Business Development of the Goleshi Mine Scoping Study Report In cooperation with Business Development of the Goleshi Mine Scoping Study Report GIZ Document control sheet Project data Client: Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Project title: Business Development of the Goleshi Mine Project No.: 2019-0123 Document type: Scoping Study Report Document data Document: P:\2019\2019-0123\Projekt\05\12\Report\Final\PEA Master Goleshi_FINAL16122019.docx Issued on: 16/12/2019 Revision-No.: 07 Handling and control of document Reviewed by: Prepared by: ....................................................... ...................................................... Dr. Karsten Galipp EurGeol Christian Masurenko Director International Projects Team Leader INROS LACKNER SE / ECTerra Project No. 2019-0123 Page IV Business Development of the Goleshi Mine Scoping Study Report GIZ Table of contents Document control sheet .................................................................................................... III Table of contents ............................................................................................................... IV List of Tables ...................................................................................................................... IX List of Figures .................................................................................................................... XI Abbreviations .................................................................................................................. XIV Cautionary Statement ...................................................................................................... XV 1 Executive Summary ................................................................................................. 16 1.1 Location ............................................................................................................................... 17 1.2 Licence ................................................................................................................................ 17 1.3 History ................................................................................................................................. 17 1.4 Regional and Deposit Geology ........................................................................................... 18 1.5 Historical Resources and Reserves .................................................................................... 20 1.6 1984 Historical Resources and Reserves Estimates .......................................................... 21 1.7 Reserves in Pillars and Panels ........................................................................................... 22 1.8 2008 Historical Resources and Reserves ........................................................................... 23 1.9 Exploration .......................................................................................................................... 25 1.10 Underground Exploration Drives and Raises ...................................................................... 27 1.11 Drilling ................................................................................................................................. 28 1.12 Sample Preparation, Analyses, and Security ..................................................................... 29 1.13 Mineral Resource Estimates ............................................................................................... 29 1.14 Mineral Reserve Estimates ................................................................................................. 29 1.15 Geology, Resources and Historic Mining Interpretations and Conclusions ........................ 29 1.16 Geology and Resources Recommendations ...................................................................... 32 1.16.1 Geology and Resources ................................................................................................ 32 1.16.2 Mining ............................................................................................................................ 35 1.16.3 Conceptual Mineral Processing ..................................................................................... 36 1.17 Preliminary Finance Model ................................................................................................. 38 1.17.1 CAPEX ........................................................................................................................... 38 1.17.2 Conceptual CAPEX – Observations .............................................................................. 38 1.17.3 ROM, Production and Reserves .................................................................................... 38 1.17.4 Preliminary Economic Analysis ...................................................................................... 39 1.18 Marketing ............................................................................................................................ 40 2 Introduction .............................................................................................................. 43 2.1 Overview ............................................................................................................................. 43 2.2 Sources of Information ........................................................................................................ 44 2.3 Reliance on Other Experts .................................................................................................. 44 2.4 Property Description and Location ...................................................................................... 45 2.5 Licences and Tenure .......................................................................................................... 46 2.5.1 Licencing Details ............................................................................................................ 46 2.5.2 Licensee ......................................................................................................................... 46 2.5.3 Duration ......................................................................................................................... 46 2.5.4 Re-establishing the Goleshi Mining licence ................................................................... 47 2.5.5 Independent Commission for Mines and Minerals (ICMM) – Functions ........................ 48 INROS LACKNER SE / ECTerra Project No. 2019-0123 Page IV Business Development of the Goleshi Mine Scoping Study Report GIZ 2.5.6 Privatization Agency of Kosovo (PAK)........................................................................... 49 3 Accessibility, Climate, Local Resources, Infrastructure and Physiography ....... 52 3.1 Rail ...................................................................................................................................... 52 3.2 Ports .................................................................................................................................... 52 4 History ...................................................................................................................... 53 4.1 Historical Resource and Reserves...................................................................................... 55 4.2 1984 Historical Resources and Reserves Estimates .......................................................... 56 4.3 Method for Estimation ......................................................................................................... 56 4.4 Classification and Categorization of Historic Magnesite Resources and Reserves ........... 58 4.5 2008 Historical Resources and Reserves ........................................................................... 59 4.6 Reserves in Pillars and Panels ........................................................................................... 61 5 Geological Setting and Mineralisation ................................................................... 63 5.1 Regional Geology ............................................................................................................... 63 5.2 Project Geology .................................................................................................................. 66 5.3 Deposit Geological Structure .............................................................................................. 68 5.4 Physical Criteria .................................................................................................................. 71 5.5 Chemical Criteria ................................................................................................................ 71 5.6 Loss on Ignition (LOI) Statistics .......................................................................................... 71 5.7 Deposit Genesis .................................................................................................................. 71 6 Exploration ............................................................................................................... 73 6.1 Underground Exploration Drives and Raises ...................................................................... 75 6.2 Drilling ................................................................................................................................. 83 6.3 Sample Preparation, Analyses, and Security ..................................................................... 87 6.4 Data Verification .................................................................................................................