Mineral Resource and Ore Reserve Statement on the Talitsky Potash Project, Berezniki,Russia
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MINERAL RESOURCE AND ORE RESERVE STATEMENT ON THE TALITSKY POTASH PROJECT, BEREZNIKI, RUSSIA Prepared For Verkhnekamsk Potash Company Report Prepared by SRK Consulting (UK) Limited UK6597 changed the report name to work with the local application script 03.06.13 SRK Consulting Mineral Resource and Ore Reserve Statement COPYRIGHT AND DISCLAIMER Copyright (and any other applicable intellectual property rights) in this document and any accompanying data or models which are created by SRK Consulting (UK) Limited ("SRK") is reserved by SRK and is protected by international copyright and other laws. Copyright in any component parts of this document such as images is owned and reserved by the copyright owner so noted within this document. The use of this document is strictly subject to terms licensed by SRK to the named recipient or recipients of this document or persons to whom SRK has agreed that it may be transferred to (the “Recipient”). 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Date: July 2016 Project Number: UK6597 SRK Project Director: Mike Armitage Corporate Consultant (Geology) SRK Project Manager: Tim McGurk Corporate Consultant (Mining Engineering) Client Legal Entity: CJSC Verkhnekamsk Potash Company Client Address: St. Gagarina, d. 10, Berezniki, Perm Region, Russia, 618419 UK6597 Mineral Resource and Ore Reserve Statement_v4.docx July 2016 SRK Consulting Mineral Resource and Ore Reserve Statement– Table of Contents Table of Contents 1 INTRODUCTION ................................................................................................. 1 2 MINERAL RESOURCE ....................................................................................... 1 2.1 Introduction .............................................................................................................................. 1 2.2 Legal Aspects .......................................................................................................................... 1 2.2.1 Available Permits and Licences .................................................................................... 1 2.2.2 Required Permits, Stages and Terms of Obtaining Permits ......................................... 4 2.2.3 Licence Conditions ........................................................................................................ 4 2.2.4 Terms for Development ................................................................................................. 5 2.2.5 Licence Status ............................................................................................................... 5 2.2.6 Responsibility for Violation of the Licence Conditions................................................... 5 2.3 Geology .................................................................................................................................... 6 2.3.1 Regional Geology .......................................................................................................... 6 2.3.2 Stratigraphy ................................................................................................................... 8 2.3.3 Mineralisation .............................................................................................................. 10 2.3.4 Summary Comments ................................................................................................... 11 2.4 History .................................................................................................................................... 11 2.4.1 Regional Exploration ................................................................................................... 11 2.4.2 Exploration of Talitsky ................................................................................................. 12 2.4.3 Input Data Analysis...................................................................................................... 24 2.5 Resource Estimation .............................................................................................................. 27 2.5.1 Introduction .................................................................................................................. 27 2.5.2 Geological Modelling ................................................................................................... 27 2.5.3 Classification ............................................................................................................... 30 2.5.4 SRK Audited Mineral Resource Statement ................................................................. 32 2.5.5 Comparison with Previously Reported Resource Estimates ....................................... 37 3 ORE RESERVES ............................................................................................... 40 3.1 Mining Plan ............................................................................................................................ 40 3.2 Ore Processing ...................................................................................................................... 42 3.3 Infrastructure .......................................................................................................................... 43 3.4 Environment and Social ......................................................................................................... 44 3.5 Economic Analysis ................................................................................................................. 45 3.6 Statement of Ore Reserves ................................................................................................... 45 UK6597 Mineral Resource and Ore Reserve Statement_v4.docx July 2016 Page i of ii SRK Consulting Mineral Resource and Ore Reserve Statement– Table of Contents List of Tables Table 2-1: Licence Coordinates for the Talitsky Project ................................................................. 2 Table 2-2: Topographic Survey of Talitsky Area. ......................................................................... 12 Table 2-3: Holes by Exploration Campaigns ................................................................................ 13 Table 2-4: Final Database for Resource Estimation ..................................................................... 14 Table 2-5: Methods of Downhole Survey for Holes Drilled in 1980-1990s ................................... 17 Table 2-6: Methods of Downhole Survey for Holes Drilled in 2009-2011 .................................... 18 Table 2-7: Core Recovery within the GKZ Ore Intervals .............................................................. 18 Table 2-8: SRK Check of Grade Calculation within GKZ Ore Intervals, Holes 1967-69 .............. 25 Table 2-9: SRK check of grade calculation within GKZ ore intervals, holes 1988-94 .................. 25 Table 2-10: SRK check of grade calculation within selected ore intervals, holes 2009-11 ............ 26 Table 2-11: Structural Grid and Block Model Extents and Size ..................................................... 27 Table 2-12: GKZ Potassium Resource Categorisation for the Talitsky deposit, effective date 1 January 2016 (Protokol #2809) ................................................................................ 31 Table 2-13: Comparison of SRK’s block model with the GKZ Reserves for the AB horizon.......... 31 Table 2-14: Comparison of SRK’s block model and GKZ Reserves on block basis of Red 2 horizon ......................................................................................................................... 32 Table 2-15: Comparison of SRK’s block model and GKZ Reserves on a block basis for Red 3 horizon 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