing plant and that the operator provide an alternative borehole water supply to the Zambia Air Force base, located nearby. Further stakeholder engagement as well as updated environmental and social baseline studies would ascertain whether these conditions have been met and would highlight any potential further issues in the context of Environmental Permitting as well as economic and physical displacement of members of local communities. ZT61-1601/MM1131 Final V6.0 Page 169 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

4.11.2.5 Closure and Post-Closure Activities

The 2013 EIA suggests that the mine site will be progressively rehabilitated throughout the life of the mine as areas become available. At the time, Luiri Gold was tasked with implementing a programme of post-closure environmental inspection and monitoring. An independent consultant was assigned to conduct the site inspection and environmental monitoring, proposed by the company to be conducted bi-annually for the first two years to establish seasonal variations. No significant post-closure environmental issues were anticipated and environmental inspections and monitoring were scheduled to cease in year five, subject to ministerial approval.

Activities relating to closure and post-closure activities, which the project operators were tasked with at the time, are listed within Section 8.4 of the 2013 Feasibility Study.

An R&D report from 2014 suggests that the soluble copper levels are sufficiently high, and distributed in varying amounts throughout the Dunrobin Gold Project ore body, that gold extraction and environmental management problems may occur.

4.11.2.6 Relevant Mining Legislation

The primary law governing the mining sector in Zambia is the Mines and Minerals Development Act No. 11 of 2015 of the Laws of Zambia (“MMDA”). The MMDA became effective on 1st July, 2015 although the date of assent is 14th August, 2015. It repealed and replaced the Mines and Minerals Development Act No. 7 of 2008. The MMDA deals with mining rights, licences, large-scale mining in Zambia, gemstone mining, health and safety, environmental protection, and geological services on analysis, royalties and charges. Other pieces of legislation, other than the Mines and Minerals Development Act, include: Mines Acquisition (Special Provisions) Act; Chapter 218 of the Laws of Zambia and Mines Acquisition (Special Provisions) (No. 2) Act; and Chapter 219 of the Laws of Zambia.

The mining industry is administered by the Ministry of Mines and Minerals Development previously called Ministry of Mines Energy and Water Development, specifically by the office of the Director of Mines. The MMDA gives primary power to the Director of Mines, Director of Mines Safety, Director of Mining Cadastre and Director of Geological Survey, while the Minister enjoys an appellate and supervisory role over the respective Director’s actions.

The holder of a mining right is required to have approved environmental authorisation from the Zambia Environmental Management Agency (“ZEMA”).

The 1969 Mines and Mineral Act gave way for the Government to introduce the Mining Regulations 1971 and the Mining Regulations 1973. Further, these two regulations have been amalgamated to form the Guide to the Mining Regulations booklet currently being used in the copper mining industry.

The other Acts referred to, also include the Medical Examination of Young Persons (Underground Work) Act, Chapter 216 of the Laws of Zambia, Pneumoconiosis Act, Chapter 217 of the Laws of

ZT61-1601/MM1131 Final V6.0 Page 170 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Zambia, Occupational Health and Safety Act, Act 36 of 2010, the Workers’ Compensation Act 1999 and either environmental-related or general medicine.

4.11.3 Environmental Permit

WAI reviewed the environmental and social performance of Alecto Minerals Plc assets in Zambia (Matala and Dunrobin).

Currently the Environmental Permit granted by the Zambian authorities in 2013 was based on an EIA which covers the entire mining block, although the scope of this was restricted to a 150Ktpa (ore) open pit mine and processing plant located solely around the Dunrobin site.

The Alecto plan is to mine 400Ktpa (ore) starting at Matala (open pit Phase 1) for 3 years, then at Dunrobin (open pit Phase 2) whilst the underground mining infrastructure is prepared and equipped at Matala (Phase 3).

Recent discussions with the Director of Mines’ Safety, (a Department of the Ministry of Mines and the most significant consultee to ZEMA on environmental applications), has indicated the appropriate way forward. They have suggested that, on the basis that a mining licence and Environmental Permit have already been approved, that the most efficient way to include the new proposals is to upgrade the existing Environmental Permit. This should typically take some 6-8 weeks and cost +/US$15K to prepare.

Alecto has recently updated the local chief as well as the Minister of Mines of the items above, and the government is fully supportive of the company’s efforts.

ZT61-1601/MM1131 Final V6.0 Page 171 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

WAI Comment: WAI understands that in 2013 Luiri Gold Mines reached agreement to resettle members of households living in close proximity to the project. These agreements were enacted in 2016 but these along with further economic and physical displacement should be verified and formalised within an internationally compliant Livelihood Restoration Plan. This plan should also include hydrogeology, air quality, biodiversity, noise, socioeconomic and cultural heritage impacts. Best practice also recommends the development of an Environmental and Social Action Plan, formalising the delivery of mitigation measures over time.

ZT61-1601/MM1131 Final V6.0 Page 172 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5 MALI ASSETS

5.1 Introduction

Alecto currently owns the following projects in Mali, namely the Kossanto East, and Kossanto West projects, see details below.

5.2 Location, Access and Infrastructure

The Kossanto Project is centred on UTM coordinates 200,000E and 1,490,000N in the Kayes administrative district in Western Mali. (Figure 5.1).

Figure 5.1: Location Map of the Kossanto Project

Kossanto East (see Figure 5.2 below) is located in the south-eastern part of the licence area and consists of Gourbassi East, West and Gourbassi Northeast.

ZT61-1601/MM1131 Final V6.0 Page 173 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.2: Kossanto East Project

Kossanto West (see Figure 5.3 below) is located approximately 27km to the WNW of Gourbassi. Massakama and Goruba are the most important mineral occurrences in Kossanto West.

ZT61-1601/MM1131 Final V6.0 Page 174 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.3: Kossanto West Project

Bamako is the capital city in Mali with a population of approximately 1.8M. It has an international airport serviced by major airlines such as Air France and Royal Air Maroc. Flying time from Paris is approximately 5.5 hours.

Travel to the project area is by road from the capital city of Bamako to Gourbassi. This journey covers approximately 450km mainly by paved road, with the final 180km is by dirt road in varying states of repair. The trip takes approximately 10 hours.

Within the project areas, access is limited to dirt tracks and the use of 4x4 vehicles is essential.

In Mali, there is a railway that connects to bordering countries and approximately 29 airports of which 8 have paved runways.

Energie du Mali (“EDM”) is the sole electric company that provides electricity within Mali. However, only 55% of the population in the cities have access to EDM. ZT61-1601/MM1131 Final V6.0 Page 175 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.3 Topography & Climate

Mali is divided into two distinct zones, the Savannah in the south, and the Sahara Desert in the north. The country is mostly flat, rising to rolling northern plains covered by sand. The Adrar des Ifoghas massif lies in the northeast.

The country’s climate ranges from tropical in the south to arid in the north. Most of the country receives negligible rainfall; droughts are frequent. Late June to early December is the rainy season. During this time, flooding of the Niger River is common, creating the Inner Niger Delta.

5.4 Mali Summary Information

The Republic of Mali is a landlocked country in West Africa (Figure 5.4). Mali is bordered by Algeria to the north, Niger to the east, Burkina Faso and Côte d’Ivoire to the south, Guinea to the southwest, and Senegal and Mauritania to the west. Its size is just over 1,240,000km² with a population of 14.5M. Mali lies between latitudes 10° and 25°N, and longitudes 13°W and 5°E. At 1,242,248km², Mali is the world’s 24th largest country and is comparable in size to South Africa or Angola.

Mali’s capital is Bamako and Mali consists of eight regions with its borders to the north reaching deep into the middle of the Sahara, while the country’s southern part, where the majority of inhabitants live, features the Niger and Senegal rivers.

Desert or semi-desert covers about 65% of Mali's area. The Niger River creates a large and fertile inland delta as it arcs northeast through Mali from Guinea before turning south and eventually emptying into the Gulf of Guinea.

ZT61-1601/MM1131 Final V6.0 Page 176 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.4: Map of Mali

Mali lies in the torrid zone and is among the hottest countries in the world. The northern desert part of Mali has a hot desert climate whilst the central area has a hot semi-arid climate. The little southern band possesses a tropical wet and dry climate with very high temperatures year-round with a dry season and a rainy season.

Among the 25 poorest countries in the world, Mali depends on gold mining and agricultural exports for revenue. The country's fiscal status fluctuates with gold and agricultural commodity prices and the harvest; cotton and gold exports make up around 80% of export earnings. Mali remains dependent on foreign aid. Economic activity is largely confined to the riverine area irrigated by the Niger River and about 65% of its land area is desert or semi desert. About 10% of the population is nomadic and about 80% of the labour force is engaged in farming and fishing. Industrial activity is concentrated on processing farm commodities.

Mali is developing its iron ore extraction industry to diversify foreign exchange earnings away from gold, but the pace will largely depend on global price trends. Mali’s economic performance has improved since 2013 although physical insecurity, high population growth, corruption, weak infrastructure, and low levels of human capital remain hindrances to sustained growth.

Economic Forecast (2016-2020) by Trading Economy are summarised in Table 5.1.

ZT61-1601/MM1131 Final V6.0 Page 177 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 5.1: Mali Economic Forecast MARKETS Actual Q2/17 Q3/17 Q4/17 Q1/18 2020 Unit Currency 614.98 619 626 644 638 736 GDP GDP Annual Growth Rate 5.2 5.21 5.19 5.3 5.32 5.33 percent GDP 12.75 13.11 13.04 12.97 13.06 12.05 USD Billion GDP per capita 720.81 714 719 725 726 749 USD GDP per capita PPP 1111.65 1121 1121 1120 1119 1123 USD LABOUR Unemployment Rate 8.2 9.38 7.51 6.38 6.03 8.5 percent Population 17.6 16.13 16.26 16.39 16.39 18.84 Million TRADE Balance of Trade -226.1 -172 -172 -172 -172 -172 CFA Franc Billion Exports 305.9 310 280 303 288 293 CFA Franc Billion Imports 532 483 482 484 484 483 CFA Franc Billion Current Account -406.4 -379 -367 -354 -342 -315 XOF Billion Current Account to GDP -3.6 -6.21 -6.26 -6.32 -6.81 -7.27 percent Terrorism Index 6.03 6.09 6.4 6.72 6.79 8.69 Source: https://tradingeconomics.com

Although Mali is a landlocked country with poor infrastructure, the government’s reformed mineral code has attracted numerous foreign investors. This has resulted in several new mines (gold), which has boosted the gold mining industry to be Mali’s second largest income earner after cotton.

Gold production dominates Mali’s natural resource sector, with Mali being the third largest gold exporter in Africa and 11th largest in the world. Gold makes up the largest portion of Mali’s export with nearly 65% of total exports in 2015. In 2015, Mali produced 50t of gold of which 46t are industrial production and four tonnes are artisanal.

The price of gold fluctuates with the world market price. The sector has experienced some difficulties as unproductive mines have been closed. Three new mines are expected to open by 2017 in Fakola, Sadiola, and Kobana with a capacity of 20 tons a year. Two smaller mines (in Tabakoto and in Nampala) opened in 2015. The mines of Morela and of Yatela will close by 2017. There is also a large traditional mining sector, contributing approximately 10% of gold exports. Over two million people depend on the mining sector for income.

Mali also has other mineral prospects as the majority of the territory remains largely unexplored and unmapped. The Ministry of Mines estimate significant resources of iron ore, uranium, manganese, lithium and limestone.

5.5 Regulatory Environment & Mineral Tenure

ZT61-1601/MM1131 Final V6.0 Page 178 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

At Kossanto East, Ashanti Gold Corp. has the exclusive right to earn-in for a 65% interest in the Project (58.5% effective interest after allowing for the 10% carried interest of the Government of Mali) by completing a preliminary feasibility study (“PFS”) within a period of 36 months. Ashanti will be required to maintain and keep the Project’s licence in good standing during the Option Period. This expansive project area has recently undergone permit consolidation and renewals in order to maximise the exploration potential at what is considered to be one of the most prospective terrains in western Mali, allowing for exploration activities to continue to 2022.

At Kossanto West, Caracal Gold Mali SARL (“Caracal”), Alecto’s wholly owned subsidiary, has entered into a joint venture agreement with Randgold Resources (Mali) Limited (“Randgold”) for the exploration and development of Alecto’s 137km2 Kossanto West Gold Project in western Mali comprising the Kobokoto East and Koussikoto exploration permits (the “Permits”).

On completion of the Joint Venture, Randgold will fund all costs up to and including the completion of a Pre-Feasibility Study on the Project (“PFS”) and will hold a 65% and Alecto will retain a 35% participating interest in the Permits.

WAI Comment: Malian Government interest: As noted above, the Kossanto West projects sees ownership as 65% Randgold, and 35% Alecto. As WAI understands, the Malian Government is entitled to a 10% free-carry upon formation of a new mining company (post- successful feasibility study) and it has the right to acquire up to a further 10% by participating financially to the operating company.

As long as Alecto and Randgold contribute proportionally, their 35%, and 65% remains through the current exploration phase, with each party’s ownership being diluted proportionally by the Government’s interest in the mining phase. So, for example, if the Malian Government acquired an additional 5% interest over and above their 10% free carry, then the ownership of the future mining company joint venture would look like this:

• Govt Mali: 15%; • Randgold: 55.25%; and • Alecto: 29.75%.

All the exploration licences have an initial term of three (3) years, and may be renewed twice each time for an additional two years. A mine-operating permit when issued will be valid for a period of thirty (30) years and shall be renewable.

The exploration licence is held in conjunction with a planned exploration programme, detailing the work to be completed and expected costs of these works.

The Kossanto East + West Project cover a total area of 207km2 shown in Figure 5.5 below.

ZT61-1601/MM1131 Final V6.0 Page 179 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.5: Kossanto East and West Licence Areas

5.6 Exploration History

5.6.1 Kossanto East

Exploration on the Kossanto East project has, in order of exploration, been conducted by Bureau de Recherches Géologiques et Minières (“BRGM”), Caracal Gold (“Caracal”), African Mining & Exploration (AME), and presently Alecto Minerals Plc (“Alecto”).

Historically the area was previously explored by Randgold between 1995 and 1997 (permits under the name of Kérékoto I & II). Works completed include several geochemical grids, lithosampling, extensive pitting and trenches. This work led to the generation of the main prospects of Gourbassi East and Gourbassi West, which have been the focus of subsequent exploration works by both Caracal Gold Mali (“CGM”) and Alecto Minerals.

Previous exploration targets on Kossanto permits were generated in the main from regional soil geochemistry and the regional geological map drawn up by the BRGM. Subsequently, Caracal targeted a felsic intrusive body (Rhyolite) at Kobokoto, the Sadiola dyke at Koussikoto and a lithological contact at Gourbassi.

Work by Alecto has resulted in the identification of numerous potential targets within an area of 41km². Additional drilling and integration of all data which led in April 2013 to a Maiden Resource being declared at Gourbassi East.

ZT61-1601/MM1131 Final V6.0 Page 180 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Following the completion of further drilling in 2013 and 2014, WAI completed an updated Mineral Resource estimation for Gourbassi East and a Maiden Mineral Resource for Gourbassi West in May 2014.

5.6.2 Kossanto West

Historically the area was previously explored by Randgold between 1995 and 1997 (permits under the name of Kérékoto I & II). Works completed include several geochemical grids, lithosampling, extensive pitting and trenches. This work led to the generation of the Massakama prospect and CGM concentrated their efforts over the Massakama Main Zone, initially with trenches completed over soil geochemistry anomalies and proved the presence of in situ gold mineralisation, with significant intercepts up to 22m @ 0.74g/t, including 1m @ 3.25g/t and 36m @ 0.55g/t, including 6m @ 1.2g/t.

This was followed up by an IP survey at Kossanto West and RC drilling, with anomalous results in the region of a few hundred ppb seen throughout the drillholes, with one ‘bonanza’ hole, MRC08 returning a very high intercept of 8m @ 18.5g/t Au, including 2m @ 43g/t Au.

5.7 Geology and Mineralisation

5.7.1 Regional Geology

Mali is underlain by two cratonic nuclei, extensions of the West African Craton and the Tuareg Shield, which were welded together during the Neoproterozoic Pan-African orogenic event. The West African Craton outcrops at the border with Senegal, in southern Mali as part of the Leo Shield and in the far north as part of the Reguibal Shield (Figure 5.6).

ZT61-1601/MM1131 Final V6.0 Page 181 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.6: Geology of Mali

The West African Craton, comprises basal granulites, charnockites, amphibolites and migmatiites succeeded by marbles, ferruginous quartzites and paragneiss; these assemblages are intruded by metagabbros-anorthosites and serpentinites and syntectonic granites are abundant in the eastern part of the outcrop.

The Tuareg Shield outcrops in the east in the Adrar des Iforas mountains and is dominated by high- grade granulitic assemblages unconformably overlain by Neoproterozoic volcano-clastic units. Neoproterozoic–Palaeozoic sediments of the extensive intra-cratonic Taoudeni Basin underlie most of Mali and large parts of northern and eastern Mali are covered by Cretaceous and Tertiary clastic sediments.

The Kossanto Project is in the prolific Kedougou-Kenieba Inlier, the northwestern most exposure of Birimian rocks in West Africa (Figure 5.7). ZT61-1601/MM1131 Final V6.0 Page 182 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.7: Regional Geological Map of the Kenieba Inlier Showing Location of Alecto Projects and Major Mines

ZT61-1601/MM1131 Final V6.0 Page 183 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.7.2 Birmian Gold Deposits

Structure is the principal control on the location of gold mineralisation. Major Birimian gold deposits are typically located on or near shear zones, near or at intersecting crosscutting faults, and near or on significant bends in the stratigraphy, or hosting shear zone. In addition, the presence of intrusive bodies may or may not be significant. Major shear zones have strike extensions typically exceeding 10km, extend at depth to over 2km with widths varying from 10-200m.

The weathering profile is often deep and typically results in extensive surface oxidation of bedrock to a depth of up to 100m. In such areas, gold deposits comprise a surface oxide zone, an intermediate transition zone and a deeper fresh rock zone. Gold is typically free milling in the oxide zone, and the target for both artisanal miners and mining companies, as the oxidation of primary mineralisation under tropical conditions can form large deposits amenable to low-cost open pit mining and cyanide- leach gold recovery.

As an example of the importance of structure within greenstone belts, see the surrounding gold mines in close proximity to the Kossanto project in Figure 5.8.

Figure 5.8: Minerals Occurrences in Mali

ZT61-1601/MM1131 Final V6.0 Page 184 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.7.3 Local Geology

5.7.3.1 Introduction

The Kossanto Project consists of three contiguous exploration licences in the Kenieba inlier, a block of ancient greenstones and granites hosting many significant gold deposits in Senegal and Mali, making it one of the most important gold regions in Africa.

Two distinct units can be recognised within the permitted area. The Saboussiré Formation is the main formation in the Kossanto properties and represents a mature arc-type volcanic package which is distinctly heterogenous and composed of felsic to intermediate composition volcanics, meta-basalts, meta-andesites and dacites, volcanoclastics and pyroclastics. Meta-tuffs are largely represented, as well as cherty intervals and calcic volcano-sediments. The Saboussiré Formation is known as the Mako Group in Senegal.

The Kéniébandi Formation is mainly composed of meta-greywackes with carbonaceous cement building monotonous sequences with locally polymictic conglomerates, about which certain authors infer similarities to Tarkwaian. The conglomerates are believed to come from the erosion of the Saboussire Formation. Some andesitic flows are intercalated within the Kéniébandi Formation.

Previous exploration targets at Kossanto were generated in the main from regional soil geochemistry anomalies and the regional geological map drawn up by the BRGM (Bureau de Recherches Géologiques et Minières). As a result, Caracal targeted a felsic intrusive body (rhyolite) at Kobokoto, the Sadiola dyke at Koussikoto and a lithological contact at Gourbassi.

Subsequently, Alecto has integrated all of the available geological, geochemical and geophysical information on the Kossanto area. This has resulted in the identification of a total of 11 potential target areas of 41km² on the entire permit blocks including 8 new targets along with the 3 target areas drilled previously by Caracal.

5.7.3.2 Kossanto East

The geology at the Gourbassi East prospect is dominated by volcanics which vary from felsic rhyolites (the host of the mineralisation) through to intermediate and mafic volcanics. Red cherts, rich in iron and manganese, have been mapped several hundreds of metres outside of the main mineralised zone. In places these cherts contain sulphides, but do not seem to be gold-bearing.

ZT61-1601/MM1131 Final V6.0 Page 185 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.9: Geological Map of Gourbassi East

ZT61-1601/MM1131 Final V6.0 Page 186 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

The Gourbassi West prospect lies approximately 3.7km WNW of Gourbassi E and appears to be analogous with its clear NNW striking zone of mineralisation associated with altered volcanic breccias and silicified sandstones (Figure 5.10).

Figure 5.10: Geological Map of Gourbassi West

The host to mineralisation is associated with quartz veins orientated NNW and along the sheared contacts between intrusive bodies and the host rock, along with the partial replacement of gold- bearing pyrite and chalcopyrite within strongly silicified intrusives.

ZT61-1601/MM1131 Final V6.0 Page 187 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.7.3.3 Kossanto West

The Alecto permits at Kossanto West are intersected by the Main Transcurrent Zone (“MTZ”) structural corridor, striking NNE-SSW. The MTZ plays an important role in the mineralisation of the Sadiola mine and is likely a major factor in the mineralisation of the Alecto licenses. Two main geological formations have been identified in this area:

• The Saboussiré formation occurs to the west of the areas and represents a mature arc-type volcanic package which is distinctly heterogenous and composed of felsic to intermediate composition volcanics, meta-basalts, meta-andesites and dacites, volcanoclastics and pyroclastics. Meta-tuffs are largely represented as well as cherty intervals and calcic volcano-sediments. The Saboussiré Formation is known as the Mako Group in Senegal; and • To the east lies the Kéniébandi which is mainly composed of meta-greywackes with carbonaceous cement building monotonous sequences with locally polymictic conglomerates, about which certain authors infer similarities to Tarkwaian. The conglomerates are believed to come from the erosion of the Saboussire formation. Some andesitic flows are intercalated within the Keniebandi formation.

The Massakama area, where much of the field work has been completed, is characterised by a complex geology and contains mafic to felsic intrusive and volcanic rocks, along with carbonaceous sediments. Areas of mineralisation have been altered with intense silicification and epidoditisation. The Koussikoto is dominated by a felsic intrusive body in the centre of the permit, hosted by fluvio-deltaic sandstones; focus of exploration is around the edges of the intrusion.

5.7.4 Mineralisation and Structure

5.7.4.1 Kossanto East

The mineralised rhyolite is interpreted as an isolated body hosted within more mafic units, suggesting that the felsic nature of the rhyolite has led it to being a preferential host to the gold mineralisation. The mineralised rhyolite is typically strongly silicified and very fine grained with varying amounts of pyrite and lesser arsenopyrite. At surface, it exhibits intense microfracturing, but this is less evident at depth. The rhyolite body is bound by chlorite altered intermediate- to mafic- extrusives which are almost never mineralised even where they are strongly silicified and contain sulphides.

Mineralisation at Gourbassi East is formed of steep dipping “pervasive silica alteration” containing disseminated gold grades which generally increase towards a lithological contact between a rhyolite and a rhyodacite structure. The drilling indicated the continuity and the quality of the mineralisation along a 900m strike length trending NNW, suggesting the area has significant resource upside potential. AME (the previous owners) refined the geological model for the target area, and WAI issued an initial resource estimate in April 2013.

ZT61-1601/MM1131 Final V6.0 Page 188 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

At the Gourbassi West target, 10 holes were drilled in this area, totalling 889m, all inclined at -60° degrees drilled either West to East or East to West.

Importantly, these drill results indicated the continuity of mineralisation along a 1.8km corridor, which ground and aerial geophysics had previously suggested. Alecto has conducted further successful exploration on this target area, in order to better define the resource potential.

An ore microscopy study on Gourbassi East concluded that there were two stages of sulphide mineralisation, one of which being pre-deformation, and suggests an epithermal-type model as opposed to the more typical orogenic gold origin.

There are two prominent regional structures in the area, the first being the Sénégalo-Malian Fault Zone (“SMFZ”), which has been interpreted as having a sinistral sense of movement striking NNW-SSE (located 15km East of Kossanto) and the Main Transcurrent Zone (“MTZ”) which cuts through the Kossanto permit, striking NNE-SSW. The MTZ plays an important role in the mineralisation of the Sadiola mine, but appears un-mineralised in the Kossanto area.

5.7.4.2 Kossanto West

The area has been a centre for significant artisanal mining activity that has uncovered some previously unknown gold occurrences that also highlight the area’s potential. Mineralisation styles so far discovered are varied and hosted by a range of lithologies; suggesting that the mineralisation is predominantly structurally controlled, most likely by splays off the MTZ.

In the Massakama area, which has received most of the previous focus of work, drilling has indicated that mineralisation is associated with quartz veins orientated NNW and along the sheared contacts between intrusive bodies and the host rock, along with the partial replacement of gold-bearing pyrite and chalcopyrite within strongly silicified intrusives. Significant intercepts from this area include 8m @ 18.5g/t Au, including 2m @ 43g/t Au, with these high grade zones having undergone thin section analysis which suggest a possible skarn-type mineralisation, different from the typical shear zone hosted gold deposit type of the Birimian (Figure 5.11).

In other areas, mineralisation is related to felsic intrusives acting as preferential hosts to mineralization and mineralized by sulphide- and gold- bearing quartz veins. Zones of gossanous cherts and epidote alteration have also been identified as auriferous.

ZT61-1601/MM1131 Final V6.0 Page 189 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.11: Kossanto West, comprising the Kobokoto East and Koussikoto Exploration Permits, Showing Interpreted MTZ and Key Exploration Results from 2013/15 Field Work by Alecto

5.7.5 Exploration Potential

Alecto has focused on the known areas of mineralisation in a successful attempt to demonstrate an increase in the known resources at Gourbassi.

Whilst there are other known (but under-explored) gold occurrences, other potential zones have not been subjected to modern exploration techniques, and in fact a number of targets remain unexplored.

WAI considers that the work Alecto has focused on identifying mineralisation at Massakama and other targets demonstrates strategic potential, and is to be commended.

ZT61-1601/MM1131 Final V6.0 Page 190 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.8 Exploration and Drilling

5.8.1 Kossanto East

Exploration activities at Gourbassi East and West are summarised in Table 5.2 below.

Table 5.2: Summary of Sample Data Area Gourbassi East Gourbassi West Total Sample Number of Number of Total Number of Number of Length Type Holes Samples Length (m) Holes Samples (m) DD 2 197 279.7 - - - RAB 58 1,301 1,301 36 625 625 RC 49 4,794 5,023 37 3,948 4,012 RCDD 3 508 804.54 - - - TRENCH 30 1,605 1,565.8 - - - Total 142 8,405 8,974.04 73 4,573 4,637

The main highlight is that in Gourbassi East and West, the company has added significant ounces to the Maiden Mineral Resource, and appears to have intersected mineralisation in new areas, such as along strike from known mineralisation and nearby targets.

The highlights of 2013-2014 drilling at Gourbassi East and Gourbassi West are shown in Figure 5.12 and Figure 5.13.

ZT61-1601/MM1131 Final V6.0 Page 191 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.12: Gourbassi East Drilling Highlights

ZT61-1601/MM1131 Final V6.0 Page 192 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.13: Gourbassi East Drilling Highlights

ZT61-1601/MM1131 Final V6.0 Page 193 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.8.2 Kossanto West

5.8.2.1 Introduction

Since Alecto Minerals acquired the project in 2013, the Kossanto West area has been subject to mapping, soil geochemical sampling, pitting, trenching and scout drilling, and the results have been extremely encouraging, demonstrating high-grade gold mineralisation over a significant area of the regionally significant Main Transcurrent Shear Zone (“MTZ”).

RC and first pass RAB drilling has been completed over several main targets in the Kobotoko license, with very positive results throughout.

Follow up drilling at the Massakama Main Zone, which sits in the centre of a significant gold-in-soil anomaly, to test the high-grade mineralisation previously found by CGM in MRC08, was completed in 2014. Historical trenching completed nearby this drill hole identified mineralisation in an outcrop of a siliceous epidote rock, with field observations suggesting a broadly E-W siliceous epidote bearing unit.

Four RC holes for 304m were drilled around MRC08 in a box formation in order to delineate the control on the mineralisation and extensions for follow-up. All four holes intersected gold mineralisation and three contained significant intersections over good lengths. Mineralisation is in silicified meta basalts and in the siliceous epidote rock. The mineralisation encountered in TRC019 and 021, the E-W holes checking for N-S mineralised structures, is in silicified mafic volcanics whilst the mineralisation in TRC022 is in the siliceous epidote altered unit. Multiple sulphides were identified in these holes (Figure 5.14).

ZT61-1601/MM1131 Final V6.0 Page 194 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.14: RC drilling at Massakama Central

5.8.2.2 Big Pit

In Big Pit, a total of four RC holes for 270m were completed in 2014 in the SW of the Kobokoto East Permit, mainly targeting the contact between the granodiorite and mafic volcanoclastic host rocks previously being worked by artisanal workers. All four holes encountered saprolite until approximately 25m, followed by a weakly altered granodiorite with minor sulphides. Abundant quartz veining was found in each hole within the saprolite.

Weak mineralisation was discovered in all of the holes, the highlight being the 1m @ 12.8g/t Au found at 49m in TRC004 within the granodiorite, mostly likely due to a high grade quartz vein (Figure 5.15). Another intercept of 1m @ 3.95g/t Au was intercepted in the same hole at 9m depth within the saprolite.

ZT61-1601/MM1131 Final V6.0 Page 195 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.15: Drill Hole Location Plan Map of the “Big Pit” Prospect

5.8.2.3 Goreba

The Goreba prospect was an active orpaillage area which has been host to up to several thousand miners, where quartz veins are predominantly being targeted. A total of eight RC holes for 554m were completed on the Goreba prospect in 2014 (Figure 5.16).

The majority of the holes intersected up to 20m of saprolite followed by quartz veins at the contact with fresh sulphide bearing granodiorite. At depth, an intermediate to mafic volcanic unit was found, which contains minor sulphides. In holes TRC005, 006 and 008 drilled under a line of high grade artisanal pits, wherein flat lying quartz veins targeted by the artisanal miners exhibit visible gold mineralisation, drill intercepts, including 1m @ 5.88g/t Au and 3m @ 1.81g/t Au, were reported at the saprolite/fresh/granodiorite boundary, confirming the presence of the high-grade quartz veins.

Holes TRC009, 10 and 11 were all positioned around a series of NE-SW striking pits that follow a quartz vein which grab sampling yielded an assay value of 34g/t Au. TRC009 appears to have intersected one of the high-grade veins, with 2m @ 13.54g/t Au from 7m depth. TRC010 and 011 intercepted minor mineralisation around the saprolite/ fresh rock boundary, with 2m @ 1.13g/t Au and 2m @ 1.14g/t Au respectively.

ZT61-1601/MM1131 Final V6.0 Page 196 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.16: Drill Hole Location Plan Map of the Goreba Prospect

5.8.2.4 Rhyolite Hill

The Rhyolite Hill target is located proximal to the Massakama Main Zone and is characterised by a steep flat topped hill with intense artisanal mining activity along its flanks. Miners are recovering coarse grains of gold from surface. On the east side of the hill the artisanal miners are exploiting NNW- SSE trending shear structures from 3m to 10m in width which have been found to be mineralised with up to 3g/t Au in historical trenches.

Six RC holes, TRC013-TRC018, for a total of 870m, targeted the area to the south of Rhyolite Hill due a lack of access to the northern area (Figure 5.17). Drilling intercepted the mapped sheared, silicified structures from 1m to 10m in width, containing multiple sulphides, with pyrite, arsenopyrite, chalcopyrite, millerite and galena were all identified. Most of these shear zones appear to be low grade, with the best intercept discovered in TRC013 with 5m @ 2.04g/t Au. Fieldwork and analysis of the tailings from artisanal pits have revealed that the granodiorite could be the preferential host rather than the meta-basalts intercepted in the scout drill holes. Therefore, increased grades and widths of mineralisation may exist and require further drill testing.

ZT61-1601/MM1131 Final V6.0 Page 197 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.17: RC Drilling at Rhyolite Hill

5.8.2.5 Toukwatou

The Toukwatou prospect was initially discovered during channel sampling of an area of artisanal workings, with follow up scout RAB drilling in 2014 discovering significant high-grade intercepts from the total of 761 metres drilled across 38 holes. Strong intercepts were encountered in 11 drill holes, including: TRABL01/1 - 6m @ 4.23g/t Au from 9m depth, TRABL05/3 - 12m @ 3.34g/t Au from 6m depth and TRABL06/8 - 6m @ 7.84g/t Au from 24m depth (Figure 5.18). Results indicate a NE-SW trending corridor of mineralisation covering a strike length of 300m associated with an intensely quartz veined felsic intrusive.

ZT61-1601/MM1131 Final V6.0 Page 198 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Figure 5.18: RAB Drilling and Channel Sampling at Toukwatou

ZT61-1601/MM1131 Final V6.0 Page 199 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.9 Mineral Resource Estimation

5.9.1 Introduction

In May 2014, WAI provided an estimate of Mineral Resources in accordance with the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves [“JORC Code (2012)”] for the Gourbassi Gold Project. The effective date of this Mineral Resource estimate was 06 May, 2014 and superseded the previous Mineral Resource estimate dated 17 April, 2013.

This recent Mineral Resource estimate includes the most recent drill hole data up to 06 May, 2014.

There was no further drilling carried on the Gourbassi East and West sites since the 2014 Mineral Resource estimation by WAI, therefore there is no change in estimated tonnage or grade.

Summary of MRE results are given in the following section, however full details of MRE methodology can be found in Section 9 of WAI’s report “Updated Mineral Resource Estimate on the Kossanto Gold Project, Mali in 2014”.

5.9.2 WAI Mineral Resource Estimation in May 2014

The stated Mineral Resources is based on the 2.5m SMU block model. No additional mining factors such as (unplanned) mining dilution or mining recovery have been applied to the Mineral Resource estimates. No mining has taken place at the project and all Mineral Resources are therefore considered as remaining in-situ Mineral Resources.

The stated Mineral Resources are not materially affected by any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant issues, to the best knowledge of the author. There are no known mining, metallurgical, infrastructure, or other factors that materially affect this mineral resource estimate, at this time.

The Mineral Resource estimates have been tabulated as follows:

1. Global Mineral Resource estimate in which the resources have not been constrained by an optimised pit shell, as shown in Table 5.3; and 2. Mineral Resource estimate in which the Mineral Resources have been limited by the optimised pit shell as shown in Table 5.4.

ZT61-1601/MM1131 Final V6.0 Page 200 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Table 5.3: Gourbassi Mineral Resource Estimate (Unconstrained) (Mineral Resources not limited by optimised open pit shell) (WAI, June 2014) Resource Cut-Off Grade (g/t) Area 0.3 0.5 0.7 Classification Au Tonnes (kt) 4,274 3,080 2,332 Gourbassi Au (g/t) 1.03 1.27 1.49 Inferred East kg 4,391 3,919 3,475 Metal koz 141 126 112 Tonnes (kt) 5,442 3,638 2,488 Gourbassi Au (g/t) 0.82 1.03 1.24 Inferred West kg 4,457 3,754 3,074 Metal koz 143 121 99 Tonnes (kt) 9,716 6,717 4,820 Au (g/t) 0.91 1.14 1.36 Total Inferred kg 8,848 7,673 6,549 Metal koz 284 247 211 Notes: 1. Mineral Resources are not reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility study. 2. Mineral Resources are reported inclusive of any reserves. 3. Grade represents estimated contained metal in the ground and has not been adjusted for metallurgical recovery. 4. Mineral Resources are quoted based on a 2.5m mining selectivity 5. Reported Mineral Resources have not been limited by an optimised pit shell 6. Numbers may not add due to rounding

Table 5.4: Gourbassi Mineral Resource Estimate (Constrained) (Mineral Resources limited by optimised open pit shell) (WAI, June 2014) Resource Cut-Off Grade (g/t) Area 0.42 Classification Au Tonnes (kt) 2,217 Au (g/t) 1.30 Gourbassi East Inferred kg 2,871 Metal koz 92 Tonnes (kt) 2,005 Au (g/t) 1.06 Gourbassi West Inferred kg 2,116 Metal koz 68 Tonnes (kt) 4,222 Au (g/t) 1.18 Total Inferred kg 4,987 Metal koz 160 Notes: 1. Mineral Resources are not reserves until they have demonstrated economic viability based on a feasibility study or pre-feasibility study. 2. Mineral Resources are reported inclusive of any reserves. 3. Grade represents estimated contained metal in the ground and has not been adjusted for metallurgical recovery. 4. Mineral Resources are quoted based on a 2.5m mining selectivity 5. Reported Mineral Resources have been limited by an optimised pit shell using reasonable technical and economic parameters and a gold price of US$1,500/oz. 6. Numbers may not add due to rounding

ZT61-1601/MM1131 Final V6.0 Page 201 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.10 Environment, Social, Health & Safety

5.10.1 Introduction

This review of the environmental and social performance of Alecto Minerals Plc assets in Mali (Kossanto East and West) is based on a brief desk-based survey of existing documentation and information gained from a December 2013 site visit by WAI and subsequent Competent Person’s Report under the guidelines of the JORC Code (2012). During the visit, WAI thoroughly reviewed the site exploration activities and conducted QA/QC procedures.

• Mali – Kossanto East (now in a JV with Ashanti) and Kossanto West (managed by Randgold).

The main documents inspected for this report were:

• An updated Mineral Resource Estimate on the Kossanto Gold Project, Mali (June 2014 for Alecto Minerals Plc), Wardell Armstrong International; and • Site Visit Report on the Kossanto Gold Project, Mali (February 2014 for Alecto Minerals Plc), Wardell Armstrong International.

5.10.2 Environmental & Social Setting and Context

5.10.2.1 Background

The Kossanto East Project is a 66.41km2 concession in the Kedougou - Kenieba Inlier, the northwestern most exposure of Birimian rocks in West Africa. Adjacent to the Kossanto East project is the 137km2 Kossanto West exploration project, comprising the permits of Kobokoto East and Koussikoto. This expansive project area has recently undergone permit consolidation and renewals in order to maximise the exploration potential at what is considered to be one of the most prospective terrains in western Mali, allowing for exploration activities to continue to 2022.

Details of the topography, climate and infrastructure are included elsewhere in this section.

ZT61-1601/MM1131 Final V6.0 Page 202 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

5.10.2.2 Socioeconomic Aspects

During a 2013 site visit, WAI noted a considerable amount of artisanal mining activity on the project areas, however, WAI has been informed that currently in 2016/2017, there are very few artisanal miners on site.

WAI Comment: In line with international best practice, the status of artisanal mining activity in and around the Project area should be verified prior to further development of the mine. Particular attention should be paid to the potential for economic displacement as a result of small-scale miners losing their livelihoods if they are unable to continue working on the site, even if they do not have the legal right to operate there. It is recommended that a Stakeholder Engagement Plan is developed, allowing Alecto to fully understand the concerns of Affected Communities, and subsequently that a Livelihood Restoration Plan be developed, focusing on any potential economic or physical displacement related to the Project.

5.10.2.3 Relevant Legislation

In Mali, the mineral law is based on the French civil law. The mining code was revised Mining Code Law No. 2012-015 of 27 February 2012 of the Republic of Mali. The State owns all the mineral rights. Standard agreements are available. A scale of fees based on area is applied to mineral licences.

A founding agreement [Convention d'Etablissement] is signed between the (foreign) company and the Malian government before exploration or mining commences. The agreement, negotiated between the parties, comprehensively fixes all the conditions that will apply to the exploration and, in the event of a discovery, exploitation periods. The conditions include work obligations, reporting, taxes, duties, duty-free arrangements, state equity participation, etc. Prospecting licences (Autorisation de Prospection) are awarded for two years and cover 8km².

5.10.2.4 Permitting and Licenses

The Kossanto Project consists of three exploration licences, covering a total area of 204.8km2 in the Kayes administrative district in Western Mali within the Kenieba Inlier. In 2016, Ashanti Gold signed a non-binding letter of intent (“LOI”) with Alecto Minerals, which will allow it to earn a 65% in the Africa- focused firm’s Kossanto gold project in western Mali. As part of the deal, Ashanti will become the operator of the project during a 36-month option period in which it would have to complete a preliminary feasibility study (“PFS”). WAI has seen official certification of these licence areas, including the Permit Establishment Agreements and the “Arretes”, and has no reason to question the validity of the permits. In Mali an exploration permit (or 'Permis de Recherche') is granted for an initial three years, which may be renewed for a further two years twice giving a total permit duration of 7 years.

As of 2013, the exploration licence has an initial term of three (“3”) years and may be renewed twice each time for an additional two years. The exploration licence is held in conjunction with a planned exploration programme, detailing the work to be completed and expected costs of these works.

ZT61-1601/MM1131 Final V6.0 Page 203 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

In Mali, an environmental permit is issued subsequent to the delivery of an Environmental and Social Impact Assessment (ESIA), in addition to a Resettlement Action Plan (RAP) for families to be resettled as a result of the Project, if applicable. The final ESIA is approved by the Minister of Environment (Ministere de l’Environnement, de l’Assainissement et du Developpement Durable).

A permit is required for the discharge of water from the pit to ensure a safe working environment and to ensure compliance with relevant standards. This is generally included in the ESIA report, when it is submitted and subsequently approved by the Minister of Environment.

5.11 Summary

WAI is aware that Alecto has received updates of the JV activities from Randgold and works appear to be progressing.

WAI is satisfied that the mineral rights Alecto holds in Mali are prospective for gold, and by concentrating on the Zambia and Botswana assets, and allowing the Mali assets to be developed via JV partners, this will enable all projects to progress independently.

ZT61-1601/MM1131 Final V6.0 Page 204 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

6 GLOSSARY

Glossary Term Definition “ADTs” Articulated Dump Trucks “AIA” Archaeological Impact Assessment Changes in the chemical or mineralogical composition of a rock, generally produced by “alteration” weathering or hydrothermal solutions. “Alecto” Alecto Minerals Plc “AMC” African Mining Consultants “AME” African Mining & Exploration “AMP” Archaeological Management Plan “Au” Chemical symbol for the element gold “BCL” Bamangwato Concessions Limited “BRGM” Bureau de Recherches Géologiques et Minières “C” Degrees Celsius “Caracal” Caracal Gold Mali SARL “CCIC” Caracle Creek “Cgeol” Chartered Geologist of the Geological Society “Coffey Mining” Coffey Mining Pty Ltd “Cradle” Cradle Arc Investments (Proprietary) Limited The mineral sulphide of iron and copper, CuFeS ; sometimes called copper pyrite or “chalcopyrite” 2 yellow copper ore Tetrahedral sheet silicates of iron, magnesium, and aluminium, characteristic of low-grade “chlorite” metamorphism; green colour, with cleavage like mica “CPR” Competent Persons Report “Cu” Chemical symbol for copper The minimum concentration of a valuable component in a marginal sample of the mineral. The “Cut-off grade” cut-off grade is used to delineate parts of the deposit to be mined “Cuacid“ Acid Soluble Copper “CuTotal” Total Copper (“CuTotal“) A principal method of extracting gold from low grade ore by converting the gold to a water- “cyanidation” soluble complex “deposit” A body of mineralisation that represents a concentration of valuable metals. Waste rock that is, by necessity, removed along with the ore in the mining process “dilution” subsequently lowering the grade of the ore “dip angle” The angle between the direction of the described geological structure and horizontal plane. Mineral deposit in which the desired minerals occur as scattered particles in the rock, but in “disseminated” sufficient quantity to make the deposit an orebody “DMS” Dense Medium Separation “DTM” Digital Terrain Models Democratic Republic of Congo “DRC”

“EDM” Energie du Mali “EHS” Environmental, Health & Safety “EIA” Environmental Impact Assessment “EPC” Engineering Procurement Construction “EPs” The Equator principles “ESIA” Environmental and Social Impact Assessment “Falconbridge or FEB” Falconbridge Explorations Limited “Fe” Chemical symbol for iron. “feasibility study” Technical and financial study to assess the commercial viability of a project Most important group of rock forming silicate minerals, with end-members, alkali feldspar “feldspar” KalSi2O8, sodium feldspar NaAlSi2O8 and calcium feldspar CaAlSi2O8 “FGS” Fellow of the Geological Society “g/t” gramme per metric tonne

ZT61-1601/MM1131 Final V6.0 Page 205 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Glossary Term Definition Gross Domestic Product; total value of goods produced and services provided in a country in “GDP” one year “GFC” Global Financial Crisis “grade” Relative quantity or the percentage of ore mineral or metal content in an orebod “HCN” Hydrogen Cyanide “hematite” Hematiteis the mineral form of iron(III) oxide (Fe₂O₃), one of several iron oxides “HG” High Grade “host rock” Wall rock that confines the mineral occurrence zone Refers in the broad sense to the process associated with alteration and mineralisation by a hot “hydrothermal” mineralised fluid (water). “ICMI” The International Cyanide Management Code “IDW2” Inverse Distance Squared “IFC” International Finance Corporation An economic mineral occurrence have been sampled (from locations such as outcrops, trenches, pits and drillholes) to a point where an estimate has been made, at a reasonable level “Indicated resource” of confidence, of their contained metal, grade, tonnage, shape, densities, physical characteristics. “IPD” Inverse Power Distance Joint Ore Reserve Committee Code; the Committee is convened under the auspices of the “JORC Code” Australasian Institute of Mining and Metallurgy “kg” Kilogramme (1,000kg = 1t) “km(s)” kilometres “km2” square kilometres “lb” Unit of mass, pound (1 metric tonne = 2,204lb) A rock that is subject to the process of being broken down by the action of substances dissolved “leached” in water. “leaching” see cyanidation “LG” Low Grade “LHDs” Load Haul Dump “LOI” Letter of Intent “LOM” Life of Mine “m” metre

“malachite” Cu2CO3(OH)2; bright green; occurs in oxidised zones of copper deposits and a source of copper. “MCB” Messina Copper Botswana A rock that has, in a solid state, undergone changes in mineralogy, texture, or chemical “metamorphic rock” composition as a result of heat or pressure. “MIK” Multiple Indication Kriging Describes activities to be conducted at the mine site over the life of the operation as well as “mine plan” post mining management to ensure environmentally sound mining, including leaving the area in a safe, non-polluting condition, and preserving as much land value as possible. “mine” A mineral mining enterprise. The term is often used to refer to an underground mine. A body of mineralisation that represents a concentration of valuable metals. The limits can be “mineral deposit” defined by geological contacts or assay cut-off grade criteria. a concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such a form that there are reasonable prospects for the eventual economic extraction; “mineral resource” the location, quantity, grade geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge; mineral resources are sub-divided into Inferred, Indicated and Measured categories Process of formation and concentration of elements and their chemical compounds within a “mineralisation” mass or body of rock. A combination of technical solutions that define the geometry, technology and sequence of “mining method” mining. “mm” millimetre, one thousandth of a metre. “MMDA” Mines and Minerals Development Act “MMEWA” Ministry of Minerals Energy and Water Affairs “Mowana” Mowana Copper Mine ZT61-1601/MM1131 Final V6.0 Page 206 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Glossary Term Definition “MRE” Mineral Resource Estimate “Mt” Million tonnes. “MTZ” Main Transcurrent Shear Zone “MQWM” The Mines, Quarries, Works and Machineries Act “NaHS” Sodium Hydrogen Sulphide “NHI” Northern Heavy Industries Group Company Limited “NN” Nearest Neighbour “OK” Ordinary Kriging “OSA” On Stream Analyser “open pit” A mine that is entirely on surface; also referred to as open-cut or open-cast mine. Naturally occurring material from which a mineral or minerals of economic value can be “ore” extracted profitably or to satisfy social or political objectives. Mining term to define a solid mass of mineralised rock which can be mined profitably under “orebody” current or foreseeable economic conditions. “ounce” or “oz” troy ounce (= 31.1035 grammes) Mineral formed by the union of an element with oxygen; the portion of an orebody near the “oxide” surface that has been leached by percolating water carrying oxygen, carbon dioxide, or other gases. “Pb” Chemical symbol for lead. “PFS” Preliminary Feasibility Study “PGMs” Platinum-group metals “ppb” Parts per billion “ppm” Parts per million “precious metal” Gold, silver and platinum group minerals. A combination of processes for primary treatment of solid minerals in order to extract the “processing” products amenable to further technically and economically feasible chemical or metallurgical treatment or use.

“pyrite” Mineral compound of iron and sulphur, sulphide mineral, iron sulphide, chemical symbol FeS2. “QA/QC” Quality assurance/quality control. “quartz” Mineral composed of silicon dioxide. “Randgold” Randgold Resources (Mali) Limited “RAP” Resettlement Action Plan “RC” Reverse Circulation “RPA” Roscoe Postle and Associates Inc. “RSV” Read, Swatman and Voight The process of studying the qualitative and quantitative composition and properties of natural “sampling” formations comprising a deposit. SART (sulphidisation, acidification, recycling and thickening) is an industry standard process to “SART” efficiently manage and recycle the cyanide while complying with environmental regulations concerning cyanide destruction. a medium-grade metamorphic rock with medium to large, flat, sheet-like grains in a preferred “schist” orientation. Rock formed by sedimentation of substances in water, less often from air and due to glacial actions on the land surface and within sea and ocean basins. Sedimentation can be mechanical “sedimentary rock” (under the influence of gravity or environment dynamics changes), chemical (from water solutions upon their reaching saturation concentrations and as a result of exchange reactions), or biogenic (under the influence of biological activity). Rocks formed from material derived from pre-existing rocks by processes of erosion, mass “sedimentary” wasting and weathering. “SMFZ” Sénégalo-Malian Fault Zone “SNC-Lavalin” SNC- Lavalin Engineers and Constructors Inc Mineral containing sulphur in its non-oxidised form; that part of a sulphide deposit that has not “sulphide” been oxidised by near-surface waters. Ore which is in its primary mineralised state and has not undergone the process of natural oxidation. Solvent extraction and electrowinning (SX-EW) is a two-stage hydrometallurgical process that “SX-EW” first extracts and upgrades copper ions from low-grade leach solutions into a solvent containing ZT61-1601/MM1131 Final V6.0 Page 207 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

Glossary Term Definition a chemical that selectively reacts with and binds the copper in the solvent. The copper is extracted from the solvent with strong aqueous acid which then deposits pure copper onto cathodes using an electrolytic procedure (electrowinning). “t” metric tonne (1,000kg) Liquid wastes of mineral processing with valuable component grade lower than that of the “tailings” initial material. “US$” United States Dollars Tabular deposit of minerals occupying a fracture, in which particles may grow away from the “vein” walls towards the middle. “VGL” Very low Grade “WAI” Wardell Armstrong International “WSB” Water Surveys (Botswana) (Pty) Ltd “Xinhai” Xinhai Mining Machinery Company Limited X-ray fluorescence; emission of characteristic "secondary" (or fluorescent) X-rays from a “XRF” material that has been excited by bombarding with high-energy X-rays or gamma rays; widely used for elemental analysis. “ZAF” Zambian Air Force “ZEMA” Zambia Environmental Management Agency “ZESA” Zambian Electricity Supply Authority “ZESCO” Zambian state-owned power company “Zn” Chemical symbol for zinc “$” United States Dollars “%” Percent

ZT61-1601/MM1131 Final V6.0 Page 208 August 2017

ALECTO MINERALS PLC COMPETENT PERSON’S REPORT ON THE MINERAL ASSETS HELD BY ALECTO IN AFRICA

ZT61-1601/MM1131 Final V6.0 Page 209 August 2017