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REPORT

Keliber

Pekka Lovén, Markku Meriläinen

8.December 2011

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MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF LÄNTTÄ AND OUTOVESI LITHIUM DEPOSITS

FOR KELIBER OY

Outotec Oyj Riihitontuntie 7 C, PO Box 86 FI-02201 Espoo, Finland Tel. +358 20 529 211, Fax +358 20 529 2200 www.outotec.com Domicile Espoo, Finland Business ID 0828105-4, VAT FI08281054

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Introduction and summary This report is not a comprehensive Minerals Experts Report but is intended to be a part of the Keliber Litium Project pre-feasibility study. The following sections describe the methodology used by Outotec (Finland) Oy in estimating the Mineral Resources and Ore Reserves of the Länttä and Outovesi Lithium projects. Markku Merilainen, MAusIMM and Pekka Lovén MAusIMM(CP) of Outotec (Finland) Oy, both Competent Persons as defined by Joint Ore Reserves Committee (JORC) prepared the Länttä and Outovesi project mineral resource and ore reserve estimates. Markku Merilainen visited the project area 19.–20.8.2010. The estimates comply with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (Joint Ore Reserve Committee – JORC-code). The Li2O grade cut-off used to determine the mineral resources is 0.5 %. The tables below summarize the Mineral Resources of the Länttä and the Outovesi deposits.
Länttä Mineral Resource @ 0.5% Li2O cut‐off  Li2O  %  Resource Class  Tonnage  Measured  433 000  1.12  Indicated  868 000  1.06  Measured + Indicated  1 301 000 1.08 

Outovesi Mineral Resource @ 0.5% Li2O cut‐off  Li2O  Resource Class  Tonnage  %  Measured  0  0.00 

Indicated  Measured + Indicated 

289 000  289 000 

1.49  1.49 

The Ore Reserve estimates of the Länttä and Outovesi are given in the tables below.

5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Waste/Ore ratio Tonnage Li2O % 0 277 000 277 000 0.00 1.96 0.0 Ore reserve tonnage and grade include 95% mining recovery and 25% waste rock dilution at 0% Li2O grade Ore Reserves are not additional to Mineral resources. .17 6.9 Ore reserve tonnage and grade include 95% mining recovery and 15% waste rock dilution at 0% Li2O grade Outovesi Ore Reserve @ 0.3 (20) Länttä Ore Reserve @ 0.17 1.98 0.97 6.5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Waste/Ore ratio Tonnage Li2O % 472 000 513 000 985 000 0.

K2O. Li. The Länttä database contains information on 54 drill holes with a total length of 5691. CaO. The rest of drillholes have only collar azimuth and dip. The deposit consists of two. The number of assayed intervals is 553.7 tonne/m3 was used throughout the estimates. BeEO. Only about half of the drillholes have been downhole surveyed for azimuth and dip. DENSITY. The database contains 111 density records with constant value of 2. partly boudinage veins. Rb.4m. Be.7. The schist belt is composed of mica schists and greywackes with some sulphide bearing black schists and volcanic rocks. Al2O3. The Länttä veins represent an example of homogenous albite-spodumene pegmatite. The density of 2. ROCKCODE. Overburden averages 4 m at Länttä varying from almost 0 to 7 m and is almost totally till with some peat on the surface. Ta. Unsurveyed holes are quite short and all the holes have a good matching with the very straightforward pegmatite vein model. Nb. Outotec (Finland) Oy has not validated the database against the original drill logs but is in opinion that the database integrity is good and sufficient for the purpose. with maximum vein width of about ten meters. Data Drill Hole Database The drill hole database was obtained from Keliber as Excel spreadsheets and was transferred into Microsoft Access for use in Surpac software. The host rock is mainly intermediate-mafic volcanic rock with some mica schist. The vein strike is SW-NE and dip 70º to SE with close to vertical lineation. Also small parallel veins exist in connection to these main veins. SiO2. Na2O. Ta2O5.4 (20) MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF LÄNTTÄ Geology Deposit Geology The Länttä mining licence area (as also Outovesi) is located on the Pohjanmaa schist belt between the Central Finland Granite Complex and the Vaasa Migmatite Complex. Assay file contains the fields for Li2O. Fe2O3. .

5 (20) Resource Estimate Orebody Model The resource outlines were constructed on cross sections at intervals of 5 30 m based on the lithological and assayed intervals. which dimensions were sufficient for mining. The mineralized envelopes with blockmodel are shown in the Figure 1. Downward the model was also continued some 5 m from the lowermost drill hole information. . Top view of the Länttä deposit. In some occasion it was necessary to include material below the cutoff in order to maintain the continuity of the structure. The nominal cutoff grade used was 0.5% Li2O. Each of the resource wireframe was used as a hard boundary for grade interpolation. Figure 1. The 3D model was continued only about 5 m from the last drilled cross section in the northwestern and southeastern ending of the deposit. where the grade was above the cutoff. were modeled. parallel veins. The modeled dikes quite probably continue outside of the modeled area. Three separate.

03 1.6 (20) Basic Statistics The assay data was coded using the wireframes of the mineralized zones to define the resource intersections. This step eliminates any effect relating to the sample length.08 0.11 1.00 2. The summary of basic summary statistics of the composites is presented in the table below. Basic statistics of the composites data used in the grade estimations The data sets show low Coefficient of Variation which indicates that there is no need for any top cutting the high grade assays.06 0.23 0.22 0.25 2. The intersection codes were used to extract samples for statistical analysis and for compositing the data for grade interpolation.44 Composites 7 8 Li2O Li2O 84 0.98 1. .48 0. which may exist in the data. Compositing of drill hole samples is carried out in order to standardize the database for further statistical evaluation.26 0. Trisolation Variable Number of samples Minimum value Maximum value Mean Median Variance Standard Deviation Coefficient of variation 5 Li2O 6 0.47 0.05 1.15 0.71 1.79 0.32 122 0.20 1.47 Table 1.38 0.

. Inverse Distance squared method was used to interpolate the Li2O grade into the blocks.5m x 5m was selected partly on a basis of the drilling density and partly to honor the geometry of the mineralized lenses.8m rounded up to nearest full meter. 3=inferred Float 1 ‐1 Float 3 0 Integer ‐ 2 1=ovb. Grade Interpolation Prior to the grade interpolation the assay data was composited to 2m downhole composites honoring the mineralised lens boundaries. Minimum Coordinates Maximum Coordinates User Block Size Min.5 5 45 0 0 Type   Decimals  BackgrounDescription  Float 1 ‐1 Integer ‐ 3 1=measured. Block Size Rotation Attribute  Name   avgdst class dst2ns li2o material ns nsr Northing Easting Elevation 7057700 2506900 ‐100 7058400 2507450 125 10 5 5 5 2. The composite length was chosen on the basis of the average length of the samples inside the mineralized envelopes of 1.7 (20) Block Model The resource block model was created using Surpac software. The summary of the block model parameters is in the table 2.3=ore Integer ‐ 0 ‐ li2o*145 Calculated‐ Table 2. The search ellipsoids were aligned to honor the main continuity directions of the ore lenses. The blocks inside each wireframe were filled maximum search distances of 60 m. A minimum of 3 and a maximum of 20 composites were used to estimate the grades into the blocks. The parent block size of 10m x 5m x 5m with sub-blocking to 5m x 2. 2=indicated. Länttä resource blockmodel parameters. 2=waste. Each domain was estimated separately using the composites belonging to the estimated domain.

Spodumene occurs in the pegmatite veins from contact to contact and is orientated close to perpendicularly to the contact of the vein.23 0.47 0.08 1.79 0. Länttä – Analytical method check 2011: Keliber oy). 2009. E.22 0.20 1.32 122 0.05 0. potash feldspar. Basic statistics of the blockmodel and composites used to estimate the block grade. Trisolation Variable Number of samples Minimum value Maximum value Mean Median Variance Standard Deviation Coefficient of variation 5 Li2O 6 0.98 1.26 0.8 (20) Blockmodel validation The block model validation includes visual inspection and comparing the mean between the composited and estimated data.00 2. The visual inspection did not show any unusual problem when compared with drill hole grade across sections and statistical comparisons of global block mean and median grades and corresponding composite grades showed expected correlation. surface mapping and trenching results.06 0.20 Table 3. The geophysical magnetic survey (Lehtonen. Mineral Resource Classification The Länttä deposit consists of three parallel pegmatite veins.00 1.44 Composites 7 8 Li2O Li2O 84 0. 2011.08 0.48 0.47 Blockmodel Li2O 2925 0...11 1. T.03 1.74 1. Länttä Mineral Resource is classified as Measured Mineral Resource and Indicated Mineral Resource.25 2. a detailed magnetic survey. The classification is based on the drilling density.22 0. The composition of the veins is quite homogenous and consists of albite. According to Outotec.05 1. A Detailed Magnetic Survey Over the Länttä Deposit: Keliber Oy) confirms the continuation of the pegmatite host . The old contradiction of the lithium grade (close to ten percent) between the two drilling stages (2001/2004) and between the two laboratories (GTK/ALS) is now checked and proved to be caused by natural grade variability between the drilling stages (Sandberg.38 0.07 0. quartz and spodumene.15 0.71 1.

Mineral Resource classification. Detailed geological surface mapping was completed during 2010.. the quality of the pegmatite veins and the nature of contacts against hosting volcanic rock and mica shist (Sandberg. but there are indications that the veins are thinner and lower grade than in the modeled area. Overburden stripping at Länttä in 2010.9 (20) rock veins between the drilling profiles. The magnetic survey results match well with the information got from the diamond drilling and the trenching. . Figure 2. Narrow veins (usually less than 1 m) around the two main veins are not included into the Outotec model and resource classification. Keliber Oy). 2011. The veins are known to continue outside of the modeled area. In this area also the drilling density is the highest one. The results confirm the continuities. especially inside the potential open pit. As Measured Mineral Resource are classified the parts of the veins which are located directly below the detailed mapped area to the depth of 70 – 85 m. Part of these narrow veins may be minable. Green=Indicated. E. The rest of the modeled veins are classified as Indicated Mineral Resource. Inferred Mineral Resource classification is not used at all. Yellow=Measured.

. Länttä Mineral  Resource  @ 0.08 Table 4.5% Li2O cut off.12 Indicated 868 000 1.06 Measured + Indicated 1 301 000 1.2011.10 (20) Mineral Resource Statement The table below summarizes the mineral resources calculated by Outotec (Finland) Oy.5% Li2O cut‐off Resource  Class Tonnage Li2O % Measured 433 000 1. The mineral resource has been calculated using 0.Länttä Mineral Resource as of 30.11.

30 €:Us$ 80 % 90 % 1. The open pit design criteria is presented in the table 6 below. Batter angle Interramp angle Overall  slope  angle Road gradient Road width Berm width 80 dec 65 dec 55 dec 10 % 9m 8m Table 6.0 €/t 50.7 €/t 45.5% Li2O cut off.11 (20) Ore Reserve Estimate The Länttä deposit is amenable for conventional open pit mining. The pit optimization parameters are presented in the following table.9.0 dec 20. The open pit stripping ratio is 6. The mining modifying factors are:   Mining recovery Dilution 95%. In the more mature state of the project also underground mining possibilities should be considered. 15%. The ore reserve estimate of Länttä is based on the open pit optimization (floating cone algorithm) followed by the open pit design of the highest “profit” pit shell. Open pit design criteria. Li ‐carbonate  price Bi ‐product credit Exchange  rate Flotation recovery % Conversion recovery % Waste  mining cost Ore  mining cost Processing and other opex Overall  slope  angle  (rock) Slope  angle  (soil) 10 000 Us$/t 7 % 1. Open pit optimization parameters.4 €/t 1. . The table 7 summarizes the Länttä ore reserves at 0.0 dec Table 5.

98 0.5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Tonnage Li2O % 472 000 513 000 985 000 0.97 Table 7. Länttä open pit.Länttä Ore Reserve as of 30.11.2011. The ore reserve is not additional to the mineral resource.96 0. .12 (20) Länttä Ore Reserve @ 0. Figure 3.

The Outovesi database contains information on 20 drill holes with a total length of 1499 m. The main minerals are albite. The long axis of spodumene crystals is orientated typically almost perpendicular to the vein contact. RQD (Rock Quality Designation) and lithology. .13 (20) MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF OUTOVESI Geology Deposit Geology The Outovesi claim area is located on the Pohjanmaa Schist Belt as Länttä. The host rock on both sides is homogenous mica schist including some graphitic schist. The vein width is up to ten meter and it cuts hosting mica schist bedding almost perpendicularly. The overburden (till) thickness is about ten meter. Cl. The total length is 300 m and the vein is partly open to depth. Spodumene is altered to muscovite in places at vein contacts and at narrow (usually < 2 m) ends of the vein spodumene is totally altered. The vein is SSW-NNE orientated and dipping about 60º to WNW. The vein represents an example of homogenous albite-spodumene pegmatite. Drill hole collar coordinates were surveyed using differential GPS method. greywacke or small greenish skarn interlayers.7 ton/m3 was used throughout the estimates. The number of assayed intervals is 404. usually 8-10 mm. Spodumene is light green in color and the crystal thickness is quite uniform. potassium feldspar and spodumene. Collar azimuths were surveyed using GPS methods. The density of 2. Data Drill Hole Database The drill hole database was obtained from Keliber as Excel spreadsheets and was transferred into Microsoft Access for use in Surpac software. Assay file contains the fields for Li2O. quartz. All drillholes have been downhole surveyed for dip. It is considered that incomplete downhole survey does not cause any significant bias in resource estimation because the geological frame work is very simple and the most of the holes are less than one hundred meters long. Neither smaller parallel spodumene pegmatite veins (as in Länttä) nor mica schist inclusions in pegmatite were discovered. The database doesn’t contain any density determination results.

The cutoff grade used was 0. Resource Estimate Orebody Model The resource outlines were constructed on cross sections at intervals of 40m based on the lithological and assayed intervals. The resource block model inside the mineralized envelopes is shown in the Figure 1. Each of the resource wireframe was used as a hard boundary for grade interpolation. The 3D model was continued about 15 m from the last drilled cross section in the northwestern and southeastern ending of the deposit. Downward the model was continued some 5 . Figure 4. .5% Li2O. Top view of the Outovesi deposit.15 m from the lowermost drill hole information.14 (20) Outotec (Finland) Oy has not validated the database against the original drill logs but is in opinion that the database integrity is good and sufficient for the purpose.

.45 1. which may exist in the data.32 2. Variable Number of samples Minimum value Maximum value Mean Median Geometric Mean Variance Standard Deviation Coefficient of variation li2o 39 0. Compositing of drill hole samples is carried out in order to standardize the database for further statistical evaluation.54 1.18 0.15 (20) Basic Statistics The assay data was coded using the wireframe of the mineralized zone to define the resource intersections.36 0.11 1. Basic statistics of the composites data used in the grade estimations The data sets show low Coefficient of Variation which indicates that the data is of good quality and there is no need for any top cutting the high grade assays. The intersection codes were used to extract samples for statistical analysis and for compositing the data for grade interpolation. The summary of basic summary statistics of the composites is presented in the table below.29 Table 8.42 0. This step eliminates any effect relating to the sample length.

16 (20) Block Model The resource block model was created using Surpac software.5m x 5m was selected partly on a basis of the drilling density and partly to honor the geometry of the mineralized lens. The summary of the block model parameters is in the table 9. The composite length was chosen on the basis of the average length of the samples inside the mineralized envelopes and above 0. Outovesi resource blockmodel parameters.5%Li2O grade of 1. Block Size Rotation Attribute  Name   avgdst dst2ns li2o material ns nsr Y  7066600 7067350 10 5 30 Type   Float Float Float Integer Integer Calculated X  3338350 3338650 5 2. The search ellipsoids were aligned to honor the main continuity directions of the ore lenses.5 0 Z  ‐25 95 5 5 0 Decimals  BackgrounDescription  1 ‐1 1 ‐1 2 0 ‐ 2 1=ovb. 3=ore ‐ 0 ‐ ‐ li2o*146 Table 9.2m rounded up to nearest full meter. Type   Minimum Coordinates Maximum Coordinates User Block Size Min. Inverse Distance squared method was used to interpolate the Li2O grade into the blocks. 2=waste. . A minimum of 3 and a maximum of 20 composites were used to estimate the grades into the blocks. Grade Interpolation Prior to the grade interpolation the assay data was composited to 2m downhole composites honoring the mineralised lens boundaries. The blocks inside each wireframe were filled maximum search distances of 60 m. The parent block size of 10m x 5m x 5m with sub-blocking to 5m x 2.

95 1. because it seems quite obvious that the spodumene containing mineralization is mainly changed to muscovite downwards and along the strike to NE and SW at least in the thinner parts of the vein. The classification is based on the drilling density and a very simple geological frame work. sampling and assaying have been done according to the procedures of Keliber (Sandberg E.45 1. . Outovesi Mineral Resource is classified as Indicated Mineral Resource.11 1.29 Blockmodel li2o 691 0.54 1.18 0. 2011. The visual inspection did not show any unusual problem when compared with drill hole grade across sections and statistical comparisons of global block mean and median grades and corresponding composite grades showed expected correlation.51 Not Calculated 0.47 1.17 (20) Blockmodel validation The block model validation includes visual inspection and comparing the mean between the composited and estimated data.18 Table 10.07 0.27 0. Inferred Mineral Resource classification is not used at all.42 0. All the core logging. Variable Number of samples Minimum value Maximum value Mean Median Geometric Mean Variance Standard Deviation Coefficient of variation Composites li2o 39 0.32 2. Methods and results of the Keliber drilling programme on the Kaustinen area from Sep 2010 to Jan 2011.36 0. Keliber Oy).00 1. Basic statistics of the blockmodel and composites used to estimate the block grade.. Mineral Resource Classification According to Outotec.

11. Outovesi  Mineral  Resource  @ 0.5% Li2O cut off.5% Li2O cut‐off Resource  Class Tonnage Li2O % Measured 0 0.2011. .00 Indicated 289 000 1.49 Measured + Indicated 289 000 1.18 (20) Mineral Resource Statement The table below summarizes the mineral resources calculated by Outotec (Finland) Oy.Outovesi Mineral Resource as of 30.49 Table 11. The mineral resource has been calculated using 0.

The open pit design criteria are provides in the table 13 below.0 dec 20.0 dec Table 12. Li ‐carbonate  price Bi ‐product credit Exchange  rate Flotation recovery % Conversion recovery % Waste  mining cost Ore  mining cost Processing and other opex Overall  slope  angle  (rock) Slope  angle  (soil) 10 000 Us$/t 7 % 1.4 €/t 1. Batter angle Interramp angle Overall  slope  angle Road gradient Road width Berm width 80 dec 65 dec 55 dec 10 % 9m 8m Table 13. Open pit optimization parameters.7 €/t 45.5% Li2O cut off. The table 14 summarizes the Outovesi ore reserves at 0.0. Open pit design criteria. 25%. The mining modifying factors are:   Mining recovery Dilution 95%. . The pit optimization parameters are presented in the following table. The open pit stripping ratio is 6. The ore reserve estimate of Outovesi is based on the open pit optimization (floating cone algorithm) followed by the open pit design of the highest “profit” pit shell.19 (20) Ore Reserve Estimate The Outovesi deposit is amenable for conventional open pit mining.30 €:Us$ 80 % 90 % 1.0 €/t 50.

17 Table 14. The ore reserve is not additional to the mineral resource.00 1.Outovesi Ore Reserve as of 30.11.2011.17 1. Outovesi open pit .5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Tonnage Li2O % 0 277 000 277 000 0. Figure 5.20 (20) Outovesi Ore Reserve @ 0.