CJSC Bazovye Metally Kekura Gold Project Feasibility Study Section 1 EXECUTIVE SUMMARY January 2018 This page is intentionally blank. CJSC Bazovye Metally Kekura Gold Project Project No. A9KU Feasibility Study CONTENTS SECTION 1 EXECUTIVE SUMMARY ................................................................................................. 1-1 1.1 Project Description ........................................................................................................... 1-1 1.2 Geology and Mineral Resources ...................................................................................... 1-2 1.2.1 Summary ............................................................................................................. 1-2 1.2.2 Geology ............................................................................................................... 1-3 1.2.3 Database ............................................................................................................. 1-5 1.2.4 Domain Modelling and Estimation ...................................................................... 1-5 1.2.5 Mineral Resource Classification .......................................................................... 1-5 1.2.6 Geotechnics ........................................................................................................ 1-7 1.3 Mining ............................................................................................................................. 1-13 1.3.1 Open Pit Mining ................................................................................................. 1-13 1.3.2 Underground Mining ......................................................................................... 1-17 1.3.3 Mining Schedule................................................................................................ 1-26 1.3.4 JORC Code, 2012 Edition – Table 1 Report ..................................................... 1-30 1.4 Process Plant ................................................................................................................. 1-57 1.5 Dry Stacked Tailing Storage Facility .............................................................................. 1-58 1.6 Power Supply ................................................................................................................. 1-59 1.7 Onsite Infrastructure....................................................................................................... 1-60 1.8 Offsite Infrastructure....................................................................................................... 1-62 1.9 Project Execution ........................................................................................................... 1-63 1.10 Capital Cost Estimate..................................................................................................... 1-64 1.11 Operating Cost Estimate ................................................................................................ 1-66 1.12 Mine Closure .................................................................................................................. 1-66 1.13 Financial Analysis .......................................................................................................... 1-67 1.14 Risks and Opportunities ................................................................................................. 1-68 JANUARY 2018 EXECUTIVE SUMMARY CJSC Bazovye Metally Kekura Gold Project Project No. A9KU Feasibility Study TABLES Table 1-1 Mineral Resources at Kekura Deposit as of December 2017 - Open Pit and Underground Mining Potential1,2,3,4,5,6 ................................................................................................ 1-6 Table 1-2: Mechanical Properties of Key Geotechnical Domains.............................................................. 1-7 Table 1-3: Hoek-Brown Strength Parameters for Geotechnical Domains ................................................. 1-8 Table 1-4: Average Rock Mass Rating Parameters by Lithological Units ................................................. 1-9 Table 1-5: Limit Equilibrium Slope Stability Estimation Results for Kekura Open Pit .............................. 1-12 Table 1-6: Finite Elements Slope Stability Estimation Results for Kekura Open Pit ............................... 1-12 Table 1-7: Cut-Off Grade Estimation ....................................................................................................... 1-13 Table 1-8: Pushback Volumes ................................................................................................................. 1-15 Table 1-9: Open Pit Mining Fleet ............................................................................................................. 1-16 Table 1-10: Open-Pit Mining Capital Costs .............................................................................................. 1-17 Table 1-11: Equipment Operating Unit Costs .......................................................................................... 1-17 Table 1-12: Indicative Unsupported Spans at Kekura by Q Class.......................................................... 1-19 Table 1-13: Tributary Area Pillar Stress versus Depth at Varying Extraction Ratios .............................. 1-19 Table 1-14: Mine Plan ............................................................................................................................. 1-27 Table 1-15: Ore Reserves for the Kekura Deposit as at 1st January 2018 1, 2, 3 .................................... 1-29 Table 1-16: Sampling Techniques and Data ........................................................................................... 1-30 Table 1-17: Reporting of Exploration Results ......................................................................................... 1-35 Table 1-18: Estimation and Reporting of Mineral Resources ................................................................. 1-38 Table 1-19: Estimation and Reporting of Ore Reserves ......................................................................... 1-47 Table 1-20: Major Process Equipment ..................................................................................................... 1-57 Table 1-21: Project Schedule Major Milestones ...................................................................................... 1-64 Table 1-22: Capital Cost Summary .......................................................................................................... 1-65 Table 1-23: Estimated Operating Costs by Category .............................................................................. 1-66 Table 1-24: Financial Summary ............................................................................................................... 1-67 Table 1-25: NPV Sensitivity to Gold Price and Discount Rate ................................................................. 1-68 FIGURES Figure 1-1: Project Location ....................................................................................................................... 1-1 Figure 1-2: Kekura Project Annual Plant Feed and Ore Grade ................................................................. 1-2 Figure 1-3: General View of Kekura Deposit with Open Pit and Underground Workings ....................... 1-3 Figure 1-4: Typical Geological Cross-Section, Line PR2B ...................................................................... 1-4 Figure 1-5: View of Final Structural Model of Kekura Deposit with Cross-Section .................................... 1-9 Figure 1-6: Pit Domaining Based on Stable Bench Parameters .............................................................. 1-11 Figure 1-7: Example of Finite Element Model for Kekura Open Pit, Section S01 Maximum Shear Strain ................................................................................................................................................ 1-12 Figure 1-8: Pit Shell and Metal Price Sensitivity Diagram ................................................................ 1-14 Figure 1-9 Final Pit and Dump Design and Layout .................................................................................. 1-15 Figure 1-10: Underground Access Scheme for Kekura Deposit .............................................................. 1-21 Figure 1-11: Capital Development Schedule ........................................................................................... 1-21 Figure 1-12: Stope Development Schedule ............................................................................................. 1-22 Figure 1-13: Losses and Dilution During Development of Ore Drifts ....................................................... 1-23 Figure 1-14: Underground Mining Schedule ............................................................................................ 1-24 Figure 1-15: Operating Costs by Year ..................................................................................................... 1-25 Figure 1-16: Operating Costs by Category .............................................................................................. 1-25 Figure 1-17: Operating Costs by Year ..................................................................................................... 1-26 Figure 1-18: Simplified Overall Process Diagram .................................................................................... 1-57 Figure 1-19: Process Plant General Arrangement ..................................................................................