THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX IV INDEPENDENT TECHNICAL REPORT Independent Technical Report of Xiangyang Future Bright Mining’s Yiduoyan Marble Project Report Prepared for Future Bright Mining Holdings Limited Report Prepared by SRK Consulting (Hong Kong) Limited XFB002 [REDACTED] – IV-1 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX IV INDEPENDENT TECHNICAL REPORT Independent Technical Report of Xiangyang Future Bright Mining’s Yiduoyan Marble Project Future Bright Mining Holdings Limited R16/F, Guangdong Finance Building, 88 Connaught Road West, Hong Kong SRK Consulting (Hong Kong) Limited Suite A1, 11/F, One Capital Place, 18 Luard Road, Wanchai, Hong Kong e-mail: [email protected] website: srk.com.hk Tel: +852 2520 2522 Fax: +852 2520 0003 SRK Project Number XFB002 [REDACTED] Compiled by Peer Reviewed by Helen Ray Anthony Stepcich Associate, Industrial Minerals Principal Consultant, Project Evaluations Authors: Gavin Chan; Helen Ray; Sue Border; Jinhui Liu; Gerard Guo; Xue Nan – IV-2 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX IV INDEPENDENT TECHNICAL REPORT EXECUTIVE SUMMARY SRK Consulting (Hong Kong) Limited (“SRK”) has been commissioned by Future Bright Mining Holdings Limited (“Future Bright” or the “Company”) to prepare an Independent Technical Report (“ITR” or “Report”) on its Yiduoyan Marble Project (the “Project”), located in Xiaoyan Township, Nanzhang County, Xiangyang, Hubei Province of Peoples’ Republic of China. The ITR is prepared in a format which meets the requirements for a proposed listing on the Main Board of the Stock Exchange of Hong Kong Limited (“HKEx” or “Stock Exchange”). The Scope of Works for the ITR includes a review and reporting of the following technical aspects: • Geology; • Resources Estimate; • Mining Methods and Ore Reserves; • Environment, Permits and Social Impacts; • Capital and Operating Costs; • Marble Quality and Marketing; and • Risk Assessment. Work Programme SRK has reviewed information supplied by the Company including a feasibility study (“FS”), prepared by the Suzhou Sinoma Design & Research Institute of Non-metallic Minerals Industry Co., Ltd (“Sinoma”), a market study, drilling information, test reports and various requested documents. SRK consultants visited the site twice in July 2013 and May 2014. This Report comprises the results of the investigations, Resource and Reserve estimations and discussions with Future Bright. Project Background and Current Status Future Bright proposes to develop the Project to extract white and grey marble dimension stone blocks for sale to processing plants for the production of polished slabs and other products. The Project is located in Nanzhang County, Hubei Province of China, approximately 45 km from Nanzhang. The Project area is covered by a mining licence, measuring approximately 0.5 km2. – IV-3 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX IV INDEPENDENT TECHNICAL REPORT The Project site has not previously been systematically explored before 2012. In 2012, Future Bright commissioned the Team 932 of Nonferrous Metals Geological Bureau of Guangdong Province (“Team 932”) to conduct geological investigation comprising 12 diamond drillholes totalling 1,009.2 m, of which nine were logged, a topographical survey, geological mapping, hydrological study, and sampling for physical and chemical tests. In July 2013, Future Bright also commissioned Sinoma to undertake a Feasibility Study (“FS”) on the Project. Future Bright conducted limited site construction between September 2012 and July 2013, and has begun full-scale mine construction since August 2013. In April 2014, Future Bright had already constructed three production benches at 556 m, 548 m and 540 m respectively at the initial mining area, located between Exploration Lines 101 and 102. These benches measure 120 m, 220 m and 260 m respectively. As of the end of June 2014, the production bench at 556 m had been completely mined out whereas mining continues at level 548 m and 540 m. According to the FS, mining will then proceed to pushback downwards bench by bench and form a final open pit with the bench height of 8 m, a safety cleaning berm width of3mand a haulage berm width of 6 m. The working bench angle is 90°, but the final slope angle will become 55° and 45° within marble and the weathered zone, respectively. The final pit will measure a depth of 160 m. The dimension of the pit top will measure 517 m x 298 m and the pit bottom will measure 312 m x 140 m. As of the end of June 2014, topsoil and weathered materials had been stripped off at the initial mining area. These materials have been used as fill materials for the haulage road and the foundation of the transfer pad area. A 900-m-long haulage road, connecting the Provincial Highway S251 to the temporary office complex and the mining area has been constructed. According to the FS, the haulage road will further be extended to 1.89 km long and 6.5 m wide. Geology The Project area is underlain by the Jialingjiang Formation of Triassic age. Two units of marble of economic interest have been identified, a light to dark grey fine to very fine grained marble (Grey Marble V-2) which is overlain by a milky white to light grey and pink fine grained marble (White Marble V-1). The marble occurs in a southeast gently plunging asymmetric open syncline. A fault occurs in the eastern part of the Project area, the extent of which has been deducted in Resource and Reserve estimations. Structural mapping has identified two main joint sets as well as bedding parallel jointing. The marble within the mining licence area is affected by shallow weathering karst features and two sinkholes. No subsurface information is available about the sinkholes and they have been excluded from the proposed pit area and hence Reserve estimation. – IV-4 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX IV INDEPENDENT TECHNICAL REPORT Mineral Resources A detailed topographical survey and geological mapping have been conducted on the mining licence area, with more detailed investigations in the proposed quarry area. In all, 12 wireline diamond drillholes were drilled during the geological investigation of the site. Nine of the drillholes were considered in the geological model and Resources estimation, and the remaining three have not yet been logged or tested. Core recovery within the marble units was 96%. Physical tests have been carried out on core and surface samples from the Project area. Bulk density, water absorption, compressive and flexural strength tests, abrasion resistance, gloss and radioactivity tests have been carried out on surface and drill core samples. The results of the tests meet Chinese standard specifications for marble dimension stone with the exception of a limited number of water absorption tests, most of which are associated with either weathering or joints. Chemical analysis and inspection of core and quarry faces and polished samples have indicated that no deleterious minerals are present. Samples of the marble also meet the national mandatory standard for radionuclides in building materials for Class A materials which places no restrictions on its use. SRK has carried out a limited number of check tests that, in general, confirm the results of the tests carried out by the Company. The block yield, the number of blocks (1.7 m x 1.7 m x 2.5 m) that can be produced from a cleaned bench which contains a volume of 1,112 m3, was estimated by Team 932 as 35%. This was verified by SRK through joint mapping at one of the recently cleaned benches in July 2013. Actual production data for early 2014 also yielded similar results. SRK is of the opinion that there is sufficient confidence in the continuity of marble colour and quality to classify Resources within 70 m from drillholes as Indicated and those within 140 m as Inferred. SRK considers that the data are of sufficient quality, and the Resource estimate is considered by SRK to comply with Joint Ore Reserves Committee (“JORC”) Code, 2012 (Table ES-1). Table ES-1: Yiduoyan Marble Resource Statement as at 1 July 2014 White Grey Resource Category Marble V-1 Marble V-2 Total (million m3) (million m3) (million m3) Inferred 1.8 1.5 3.4 Indicated 5.6 1.8 7.3 Total 7.4 3.3 10.7 The Resource has been limited to the area within the mining licence between the approved elevations limits of 420 to 589 m RL. The Resource is calculated to have a block yield of approximately 35%. Based on the testwork conducted we have determined the whole Resource is of potentially mineable quality and has a potentially economic block yield. Areas of the deposit that are not potentially marketable on the grounds of appearance, quality or potential block size have been excluded from the Resource estimate. Marble blocks produced prior to 1 July 2014 have been deducted from the estimated Resources. – IV-5 – THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT. APPENDIX IV INDEPENDENT TECHNICAL REPORT Ore Reserves Based on the mine planning and modifying factors (defined in Figure 6-1) described in the FS and the defined Indicated Resources, SRK has classified the final saleable marble block product portion of the Indicated Resources, within the proposed pit (517 m long and 298 m wide), designed by Sinoma as Probable Reserves, as shown in Table ES-2.