i Block G, First Floor Rochester Place 173 Rivonia Road Sandton 2146 PO Box 782761 Sandton 2146 Republic of South Africa A PRELIMINARY ECONOMIC ASSESSMENT IN THE FORM OF AN Tel: +27 11 783 9903 INDEPENDENT TECHNICAL REPORT Fax: +27 11 783 9953 ON www.venmyn.com MBAC FERTILIZER CORP. (MBAC) ARAXÁ PROJECT LOCATED IN MINAS GERAIS STATE, BRAZIL, AS AMENDED, PREPARED BY VENMYN RAND (PTY) LIMITED (VENMYN) AUTHORS: PROFESSIONAL NAMES QUALIFICATION DESIGNATION REGISTRATION M.Sc. (Geol.), M.Sc. (Min. Eng.), Venmyn Managing Director and Pr Sci Nat, MSAIMM, A.N. Clay Dip. Bus. Qualified Person FAusIMM, FGSSA Consulting Geologist (Andes Mining B. Ackroyd B.Sc (Geol) MAIG Services) and Qualified Person Venmyn Ref: D1115R Effective Date: 1st October 2012 Amendment and Restatement Date: 25th January 2013 Directors: A N Clay (British); S E Conquest; E de V Greyling; N McKenna; C A Telfer Venmyn Rand (Pty) Ltd. trading as Venmyn Reg. No. 1988/004918/07 i DISCLAIMER AND RISKS Venmyn and its Qualified Persons have prepared this Independent Technical Report and, in so doing, have utilised information provided by MBAC and its consultants. This information has been verified from independent sources with due enquiry in terms of all material issues that are a prerequisite to comply with National Instrument 43-101, the CIM Standards and the Toronto Stock Exchange rules. OPERATIONAL RISKS The businesses of mining and mineral exploration, development and production by their natures contain significant operational risks. The businesses depend upon, amongst other things, successful prospecting programmes and competent management. Profitability and asset values can be affected by unforeseen changes in operating circumstances and technical issues. POLITICAL AND ECONOMIC RISKS Factors such as political and industrial disruption, currency fluctuation, increased competition from other prospecting and mining rights holders and interest rates could have an impact on MBAC and its subsidiaries‟ future operations, and potential revenue streams can also be affected by these factors. The majority of these factors are, and will be, beyond the control of MBAC or any other operating entity. FORWARD LOOKING INFORMATION The following report contains forward-looking information. This forward looking information is based on opinions and estimates of MBAC management and Venmyn at the date the information is provided. Such information is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in the forward-looking information. Factors that could cause such differences include changes in world commodity markets, equity markets, costs and supply of materials relevant to the projects, and changes to regulations affecting the project. Although Venmyn believes the assumptions and expectations reflected in the forward- looking information to be reasonable, Venmyn cannot guarantee future results, levels of activity, performance or achievements. Araxá Project Venmyn Rand (Pty) Ltd October 2012 ii A PRELIMINARY ECONOMIC ASSESSMENT IN THE FORM OF AN INDEPENDENT TECHNICAL REPORT ON MBAC FERTILIZER CORP. (MBAC) ARAXÁ PROJECT LOCATED IN MINAS GERAIS STATE, BRAZIL, AS AMENDED, PREPARED BY VENMYN RAND (PTY) LIMITED (VENMYN) LIST OF CONTENTS 1. EXECUTIVE SUMMARY (NI 1) ................................................................................................................................... 8 1.1. Project Description (NI 1) .............................................................................................................................. 8 1.2. Infrastructure (NI 1) ....................................................................................................................................... 9 1.3. Ownership (NI 1) ........................................................................................................................................... 9 1.4. Material Agreements (NI 1) ........................................................................................................................... 9 1.5. Geology and Mineralisation (NI 1) ................................................................................................................ 9 1.6. Status of Exploration (NI 1) ......................................................................................................................... 10 1.7. Development and Operations (NI 1) ........................................................................................................... 11 1.8. Mineral Processing and Metallurgical Testing (NI 1) ................................................................................... 11 1.9. Mineral Resource and Mineral Reserve Estimates (NI 1) ........................................................................... 12 1.10. Mining Methods (NI 1) ................................................................................................................................ 13 1.11. Recovery Methods (NI 1) ............................................................................................................................ 13 1.12. Preliminary Economic Assessment (NI 1) ................................................................................................... 14 1.13. Conclusions (NI 1) ...................................................................................................................................... 16 1.14. Recommendation (NI 1) .............................................................................................................................. 16 2. INTRODUCTION (NI 2) ............................................................................................................................................. 17 2.1. Issuer (NI 2a) .............................................................................................................................................. 17 2.2. Terms of Reference and Purpose (NI 2b) ................................................................................................... 17 2.3. Use of the Term “Ore” ................................................................................................................................. 17 2.4. Sources of Information (NI 2c) .................................................................................................................... 17 2.5. Personal Inspection (NI 2d) ........................................................................................................................ 20 3. RELIANCE ON OTHER EXPERTS (NI 3) ................................................................................................................. 20 4. PROPERTY DESCRIPTION AND LOCATION (NI 4) ............................................................................................... 20 4.1. Description (NI 4a) ...................................................................................................................................... 20 4.2. Location (NI 4b) .......................................................................................................................................... 20 4.3. Mineral Tenure (NI 4c)(NI 4d) ..................................................................................................................... 21 4.4. Material Agreements (NI 4e) ....................................................................................................................... 21 4.4.1. Itafós and Extramil Option Agreement ....................................................................................... 21 4.4.2. MBAC and CBMM Access Agreement....................................................................................... 24 4.4.3. Government Royalty .................................................................................................................. 24 4.4.4. Marketing or Sales Agreements ................................................................................................. 24 4.5. Environmental Liabilities (NI 4f) .................................................................................................................. 24 4.6. Other Permits (NI 4g) .................................................................................................................................. 24 4.7. Other Risks (NI 4h) ..................................................................................................................................... 24 5. ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE and PHYSIOGRAPHY (NI 5)................ 25 5.1. Topography, Elevation and Vegetation (NI 5a) ........................................................................................... 25 5.2. Access (NI 5b) ............................................................................................................................................ 25 5.3. Proximity to Population Centres (NI 5c) ...................................................................................................... 25 5.4. Climate (NI 5d) ............................................................................................................................................ 25 5.5. Availability of Infrastructure (NI 5e) ............................................................................................................. 25 6. HISTORY (NI 6) .......................................................................................................................................................