CANADIAN NATIONAL INSTRUMENT 43-101 TECHNICAL REPORT PREFEASIBILITY STUDY MAYANIQUEL PROJECT GUATEMALA EFFECTIVE DATE: October 24, 2012 DATE OF REPORT: December 7, 2012 QUALIFIED PERSONS: Neil B. Prenn, PE Robert Sim, PGeo Bruce M. Davis, PhD Nicholas A. Barcza, PhD, Pr Eng _________________________________________________________________________ Prepared by: Prepared for: MTB Project Management Professionals, Inc. 8301 E. Prentice Avenue, Suite 312 Greenwood Village, Colorado 80111 P: 303.741.9633 F: 303.741.9636 Table of Contents 1.0 Summary ............................................................................................ 15 1.1 Introduction .................................................................................................................15 1.2 Project Location, Accessibility and Climate .................................................................15 1.3 Property Ownership ....................................................................................................15 1.4 Property Description ...................................................................................................16 1.5 Geology and Mineralization .........................................................................................18 1.6 Drilling .........................................................................................................................20 1.7 Mineral Resource ........................................................................................................21 1.8 Mining .........................................................................................................................23 1.9 Mineral Reserve Estimate ...........................................................................................24 1.10 Metallurgical Testwork ................................................................................................25 1.10.1 Prior Testwork ......................................................................................................25 1.10.2 Ore Upgrading Pilot Testwork ..............................................................................25 1.10.3 Smelter Pilot Testwork .........................................................................................26 1.11 Process Design and Recovery ....................................................................................26 1.12 Execution Plan and Schedule .....................................................................................27 1.13 Capital Cost ................................................................................................................28 1.14 Operating Cost ............................................................................................................28 1.15 Marketing Studies .......................................................................................................29 1.16 Economic Evaluation ..................................................................................................29 1.17 Conclusions and Recommendations ...........................................................................30 1.17.1 Conclusions .........................................................................................................30 1.17.2 Recommendations ...............................................................................................31 1.18 Cautionary Note Regarding Forward-Looking Information and Statements .................31 2.0 Introduction ......................................................................................... 34 2.1 Purpose of the Technical Report .................................................................................34 2.2 Sources of Information ................................................................................................34 2.3 Personal Inspections of the Mayaniquel Project ..........................................................35 2.4 Currency Assumptions ................................................................................................35 3.0 Reliance on Other Experts .................................................................. 36 4.0 Property Description and Location ...................................................... 37 MTB Project Management Professionals, Inc. 2 4.1 Property Ownership and Agreements .........................................................................37 4.2 Environmental Liabilities and Permitting ......................................................................39 4.2.1 Environmental and Permitting Requirements .......................................................39 4.2.2 Environmental Baseline .......................................................................................40 4.2.3 Reclamation Activities ..........................................................................................40 4.3 Other Significant Factors and Risks Affecting Access or Title .....................................41 4.4 Royalties .....................................................................................................................41 5.0 Accessibility, Climate, Local Resources, Infrastructure & Physiography ................................................................................................................. 42 5.1 Location and Access ...................................................................................................42 5.2 Physiography ..............................................................................................................42 5.3 Climate .......................................................................................................................42 5.4 Local Resources .........................................................................................................42 5.5 Infrastructure ...............................................................................................................43 6.0 History ................................................................................................ 44 6.1 Regional Exploration ...................................................................................................44 6.2 Project Area Exploration .............................................................................................44 7.0 Geological Setting and Mineralization ................................................. 46 7.1 Regional Geology .......................................................................................................46 7.2 Local and Property Geology ........................................................................................46 7.3 Mineralization ..............................................................................................................50 8.0 Deposit Types ..................................................................................... 51 9.0 Exploration .......................................................................................... 53 9.1 Historical Exploration ..................................................................................................53 9.2 Exploration by Anfield Nickel Corp. .............................................................................53 10.0 Drilling ............................................................................................... 54 11.0 Sample Preparation, Analyses and Security ..................................... 57 11.1 Sampling Method and Approach .................................................................................57 11.2 Sample Preparation ....................................................................................................59 11.3 Chemical Analysis.......................................................................................................60 11.4 Quality Assurance/Quality Control ..............................................................................60 11.5 Sample Security ..........................................................................................................61 MTB Project Management Professionals, Inc. 3 12.0 Data Verification ............................................................................... 63 13.0 Mineral Processing and Metallurgical Testing ................................... 64 13.1 Background.................................................................................................................64 13.2 Ore Upgrading Pilot Testwork .....................................................................................65 13.2.1 Introduction ..........................................................................................................65 13.2.2 Pilot Scale Testing ...............................................................................................66 13.3 Smelter Pilot Testwork ................................................................................................68 13.3.1 Introduction ..........................................................................................................68 13.3.2 Objectives of the Testwork Campaign ..................................................................68 13.3.3 Ore Sample Selection and Preparation at the Mine..............................................69 13.3.4 Ore Sample, Sampling, Analysis, and Homogenization at Morro Azul .................69 13.3.5 Feed Processing ..................................................................................................70 13.3.6 Smelting Operating Philosophy