Jor C Report

Independent Technical Report
for an High-magnesium Serpentinite

Project in Tuoli County,
Xinjiang Uygur Autonomous Region,
P.R. China
Report prepared for
Xinjiang Fenglideyuan Trading Limited
Prepared by
January 2014
SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page ii
Independent Technical Report

for an High-magnesium Serpentinite Project
in Tuoli County, Xinjiang Uygur
Autonomous Region,
P.R. China
For
Xinjiang Fenglideyuan Trading Limited

th
25 Floor, Yingke International Centre, 416 Beijingnan Street
Urumqi City
Xinjiang Uygur Autonomous Region, China
SRK Project Number SCN329

SRK Consulting China Ltd
B1205, COFCO Plaza, 8 Jianguomennei Dajie
Dongcheng District, Beijing 100005
Contact: Dr. Yiefei Jia

Telephone No.: +86 10 8512 0365
Email: yjia@srk.cn
URL: www.srk.cn
January 2014
Compiled by: Peer reviewed by:
Dr. Yiefei Jia, FAusIMM Daniel Guibal, FAusIMM

Principal Consultant Corporate Consultant
(Geology) (Geostatistics & Resources)
Authors:
Yuanjian Zhu and Dr Yiefei Jia
Peer Reviewers:
Dr Anson Xu (internal), Mr. Daniel Guibal (external)
YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page iii
Executive Summary
Background
Fenglideyuan Trading Limited (“Fenglideyuan”, the “Company” or the “Client”) commissioned SRK
Consulting China Limited (“SRK”) to review the geology, supervise the exploration program, and prepare a
mineral resource estimate for the Akekerishi serpentinite deposit (“Akekerishi Deposit”) in Tuoli County,
Xinjiang Uygur Autonomous Region, the People’s Republic of China (“P.R. China”). The geological review
and resource estimates were required to be included in a Competent Person’s Report (“this Report” or “the
Report”) to provide Fenglideyuan and potential equity investors as well as possible future shareholders with
SRK’s independent technical opinions on this property.
Summary of Principal Objectives

The principal objective of this Report is to provide the Company and potential investors in the Company
with an independent technical assessment of the geology, exploration and resource aspects of the reviewed
projects based on all available technical data. The aim has been to produce a Competent Persons Report
(“CPR”) suitable for inclusion in a prospectus prepared to support the proposed listing of the Company on
the Alternative Investment Market (“AIM”) of the London Stock Exchange.
Outline of Work Program

The work programme for this project consisted of:
- A review of data provided by Fenglideyuan;
- Two site visits to the project area in April and November 2013;
- Discussions with Company personnel and the relevant geological professionals and consultants who
conducted the geological exploration;
- On-site supervision of the quality assurance and quality control (“QA/QC”) procedures followed in the
surface drilling programme and sampling between August and October 2013;
- Geological modelling and resource estimation of the serpentinite deposit in December 2013;
- Analysis of the data provided by the Company and generated by SRK; and
- Preparation of this Report.
Results
Summary
Fenglideyuan wholly owns one exploration permit named Xinjiang Tuoli County Akekerishi Cooper
Polymetallic Exploration permit, covering an area of 21.51 square kilometres (“km2”). The property is
located approximately 100 kilometres (“km”) south of the Tuoli County town in Xinjiang Uygur
Autonomous Region, P.P. China, and is under the administrative jurisdiction of Tuoli County. Access to the
property is relatively easy via paved roads from Urumqi.
The reviewed area is located in the southwest of the permit area and covers an area of nearly 5 km2, in which
149 drillholes with an aggregate length of approximately 29,400 metres (“m”) were drilled between August
and October 2013, which was under SRK’s supervision. A total of 9,612 samples representing 28,793.3 m of
drilling core were collected during the campaign. Generally SRK is satisfied with the quality of drilling,
sampling and assaying, and SRK is confident that the data so obtained are of sufficient quality for use in
preparing a resource statement for the Akekerishi Deposit complying with the requirements of the Australian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code (2012
edition)).
As of 31 December 2013, the Akekerishi Deposit, at a cut-off grade of 30% magnesium oxide (“MgO”), was
estimated to contain 1,536 million tonnes (Mt) of Measured Resource at an average grades of 41.75% MgO;

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page iv
2,666 Mt of Indicated Resource at average grades of 42.01% MgO; and 5,726 Mt of Inferred Resource at an
average grades of 42.74% MgO.
Exploration permit
The Akekerishi Deposit is located in Tuoli County, Xinjiang Uygur Autonomous Region in China, under the
direct jurisdiction of Tuoli County and 100 km south of the Tuoli urban area. The geographical coordinates
of the deposit area are limited to the area between 83°23′00″ to 83°26′45″ East longitude and 45°06′15″ to
45°08′45″ North latitude. The Xinjiang Tuoli County Akekerishi Cooper Polymetallic Exploration permit
was acquired by Fenglideyuan in October 2008. A copy of the original exploration permit of the Akekerishi
Deposit is shown in Appendix 1.
Geology and Mineralogy
The serpentinite deposit in Akekerishi property is recognized as an ultra-mafic intrusion type deposit
characterized by high-MgO content.
Folds and faults are relatively developed in the deposit area. The faults are secondary faults regionally
induced by the northeast trending Daerbute fault and Mayile fault, and these secondary faults have no effect
on the continuity of mineralisation in the Akekerishi deposit. Intermediate-felsic volcanic-sedimentary rocks
of the Middle Ordovician Kekesayi Formation dominate the area. Serpentinization is widely developed in the
region. The Late Paleozoic Variscan ultra-mafic serpentinites are the major intrusive rocks which form the
mineralised zone.
One mineralised zone was defined in the region. It is over 4,000 m long, 3,000 m wide and extends for over
600 m deep, in a bedded shape. It is located in the southwest portion of the exploration permit area, covering
approximately one third of the total area.
The potential useful mineral in Akekerishi Deposit is serpentine or/and olivine, which represents over 90%
of the mineralisation. The secondary associated minerals mostly comprise pyroxene, magnetite, and
magnesite. Gangue minerals mostly consist of amphibole and biotite. Serpentine mostly occurs in micro
scaly, xenomorphic-hypidiomorphic fine granular or columnar textures, and appears in massive or vein
structures.
The accompanying useful minerals consist of silicon dioxide (“SiO2”, with an average grade of 35.79%), iron
oxide (“Fe2O3”, with an average grade of 6.81%), nickel (“Ni”, with an average grade of 0.22%), cobalt
(“Co”, with an average grade of 0.010%), gold (“Au”, with an average grade of 0.06 gram per tonne (g/t)),
and silver (“Ag”, with an average grade of 5.95 g/t). All of these minerals except Co, Au and Ag can be
economically recovered based on several metallurgical test reports provided by the Client. The harmful
elements are sulphur (“S”, with an average grade of 0.016%), phosphorus (“P”, with an average grade of
0.013%), chromic oxide (“Cr2O3”, with an average grade of 0.40%), calcium oxide (“CaO”, with an average
grade of 0.16%), and arsenic (“As”, less than the detectable limit of 3 g/t).
Exploration, Sampling, Analytical Procedures, Quality Assurance and Quality Control
Under SRK’s supervision, the No. 8 Geological Brigade of Fujian Province (“No. 8 Brigade”) conducted
drilling and geological exploration programs at the Akekerishi deposit from August to October 2013. As of
October 2013, a total of 149 vertical drillholes with an aggregate length of approximately 29,400 m had been
drilled out at the deposit. All drillholes were arranged along exploration lines. The collars of the drill holes
were properly surveyed and down-hole surveying was undertaken at 100 m or lower intervals. The drill cores
were logged while uncut. Samples were taken from halves of drill cores by splitting along the core axis.
Sample intervals were marked by geologists and ranged from 1 m to 5 m in length. The most common
sample length amongst the core samples was 3 m. Wall rocks and ore were sampled separately. The recovery
rates for all cores varied from 90% to 100% with an average recovery rate of 98%, and for all mineralised
drill cores varied from 92% to 100% with an average recovery rate of 98%.

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Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page v
A total of 9,612 samples from the deposit were collected and analysed by the Laboratory of No. 121
Geological Brigade of Fujian Province (“No. 121 Laboratory”). Five components including MgO, SiO2,
Fe2O3, Ni and Co were assayed. For each 100 sample batch, 10 QA/QC samples were inserted, consisting of
two certified reference materials (“CRM”), two blanks, two core duplicates, two coarse rejects and two pulp
duplicates. Additionally, four (4) out of every 100 samples were randomly chosen and sent to a second
independent laboratory (SGS-CSTC Standards Technical Services (Tianjin) Co., Ltd (“SGS”)) for external
check. A total of 1,454 QA/QC samples were inserted, consisting of 392 external check samples, 194 CRMs,
180 blanks, 231 core duplicates, 208 coarse rejects, and 160 pulp duplicates. The results are generally within
the control limits for the CRMs and blank material assays. The duplicates (including core duplicates, coarse
rejects and pulp duplicates) and external checks display relatively good correlation with the original samples,
with only a small number of samples returning relatively large deviations.
Therefore, it is the opinion of SRK that the No. 8 Brigade followed the QA/QC practices proposed by SRK.
Assay results of the sample blanks, core duplicates, pulp duplicates and laboratory external checks were
within acceptable limits. Therefore, SRK has confidence in the geological database obtained during the
exploration program, and the resource estimation based upon these data complies with the requirements of
the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC
Code”).
Mineral Resource Estimation
The drillhole database used for the resource estimation consists of 149 core holes. A total of 9,612 intervals
were sampled at the deposit, representing 28,793.3 m of drilling cores. All the available data was input into a
Surpac (version 6.3) database for the estimation procedure. The database was validated within Surpac to
search for errors such as missing or overlapping intervals, and to correct hole lengths, azimuths and dips, and
to eliminate duplicated samples.
The cut-off grade was determined based on the assumptions of a price of 10,000 Renminbi Yuan (RMB) per
tonne of magnesium hydroxide (the final product, with grade above 98%), a mining dilution rate of 5%, total
processing recovery rate of 68%, and overall production cost of 2804 RMB per tonne of ore, including
mining, processing and metallurgical, and administration costs. The metallurgical costs are based on the
metallurgical test reports provided by the Company. The cost of production of high purity ultra-fine
magnesium hydroxide is 2,704 RMB per tonne of ore with a recovery rate of 68%. In addition, the price of
the magnesium hydroxide product is also sourced from the test reports. The mining and stripping cost of 50
RMB per tonne of ore, the administration cost of 50 RMB per tonne of ore, and the mining dilution rate of 5%
were selected based on the following considerations: similar type of mine in this region and open pit mining
method and so on. Based on these assumptions, SRK selected a cut-off grade of 30% MgO for the resource
estimate.
The following table presents a summary of the estimated Mineral Resources at Akekerishi Deposit as of 31
December 2013 using an MgO cut-off grade of 30%. Only the Measured and Indicated Mineral Resources
can be used for ore reserve estimation and mine planning.
Resource Category Resources (Mt) MgO (%) SiO2 (%) Fe2O3 (%) Ni (%) Co (%)
Measured 1,536 41.75 35.50 6.73 0.22 0.010
Indicated 2,666 42.01 35.96 6.86 0.22 0.010
Measured + Indicated 4,202 41.91 35.79 6.81 0.22 0.010
Inferred 5,223 42.79 36.36 6.83 0.23 0.010
The information in this report which relates to Mineral Resources is based on information compiled by Mr Yuanjian
Zhu and Dr Yiefei Jia, full time employees of SRK Consulting (China) Ltd and members of the Australasian Institute of
Mining and Metallurgy(AusIMM). Mr Zhu and Dr Jia have sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as
Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results,

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page vi
Mineral Resources and Ore Reserves. Mr Zhu and Dr Jia consent to the reporting of this information in the form and
context in which it appears.
Exploration Potential
The continuity the major mineralised zone is suitably controlled by the exploration grid of drilling and is
well understood. In addition, major features that affect the mineral distribution, such as faults, folds,
intrusions and shear zones, were logged and interpreted competently. As the current resources are not
completely closed off in the down-dip extension, SRK believes there is great potential to extend the current
resources of the Akekerishi Deposit. Additional step out deeper drilling could be conducted which would
undoubtedly further increase the resource tonnages.

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page vii
Table of Contents
Executive Summary .......................................................................................................... iii
Disclaimer .......................................................................................................................... x
List of Abbreviations.......................................................................................................... xi
1 Introduction and Scope of Report ............................................................................1
2 Background and Brief ..............................................................................................1
3 Program Objectives and Work Program ..................................................................1

3.1 Program Objectives ................................................................................................ 1
3.2 Reporting Standard ................................................................................................. 1
3.3 Limitations Statement ............................................................................................. 1
3.4 Work Program ......................................................................................................... 2
3.5 Project Team .......................................................................................................... 2
3.6 Statement of SRK’s Independence ......................................................................... 3
3.7 Representation ....................................................................................................... 3
3.8 Consent .................................................................................................................. 3
3.9 SRK’s Experience ................................................................................................... 3
3.10 Forward-looking Statements ................................................................................... 5
4 Regional Geography and Access ............................................................................6

4.1 Regional Location ................................................................................................... 6
4.2 Access .................................................................................................................... 6
4.3 Topography, Climate and Local Economy and Infrastructure .................................. 6
5 Exploration Licences and Permits ...........................................................................7
6 Geological Description ............................................................................................8

6.1 Regional Geology ................................................................................................... 8
6.2 Local Geology ......................................................................................................... 9
6.2.1 Stratigraphy .............................................................................................................9
6.2.2 Structures ................................................................................................................9
6.2.3 Alteration ..................................................................................................................9
6.2.4 Intrusions .............................................................................................................. 10
6.3 Deposit Geology ................................................................................................... 10
6.3.1 Characteristics of Mineralised Zone ..................................................................... 10
6.3.2 Mineralogy ............................................................................................................ 11
6.4 Exploration History ................................................................................................ 11
6.5 Exploration, Sampling, Analytical Procedures, Quality Assurance and Quality
Control .................................................................................................................. 12
6.5.1 Exploration, Sampling Procedures and Quality Control ....................................... 12
6.5.2 Analytical Procedures and Quality Control ........................................................... 14
6.6 Resource Estimation under the JORC Code ......................................................... 20
6.6.1 Introduction ........................................................................................................... 20
6.6.2 Resource Estimation Procedures ......................................................................... 21
6.6.3 Exploration Database ........................................................................................... 21
6.6.4 Solid Modelling ..................................................................................................... 22
6.6.5 Compositing .......................................................................................................... 22
6.6.6 Statistical Analysis and Variography .................................................................... 23
6.6.7 Block Model and Grade Estimation ...................................................................... 25
6.6.8 Model Validation ................................................................................................... 26
6.6.9 Mineral Resource Classification ........................................................................... 27
6.6.10 Mineral Resources Statement .............................................................................. 28
6.6.11 Grade Sensitivity Analysis .................................................................................... 29
6.7 Exploration Potential ............................................................................................. 30

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Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page viii
References .................................................................................................................... 31
Appendices .................................................................................................................... 32
Appendix 1: Exploration Licences .................................................................................... 32

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Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page ix
List of Tables
Table 3-1: SRK Project Team .................................................................................................... 2
Table 3-2: Recent Reports by SRK for Chinese Companies ...................................................... 4
Table 5-1: Coordinates of the Akekerishi Exploration permit (in Xi’an Geodetic Coordinate
System 1980) ................................................................................................................ 7
Table 6-1: Recovery Rate of Drillholes in Exploration Line 9, 15 and 19 ................................... 12
Table 6-2: Summary Statistics: All MgO Raw Assays .............................................................. 23
Table 6-3: Parameters Chosen for the Mineralised Zone (MgO) .............................................. 24
Table 6-4: Coordinate Extents of Block Model ......................................................................... 26
Table 6-5: Assumptions Used for Cut-Off-Grade Calculation ................................................... 28
Table 6-6: Estimated Resources at Akekerishi Deposit, as of 31 December 2013 ................... 29
Table 6-7: Global Grade-Tonnage Table*, as of 30 June 2013 ................................................ 29
List of Figures
Figure 4-1: Schematic Map of the Project Location .................................................................... 6
Figure 6-1: Regional Geological Map of Akekerishi Deposit ....................................................... 8
Figure 6-2: Simplified Geological Map of Akekerishi Deposit...................................................... 9
Figure 6-3: Schematic Exploration Cross Section in Akekerishi Deposit .................................. 10
Figure 6-4: Typical Drillhole Logging Histograms ..................................................................... 11
Figure 6-5: Drill Hole Distribution Map ...................................................................................... 12
Figure 6-6: Drill Cores with High Recovery Rate (left) and Core Shed (right) ........................... 14
Figure 6-7: CRM Performance ................................................................................................. 15
Figure 6-8: Duplicate Performance .......................................................................................... 17
Figure 6-9: External Check Sample Performance .................................................................... 19
Figure 6-10: Scatter Diagrams for Bulk Density vs. Grade of TFe ............................................ 20
Figure 6-11: Digital Terrain Model Used in the Resource Estimation........................................ 22
Figure 6-12: Three-Dimensional View of Mineralised Zone in Akekerishi Deposit .................... 22
Figure 6-13: Cumulative Probability Plot for MgO in the Akekerishi Deposit(left) and Histogram
of Core Length (right) .................................................................................................. 23
Figure 6-14: Frequency Distribution Histograms for MgO Composite in the Mineralised Zone . 24
Figure 6-15: Variogram Models for Each Axis in the Mineralised Zone .................................... 25
Figure 6-16: Swath Plot of the Akekerishi Deposit.................................................................... 27
Figure 6-17: Grade Tonnage Curves for the Akekerishi Deposit .............................................. 30

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Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page x
Disclaimer
The opinions expressed in this report have been based on information supplied to SRK Consulting China Ltd
(“SRK”) by Fenglideyuan. The opinions in this Report are provided in response to a specific request from
Fenglideyuan. SRK has exercised all due care in reviewing the supplied information. While SRK has
compared key supplied data with expected values, the accuracy of the results and conclusions from the
review are entirely reliant on the accuracy and completeness of the supplied data. SRK does not accept
responsibility for any errors or omissions in the supplied information and does not accept any consequential
liability arising from commercial decisions or actions resulting from them.
Opinions presented in this Report apply to the site’s conditions and features as they existed at the time of
SRK’s investigations, and those reasonably foreseeable. These opinions do not necessarily apply to
conditions and features that may arise after the date of this Report, about which SRK have had no knowledge
nor had the opportunity to evaluate.

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page xi
List of Abbreviations
% Percent
°
Degrees, either of temperature or angle of inclination
ASL Above sea level
AusIMM Australasian Institute of Mining and Metallurgy
E East
g Gram
g/t Gram per tonne
Indicated Mineral That part of a resource for which tonnage, densities, shape, physical characteristics, grade
Resource and mineral content can be estimated with a reasonable level of confidence. It is based on
exploration, sampling and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes. The locations are too
widely or inappropriately spaced to confirm geological and/or grade continuity but are
spaced closely enough for continuity to be assumed
Inferred Mineral That part of a resource for which tonnage, grade and mineral content can be estimated with
Resource a low level of confidence. It is inferred from geological evidence and assumed but not
verified geological and/or grade continuity. It is based on information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill
holes which may be limited or of uncertain quality and reliability
JORC Code Joint Ore Reserves Committee Code
JORC Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy,
Australian Institute of Geoscientists and Minerals Council of Australia
kg Kilogram, equivalent to 1,000 grams
km Kilometres, equivalent to 1,000 metres
2
km Square kilometres
m Metre
2
m Square metre
3
m Cubic metre
M Million
Measured Mineral That part of a resource for which tonnage, densities, shape, physical characteristics, grade
Resource and mineral content can be estimated with a high level of confidence. It is based on
detailed and reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings and drill
holes
Mg Magnesium
mm Millimetre/s
Mt Million tonne (s)
Mtpa Million tonnes per annum
PRC People’s Republic of China
Probable Ore Reserve The economically mineable part of an indicated, and in some circumstances measured,
resource. It includes diluting materials and allowances for losses which may occur when the
material is mined. Appropriate assessments, which may include feasibility studies, have
been carried out, and include consideration of and modification by realistically assumed
mining, metallurgical, economic, marketing, legal, environmental, social and government
factors. These assessments demonstrate at the time of reporting that extraction could
reasonably be justified
Proved Ore Reserves The economically mineable part of a measured resource. It includes diluting materials and
allowances for losses which may occur when the material is mined. Appropriate
assessments, which may include feasibility studies, have been carried out, and include
consideration of and modification by realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and government factors. These assessments
demonstrate at the time of reporting that extraction could reasonably be justified.
QA/QC Quality Assurance/Quality Control
RMB Renminbi

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Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page xii
ROM Run of mine

t Tonne
tpa Tonnes per annum
tpd Tonnes per day
Valmin Code Code for Technical Assessment and Valuation of Mineral and Petroleum Assets and
Securities for Independent Expert Reports

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine Page 1
1 Introduction and Scope of Report

Fenglideyuan Trading Limited (“Fenglideyuan”, the “Company” or the “Client”) commissioned SRK to
review Fenglideyuan’s serpentinite project, the Akekerishi serpentinite deposit (“Akekerishi Deposit” or the
“Project”), located in Tuoli County, Xinjiang Uygur Autonomous Region, the People’s Republic of China
(“P.R. China”). SRK was required to provide a Competent Person’s Report (“this Report” or “the Report”)
including reviews of the geology and resources aspects. The principal objective of this Report is to provide
the Company, financial institutions and the London Stock Exchange (“LSE”) with the Report suitable for
inclusion in documents for a proposed listing on the Alternative Investment Market (“AIM”) of the LSE.
2 Background and Brief

Fenglideyuan commissioned SRK to review and report geological and technical aspects of Akekerishi
Deposit in Tuoli County, Xinjiang Uygur Autonomous Region, P.R. China. The Company is the sole holder
of the exploration permit. Copy of the original exploration permit is shown in Appendix 1.
3 Program Objectives and Work Program

3.1 Program Objectives
The principal objectives of this Report is to provide existing and potential shareholders of Fenglideyuan and
the London Stock Exchange (LSE) with this Report suitable for inclusion in documents that the Company
plans to submit to LSE in relation to the proposed listing on the AIM. The SRK report is proposed to provide
LSE and existing and potential shareholders in Fenglideyuan an unbiased technical assessment of the risks
and opportunities of the proposed listing company.
3.2 Reporting Standard

The Mineral Resource estimates presented in this report have been reported in accordance with the 2012
edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
(the “JORC Code”). The signing authors and peer reviewers of this Report qualify as “Competent Persons”
as defined by the JORC Code.
This Report is not a valuation report and does not express an opinion as to the value of the mineral assets
under review.
This report may include technical information that requires subsequent calculations to derive sub-totals,
totals, and weighted averages. Such calculations inherently involve a degree of rounding and consequently
introduce a margin of error. Where these occur, SRK does not consider them to be material.
3.3 Limitations Statement

SRK is not professionally qualified to opine upon and/or confirm that Fenglideyuan has 100% ownership of
Akekerishi Deposit and its various underlying tenements and/or has any unresolved legal matters relating to
any transfer of ownership or associated fees and royalties. SRK has therefore assumed that no legal
impediments exist regarding the relevant tenements and that Fenglideyuan has legal rights to all underlying
tenements as purported. Assessing the legal tenure and processing rights of the prospects of Fenglideyuan
and its subsidiary company is the responsibility of legal due diligence conducted by entities other than SRK.
SRK has however confirmed that the Mineral Resources as presented here occur entirely within the tenement
areas.
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SRK Consulting
3.4 Work Program

The work programme for this project consisted of:
- a review of data provided by Fenglideyuan;
- two site visits to the project area in April and November 2013;
- discussions with Company personnel and the relevant geological professionals and consultants who
conducted the geological exploration;
- on-site supervision of the quality assurance and quality control (“QA/QC”) procedures followed in the
surface drilling programme and sampling between August and October 2013;
- geological modelling and resource estimation of the serpentinite deposit in December 2013;
- analysis of the data provided by the Company and generated by SRK;
- and preparation of this Report.
3.5 Project Team

The SRK project team, their title, and their responsibilities within this Report are shown in Table 3-1 below.
Table 3-1: SRK Project Team
Consultant Title Discipline and Task
Dr Yiefei Jia Principal Consultant (Geology) Geology and Resources, Overall Reporting
Yuanjian Zhu Senior Consultant (Geology) Geology and Resources
Dr Anson Xu Principal Consultant (Geology) Internal Peer Review
Daniel Guibal Corporate Consultant (Geostatistics & Resources) External Peer Review
Yiefei Jia, PhD, FAusIMM, is a Principal Consultant (Geology) specialising in of exploration of mineral
deposits. He has more than 20 years’ experience in the field of exploration, development, and resources
estimate of precious metal (gold, silver and PGE), base metals (lead, zinc, copper, vanadium and titanium),
and black metals (iron and manganese) as well as other metal ore deposits in various geological settings in
Australia, Africa, China, and North and Central America. He has extensive experience in project
management, exploration design and resource assessment. He, as Competent Person, has coordinated a
number of due diligence projects with technical reports either for fund raising or initial public offerings (IPO)
such as on HKEx. Dr Jia was the project manager of this project and the Competent Person (CP) who takes
overall responsibility for this report. He visited the property in April and November 2013.
Yuanjian Zhu, M.Sc, MAusIMM, is a Senior Consultant (Geology), obtained a Master’s degree in Geology
from the Institute of Geology and Geophysics at the Chinese Academy of Sciences in 2008. He also holds a
Bachelor’s degree in Geology from Peking University. He has been involved in the oil and gas profile
national investigation project and was a technical leader in a mining company in charge of resource
explorations and due diligence reviews for new projects. He has extensive exploration experience in
epithermal Au, Ag, Sb, Pb and Zn deposits as well as Cu and Fe deposits. He has expertise in geological
modelling, resource/reserve reconciliation and geo-statistical theory and software (GS+, ArcGIS, Grapher,
etc.). Yuanjian is proficient with geological and digital graphic processing software such as MapGIS,
AutoCAD, CorelDraw, Surfer, Photoshop, and many others. Mr Zhu assisted Dr. Jia in completing the
geological QA/QC and resource estimate. He visited the property in April and November 2013.
Anson Xu, PhD, FAusIMM, is a Principal Consultant (Geology) specialising in exploration of mineral
deposits. He has more than 20 years experience in exploration and development of various types of mineral
deposits including copper-nickel sulphide deposits related to ultrabasic rocks, tungsten and tin deposits,
diamond deposits, and in particular, various types of gold deposits, including vein-type, fracture-breccia zone
type, alteration type and Carlin type. He was responsible for the resource estimates of several diamond
deposits, and review of resource estimates of several gold deposits. He has recently completed several due
diligence jobs for clients in China, including gold, silver, lead-zinc, iron, bauxite, and copper projects, and
several technical review projects, as well as technical reports for listing on HKEx. Dr Xu provided internal
peer review to ensure the quality control of the Report.

SRK Consulting
Daniel Guibal, M.Sc, FAusIMM, MMICA, MGAA, is a Corporate Consultant with SRK Australasia. His
range of deposit types studied covers a very broad spectrum and includes gold, copper, iron, tin, nickel
(laterite and sulphides), lead-silver-zinc, uranium, mineral sands, phosphate, coal, diamonds and bauxite.
His particular fields of expertise include resource estimation, resource classification (JORC), recoverable
resource evaluation (non-linear geostatistics, MIK, uniform conditioning), conditionals simulation of
orebodies, application of conditional simulation to grade control and risk analysis, sampling theory, design,
implementation and audit of grade control, and resource estimation systems, mining simulation, open pit
optimisation and training of professionals in statistics, geostatistics, sampling and grade control. Mr Guibal
provided external peer review and quality control for the Report.
3.6 Statement of SRK’s Independence

Neither SRK nor any of the authors of this Report have any material, present or contingent interest in the
outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably regarded as
being capable of affecting their independence or that of SRK.
SRK’s fee for completing this Report is based on its normal professional daily rates plus reimbursement of
incidental expenses. Payment of that professional fee is not contingent upon the outcome of the Report.
None of SRK or any authors of this report have any direct or indirect interest in any assets which had been
acquired, or disposed of by, or leased to any member of the Company or any of the Company or any of its
subsidiaries within the two years immediately preceding the issue of this transaction.
3.7 Representation
Fenglideyuan has represented to SRK that full disclosure has been made of all material information and that,
to the best of its knowledge and understanding, such information is complete, accurate, and true. SRK has no
reason to doubt this representation.
3.8 Consent
SRK consents to this Report being included in full in the application for a listing of Fenglideyuan on the
AIM of the LSE, in the form and context in which the technical assessment is provided, and not for any other
purpose.
SRK provides this consent on condition that the technical reviews expressed in the summary and in the
individual sections of this Report are considered with, and not independently of, the information set out in
the complete Report and its cover letter.
3.9 SRK’s Experience

SRK Consulting is an independent, international consulting group with extensive experience in preparing
independent technical reports for various stock exchanges around the world (see www.srk.com for a review).
SRK is a one-stop consultancy offering specialist services to mining and exploration companies for the entire
life cycle of a mining project, from exploration through to mine closure. Among SRK's more than 1,500
clients are most of the world’s major and medium-sized metal and industrial mineral mining houses,
exploration companies, banks, petroleum exploration companies, agribusiness companies, construction firms,
and government departments.
Formed in Johannesburg, South Africa, in 1974 SRK now employs more than 1,500 professionals
internationally in more than 40 permanent offices on six continents. A broad range of internationally
recognized associate consultants complements the core staff.

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SRK Consulting employs leading specialists in each field of science and engineering. Its seamless integration
of services, and global base, has made the company a world's leading practice in due diligence, feasibility
studies and confidential internal reviews.
The SRK Group’s independence is ensured by the fact that it holds no equity in any project and that its
ownership rests solely with its staff. This permits the SRK Group to provide its clients with conflict-free and
objective recommendations on crucial judgment issues.
SRK China was established in early 2005, and is mainly working on Chinese mining projects independently
or together with SRK’s other offices, mainly SRK Australasia (see www.srk.cn and www.srk.com.au). SRK
China has prepared a number of independent technical reports on mining projects for various companies who
acquired Chinese projects or completed public listings on overseas stock exchanges, as showing in Table 3-2.
Table 3-2: Recent Reports by SRK for Chinese Companies

Company Year Nature of Transaction
Yanzhou Coal Limited (company listed on the 2000 Sale of Jining III coal mine by parent company to the
Stock Exchange of Hong Kong Limited) listed operating company
Chalco (Aluminum Corporation of China) 2001 Listing on the Stock Exchange of Hong Kong Limited
and New York Stock Exchange
Fujian Zijin Gold Mining Company 2004 Listing on the Stock Exchange of Hong Kong Limited
Lingbao Gold Limited 2005 Listing on the Stock Exchange of Hong Kong Limited
Yue Da Holdings Limited (company listed on the 2006 Proposed acquisition of shareholding in mining
Stock Exchange of Hong Kong Limited) projects in P.R. China
China Coal Energy Company Limited (China 2006 Listing on the Stock Exchange of Hong Kong Limited
Coal)
Sino Gold Mining Limited 2007 Dual listing on the Stock Exchange of Hong Kong
Limited
Xinjiang Xinxin Mining Industry Company 2007 Listing on the Stock Exchange of Hong Kong Limited
Limited
Espco Technology Holdings Limited 2008 Acquisition of shareholding in Tongguan Taizhou Gold-
Lead projects in P.R. China
China Shenzhou Mining and Resources Inc 2008 Listing (SHZ) on the American Stock Exchange
Green Global Resource Ltd 2009 Acquisition of shareholding in iron project in Mongolia
Ming Fung Jewellery Group Holdings Ltd 2009 Acquisition of shareholding in gold projects in Anhui
and Hebei Provinces, P.R. China
Continental Holdings Ltd 2009 Acquisition of a gold project in Henan Province, P.R.
China
North Mining Shares Company Ltd 2009 Acquisition of a molybdenum projects in Shaanxi,
Province, P.R. China
CNNC International Ltd 2010 Acquisition of an uranium mine in Africa
New Times Energy Corporation Ltd 2010 Acquisition of shareholding in gold projects in Hebei,
Sino Prosper Mineral Products Ltd 2010 Acquisition of shareholding in gold projects in Hebei,
United Company RUSAL Ltd 2010 Listing on the Stock Exchange of Hong Kong Limited
CITIC Dameng Holdings Ltd 2010 Listing on the Stock Exchange of Hong Kong Limited
China Hanking Holdings Ltd 2011 Listing on the Stock Exchange of Hong Kong Limited
China Non-ferrous Mining Corporation Ltd 2012 Listing on the Stock Exchange of Hong Kong Limited
Hengshi Mining Investments Ltd 2013 Listing on the Stock Exchange of Hong Kong Limited

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3.10 Forward-looking Statements

Estimates of Mineral Resources, Ore Reserves and mine and processing plant production are inherently
forward-looking statements, which, being projections of future performance, will necessarily differ from
actual performance. The errors in such projections result from inherent uncertainties in the interpretation of
geologic data, variations in the execution of mining and processing plans, the ability to meet construction
and production schedules due to many factors including weather, availability of necessary equipment and
supplies, fluctuating prices, and changes in regulations. The possible sources of error in forward-looking
statements are addressed in more detail in the appropriate sections of this report. Also provided in the report
are comments on the risks inherent in the different areas of mining and processing operations.

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4 Regional Geography and Access

4.1 Regional Location
The Akekerishi Deposit is located in Tuoli County, Xinjiang Uygur Autonomous Region in China (Figure
4-1), under the jurisdiction of Tuoli County, 100 km south of the Tuoli County Town. The geographical
coordinates of the deposit area are limited to the area between 83°23′00″ to 83°26′45″ East longitude and
45°06′15″ to 45°08′45″ North latitude.
Map Location
Tuoli
Project Area China
Figure 4-1: Schematic Map of the Project Location

4.2 Access
Access to the property is relatively easy. The Kuytun-Bole National Road passes by about 60 km south of the
project area, and the Karamay-Tuoli Road passes by about 70 km north of the deposit. In addition, numerous
unimproved dirt roads connect the deposit to paved highways. Access to the Project takes about 12 hours by
car from Urumqi, the capital of Xinjiang, which is connected through regular flights with majors cities in
China.
4.3 Topography, Climate and Local Economy and Infrastructure

The Akekerishi Deposit is located in the southeast edge of the Mayile Range, northwest of Aibi Lake,
characterised by low hills with altitudes ranging from 800 m to 1040 m above sea level (“ASL”) with
relative reliefs between 50 m and 200m. Perennial surface runoffs and springs are widely distributed, most of
which are brackish.
The deposit area is characterised by a continental dry climate with seasonal temperatures varying from
winter lows reaching -10 degrees centigrade (“°C”) to summer highs up to 40°C. The average annual
precipitation is between 160 mm and 170 mm, mainly in June and July.
Population in the region is relatively sparse, and the workforce is insufficient for the mine’s labour needs.
The local economy is dominated by animal husbandry.

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5 Exploration Licences and Permits

Fenglideyuan initially acquired the exploration permit in October, 2008. After two renewals, the latest
exploration permit will expire on 31 May, 2015. The Client is now applying for a new mining permit in the
area for serpentinite mining activity. The coordinates of the tenements are given in Table 5-1. Appendix 1
also shows a copy of the exploration permit.
Table 5-1: Coordinates of the Akekerishi Exploration permit (in Xi’an Geodetic Coordinate
System 1980)
Boundary Point Northing Easting
1 5001349.117 451378.368
2 5001313.513 456293.783
3 4997609.032 456268.390
4 4997618.155 454956.847
5 4996692.039 454950.310
6 4996718.519 451343.048

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6 Geological Description
6.1 Regional Geology
The Akekerishi Deposit is located in the conjunction zone of the Kazakh plate, the Jungar plate, the west
segment of the Tuoli-Santanghu Late Paleozoic trench-arc belt, and the Jungar Meso-Cenozoic depression.
Stratigraphically, rocks exposed in the area consist of Early Ordovician phyllitized siltstone, slate and
phyllite; Mid Ordovician tuff, andesite, basalt and silicalite; Silurian volcanoclastic rocks; Devonian tuffs
and sandstone; Carboniferous volcaniclastic rocks and carbonate rocks; and Quaternary deposits.
Igneous rocks are well developed in the region, from ultra-mafic rocks to felsic rocks, with structurally
controlled spatial distribution. Numerous secondary faults sourced from northeast trending Daerbute fault
and Mayile fault are widely distributed in this region. Most rocks in the region experienced regional
metamorphism of low greenschist facies. Widely distributed faults also led to ductile shearing or brittle
fracture metamorphism.
Nickel mines formed through magmatic differentiation are the major deposits in the region, followed by
tungsten, molybdenum and copper deposits.
Figure 6-1: Regional Geological Map of Akekerishi Deposit

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6.2 Local Geology

6.2.1 Stratigraphy
Outcrops in the Akekerishi Deposit are dominated by intermediate-felsic rocks of the Middle Oredovician
Kekesayi Formation (see Figure 6-2). The Kekesayi Formation consists of tuff, andesite, felsites and
silicolite, generally striking east-west, dipping north-northeast with dip angles varying from 55°to 70°. In
addition, Tertiary strata are also widespread over the region.
Figure 6-2: Simplified Geological Map of Akekerishi Deposit
6.2.2 Structures
Folds and faults are relatively developed in the Akekerishi area. The faults are secondary faults regionally
induced by the northeast trending Daerbute fault and Mayile fault, and have no effect on the continuity of
mineralisation in the Akekerishi deposit. In addition, these secondary faults are not well-developed in the
south-western part of the Akekerishi exploration tenement area (Figure 6-2).
6.2.3 Alteration
Alterations such as serpentinization, sericitization, chloritization and silicification are widely developed in
the region.

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6.2.4 Intrusions
Variscan ultra-mafic serpentinite rocks are the major intrusive rocks in the region. These rocks feature high
magnesium and iron contents, and mostly consist of serpentine, augite and olivine. Felsitic dikes have also
been discovered in the region.
6.3 Deposit Geology

6.3.1 Characteristics of Mineralised Zone
The target deposit is an ultra-mafic intrusive type deposit. The wall rocks mostly consist of tuff and silicalite
of Kekesayi Formation. SRK defined one mineralised zone of serpentinite as delineated by 149 vertical
drillholes. It is over 4,000 m long, 200 m - 3,000 m wide and extends for over 600 m deep, in a triangular
thick-plate shape. It is distributed in the southwest portion of the exploration permit area, covering
approximately one third of the total area. The current maximum depth of drillhole is 600 m. All of the
drillholes are not deep enough to drill through the floor of the mineralised zone except a few drillholes
located on the edge of the mineralised zone. Figure 6-3 and Figure 6-4 show a typical cross-section of an
exploration line and some drillhole logging histograms, which indicate that the mineralised zone has
relatively good continuity and the MgO grade in serpentinite is relatively stable.
Figure 6-3: Schematic Exploration Cross Section in Akekerishi Deposit

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50
40
MgO (%)
MgO (%)
ZK15-1
ZK5-12
Lithology0
Lithology0
Depth (m)
Depth (m)
100.0
200.0
300.0
100.0
0.0
0.0
50
MgO (%)
ZK7-5
Lithology 0
Depth (m)
100.0
200.0
300.0
400.0
500.0
600.0
0.0
Legend
Tertiary Sandstone Silicolite Tuff Serpentinite MgO Grade D:\work\SRK.jpg
Figure 6-4: Typical Drillhole Logging Histograms
6.3.2 Mineralogy
The potential useful mineral in Akekerishi Deposit is serpentine or/and olivine, which represents over 90%
of the mineralisation. The secondary associated minerals mostly comprise pyroxene, magnetite, and
magnesite. Gangue minerals mostly consist of amphibole and biotite.
Serpentine mostly occurs in micro scaly, xenomorphic-hypidiomorphic fine granular or columnar textures,
and appears in massive or vein structures.
The accompanying possible useful minerals consist of silicon dioxide (“SiO2”), with an average grade of
35.79%, iron oxide (“Fe2O3”), with an average grade of 6.81%, nickel (“Ni”), with an average grade of
0.22%, cobalt (“Co”), with an average grade of 0.010%, gold (“Au”), with an average grade of 0.06 gram per
tonne (g/t), and silver (“Ag”), with an average grade of 5.95 g/t. All of these minerals except Co, Au and Ag
can be economically recovered according to the several metallurgical test reports provided by the Client. The
harmful elements are sulphur (“S”), with an average grade of 0.016%, phosphorus (“P”), with an average
grade of 0.013%, chromic oxide (“Cr2O3”), with an average grade of 0.40%, calcium oxide (“CaO”, with an
average grade of 0.16%), and arsenic (“As”), less than the detectable limit of 3 g/t.
6.4 Exploration History

Historical explorations in the Akekerishi area began in 1983. Between 1983 and 1985, a geological mapping
at a 1:500,000 scale was conducted in Tacheng area by the No. 7 Geological Brigade of Xinjiang Geology
Bureau. After that, the same brigade carried out a 1:50,000 scale geological prospecting and submitted a
regional geological mineral report of the area in 1990.
In 1998, a regional geochemical survey at a 1:10,000 scale was carried out in the area by the No. 1 Regional
Geological Survey Brigade of Xinjiang Geological Exploration Bureau. Between 2003 and 2005, the same
brigade conducted a 1:50,000 scale geological prospecting and submitted a 1:50,000 scale regional
geological mineral report of the northwest Akekerishi area. Between 2007 and 2009, this same brigade
conducted another 1:50,000 scale geological mineral survey in the north region.
In 2011, the Tai’an Geological Exploration Institute conducted a general exploration of the Akekerishi
Deposit.

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6.5 Exploration, Sampling, Analytical Procedures, Quality Assurance

and Quality Control
Under SRK’s supervision, the No. 8 Geological Brigade of Fujian Province (“No. 8 Brigade”) conducted
drilling and geological exploration programs at the Akekerishi deposit from August to October 2013. Figure
6-5 shows the distribution of all drillholes drilled and used for the resource estimation presented in this
Report. The following sections summarise the resource data verification and reconciliation for the property.
Figure 6-5: Drill Hole Distribution Map
6.5.1 Exploration, Sampling Procedures and Quality Control
As of October 2013, a total of 149 drillholes with an aggregate length of approximately 29,400 m had been
drilled at the deposit. All drillholes were arranged along exploration lines. The exploration grid was set at
200 m × 200 m for Measured Resource and 400 m × 400 m for Indicated Resource. All drillholes were
vertical. The collars of the drill holes were properly surveyed and down-hole surveying was undertaken at
minimum 100 m intervals. The drill cores were logged while uncut. The recovery rates for all cores vary
from 90% to 100% with an overall recovery rate of 98%, and for all mineralised drill cores varied from 92%
to 100% with an overall recovery rate of 98%. Table 6-1 shows recovery rates from all drillholes.
Table 6-1: Recovery Rate for All Cores in Akekerishi Deposit
Hole ID Length Recovery Rate Hole ID Length Recovery Rate Hole ID Length Recovery Rate
ZK9-A 150.16 94.91% ZK3-3 222.24 98.25% ZK13-A 146.81 94.52%
ZK9-12 95.90 94.21% ZK3-2 184.31 99.95% ZK13-14 130.00 100.00%
ZK9-11 138.50 98.77% ZK3-1 202.32 98.63% ZK13-13 148.55 99.73%
ZK9-10 100.30 95.51% ZK2-5 117.30 95.56% ZK13-12 147.10 99.25%
ZK9-9 150.70 99.93% ZK2-4 150.09 95.12% ZK13-11 148.30 99.93%
ZK9-8 94.10 92.32% ZK2-3 147.00 94.39% ZK13-10 149.33 97.20%
ZK9-7 145.70 99.86% ZK2-2 138.70 98.05% ZK13-9 141.90 95.91%

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ZK9-6 100.30 98.31% ZK2-1 133.40 94.08% ZK13-8 146.00 99.28%

ZK9-5 145.60 99.24% ZK19-13 306.39 98.18% ZK13-7 150.70 100.00%
ZK9-4 100.15 97.65% ZK19-12 149.59 97.74% ZK13-6 148.50 100.00%
ZK9-3 149.95 100.00% ZK19-11 350.20 100.00% ZK13-5 150.65 100.00%
ZK9-2 99.97 90.73% ZK19-10 150.50 99.87% ZK13-4 150.00 97.50%
ZK9-1 144.80 90.95% ZK19-9 349.30 99.41% ZK13-3 146.40 98.70%
ZK8-B 281.20 99.26% ZK19-8 151.10 99.87% ZK13-2 151.40 97.75%
ZK8-A 133.00 99.40% ZK19-7 350.48 99.87% ZK13-1 146.70 93.63%
ZK7-12 118.30 97.46% ZK19-6 150.34 98.17% ZK12-1 211.60 96.24%
ZK7-11 350.20 99.74% ZK19-5 350.60 99.71% ZK11-N1 103.60 96.24%
ZK7-10 145.70 100.00% ZK19-4 348.68 98.09% ZK1-12 144.80 93.02%
ZK7-9 346.30 93.30% ZK19-3 107.09 93.97% ZK11-15 200.07 100.00%
ZK7-8 149.41 99.69% ZK19-2 147.27 93.45% ZK11-14 118.80 93.43%
ZK7-7 342.66 98.13% ZK19-1 312.14 100.00% ZK11-13 328.80 95.48%
ZK7-6 144.20 98.99% ZK17-A 145.20 99.17% ZK11-12 146.85 99.18%
ZK7-5 620.10 98.35% ZK17-14 151.46 97.12% ZK11-11 347.00 97.75%
ZK7-4 146.30 96.69% ZK17-13 151.05 100.00% ZK11-10 146.50 95.22%
ZK7-3 348.98 98.33% ZK17-12 147.72 99.28% ZK11-9 341.50 93.29%
ZK7-2 148.00 99.38% ZK17-11 147.90 100.00% ZK11-8 142.80 93.77%
ZK7-1N 279.50 99.86% ZK17-10 149.80 100.00% ZK11-7 349.70 99.63%
ZK7-1 223.50 99.35% ZK17-9 150.90 99.87% ZK11-6 149.50 99.67%
ZK6-B 335.50 98.87% ZK17-8 147.90 100.00% ZK11-5 347.10 99.63%
ZK6-A 148.35 98.83% ZK17-7 148.62 98.68% ZK11-4 150.30 99.77%
ZK5-12 159.90 99.31% ZK17-6 149.24 99.36% ZK11-3 348.70 99.68%
ZK5-11 128.50 98.64% ZK17-5 149.30 99.80% ZK11-2 149.46 99.87%
ZK5-10 148.24 100.00% ZK17-4 146.75 99.86% ZK11-1 90.10 92.56%
ZK5-9 142.83 96.46% ZK17-3 150.69 99.96% ZK1-10 143.20 99.86%
ZK5-8 147.20 91.24% ZK17-2 150.26 99.23% ZK1-9 124.10 100.00%
ZK5-7 150.27 99.95% ZK17-1 146.15 100.00% ZK1-7 145.70 100.00%
ZK5-6 149.18 99.77% ZK15-14 339.97 97.67% ZK1-6 141.14 94.62%
ZK5-5 150.86 99.54% ZK15-13 348.00 99.01% ZK1-5 143.90 96.52%
ZK5-4 151.18 98.10% ZK15-12 150.38 98.86% ZK1-4 147.10 98.70%
ZK5-3 151.50 98.75% ZK15-11 350.60 99.71% ZK1-3 146.50 93.52%
ZK5-2 150.00 93.93% ZK15-10 150.10 99.77% ZK1-2 97.40 92.09%
ZK5-1 140.30 98.11% ZK15-9 500.33 99.97% ZK1-1 143.10 100.00%
ZK4-A 199.37 99.50% ZK15-8 150.10 99.87% ZK0-12 147.00 97.79%
ZK3-10 147.23 100.00% ZK15-7 348.03 100.00% ZK0-9 344.70 98.78%
ZK3-9 237.90 99.12% ZK15-6 150.30 99.50% ZK0-5 336.72 94.51%
ZK3-8 58.65 97.95% ZK15-5 347.70 99.99% ZK0-4 144.00 95.83%
ZK3-7 101.00 99.11% ZK15-4 149.00 99.80% ZK0-3 501.56 96.73%
ZK3-6 288.78 100.00% ZK15-3 262.67 97.17% ZK0-2 143.40 100.00%
ZK3-5 65.70 95.98% ZK15-2 150.26 100.00% ZK0-1 335.12 92.46%
ZK3-4 346.95 98.65% ZK15-1 355.36 98.38%
Upon completion of each hole, preliminary logging was carried out by a geologist to record various aspects
including weathering, texture, lithology, alteration and structure. After logging, the core was stored in core
trays and each core tray was digitally photographed. Core trays were clearly marked with box and hole
numbers and starting and ending depths. Further details of each run were also recorded on a paper chart and
kept in a sealed plastic envelope inside the tray. The core boxes were then stacked and transported to the core
shed for further checking and core spliting.
Samples were taken from drill cores by splitting along the core axis. Sample intervals were marked by
geologists and ranged from 1 m to 5 m in length. The most common sample length was 3 m. Wall rocks and
ore were sampled separately. One half of each core was sampled and bagged while the other half was stored
in the core tray. Each bag was numbered by the on-site geologist, and some numbers were reserved for
inserting the QA/QC samples. Samples were transported to an Urumqi office of the Laboratory of No. 121
Geological Brigade of Fujian Province (“No. 121 Laboratory”) for assaying under the supervision of SRK’s
on site staff. Figure 6-6 shows drilling cores stored in core trays on site and core shed.

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Figure 6-6: Drill Cores with High Recovery Rate (left) and Core Shed (right)
6.5.2 Analytical Procedures and Quality Control
6.5.2.1 Sample Preparation and Analysis
A total of 9,612 samples were collected from the deposit. They were prepared and analysed by the No. 121
Laboratory. Samples were first crushed to less than 3 mm and then divided into four portions using a
quartering approach in which the two portions diagonally opposite each other were taken for further
processing while the other half of the samples was kept as a spare (coarse reject). Following crushing the
samples were pulverised to -180 mesh (0.080 mm). A 30 gram (“g”) charge was then taken for assaying and
the remains of the pulverised material were stored at the laboratory. Five components including MgO, SiO2,
Fe2O3, Ni and Co were assayed. MgO, SiO2, and Fe2O3 were assayed by X-ray fluorescence spectrometry
(“XRF”), while Ni and Co were analysed by atomic absorption spectrophotometry (“AAS”).
6.5.2.2 Control Sample Insertion
For QAQC purpose, each 100 samples batch included 10 QA/QC samples, consisting of two certified
reference materials (“CRM”), two blanks, two core duplicates, two coarse rejects and two pulp duplicates.
Additionally, four (4) out of every 100 samples were randomly chosen and sent to a second independent
laboratory (SGS-CSTC Standards Technical Services (Tianjin) Co., Ltd (“SGS”)) for external check. A total
of 1,454 QA/QC samples were inserted, consisting of 392 external check samples, 194 CRMs, 180 blanks,
231 core duplicates, 208 coarse rejects, and 160 pulp duplicates.
6.5.2.3 CRM
The certified standards for serpentinite were purchased from the Chinese National Institute of Metrology.
CRM performance is considered acceptable, and the assaying process well-controlled, given that at least 90%
of the results fall within ±10% of the certified value for MgO, SiO2 and Fe2O3 and within ±20% of the
certified value for Ni and Co, respectively. As shown in Figure 6-7, all assayed data fell within the control
limits, these suggest there are no systematic assaying problems (biases) in the analysis.

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44 44
42 42
Assayed Value (% )
Assayed Value (% )
40 40
38 38
36 36
34 34
32 32
MgO Standard Value SiO2 Standard Value
30 30
Sample No. Sample No.
9 0.030
8.5 0.25
0.025
8
0.20
0.020
Assayed Value (% )
7.5
Co Grade (%)
Ni Grade (%)
7 0.15 0.015
6.5
0.10 0.010
6
0.05 Standard Value
Ni Co 0.005
5.5
Fe2O3 Standard Value
5 0.00 0.000
Sample No. Sample No.
Figure 6-7: CRM Performance
6.5.2.4 Blank
A total of 180 blank samples were submitted for analysis. The results are generally within the control limit
for the blank material assays. The results of blank samples suggest that neither considerable nor systematic
contamination occurred during sample preparation.
6.5.2.5 Duplicates
Duplicate samples, including core duplicates, coarse rejects and pulps, were inserted into each batch of
regular samples during the assaying procedure to ensure the quality of the assay. SRK completed a
repeatability analysis of the original samples and duplicates, as shown in Figure 6-8. The duplicate assays
display relatively strong correlation with the original samples, with only a small number of samples returning
relatively large deviations. The assays are considered acceptably repeatable.

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50.0 Q-Q Plot 50.0 Scatter Plot

Number of data 599
Number plotted 599
X Variable: mean 38.628
std. dev. 10.349
40.0 40.0 Y Variable: mean 38.165
std. dev. 10.186
Grade of Duplicate (%)
Correlation 0.991

Rank correlation 0.716
30.0 30.0
20.0 20.0
10.0 10.0
MgO
y=x
MgO
±10% Tolerance Limit
.0 0.0
.0 10.0 20.0 30.0 40.0 50.0 0.0 10.0 20.0 30.0 40.0 50.0
Grade of Original Sample (%) Grade of Original Sample (%)
100. Q-Q Plot 100.0 Scatter Plot

Number of dat a 599
Number plotte d 599
X Variable: mea n 37.575
80. 80.0 std. dev . 8.321
Y Variable: mea n 37.767
std. dev . 8.419
Correlatio n 0.985
Grade of Duplicate (%),
Rank correlatio n 0.828

60. 60.0
40. 40.0
20. 20.0
SiO2
y=x SiO2
0. 0.0
0. 20. 40. 60. 80. 100. 0.0 20.0 40.0 60.0 80.0 100.0

Number of data 599
Number plotted 598
X Variable: mean 6.760
8.0 std. dev. 1.296
8.0
Y Variable: mean 6.714
std. dev. 1.082
Correlation 0.882

6.0 6.0
4.0 4.0
2.0 2.0
Fe2O3
y=x Fe2O3
.0
.0
.0 2.0 4.0 6.0 8.0 10.0
.0 2.0 4.0 6.0 8.0 10.0
Grade of Original Sample (%)

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.30 Q-Q Plot .30 Scatter Plot

Number of data 599
Number plotted 599
.25 X Variable: mean 0.199
std. dev. 0.058
std. dev. 0.061

.20

.20 Correlation 0.939
.15
.10
.10
.05
Ni
y=x Ni
.00 ±20% Tolerance Limit
.00 .05 .10 .15 .20 .25 .30 .00
Grade of Original Sample (%) .00 .10 .20 .30
Q-Q Plot .020 Scatter Plot

Number of dat a 599
Number plotte d 599
.016 std. dev . 0.002
.015 Y Variable: mea n 0.010
std. dev . 0.002

Correlatio n 0.867
.012 Rank correlatio n 0.496
.010
.008
.005
.004
Co Co
y=x ±20% Tolerance Limit
.000 .000
.000 .004 .008 .012 .016 .000 .005 .010 .015 .020
Figure 6-8: Duplicate Performance
6.5.2.6 External Sample Performance
External checks of the primary assay were performed by SGS-CSTC Standards Technical Services (Tianjin)
Co., Ltd (“SGS”) on approximately 4% of the total samples. SRK compared the resulting data with the
original sample tests; the results are shown in Figure 6-9. The external checks indicate a good correlation
with original samples, with only a small number of samples returning relatively large deviations. The
repeatability of the assay conducted by the 121 Laboratory is considered acceptable.

SRK Consulting

MgO
Grade of External Check Sample (%)

40.0 40.0
30.0 30.0
20.0 20.0
Number of dat a 392
Number plotte d 392
10.0 10.0 std. dev . 9.438
MgO std. dev . 9.312
Correlatio n 0.991
y=x Rank correlatio n 0.888
.0 0.0
.0 10.0 20.0 30.0 40.0 50.0 0.0 10.0 20.0 30.0 40.0 50.0
100. Q-Q Plot 100. Scatter Plot
SiO2
80. 80.
60. 60.
40. 40.
Number of dat a 392
Number plotte d 392
std. dev . 6.999
20. 20. Y Variable: mea n 36.962
SiO2 std. dev . 6.978
Correlatio n 0.986
y=x
0. 0.
0. 20. 40. 60. 80. 100. 0. 20. 40. 60. 80. 100.
Q-Q Plot Scatter Plot

Fe2O3
12.0 12.0
8.0 8.0
Number of dat a 392

Number plotte d 392
4.0 4.0 X Variable: mea n 6.830
std. dev . .913
std. dev . .850
Fe2O3 Correlatio n 0.927
y=x
.0 .0
.0 4.0 8.0 12.0 .0 4.0 8.0 12.0

SRK Consulting

Ni
.40

.40
.30 .30
.20 .20
Number of dat a 392
Number plotte d 392
.10 std. dev . 0.056
.10 Y Variable: mea n 0.205
Ni std. dev . 0.057
Correlatio n 0.952
y=x Rank correlatio n 0.625
.00
.00
.00 .10 .20 .30 .40
.00 .10 .20 .30 .40 .50

Co
.012
.015
.008
.010
Number of data 392

.004 Number plotted 392
.005 X Variable: mean 0.010
std. dev. 0.002
Co std. dev. 0.002
y=x Correlation 0.903
.000
.000
.000 .004 .008 .012
.000 .005 .010 .015 .020
Figure 6-9: External Check Sample Performance
6.5.2.7 Bulk Density Sample Analysis
A total of 59 bulk density samples were collected from various locations within the deposit, and were used
by the No. 121 Laboratory for ore density. Scatter diagrams for the sample’s bulk density plotted against
MgO, SiO2 and Fe2O3 grades are shown in Figure 6-10. Overall, bulk density results vs. MgO, SiO2 and
Fe2O3 grades scatter irregularly, with bulk densities values ranging from 2.27 grams per cubic centimetre
(“g/cm3”) to 2.97 g/cm3. SRK has checked these data with using a linear regression and found no linear
relationship between bulk density and grade of MgO, SiO2 and Fe2O3. The average density is 2.54 g/cm3.

SRK Consulting
3.50
3.00
2.50
Bulk Density (g/cm3)
y = 0.0326x + 1.3756
y = 0.0128x + 2.0049 R²= 0.1977 y = 0.0482x + 2.2157
2.00 R²= 0.0225 R²= 0.041
1.50
1.00
MgO SiO2 Fe2O3

0.50
Linear Relationship
0.00
38.00 40.00 42.00 44.00 46.00 30.00 35.00 40.00 45.00 5.00 6.00 7.00 8.00 9.00
MgO Grade (%) SiO2 Grade (%) Fe2O3 Grade (%)
3.50
3.00
Bulk Density (g/cm3)
2.50
2.00 y = 0.0305x - 0.0351

R²= 0.2642
1.50
1.00
0.50 Linear Relationship
0.00
80.0 82.0 84.0 86.0 88.0 90.0 92.0
Grade of MgO + SiO2 + Fe2O3 (%)
Figure 6-10: Scatter Diagrams for Bulk Density
In general, SRK is satisfied with the quality and result of the sample preparation and assaying performed by
the No. 121 Laboratory and is confident that the primary sample results are suitably reliable for use in
resource estimation.
6.6 Resource Estimation under the JORC Code

6.6.1 Introduction
The Mineral Resource Statement presented herein summarises the Akekerishi mineral resource evaluations
prepared for the Fenglideyuan Project in accordance with the 2012 Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code 2012”).
This section describes the resource estimation methodology and summarizes the key assumptions considered
by SRK. In SRK’s opinion, the resource evaluation reported herein is a reasonable representation of the
global serpentinite mineral resource found in the Akekerishi Deposit at the current level of sampling. The
mineral resources are reported in accordance with the JORC Code.
The project limits are based on the Xi’an Geodetic Coordinate System 1980 (“XAS1980”). The database
used to estimate the mineral resources was audited by SRK. SRK is of the opinion that the current drilling

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information is sufficiently reliable to interpret with confidence the boundaries for mineralisation and that the
assay data are sufficiently reliable to support mineral resource estimation.
Surpac Version 6.3 was used to construct the geological solids, prepare assay data for geostatistical analysis,
construct the block model, estimate metal grades and tabulate mineral resources. The Geostatistical Software
Library (“GSLib”) family of software and Excel were used for geostatistical analysis.
6.6.2 Resource Estimation Procedures
The resource evaluation methodology involved the following procedures:
• Database compilation and verification;

• Construction of wireframe models for the boundaries of the mineralization;
• Definition of resource domains;
• Data preparation (compositing) for geostatistical analysis and variography;
• Block modelling and grade interpolation;
• Resource classification and validation;
• Assessment of “reasonable prospects for economic extraction” and selection of appropriate
cut-off grades; and
• Preparation of the Mineral Resource Statement.
6.6.3 Exploration Database
The drillhole database used for the resource estimation consists of 149 boreholes. A total of 9,612 intervals
were sampled at the deposit, representing 28,793.3 m of sample drilling cores. All the available data was
input into a Surpac (version 6.3) database for the estimation procedure. The database was validated within
Surpac to search for errors such as missing or overlapping intervals, and to correct hole lengths, azimuths
and dips, and to eliminate duplicated samples. Drillhole collars for the holes used in this estimate are shown
in Figure 6-5.
All drilling data as well as the digital topographic surface have been provided to SRK in the XAS80
coordinate system and resource modelling and grade estimation work was conducted in this coordinate
system.
Wireframe digital terrain model (“DTM”) of the surface topography of the deposit was modelled by SRK
based on the contour maps provided by the Client and is shown in Figure 6-11. A visual comparison between
the drillhole collars and the topography shows very good agreement, and SRK considers that the topographic
maps covering the deposits as provided by the Client are appropriate for use in the resource estimation.

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Figure 6-11: Digital Terrain Model Used in the Resource Estimation
6.6.4 Solid Modelling
One (1) Mineralised zone was modelled by SRK based on cross-sectional interpretations. A 3-dimensional
(“3D”) view of this zone is shown in Figure 6-12. Boundaries were interpreted according to the lithology of
serpentinite. The minimum mineable thickness is 2 m with a maximum interburden waste thickness of 2 m.
Figure 6-12: Three-Dimensional View of Mineralised Zone in Akekerishi Deposit
6.6.5 Compositing
Univariate statistics were calculated for MgO within the mineralised zone and are shown in Table 6-2. The
cumulative probability plot for MgO and the distribution of core sample lengths are provided in Figure 6-13.
No assay cap was applied for the deposit and composites were created at 3 m down-hole intervals, broken at
zone boundaries, as the majority of the core lengths were 3 m.

SRK Consulting
Table 6-2: Summary Statistics: All MgO Raw Assays

Number of Standard Coef. of
Zone Average Minimum Median Maximum Skewness
samples deviation variation
All 9,612 38.59 0.43 41.79 51.47 10.52 0.27 -2.83
Mineralised
8,609 41.79 1.08 41.99 51.47 2.58 0.06 -6.57
Zone
Statistics
Number of Data 9,612
8,000
Mean 3.00
Median 3.00
Standard Deviation 0.23
Coef. of Variation 0.08
6,000
Minimum 0.90
Frequency
Maximum 5.10
4,000
2,000
0
0 1.00 2.00 3.00 4.00 5.00 6.00
Length (m)
Figure 6-13: Cumulative Probability Plot for MgO in the Akekerishi Deposit (left) and
Histogram of Core Length (right)
6.6.6 Statistical Analysis and Variography
The histogram of the composited MgO data from mineralised zone is displayed in Figure 6-14. Histogram
analysis indicates that the distribution of MgO composites in Akekerishi deposits approaches normality.

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Statistics
Number of Data 8,511
4000
Mean 41.84
Median 42.01
Standard Deviation 2.20
Coef. of Variation 0.05
3000
Minimum 5.94
Frequency
Maximum 51.12
2000
1000
0
0 10.0 20.0 30.0 40.0 50.0
MgO (%)
Figure 6-14: Frequency Distribution Histograms for MgO Composite in the Mineralised
Zone
General directional variograms of MgO, SiO2, Fe2O3, Ni, and Co were generated. Variogram parameters
selected are listed in Table 6-3. Variogram models along the three axes are also provided in Figure 6-15
Table 6-3: Parameters Chosen for the Mineralised Zone

Bearing Plunge Dip Major/Semi-Major Major/Minor Nugget Sill Range
MgO 144 0 0 1.170 1.647 0.17 0.63 600
SiO2 144 0 0 1.058 3.860 0.04 0.64 600
Fe2O3 162 0 0 2.060 2.319 0.11 0.79 700
Ni 36 0 0 1.609 2.913 0 0.82 500
Co 126 0 0 1.000 2.157 0.02 0.48 460
0.9 0.9 1.4

Major (Mg) Minor (Mg)
0.8 0.8
1.2
0.7 0.7
1
0.6 0.6
Gamma (h)
Gamma (h)
Gamma (h)
0.5 0.5 0.8
0.4 0.4 0.6

0.3 0.3
0.4
0.2 0.2
0.1 0.1 Semi-major (Mg) 0.2
0 0 0
0 200 400 600 800 0 200 400 600 800 0 100 200 300 400
Distance (m) Distance (m) Distance (m)

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0.8 0.8 1.4

Major (SiO2) Semi-major (SiO2) Minor (SiO2)
0.7 0.7 1.2
0.6 0.6
1
0.5 0.5
Gamma (h)
Gamma (h)
Gamma (h)
0.8
0.4 0.4
0.6
0.3 0.3
0.4
0.2 0.2
0.1 0.1 0.2
0 0 0
0 200 400 600 800 0 200 400 600 800 0 100 200 300 400
1.2 1 1.4
Major (Fe2O3) Minor (Fe2O3)
0.9
1 1.2
0.8
0.7 1
0.8
Gamma (h)
Gamma (h)
Gamma (h)
0.6
0.8
0.6 0.5
0.6
0.4
0.4
0.3 0.4
0.2
0.2
0.1
Semi-major (Fe2O3) 0.2
0 0 0
0 200 400 600 800 0 200 400 600 800 0 100 200 300 400
0.9
Major (Ni) 0.9 2.5
Minor (Ni)
0.8 0.8
0.7 0.7 2
0.6 0.6
Gamma (h)
Gamma (h)
Gamma (h)
1.5
0.5 0.5
0.4 0.4
1
0.3 0.3
0.2 0.2 0.5

0.1 0.1 Semi-major (Ni)
0 0 0
0 200 400 600 800 0 200 400 600 800 0 100 200 300 400
0.6 0.7 1.4

Major (Co) Semi-major (Co) Minor (Co)
0.5 0.6 1.2
0.5 1
0.4
Gamma (h)
Gamma (h)
Gamma (h)
0.4 0.8
0.3
0.3 0.6
0.2
0.2 0.4
0.1 0.2
0.1
0 0 0
0 200 400 600 800 0 200 400 600 800 0 100 200 300 400
Figure 6-15: Variogram Models for Each Axis in the Mineralised Zone
6.6.7 Block Model and Grade Estimation
Grade estimation for Akekerishi Deposit was done using Ordinary Kriging (“OK”) within the mineralised
zone. The maximum and minimum numbers of composites used for grade estimation were 25 and 3,
respectively. The search type is ellipsoid. In all cases three passes were used for block estimation, controlled
by a search ellipsoid with attitudes taken from the parameters stated in Table 6-3. The search radius for the
first pass was kept at 400 m for all variables. The search radius for the second pass was 600 m for MgO, SiO2,
and Fe2O3; and 500 m for Ni and Co. The third radius for all variables was held at 2 times of each variogram
range if there were still un-estimated blocks after the first two passes. The coordinate extents of the block
model are represented in Table 6-4. An average bulk density of 2.54 g/cm3 was used for the purposes of
reporting resources.

SRK Consulting
Table 6-4: Coordinate Extents of Block Model

Block Size
Coordinate Min Max
Maximum Minimum
Northing 4996000 5001024 32 16
Easting 451000 455000 32 16
Elevation -300 820 32 16
6.6.8 Model Validation
Swath plots of MgO, SiO2, Fe2O3, Ni and Co were created in three orthogonal directions (northing, easting
and vertical) in particular slice thickness in each direction to validate the resultant block models, as shown in
Figure 6-16. The block models and composites match reasonably well in all orthogonal directions. This
comparison shows close agreement between the block model and composites in terms of overall distribution
as a function of X, Y, and Z location.
45
45 48 Bin 1 2 3 4 5 6
Number of Blocks 539 866 5606 8642 16205 12289
Number of Composites 0 0 11 36 64 126
43 Bin 7 8 9 10 11 12
47 Number of Blocks 20041 14097 21090 13157 11792 1005
41 40 Number of Composites 514 912 1686 3103 1862 197
46
Average Grade of MgO (%)

39
35 45
37
35 Bin 1 2 3 4 5 6 7 8
Bin 1 2 3 4 5 6 7 8 44
Number of Blocks 6770 9097 9372 10228 10451 11507 8885 8800
Number of Blocks 2143 13847 12505 12178 11648 12957 11278 11034
Number of Composites 0 254 976 565 888 686 920 513
33 Number of Composites 1063 729 1131 674 1062 523 1074 484 30
Bin 9 10 11 12 13 14 15 16
Bin 9 10 11 12 13 14 15 16 43
Number of Blocks 8469 8625 6995 6642 5974 5955 3984 2382
Number of Blocks 9814 7825 5952 5303 1902 3261 2555 967
31 Number of Composites 511 402 503 142 4 129 80 0
42
29 25
Block Block
Block 41
27 Composite
MgO MgO MgO
Composite Composite
25 20 40
451300 452300 453300 454300 4997100 4998100 4999100 5000100 -120 80 280 480 680
East (m) North (m) Elevation (m)
40
41 40
38 38
39
36 36
37
Average Grade of SiO2 (%)
Average Grade of SiO2 (%)

Average Grade of SiO 2 (%)
34 34
35 32 32
33 30 30
Bin 1 2 3 4 5 6 7 8 Bin 1 2 3 4 5 6
Number of Blocks 6770 9097 9372 10228 10451 11507 8885 8800 Number of Blocks 539 866 5606 8642 16205 12289
Bin 1 2 3 4 5 6 7 8 28 Number of Composites 0 254 976 565 888 686 920 513 28 Number of Composites 0 0 11 36 64 126
31 Number of Blocks 2143 13847 12505 12178 11648 12957 11278 11034 Bin 9 10 11 12 13 14 15 16 Bin 7 8 9 10 11 12
26 26 Number of Composites 514 912 1686 3103 1862 197
Bin 9 10 11 12 13 14 15 16 Number of Composites 736 371 742 420 605 347 420 68
29 Number of Blocks 9814 7825 5952 5303 1902 3261 2555 967
Number of Composites 511 402 503 142 4 129 80 0 24 24
Block Block Block
27
Composite
SiO2 22 SiO2 22 SiO2
Composite Composite
25 20 20
451300 452300 453300 454300 4997100 4998100 4999100 5000100 -120 80 280 480 680
8
8 8
7 7 7
6 6 6
Average Grade of Fe 2 O3 (%)

5 5 5
Bin 1 2 3 4 5 6
Bin 1 2 3 4 5 6 7 8
Number of Blocks 539 866 5606 8642 16205 12289
4 Bin 1 2 3 4 5 6 7 8 4 Number of Blocks 6770 9097 9372 10228 10451 11507 8885 8800 4
Number of Blocks 2143 13847 12505 12178 11648 12957 11278 11034 Number of Composites 0 254 976 565 888 686 920 513
Bin 7 8 9 10 11 12
Number of Composites 1063 729 1131 674 1062 523 1074 484 Bin 9 10 11 12 13 14 15 16
Number of Blocks 20041 14097 21090 13157 11792 1005
3 Bin 9 10 11 12 13 14 15 16 3 Number of Blocks 8469 8625 6995 6642 5974 5955 3984 2382 3 Number of Composites 514 912 1686 3103 1862 197
Number of Blocks 9814 7825 5952 5303 1902 3261 2555 967 Number of Composites 736 371 742 420 605 347 420 68
2 2 2
Block Block 1 Block

1
Composite
Fe2O3 1
Fe2O3 Fe2O3
Composite Composite
0 0 0
451300 452300 453300 454300 4997100 4998100 4999100 5000100 -120 80 280 480 680

SRK Consulting
0.25
0.25 0.4
0.35
0.2 0.2
0.3
Average Grade of Ni (%)

0.15 0.25
0.15
Bin 1 2 3 4 5 6 7 8
Bin 1 2 3 4 5 6 7 8 Number of Blocks 6770 9097 9372 10228 10451 11507 8885 8800 0.2
Number of Composites 0 254 976 565 888 686 920 513 Bin 1 2 3 4 5 6
Number of Blocks 2143 13847 12505 12178 11648 12957 11278 11034
Bin 9 10 11 12 13 14 15 16 Number of Blocks 539 866 5606 8642 16205 12289
0.1 Number of Composites 1063 729 1131 674 1062 523 1074 484 0.1
Bin 9 10 11 12 13 14 15 16 Number of Blocks 8469 8625 6995 6642 5974 5955 3984 2382 0.15 Number of Composites 0 0 11 36 64 126
Number of Composites 736 371 742 420 605 347 420 68 Bin 7 8 9 10 11 12
Number of Blocks 9814 7825 5952 5303 1902 3261 2555 967
Number of Blocks 20041 14097 21090 13157 11792 1005
0.1
0.05 0.05
Block Block
Block 0.05
Composite
Ni Ni Composite
Ni
Composite
0 0 0
451300 451800 452300 452800 453300 453800 454300 4997100 4998100 4999100 5000100 -120 80 280 480 680
0.012 0.012
0.012
0.01 0.01 0.01

Average Grade of Co (%)

0.008 0.008 0.008
Bin 1 2 3 4 5 6
Number of Blocks 539 866 5606 8642 16205 12289
0.006 0.006 Bin 1 2 3 4 5 6 7 8 0.006 Number of Composites 0 0 11 36 64 126
Number of Blocks 6770 9097 9372 10228 10451 11507 8885 8800
Bin 1 2 3 4 5 6 7 8 Bin 7 8 9 10 11 12
Bin 9 10 11 12 13 14 15 16
Number of Composites 1063 729 1131 674 1062 523 1074 484 Number of Composites 514 912 1686 3103 1862 197
Number of Blocks 8469 8625 6995 6642 5974 5955 3984 2382
0.004 Bin 9 10 11 12 13 14 15 16 0.004 0.004
Number of Blocks 9814 7825 5952 5303 1902 3261 2555 967
0.002 Block 0.002 0.002

Block Block
Composite
Co Co Co
Composite Composite
0 0 0
451300 451800 452300 452800 453300 453800 454300 4997100 4998100 4999100 5000100 -120 80 280 480 680
Figure 6-16: Swath Plots of the Akekerishi Deposit
6.6.9 Mineral Resource Classification
Block model quantities and grade estimates for the Akekerishi Project were classified according to the JORC
Code. Mineral resource classification is typically a subjective concept; industry best practices suggest that
resource classification should consider both the level of confidence in the geological continuity of the
mineralized structures and the quality and quantity of exploration data supporting the estimates and the
geostatistical confidence in the tonnage and grade estimates. Appropriate classification criteria should aim at
integrating both concepts to delineate regular areas of similar resource classification.
SRK is satisfied that the geological modelling presented in this report honours the current geological
information and knowledge. The locations of the samples and the assay data are sufficiently reliable to
support resource evaluation. The sampling information was acquired primarily by core drilling on sections
spaced 200 m apart.
Generally, for a mineralised zone exhibiting good geological continuity investigated at an adequate spacing
with reliable sampling information accurately located, SRK considers that blocks estimated within
exploration grids of 200 m × 200 m and 400 m × 400 m can be classified as Measured Resources and
Indicated Resources, respectively, as defined in the JORC Code. For those blocks, SRK considers that the
level of confidence is sufficient to allow appropriate application of technical and economic parameters to
support mine planning and to allow evaluation of the economic viability of the deposit. Conversely, other
blocks beyond the grid in the mineralised zone should be classified as Inferred Resources, because the
confidence in the estimate is insufficient to allow for the meaningful application of technical and economic
parameters or to enable an evaluation of economic viability.

SRK Consulting
6.6.10 Mineral Resources Statement
The JORC Code defines a mineral resource as:
“A concentration or occurrence of material of intrinsic economic interest in or on the Earth’s crust in such
form, quality, and quantity that there are reasonable prospects for eventual economic extraction. The
location, quantity, grade, geological characteristics, and continuity of a Mineral Resource are known,
estimated, or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-
divided, in order of increasing geological confidence, into Inferred, Indicated, and Measured categories.
Portions of a deposit that do not have reasonable prospects for eventual economic extraction must not be
included in a Mineral Resource…”
The “reasonable prospects for eventual economic extraction” requirement generally implies that the tonnage
and grade estimates meet certain economic thresholds and that the mineral resources are reported at an
appropriate cut-off grade that takes into account extraction scenarios and processing recoveries.
SRK considers that portions of the Akekerishi mineralization are amenable to open pit extraction. In order to
determine the quantities of material offering “reasonable prospects for eventual economic extraction” by an
open pit, SRK used a set of mining and processing assumptions/parameters provided by the Client to
evaluate the proportions of the block model (Measured, Indicated and Inferred blocks) that could be
“reasonably expected” to be mined from open pit. The reader is cautioned that the results of the estimate are
used solely for the purpose of testing the “reasonable prospects for eventual economic extraction” by an open
pit and do not represent an attempt to estimate mineral reserves. There are no mineral reserves at the
Akekerishi serpentinite project. The results are used as a guide to assist in the preparation of a Mineral
Resource Statement and to select an appropriate resource reporting cut-off grade.
According to the metallurgical test reports provided by the Company, the Akekerishi serpentinite ores can be
economically processed into four types of metallurgical products, consisting of high purity ultra-fine
magnesium hydroxide (Mg(OH)2), silica gel, ferrous oxalate (FeC2O4) and nickel concentrate (Ni), and the
total metallurgical costs are approximately 5,400 RMB per tonne of ore. For the cut-off grade estimate, only
MgO and the consequent final product of magnesium hydroxide were considered, as this is the most valuable
among the potential final products, and its metallurgical cost is 2,704 RMB per tonne of ore with a recovery
rate of 68%. In addition, the price of the magnesium hydroxide product is also sourced from the test reports.
The mining and stripping cost of 50 RMB per tonne of ore, the administration cost of 50 RMB per tonne of
ore, and the mining dilution rate of 5% were selected based on the following considerations: similar type of
mine in this region and open pit mining method and so on. Table 6-5 lists the parameters used for the
estimation of cut-off grade. The following formula was applied by SRK to calculate the cut-off grade:
Table 6-5: Assumptions Used for Cut-Off-Grade Calculation

Parameter Value Unit
Magnesium Hydroxide Price (P) 10,000 RMB per tonne
Mining Cost (MC) 50 RMB per tonne of ore
Processing Cost (PC) 2,704 RMB per tonne of ore
General and Administration Cost (GC) 50 RMB per tonne of ore
Mining Dilution (MD) 5 percent
Processing Recovery Rate (PR) 68 percent
In Situ Cut-Off-Grade (G) 30 percent

SRK Consulting
After reviewing the results, SRK considers that it is reasonable to report mineral resources at Akekerishi
Deposit under a cut-off grade of 30% MgO. As of 31 December 2013, the Akekerishi deposit, under a cut-off
grade of 30% MgO, was estimated to contain 1,536 Mt of Measured Resource at average grades of 41.75%
MgO; 2,666 Mt of Indicated Resource at average grades of 42.01% MgO; and 5,726 Mt of Inferred Resource
at average grades of 42.74% MgO as shown in Table 6-6.
Table 6-6: Estimated Resources at Akekerishi Deposit, as of 31 December 2013
Resource Category Resources (Mt) MgO (%) SiO2 (%) Fe2O3 (%) Ni (%) Co (%)
Measured 1,536 41.75 35.50 6.73 0.22 0.010
Indicated 2,666 42.01 35.96 6.86 0.22 0.010
Measured + Indicated 4,202 41.91 35.79 6.81 0.22 0.010
Inferred 5,223 42.79 36.36 6.83 0.23 0.010
The information in this report which relates to Mineral Resources is based on information compiled by Mr Yuanjia Zhu
and Dr Yiefei Jia, full time employees of SRK Consulting (China) Ltd and Members of the Australasian Institute of
Mining and Metallurgy. They have sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined
in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore
Reserves”. Mr Zhu and Dr Jia consent to the reporting of this information in the form and context in which it appears.
6.6.11 Grade Sensitivity Analysis
The tonnages and grades of the mineral resources of the Akekerishi Deposit are sensitive to the selection of
the reporting cut-off grade. To illustrate this sensitivity, a global grade and tonnage table is presented in
Table 6-7. The reader is cautioned that the figures presented in this table should not be mistaken for a
Mineral Resource Statement. The figures in Table 6-7 are only presented to show the sensitivity of the block
model estimates to the choice of cut-off grade. Figure 6-17 presents the grade tonnage curves for the
Akekerishi Deposit.
Table 6-7: Global Grade-Tonnage Table*, as of 31 December 2013

Cut-offs (MgO%) Resource Category Resources (Mt) MgO (%) SiO2 (%) Fe2O3 (%) Ni (%) Co (%)
Measured 1,536 41.75 35.50 6.73 0.22 0.010
30 Indicated 2,666 42.01 35.96 6.86 0.22 0.010
Inferred 5,223 42.79 36.36 6.83 0.23 0.010
Measured 1,536 41.75 35.50 6.73 0.22 0.010
32 Indicated 2,662 42.03 35.94 6.86 0.22 0.010
Inferred 5,222 42.79 36.36 6.83 0.23 0.010
Measured 1,535 41.75 35.50 6.73 0.22 0.010
34 Indicated 2,654 42.05 35.92 6.86 0.22 0.010
Inferred 5,219 42.80 36.36 6.83 0.23 0.010
Measured 1,534 41.76 35.49 6.73 0.22 0.010
36 Indicated 2,642 42.09 35.91 6.86 0.22 0.010
Inferred 5,212 42.81 36.36 6.83 0.23 0.010
Measured 1,529 41.78 35.48 6.73 0.22 0.010
38 Indicated 2,622 42.13 35.89 6.85 0.22 0.010
Inferred 5,173 42.85 36.35 6.83 0.23 0.010
Measured 1,410 41.97 35.53 6.69 0.22 0.010
40 Indicated 2,472 42.29 35.92 6.83 0.23 0.010
Inferred 5,093 42.91 36.35 6.83 0.23 0.010
Measured 1,177 42.24 35.62 6.65 0.23 0.010
41 Indicated 2,166 42.53 36.02 6.80 0.23 0.010
Inferred 4,881 43.01 36.36 6.82 0.23 0.011
Measured 666 42.79 35.83 6.58 0.23 0.010
42 Indicated 1,524 42.96 36.27 6.78 0.23 0.010
Inferred 4,054 43.32 36.36 6.82 0.23 0.010
Measured 216 43.50 35.79 6.49 0.23 0.010
43
Indicated 687 43.48 36.52 6.80 0.23 0.010

SRK Consulting
Inferred 2,167 43.91 36.55 6.84 0.24 0.010

Measured 27 44.37 35.55 6.24 0.23 0.010
44 Indicated 84 44.48 37.84 7.17 0.24 0.010
Inferred 592 45.29 37.43 7.03 0.25 0.010
*The reader is cautioned that the figures in this table should not be misconstrued as a Mineral Resource Statement. The
figures are only presented to show the sensitivity of the block model estimates to the choice of cut-off grade.
6,000 45.50
45.00
5,000
44.50
4,000
44.00
MgO Grade (%)

Tonnage (Mt)
3,000 43.50
43.00
2,000
42.50
1,000
42.00
0 41.50
30 32 34 36 38 40 42 44
Cut-off (MgO%)
Measured (Tonnage) Indicated (Tonnage) Inferred (Tonnage)
Measured (MgO) Indicated (MgO) Inferred (MgO)
Figure 6-17: Grade Tonnage Curves for the Akekerishi Deposit
6.7 Exploration Potential

The continuity of the major mineralised zones is suitably controlled by the exploration grid of drilling and is
well understood. In addition, major features that affect the mineral distribution, such as faults, folds,
intrusions and shear zones, were logged and interpreted competently. As the current resources are not
completely closed off at depth, SRK believes there is great potential to extend the current resources within
the Akekerishi Deposit. Additional step out deeper drilling could be conducted which would undoubtedly
further increase the resource tonnages.

SRK Consulting
References
1. Tai’an Geological Exploration Institute of China Chemical Geology and Mine Bureau, General
Exploration Report of Akekerishi Copper (Magnesium, Nickel) Polymetallic Mine, December 2011.
2. Beijing University of Chemical Technology, Economical and Technical Parameters of Ni/Co-containing
Peridotite-Serpentinite Development.
3. Beijing University of Science and Technology, Feasibility Report of Magnesium Smelting Using
Forsterite. September 2009.
4. Nanyang Science and Technology Institute for Boron and Magnesium, Feasibility Study Report of
Serpentinite Utilisation. October 2011.

SRK Consulting
Appendices
Appendix 1: Exploration Licences

SRK Consulting
Resource Estimate Report – Fenglideyuan’s Serpentinite Mine
SRK Report Distribution Record
Ref: SCN329
Copy No: 1
Date: 5 January 2014
Name/Title Company Copy #

Ms Iris Tan Fenglideyuan Trading Limited No. 1
Approval Signature:
This document is protected by copyright vested in SRK. It may not be reproduced or transmitted in
any form or by any means whatsoever to any person without the written permission of the
copyright holder, SRK.

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Independent Technical Report

for an High-magnesium Serpentinite

Report prepared for

Xinjiang Fenglideyuan Trading Limited

Independent Technical Report

Xinjiang Fenglideyuan Trading Limited

SRK Project Number SCN329

Contact: Dr. Yiefei Jia

Dr. Yiefei Jia, FAusIMM Daniel Guibal, FAusIMM

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

Summary of Principal Objectives

Outline of Work Program

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

Geology and Mineralogy

Exploration, Sampling, Analytical Procedures, Quality Assurance and Quality Control

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

Mineral Resource Estimation

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YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

1 Introduction and Scope of Report ............................................................................1

2 Background and Brief ..............................................................................................1

3 Program Objectives and Work Program ..................................................................1

4 Regional Geography and Access ............................................................................6

5 Exploration Licences and Permits ...........................................................................7

6 Geological Description ............................................................................................8

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YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

ROM Run of mine

YZ/YJ/AX/DG SCN329_SRK_Tuoli_Serpentinite Mine _ITR_Ver3_20140114_Final clean version.docx January2014

1 Introduction and Scope of Report

2 Background and Brief

3 Program Objectives and Work Program

3.2 Reporting Standard

3.3 Limitations Statement

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3.4 Work Program

3.5 Project Team

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3.6 Statement of SRK’s Independence

3.9 SRK’s Experience

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Table 3-2: Recent Reports by SRK for Chinese Companies

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3.10 Forward-looking Statements

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4 Regional Geography and Access

Project Area China

Figure 4-1: Schematic Map of the Project Location

4.3 Topography, Climate and Local Economy and Infrastructure

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5 Exploration Licences and Permits

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Figure 6-1: Regional Geological Map of Akekerishi Deposit

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6.2 Local Geology

Figure 6-2: Simplified Geological Map of Akekerishi Deposit

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6.3 Deposit Geology

Figure 6-3: Schematic Exploration Cross Section in Akekerishi Deposit