Qualified Persons’ Report on Esaase Gold Project, Ashanti Region Ghana i An Independent Qualified Persons’ Report On Esaase Gold Project in the Ashanti Region, Ghana Effective Date: 06 November 2012 Issue Date: 08 November 2012 Minxcon Reference: M12-085 Authors: Antonio Umpire Mineral Resources Manager International (CIP 91856) CJ Muller (Director Minxcon): B.Sc. (Hons) (Geol.), Pr. Sci. Nat Suite 5, Coldstream Office Park Cnr Hendrik Potgieter & Van Staden Streets Prepared by Minxcon (Pty) Ltd Little Falls, Roodepoort, South Africa Tel: +27 11 958 2899 │ Fax: +27 11 958 2105 www.minxcon.co.za Directors: NJ Odendaal, D Van Heerden, CJ Muller Registration No. 2004/029587/07 Qualified Persons’ Report on Esaase Gold Project, Ashanti Region Ghana ii INFORMATION RISK This Report was prepared by Minxcon (Pty) Ltd (“Minxcon”). In the preparation of the Report, Minxcon has utilised information relating to operational methods and expectations provided to them by various sources. Where possible, Minxcon has verified this information from independent sources after making due enquiry of all material issues that are required in order to comply with the requirements of the SAMREC and NI 43-101 Reporting Codes. OPERATIONAL RISKS The business of mining and mineral exploration, development and production by their nature contain significant operational risks. The business depends 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 RISK Factors such as political and industrial disruption, currency fluctuation and interest rates could have an impact on 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 any operating entity. Prepared by Minxcon (Pty) Ltd Qualified Persons’ Report on Esaase Gold Project, Ashanti Region Ghana iii DATE AND SIGNATURE PAGE Yours faithfully, ______________________________ CJ MULLER B.Sc. (Hons) (Geol.), Pr. Sci. Nat. DIRECTOR Effective Date of Report: 06 November 2012 Issue Date of Report: 08 November 2012 Prepared by Minxcon (Pty) Ltd Qualified Persons’ Report on Esaase Gold Project, Ashanti Region Ghana iv TABLE OF CONTENTS Item 1 – Executive Summary ......................................................................................... 8 Item 1 (a) – Property Description ................................................................................... 8 Item 1 (b) – Ownership of the Property ............................................................................ 9 Item 1 (c) – Geology and Mineralisation ............................................................................ 9 Item 1 (d) - Status of Exploration .................................................................................. 12 Item 1 (e) – Mineral Resource and Mineral Reserve Estimates ................................................. 12 Item 1 (f) – Development and Operations ........................................................................ 12 Item 1 (g) – Conclusions and Recommendations ................................................................. 13 Item 2 – Introduction .................................................................................................. 14 Item 2 (a) – Issuer Receiving the Report .......................................................................... 14 Item 2 (b) – Terms of Reference and Purpose of the Report ................................................... 14 Item 2 (c) – Sources of Information and Data Contained in the Report ...................................... 14 Item 2 (d) – Qualified Persons’ Personal Inspection of the Property ......................................... 14 Item 3 – Reliance on Other Experts ................................................................................ 15 Item 4 – Property Description and Location ...................................................................... 16 Item 4 (a) – Area of the Property .................................................................................. 19 Item 4 (b) – Location of the Property .............................................................................. 19 Item 4 (c) – Mineral Tenure ......................................................................................... 20 Item 4 (d) – Issuer’s Title to/Interest in the Property .......................................................... 21 Item 4 (e) – Royalties and Payments ............................................................................... 21 Item 4 (f) – Environmental Liabilities ............................................................................. 21 Item 4 (g) – Permits to Conduct Work ............................................................................. 21 Item 4 (h) – Other Significant Factors and Risks ................................................................. 22 Item 5 – Accessibility, Climate, Local Resources, Infrastructure and Physiography ..................... 22 Item 5 (a) – Topography, Elevation and Vegetation ............................................................. 22 Item 5 (b) – Access to the Property ................................................................................ 22 Item 5 (c) – Proximity to Population Centres and Nature of Transport ...................................... 22 Item 5 (d) – Climate and Length of Operating Season .......................................................... 22 Item 5 (e) – Availability and Sufficiency of Rights and Resources ............................................. 22 Item 6 – History ........................................................................................................ 23 Item 6 (a) – Prior Ownership and Ownership Changes .......................................................... 23 Item 6 (b) – Historical Exploration and Development ........................................................... 24 Item 6 (c) – Historical Mineral Resource Estimates .............................................................. 25 Item 6 (d) – Historical Mineral Reserve Estimates ............................................................... 26 Item 6 (e) – Historical Production .................................................................................. 27 Item 7 – Geological Setting and Mineralisation ................................................................... 27 Item 7 (a) – Regional, Local and Property Geology .............................................................. 27 Item 7 (b) – Significant Mineralised Zones on the Property .................................................... 33 Item 8 – Deposit Types ................................................................................................ 35 Item 9 – Exploration ................................................................................................... 35 Item 9 (a) – Survey Procedures and Parameters ................................................................. 35 Item 9 (b) – Sampling Methods and Sample Quality ............................................................. 36 Item 10 – Drilling ..................................................................................................... 38 Item 10 (a) - Drilling ................................................................................................ 38 Item 10 (b) - RC and Core Sampling Procedures ................................................................ 40 Item 10 (c) – Factors Influencing the Accuracy of Results .................................................... 41 Item 10 (d) – Exploration Properties – Drill Hole Details ...................................................... 41 Prepared by Minxcon (Pty) Ltd Qualified Persons’ Report on Esaase Gold Project, Ashanti Region Ghana v Item 11 – Sample Preparation, Analysis and Security ......................................................... 42 Item 11 (a) – Sample Handling Prior to Dispatch ............................................................... 42 Item 11 (b) – Sample Preparation and Analysis Procedures ................................................... 42 Item 11 (c) – Quality Assurance and Quality Control .......................................................... 42 Item 11 (d) – Adequacy of Sample Preparation ................................................................. 47 Item 12 – Data Verification ......................................................................................... 48 Item 12 (a) – Data Verification Procedures ..................................................................... 48 Item 12 (b) - Limitations of Data Verification .................................................................. 48 Item 12 (c) – Adequacy of Data ................................................................................... 48 Item 13 – Mineral Processing and Metallurgical Testing ...................................................... 49 Item 13 (a) – Nature and Extent of Testing and Analytical Procedures ..................................... 49 Item 14 – Mineral Resource Estimates ............................................................................ 50 Item 14 (a) – Assumptions, Parameters and Methods Used for Mineral Resource Estimates ............ 50 Item 14 (b) – Disclosure Requirements for Mineral Resources ................................................ 64 Item 14 (c) – Factors Affecting Mineral