Nohra-Elende Exploration Target Report

Home , Central Uplands, Heilbad Heiligenstadt, Kehmstedt, Nordhausen (district), Sollstedt

DAVENPORT RESOURCES LIMITED

TECHNICAL REPORT

ON THE

EXPLORATION TARGET

OF THE

NOHRA-ELENDE SUB AREA OF THE MÜHLHAUSEN- NOHRA MINING LICENCE

SOUTH HARZ POTASH PROJECT

THURINGIA, GERMANY

Report Date: 8th January 2019 Effective Date: 8th January 2019

Prepared By

Micon International Co Limited Suite 10 Keswick Hall, Norwich, NR4 6TJ, United Kingdom

Davenport Resources Ltd

Table of Contents

1.0 EXECUTIVE SUMMARY ...... 1 1.1 INTRODUCTION ...... 1 1.2 PROPERTY DESCRIPTION AND LOCATION ...... 2 1.3 LICENCES AND PERMITS ...... 3 1.4 INFRASTRUCTURE ...... 3 1.5 GEOLOGY AND MINERALISATION ...... 4 1.6 EXPLORATION ...... 5 1.7 EXPLORATOIN TARGET ESTIMATION ...... 6

2.0 INTRODUCTION...... 2 2.1 PURPOSE AND SCOPE OF REPORT ...... 2 2.2 CAPABILITY AND INDEPENDENCE...... 2 2.3 DISCLAIMER ...... 3

3.0 GENERAL INFORMATION ...... 5 3.1 KALI-INSTRUKTION AND THE GKZ SYSTEM ...... 5 3.2 MICON APPROACH TO RESOURCE/RESERVE CLASSIFICATION ...... 7 3.2.1 Mineral Resources ...... 7

4.0 PROPERTY DESCRIPTION AND LOCATION ...... 9 4.1 PROPERTY DESCRIPTION ...... 9 4.2 PROPERTY LOCATION ...... 9 4.3 LICENCES ...... 9 4.3.1 Mining Rights ...... 12 4.3.2 Surface Rights ...... 13 4.4 ROYALTIES ...... 13 4.5 ENVIRONMENTAL LIABILITIES, LEGISLATIVE AND PERMITTING REQUIREMENTS ...... 13 4.6 MATERIAL AGREEMENTS ...... 14 4.7 OTHER SIGNIFICANT FACTORS AND RISKS ...... 14

5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 15 5.1 PROPERTY ACCESS ...... 15 5.2 CLIMATE ...... 15 5.3 LOCAL RESOURCES AND INFRASTRUCTURE ...... 15 5.4 PHYSIOGRAPHY ...... 16 5.5 FLORA AND FAUNA ...... 16

6.0 REGIONAL GEOLOGY ...... 17 6.1 DEPOSIT TYPES ...... 17 6.2 REGIONAL GEOLOGY AND STRUCTURAL SETTING ...... 17 6.3 LOCAL GEOLOGY ...... 18 6.4 MINERALISATION ...... 20 6.5 ECONOMIC MINERALS ...... 22 6.5.1 Sylvinite – ‘Hartsalz’ ...... 22

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6.5.2 Carnallitite...... 23 6.5.3 Rock-Salt...... 23

7.0 HISTORICAL EXPLORATION ...... 24 7.1 HISTORY OF THE SOUTH HARZ POTASH DISTRICT ...... 24 7.2 HISTORIC OWNERSHIP ...... 25 7.3 SOURCE DATA ...... 25 7.4 EXPLORATION ...... 26 7.5 DRILLING ...... 33 7.6 LOGGING ...... 33 7.7 SAMPLE PREPARATION AND ANALYSIS ...... 34 7.7.1 Sampling ...... 34 7.7.2 Analysis Procedures ...... 34 7.8 HISTORICAL MINERAL RESOURCE ESTIMATES...... 35

8.0 DATA VERIFICATION ...... 38

9.0 MINERAL PROCESSING METALLURGY AND TESTING ...... 39

10.0 MINERAL RESOURCE ESTIMATE ...... 40 10.1 INTRODUCTION ...... 40 10.2 GEOLOGICAL INTERPRETATION AND MODELLING ...... 40 10.3 EXPLORATION TARGET ...... 41

11.0 MINING METHODS ...... 49

12.0 CONCLUSIONS AND RECOMMENDATIONS ...... 50

13.0 DATE AND SIGNATURE PAGE ...... 52

14.0 REFERENCES ...... 53

15.0 CERTIFICATE ...... 54

16.0 GLOSSARY AND ABBREVIATIONS ...... 55 16.1 GLOSSARY ...... 55 16.2 ABBREVIATIONS ...... 58

17.0 APPENDIX 1 ...... 60

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List of Tables

Table 1.1: Historical Resources for the Nohra-Elende Sub-Area ...... 6 Table 1.2: Exploration Target Mineral Resource Estimate for the Nohra-Elende Sub- Area of the Mühlhausen-Nohra Mining Licence (Ercosplan, 2017) ... 7 Table 1.3: Exploration Target Estimate for the Nohra-Elende Sub-Area of the Mühlhausen-Nohra Mining Licence (Micon, 8th January 2019) ...... 1 Table 4.1: Mühlhausen-Nohra Mining Licence ...... 13 Table 6.1: Zechstein Series Geology (after Ercosplan, Jan 2018) ...... 19 Table 6.2: Evaporite Rock Types within the Ebeleben Licence Area ...... 21 Table 7.1 Historically Significant South Harz Potash District Mines ...... 24 Table 7.2: Nohra-Elende Sub-Area Drill Hole Database Summary ...... 27 Table 7.3: Exploration Drill Holes Data within the Nohra-Elende Sub-Area ...... 28 Table 7.4: Historical Resources for the Nohra-Elende Sub-Area ...... 36 Table 7.5: Exploration Target mineral resource estimate for the Nohra-Elende Sub- Area of the Mühlhausen-Nohra Mining Licence (Ercosplan, 2017) . 37 Table 10.1: Criteria used to define the Exploration Target ranges ...... 44 Table 10.2: Exploration Target Estimate for the Nohra-Elende Sub-Area of the Mühlhausen-Nohra Mining Licence as at 8th January 2019 ...... 48

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List of Figures

Figure 1.1: Location Map of the Mühlhausen-Nohra Mining Licence ...... 2 Figure 3.1: Comparison of GKZ and JORC Code Resource/Reserve Classification ... 6 Figure 3.2: Exploration Results, Mineral Resources and Ore Reserves as Defined by the JORC Code ...... 7 Figure 4.1: Regional Location Map of the South Harz Potash Project ...... 10 Figure 4.2: Location Map of the Davenport Mining and Exploration Licence Areas 11 Figure 4.3: Nohra-Elende and Mühlhausen-Keula Sub-Areas of the Mühlhausen- Nohra Mining Licence ...... 12 Figure 6.1: Geological Map of the Mühlhausen-Nohra Mining Licence Area...... 20 Figure 7.1: Drill Hole Positions and Main Mineral Distribution within the Nohra- Elende Sub-Area ...... 32 Figure 10.1: NNW-SSE Cross-Section across the Nohra-Elende Sub-Area ...... 42 Figure 10.2: Mineral distribution and Classification of the Nohra-Elende Sub-Area 43

Figure 10.3: K2O Grade Distribution in the Combined Potash Seams, Nohra-Elende Sub-Area ...... 45 Figure 10.4: Thickness Distribution in the Combined Potash Seams, Nohra-Elende Sub-Area ...... 46 Figure 10.5: Upper Sylvinite Seam Roof Elevation, Nohra-Elende Sub-Area ...... 47

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1.0 EXECUTIVE SUMMARY

1.1 INTRODUCTION

Micon International Co Limited (Micon) was contracted by Davenport Resources Ltd (Davenport) to undertake an estimate of the mineral resources of the Mühlhausen-Nohra mining licence located within the South Harz Potash District of the Thuringian Basin, Germany. Davenport is a publicly listed company on the Australian Securities Exchange (ASX) and holds the Mühlhausen-Nohra mining license through its wholly owned subsidiary East Exploration GmbH. In addition to the Mühlhausen-Nohra mining license, Davenport has also been awarded the Ebeleben and Ohmgebirge mining licenses, together with the adjoining Küllstedt and Gräfentonna exploration licenses, all of which form the greater South Harz Potash Project.

Due to the extent, shape and geological characteristics of the Mühlhausen-Nohra mining license, Micon logically spilt it into two distinct sub-areas, each of which were separately interpreted and modelled – a northerly Nohra-Elende sub-area and a southerly Mühlhausen- Keula subarea. The results of the modelling exercises resulted in a combined total Inferred mineral resource of 2,822.2 Mt at a grade of 10.24% K2O prepared in accordance with the guidelines of the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia (the JORC Code).

The results of the mineral resource estimates for Nohra-Elende and Mühlhausen-Keula were released on 13th November 2018 and 16th October 2018 respectively and can be found on the Davenport website www.davenportresources.com.au. During the Nohra-Elende modelling a portion of the sub-area was excluded as an Inferred mineral resource and was classified as an Exploration Target. This report includes the results of the Nohra-Elende Exploration Target. The majority of the report has the same contents as the report issued by Micon on Nohra-Elende in November 2018 with only changes made to reflect the Exploration Target area, including an update to Table 1.

The evaluation of the Nohra-Elende sub-area has been based on historical exploration records supplied to Micon, which Micon used to create a three-dimensional (3D) model using Micromine® modelling software. The historical data was supplied to Micon either as scans of the original drilling information, or as pre-captured data ordered in an Excel database by Ercosplan Geotechnik und Bergbau (Ercosplan).

The principal consultants responsible for the review of the Project and the preparation of this Report are listed in Section 2.2.

Elizabeth de Klerk M.Sc., Pr.Sci.Nat., SAIMM., Micon’s Senior Geologist and Competent Person visited the South Harz Potash project from 12th to 16th February and 6th to 8th March 2018. During the initial site visit the South Harz Potash Project and laboratory facilities at K-UTEC AG Salt Technologies (K-UTEC) in Sondershausen were visited. The original hard copy drill hole logs, reports, maps and cross-sections held in the Bodenverwertungs und verwaltungs GmbH (BVVG) archives in Berlin were inspected. In addition, Mrs. de Klerk had discussions with the Ercosplan team at the offices in Erfurt to understand how the data was captured and structured in an Excel database in order to estimate Exploration Targets for the various licenses of the South Harz Potash Project. The second site visit involved additional

Mühlhausen-Nohra Project, January 2019 1 Davenport Resources Ltd time being spent at K-UTEC inspecting additional historical records for the South Harz Potash Project held in the K-UTEC archives at its head office in Sondershausen.

The results of this study are principally derived from the examination and interpretation of historical exploration and sampling data. No independent confirmatory sampling has been performed by Micon as a part of the current study to confirm or otherwise quantify the conclusions presented in this report due to no historical drill core being available for check logging or sampling.

Micon has provided a completed Table 1 of the JORC Code in Appendix 1 for the Exploration Target located in the Nohra-Elende sub-area of the Mühlhausen-Nohra mining licence area.

1.2 PROPERTY DESCRIPTION AND LOCATION

The Mühlhausen-Nohra mining licence is located in the north-western part of the Federal State of Thuringia, approximately 30 km northwest of the state’s capital city of Erfurt, and at the south-western boundary of the South Harz Potash District (Figure 1.1).

Figure 1.1: Location Map of the Mühlhausen-Nohra Mining Licence

Source: Davenport

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The Mühlhausen-Nohra mining licence is situated within the Central Uplands of Germany, which has a transitional climate that fluctuates between moderately oceanic and humid continental. Winters are relatively cold with average highs of 2ºC and lows of -3ºC, whilst summers tend to be warm, and at times humid, with average highs of 23ºC, although maximums can exceed 30ºC. Precipitation averages 502 mm per annum, which falls throughout the year.

The topography in the area is characterised by gently undulating hills, which are often forested and interspersed by narrow slow-flowing rivers and streams.

1.3 LICENCES AND PERMITS

East Exploration GmbH is 100% owned by Davenport and is the owner of each of the Ebeleben, Mühlhausen-Nohra and Ohmgebirge mining licences, in addition to the neighbouring Gräfentonna and Küllstedt exploration licences. This report does not contain a legal review of the Mühlhausen-Nohra and Ohmgebirge mining licences or the Gräfentonna and Küllstedt exploration licences. The Mühlhausen-Nohra Mining Licence Deed No. is 1077/95-611 and has an area of 141.6049 km2.

Due to the original Südharz mining property having been classified as an ‘old mining property’ pursuant to Sec. 151 of the Bundesberggesetz (BBergG), from which the Mühlhausen-Nohra and Ebeleben mining properties were later derived, the Mühlhausen-Nohra and Ebeleben mining properties are classified as ‘old mining properties’ – i.e. those mining properties which were derived during the former East German system. It has been confirmed by the relevant authority post the reunification of Germany that these licences are unlimited in time and are not subject to any royalty payments with no supporting work programme required. As such the Mühlhausen-Nohra mining licence is classified as being perpetual in nature, is not subject to expiry and is valid to explore for and produce ‘potash including (associated) brine’ with no applicable statutory royalties.

The holder of a mining right has the exclusive right to explore and/or produce and to appropriate the respective mineral resources in a certain field. However, all exploration and production activities require a mining permit (Betriebsplanzulassung) to be applied for with the mining authority. In addition, environmental and water permits may also be required as well other permits, such as deep drilling operations which require approval from the Federal Office for the Safety of Nuclear Waste Management (BfE) that is responsible for preserving geological formations that are potentially suitable for the storage of nuclear waste.

Davenport Resources Ltd do not own any of the surface rights across the Mühlhausen-Nohra mining license.

1.4 INFRASTRUCTURE

In general, the infrastructure of the region is modern and well-developed with several federal and state roads connecting to federal motor-ways, and a regional railway network connecting to the trans-regional railway network in the vicinity of the mining licence. Power supplies are available for households, established commerce and industry via a well-developed grid network. All of the state towns, especially the district capitals, are considered to be advanced modern towns with a developed infrastructure that includes shopping centres, hospitals and clinics, schools and banking.

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Thuringia State has an average population density of 130 people per km2 with numerous towns and villages located both within or adjacent to the Project. Each of the district capital towns of Heilbad Heiligenstadt, Nordhausen, Mühlhausen and Sondershausen are approximately 20 km from the Project area. Erfurt the largest city and state capital of Thuringia has a population of approximately 206,000 and is 50 km southeast of the Mühlhausen-Nohra mining license. All basic services can be sourced from these towns.

Potash mining is an established industry in the region which has resulted in the ongoing development of a skilled workforce in this regard. Supplies and personnel to conduct exploration and mining activities can be sourced locally and whatever cannot be sourced from Erfurt or elsewhere in Thuringia can be easily sourced from cities such as Berlin and Frankfurt.

1.5 GEOLOGY AND MINERALISATION

The Mühlhausen-Nohra mining license is located in the north of Thuringia in the central/north- western section of the Thuringian Basin and has an area of 141.6049 km2. The Project has never been mined with the primary target being the Staßfurt potash seam of the potash-bearing Zechstein Group (Upper Permian – Zechstein). The adjacent Volkenroda, Sollstedt, Bleicherode and Kemstedt mining fields have been historically mined since 1896 for the production of potash fertilisers and are currently being used as underground waste storage facilities. The adjacent Volkenroda underground potash mine originally held the mining licences for both Mühlhausen-Nohra and Ebeleben and had planned on extending the mine southeast onto the Ebeleben mining license. A new ventilation shaft was started on Ebeleben, which was sunk to a depth of 100 m, before Germany was reconciled in 1990 and Volkenroda lost the licences. Whilst on site, Mrs. de Klerk visited the area where the ventilation shaft was sunk.

The regional stratigraphy of the South Permian Basin is fairly well understood with a pre-Variscan basement (Upper Carboniferous and older rocks) and a transition horizon of Upper Carboniferous to Lower Permian lying beneath an expansive sequence of evaporite rocks of the Upper Permian succession. These evaporite deposits are assigned to the Zechstein Group, and host the target potash mineralisation of the South Harz Potash District which occurs on Mühlhausen-Nohra. The potash-bearing target Zechstein Group consists of seven depositional cycles with the potash mineralisation of the South Harz Potash District hosted within the second cycle, the Staßfurt Formation (Z2).

The majority of the potash deposits have been altered by intruding water or basalt causing plastic deformation resulting in the potash horizons being forced upwards into the overlying strata. Faulting and water intrusion have caused alteration or dissolving of the deposited potash, and as such strata within the Zechstein Group can be regionally highly variable.

The Z2 is further sub-divided into horizons, of which the Kaliflöz Staßfurt (z2KSt) hosts the potentially economic potash seam. The z2KSt is split into a hanging wall group that has 11 to 19 horizons of finely layered potassium salts and a footwall group that has 1 to 10 coarsely layered potassium salts and thick halite layers. The z2KSt is present across the extent of the Mühlhausen-Nohra mining license and has an average thickness of 21.8 m across the northerly Nohra-Elende sub-area. The main minerals present are carnallite and sylvinite. Lesser amounts of halite, polyhalite, anhydrite, langbeinite, kainite, aphthitalite and syngenite also occur.

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1.6 EXPLORATION

All of the exploration conducted on the Mühlhausen-Nohra mining license is historical. The first evidence of exploration drilling is from drill hole Kal Möhrbach 1/1890, drilling of which commenced in 1889, following the completion of which a further 14 drill holes were drilled during the 1890’s. The majority of the historical exploration drilling on the Mühlhausen-Nohra mining license was conducted by the former German Democratic Republic (GDR) during two major campaigns, one in the 1960s and one in the 1970/80s. Various state institutions were involved during these campaigns, institutions which were merged after reunification to form the VEB Kombinant.

The drill hole database for the Nohra-Elende sub-area consists of 92 drill holes, 28 within the license and 64 adjacent to the license. Of these 92 drill holes, 4 were hydrocarbon exploration drill holes and 88 potash exploration drill holes drill holes. The database is incomplete with various drill holes missing various corresponding downhole data sets throughout. This is due to the historical data having been partially sourced with the unsourced data either considered as being stored at an as yet undetermined location, or having been lost/destroyed.

Various state institutions were involved in the historical exploration, where during and post- unification, the responsibility of the ownership and curatorship of the historical geological exploration archives became unassigned. This effectively resulted in the archives being neglected over this period of instability, thereby instigating a process of the exploration archives being seized/copied and privately stored by various private firms and newly formed technical institutions of the time.

This has today resulted in the historical data either being stored in duplicate at various localities, being stored in a single known locality, being stored at a as yet to be determined locality or being assumed as being lost/destroyed. The BVVG is considered to have the most complete national archive, with various other depositories hosting duplicates thereof, as well as various additional datasets that the BVVG does not yet have copies of. This has resulted in the current archives stored by BVVG as being partial in extent.

Compounding this scenario is that various, often undated, iterations of the historical exploration data, pertaining to a single drill hole exists – i.e. during the drilling and analysis of a drill hole various updated versions of the drill hole were issued, each differing to the previous as additional data became available, geological logging was refined (based on any downhole geophysics) or the chemistry and mineralogy results were corrected before sign off and final approval by the analytical institution. As such it is a common occurrence that two separate data depositories may contain exploration data for the same drill hole, but which differ when compared against each other. These differences are virtually always <5%, and rarely between 5% to 10%. It is often impossible to determine which is the more recent and which should be relied upon as the date is more often than not recorded only as the year, e.g. 1978.

In compiling the Mühlhausen-Nohra mining license exploration database, Micon relied on drill hole data that had been stored and previously captured by Ercosplan. Where possible this captured data was cross-checked by Micon against both the archived Ercosplan data, as well as that data stored at BVVG. In addition, Davenport was able to source additional historical exploration data from K-UTEC which was independently captured by Micon and which was also used for cross-checking with the Ercosplan data. In various instances, cross-checks yielded

Mühlhausen-Nohra Project, January 2019 5 Davenport Resources Ltd minor differing results (largely <5%) between the chemistry and mineralogy, this due to different versions of the drill hole being compared.

All drill holes with supporting downhole chemistry data were relied upon for geological modelling and estimation purposes, whilst drill holes with only downhole geological data were relied upon in order to complete wireframing interpretations, especially in localities where there was a paucity of drill holes with supporting chemistry data.

In instances where full drill hole logs were available, these typically included a detailed lithological description of the entire drill hole, a summarised stratigraphic log, graphically displayed downhole geophysical logging and the chemistry and mineralogy results.

All drill hole sampling was conducted according to the procedures and protocols as specified in Kali-Instruktion (1956 and 1960). Drill core samples were collected from all of the potash drill holes. Where possible, the K2O grade of the potash-bearing horizons was historically determined on an empirical base using the correlation with the downhole natural gamma log. Samples were collected across all potash-bearing horizons and the total sampled length represents the total thickness of the potash-bearing horizon of the z2KSt. In the potash drill holes, core sample thicknesses ranged from 0.18 m to 4.00 m. Over inhomogeneous potash horizons where interlayers of potential waste were included, the minimum sample thickness was 0.5 m and the maximum was 5 m. Samples were crushed to 2 mm in a jaw crusher and a representative sample was milled and crushed further to 50 μm. A sub-sample was assayed by ICP-OES for all elements except NaCl, which was analysed using potentiometric titration. XRD was used for mineralogy and thin sections were carried out at a local university.

1.7 EXPLORATOIN TARGET ESTIMATION

Between 1980 and 1987 historical resource estimates were reported for three separate sub- sections of the Mühlhausen-Nohra mining license, referred to as:

• a southerly Mühlhausen sub-section; • a central Keula sub-section (comparable to the Mühlhausen-Keula sub-area); and, • a northerly Nohra-Elende sub-section.

The exact extent of the historically defined sub-section areas of the three resources differ slightly to the current mining licence boundary. The historical resource estimates were estimated by VEB Geological Research und Exploration, a nationally owned enterprise, according to the Kali-Instruktion of the former German Democratic Republic (GDR) (Gotte, 1982, /12/) (Table 1.1).

Table 1.1: Historical Resources for the Nohra-Elende Sub-Area (Kästner et al., 1980 and 1987)

Tonnage Tonnage Grade Sub-Section Date Area (km2) Mining Horizon Category (Mt) K2O (Mt) K2O (%) Nohra-Elende 1980 26.5 Carnallitite 816 72.8 8.9 Balance - C2

A separate Exploration Target mineral resource estimate for the Nohra-Elende sub-area was estimated by Ercosplan in January 2017 in accordance with the guidelines of the JORC Code (2012) as shown in Table 1.2.

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Table 1.2: Exploration Target Mineral Resource Estimate for the Nohra-Elende Sub-Area of the Mühlhausen-Nohra Mining Licence (Ercosplan, 2017)

Tonnage (Mt) Grade K2O (%) Tonnage K2O (Mt) Seam Volume (Mm3) Min. Max. Min. Max. Min. Max. Upper sylvinite 74 123 169 11.38 22.89 14 39 Carnallitite 1,000 1,830 2,612 8.28 10.63 152 278 Lower Sylvinite 6 10 15 8.25 11.38 1 2 TOTAL 1,080 1,963 2,796 8.47 11.37 167 319

The Ercosplan Exploration Target grade estimate is comparable to the 6th November 2018 Micon Inferred mineral resource estimate. However, the Micon Inferred mineral resource tonnage is approximately 15% less than the Ercosplan Exploration Target tonnes. This was due to the fact that Micon chose to leave some of the Nohra-Elende sub-area as an Exploration Target as there was not sufficient information to convert it all to an Inferred mineral resource. The Exploration Target reported by Micon is the focus of this report.

The Exploration Target and Inferred mineral resource were modelled by Micon at the same time and therefore the methodology described in the previous report is the same as that described below.

The geological model and resource estimation undertaken by Micon for the Project was carried out in Micromine®, a software package used for modelling stratiform deposits. The database used to create the geological model and mineral resource estimation was created from the manual data entry of hard-copy historical drill hole logs and exploration records. The Excel database was cross-checked against the original drill hole logs in both the BVVG, Ercosplan and K-UTEC archives in Berlin and Sondershausen respectively. The drill hole database was imported into Micromine® and validated. Validation checks undertaken included checking for missing samples, mismatching sample and stratigraphy intersections, duplicate records and overlapping from-to depths. In addition, and where possible the sum of chemical compounds was checked to ensure a total of 100%.

Once validated, the chemical database was first composited according to stratigraphy, which allowed the merging of the mineralogical and chemical data tables. Each drill hole was individually examined and, based on stratigraphy, sequence of mineralised seams and K2O composite grades, the sylvinite or Carnallitite seams were further divided into the Upper Sylvinite seam, Carnallitite seam and Lower Sylvinite seam. In the Exploration Target area only the Upper Sylvinite and Carnallite seams occur.

Roof and floor grids were made for each of the four seams. The minimum and maximum X and Y origins used for gridding were 601233 (min X), 5690017 (min Y), 622433 (max X) and 5706817 (max Y). A grid cell size of 400 was used as this best fitted the data when correlated in cross-section. An inverse distance squared gridding algorithm was used, with a circular search area and a 5,000 m search radius to cover the distance between data points, one sector and maximum 1 point per sector. The roof and floor grids were converted to wireframe surfaces (DTM).

Mühlhausen-Nohra Project, January 2019 7 Davenport Resources Ltd composited assay database, which were modelled using the same algorithm and parameters as the seam roof and floor surfaces.

Based on the quality and quantity of the historical data used to create the geological model, Micon has classified a 13,927,858.7 m2 central portion of the Nohra-Elende sub-area as an Exploration Target with a 20% geological loss to take into consideration the confidence levels and potential for seam loss due to localised faulting (Table 1.3).

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Table 1.3: Exploration Target Estimate for the Nohra-Elende Sub-Area of the Mühlhausen-Nohra Mining Licence (Micon, 8th January 2019)

Tonnage (Mt) K2O (%) K2O (Mt) Seam Category Minimum Maximum Minimum Maximum Minimum Maximum Upper Sylvinite 179 223 11.0 13.5 22 27 Exploration Target Carnallite 459 939 8.5 10.5 44 89 Exploration Target Total Nohra-Elende Sub-Area 638 1,162 9.20 11.07 66 117 Exploration Target

Notes: Minimum seam thickness considered for deposit is 1m. Minimum cut‐off grade ≥5% K2O. Data source: historical state records (BVVG) checked and verified. Exploration Target tonnes rounded to nearest 100,000 t. Errors may exist due to rounding.

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2.0 INTRODUCTION

2.1 PURPOSE AND SCOPE OF REPORT

Micon International Co Limited (Micon) was contracted by Davenport Resources Ltd (Davenport) to complete an evaluation of the mineral resources of the Mühlhausen-Nohra mining licence located within the South Harz Potash District of the Thuringian Basin, Germany. Davenport is a publicly-listed company on the Australian Securities Exchange (ASX) and holds the Mühlhausen-Nohra mining licence through its wholly owned subsidiary East Exploration GmbH. In addition to the Mühlhausen-Nohra mining licence, Davenport has also been awarded the Ebeleben and Ohmgebirge mining licences, together with the adjoining Küllstedt and Gräfentonna exploration licences, all of which form the greater South Harz Potash Project.

This Technical Report contains the results of the evaluation of the northerly Nohra-Elende sub- area (the Project) of the Mühlhausen-Nohra mining licence area. It has been prepared in accordance with the guidelines of the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia (the JORC Code).

The evaluation of the Nohra-Elende sub-area of the Mühlhausen-Nohra mining licence has been based on historical exploration records supplied to Micon, which Micon used to create a three-dimensional (3-D) model using Micromine® modelling software. The historical data was supplied to Micon either as scans of the original drilling information sourced from various data depositories, or as pre-captured data ordered in an Excel database by Ercosplan (Ercosplan).

2.2 CAPABILITY AND INDEPENDENCE

Micon is an independent consulting firm of geologists, mining engineers, metallurgists and environmental consultants, all of whom have extensive experience in the mining industry. The firm has offices in Norwich and Cornwall (United Kingdom), Toronto and Vancouver (Canada).

Micon offers a broad range of consulting services to clients involved in the mining industry. The firm maintains a substantial practice in the geological assessment of prospective properties, the independent estimation of resources and reserves, the compilation and review of feasibility studies, the economic evaluation of mineral properties, due diligence reviews and the monitoring of mineral projects on behalf of financing agencies.

Micon’s practice is worldwide and covers all of the precious and base metals, the energy minerals (coal and uranium) and a wide variety of industrial minerals. The firm’s clients include major mining companies, most of the major United Kingdom and Canadian banks and investment houses, and a large number of financial institutions in other parts of the world. Micon’s technical, due diligence and valuation reports are typically accepted by regulatory agencies such as the London Stock Exchange, the US Securities and Exchange Commission, the Ontario Securities Commission, the Toronto Stock Exchange, and the Australian Stock Exchange.

Mühlhausen-Nohra Project, January 2019 2 Davenport Resources Ltd

Micon is internally owned and is entirely independent of Davenport Resources Ltd, East Exploration GmbH and their affiliated companies. The personnel responsible for this review and the opinions expressed in this Report are Micon’s full-time employees or Micon associates. For its services in preparing this Report, Micon is receiving payment based upon time and expenses and will not receive any capital stock from Davenport Resources Ltd, East Exploration GmbH or any of their affiliated companies. Micon is reimbursing its associates based upon time and expenses.

The principal consultants responsible for the review of the Nohra-Elende sub-area of the Mühlhausen-Nohra mining licence, and the preparation of this report have extensive experience in the mining industry, have appropriate professional qualifications and are listed below:

• Stanley Bartlett, M.Sc., P.Geo., Micon Vice President, Senior Geologist and Managing Director of Micon’s UK office, who reviewed the mineral resource estimate; • Elizabeth de Klerk, M.Sc., Pr.Sci.Nat., SAIMM, Micon Senior Geologist, Project Manager and Competent Person, who visited the site and reviewed the geological model and mineral resource estimate, as well as the exploration history, geology and mineralisation; • Andrew de Klerk, B.Sc. Pri.Sci.Nat., SAIMM Micon Senior Geologist, who managed the exploration data, reviewed the mineral resource estimate and compiled the report; • James Turner, B.Sc., M.Sc., CEng., MIMMM, Micon Senior Processing Engineer who commented on the processing options; and, • Sandra Stark, B.Sc., FGS, Micon Geologist, who reviewed the report.

2.3 DISCLAIMER

Whilst Micon has reviewed the exploration and mining licences, permits and entitlements of the property in so far as these may influence the investigation and development of the mining assets, Micon has not undertaken legal due diligence of the asset portfolio described in this Report. The reader is therefore cautioned that the inclusion of exploration and mining properties within this Report does not in any form imply legal ownership.

2.4 SOURCES OF INFORMATION

Various sources of information were accessed to prepare this report including:

• Structured and informal interviews conducted during the site visit with the management and senior staff of Davenport, BVVG, Ercosplan and K-Utec; • Reports submitted to Davenport by Ercosplan on the historical data collation and Exploration Target estimation for Mühlhausen-Nohra; • The Ercosplan electronic drill hole database held in Excel including information on drill hole collar, lithology, stratigraphy, chemical assay results, mineralogy and geophysical results; • Extensive scans of acquired historical exploration drill holes from K-UTEC which were captured by Micon into the Project downhole database including stratigraphy, chemical assay results, mineralogy, plan maps, cross-sections and downhole geophysical logging results;

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• Existing electronic database of historical information including scans and photographs of the Mühlhausen-Nohra mining licence original drill hole logs as stored and captured by Ercosplan including stratigraphy, chemical assay results, mineralogy, reserve estimations according to Kali-Instruktion, plan maps, cross-sections and downhole geophysical logging results including caliper, natural gamma, gamma-gamma, resistivity and temperature; and, • The original historical drill hole information, where available, including drill hole logs, stratigraphic interpretation, chemical assay results, mineralogy, reserve estimations according to Kali-Instruktion, plan maps, cross-sections and downhole geophysical logging results including caliper, natural gamma, gamma-gamma, resistivity and temperature.

2.5 UNITS OF MEASUREMENT

Quantities are generally stated in SI units, as utilised by international mining companies. These include metric tonnes (t), million metric tonnes (Mt), kilograms (kg) and grammes (g) for weight; kilometres (km), metres (m), centimetres (cm) and millimetres (mm) for distance; cubic metres (m3), litres (l), millilitres (ml) and cubic centimetres (cm3) for volume, square kilometres (km2) and hectares (ha) for area, weight percent (%) for base metal grades, grammes per metric tonne (g/t) for gold and silver grades and tonnes per cubic metres (t/m3) for density. Precious metal grades may also be expressed in parts per billion (ppb) or parts per million (ppm) and their quantities may also be reported in troy ounces (ounces, oz), a common practice in the mining industry. All currency amounts are stated either in US dollars (US$) or Euros (EUR).

A glossary of terms and abbreviations are provided in Section 16.0.

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3.0 GENERAL INFORMATION

3.1 KALI-INSTRUKTION AND THE GKZ SYSTEM

All historical exploration of the Ebeleben Project was conducted adhering strictly to the German state procedures manual specific to potash exploration entitled ‘Instruktion zur Anwendung der Klassifikation der Lagerstätten-vorräte fester mineralischer Rohstoffe vom 28. August 1979 auf Kalisalz- und Steinsalzlagerstätten’, commonly referred to as the Kali- Instruktion (directly translated as ‘Potash Instruction’). The Kali-Instruktion was issued in German in the former GDR and it is based on the established system developed and administered by the Russian State Commission for Mineral Reserves (Gosudarstvennaya Komissia po Zapasam - GKZ). The first Kali-Instruktion issued on the classification of reserves regarding potash and rock-salt deposits (Stammberger 1956) was released in 1957 with revision in 1960 by Ulbrich containing detailed information about the sampling and analytical procedures used as guidance by the former GDR State Geological Survey for potash- bearing salt rocks. The latest revision was issued on 17th November 1981.

The Kali-Instruktion applied strict control over the estimation and reporting of mineral reserves and utilised a prescribed protocol for their calculation that was usually based upon standard sectional methods. Preliminary mineral reserve estimates, as completed by the licence holder, were submitted to the GDR State Geological Survey for approval. These included the justification of the cut-off grade criteria which were used to generate the mineral reserves.

In many respects the system is similar to western classification systems, essentially measuring the level of confidence in quantity and quality information that is used to define the mineral resources or reserves. One of the systems commonly adhered to in Western countries is the JORC Code (the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia), which was released in 1989 and last updated in 2012.

In Micon’s experience, the level of detail required to support a submission of mineral reserves to the GKZ or the State Geological Survey is more systematic and comprehensive than is required under the JORC Code in almost all respects. The data submitted for approval are subject to rigorous review, including consideration of the geological complexity of the deposit, the distribution and complexity of the ore mineralogy, the degree of knowledge obtained from exploration activities such as the density of drilling, the extent of any underground development, the computation of resource estimates, cut-off grades, as well as numerous other economic, technological, mining and metallurgical characteristics. The State Geological Survey or the GKZ analyses the approach undertaken for calculations as well as mineral resources and cut-off grade estimates.

The JORC Code and the Kali-Instruktion/GKZ reserve reporting systems share a very important fundamental principle, which is that the economic viability of a reserve base must be demonstrated. For this reason, both systems utilise a similar set of geological, economic and technical factors within a sequential classification scheme which reflects the increasing degree of knowledge and confidence in the integrity of the reserves. Figure 3.1 illustrates Micon’s understanding of the correlation between the JORC Code and the GKZ systems.

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Figure 3.1: Comparison of GKZ and JORC Code Resource/Reserve Classification

Using the Kali-Instruktion/GKZ system, mineral resources and reserves are recognised as either prognosticated resources, which include those resources that are of an inferred, potential or speculative nature, or mineral reserves, which can be effectively subdivided into those that demonstrate economic significance (balance mineral reserves) and those with only potential economic significance (off-balance mineral reserves).

Balance mineral reserves comprise that part of the mineralisation that has been demonstrated to a sufficient level of confidence to contain a metal or commodity whose economic viability has been approved by the Kali-Instruktion/GKZ. They may not however, include adjustment for technical and economic matters such as mining dilution and losses.

The JORC (2012) classification term "mineral resources" approximately corresponds to the term "geological reserves" from the German Kali-Instruktion and Russian GKZ systems. The JORC (2012) term "ore reserves" approximately corresponds to the term "exploitation reserves" from the German Kali-Instruktion and Russian GKZ systems.

The Kali-Instruktion/GKZ categories for balance mineral reserves (A, B, C1 and C2) can be correlated by definition with mineral resources as defined under the JORC Code. Categories A and B are generally reported as Measured resources, whilst category C1 generally constitutes Indicated mineral resources, with C2 category as Inferred mineral resources. Under the Kali- Instruktion/GKZ systems, C2 category mineral reserves can be included in mine-planning

Mühlhausen-Nohra Project, January 2019 6 Davenport Resources Ltd studies, but it should be noted that under the terms and conditions of reporting public documents to Western standards, Inferred mineral resources cannot be included as ‘ore reserves’ or used for formal valuation purposes.

By contrast, the classification of prognosticated resources (P1, P2, and P3) refers to mineral resources that range from Inferred mineral resources, to potential and speculative resources. These are not generally recognised as quantifiable in Western terms and can only be regarded as indicators of the mineral potential of an area or region. Such resources may be subsequently upgraded to recognised categories of reserves and resources by successful exploration work, or excluded if the work is unsuccessful.

3.2 MICON APPROACH TO RESOURCE/RESERVE CLASSIFICATION

The classification of the mineral resources contained within this Report has been completed in accordance with the guidelines of the JORC Code (2012). Similar to the system followed by the Kali-Instruktion/GKZ, the JORC Code relies upon an increased level of geological knowledge and the application of mining and other modifying factors to elevate those categories of resources to reserves as summarised in Figure 3.2.

Figure 3.2: Exploration Results, Mineral Resources and Ore Reserves as Defined by the JORC Code

The JORC Code is similar in most respects to those systems adopted in North America and in Europe, in particular the system of resource definition established by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) and recognised under the guidelines of Canadian National Instrument (NI) 43-101.

3.2.1 Mineral Resources

The relevant sections of the JORC Code are provided for reference as follows:

• An ‘Exploration Target’ is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted

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as a range of tonnes and a range of grade (or quality), related to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.

• A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. • An ‘Inferred mineral resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify, geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. An Inferred mineral resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to Ore Reserves. It is reasonably expected that the majority of Inferred mineral resources could be upgraded to Indicated Mineral Resources with continued exploration. • An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are gathered. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Ore Reserve. • A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape and physical characteristics, are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered. A Measured Mineral Resource has a higher level of confidence than that applying to an Indicated or an Inferred mineral resource. It may be converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve.

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4.0 PROPERTY DESCRIPTION AND LOCATION

4.1 PROPERTY DESCRIPTION

The Mühlhausen-Nohra mining licence is located in the German Federal State of Thuringia located within the large-scale potash field known as Südharz, an area, which has been subjected to multiple legal divisions, each of which is informally described as its own mining ‘field’. Whilst not adjoining, the Mühlhausen-Nohra and Ebeleben (also owned by Davenport) mining fields are considered as neighbouring as they are separated by an approximate 10 km gap in an area where the now defunct Volkenroda potash mine is located.

In addition to the Mühlhausen-Nohra mining licence, Davenport has also been awarded the Ebeleben and Ohmgebirge mining licences, together with the adjoining Küllstedt and Gräfentonna exploration licences, all of which form the greater South Harz Potash Project located in the north of Thuringia (Figure 4.1) in the central/north-western section of the Thuringian Basin. The Mühlhausen-Nohra mining licence has an area of 141.6049 km2 and has never been mined. The primary target is the Staßfurt potash seam of the potash-bearing Zechstein Group (Upper Permian – Zechstein). The adjacent Volkenroda, Sollstedt, Bleicherode and Kemstedt mining fields (Figure 4.2) have been historically mined since 1896 for the production of potash fertilisers and are currently being used as underground waste storage facilities.

Due to the extent, shape and geological characteristics of the Mühlhausen-Nohra mining licence, Micon has logically split it into two distinct sub-areas, each of which were separately interpreted and modelled – a northerly Nohra-Elende sub-area and a southerly Mühlhausen- Keula sub-area. This technical report presents the results of the mineral resource estimate for the northern Nohra-Elende sub-area (the Project) of the Mühlhausen-Nohra mining licence area only. The results of the modelling exercises resulted in a combined total Inferred mineral resource of 2,822.2 Mt at a grade of 10.24% K2O. The results of the mineral resource estimates for Nohra-Elende and Mühlhausen-Keula were released on 13th November 2018 and 16th October 2018 respectively and can be found on the Davenport website www.davenportresources.com.au. During the Nohra-Elende modelling a portion of the sub- area was excluded as an Inferred mineral resource and was classified as an Exploration Target. This report includes the results of the Nohra-Elende Exploration Target only.

4.2 PROPERTY LOCATION

The Nohra-Elende sub-area (Figure 4.3) represents the northern half of the Mühlhausen-Nohra mining licence, which is located in the northwest of the Federal State of Thuringia in central Germany, approximately 50 km northwest of Erfurt, the largest city and state capital of Thuringia (Figure 4.1). The Mühlhausen-Nohra mining licence is centred approximately on 51°21’15” N and 10°31’30” E. More specifically the Project straddles each of the Eichsfeld, Nordhausen, Unstrut-Hainich and Kyffhäuserkreis Districts of the Thuringia. Each of the capital towns of these districts flank the Project area and are located approximately 20 km from the licence centre point.

4.3 LICENCES

Davenport is the current owner of the Ebeleben, Mühlhausen-Nohra and Ohmgebirge mining licences in addition to the neighbouring Gräfentonna and Küllstedt exploration licences (Figure

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4.2). This technical report presents the results of the mineral resource estimate for the northern Nohra-Elende sub-area of the Mühlhausen-Nohra mining licence area only, excluding the Mühlhausen-Keula and Ohmgebirge mining licences as well as both the Gräfentonna and Küllstedt exploration licences.

Figure 4.1: Regional Location Map of the South Harz Potash Project

South Harz Potash Project

(Source: Nations Online)

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Figure 4.2: Location Map of the Davenport Mining and Exploration Licence Areas

Source: Davenport

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Figure 4.3: Nohra-Elende and Mühlhausen-Keula Sub-Areas of the Mühlhausen-Nohra Mining Licence

The Mühlhausen-Nohra mining licence was acquired by Davenport through an open tender advertised by Bodenverwertungs- und verwaltungs GmbH (BVVG) and was successfully awarded to its 100% owned locally registered subsidiary, East Exploration GmBH.

Davenport appointed CMS Hasche Sigle Partnerschaft von Rechtsanwälten und Steuerberatern mbB (CMS) to conduct a detailed legal due diligence during the acquisition of the Ebeleben mining property, the findings of which are summarised in Section 4.3.1.

4.3.1 Mining Rights

Preceding the delineation and issuance of the Mühlhausen-Nohra mining licence, the earlier original and larger Südharz mining property had been demarcated prior to unification. This Südharz mining property was internally sub-divided into separate ‘mining fields’, including the likes of Mühlhausen-Nohra and Ebeleben.

Due to the Südharz mining property having been issued pre-unification, it is today classified as an ‘old mining property’ pursuant to Sec. 151 BBergG from which the Mühlhausen-Nohra mining property was subsequently derived. As such, and in turn, the Mühlhausen-Nohra has been classified as an ‘old mining property’, which was derived from the former East German system.

This is an important legal consideration as exploration and mining properties issued in accordance with the current-day German Federal Mining Act (Bundesberggesetz – BbergG) are limited in time and are subject to royalty payments. In addition, the applicant and holder are required to submit a work programme, any deviation from which can result in the rescission

Mühlhausen-Nohra Project, January 2019 12 Davenport Resources Ltd of a mining right. In contrast to this, ‘old mining properties’ that were granted during the former East Germany, and which have been confirmed by the relevant authority post the reunification of Germany, are unlimited in time and are not subject to any royalty payments with no supporting work programme required.

As such the Mühlhausen-Nohra mining field licence is perpetual in nature, not subject to expiry and is valid to explore for and produce ‘potash, including (associated) brine’ with no applicable statutory royalties. The Mühlhausen-Nohra Mining Licence Deed No. is 1077/95-611 and has an area of 141.6049 km2.

The purchase agreement between BVVG and East Exploration GmBH was signed and notarised on 15th August 2017. The transfer of the mining property was approved by the Thuringian mining authority pursuant to Sec. 23 para. 2 sentence 3 BBergG on 18th October 2017.

Following approval of the transfer of the mining properties by the Thuringian mining authority from BVVG to East Exploration GmBH, a staggered instalment payment system was agreed upon. The final instalment payment was due on 9th May 2018. Following this payment East Exploration GmBH were officially registered as the new owner of the Mühlhausen-Nohra property in the public mining property registry, and the transfer of ownership was completed. A summary of the details of the Mühlhausen-Nohra mining licence is presented in Table 4.1.

Table 4.1: Mühlhausen-Nohra Mining Licence

Licence Area Type Deed No.* Commodity Validity Current Owner Name (km²) Mining Mühlhausen- Potash including East Exploration (Old Mining 1077/95-611 Perpetuity 141.6049 Nohra (associated) brine GmBH ** Property) Notes: * Berechtsamsurkunde No. - a mining legal document presented in the award of a mining property. ** East Exploration GmBH is 100% owned by Davenport Resources Ltd.

4.3.2 Surface Rights

Davenport do not own any of the surface rights across the Mühlhausen-Nohra mining licence.

4.4 ROYALTIES

All exploration and mining properties issued in accordance with the current German Federal Mining Act (Bundesberggesetz – BbergG) are subject to royalty payments. However, because the Mühlhausen-Nohra mining licence was granted during the former East Germany and has been categorised as ‘old mining property’, it is not subject to any royalty payments.

4.5 ENVIRONMENTAL LIABILITIES, LEGISLATIVE AND PERMITTING REQUIREMENTS

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In addition, environmental and water permits may also be required as well other permits, such as deep drilling operations which require approval of the Federal Office for the Safety of Nuclear Waste Management (BfE) that is responsible for preserving geological formations that are potentially suitable for the storage of nuclear waste. All permits can only be granted if the relevant statutory prerequisites have been met. Thus, holding a mining right does not necessarily mean that the mineral resources can actually be explored or produced until such time as the other supporting environmental permits have been granted.

4.6 MATERIAL AGREEMENTS

Micon is unaware of any other material agreements pertaining to the Mühlhausen-Nohra mining licence.

4.7 OTHER SIGNIFICANT FACTORS AND RISKS

Micon is unaware of any other significant factors or risks associated with the Ebeleben mining field.

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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY

5.1 PROPERTY ACCESS

Access to the Mühlhausen-Nohra mining licence is primarily via road. The Federal Autobahn (A) A38 acts as the main access highway from both Berlin and Frankfurt and bisects the northerly Nohra-Elende sub-area of the mining licences. Several nationally maintained Bundesstraße (B) roads leading off the A38 traverse the area (B247), including numerous State maintained Landesstraße (L) roads and country roads branching therefrom. Beyond these roads, four-wheel drive vehicles can be used to access farm or country tracks.

The nearest tarred airport to the Project, which can accommodate charter planes is the Obermehler-Schlotheim Airfield located adjacent to the town of the Schlotheim directly between the Mühlhausen-Nohra and Ebeleben mining licences. The capital city of Germany, Berlin, is located to the northeast (approximately 285 km) and the city of Frankfurt to the southwest (approximately 245 km). Both the Berlin Tegel Airport (IATA: TXL) and the Frankfurt Airport (IATA: FRA) are well serviced by frequent daily domestic and multiple direct international flights across Europe and worldwide.

5.2 CLIMATE

The climate of Germany as a whole is classified as largely temperate to oceanic with generally cold, cloudy and wet winters and warm wet summers with no consistent dry season. This is due to Germany being situated between the oceanic climate of Western Europe and the continental climate of Eastern Europe with the climate largely moderated by the North Atlantic Drift, the northern extension of the Gulf Stream.

The Mühlhausen-Nohra mining licence is located within the Central Uplands, which has a transitional climate that fluctuates between moderately oceanic and humid continental. Winters are relatively cold with average highs of 2ºC and lows of -3ºC. Summers tend to be warm, and at times humid, with average highs of 23ºC, although maximums can exceed 30ºC. Precipitation averages 502 mm per annum, which falls throughout the year.

The climatic conditions are such that no specific operating season would be applicable and any exploration or mining activities could be undertaken throughout the year. Micon does not consider the climatic conditions to be a risk to the Project.

5.3 LOCAL RESOURCES AND INFRASTRUCTURE

Thuringia is the sixth smallest state in Germany and the fifth smallest by population which is supported by a modern and well-maintained infrastructure. As the most central state in Germany, Thuringia is an important hub for road, rail and communication traffic with extensive investment and upgrades in this infrastructure ensuring that it is modern and well maintained.

Mühlhausen-Nohra Project, January 2019 15 Davenport Resources Ltd modern towns with a developed infrastructure that includes shopping centres, hospitals and clinics, schools and banking.

Thuringia State has a population density of 130 people per km2 with numerous towns and villages located both within or adjacent to the mining field. Each of the district capital towns of Heilbad Heiligenstadt (Eichsfeld district), Nordhausen (Nordhausen district) Mühlhausen (Unstrut-Hainich district) and Sondershausen (Kyffhäuserkreis district) are less than 20 km from the Ebeleben project area. The populations of these district capitals are: Heilbad Heiligenstadt 17,000; Nordhausen 42,000; Mühlhausen 33,000 and Sondershausen 22,000. Erfurt the largest city and state capital of Thuringia has a population of 206,000 and is 30 km southeast of the Ebeleben project. All basic services can be sourced from these towns.

5.4 PHYSIOGRAPHY

Generally, the physiography of Germany can be sub-divided into three distinct topographical regions:

• Low-lying featureless and flat northern region, which forms a part of the North European Plain; • Central elevated hilly region which is at times rugged that is informally referred to as the Central Uplands; and, • High mountainous southern region which is characterised by mountain ranges such as the Swabian Jura, Franconian Jura, Alps and the Black Forest.

The Mühlhausen-Nohra mining licence is located within the Central Uplands between the North European Plain and the mountainous southern region. The topography in the area is characterised by gently undulating hills, which are often forested and interspersed by narrow slow-flowing rivers and streams.

5.5 FLORA AND FAUNA

The original natural vegetation of the Mühlhausen-Nohra mining licence, and the Thuringia state as a whole, was beech and spruce forests. However due to centuries of intensive settlement most of the area has been shaped by human influence. Protected natural tracts of these forests do still exist, as can be found across the Hainich forested hill chain and the Dün Ridge across the Project area and these form part of the greater Eichsfeld-Hainich-Werratal Nature Park. Some of these protected areas have been granted national park status to ensure the protection of the unique beech forest fauna and flora communities synonymous with the area. This includes populations of ash trees, hornbeams, maples, lindens, and occasional checker trees which, amongst other species, support populations of wild cats, 15 species of bats and seven species of woodpecker.

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6.0 REGIONAL GEOLOGY

6.1 DEPOSIT TYPES

The deposits within the Ebeleben mining licence area are formally classified as evaporites within the South Harz Potash District which is part of the Upper Permian Zechstein Group.

The deposits of the Zechstein Group were formed within the Zechstein Sea, a partly barred large basin with relict sea characteristics. The barriers were totally breached on at least four occasions allowing mass influxes of oceanic water followed by regression and prolonged sequential desiccation. Initially the deposits at the base of each sequence were limestones, now dolomitised, marls and shales all of supratidal to relatively deep-water origins. These grade vertically and laterally into sulphate and chloride beds. Evaporite sub-cycles show a gradual vertical change from the least soluble calcium salts at the base (calcite, gypsum and anhydrite) followed by halite and polyhalite and lastly potassium and magnesium salts at the top (sylvite, carnallite, kainite and kieserite).

The Zechstein Group consists of seven depositional cycles with the potash mineralisation of the South Harz Potash District hosted within the second cycle, the Staßfurt Formation, specifically the Kaliflöz Staßfurt lithostratigraphic horizon (z2KSt). Locally, potash mineralisation also occurs within the salt rocks of the Staßfurt-Steinsalz horizon (z2NA). Remnants of potassium salts are also present in the salt rocks of the lithostratigraphic Decksteinsalz (z2NAr) horizon. No commercially mineable concentrations within the salt rocks of the Staßfurt-Steinsalz unit (z2NA) have been identified yet.

The main potash minerals present in the deposits are carnallite and sylvite; chemical analyses performed on samples confirm the occurrence of polyhalite and subordinate kieserite, langbeinite, glaserite and anhydrite. The sylvite is of secondary origin, which leads to the assumption that the primary carnallite was influenced by brines. A primary origin is assumed for carnallite and polyhalite.

The majority of the potash deposits have been altered by intruding water or basalt causing plastic deformation resulting in the potash horizons being forced upwards into the overlying strata. Extensive faulting and water intrusion have caused alteration or dissolving of the deposited potash, therefore strata within the Zechstein Group are highly variable.

6.2 REGIONAL GEOLOGY AND STRUCTURAL SETTING

The Südharz (South Harz) Potash District is located in the north-western extent of the Thuringian sedimentary basin, which has been separated by the uplift of the northerly Harz Mountains from the South Permian Basin (SPB). The South Permian Basin comprises an area from England to Eastern Poland with flanking areas within Denmark and the South Baltic Sea in the north and the upland regions of Belgium and Germany to the south.

The regional stratigraphy of the South Permian Basin is well understood with a pre-Variscan basement (Upper Carboniferous and older rocks) and a transition horizon of Upper Carboniferous to Lower Permian lying beneath an expansive sequence of evaporite rocks of the Upper Permian succession. These evaporite deposits are assigned to the Zechstein Group, and host the target potash mineralisation of the South Harz Potash District, which occurs on both the Mühlhausen-Nohra and Ebeleben mining licences. In the hanging wall of

Mühlhausen-Nohra Project, January 2019 17 Davenport Resources Ltd the evaporite rocks of Upper Permian age, the rocks of the German Triassic Supergroup follow, consisting of sandstones, siltstones, clays and carbonate rocks and along with subordinate amounts of evaporite rocks. The potash-bearing target Zechstein Group consists of seven depositional cycles with the potash mineralisation of the South Harz Potash District hosted within the second cycle, the Staßfurt Formation.

The majority of the potash deposits have been altered by intruding water or basalt causing plastic deformation resulting in the potash horizons being forced upwards into the overlying strata. Extensive faulting and water intrusion have caused alteration or dissolving of the deposited potash, therefore strata within the Zechstein Group are highly variable.

Generally, the deposit bedding is assumed to be undulating with an even dip over large distances. Local differences may occur in areas influenced by tectonic structures.

6.3 LOCAL GEOLOGY

Potash mineralisation is present within the Staßfurt-Steinsalz and Kaliflöz Staßfurt evaporite horizons within the Staßfurt Formation. In the South Harz Potash District commercially mineable concentrations of potassium salts occur normally within the Kaliflöz Staßfurt lithostratigraphic horizon. Rock-salt “barren” zones above the sylvinite are a common feature of the Kaliflöz Staßfurt potash-bearing horizon (Table 6.1).

In the South Harz Potash District polysulphatic sylvinite was encountered in the western and southern boundary areas of the deposit, e.g. in the Volkenroda and Bischofferode mines and also in the Küllstedt exploration licence area. Otherwise, almost only mono-sulphatic ‘anhydritic sylvinite’ occurs, which surrounds the large barren zones of the Potash District.

The Zechstein Group has been split into four main economic series that occur within the Ebeleben mining licence, in stratigraphic order they are as follows:

• Z4 Aller Formation; • Z3 Leine Formation; • Z2 Staßfurt Formation; and, • Z1 Werra Formation.

Pure sylvinite with some Carnallitite is only found in the upper Z3 and Z4 potash beds across parts of England (e.g. Boulby Mine), northern Germany and the Netherlands. Some localised pure sylvinite, but mostly mixed sulphate and potash salts, also known as hartsalz are found in the Z1 and Z2 potash beds of central Germany, parts of northern Germany and Poland. The Ebeleben mining licence is located in an area where the Z2 potash beds have been historically economically mined. The target potash bed is locally known as the Kaliflöz Staßfurt horizon (z2KSt), where Kali is the local German term for Potash.

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Table 6.1: Zechstein Series Geology (after Ercosplan, Jan 2018)

Thickness Formation Horizon Rock Types (m) Ohre-bis Fulda- 0.0 to 13.0 "Obere Zechsteinletten" (z4Tb-z7) Siltstones and claystones with minor anhydrite and carbonates. Formation 0.3 to 14.0 Oberer Aller-Anhydrit (z4ANb) White to flesh red anhydrite partly converted to gypsum.

9.0 to 21.4 Aller-Steinsalz unit (z4NA) Colourless to milky halite with subordinately occurring anhydrite. Aller Formation (Z4) Light grey anhydrite with halite intergrowth in the subrosion-free areas, and 0.0 to 2.4 Unterer Aller-Anhydrit (z4ANa) light grey to white anhydrite in areas influenced by subrosion.

Unterer Aller-Ton (z4Ta) red coloured salt clays. 0.0 to 9.5 “Roter Salzton” Oberer Leine-Ton (z3Tb) red coloured salt clays. 34.2 to 71.0 Leine-Steinsalz (z3NA) Halite, anhydrite and subordinate clay.

Leine 23.0 to 51.0 Leine-Anhydrit (z3AN) Blue-grey anhydrite rocks with subordinate limestone and clay inclusions. Formation (Z3) 0.0 to 6.0 Leine-Karbonat (z3CA) Dolomite. Unterer Leine-Ton unit (z3Ta) - Grey sediments with clay content increasing up the unit and evaporite content decreasing. 5.5 to 20.5 “Grauer Salzton” (z2Tb-z3Ta) Oberer Staßfurt-Ton unit (z2Tb) - Grey sediments with clay content increasing up the unit and evaporite content decreasing. Anhydrite rocks extensively altered by leaching processes, containing relict 0.0 to 4.5 Deckanhydrit (z2ANb) potash minerals and structures. Halite and anhydrite rocks altered by leaching processes, containing relict 0.0 to 4.1 Decksteinsalz (z2NAr) potash minerals and structures.

Hanging Wall Group - Horizons 11 to 19 finely layered potassium salts. 1.4 to 39.5 Kaliflöz Staßfurt (z2KSt) Footwall Group - Horizons 1 to 10 coarsely layered potassium salts and thick halite layers.

Staßfurt Oberes Südharzsteinsalz - Grey or yellow-red halite and anhydrite, locally Formation (Z2) contains polyhalite, kieserite, sylvite and carnallite in the form of nests or as fissure fillings.

6.0 to 111.3 Staßfurt-Steinsalz (z2NA) Unteres Südharzsteinsalz - Grey or yellow-red halite and anhydrite, locally contains polyhalite, kieserite, sylvite and carnallite in the form of nests or as fissure fillings. Anhydritisches Steinsalz - Rock-salt. Kieseritic horizon in the Sondershausen and Bleicherode areas. Blue-grey to dark grey anhydrite rocks with a low percentage of carbonate Unterer Staßfurt-Anhydrit 0.7 to 28.5 and inclusions of halite in its upper portions. Also known as Staßfurt- (z2ANa) Basananhydrit. Light grey-brown dolomite with subordinate layers of anhydrite, also 24.5 to 52.5 Staßfurt-Karbonat (z2CA) hydrocarbon bearing. 2.1 to 172.5 Oberer Werra-Anhydrit (z1ANc) Anhydrite rocks. 0.0 to 0.0 Werra-Steinsalz (z1NA) Salt rocks. 0.0 to 0.0 Unterer Werra-Anhydrit (z1ANa) Anhydrite rocks. Werra- 2.0 to 2.0 Werra-Karbonat (z1CA) Limestones. Formation (Z1) Unterer Werra-Ton 0.0 to 0.0 Dark grey heavy metal-bearing clays. (Kupferschiefer) (z1T)

0.0 to 0.0 Zechsteinkonglomerate (z1C) Grey carbonate cemented conglomeratic sandstones.

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Within the potash-bearing Staßfurt-Steinsalz and Kaliflöz Staßfurt evaporite horizons at Ebeleben different evaporite minerals occur, changing in their abundance both horizontally as well as vertically. The fine rock-salt and clay layers usually remain constant. The potash-bearing layer is developed over the entire Ebeleben mining licence area (Figure 6.1).

The potash-bearing horizon is developed over the entire Nohra-Elende sub-area, which is relatively flat lying with localised undulations. Regional folding is known, whilst locally it displays varying thicknesses and K2O grades. The bedding shows in general wide alternating syn- and anticlines with, especially within the saliferous horizons. Faults and folds as well as local thinning and thickening of the potash bearing horizon are observed within the Nohra- Elende sub-area but not in the area that is the main focus of this report.

Figure 6.1: Geological Map of the Mühlhausen-Nohra Mining Licence Area

Source: Davenport

6.4 MINERALISATION

Within the Kaliflöz Staßfurt horizon (z2KSt) the original potash-bearing salt rocks were relatively evenly deposited as kieseritic carnallitite with the original mineralisation consisting of carnallite (55% - 60%), halite (25% - 30%) and kieserite (10% -14%). Soon after the deposition of the Carnallite mineral conversion processes started taking place due to the high solubility and reactivity of the salt minerals as the units underwent diagenesis in different chemical environments. Ascending brines were able to flow through the still relatively porous and uncompacted evaporites and as these brines were usually undersaturated in potassium salts they removed their components in the order of decreasing solubility, accompanied by the generation of new minerals in the affected areas. Carnallite was converted to sylvite via the

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removal of magnesium chloride (MgCl2). Dissolution of sylvite, the main potassium salt in sylvinite, produced barren rocks. Kieserite has a relatively low solubility and was converted to alkaline-bearing sulphates (Mg, Ca, K and Na).

The movement of these brines therefore has led to significant restructuring of the original evaporite rocks via dissolution and recrystallisation resulting in different thicknesses of potash minerals spatially with depth and laterally. The process of dissolving soluble rocks underground via undersaturated solutions with the removal of the dissolved material and the insoluble parts of these rocks being left behind is called subrosion.

The evaporite rock types occurring within the Staßfurt-Steinsalz and Kaliflöz Staßfurt evaporite horizons of the Nohra-Elende sub-area area are detailed in Table 6.2 along with the associated mineral components.

Table 6.2: Evaporite Rock Types within the Ebeleben Licence Area

Ore Type Description Minerals Formula Comments Primary potassium- Carnallite KMgCl ∙6(H O) 3 2 bearing mineral Halite NaCl - Most abundant ore type within the potash Kieserite MgSO4·H2O - target horizon. Carnallitite Anhydrite CaSO4 Subordinate Contains the lowest Clays Various Rarely occurring mineralogical

variability. Boracite Mg3B7O13Cl Rarely occurring

Goethite Fe3+O(OH) Finely dispersed as red

Haematite Fe2O3 colour pigments Halite NaCl Primary mineral Primary potassium- Sylvite KCl Sylvinite deposits are bearing mineral usually spatially Polyhalite K2Ca2Mg(SO4)4·2H2O - linked to barren zones Langbeinite K Mg (SO ) - where it is arranged 2 2 4 3 between these zones Kainite KMg(SO4)Cl·3H2O - Sylvinite and the carnallitite Kieserite MgSO4·H20 - zones. Generally, there is a high to very Anhydrite CaSO4 -

high variability in the → In order increasingof occurrence → Clays Various - mineralogy of the Glaserite K Na(SO ) sylvinite. 3 4 2 Occur together as Boracite Mg3B7O13Cl irregular admixtures in small concentrations Pyrite FeS2 Barren Zones Halite NaCl Primary mineral occurring within, Often the only Rock-Salt Anhydrite CaSO4 above or below the accompanying mineral

sylvinite Polyhalite K2Ca2Mg(SO4)4·2H2O Local occurrences only

The mineralised horizon of the Nohra-Elende sub-area hosts three distinct seams, which, from a modelling perspective, have been named according to their stratigraphic position: Upper Sylvinite, Carnallitite and Lower Sylvinite.

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6.5 ECONOMIC MINERALS

The cut-off grade for potash deposits is variable depending on the mineralisation and the MgCl2 content contained within the carnallitite. High-grade potash minerals include sylvite and carnallite. These deposits produce a concentrate referred to as Muriate of Potash (MOP) and often generate halite as a by-product. The halite can be sold for salting roads or made into a paste and used as backfill. A typical potash project will, at best, breakeven on selling the halite as a by-product.

High-grade sulphate minerals include kieserite, kainite and polyhalite. Sulphate-rich deposits produce a concentrate referred to as Sulphate of Potash (SOP). SOP and MOP must be reported separately in resource estimates.

Insoluble material (‘insols’) is also associated with potash deposits, which include anhydrite, clay and dolomite. This material downgrades potash deposits and can render processing to be complicated. As such, it is important to understand the amount and composition of the insoluble material. A typical potash resource statement will report percentages of the following, where K2O represents the deposit grade:

• K2O; • K; • Mg; • Na;

• SO4; and, • Insols.

The resource statement will show grade, tonnage and tonnage of potash.

6.5.1 Sylvinite – ‘Hartsalz’

From the Mühlhausen-Nohra mining licences the potash-bearing evaporite target horizon has historically been termed “hartsalz”, a common miner’s term for the locally occurring potash- bearing evaporite rocks. This is due to the primary ore horizon containing sylvite along with other potash sulphate minerals such as langbeinite, kainite, arcantite, and non-potash minerals such as kieserite. These minerals render the ore to be much “harder” than ‘conventional’ sylvinite. The hartsalz also demonstrates a highly variable mineralogy.

Generally, the mineralogy of sylvinite is highly variable and as such the ‘hartsalz’ is not truly “sylvinite” rock as per its definition of being composed of the minerals sylvite and halite. The main mineral of the ‘hartsalz’ is halite (NaCl) with sylvite (KCl), the main potassium bearing mineral. In addition, anhydrite (CaSO4), kieserite (MgSO4·H2O), glaserite (K3Na(SO4)2), polyhalite (K2SO4·MgSO4·2CaSO4·H2O) and clays mineral along with minor boracite (Mg3B7O13Cl) and pyrite (FeS2) may be present. In the South Harz Potash District, the sylvinite mainly occurs as monosulphatic “anhydritic sylvinite” and these deposits surround large barren zones of the Potash District.

Where both potash-bearing rock types are present at the Project, the ‘hartsalz’ sylvinite typically occurs at the top and or/base of the carnallitite. The ‘hartsalz’ above the carnallitite

Mühlhausen-Nohra Project, January 2019 22 Davenport Resources Ltd is distributed over almost the entire Nohra-Elende sub-area with the exception of two halite zones, whilst the ‘hartsalz’ below the carnallitite occurs only in four drill holes in the very north of the project area.

6.5.2 Carnallitite

This is the most abundant economic rock type in the South Harz Potash District consisting mainly of carnallite the main potassium mineral, accompanied by halite and kieserite with subordinate anhydrite and rarely clay and boracite. Iron-bearing minerals (haematite) and occasionally goethite appear finely dispersed as red colour pigments. Carnallitite occurs most often in terms of area, compared to other evaporite rocks in the potash-bearing horizons, with the comparably lowest mineralogical variability of all the evaporite rocks. Carnallitite has a lower percentage of K2O compared to sylvinite. Carnallitite is very brittle and weak and as a result, all underground shafts into carnallite areas must be backfilled, as subsidence is an important issue.

In the Nohra-Elende sub-area carnallite is the dominant mineral and occurs across most of the Project area apart from two zones one to the north east and one to the south west, where the main mineral is halite. There is often elevated kieserite associated with carnallite, which drops off in content towards the base of the carnallite layer. Kieserite is especially high in drill hole Kal Pstl 001/1960.

6.5.3 Rock-Salt

Rock-salt is composed mainly of halite, often only accompanied by anhydrite as well as with polyhalite and kieserite occurring locally in the Bischofferode mine. Zones of rock-salt are also referred to as barren zones. These zones comprise partly the complete profile of the potash-bearing horizon, but can also only affect parts of it, either below, within or above the potash-bearing horizon in varying combinations. Barren zones above the potash-bearing horizon are a common feature of the Kaliflöz Staßfurt horizon.

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7.0 HISTORICAL EXPLORATION

7.1 HISTORY OF THE SOUTH HARZ POTASH DISTRICT

Potash mining in the South Harz Potash District commenced with the sinking of the first exploration drill hole in 1888 near the town of Kehmstedt in the north of Thuringia. Results from this drill hole proved the existence of potash-bearing salt rocks in the south of the Harz Mountains, resulting in extensive exploration for potash commencing across the region. This exploration was initiated by the Prussian State and private investors. The early exploration campaign culminated in the development of multiple small and medium-sized potash mines (Table 7.1).

Table 7.1 Historically Significant South Harz Potash District Mines

Total Operating Date of Current Mine Name Production Comment Date Decommissioning Owner (Mt) Since 2004 production of rock salt Sondershausen 1896 to 1991 31st December 1991 110 GSES for de-icing salt (~200kt) Bischofferode 1911 to 1993 31st December 1993 114 LMBV - Sollstedt 1905 to 1991 31st December 1991 85 NDH-E - Bleicherode 1902 to 1990 31st December 1991 86 NDH-E - Since 2007 utilisation of mine gas for Volkenroda 1909 to 1991 31st December 1991 55 LMBV generation of electricity

Between 1920 and 1950 several of the existing potash operations had started to flood, which under state resolution were put under the ownership of the remaining operating potash consortia in the South Harz Potash District. Furth consolidation of potash producing sites in the South Harz Potash District resulted in the remaining potash operations being combined into the VEB Kaliwerke Südharz which controlled the remaining six separate producing units as detailed in Table 7.1 above, along with Roßleben, located in the Unstrut Potash District.

During this time the mining law was re-written and the resulting sub-fields (i.e. a defined area with a reasonable prospect for mining) were summarised as BWE Thüringen Nord. Today’s classification of the mine property fields (or BWE) in the South Harz Potash District is based upon this earlier re-organisation, where the mine property fields were created by sub-dividing the former sub-fields.

During operation of the South Harz Potash District mines (Table 7.1), the GDR was one of the top three producing countries in the world, with a steady increase of produced K2O tonnage from 1,336 kt K2O in 1950 to 3,510 kt K2O in 1988. The potash mines in the South Harz Potash District contributed approximately 43% of the GDR production (in 1985) with the extraction of the potash ore mainly carried out by conventional underground mining techniques.

By resolution of the board of directors of the Mitteldeutsche Kali AG, the last active mines and potash processing plants (Table 7.1) were decommissioned in 1991 and 1993. Most of the geological documentation was in-complete at the time of decommissioning, and what was available was handed to the trust company Gesell-schaft zur Verwahrung und Verwertung von Bergwerksbetrieben (GmbH).

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Today potash is produced in the South Harz Potash District only from the BWE Kehmstedt and Kehmstedt-NW-owned Kehmsted operation via solution mining techniques.

7.2 HISTORIC OWNERSHIP

Early exploration was initiated by the Prussian State and private investors with the VEB Kaliwerke Südharz assuming ownership of the five key producing units of the South Harz Potash District (Table 7.1).

In September 1990 the competent authority of the German Democratic Republic (East Germany) granted the Südharz mining property to the state-owned agency of Treuhandanstalt (later renamed Bundesanstalt für vereinigungsbedingte Sonderaufgaben (BvS)) that was responsible for the privatisation of state-owned industry and commercial assets.

Following the reunion of the Federal Republic of Germany (West Germany) and East Germany on 3rd October 1990, doubt was cast over the validity of the Treuhandanstalt owned Südharz mining property. Validity of the mining property was confirmed by the newly appointed Federal Republic of Germany competent mining authority in February 1991, with the Südharz mining property being classified as an ‘old mining property’ pursuant to Sec. 151 BBergG, which remains continuously valid to its original extent.

The original larger all-encompassing Südharz mining property has since been sub-divided into several smaller legal mining licences, mainly between February 1993 and December 1995, resulting in the formation of several smaller ‘mining fields’, amongst which were the Ebeleben and Mühlhausen-Nohra mining licences.

In 2002 BvS transferred all of the newly-formed Südharz mining licences to its subsidiary BVVG whose mandate it was to privatise state-owned agricultural and forestry land as well as mining rights in the territory of the former East Germany.

7.3 SOURCE DATA

During the 1950s and 1960s an internal company standard for processing historical and recent exploration data was established in the mines of the South Harz Potash District. The purpose of the standard was to evaluate several parameters of the deposit, such as its thickness, distribution and structure, which were missing from previous records. Until then the geological documentation was prepared according to different degrees of detail depending on which group of companies the individual mine was affiliated with. By 1964 this framework had been set, and geological documentation was collected and processed according to this newly-established framework during the following years.

After German reunification, the Kali-Umwelttechnik GmbH was established in 1992 as a successor of the Kaliforschungsanstalt that had successfully developed the patents pertaining to potash processing from the end of the Second World War. Its role was to continue the research in the field of potash mining and processing. Since 2008, the Kali-Umwelttechnik GmbH has been known as K-UTEC AG Salt Technologies.

Geological data pertaining to the Mühlhausen-Nohra mining licence is historical. The historical data was supplied to Micon as scans of the original drilling information sourced from BVVG, Ercosplan and K-UTEC, as well an existing Excel database previously compiled by

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Ercosplan from its archived data sources. The scanned data was verified by Mrs. de Klerk at both the BVVG and Ercosplan during the site visit.

In addition to the above, various other sources of information were used by Micon to evaluate Mühlhausen-Nohra, including:

• Structured and informal interviews conducted during the site visit with the management and senior staff of Davenport, BVVG, Ercosplan and K-UTEC; • Reports submitted to Davenport by Ercosplan on the historical data collation and Exploration Target estimation for Mühlhausen-Nohra; • The Ercosplan electronic drill hole database held in Excel, including information on drill hole collar, lithology, stratigraphy, chemical assay results, mineralogy and geophysical results; • Electronic database of historical information including scans and photographs of the Mühlhausen-Nohra original drill hole logs, stratigraphic interpretation, chemical assay results, mineralogy, reserve estimates according to Kali-Instruktion, plan maps; • Cross-sections and downhole geophysical logging results including caliper, natural gamma, gamma-gamma, resistivity and temperature; and, • The original historical drill hole information, where available, including drill hole logs, stratigraphic interpretation, chemical assay results, mineralogy, reserve estimates according to Kali-Instruktion, plan maps, cross-sections and downhole geophysical logging results including caliper, natural gamma, gamma-gamma, resistivity and temperature.

7.4 EXPLORATION

The first recorded evidence of exploration drilling on the Mühlhausen-Nohra mining licence is from drill hole Kal Möhrbach 1/1890, drilling of which commenced in 1889, following the completion of which a further 14 drill holes were drilled during the 1890’s. Following this initial phase of exploration in the Mühlhausen-Nohra mining licence, exploration activities were intermittent up to 1984, targeting two primary commodities:

• Potash, hosted by the potash-bearing salt rocks of the lithostratigraphic unit Kaliflöz Staßfurt (z2KSt); and, • Natural gas and crude oil, hosted by the carbonate rocks of the lithostratigraphic unit Staßfurt-Karbonat (z2CA).

The proximity of the Mühlhausen-Nohra mining licence to the Volkenroda Mine rendered it to be considered a prospective extension to the mine and mine life, and therefore was regarded as a strategic property with respect to the development of the potash industry in the former GDR. As such the majority of the historical exploration drilling on the Mühlhausen-Nohra mining licence was conducted by the GDR, targeting potash during various campaigns, primarily in the 1970s. Various state institutions were involved during these campaigns; institutions which were merged after reunification to form the VEB Kombinant.

All historical exploration was conducted adhering strictly to the German state procedures manual specific to potash exploration entitled ‘Instruktion zur Anwendung der Klassifikation der Lagerstätten-vorräte fester mineralischer Rohstoffe vom 28. August 1979 auf Kalisalz- und

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Steinsalzlagerstätten’, commonly referred to as Kali-Instruktion (directly translated as ‘Potash Instruction’).

The drill hole database considered for the Nohra-Elende sub-area consists of 92 drill holes made up of 4 hydrocarbon exploration drill holes and 88 diamond core potash exploration drill holes (Table 7.2). Not all the drill holes considered for modelling are located exclusively within the licence area. A total of 64 of the 92 Project drill holes are located outside and adjacent to the licence boundary (Figure 4.3), but sufficiently close such that they have been deemed to have a material impact in the geological modelling and mineral resource estimation process. The data from these outlying drill holes has been sourced and purchased by Davenport from K-UTEC.

Table 7.2: Nohra-Elende Sub-Area Drill Hole Database Summary

Downhole Geophysics Hole Location No. Collar Geology Min Chem Gamma- Neutron- Category Calliper Gamma Gamma Gamma Hydrocarbon 0 0 0 0 0 0 0 0 0 Within Potash 28 28 28 19 23 13 15 0 0 Licence Sub-Total 28 28 28 19 23 13 15 0 0 Hydrocarbon 4 4 4 0 3 0 0 0 0 Adjacent to Potash 60 60 30 6 12 0 0 0 0 Licence Sub-Total 64 64 34 6 15 0 0 0 0 Hydrocarbon 4 4 4 0 3 0 0 0 0 Total Potash 88 88 58 25 35 13 15 0 0 TOTAL 92 92 62 25 38 13 15 0 0

The Project database is considered to be incomplete with various drill holes missing various corresponding downhole data sets, as summarised in Table 7.2. This is due to the historical data having been partially sourced with the unsourced data, either considered as being stored at an as yet undetermined location, or having been lost/destroyed. All holes were drilled vertically on the Project. Table 7.3 provides an overview of the holes drilled on the Nohra- Elende sub-area of the Mühlhausen-Nohra mining licence and their mineralised intersections. Acquisition and capture of this missing data remains an ongoing priority task by Davenport. Four drill holes from the Nohra-Elende database fall within the Exploration Target area, and only one (Kal NSo 8/1907) intersected the z2KSt as the other three drill holes were stopped short.

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Table 7.3: Exploration Drill Holes Data within the Nohra-Elende Sub-Area

Average Easting Northing z2KSt EOH Width K2O Hole ID Location (UTM (UTM RL Intersection (m) (m) (m) Grade 32N) 32N) From To (%) E BtrWr 1/1963 Off Licence 602132.00 5694538.00 272.70 534.70 Not intersected E Hzl 3/1970 Off Licence 612262.00 5688494.00 418.80 1094.00 993.00 1011.00 18.00 8.46 E Hzl 4/1970 Off Licence 613201.00 5688890.00 416.20 1117.30 974.00 982.00 8.00 12.25 E Hzl 5/1971 Off Licence 614858.00 5689968.00 406.20 1152.50 983.00 1040.00 57.00 8.72 Kal Aso 1a/1957 Off Licence 604005.00 5697241.00 312.00 700.00 624.45 939.80 4.20 9.48 Kal Bhl 3/1960 Off Licence 602750.00 5698813.00 359.00 764.30 746.60 762.65 8.95 - Kal Blei 001/1893 Off Licence 611526.00 5702281.00 235.00 540.78 No data Kal BtrWr 1961 Off Licence 602960.00 5694187.00 341.30 594.00 520.33 540.30 19.97 - Kal Bwo 3 Off Licence 600810.00 5697180.00 281.86 419.61 Stopped short Kal Ele 01/1894 Off Licence 613062.00 5699233.00 245.00 700.00 596.00 652.50 7.00 10.70 Kal Ele 09/1978 Off Licence 612707.00 5698514.00 260.90 714.15 678.90 691.41 0.45 11.02 Kal Ele 10/1978 Off Licence 611931.00 5698010.00 261.30 643.70 618.10 621.60 2.50 8.69 Kal Ele 11/1977 Licence 614434.00 5701241.00 216.40 496.54 446.87 467.76 7.78 11.41 Kal Ele 12/1977 Licence 615961.00 5700352.00 214.20 588.24 535.55 566.77 31.22 8.60 Kal Ele 13/1978 Licence 613768.00 5698691.00 289.40 745.63 716.87 725.74 8.87 12.84 Kal Ele 14/1977 Licence 614586.00 5699497.00 246.80 665.00 619.25 640.62 21.37 9.98 Kal Ele 15, 5a/1978 Licence 615030.00 5698261.00 302.10 766.73 670.55 751.36 80.81 9.05 Kal Ele 16/1978 Off Licence 613960.00 5697795.00 311.90 786.82 630.30 686.50 56.20 11.19 Kal Ele 17/1978 Licence 613151.00 5697791.00 313.30 785.09 692.85 770.79 77.94 9.54 Kal Ele 18/1978 Off Licence 611127.00 5697137.00 279.50 715.23 No data Kal Ele 19/1978 Licence 615664.00 5699809.00 258.30 664.92 481.45 505.80 24.35 9.48 Kal Fef /019 Off Licence 601433.00 5694905.00 264.00 487.00 Stopped short Kal Frod Off Licence 608842.00 5695021.00 443.00 836.90 No data Kal Gte 001/1961 Off Licence 603672.00 5692037.00 307.40 560.10 528.24 538.43 10.19 - Kal HrdeHl 001/1896 Licence 617573.00 5698037.00 240.00 797.50 621.00 654.35 33.35 11.55 Kal HrdeHl 002 Off Licence 617790.00 5696895.00 270.90 754.00 No data Kal HrdeHl 002/1897 Licence 617533.00 5698035.00 240.00 462.52 Stopped short Kal HrdeHl 003/1897 Licence 617493.00 5698023.00 240.00 463.36 Stopped short Kal HrdeHl 003/1899 Off Licence 618476.00 5697723.00 245.70 730.30 No data Kal HrdeHl 004/1897 Licence 617502.00 5698064.00 240.00 462.31 Stopped short Kal Hyo 2 Off Licence 600607.00 5698629.00 313.33 686.89 No data Kal Hyo 4/1961 Off Licence 600258.00 5699218.00 340.64 728.00 674.30 694.63 0.44 14.35 Kal Hzl 1/1961 Off Licence 610548.00 5688466.00 412.30 1033.80 963.27 983.78 0.53 11.92 Kal Keh 010/1977 Off Licence 614132.00 5702958.00 244.90 465.79 420.00 443.85 12.05 9.53 Kal Keh 011/1977 Licence 615876.00 5702682.00 287.40 535.37 480.65 507.15 26.50 8.38 Kal Keh 113/1988 Off Licence 612925.00 5702879.00 229.50 528.91 No data Kal Keh 114/1989 Off Licence 612942.00 5702868.00 229.50 534.00 No data Kal Keh 1218/1988 Off Licence 614476.00 5703385.00 245.30 457.75 No data Kal Keh 1519/1988 Off Licence 614796.00 5703566.00 280.20 508.87 No data Kal Keh 1718/1986 Off Licence 614849.00 5703818.00 265.10 499.65 No data

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Average Easting Northing z2KSt EOH Width K2O Hole ID Location (UTM (UTM RL Intersection (m) (m) (m) Grade 32N) 32N) From To (%) Kal Keh 2112/1987 Off Licence 614757.00 5704496.00 273.20 435.70 386.51 419.03 7.83 - Kal Keh 2509/1988 Off Licence 614934.00 5704970.00 239.00 374.72 Stopped short Kal Kndr 001/1959 Licence 617133.00 5699714.00 215.78 591.80 515.22 550.20 34.98 9.40 Kal Kwd 001 Off Licence 615700.00 5697590.00 291.80 830.40 No data Kal Kwd 002 Off Licence 615707.00 5697660.00 290.00 536.60 Stopped short Kal Kwd 003 Off Licence 615712.00 5697780.00 285.00 530.50 Stopped short Kal Kwd 004 Off Licence 615719.00 5697851.00 279.70 521.60 Stopped short Kal Lud /008 Off Licence 616368.00 5693735.00 365.00 901.60 No data Kal Lud 003/1905 Off Licence 616285.00 5693312.00 354.00 762.20 No data Kal Lud 007 Off Licence 617529.00 5697144.00 265.20 521.10 Stopped short Kal Lud 010 Off Licence 617402.00 5697329.00 270.80 528.60 Stopped short Kal Lud 011/1909 Off Licence 618389.00 5697625.00 249.90 485.80 Stopped short Kal Mda 4/1984 Off Licence 608233.00 5688437.00 388.60 933.86 866.00 875.71 9.71 18.92 Kal Mlra 001/1899 Licence 616563.00 5698025.00 256.64 680.00 619.25 666.30 47.05 12.63 Kal Moerb 002/1890 Off Licence 617983.00 5700975.00 218.00 310.50 Stopped short Kal Moerb 004/1894 Off Licence 617981.00 5701495.00 218.00 527.00 No data Kal Moerb 005/1894 Off Licence 617982.00 5700995.00 218.00 617.26 Stopped short Kal Moerb 1/1889 Licence 618005.00 5700926.00 230.00 316.05 Stopped short Kal Moerb 3/1890 Licence 618007.00 5700876.00 218.00 316.74 Stopped short Kal Nga 001/1895 Off Licence 610701.00 5697765.00 240.00 740.00 No data Kal Nga 002/1895 Off Licence 610722.00 5697736.00 240.00 480.10 Stopped short Kal Nga 003/1896 Off Licence 610753.00 5697717.00 240.00 479.81 Stopped short Kal NohNo 007/1960 Off Licence 617175.00 5701380.00 240.73 586.00 459.42 475.10 15.68 - Kal NohNo 010/1978 Licence 616651.00 5699606.00 246.40 651.85 507.40 556.25 48.85 14.65 Kal NohNo 011/1978 Licence 616101.00 5698535.00 242.30 815.59 641.23 695.97 54.74 9.32 Kal NohNo 012/1978 Licence 617596.00 5698657.00 249.00 744.75 712.63 719.10 6.47 11.41 Kal NohNo 013/1978 Off Licence 617430.00 5697494.00 263.00 685.00 646.70 665.64 0.32 9.45 Kal NohNo 014/1978 Licence 618801.00 5698291.00 236.20 661.95 582.96 606.80 23.84 9.55 Kal NohNo 015/1978 Off Licence 620231.00 5697662.00 244.50 634.30 Not intersected Kal NohNo 016/1978 Off Licence 619302.00 5697001.00 288.10 816.23 776.40 807.46 0.81 8.24 Kal NohNo 017/1979 Licence 618526.00 5699186.00 213.00 679.90 590.75 654.53 63.78 8.91 Kal NohNo 9/1960 Off Licence 617114.00 5702893.00 283.80 530.80 476.90 493.55 4.80 - Kal NSo 1 Licence 605661.00 5693297.00 328.40 686.70 643.10 664.60 21.50 10.93 Kal NSo 2 Licence 608745.00 5694088.00 428.00 850.00 819.00 830.00 11.00 11.08 Kal NSo 3 Licence 606232.00 5692800.00 366.80 742.82 660.33 701.23 40.90 10.56 Kal NSo 4 Off Licence 613339.00 5693671.00 335.00 684.75 Stopped short Kal NSo 5 Off Licence 613353.00 5693592.00 335.00 685.00 Stopped short Kal NSo 6 Off Licence 611641.00 5692641.00 350.00 661.90 Stopped short

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Average Easting Northing z2KSt EOH Width K2O Hole ID Location (UTM (UTM RL Intersection (m) (m) (m) Grade 32N) 32N) From To (%) Kal NSo 7 Off Licence 605204.00 5693468.00 328.10 460.14 Stopped short Kal NSo 8/1907 Off Licence 611692.00 5692613.00 350.00 856.60 814.98 850.70 35.72 10.22 Kal Oga 002/1902 Off Licence 610336.00 5696156.00 320.07 717.30 No data Kal Probekandidat Off Licence 605373.00 5694956.00 275.20 591.14 No data Kal Pstl 001/1960 Licence 615176.00 5700496.00 216.76 581.30 568.50 579.00 10.50 9.27 Kal Pstl 002/1960 Licence 615683.00 5701859.00 241.00 616.00 526.45 543.10 16.65 7.94 Kal SosNo 001/1903 Off Licence 607943.00 5695972.00 311.00 651.30 No data Kal Vll 1/1961 Off Licence 604761.00 5691417.00 361.01 672.10 608.32 638.43 1.61 9.87 Kal Wipp 1/1955 Licence 614352.00 5702110.00 223.70 574.40 479.15 500.70 21.55 8.28 Kal Wr 10 Off Licence 601999.00 5696488.00 266.50 533.00 No data Kal Wsbn 2/1960 Off Licence 620984.00 5699620.00 207.73 602.00 Not intersected Kal Wsbn 3/1959 Licence 619354.00 5699001.00 214.67 493.80 469.88 470.42 0.54 7.20 Kal Wsbn 4/1960 Off Licence 619597.00 5700305.00 223.29 535.80 Halite noted in lith log Kal Wueg 001/1956 Off Licence 605287.00 5696437.00 253.60 597.40 No data

As discussed, various state institutions were involved in the historical exploration, where during and post-unification, the responsibility of the ownership and curatorship of the historical geological exploration archives became unassigned. This effectively resulted in the archives being neglected over this period of instability, thereby instigating a process of the exploration archives being seized/copied and privately stored by various individuals and newly formed technical institutions of the time.

This has today resulted in the historical data either being stored in duplicate at various localities, being stored in a single known locality, being stored at an unknown locality, or being assumed to be lost/destroyed. The BVVG is considered to have the most complete national archive, with various other depositories hosting duplicates thereof, as well as various additional datasets of which the BVVG does not yet have copies. This has resulted in the current archives stored by BVVG as being partial in extent.

Compounding this scenario is that various, often undated, iterations of the historical exploration data pertaining to a single drill hole exist: during the drilling and analysis of a drill hole various updated versions of the drill hole were issued, each differing to the previous as additional data became available, geological logging was refined (based on any downhole geophysics) or the chemistry and mineralogy results were corrected before sign off and final approval by the analytical institution. As such, it is a common occurrence that two separate data depositories may contain exploration data for the same drill hole, but which differ when compared to one another. These differences are virtually always <5%, and rarely between 5% to 10%. It is often impossible to determine which is the more recent and which should be relied upon, as the date is more often than not recorded only as the year, e.g. 1978.

In compiling the Mühlhausen-Nohra mining licence exploration database, Micon relied upon drill hole data that had been stored and previously captured by Ercosplan. Where possible this captured data was cross-checked by Micon against both the archived Ercosplan data, as well as that data stored at BVVG. In addition, Davenport was able to source historical exploration data from K-UTEC, which was independently captured by Micon and which was also used for cross-checking with the Ercosplan data. In various instances, cross-checks yielded minor

Mühlhausen-Nohra Project, January 2019 30 Davenport Resources Ltd variances (largely <5%) between the chemistry and mineralogy; this due to different versions of the drill hole data being compared.

All drill hole sampling was conducted according to the procedures and protocols as specified in Kali-Instruktion (1956 and 1960). Drill core samples were collected from all of the potash drill holes. Where possible, the K2O grade of the potash-bearing horizons was historically determined on an empirical base using the correlation with the downhole natural gamma log. Samples were collected across all potash-bearing horizons and the total sampled length represents the total thickness of the potash-bearing horizon of the z2KSt. In the potash drill holes, core sample thicknesses ranged from 0.18 m to 4.00 m. Over inhomogeneous potash horizons where interlayers of potential waste were included, the minimum sample thickness was 0.5 m and the maximum was 5 m. Samples were crushed to 2 mm in a jaw crusher and a representative sample was milled and crushed further to 50 μm. This sub-sample was assayed by ICP-OES for all elements except NaCl, which was analysed using potentiometric titration. XRD was used for mineralogy and thin sections were carried out at a local university.

The position of the drill holes and the distribution of the main mineral types is shown in Figure 7.1.

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Figure 7.1: Drill Hole Positions and Main Mineral Distribution within the Nohra-Elende Sub-Area

Source: Micon

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7.5 DRILLING

Information relating to the drilling techniques used in the historical exploration is based upon the English translation in the Ercosplan report dated 12th January 2018, ‘JORC compliant Report for the Mühlhausen-Nohra Mining Licence Area, Federal State of Thuringia, Federal Republic of Germany’.

Not a lot of detail of the drilling techniques used for the hydrocarbon drill holes are known. However, Ercosplan state that state-of the-art techniques were used and assume the methods and technology to be similar to those applied on licences in the surrounding South Harz area.

Three types of drill rigs (T-50, BU-40 or BU-75) were used for the hydrocarbon drilling. According to historical technical reports rotary tricone bits were used to penetrate the overburden and upper stratigraphy into the top of the salt rocks of the Staßfurt-Steinsalz (z2NA). The drilling method was then switched to diamond drill bits, resulting in drill core through the salt intersections. In addition, the sandstone of the Chirotheriensandstein (smSTC) was cored to gain detailed structural understanding for possible extraction of hydrocarbons. Once the drill bit was removed, geophysical logging was conducted downhole.

For the core drilling, a clay mud was used as the drilling fluid through the overburden sections and a NaCl-saturated drilling fluid was used through the salt horizons. Additional measures were taken to reduce core loss and caving, including addition of CMC (carboxymethyl cellulose) to build filter cake and reduce fluid losses and mud pressure and reduced drilling speed.

Diamond core drilling was conducted with drill hole diameters of 114 mm, 118 mm, 143 mm or 193 mm. The last cemented casing (size: 6 ⅝” or 5 ¾”) was mainly installed in the salt rocks of the Staßfurt-Steinsalz (z2NA), in the anhydrite rocks of the Unterer Staßfurt-Anhydrit (‘Basalanhydrit’, z2ANa), or in the upper part of the dolomite of the Staßfurt-Karbonat (z2CA).

7.6 LOGGING

All drill hole logging was conducted according to the Kali-Instruktion. Drill core was geologically logged in detail and full and summary drill-core logs were produced in both written and graphical format. The complete core intersection was logged on a millimetre scale and information recorded on the drill-core logs included lithological depths, stratigraphic interpretation, and sampling information.

Chip logging was conducted on the upper sections of the drill holes that had been drilled using tricone drilling methods, to give an indication of rock type. In the hydrocarbon drill holes the K2O grade of the potash-bearing horizons was determined on an empirical base, using the correlation with the downhole natural gamma log. This was also used to correlate recovery and interpreted stratigraphy based on the drill-core logs.

Full drill hole logs include a detailed lithological description of the entire drill hole, which was also summarised and graphically portrayed alongside the downhole geophysical logging and assay results. Full logs are available for two drill holes, assay logs are available for 32 drill holes and geophysical logs are available for 23 drill holes, mostly made up of calliper and natural gamma with the full suite of geophysical results available for at least two drill holes. Geophysical logging speed is recorded as 2.5 m/min and 7 m/min and the majority of the 1980 drill holes had the temperature also recorded.

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Currently there are no exploration activities being conducted in the Mühlhausen-Nohra mining licence area.

7.7 SAMPLE PREPARATION AND ANALYSIS

The sampling and assay procedures completed on the potash-bearing salt rock samples from the potash deposits within the Mühlhausen-Nohra Licence area followed the latest technology and state of scientific knowledge at the time the potash exploration holes were drilled.

7.7.1 Sampling

The sampling procedures consisted of the following:

• Samples were taken across all potash-bearing horizons; • The total sampled length represents the total thickness of the potash-bearing horizon of the z2KSt; • In the hydrocarbon drill holes, core sample thickness ranges from 0.07 m to 1.58 m. In the potash drill holes, core sample thickness ranges from 0.18 m to 4.00 m; • Over inhomogeneous potash horizons where interlayers of potential waste were included, the minimum sample thickness was 0.5 m and the maximum was 5 m; • Samples were crushed to 2 mm in a jaw crusher and a representative sample was milled and crushed further to 50 μm; • In situations where interlayers of clay, anhydrite, carbonates or other undesirable substances are contained in the potash-bearing salt rocks within the potash deposit, interlayers with thicknesses of up to 50 mm were incorporated into the sample for analysis. Interlayers thicker than 50 mm were analysed separately to ascertain if separation of the raw ore material was appropriate; and, • The crushed sample was assayed by ICP-OES for all elements except NaCl which was tested using potentiometric titration. XRD was used for mineralogy and thin sections were carried out at a local university.

7.7.2 Analysis Procedures

Micon has no specific details about the procedures used prior to 1919; however, it is known that since the foundation of the Kaliforschungsanstalt GmbH in 1919, it was responsible for representative sampling and analytical work of potash-bearing salt rock samples following the corresponding procedures.

The first documentation (Kali-Instruktion) issued on the classification of reserves regarding potash and rock-salt deposits (Stammberger 1956) was released in 1957. The instruction was revised in 1960 by Ulbrich to include detailed information about the sampling and analytical procedures used by the former GDR for potash-bearing salt rocks.

Samples were homogenised to ensure a representative sample was assayed.

Samples were sent to the VEB Kombinat Foundation of Potash Research Institute, now known as K-Utec AG Salt Technologies. Samples were assayed by ICP-OES for all elements except NaCl which was tested using potentiometric titration.

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The sample analysis procedures consisted of the following:

• Samples consisting mainly of carnallite and/or other hygroscopic evaporite minerals were sealed in airtight containers after sample retrieval. If the analysis of the sample was not conducted immediately under appropriate conditions storage and transport for analyses were conducted without destroying the seal; • Complete and partial sample analyses were distinguished. Partial analysis was mainly restricted to determining the K2O content of samples; • Potassium, magnesium, calcium, sulphate, chloride, water and insoluble material contents were analytically determined. The sodium content was determined by calculation; • If required, the bromine, boron, iodine and other valuable components of the samples were determined; • Partial analyses were only permitted for already investigated potash deposits and cannot generally be used as the basis for reserve estimation in newly explored potash deposits; and, • Analysis results were cross-checked by analysing duplicate samples. Duplicate samples had to be chosen with respect to a homogenous distribution within the deposit. For surface drill holes 10% of the total sample amounts have to be duplicated with internal and external cross-check samples.

The sample preparation and analysis of samples obtained from the potash-bearing salt rocks in the Mühlhausen-Nohra region were carried out in the VEB Kombinat Kali’s research department laboratory according to standard procedures by the state authority. In 1992 the VEB Kombinat Kali laboratory was renamed K-Utec. These standard procedures were developed during the 1950’s, but were mandatory since 1975.

All the Mühlhausen-Nohra samples were taken during the historical drilling campaigns predominantly carried out during the 1960's and 1970's, with one hole drilled in 1934 and another six drilled in the 1980’s. Sample data exists from seven (of 18) hydrocarbon drill holes that were geophysically logged on and around the property, and 39 diamond core drill holes ('potash drill holes'). Core samples were taken from 35 of the potash drill holes; none of the hydrocarbon drill holes were sampled.

7.8 HISTORICAL MINERAL RESOURCE ESTIMATES

Between 1980 and 1987 historical resource estimates were reported for three separate sub- sections of the Mühlhausen-Nohra mining license, referred to as:

• a southerly Mühlhausen sub-section; • a central Keula sub-section (comparable to the Mühlhausen-Keula sub-area); and, • a northerly Nohra-Elende sub-section (comparable to the Mühlhausen-Keula sub-area).

Micon has modelled the Nohra-Elende sub-area for the resource estimated detailed in this report. The exact extent of the historically defined sub-section areas of the three resources differ slightly to the current mining licence boundary. The historical resource estimates were prepared by VEB Geological Research und Exploration, a nationally-owned enterprise,

Mühlhausen-Nohra Project, January 2019 35 Davenport Resources Ltd according to the Kali-Instruktion of the former German Democratic Republic (GDR) (Gotte, 1982, /12/) (Table 7.4).

Table 7.4: Historical Resources for the Nohra-Elende Sub-Area (Kästner et al., 1980 and 1987)

Tonnage Tonnage Grade Sub-Section Date Area (km2) Mining Horizon Category (Mt) K2O (Mt) K2O (%) Nohra-Elende 1980 26.5 Carnallitite 816 72.8 8.9 Balance - C2

The following parameters were applied to the historical reserves:

• Resources within the 2 m roof beam and those exceeding a maximum extraction height of 7 m (located below the mining horizon) were classified as off-balance;

• Minimum content cut-off of the total resources of 5.1 % K2O; • Minimum extraction height: 15.0 m; and • A commodity coefficient of 0.6.

The following methodology used for the historical resource estimation has been extracted from the Ercosplan report. The method of geological block delineation was applied to produce the resource estimate. The area was determined by circumnavigating the blocks with planimeter and subtracting the drill hole safety pillars (r = 50 m). The average thickness per block was calculated as an arithmetic mean based on drill holes with available drill cores and matching cut-off criteria. Drill holes not matching the cut-off criteria (e.g. barren zones) were considered in the estimation of the resources by applying the commodity coefficient. K2O grades and mineralogical compositions were derived from chemical and mineralogical assays. Average values per drill holes were calculated as thickness weighted mean. The density of the mineralised rock was based on the mineralogical composition and density values of the single minerals. The commodity coefficient was reasoned by analogy to the Volkenroda mine.

Davenport commissioned Ercosplan in August 2017 to review the available historical exploration data pertinent to the Mühlhausen-Nohra mining licence with the intention of ascertaining the resource potential.

Ercosplan conducted the geological modelling in Paradigm SKUA-GOCAD (version 17) software using a Discrete Smooth Interpolation (DSI) algorithm and a cell size of 50 x 50 m. A minimum K2O cut-off grade of 5% was used for the estimation and no thickness cut-offs were used. For more details regarding the modelling methodology applied by Ercosplan the reader is referred to the JORC compliant report that accompanied the resource statement (see references).

Ercosplan classified each of the Mühlhausen sub-areas as Exploration Targets in accordance with the guidelines of the JORC Code (2012) (Table 7.5).

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Table 7.5: Exploration Target mineral resource estimate for the Nohra-Elende Sub-Area of the Mühlhausen-Nohra Mining Licence (Ercosplan, 2017)

On 6th November 2018 Micon reported an Inferred mineral resource over the Nohra-Elende sub-area of 1,698 Mt at an average grade of 9.69% K2O. The Ercosplan Exploration Target grade estimate is comparable to the Micon Inferred mineral resource estimate. However, the Micon Inferred mineral resource tonnage is approximately 15% less than the Ercosplan Exploration Target tonnes. This was due to the fact that Micon chose to leave some of the Nohra-Elende sub-area as an Exploration Target, which is being reported herein.

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8.0 DATA VERIFICATION

For all exploration work conducted post-1950, quality assurance and quality control (QAQC) procedures performed across the South Harz Potash Project were conducted by independent state institutions and quality checked by VEB Kombinat Kali company professionals. Detailed information regarding the cross-check analysis, that is reported to have occurred on the Mühlhausen-Nohra mining licenses drill hole data, is not yet currently available and requires sourcing from an as yet determined data depository.

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9.0 MINERAL PROCESSING METALLURGY AND TESTING

Currently no mineral processing or metallurgical test work programmes are planned, as no mining or processing plans have been conceptualised.

Processing of sylvinite is well understood and focuses on the correct size at which the potash is liberated and desliming to remove insoluble and fines. The most common method used in potash processing, which has been adopted in the South Harz region, is conventional flotation including drying, compaction and glazing. Ultimately this will depend on the product or anticipated range of products that will be produced from the Mühlhausen-Nohra mining license as whole.

Mühlhausen-Nohra Project, January 2019 39 Davenport Resources Ltd

10.0 MINERAL RESOURCE ESTIMATE

10.1 INTRODUCTION

The historical drill hole database was used by Micon to create a 3-D geological model and resource estimate over the whole of the Nohra-Elende sub-area, which was then divided into resource categories based on the quality and quantity of the data. The following sections describe the process.

10.2 GEOLOGICAL INTERPRETATION AND MODELLING

The geological model and mineral resource estimation for the Nohra-Elende sub-area was conducted in Micromine®, a software package used for geologically modelling stratiform deposits. The database used to create the geological model and mineral resource estimate was created from the manual data entry of hard copy historical drill hole logs and exploration records.

The drill hole database was imported into Micromine® and validated. Validation checks undertaken included checking for missing samples, mismatching sample and stratigraphy intersections, duplicate records and overlapping from-to depths. No mistakes in the database were identified. Once imported into Micromine®, geological interpretation was carried out in 2-D cross-sections and 3-D downhole plots of lithology and grade (Figure 10.1). This process confirmed the correlating relationship between the drill hole logs and the geophysical logging as well as the stratigraphic-hosted nature of the potash mineralisation. Micon also noted that in some instances the mineralisation zone containing grade goes above the z2KSt seam into the overlying Dechsteinsalz (zZNAr) as a result of alteration from ascending brines e.g. Kal Ele 19/1978.

The chemical database was first composited according to stratigraphy, which allowed the merging of the mineralogical and chemical data tables. The composited database was assigned a tag column to indicate if a sample was sylvinite or carnallitite based on the mineralogical drill hole logging data and the chemical assay data.

Some drill holes did not have a full suite of chemical data, for example, a number of drill holes did not have assay results for MgSO4. In these instances, a length weighted average dummy value was assigned. For missing KCl values, the K2O was divided by 0.63. Some drill holes had missing sample intervals such as Kal Ele 12/1977 which has 12 cm of unsampled material in between samples 29 and 30. In instances such as this Micon checked the stratigraphy file for any comments regarding core loss and ensured that the sequence was logged as the z2KSt. If the missing sample was less than 30cm a dummy sample value was inserted based on the results for the samples above and below the missing one.

The Nohra-Elende database contains some drill holes with duplicated stratigraphy indicating faulting or folding. These were numbered according to elevation and cross-sections drawn to determine which portion of the z2KSt would be used for modelling.

Each drill hole was individually examined and, based on stratigraphy, sequence of mineralised seams and K2O composite grades, the sylvinite or carnallitite seams were further divided into the Upper Sylvinite seam, Carnallitite seam and Lower Sylvinite seam. Only the Upper Sylvinite and Carnallite seams occur within the Exploration Target area. Micon created

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histograms of the K2O grade and thickness for each seam. The Carnallitite seam displays continuous grade but the thickness is more variable ranging from 0.5m to 63m and displays faulting. The Sylvinite seams have relatively consistent grade and thickness. No top cut was applied to any of the seam grades. Within the Exploration Target area itself the z2KSt stratigraphic sequence was only intersected in Kal NSo 8/1907, which contained 9.12 m of Upper Sylvinite at a grade of 12.26% K2O and 26.60 m of Carnallite at a grade of 9.52% K2O. The thickness of the Upper Sylvinite is considerably higher than in other drill holes on Nohra- Elende and this should be investigated in the future will infill drilling in the area.

The database was composited again, this time by grade, using a minimum trigger of 5% K2O, a minimum grade length of 0.5 m, a maximum total length of waste of 2 m and a 1 m maximum consecutive length of waste.

In addition, Micon was provided with data for drill holes located in adjacent areas flanking the Project area of the Mühlhausen-Nohra mining licence. The surfaces were cut according to the limits of the seams that extend outward of the Mühlhausen-Nohra mining licence boundary. The surfaces were additionally cut to the licence boundaries forming a second set of DTM surfaces for analysis. Lastly, two sets of solid wireframes were created for the Upper Sylvinite seam, Carnallitite seam and Lower Sylvinite seam using the roof and floor surfaces. The first set of wireframes represents the total extent of potash mineralisation based on the complete set of data provided, while the second set of wireframes represents the potash seam mineralisation cropped by the Project licence boundary. A cross section of the resultant solid wireframes is shown in Figure 10.1.

The final extents of the modelled Upper Sylvinite seam and Carnallitite seam is shown in Figure 10.2. Faulting has not been identified within the Exploration Target area but does occur within the Nohra-Elende sub-area so the possibility of discovering faulting cannot be ruled out.

10.3 EXPLORATION TARGET

Based on the extended wireframing across the whole of the Nohra-Elende sub-area and the mineralised intersection recorded in drill hole Kal NSo 8/1907, the potash deposit appears to extend across the whole of the Exploration Target area (Figure 10.2).

The mineral deposit has been restricted by a total seam thickness (>1 m), grade (>5% K2O) and the licence area boundary to keep in line with the criteria used for the Inferred mineral resource estimation.

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Figure 10.1: NNW-SSE Cross-Section across the Nohra-Elende Sub-Area

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Figure 10.2: Mineral distribution and Classification of the Nohra-Elende Sub-Area

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The average thicknesses of the wireframes are:

• Upper Sylvinite seam is 6.12 m; • Carnallitite seam is 32.87 m.

However, it should be noted that the Upper Sylvinite thickness is unusually thick due to the intersection of 9.12 m in drill hole Kal NSo 8/1907. This thickness is the greatest intersection of Upper Sylvinite in the database and is an outlier with only two other drill holes intersecting the Upper Sylvinite with a thickness > 3.91 m. Whilst there is no other reason to doubt this intersection, Micon has chosen to treat it conservatively and it is one of the reasons this portion of Nohra-Elende has been classified as an Exploration Target (Figure 10.2).

The minimum depth from surface to the roof of the uppermost seam, the Upper Sylvinite seam, is ±692 m towards the north of the Exploration Target area increasing towards the south to a depth of ±815 m. The modelled seam package is sub-horizontal with localised gentle undulations.

A grade-tonnage report was generated for the two seams using average densities obtained from historical records, specifically: 2.17 t/m³ for Upper Sylvinite seam and 1.90 t/m³ for the Carnallitite seam. The grades for each wireframe have been reported based on the modelled composited assay database, which were modelled using the same algorithm and parameters as the seam roof and floor surfaces. The modelled K2O grade and width of the composited potash seams and the depth of the Upper Sylvinite seam roof are indicated in Figures 10.3 to 10.5.

The portion of the Nohra-Elende sub-area discussed in this report has been classified as an Exploration Target following the guidelines defined in the 2012 edition of the JORC Code. The estimated grade and tonnage ranges were defined using the criteria shown in Table 10.1.

Table 10.1: Criteria used to define the Exploration Target ranges

Category Criteria An area approximately 1,500m surrounding Kal Minimum NSo 8/1907 taking into consideration the tonnage surrounding drill holes with information. Maximum The entire area joining the two Inferred resource tonnage areas to the north and south of Nohra-Elende. The K O grade from drill hole Kal NSo 8/1907 Minimum grade 2 discounted by 10% The K O grade from drill hole Kal NSo 8/1907 Maximum grade 2 credited by 10%

The spacing between drill holes ranges from ±400 m to ±2,800 m. Figure 10.3 highlights the extents of the Exploration Target.

The 8th January 2019 Exploration Target for the Nohra-Elende sub-area is presented in Table 10.2.

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Figure 10.3: K2O Grade Distribution in the Combined Potash Seams, Nohra-Elende Sub-Area

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Figure 10.4: Thickness Distribution in the Combined Potash Seams, Nohra-Elende Sub-Area

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Figure 10.5: Upper Sylvinite Seam Roof Elevation, Nohra-Elende Sub-Area

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Table 10.2: Exploration Target Estimate for the Nohra-Elende Sub-Area of the Mühlhausen-Nohra Mining Licence as at 8th January 2019

(in accordance with the guidelines of the JORC Code (2012)

Notes: Minimum seam thickness considered for deposit is 1m. Minimum cut‐off grade ≥5% K2O. Data source: historical state records (BVVG) checked and verified. Exploration Target tonnes rounded down to nearest 100,000 t. Errors may exist due to rounding.

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11.0 MINING METHODS

The South Harz region is a renowned producer of potash, which has been economically mined from various depths and at different thicknesses for decades. A number of mines in the surrounding area have been mining potash from similar depths to the deposits on the Nohra- Elende sub-area, using both conventional underground methods and solution mining. Most notable is the adjacent conventional underground Volkenroda mine (closed in 1990), and the Kehmstedt operations to the north of Nohra-Elende, which is currently producing potash through solution mining. Nohra-Elende shares a boundary with the once operational Volkenroda mine, which produced 55 Mt of crude salt between 1909 and 1951 from its conventional underground workings. At this stage it can be speculated that conventional room and pillar mining may be suitable.

No mining method has been planned for Nohra-Elende at this stage of study, but a minimum seam thickness of 1 m was applied to the resources to exclude areas where there is no prospect for eventual economic extraction.

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12.0 CONCLUSIONS AND RECOMMENDATIONS

The Nohra-Elende sub-area of the Mühlhausen-Nohra mining licence held by Davenport is located in a well-known potash producing area in the South Harz Potash District in the Thüringen Basin, Central Germany. A total of 92 historical drill holes were used to create a geological model and mineral resource estimate using Micromine® for the whole of the Nohra- Elende sub-area that was split into Inferred mineral resources and an Exploration Target. Downhole sampling data was available from four hydrocarbon drill holes that were geophysically logged, whilst downhole sampling data was available from 35 of the 88 diamond core drill holes ('potash drill holes').

The target economic potash deposit is hosted in the z2KSt stratigraphic horizon, which occurs across the whole of the Nohra-Elende sub-area. Mineral resources have been defined from three distinct seams, including the Upper and Lower Sylvinite seams and the Carnallitite seam, of which only the Upper Sylvinite and Carnallitite seams occur in the Exploration Target area. Each of these have been restricted by a seam thickness (>1 m) and grade (>5% K2O).

The seams are predominately horizontal with gentle undulations. No faulting has been identified inside the Exploration Target area but a fault with a ±100 m up-thrown block has been interpreted in the north of the Nohra-Elende sub-area. The minimum depth to the roof of the Upper Sylvinite seam is ±692 m increasing in depth to the south of the Exploration Target to ±815 m.

The drill hole spacing in the Nohra-Elende sub-area ranges from ±400 m to ±2,800 m. Whilst this is considered sufficient to imply geological and grade continuity to produce an Inferred mineral resource following the guidelines defined in the 2012 edition of the JORC Code over the majority of the sub-area, a portion in the middle has been classified as an Exploration Target. The reasons for this are: -

• Over an area of 13,926,288 m2 there is only one drill hole that intersected the z2KSt (others were stopped short); • Drill holes outside of the licence area and adjacent to the target area also do not have geological information so the extents of the z2KSt and possible grades cannot be predicted; and • The one drill hole that has intersected the z2KSt has an unusually thick Upper Sylvinite seam.

The Micon Exploration Target grade estimate compares with all other resource estimations carried out on Mühlhausen-Nohra property including the Micon Inferred mineral resource estimate from November 2018, the VEB Geological Research und Exploration historical resource estimate and the Ercosplan Exploration Target.

There is a difference in tonnage between the historical estimates and the Micon Exploration Target estimate due to the use of different areas of estimation.

In order to increase confidence in the resources on the Nohra-Elende sub-area, Micon recommends a twin-drilling programme to confirm the grade reported in the historical drill hole database. This recommendation is based on the quality and volume of the available historical data, which throughout this modelling process has been queried and the validity checked at source.

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Twin-hole drilling work will increase confidence in the historical exploration data. Micon suggests twinning three drill holes, commencing in order of twinning Kal NSo 08/1907, Kal Pstl 001/1960 and Kal Ele 15, 5a/1978 (Figure 10.2).

Due to the complexities encountered whilst interpreting the historical drill hole logging and sampling records, Davenport is committed to continuing to update and verify the historical drill hole database. This process would allow for a better understanding of the historical seismic survey data, which would be used in any subsequent update of the geological interpretation on the Nohra-Elende sub-area and the Mühlhausen-Nohra mining license as a whole. Should the historical seismic data be deemed unreliable for use, Davenport can consider conducting a new seismic survey to reinforce the geological interpretation.

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13.0 DATE AND SIGNATURE PAGE

The effective date of the Exploration Target presented in this report is 8th January 2019.

Signed on behalf of Micon International Co Limited

Liz de Klerk, M.Sc., Pr.Sci.Nat., SAIMM Senior Geologist & Director Micon International Co Limited

Date: 9th January 2019

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14.0 REFERENCES

JORC compliant Report for the Ebeleben Mining Licence Area, Federal State of Thuringia, Federal Republic of Germany, Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH, 2nd February 2018.

Review of Historical Exploration Data and Estimation of Exploration Targets for the Ebeleben Mining License Area, Ercosplan Ingenieurgesellschaft Geotechnik und Bergbau mbH, 2nd November 2017.

JORC Code (2012) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Minerals Council of Australia, 20th December 2012.

Potash - Deposits, Processing, Properties and Uses, Donald E. Garrett, PhD., 1996.

Kali-Instruktion - Instruktion zur Anwendung der Klassifikation der Lagerstättenvorräte fester mineralischer Rohstoffe vom. 28 August 1979 auf Kalisalz- und Steinsalzlagerstätten, Prof. Dr W Gotte, Akademie-Verlag Berlin, Zeitschrift für angewandte Geologie, Bd. 28 (1982), Heft 6, p287 - 293.

Ulbrich, Instruktion zur Anwendung der Klassifikation der Lagerstättenvorräte fester mineralischer Rohstoffe auf Kali- und Steinsalzlagerstätten der DDR (2. Kali-Instruktion vom 9 Januar 1960). In: Zeitschrift für angewandte Geologie, Bd. 6 Heft 7, Zentrales Geologisches Institut, Akademie-Verlag Berlin, , Berlin, Juli 1960, p330 - 336.

Stammberger, F., Instruktion zur Anwendung der Klassifikation der Lagerstättenvorräte fester mineralischer Rohstoffe auf Kali- und Steinsalzlagerstätten. Akademie-Verlag Berlin: Zeitschrift für angewandte Geologie. Berlin, Heft 2/3, December 1956, p134 - 139.

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15.0 CERTIFICATE

CERTIFICATE OF AUTHOR ELIZABETH DE KLERK

As author of this report entitled “Technical Report on the Exploration Target of the Nohra-Elende sub- area, South Harz Potash Project, Thuringia, Germany”, effective date 8th January 2019, I, Elizabeth de Klerk do hereby certify that:

1. I am employed as a Senior Geologist by, and carried out this assignment for, Micon International Co Limited, Suite 10, Keswick Hall, Norwich, United Kingdom. tel. 0044(1603) 501 501, e-mail [email protected] ; 2. I hold the following academic qualifications:

B.Sc. Geology University of Leicester, United Kingdom, 2000; M.Sc. Exploration Geology University of Rhodes, Grahamstown, South Africa, 2002; 3. I am a member of the South African Institute of Mining and Metallurgy (SAIMM) and a Fellow of the Geological Society of Africa and a registered Professional Natural Scientist (Pr.Sci.Nat. 400090/08) 4. I have worked as a geologist in the minerals industry for over 15 years in the mining industry in Africa, Europe and United Kingdom; 5. I do, by reason of education, experience and professional registration, fulfil the requirements of a Competent Person as defined by the JORC Code (2012); 6. I visited the property that is the subject of this Technical Report from 12th to 16th February and 6th to 8th March 2018; 7. I am responsible for the preparation or supervision of preparation of all sections of this Technical Report; 8. I am independent of Davenport Resources Ltd and East Exploration GmbH, their directors, senior management, and other advisers, I have had no previous involvement with the property; 9. I have read the JORC Code (2012) and this report for which I am responsible and it has been prepared in compliance with the instrument; 10. As of the date of this certificate to the best of my knowledge, information and belief, this Technical Report for which I am responsible contains all scientific and technical information that is required to be disclosed to make this report not misleading.

Liz de Klerk {signed and sealed}

Elizabeth de Klerk, M.Sc., Pr.Sci.Nat., SAIMM (707850) Senior Geologist & Director Micon International Co Limited Signed Date: 9th January 2019

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16.0 GLOSSARY AND ABBREVIATIONS

16.1 GLOSSARY

Anhydrite (CaSO4): Anhydrous calcium sulphate, common evaporite deposit mineral.

Aphthitalite also known as Glaserite (K3Na(SO4)2): Potassium sodium sulphate uncommon evaporite mineral, however it is an important potash source.

Argillaceous rocks: Group of detrital sedimentary rocks, commonly clays, shales, mudstones, siltstones and marls.

Basalt: A finely crystalline igneous rock with a basic composition.

Boracite (Mg3B7O13Cl): Magnesium chloroborate, rare evaporite marine deposit mineral.

Brecciated (breccia): Fragmented rock consisting of angular particles that have not been worn by water (unlike conglomerates).

Calcite (CaCO3): Calcium carbonate.

Carbonate rock: Rock primarily composed of carbonate minerals: calcite, aragonite, dolomite, magnesite, siderite etc. The majority of carbonate rock is formed by sedimentation in sea and lake basins.

Carnallite (KMgCl3∙6(H2O): Hydrated potassium magnesium chloride, common marine evaporite deposit mineral and an economically important potash source.

Carnallitite: Potassium rich evaporite rock consisting mainly of carnallite, halite, kieserite and anhydrite.

Clay: Finely grained sedimentary rock composed of clay minerals.

Cut-Off: An assay cut-off is the break-even economic value of the ore; the block cut-off is the economic value that optimises the net present value of the operating assets.

Dolomite: (CaMg(CO3)2): Calcium magnesium carbonate rock.

Evaporite Deposit: A sedimentary rock deposited from aqueous solution (e.g. seawater) as a result of evaporation.

Footwall: The rock on the underside of a vein or ore structure.

Glaserite also known as Aphthitalite (K3Na(SO4)2): Potassium sodium sulphate uncommon evaporite mineral, however it is an important potash source.

Gosudarstvennaya Komissia po Zapasam (GKZ): the State Commission for Mineral Reserves. Founded in 1927, GKZ manages mineral reserves on behalf of the Ministry for Environmental Protection and Natural Resources of the Russian Federation.

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Goethite (αFeO.OH): Hydrated iron oxide, rust like in appearance.

Gypsum (CaSO4∙2H2O): Calcium sulphate, common mineral in sedimentary rocks. This mineral is especially important in evaporite deposits.

Haematite (Fe2O3): Iron oxide common in igneous, metamorphic and sedimentary rocks.

Halite (NaCl): Sodium chloride, very common evaporite deposit mineral.

Hartsalz: Rock comprising sylvite, halite, anhydrite and/or kieserite. Common miner’s term for potash-bearing evaporite rocks, which exhibit a high hardness while drilling due to the admixtures of sulphate minerals.

Igneous rock: A rock formed by the solidification of magma.

Intrusion: A body of igneous rock that invades older rock. The invading rock may be a plastic solid or magma that pushes its way into the older rock.

Isopach: A line, on a map, drawn through points of equal thickness of a designated unit.

JORC Code: The Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Ore Reserve Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. The current edition is dated 2012.

Kainite (KMg(SO4)Cl∙3H2O): Hydrated potassium magnesium sulphate. A secondary mineral in marine potash deposits formed due to metamorphism or resolution by ground waters.

Kainitite: Potassium rich evaporite rock consisting mainly of kainite and halite.

Kali-Instruktion: Guideline document for the classification of solid mineral resources of rock- salt and potash deposits in the former German Democratic Republic. It defines the requirements for the exploration of rock-salt and potash. Originally published 5th December 1956, three revisions, dated 9th January 1960 (2nd revision), 20th June 1963 (3rd revision) and 17th November 1981 (4th and last revision).

Kieserite (MgSO4∙H2O): Hydrated magnesium sulphate monohydrate, commonly occurring mineral in marine evaporites.

Langbeinite (K2Mg2(SO4)3): Potassium magnesium sulphate uncommon marine evaporite mineral, however it is an important potash source.

Limestone: A common sedimentary rock composed mainly of calcium carbonate.

Magmatic: Consisting of, relating to or of magma origin.

Metamorphic rock: A rock that has, in a solid state, undergone changes in mineralogy, texture, or chemical composition as a result of heat or pressure.

Mine: An excavation from which valuable materials are recovered.

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Mineral deposit: A body of mineralisation that represents a concentration of valuable metals. The limits can be defined by geological contacts or assay cut-off grade criteria.

Mineral Reserve: The Russian equivalent of the Western mineral resource and ore reserve. Mineral reserves are subdivided into A, B, C1 and C2 categories depending on the level of definition and technological study.

Mineral Resource: The JORC Code defines a mineral resource as “a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form and quantity that there are reasonable prospects for eventual economic extraction”. Subdivided into Measured, Indicated and Inferred categories depending on how well they are defined.

Off-Balance Mineral Reserve: A volume of material which has demonstrated the presence of a metal to a sufficient level of confidence, but whose economic viability has not been demonstrated.

Open pit: A mine that is entirely on surface; also referred to as open-cut or open-cast mine.

Operational reserves: Balance mineral reserves that have been adjusted for dilution and losses, and have been incorporated into a mine production schedule.

Ore Reserve: The JORC Code defines an ore reserve as “the economically mineable part of a Measured or Indicated mineral resource”. Ore reserves have been the subject of appropriate assessments, such as feasibility studies that apply realistic mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.

Polyhalite (K2Ca2Mg(SO4)42∙H2O): Hydrated potassium calcium magnesium sulphate. Common marine evaporite deposit mineral and an economically important potash source.

Pyrite (FeS2): Iron sulphide.

Run of mine (ROM): A term used loosely to describe ore of average grade as produced from the mine.

Sedimentary rock: 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 (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).

Sylvinite: Evaporite rock comprising sylvite and halite.

Sylvite (KCl): Potassium chloride, common evaporite deposit mineral and an economically important potash source.

Suite: An aggregate of conformable rock beds with similar general properties that differentiate them from overlying or underlying rocks.

Techniko-Ekonomicheskie Obosnovie (TEO): Standard Russian format for characterising a mineral deposit.

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16.2 ABBREVIATIONS

% Percent ° degree (angle) °C degree Centigrade Ca Calcium CaSO4 Calcium sulphate ASX Australian Stock Exchange CIM Canadian Institute of Mining, Metallurgy and Petroleum CoV coefficient of variation CP Competent Person CRM certified reference material Cu copper € Euro EHS environment, health and safety ESIA Environment and Social Impact Assessment G&A general and administration GDR German Democratic Republic GKZ The State Commission for Mineral Reserves GMT Greenwich Mean Time g Gram(s) g/t gramme/tonne h Hour(s) ha Hectare ICP-OES inductively coupled plasma-optical emission spectrometry ID2 inverse distance weighting to the power of two ID3 inverse distance weighting to the power of three Insols Acid insoluble material K Potassium K2O Potassium oxide KCl Potassium chloride kg kilogramme km kilometre km2 square kilometre k m3 thousand cubic metres kt thousand tonnes kV kilovolt kW Kilowatt(s) kWh Kilowatt hour(s) kWh/t Kilowatt hours per tonne L Litre(s) LOM life-of-mine µm micron mm millimetre m metre m2 square metre m3 cubic metre Ma Millions of years ago Mg Magnesium MgCl2 Magnesium chloride

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MgSO4 Magnesium sulphate Micon Micon International Co Limited Mt million tonnes Mt/a million tonnes per year MW megawatt Na Sodium NaCl Sodium chloride N/A Not applicable NN nearest neighbour oz ounce QA/QC Quality assurance/quality control QP Qualified Person Report technical report ROM Run of Mine s Second t tonne t/a tonnes/year t/d tonnes/day t/h tonnes/hour TEO Techniko-Ekonomicheskie Obosnovie US$ United States dollar V Volt(s) VAT Value Added Tax Wt% Weight percent XRF X-ray fluorescence XRD X-ray diffraction y Year(s)

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17.0 APPENDIX 1

JORC Code, 2012 Edition – Table 1

Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.)

Criteria JORC Code explanation Commentary All samples were taken during historical drilling campaigns predominantly carried out during the 1960's and 1970's with Nature and quality of sampling (eg cut eight holes drilled in the 1980’s and an additional 20 drill holes channels, random chips, or specific drilled between 1890-1909 most of which were stopped before specialised industry standard measurement intersecting the z2KSt horizon. Sample data exists from three tools appropriate to the minerals under hydrocarbon drill holes that were geophysically logged and 35 investigation, such as down hole gamma diamond core drill holes ('potash drill holes') that produced core sondes, or handheld XRF instruments, etc). samples. Only one drill hole with sample data occurs within the These examples should not be taken as extents of the Exploration Target, namely Kal NSo 8/1907 the limiting the broad meaning of sampling. remainder of the drill holes are within the greater Nohra-Elende sub-area and/or outside the Davenport licence area. Information about the calibration of the geophysical downhole Include reference to measures taken to tools is not available. Core recovery logs were kept for the core ensure sample retrospectivity and the drill holes, showing measurements taken by the drillers and appropriate calibration of any geologists, which were checked and correct against the measurement tools or systems used. geophysical logs. Sampling All drill hole sampling was conducted according to the Kali- techniques Instruktion (1956 and 1960). No core samples were taken from Aspects of the determination of the hydrocarbon drill holes. Core samples were taken from 35 of mineralisation that are Material to the the potash drill holes. Where possible, the K O grade of the Public Report. 2 potash-bearing horizons was determined on an empirical base

using the correlation with the downhole natural gamma log. In cases where ‘industry standard’ work Samples were taken across all potash-bearing horizons and the has been done this would be relatively total sampled length represents the total thickness of the potash- simple (eg ‘reverse circulation drilling was bearing horizon of the z2KSt. In the potash drill holes, core used to obtain 1 m samples from which 3 kg sample thickness ranges from 0.18 m to 4.00 m. Over was pulverised to produce a 30 g charge inhomogeneous potash horizons where interlayers of potential for fire assay’). In other cases more waste were included, the minimum sample thickness was 0.5 m explanation may be required, such as and the maximum was 5 m. Samples were crushed to 2 mm in a where there is coarse gold that has inherent jaw crusher and a representative sample was milled and crushed sampling problems. Unusual commodities further to 50 μm which was assayed by Induced Coupled Plasma or mineralisation types (eg submarine Optical Omission Spectrometry (ICP-OES) for all elements nodules) may warrant disclosure of except NaCl which was tested using potentiometric titration. X- detailed information. Ray Diffraction (XRD) was used for mineralogy and thin sections were carried out at a local university.

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Criteria JORC Code explanation Commentary

The 88 cored potash drill holes were drilled using a Type C 1500 rig in the 1960s, and T50A and Sif 1200 rigs in the 1980s producing core with diameters of 108 mm and 65 mm respectively. The four hydrocarbon drill holes were drilled using Drill type (eg core, reverse circulation, T-50, BU-40 and BU-75 rigs producing core with diameters of open-hole hammer, rotary air blast, auger, 114 mm, 118 mm, 143 mm and 193 mm. All drill holes were Bangka, sonic, etc) and details (eg core Drilling drilled vertically with minor deviations in some drill holes at diameter, triple or standard tube, depth of techniques depth. Drilling from surface used tricone bits through the diamond tails, face-sampling bit or other overburden and upper stratigraphy, switching to core through the type, whether core is oriented and if so, by potash-bearing horizons to the end of hole (EOH). Clay mud was what method, etc). used as the drilling fluid through the overburden sections in potash drill holes and a NaCl-saturated drilling fluid was used through the salt horizons. Casing was used through the overburden.

It is apparent that the core recovery was monitored by the project geologist on site at the time of drilling and this recorded in the Method of recording and assessing core historical logs. From the data available, which is not easily and chip sample recoveries and results interpreted, the core recoveries appear satisfactory (approx. assessed. 97%). Lithological and stratigraphic intersections were subsequently corrected using the geophysical logging results. Measures taken to maximise sample Information about maximising sample recovery is not currently Drill sample recovery and ensure representative nature known, but may be available in historical German documents. recovery of the samples.

Whether a relationship exists between Sampling was conducted according to the stratigraphic sample recovery and grade and whether interpretation of the core using the downhole geophysical sample bias may have occurred due to logging as a depth guide. Axial drilling into the drill core with a preferential loss/gain of fine/coarse spiral drill was conducted to contain pulverised material for material. chemical and mineralogical analysis.

Whether core and chip samples have been Core samples were geologically logged in detail and full and geologically and geotechnically logged to a summary drill hole logs were produced in both written and level of detail to support appropriate graphical format. Information recorded on the drill hole logs Mineral Resource estimation, mining included lithological depths, stratigraphic interpretation, and studies and metallurgical studies. sampling information.

Full drill hole logs include a detailed lithological description of Logging the entire drill hole, which was also summarised and graphically Whether logging is qualitative or portrayed alongside the downhole geophysical logging and assay quantitative in nature. Core (or costean, results. Logs are available for 58 drill holes and geophysical channel, etc) photography. logs are available for 15 drill holes, mostly made up of calliper and natural gamma. Geophysical logging speed is recorded as 2.5 m/min and 7 m/min.

The total length and percentage of the The complete core intersection was logged on a millimetre scale. relevant intersections logged. Axial drilling into the drill core with a spiral drill was conducted If core, whether cut or sawn and whether Sub-sampling to obtain pulverised material for chemical and mineralogical quarter, half or all core taken. techniques and analysis. sample If non-core, whether riffled, tube sampled, preparation rotary split, etc and whether sampled wet Not applicable. or dry.

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Criteria JORC Code explanation Commentary For all sample types, the nature, quality All drill hole sampling was conducted according to the and appropriateness of the sample Kali-Instruktion (1956 and 1960). preparation technique. Quality control procedures adopted for all Samples were homogenised to ensure a representative sample sub-sampling stages to maximise was assayed (see section above on sampling). representivity of samples. Measures taken to ensure that the sampling No field duplicates were taken. Thicknesses of the potash- is representative of the in-situ material bearing horizons were confirmed by the geophysical logging and collected, including for instance results for the full length of the potash was sampled. field duplicate/second-half sampling. Whether sample sizes are appropriate to Sample sizes are considered appropriate to the material being the grain size of the material being sampled, which is bulk mineralisation. sampled.

The nature, quality and appropriateness of Samples were sent to the VEB Kombinat Foundation of Potash the assaying and laboratory procedures Research Institute, now known as K-Utec AG Salt Technologies. used and whether the technique is Samples were assayed by ICP-OES for all elements except NaCl considered partial or total. which was tested using potentiometric titration.

For geophysical tools, spectrometers, Quality of handheld XRF instruments, etc, the assay data and parameters used in determining the This information is not currently known, but may be available in laboratory analysis including instrument make and untranslated historical German documents. tests model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (eg standards, blanks, duplicates, Quality control was insured by technical representatives from external laboratory checks) and whether several state institutions at the time who checked the sampling acceptable levels of accuracy (ie lack of procedures and laboratory results. bias) and precision have been established. For all exploration work conducted post-1950, quality assurance and quality control (QAQC) procedures performed at Mühlhausen-Nohra was conducted by independent state The verification of significant intersections institutions and quality checked by VEB Kombinat Kali company by either independent or alternative professionals. Detailed information regarding the cross-check company personnel. analysis that is reported to have occurred on the Mühlhausen drill hole data is not currently available to Micon and may exist in the archives in Germany. The use of twinned holes. No twin drilling has taken place.

Original drill hole logs were recorded on paper, using a Verification of combination of handwritten and typed records. Copies of the sampling and drill hole logs (including the summary logs and geophysical assaying logging etc) were distributed to several institutions around Documentation of primary data, data entry Germany, including BVVG, Ercosplan and K-Utec, many of procedures, data verification, data storage which are still stored in the archives and available for review. (physical and electronic) protocols. The header for each drill hole lists has not been located, but those that are have been were reviewed in person by Micon and Davenport. No original drill core or sample pulps are still available.

Assay data was not adjusted in any way. K2O grades for the Discuss any adjustment to assay data. hydrocarbon drill holes were interpreted from the natural gamma logs.

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Criteria JORC Code explanation Commentary

Accuracy and quality of surveys used to Drill hole collars were surveyed by the state surveyor subsequent locate drill holes (collar and down-hole to drilling and given with centimetre to decimetre accuracy. surveys), trenches, mine workings and Records of collar positions were obtained from drill hole logs other locations used in Mineral Resource and state archives. estimation.

Location of Drill hole coordinates were recorded in local a German data points coordinate system, which is a 3-degree Gaus Kruger zone 4 projection with a DHDN datum and an East Germany local Specification of the grid system used. transformation to 2 m (EPSG-Code 31, 468). For the purposes of this resource estimation the coordinates have been converted to UTM Zone 32 North.

Quality and adequacy of topographic No topographic survey exists for the project area, which is flat control. lying to gently undulating.

Data spacing for reporting of Exploration The distance between the closest two drill holes with points used Results. in the Exploration Target estimate is 3,296 m.

Whether the data spacing and distribution is sufficient to establish the degree of The spacing of drill holes and samples is considered sufficient to geological and grade continuity Data spacing imply geological and grade continuity based on information appropriate for the Mineral Resource and and obtained from historical drill holes and samples. distribution Ore Reserve estimation procedure(s) and classifications applied.

Whether sample compositing has been Samples were not composited prior to laboratory test work. applied.

All drill holes are vertical with only minor deviations at depth as Whether the orientation of sampling discussed above. The potash-bearing horizons are horizontal achieves unbiased sampling of possible with only minor gentle undulations and the sample thicknesses structures and the extent to which this is are considered to represent true thickness without requiring Orientation of known, considering the deposit type. data in correction. relation to geological If the relationship between the drilling structure orientation and the orientation of key The potash seam at Nohra-Elende is horizontal to sub-horizontal mineralised structures is considered to and all thicknesses from the vertical drill holes have been treated have introduced a sampling bias, this as true thickness. should be assessed and reported if material.

No information is available about sample security, although it is noted that the historical drilling programmes were conducted Sample The measures taken to ensure sample with a very high level of technical capability with experienced security security. geologists and drillers. The laboratory used (K-Utec) is regarded as one of the most experienced salt technological facilities in the world.

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Criteria JORC Code explanation Commentary

Original analytical results retained in the K-Utec archives were Audits or The results of any audits or reviews of reviewed where possible and compared with historical records reviews sampling techniques and data. stored at the BVVG archives. No original core or sample material is available.

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Section 2 Reporting of Exploration Results Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation Commentary Type, reference name/number, location and Davenport Resources Limited is a publicly listed company on the ownership including agreements or material Australian Securities Exchange and holds the Mühlhausen-Nohra issues with third parties such as joint mining licences through its wholly owned subsidiary East ventures, partnerships, overriding royalties, Exploration GmbH. The Mühlhausen-Nohra mining licence is native title interests, historical sites, located within the South Harz Potash District of the Thuringian wilderness or national park and Basin, Germany. Mineral environmental settings. tenement and land tenure There are no known impediments to the security of the tenure status that Davenport have over the Nohra-Elende sub-area. The The security of the tenure held at the time of Mühlhausen-Nohra mining licence is perpetual in nature, not reporting along with any known subject to expiry and is valid to explore for and produce ‘potash, impediments to obtaining a licence to including (associated) brine’ with no applicable statutory operate in the area. royalties. The Mühlhausen-Nohra Mining Licence Deed No. is 1077/95-611 and has an area of 141.6049 km2

All of the exploration conducted on the Nohra-Elende sub-area is historical. The first recorded evidence of exploration drilling on the Mühlhausen-Nohra mining licence is from drill hole Kal Exploration Moerb 1/1889, drilling of which commenced in 1889, following Acknowledgment and appraisal of done by other the completion of which a further 19 drill holes were drilled exploration by other parties. parties between the 1890s to 1909. All of the other exploration drilling was conducted by the former GDR. Various parties were involved, most of which combined to form VEB Kombinant after reunification.

The Mühlhausen-Nohra mining licence is located in the Südharz (South Harz) Potash District in the north-western extent of the Thuringian sedimentary basin, which has been separated by the uplift of the northerly Harz Mountains from the South Permian Basin (SPB). The regional stratigraphy of the South Permian Basin is fairly well understood with a pre-Variscan basement (Upper Carboniferous and older rocks) and a transition horizon of Upper Carboniferous to Lower Permian lying beneath an expansive sequence of evaporite rocks of the Upper Permian succession. These evaporite deposits are assigned to the Zechstein Group, and host the target potash mineralisation of the Deposit type, geological setting and style of South Harz Potash District which occurs on the Mühlhausen- Geology mineralisation. Keula mining licence. The potash-bearing target Zechstein Group consists of seven depositional cycles with the potash mineralisation of the South Harz Potash District hosted within the second cycle, the Staßfurt Formation (Z2). The Z2 is further sub-divided into horizons, of which the Kaliflöz Staßfurt (z2KSt) hosts potentially economic potash. The z2KSt is split into a Hanging Wall Group that has 11 to 19 horizons of finely layered potassium salts and a Footwall Group that has 1 to 10 coarsely layered potassium salts and thick halite layers. The z2KSt is present across the whole of Nohra-Elende sub-area and has an average thickness of 21.8 m. The main mineral present on Nohra-Elende is carnallite with additional sylvite.

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Criteria JORC Code explanation Commentary The drill hole database for Nohra-Elende is made up of 92 A summary of all information material to historical drill holes, of which only drill hole Kal NSo 8/1907 Drill hole the understanding of the exploration results falls directly within the Exploration Target area. A table showing Information including a tabulation of the following the key drill hole information can be found in Section 7.4 of this information for all Material drill holes: report.

The chemical analysis for Nohra-Elende was composited In reporting Exploration Results, weighting according to stratigraphy (z2KSt). A minimum cut-off grade of averaging techniques, maximum and/or 5% K2O was applied to delineate the limits of the potash-bearing minimum grade truncations (eg cutting of horizon within the z2KSt. A weighted average K2O grade for high grades) and cut-off grades are usually each drill hole was calculated against sample length with a 2 m Material and should be stated. minimum grade length, a 2 m maximum total length of waste and a 1 m maximum consecutive length of waste allowed.

Data aggregation methods Where aggregate intercepts incorporate short lengths of high-grade results and Waste was included in the grade composite with a 2 m maximum longer lengths of low-grade results, the total length of waste and a 1 m maximum consecutive length of procedure used for such aggregation should waste allowed. be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly No metal equivalents were used or reported. stated.

These relationships are particularly important in the reporting of Exploration Results. Relationship If the geometry of the mineralisation with All drill holes are vertical with only minor deviations at depth as between respect to the drill hole angle is known, its discussed above. The potash-bearing horizons are horizontal mineralisation nature should be reported. with only minor gentle undulations and the sample thicknesses widths and are considered to represent true thickness without requiring intercept correction. lengths If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being Diagrams Diagrams included in the body of the report. reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

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Criteria JORC Code explanation Commentary

Where comprehensive reporting of all Exploration Results is not practicable, Balanced representative reporting of both low and All available drill hole information was used to report a portion reporting high grades and/or widths should be of the Nohra-Elende sub-area as an Exploration Target. practiced to avoid misleading reporting of Exploration Results.

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; As well as the potash and hydrocarbon drill hole information Other geophysical survey results; geochemical described above, hydrogeological, geotechnical and seismic substantive survey results; bulk samples – size and studies have also been conducted on Nohra-Elende. The details exploration method of treatment; metallurgical test and results of these projects are written up in the historical data results; bulk density, groundwater, archived reports and have not been reviewed by the author as geotechnical and rock characteristics; they require translation into English. potential deleterious or contaminating substances.

The Exploration Target on Nohra-Elende fall directly in between The nature and scale of planned further two Inferred mineral resources areas on the same property owned work (eg tests for lateral extensions or depth by Davenport. By successfully twinning drill hole Kal NSo extensions or large-scale step-out drilling). 8/1907, the Exploration Target area could potentially be incorporated into the Inferred mineral resources.

Further work

Diagrams clearly highlighting the areas of possible extensions, including the main The Exploration Target is already surrounded by Inferred geological interpretations and future Minerals Resources as shown on many diagrams in this report drilling areas, provided this information is including Figure 10.2. not commercially sensitive.

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Section 3 Estimation and Reporting of Mineral Resources (Criteria listed in section 1, and where relevant in section 2, also apply to this section.)

Criteria JORC Code explanation Commentary Database integrity Site visits Geological interpretation Dimensions Estimation and modelling techniques Moisture Cut-off parameters Mining factors or assumptions Not applicable for this report. Metallurgical factors or assumptions Environmental factors or assumptions Bulk density Classification Audits or reviews Discussion of relative accuracy/ confidence

Section 4 Estimation and Reporting of Ore Reserves (Criteria listed in section 1, and where relevant in sections 2 and 3, also apply to this section.)

Criteria JORC Code explanation Commentary Mineral Resource estimate for conversion to Ore Reserves Site visits Study status Cut-off parameters Mining factors or assumptions Metallurgical factors or assumptions Environmental Infrastructure Costs Not applicable for this report Revenue factors Market assessment Economic Social Other Classification Audits or reviews Discussion of relative accuracy/ confidence

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Section 5 Estimation and Reporting of Diamonds and Other Gemstones (Criteria listed in other relevant sections also apply to this section. Additional guidelines are available in the ‘Guidelines for the Reporting of Diamond Exploration Results’ issued by the Diamond Exploration Best Practices Committee established by the Canadian Institute of Mining, Metallurgy and Petroleum.)

Criteria JORC Code explanation Commentary Indicator minerals Source of diamonds Sample collection Sample treatment Carat Sample grade Not applicable for this report Reporting of Exploration Results Grade estimation for reporting Mineral Resources and Ore Reserves Value estimation Security and integrity Classification

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