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VOSKHOD CHROME DEPOSIT, KAZAKHSTAN
Report Prepared for:
1 Red Place Mayfair LONDON W1K 6PL
Report Prepared by
011_Summary Tech Report_NI43-101
P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc May 2006
SRK Consulting Voskhod FS
Voskhod Feasibility Study 43-101 Summary Technical Report
SRK Consulting 3 floor Windsor Court 1-3 Windsor Place Cardiff, UK CF10 3BX
Tel : +44 29 20 34 81 50 Fax : +44 29 20 34 81 99 firstname.lastname@example.org www.srk.co.uk
Report Authors Mike Beare
P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc
SRK Consulting Voskhod FS
Page SRK Consulting 2 Windsor Court 1-3 Windsor Place Cardiff United Kingdom CF10 3BX e-mail: email@example.com URL: www.srk.co.uk Tel: + 44 (0)29 20 34 81 50 Fax: + 44 (0)29 20 34 81 99
TITLE PAGE TABLE OF CONTENTS
2 2 8 25
25 25 26 26
1 Title Page 2 Table of Contents 3 Executive Summary 4 Introduction and Terms of Reference
4.1 Terms of Reference and Purpose of Report 4.2 Sources of Information 4.3 Field Involvement 4.3.1 Qualifications of Consultant
5.1 Consent and Copyright
6 Property Description and Location 7 Accessiblity, climate, local resources infrastructure and physiography
7.1 7.2 7.3 7.4 7.5 Topography, Elevation and Vegetation Means of Access to the Property Promixity of Population Centre Climate & Operating Season Rights, Power, Water and Personnel 7.5.1 Surface Ownership 7.5.2 Surface General 7.5.3 Water Supply 7.5.4 Power Supply 7.5.5 Staff
33 33 33 33 35 35 36 36 36 36
8.1 Voskhod History 8.1.1 Ownership History 8.1.2 Previous Exploration 8.1.3 Historical Resources Estimates 8.1.4 Production History
37 37 38 40 40
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9 Geological Setting 10 Deposit Type 11 Mineralization 12 Exploration 13 Drilling
13.1 Pre Oriel Drilling (1965-2003) 13.2 ORIEL DRILLING PROGRAMME 13.3 RESULTS OF ORIEL DRILLING PROGRAMME
41 57 57 59 61
61 64 67
14 Sampling Method and Approach
14.1 Drill core Sampling 14.1.1 Pre Oriel Sampling 14.1.2 Oriel Sampling 14.2 Drill Recovery Factors 14.3 Sample Quality / Bias 14.4 Description of Rock Types / Geological Controls / Widths Used to Determine Sampling Interval 14.5 List of Individual Samples
68 68 68 69 69 69 69
15 Sample preparation, Analyses and Security
15.1 Sample Preparation 15.2 Sample Analysis 15.2.1 Quality Assurance / Quality Control (QA/QC) 15.2.2 Sample Security 15.2.3 Adequacy of Procedures
70 73 75 80 80
16 Data Verification
16.1 Grade Modelling 16.1.1 Statistical Analysis 16.1.2 Geostatistical Analysis 16.1.3 Block Modelling and Grade Interpolation
83 84 90 95
17 Adjacent Properties
17.1 Donskoy Gok 17.2 Karagaash Deposit
18 Mineral Processing and Metallurgical Testing
18.1 18.2 18.3 18.4 Metallurgical Testwork Samples and Ore Mineralogy Metallurgical Testwork Forecast Product Split Process Plant 18.4.1 Plant Design Parameters and Process Description 18.4.2 Plant Description 18.4.3 Plant Operations 18.5 Infrastructure and Site Services 18.5.1 Electric Power Supply 18.5.2 Heating and Ventilation 18.5.3 Process Water Circuit and Potable Water Supply 18.5.4 Service Buildings
108 108 109 111 111 113 113 113 113 114 114 114
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SRK Consulting Voskhod FS
18.5.5 Other Services 18.6 Plant and Infrastructure Execution Philosophy 18.6.1 General
115 115 115
19 Mineral Resource and Mineral Reserve estimates
19.1.1 19.1.2 19.1.3 19.1.4 19.1.5 Mineral Resources Global Resources Grade-Tonnage Curves Mineral Resource Statement Mineral Reserves
116 117 117 118 120
20 Other Relevant Data and Information
20.1 Tailings storage 20.1.1 Design Criteria 20.1.2 Capacity Assessment 20.1.3 Geochemical Classification of Slimes Material 20.1.4 Liner Design 20.1.5 Frost Heave 20.1.6 Placement of Coarse tailings 20.1.7 Water Balance 20.1.8 Sizing of Return Water Dam 20.1.9 Final Points 20.2 Geotechnical Studies 20.2.1 Geotechnical Characteristic of the Deposit 20.2.2 Mining Method 20.2.3 Caveability 20.2.4 Mining Induced Stresses 20.2.5 Groundwater 20.2.6 Support Requirements 20.2.7 Mine Access 20.2.8 Conclusions 20.3 Water Management 20.3.1 Introduction 20.3.2 Summary of work completed 20.3.3 Hydrogeological Testwork 20.3.4 Conceptual Model 20.3.5 Water Supply & Mine water management 20.3.6 Tailings management 20.3.7 Water balance 20.3.8 Mine Closure 20.3.9 Conclusions 20.3.10 Recommendations 20.4 Logistical Studies 20.4.1 Introduction 20.4.2 Rail transportation 20.4.3 CIS 20.4.4 China 20.5 Project implementation and Permitting 20.6 Risks and Opportunities
1 1 2 5 5 5 5 6 7 8 9 10 10 11 11 11 11 12 12 12 12 13 13 13 14 14 15 15 15 16 16 16 17 17 17 23 25
21 Interpretation and Conclusions 22 Recommendations
SRK Consulting Voskhod FS
23 References 24 Date
25 Additonal Requirements for Technical Reports on Development Properties and Production Properties 31
25.1 Mining 31 25.1.1 Production Rate 25.1.2 Mining Method 25.1.3 Mining Recovery 25.1.4 General 25.1.5 Ground Subsidence 25.1.6 Main Ramp and Boxcut 25.1.7 Contractor Works 25.1.8 Ore Transportation 25.1.9 Mucking and Trucking 25.1.10 Lateral development 25.1.11 Vertical Development 25.1.12 Production 25.1.13 Mine Services 25.1.14 Ventilation 25.1.15 Underground Equipment Requirements 25.1.16 Mine Labour Requirements and Organisation 25.1.17 The Mining workforce in Summary: 25.1.18 Summary of Total Project Workforce 25.2 Recoverablity 25.3 Markets 25.4 Contracts 25.5 Environmental Considerations 25.5.1 Introduction 25.5.2 Environmental Legislation 25.5.3 Environmental Assessment Requirements 25.5.4 Environmental and Social Impacts 25.5.5 Public Consultation 25.5.6 Closure and Costs 25.5.7 Conclusion 25.6 Taxes 9 25.7 Capital and Operating Costs 25.7.1 Capital Costs 25.7.2 Operating Costs 25.8 Economic Analysis 25.9 Payback 25.10 Mine Life 31 31 31 32 32 33 34 35 1 1 1 1 1 1 1 2 2 2 4 4 5 6 6 6 6 7 8 9 9 10 10 12 17 19 19
List of Figures
Figure 6.1 Figure 6.2 Concession Boundaries Site Plan 31 32
1 Forecast Production Figure 19.4 Operating Costs (mine site) Table 3.7: Harzburgite with ovoid poikiloblasts of bastite Figure 9.3 Production transport flowsheet Figure 25.13 : Diagrammatic Representation of Lithological Setting of Orebody Figure 13.1: Comparative histograms of assay data (Pre-Oriel and Oriel) Figure 16.6 NPV Sensitivity Graph Figure 25.3: The Kempirsai Ultramafic Complex Figure 9.6: High and Low Grade Blocks in Domain 2 Figure 16.2: 2005 Resource Drilling Figure 15.1 Expected Zone of Subsidence Figure 25.SRK Consulting Voskhod FS Page 6 Figure 9.1 Grade –Tonnage Curve for Cr2O3 Figure 19.1: Idealized Ophiolite Stratigraphy Figure 9.4 CAT-1700 LHD Figure 25.11 Contour map of vertical thickness – 2D ore zone Figure 9.7: Block Model showing Cr2O3 distribution within Domain 3 in section 13N Figure 16. showing the locality of the Voskhod deposit within the Main Ore Field of the massif.2 General Schematic of the Conceptual Access Ramp Figure 25.2 Mineral Reserves Table 3.3 Forecast Product Split over LoM Table 3.5 Post Processing Costs Table 3.7 Summary of Project Cashflows 42 44 45 46 49 49 50 50 51 51 52 54 56 63 66 71 72 73 86 89 91 92 103 103 104 105 106 111 117 118 4 32 34 1 1 1 19 20 List of Tables Table 3.1: Drill Hole Collars (Pre-Oriel) Figure 13.9: Altered Hartzburgite (AHRZ) Figure 9.5: Typical example of the Cumulate Dunite (CDUN) lithology Figure 9. Figure 9.8 Comparison of Block Grades (Cr2O3 .4: Surface Geological Plan Based on Pre-Oriel Drilling Figure 9.4: Down the hole variogram (High Grade Zone – Cr2O3) Figure 16.6: Typical example of the PDUN lithology Figure 9.doc .5: Blocks on Domain Boundaries Figure 16.6 Summary of Mine Workforce Table 7.Low Grade Blocks) Figure 16.8: Alteration selvage around a deformed vein of massive chromite Figure 9.1 Rainfall and Evaporation Data Table 8.1 Mineral Resources Table 3.1 Pre Oriel Drilling Campaigns 9 9 11 16 17 18 35 38 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.10: Altered Harzburgite with abundant veins and homogeneous Altered Dunite (ADUN) Figure 9.2 Grade-tonnage Curves by Sublevel Figure 20.5 CAT AD45 Figure 25.1 Flow Sheet for Sample Preparation at Aktobe Figure 15.2 Geological map of the Kempirsai massif.12 : Hangingwall elevation (RL) contour map showing main faults Figure 9.2 Flow Sheet for Sample Preparation at Karaganda Figure 15.3 Flow Sheet for Sample Preparation at Kostanai Figure 16.3: Omni-directional Variogram for Cr2O3 (Filtered – High Grade Zone) Figure 16.2: Q-Q plots for 2m Composites (Pre-Oriel versus Oriel) Figure 16.9 Regression plot OK versus IDW for Low Grade Blocks Figure 18.1 Tailings Dam – Phase 1 Figure 25.
4 SRK Preliminary Assessment Study Table 9.1 Forecast Product Split over LoM Table 19.10 B: IDW Search Parameters Table 16. Voskhod Table 19.6: Variography for Low Grade Zone – Cr2O3 Table 16.7: Sampling and Analytical Precisions – Pre Oriel Data Table 15.4 Capital Costs – Table 1 Table 25.2: Indicator Variogram Parameters Table 16.1 Karaagash Historical Resources Table 18.9A: Grid Nodes covered by IDW Table 16.2 Probable Mineral Reserves Table 20.1: Default grades assigned to “barren” intervals Table 16.3 Geoinvest Resources Estimates Table 8.2: 2005 Drilling Summary Table 15.3: Variography for High Grade Zone – Cr2O3 Table 16.6 Total Project Operating costs (excluding Labour) Table 25.1 Classified Mineral Resource Statement.8: Variography for Low Grade Zone – Fe2O3 Table 16.9: Intra-laboratory analytical precision for Fe2O3 and Al2O3 Table 16.2 Mine equipment requirements Table 25.8 Summary of Unit operating Costs Table 25.6: Internal Repeat Analyses (by laboratory) Table 15.2 2005 Drilling Summary Table 8.7 Life of Mine Labour Costs Table 25.1: Samples analysed during the 2005 drilling programme Table 15.3: Comparison of “blank” and standard analyses for Cr2O3 Table 15.4: Variography for High Grade Zone – SiO2 Table 16.1 Lateral Development Requirements Table 25.1 Monthly Tailings Dam Water Balance Table 20.4: Analytical Precisions – Pre Oriel Data Table 15. Voskhod Table 17.9 Post processing Costs 40 40 40 48 61 64 74 75 77 77 77 78 78 78 80 82 91 92 93 93 94 94 95 97 97 98 107 110 120 120 6 7 1 1 3 11 12 14 15 16 16 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.6Table 15.5: Variography for High Grade Zone – Fe2O3 Table 16.5: Internal Assay Control Table 15.8: Sampling and Analytical Precisions – Oriel Data Table 15.2: SRK Sample Number Allocation Sheet Table 15.1: Pre Oriel Drilling Campaigns Table 13.3 Summary of Mine Workforce Table 25.1: Lithological and Mineralogical Codes Table 13.7: Variography for Low Grade Zone – SiO2 Table 16.2 Storage Requirements for the RWD Table 25.SRK Consulting Voskhod FS Page 7 Table 8.5 Capital Costs – Table 2 Table 25.doc .11: 2D Resource Statement.
This included a local Prefeasibility study undertaken on behalf of the previous owner. together with up to 80 other deposits discovered since 1936. Donskoy GOK (Donskoy). This study. undertaken on behalf of Oriel Resources Plc (Oriel) a listed company based in London. SRK notes that there is currently insufficient closely spaced data to support the classification of Measured Resources but expects that this can be obtained with the 2006 infill drilling campaign and driving of the ramp to intersect the orebody. SRK has based this study on product marketing input from Mr Heinz Pariser of Alloy Metals & Steel Market Research and on process plant design from DRA International Ltd (DRA-I) in South Africa.1. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The Voskhod deposit is itself 7 km NNE of Khromtau and is surrounded by a group of operating and closed mines belonging to another chrome producer.SRK Consulting Voskhod FS Page 8 3 EXECUTIVE SUMMARY 1 INTRODUCTION SRK Consulting (UK) Ltd (SRK) has been requested to produce a Feasibility Study for the Voskhod chrome project for which a 1. Indicated and Inferred Resources defined by SRK with a 20% Cr2O3 cut off are summarised as follows in Table 3. The site does not have permafrost conditions and the field and construction season is generally May to November. The Voskhod deposit consists of one large lens of massive to disseminated chromite with up to 9 smaller pods or footwall protrusions. OSC Geoinvest (Geoinvest). referred to as the Kempirsayskiy Massif. was based on a drilling programme supervised by SRK and a detailed technical audit of all available technical and financial information provided by Oriel. The site experiences a strongly continental climate characterised by hot summer weather (+20 ºC) and extremely cold winters (>-30 º).doc . A recently reconstructed tarmac road links the town of Khromtau with Aktobe 110 km to the west.3 Mtpa underground mining operation is proposed. This massif is 82 km long in a NNE direction and covers an area of 920 km2. UK. The host rocks to the deposit have been subjected to hydrothermal alteration and now consist of serpentinites and serpentinized dunites. It is a totally “blind” deposit. lying as it does at depths of 98 to 440 m with a north-easterly dip of 28o. 3 GEOLOGY The Voskhod chromite deposit lies within a layered ultramafic complex. 2 PROJECT LOCATION The Voskhod chrome deposit has never been worked and lies within the Khromtau District of the Aktobe Region of western Kazakhstan.
7 %Cr2o3 46.1 12. The statement has been estimated using drilling information collected up to November 2005 and is effective 24th May 2006. The current Mineral Reserves are sufficient for 14 years of production at 1.5 12.0 Fe2O3 % 13. allows rapid access to ore and is less capital intensive than a shaft access.5 %Cr2o3 48.doc .5 5 MINE DEVELOPMENT SRK has examined several options for mine access and development and concludes that a box cut and decline approach is the most appropriate for the orebody. The Voskhod reserves are summarised below.SRK Consulting Voskhod FS Page 9 Table 3. The ramp would have dimensions of 5 m by 5 m and be driven at -15%.2 Mineral Reserves Mineable Resource Mt 17. The SRK LoM plan forms the basis of the Feasibility Study and provides the economic basis for the generation of the Reserve statement. In this Summary Technical Report the economic evaluations are based solely upon the Probable Reserves.5 m diameter ventilation shaft. The Mineral Reserves have been classified in accordance with the CIM code and adhering to the guidelines set out by NI 43-101. SRK has not included any inferred material in either the life of mine plan. The shaft would be equipped P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. In the detailed 3D model generated by SRK. dilution and recovery have been applied to the Indicated Resources in order to estimate Probable Reserves.5 1.1 Resource category Indicated Inferred Mineral Resources Tonnes (million) 19. This method is flexible. Table 3.3 SiO2 % 8.3 Indicated Mineral Resource Mt 19.6 Cr2O3 % 48.6 Probable Reserve Mt 18.3 Mtpa. Primary ventilation will be provided by sinking a 5.7 Estimation Methodology 3D 2D 4 RESERVES SRK has estimated Reserves in accordance with the CIM Code by constructing an appropriately detailed Life of Mine (LoM) plan.3 %Cr2O3 40.5 41.
6 MINING METHOD SRK has studied the various mining method options available for Voskhod and concludes that with the current level of information on geotechnics. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Development of the mine would initially be undertaken by a contractor with the owner mining crews taking over in 2009. after which owner crews are scheduled to take over development and production for the life of mine. The bulk method applied to Voskhod in this study is Sublevel Caving (SLC) undertaken by trackless means using 20 m sublevel intervals and 14m drill drive spacing. In accordance with market generated constraints. The proposed beneficiation plant comprises a crushing and screening circuit followed by gravity separation into the three chromite products. Mintek were tasked with the metallurgical test work phase which SRK notes was based on a limited amount of core material. SRK has assumed that the mine production rate will be 1.SRK Consulting Voskhod FS Page 10 with a mechanical lift to provide emergency egress. The shotcrete is considered necessary to prevent the rock becoming weaker over time as a result of oxidation. In order to meet Kazakh regulatory requirements this shaft would be supplemented by an additional shaft early in 2008. parts of the orebody will need to be of the requisite grade. SRK notes that there may be a possibility to mine high grade parts of the orebody by a selective method in the future. This conclusion assumes high grade and subordinate ore will be mined together and all of the Run of Mine (ROM) material will be processed. geometry and rock mass quality to allow mining with minimal processing of the material. Production from SLC will be predominantly mined by the owner crews. SRK notes that an extensive orepass system is not appropriate for Voskhod due to the flat dip of the orebody. The trucks will be loaded directly by LHD. SRK has assumed that the contractor undertakes initial ore and waste development at the mine for a two year period. The design for ventilation underground provides for heating the air during winter.3 Mtpa which provides for 14 years of production with a two year predevelopment period. SRK has assumed in this study that all mine ore and waste will be trucked to surface in 45t diesel trucks. 7 PROCESSING Oriel commissioned DRA-I to undertake basic design and costing for the Voskhod processing facilities. For this to be successful however. Gravity spirals are used to concentrate run-of-mine into the finer products while a Dense Media Separator (DMS) drum will be used for the coarser material. Preliminary geotechnical logging by SRK suggests that the entire underground workings are likely to require shotcrete and systematic bolting. The use of this method is likely to cause subsidence at surface which will be fenced off.doc . geometry and orebody chemistry that bulk mining is the most appropriate method particularly given the low processing costs.
The product suite and specifications were based on the Heinz Pariser market study independently commissioned by Oriel and other information furnished by Oriel. typically 48 % Cr2O3. Lump Chip Fine concentrate -100/150mm + 10mm. Table 3. The yield is based on the washability data from the metallurgical testwork results which has been related back to the forecast plant feed grade and a nominal density cut point applied for the required Cr2O3 grade of product.SRK Consulting Voskhod FS Page 11 DRA prepared a process design based on their knowledge and experience of chrome plants in Southern Africa and earlier work conducted by the previous owners of Voskhod. Three products are envisaged from the process plant. <10 %SiO2 (8% typical) <10 %SiO2 (8 % typical) <3%SiO2 The forecast product split was achieved by predicting the split of feed ore types to the plant over the LoM by analysing the drilling data. -1mm.doc . 45-48 % -10mm + 1mm. Life of mine average yield is estimated to be 70 % Forecast product splits for the overall LoM are presented in Table 3. Further details of the products on a quarterly basis are presented in the financial model. The annual product forecast is shown in Figure 1 which indicates the lower product yield in the initial years of the mine life while mining the lower grade area to the SW of the orebody. This data enables a split of the feed after crushing to be estimated to each process section of the plant. 45-48 % Cr2O3. >55-59% Cr2O3.3 Forecast Product Split over LoM P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Cr2O3. which log the intersections by observed ore types. From the size distributions and washability data product yields were forecast.3. increasing in the later stages of the LoM.
050 18.567.2 10.456 552.523 5.0 11.465.5 10.3 Mtpa of feed material with a top size of 500mm.0 3.0 The process plant is designed to treat 1.9 3.541 1.9 11.914.3 % Fe2O3 % SiO2 11.0 48.5 2.6 69.9 14 8.805.195 1.314 12.8 8.doc .398.350 594.8 1-1.5 19.126 % Yield (% of RoM) Grade % Cr2O3 40.9 7.8 48.3 9.1 8.771.0 30.527.3 8.3 52.SRK Consulting Voskhod FS Page 12 Production tonnes Plant Feed Products Lump Chip Concentrate Total Waste Lump Rejects Chip Rejects Fines Slimes Total 9.298.924 1. Figure 1 Forecast Production P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.0 57.253 15.
000 200. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.000 400. which is schedule for the first quarter 2008.000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fines Chips Lumps Several issues can be expected to affect the forecast product split which cannot be fully defined from the initial investigations. It is anticipated that site construction can commence in May 2007.000. The construction and commissioning phase of the project is estimated to take nine months from site access to completion of commissioning and start of ramp up to full production. SRK has therefore assumed that the same price will be received for all three chromite products. Interconnecting conveyors between the plant selections are also in fully enclosed galleries. Fe/Cr ratio and point of sale. The plant would be expected to take 12 to13 months to design and construct with the overall project schedule governed to a major extent by project approval and the climatic window in the site area.doc . Process and service building will be heated from a small diesel fired boiler facility with hot water or steam reticulated around the site to the surface buildings. The Heinz Pariser report notes no appreciable difference between prices for each product type which are typically defined by their % chromite content. The plant is effectively fully enclosed with the necessary heating and ventilation to cater for the severe climatic conditions.200.000 1. SRK notes that these are not expected to significantly affect the overall yield into products but could possibly affect the quantity of lump product and result in increased levels of chips and fines.000 600. These include the limited data on the in-situ split of ore types in the resource and the noted degradation of material during handling which will be affected by mining and handling of the feed and in the plant.SRK Consulting Voskhod FS Page 13 Forecast Production Graph 1. The main heating duty requirement is for underground air and this will be by electric elements in the inlet to the ventilation fans. The layout is relatively compact but allows for possible future expansion and the provision of additional future recrushing and milling circuits should these be required.000 Production tpa 800.
lined return water dam will accommodate storm water run-off from the plant area as well as some water from the underground at a rate of approximately 2 500 m3/day. On the site. 60km distant from the mine site.doc . Capital has been allowed for an upgrade of this facility and to repair a the link road to the national road network.5 Mt of tailings produced over the mine life will be stored in a lined facility 500 m to the north of the project site. workshops. For this study. Process water will be provided by utilising the 2 500 m3/day of excess water pumped from underground workings and supplemented by boreholes as required. A forecast potable water demand of 550 m3/day is estimated. All chromite products from the mine have been assumed to be trucked by contractor 14 km to the Sarysai rail head. 9 INFRASTRUCTURE SRK notes that the Voskhod deposit is situated in a mining district generally well served for infrastructure. 10 ENVIRONMENTAL The Voskhod site is situated in an area heavily degraded by the surrounding Donskoy operations. SRK is currently in the process of completing a full Environmental and Social P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. SRK has assumed that there will be no shared infrastructure. which is available close to site. These parameters will be confirmed during the detailed design stage. The geotechnical parameters for the slimes and coarse tailings materials have been based on parameters previously used for chromite slimes materials of a similar nature. All buildings will be fully winterised and heated appropriately. power will be transformed to 10 kV in multiple parallel 25 MVA transformers for reticulation on surface and underground. Further investigations are on going into utilising existing power transmission facilities and possibly the on-site generation of power from gas. particularly rail links. A concrete facility will be provided on surface next to the box cut to settle coarse solids and skim oil from the mine water before reticulation to the return water dam. Voskhod is adjacent to the Donskoy GOK mining complex and the town of Khromtau. Cost estimates have been prepared for a number of service buildings including offices. The height of the rehabilitated facility at closure will be 25 m. A separate.SRK Consulting Voskhod FS Page 14 8 TAILINGS STORAGE The 5. The life of facility would be 16 years with tailings deposition over 14 years at an average rate of 148 000 tpa pumped slimes and 216 000 tpa of trucked coarse tailings material. warehouse and ancillary facilities. Electric power will be supplied by a 110kV line from the HT supply at Kimpersai. Potable water will be supplied from the treatment plant and a well field close to the plant site and this can also be used as process water make up until sufficient water is available from underground.
The commencement of the ongoing public consultation process was attended by SRK and involved Interested and Affected parties (IAPs) such as the general public. Public consultation for the project was initiated in February 2006 to satisfy Kazakh requirements for environmental impact assessment of planned activities (the Pre-OVOS process). The main areas considered important by the public were considered to be: • • • • Jobs for local citizens in the construction and operation of the mine. Due the pre-existing levels of environmental degradation SRK considers it unlikely that there will be ongoing liabilities beyond closure. Investments in infrastructure development. SRK has provided the following key environmental protection measures • • • • Lined facilities for mine water settling. Treatment of all water discharged to the environment. and Maintenance and construction of roads. Feedback from the meeting suggests that the attitude of the local citizens to the Voskhod project is positive. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Improvement of the quality of the medical services. local authorities and local non-governmental organizations. and Full closure and rehabilitation programmes for the site • From the work done to date. closure and post closure monitoring. concerned public groups. Berms and ditches to deflect clean water away from mine facilities.SRK Consulting Voskhod FS Page 15 Impact Assessment in accordance with World Bank Guidelines due to be completed in the last quarter of 2006. SRK has provided environmental costs in the capital and operating budgets to allow for assessment. SRK considers that the Voskhod project is unlikely to pose any significant environmental impacts to sensitive receptors. monitoring and reporting. As part of this document. In the Feasibility Study a sum of US$3. This is to adhere to legislative requirements in the Republic of Kazakhstan as well as World Bank Guidelines.doc .2 M has been allocated for closure rehabilitation with US$1 M for the tailings facility alone. Future diversion of the seasonal Karaagash river away from any possible zone of mine subsidence. SRK will also produce an Environmental Management Plan. The life of mine plan generated in the Feasibility Study allows for closure rehabilitation. which cannot be adequately managed through the implementation of appropriate mitigation and management control measures. tailings and return water dam. Arguably the biggest challenge facing the operation in environmental terms is quantifying the nature and extent of existing contamination and ensuring these liabilities are not transfer to Oriel’s operations.
Beyond this. SRK has relied upon the input from the marketing study by H. bagging. product quality and specification vary widely depending on its ultimate industrial application. 12 CAPITAL COSTS Capital costs for the Voskhod project were estimated to require a US$131 M (pre-financing charges) for the first two years of development prior to receipt of initial revenues from chromite production. Ahlers BV conducted a detailed logistics study which indicates that the chromite products can be viably transported by the rail network into Russia.SRK Consulting Voskhod FS Page 16 11 MARKETING AND LOGISTICS Chromite is generally priced by producers in agreement with consumers and. SRK has assumed over the life of mine a flat US$145/t (at the Sarysai rail head) for all of the chromite products from Voskhod. SRK has estimated that the mine would generate sufficient cashflows to finance all of the mine capital requirements. Table 3. The following unit costs are post this period. China and by sea to other markets. The total operating costs presented in Table 3. The chromite price used in this study assumes that the weighted average US$46/t cost for transport from Sarysai to the final destination is paid by the end user. Pariser. rail operator’s commission. The marketing work conducted by Oriel staff and independently by Heinz Pariser indicates that there is sufficient demand in World markets for the average 896 ktpa of chromite products over the mine life.4 are presented as life of mine. :All operating costs up to and including Q1-2008 have been capitalised and included in the US$131 M above.doc . product loss and moisture. SRK was provided with a range of potential markets by Oriel which were used to verify product transport volumes to the various destinations. Until such time that off take agreements have been finalised. 13 OPERATING COSTS Operating costs were calculated from first principles using a range of assumptions and input data relevant for Kazakhstan. A 10% contingency was added. as a consequence.4 Operating Costs (mine site) P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Adjustments were applied to account for logistics management.
367 Product Costs post Processing ($/t of product) Concentrate (fines only) Bagging Cost Mine to railhead Truck Transport Moisture penalty (truck transportation) Product Handling at Rail Siding Moisture penalty (rail transportation winter only) Rail Operators Commission (1% of freight charges) Rail Logistics Agent (5% of freight charges) Total Product handling Costs $/t fines $/t $/t $/t $/t $/t $/t Inflation over the mine life has not been included in the operating cost calculations.44 Total .440 3. The total operating cost per tonne of ore (including off site costs but excluding freight to end user) is estimated to be US$27.857 286.015 657.381.066.236 32.SRK Consulting Voskhod FS Page 17 Project Total Operating Costs including contingency General and Administration Costs Labour $ Expats Travel $ All Other $ Contingency (10%) Total $ Total ($/tonne ore) Mining Labour $ Expats Travel $ All Other $ Contingency (10%) Total $ Total ($/tonne ore) Processing Labour $ Expats Travel $ All Other $ Contingency (10%) Total $ Total ($/tonne ore) Total ($) 10.272 26.02 0.402 23.310.068.404 64. Table 3.702.173 20.880 48. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.758 87. The table below summarises these.363.451 169.298.824.3/t of ore.060 45.805.doc . The operating cost expressed per tonne of product is US$ 39.214.1/t of product.190.863.416 56.497 5.371.801.572.974 4.33 2.53 $ 7.424 14.94 27.36 9.309 2.301 61.07 0.74 Post Processing costs are those involved with product handling after beneficiation and are expressed as $/tonne of product or $/tonne of fines concentrate in the case of bagging.280 232.1 1.Operating Total ($/tonne ore) 412.022 893.529 6.131.180.063.295.51 2.513.83 0.740 5.5 Post Processing Costs $/unit 5.447 12.
5cents per lb of Chromium metal. SRK has assumed that this does not contain any post processing costs and the run of mine grade is 45% Cr2O3. Does not include any acquisition costs or previous corporate expenses.2/t to mine and process ore of a lower grade. The following table provides a breakdown of the expected numbers in each department. have not been taken into account.4cents per lb of Chromium metal. the SRK economic model: • Is expressed in terms of un-inflated United States Dollar (US$) with no allowances for inflation or escalation and dated at 24th May 2006 Delays all sales revenues by a quarter to simulate the product sales pipeline Is based on a chromite price used by SRK in this study for all chromite products is U$145/t at the Sarysai rail head Is expressed in post-tax and pre-financing terms which assumes 100 % equity. When converted to lbs of metal the Voskhod cost equates to US$4. Table 3. This model reflects capital and operating expenditures and revenues from the second quarter 2006 onwards.SRK Consulting Voskhod FS Page 18 The Pariser report provides an example from a South African Chromite producer with on site costs of US$37. SRK notes that the proposed mine at Voskhod has the potential to produce chromite at an ex-mine cost 20% less than the established South African producer cited in the Pariser report. Most of the project capital that has been committed to date has been excluded. A total of 384 personnel will be required for the mine and process plant.2/t to mine and process ore. This example when worked through gives a producer cost of US$5. Voskhod has equivalent costs of US$20. described below. that could be carried forward.doc . In addition. • • • • • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The corporation tax rate of 30 % has been used. Any allowable residual tax losses.6 Summary of Mine Workforce Number 31 184 3 109 5 52 384 Notes Reduces to one by 2012 Reduces to zero by 2012 Reduces to zero by 2013 Department Mining (expats) Mining (nationals) Processing (expats) Processing (nationals) G & A (expats) G & A (nationals) Total 14 FINANCIAL EVALUATIONS SRK has developed a financial model termed the Base Case Model.
Operating expenditures during commissioning and initial ramp up of mining/processing have been capitalised up to the end of the first quarter in 2008 Provides a 10% contingency for both capital and operating costs • • • • • • In terms of taxation the SRK Base Case model applies the following: 15% VAT to all capital items It is assumed that all VAT on operating expenditure is recovered in the period expended. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. capital expenditure and operating expenditure.3 Mtpa. SRK has not applied this tax to the economic evaluations for Voskhod. Therefore. Is based upon process recoveries and a plant design provided by Mintek and DRA-I respectively Takes no account of the potential for the discovery of further Mineral Resources in the licence areas. discount rate. Displayed below is the sensitivity of the Voskhod project’s NPV to chromite price. Duty rates vary from 5 to 15 % depending on the item Taxable profits (operating profit less depreciation charge) are taxed at a corporate tax rate of 30% 1% royalty applied to gross sales revenue SRK notes that under the terms of the concession agreement between Oriel and the Kazakhstan government there is provision for an Excess Profit Tax (EPT).SRK Consulting Voskhod FS Page 19 • Capital investment is depreciated on an annual fixed percentage basis as per the fiscal regime in Kazakhstan Is based on the SRK mining schedule and its production rate of 1. Import duty has been applied as per the schedule from Kazakh authorities.doc . Reflects owner mining with a premium applied to reflect the planned approach of utilising a contractor for mine startup until the end of 2008. the conclusion of the SRK feasibility study is that the Voskhod Chromite project is technically and economically feasible based on the investigations and assumptions made in this report. The NPV (Net Present Value) derived for the Base Case Model using the assumptions listed above is $US319.6 M at a discount rate of 10 %. The Internal Rate of Return (IRR) was calculated to be 41 %.
Product split analysis cannot be performed to a definitive level based upon the metallurgical test-work performed to date.000 $100. the most material of which are commented upon below. based on a predicted size distribution.000 $0 -40% -30% -20% -10% 0% % Variation 10% 20% 30% 40% SRK notes that substantial variations in the four variables do not result in a negative NPV for the Voskhod project. SRK has identified a number of risks and opportunities relating to the development of the Voskhod project.6 M and the corresponding IRR is 50 %.000.000.000 Initial Capex Opex $200.000 $400.000 $500. Incorrect Estimation of Product Splits. However.000.000 NPV Chromite price Discount Rate $300.000.doc . because core data was a) not available at the time the plant • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Permits.000. 15 RISKS In undertaking this technical-economic appraisal. The permitting process (though with improving confidence) still remains an area of concern for any new projects in the FSU region. SRK notes that without corporation tax applied the NPV is USS471. No individual off-take agreements are yet in place. Excessive Loss of Product to Slimes.SRK Consulting Voskhod FS Page 20 NPV Sensitivity (30% tax) $600. performance at the neighbouring Donskoy operation suggests that this will not be an issue.000. • • Markets. The plant has been designed.
Attracting and maintaining key staff at acceptable remuneration levels in the current minerals boom is becoming a difficult task. Consequently the waste slime could be in the region of 50% Cr2O3 depending on the level of dilution caused by fine material generated during crushing from the • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Water ingress.SRK Consulting Voskhod FS Page 21 design concepts were fixed and b) there is no reliable way to extrapolate from core data to full plant scale.doc . there is still room for subjective judgment. The orebody has the capacity to produce at a rate considerably higher than the planned 1. Extra Revenues from Discard Slimes at Saleable Grade. cover drilling and pressure grouting ahead of the ramp face. Mitigation in the plant programme exists as float (slack) time. As in all extreme climate conditions. SRK notes that there is potential for water ingress to the underground workings. This risk needs to be managed by additional hydrogeological investigations. The metallurgical test-work upon which the process plant has been designed was from four diamond drill cores which were taken to be representative of the entire orebody. although logistics would probably become an issue without some infrastructure improvements at key transfer points. • Personnel. since. • Increase Mine Production. GOST’s (standards) and applicable codes. To mitigate against this competitive salaries and work roster have been allowed. Sample Representivity.3 Mtpa and could be increased by purchasing additional mining equipment. The slime fraction is mainly generated from the PCR fraction which is generally high grade Chromite. The processing plant as proposed conforms to the chromite industry best practices available. and Weather Effects on Project Execution. particularly during ramp development. Process Plant Technical Approvals. as with most design codes and guidelines. The samples were generally high grade of predominantly ‘powdery’ and ‘massive’ chromite lithologies. The effect of this is unlikely to adversely impact the overall yield but could reduce the quantity of material reporting to the lump fraction. The current limitation on chromite production is market capacity. since it is based on being completed earlier than ore is available from the mining operations. SRK notes that there is a reduced level of confidence with this volume of material versus a bulk sample. OPPORTUNITIES • • • • 16 There are a number of opportunities that exist to enhance the project commercial and technical performance. there is still an element of risk involved in obtaining approval. the construction programme may be significantly affected by the weather conditions. Whilst care has been taken to review the relevant SNIP’s.
Direct Shipping Ore. the purchase of it may prove advantageous over the current $12.SRK Consulting Voskhod FS Page 22 competent ore types and gangue. Sections of the Orebody are of product grade material and the ability to crush. The exploration lease for this multi lense style deposit directly north of Voskhod across the Karaagash river has been awarded to Oriel Resources. Should the slime prove to be consistently at a saleable Cr2O3 grade with acceptable SiO2 and Fe2O3 specifications and suitable markets can be found it would be possible to recover this material and increase the sales revenue from the chromite. This deposit contains 4. These resources were historically Soviet classified and have only recently been licensed to Oriel. screen and direct ship material has been discussed at length. Inferred Resources.doc .57Mt @ 41. These have not been modelled into the existing production profile. In addition. At present approximately 100 000 tpa of slime is forecast to be generated. Time constraints on this feasibility study have meant that the opportunity still exists for ‘value engineering’ on some goods and services which as a default have been costed as imported items. SRK has not reviewed these resources in detail or their supporting information. Oriel have been approached by an entity owning at least part of one of the 110kv power lines from Kimpersay into the Chromtau sub-station (which is Donskoye controlled).05% Cr2O3. However given the dilution profile and non-selective nature of the mining method the extra capital for the bypass infrastructure was deemed a luxury and removed from the plant design. The deposit is adjacent to the Voskhod underground workings and provides good potential for additional production capacity. Better Usage of Cheaper Products out of the FSU Region.6M new line installation.5Mt @ 40. A number of areas have been proposed that may be explored to increase the product yield. Reduced Power Capital Cost. These include. If this power line is available along its entire length to Kimpersay. A modernisation of these regulations could help to save up to $3M off the project capital costs.9% Cr2O3 classified as C2 and P1 resources under the Soviet system. Another option involves a study underway by an Aktobe company to provide a total solution to power and heating requirements by gas which is locally available in low and high pressure pipelines and at a competitive unit rate. The Voskhod Deposit contains 1. there exists another 4 to 5 Mt of potential resources in the adjacent Karaagash deposit. The 1974 Soviet mining (ventilation) regulations on airflow per diesel engine kilowatt require a second ventilation shaft and corresponding parallel intake ventilation raise throughout the mine. Increasing the Product Yield. However the design has been made and sufficient space left in the plant should operational experience show that adequate volumes of direct shipping material can be mined. • Karaagash Deposit. Governmental Review of Mining Regulations. • • • • • • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. At the assumed price of US$145/t of saleable product this could potentially provide >US$10 million per year in additional revenues.
If the proportion of Chromite is small. SRK notes that the Voskhod project is situated in a favourable position for transporting product to both Russia and China. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. thereby recovering more chromite to product. In order to justify this. Treating the slimes through a WHIMS (Wet High Intensity Magnetic Separation) circuit. there may be a recoverable fraction of magnetic Chromite in the slimes material. Locked particles are those that contain discrete sections of valuable Chromite and waste. Many of the above would incur additional capital and operating costs. for a "similar" deposit. Based upon the work carried out by SRK and other contributors. As suggested by the Uralmechanobr report provided by Oriel. the average density of the lump will cause it to float in the DMS drum circuit and be rejected. Rail lines from Sarysai (14km from the mine) can carry product to both China and Russia simultaneously. SRK notes that the project fundamentals are all positive as follows: Robust Mineral Resources. This will further liberate Chromite grains from the gangue minerals and allow the Chromite to be recovered in the spiral plant resulting in a further possible increased overall yield.doc .SRK Consulting Voskhod FS Page 23 i) Re-crushing the DMS drum plant lump waste (floats) in an attempt to liberate 'locked' particles and re-treating the crushed material through the DMS cyclone plant. SRK concludes that the feasibility study has met its objectives in determining the viability of the Voskhod project based upon the work undertaken and assumptions made. Low costs. Milling the <25mm >1mm discards chips (floats) from the DMS cyclone circuit. the deposit is high grade with favourable mining characteristics allowing bulk mining methods to be employed. By re-crushing this lump into smaller pieces. 13 CONCLUSIONS The level of data adequacy is considered sufficient for a Feasibility Study but further work is required in the several areas in order to manage potential risks. ii) iii) Initial tests on the samples available have shown that these conceptual approaches have only been marginally successful. it may be possible that the smaller particles will contain sufficient chromite to cause them to sink. The Voskhod operation is planned to adopt low cost bulk mining methods combined with a simple processing route with proven technology The work of Heinz Pariser indicates that the market fundamentals are positive for chromite with demand expected to exceed supply in the short to medium term Infrastructure. additional costs against the potential benefits further studies area required. SRK opines that the Voskhod Chromite project can be developed into a profitable mining operation.
Key activities are as follows: Aggressively pursue permits and other approvals 2006 resource infill drilling with additional geotechnical logging Drilling of water wells and further hydrogeological testwork Completion of the full Environmental and Social Impact Assessment (ESIA) Technical Report preparation for local permit applications Negotiation of definitive off take agreements with end users and traders Commencement of on site construction – in particular the box cut and portal need to be established before the last quarter of 2006 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc .SRK Consulting Voskhod FS Page 24 RECOMMENDATIONS SRK recommends that the Oriel management team continues with its planned program of fund raising and mine development at Voskhod. SRK recommends that Oriel will need to conduct the agreed program of activities at Voskhod in order to meet the schedule requirements. In addition.
1 INTRODUCTION AND TERMS OF REFERENCE TERMS OF REFERENCE AND PURPOSE OF REPORT In October 2005 Oriel Resources Ltd (Oriel) commissioned SRK Consulting (UK) Limited (SRK) to prepare a Feasibility Study for the Voskhod Chromite Project in Kazakhstan.2 SOURCES OF INFORMATION The information SRK has used for this report has come from a wide range of sources including internal company reports and records from the previous owners. generate a life of mine plan and evaluate project economics to a Feasibility Study level. The work included a review of all historical activity on the property.SRK Consulting Voskhod FS Page 25 4 4. carry out additional site work. In addition. Geoincentre. SRK has strictly adopted the NI-43-101 template for this report which prescribes exactly the content of each section. Tom Ryan and other specialists DRA have provided extensive design and cost input for the process plant and infrastructrure. sampling and assaying practices of previous owners and an independent estimation of Mineral Resources and Mineral Reserves relative to the standards outlined in NI 43-101 using the definitions of various categories of resources and reserves established by the Canadian Institute of Mining (CIM). original assay certificates and SRK reports for the previous owners. 4. The feasibility study was completed by SRK having refined project alternatives in a Preliminary Assessment Study. define design criteria.doc . Constantin Birkin at Ahlers P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. including geology. The objectives of the Feasibility Study were to critically review the available information. Metallurgical testwork investigations and reports have been provided by Peter Craven and his team at Mintek in South Africa. SRK notes that the Feasibility Study prepared by SRK follows industry norms and was undertaken to satisfy the following objectives: To satisfy internal decision making requirements within Oriel To generate an independent estimation of Mineral Resources and Mineral Reserves relative to the standards outlined in NI 43-101 using the definitions of various categories of resources and reserves established by the Canadian Institute of Mining (CIM) To assist local permit applications for a variety of environmental and industrial permits To provide a basis for negotiating project` finance from a commercial bank SRK has based the Life of Mine Plan in the Feasibility Study Report on Indicated Mineral Resources converting to Probable Mineral Reserves only.
3. This permits the SRK Group to provide its clients with conflictfree and objective recommendations on crucial judgment issues. rock engineering. CPRs and independent feasibility evaluations on behalf of exploration and mining companies and financial institutions worldwide.doc . SRK has undertaken a program of on site activities: Supervision of an extensive orebody infil drilling campaign in 2005 including hydrogeological testwork and installation of piezometers Geotechnical logging of core from the 2005 drill program Excavation and logging of test pits for tailings facility and processing plant site investigations Water.1 FIELD INVOLVEMENT Qualifications of Consultant The SRK Group comprises 600 staff. and hydrology. providing mining industry consultancy service inputs. tailings management. The SRK Group’s independence is ensured by the fact that it holds no equity in any project. infrastructure. underground mining.SRK Consulting Voskhod FS Page 26 BV has provided a detailed logistical study for product transport and Heinz Pariser has provided in depth marketing input. offering expertise in a wide range of resource engineering disciplines. The SRK work at Voskhod has been prepared based on a technical and economic review by a team of 17 consultants sourced from the SRK Group’s offices in the United Kingdom over an 18 month period. Furthermore.3 4. who are listed below. resource and reserve estimation and classification. project evaluations and audits. have extensive experience in the mining industry and are members of good standing of appropriate professional institutions. metallurgical processing. The individuals from SRK who have provided input to the May 2006 Voskhod Feasibility Study. These consultants are specialists in the field of geology. environmental management and mineral economics. The SRK Group has a demonstrated track record in undertaking independent assessments of resources and reserves. hydrogeology. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. rock and soil sampling for environmental purposes 4. The SRK Group has also worked with a large number of major international mining companies and their projects.
Alwyn Annels. MBA Michael Beare. CGE (Turkey) Richard Connelly. Annels is a mining geologist with over 40 years experience in the mining industry and has been responsible for the reporting of Mineral Resources on various properties internationally during the past forty years. FACE James Gilbertson BSc. C. BSc. PhD. FACE William Harding. FIMMM Johan Boshoff BSc P. BSc(Tech) MIChem. CEng. permit information. C. Bsc.Eng. MSc. The Qualified Person with overall responsibility for preparing this report and for reporting of Mineral Reserves is Mr Michael Beare. Gareth Thomas. PhD.Eng Ian Brackley. MIMM.Eng. C.PhD. MSc. BSc. P. BSc. BSc. MAusIMM. BSc. FIMMM. MIMMM Gilbert Lamarche.Eng (Hons) MIMMM.Eng. FGS. C. MIMMM. MICE. B.FSAIMM Tayfun Gurdal.MSc. MICE.Eng. B. and visiting institutes & operating mines. Rodney Redden. C.Eng. Mr.Eng (Mining).doc . FGS Craig Watt. The other significant contributor to this study is Mr Rod Redden who spent four months in Kazakhstan sourcing costs. BSc (Hons).Geol. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Member AGI Neil Marshall.MSc.Eng. ACSM Alwyn Annels BSc. MSc. MSc Paul Riley C. BSc. C. B. Michael Beare is a mining engineer with 14 years experience in the mining industry and has been involved in the reporting of Mineral Reserves on various properties in Europe and Africa during the past two years.Eng.Eng Site visit N Y Y Y Y Y N N N Y Y N N Y N N N Y N Y N The Qualified Person with overall responsibility for reporting of Mineral Resources is Dr. FIQ. FGS. MIMMM. Mr Beare has visited site on one occasion for a total of 3 days during the 18 month period of SRK involvement at Voskhod.Eng (Hons). MBSA. FGS Martin Pittuck. who is an employee of SRK. C. who is an employee of SRK.Eng BSc.Eng. MSc. FGS.SRK Consulting Voskhod FS Page 27 Role Project Director Kazakhstan Project Manager Cardiff Project Manager Geology and Mineral Resources Geology and Mineral Resources Geology and Mineral Resources Geology and Mineral Resources Mining Engineering Drawings Geotechnical Engineering Geotechnical Engineering Mineral Processing Tailings Storage Facility Tailings Storage Facility Tailings Storage Facility Hydrogeology Hydrogeology Hydrogeology Environmental Environmental Financial Modelling Person Allan McCracken.MSc. BSc. FIMMM. FIMM Tracey Laight. FGS Fiona Cessford. MIMMM. C. BSc. MIMMM. BSc.MISRM Philip Mohr.Eng. MIMWA Renee Abreu B. MNGWA Ben Green. B.
The intellectual property reflected in the contents resides with SRK and shall not be used for any activity that does not involve SRK. SRK supervised extensive drilling programmes. and operational data for the project. and has not independently verified the legal status or ownership of the Voskhod Project or the underlying agreements. company letters and memoranda. reviewed mining plans. Rodney Redden and the other SRK and Oriel personnel made numerous site visits to Kazakhstan and the Voskhod site during the April 2005 to May 2006 period. Oriel has reviewed draft copies of the report for factual errors. resource. SRK carried out discussions with Oriel management and technical personnel and was provided full and open access to all available information relating to the project. Hence.SRK Consulting Voskhod FS Page 28 5 DISCLAIMER SRK has taken the technical input to this study provided by Oriel.doc . and other public and private information as listed in the “Sources of Information” section. is the exclusive property SRK. In addition. SRK has not conducted an independent investigation to verify its accuracy and completeness. 5. Mintek and Ahlers BV in good faith and has checked this for adequacy and appropriateness. Copyright of all text and other matter in this document. Mr. without written consent. SRK has verified the treatment and interpretation of this data but has not evaluated all of the source data itself in detail. including the manner of presentation. any technical procedure and/or technique contained in this document. Any changes made as a result of these reviews did not involve any alteration to the conclusions made. Oriel provided full disclosure of all reserve. Heinz Pariser. SRK has assumed that all of the information and technical documents reviewed and listed in the “Sources of Information” and “References” section are accurate and complete in all material aspects. or to reproduce and/or use.1 CONSENT AND COPYRIGHT Neither the whole nor any part of this report nor any reference thereto may be included in any other document without the prior written consent of SRK as to the form and context in which it appears. the statements and opinions expressed in this document are given in good faith and in the belief that such statements and opinions are not false or misleading at the date of this report. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. miscellaneous technical papers. Oriel has warranted that a full disclosure of all material information in its possession or control has been made to SRK. without the written consent of SRK. In preparing this report. While SRK carefully reviewed all of this information. DRA-I. SRK has only reviewed the land tenure in a preliminary fashion. geological reports and maps. Oriel has agreed that neither it nor its associates will make any claim against SRK to recover any loss or damage suffered as a result of SRK’s reliance upon Oriel. No warranties regarding the source data provided by others can therefore be given. It is a criminal offence to publish this document or any part of the document under a different cover.
signed by the Deputy Prime Minister and contained the boundary coordinates for the exploration area A contract for the “Final Exploration” of the Voskhod chromite deposit (Contract No 425 with amendment N757) was submitted on 16 May 2000.2. The Voskhod project is located in the northwest of the Republic of Kazakhstan at 50o 18’ N and 58o 30’ S. Over the period of the above extension to the licence (2001-2003). a mining town servicing the nearby chrome mines of Donskoy GOK. as indicated in Figure 6. Also shown is the 572 ha of land purchased by Oriel for the surface facilities required for the operation. The initial two year exploration licence was renewed for a further two years on 10 July 2001 and it eventually expired in July 2003. The Voskhod site has been the subject of a detailed topographic survey carried out by local contractors during the 2005 drill campaign. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. the exploration licence (Licence No AE No 1556) was granted to Geoinvest by Government Decree 932. The survey work was correlated to the Kazakhstan national survey grid. SRK has however.doc . A share agreement was agreed with Energinvest Holding GmbH on 19 January 2005 by which Oriel acquired 100% of the issued share capital of Geoinvest and formal acquisition of the project was gained on 8 February 2005.8 ha. it had not completed a “Final Exploration” programme and received final formal approval for the resources. and has been granted exclusive mining rights for 25 years and a land lease for 49 years by the local authorities. confirmed that the Voskhod orebody lies within the concession boundary held by Oriel. The area was also increased at this time to 43. Oriel has obtained 100% ownership of the project from the previous owners. royalties (1% of the value of production) and fees payable. the wholly owned mining subsidiary of Kazchrome.1 and shown in Figure 6. taxes. On 18 September 1999.8 ha and is described in Figure 6. SRK has not reviewed the original title certificates during their studies. This licence.SRK Consulting Voskhod FS Page 29 6 PROPERTY DESCRIPTION AND LOCATION The mining concession for Voskhod project covers an area of 43. Geoinvest drilled a total of 11 holes in order to more precisely define the boundaries between C2 and C1 resources and to provide additional hydro-geological and geotechnical information on the rock mass containing the deposit. The deposit lies 110 km east of the city of Aktobe in the Aktubinskaya Oblast and just 7 km to the north northeast of the town of Khromtau. and that responsibility should fall to the legal counsel of Oriel. due to commitments elsewhere. SRK has used this information for all maps and plans in the May 2006 Feasibility Study. This contract provides exclusive 21 year rights to the minerals and their exploitation on completion of the exploration required and gives details of various minimum expenditures. The neighbouring Donskoy GOK operation was forced to relinquish the licence on the Voskhod deposit because. OSC Geoinvest (Geoinvest).1.
Oriel is in the process of obtaining these permits and SRK understands that local institutes will be heavily involved in this process. This document also stipulates the expenditure on training (1% of mining costs) and of social payments to the Aktobe regional budget (US$150. SRK considers that after mining of the Voskhod deposit it is unlikely that there will be long term liabilities in relation to the mining operation that cannot be adequately addressed in the planned program of closure works. The draft mining contract.000 was paid within one month of signature of that contract which took place at the end of September 2004. as prepared by Geoincentre.SRK Consulting Voskhod FS Page 30 A “Reserves Calculation Report” dated September 2003 was produced by Geoinvest’s consultants Geological Innovational Centre (Geoincentre). The Committee Report (Protocol) of 2 April 2004 presents the results of negotiation with the Government in which Geoinvest will be assigned the right to mine ore from the Voskhod deposit for a 25 year period. SRK notes that a variety of permits are required for the mining operation from the Kazakh authorities.doc .000 pa). The mine is in an area that has been heavily degraded by the historical activities of the neighbouring Donskoy mines. was submitted in early June 2004 and 44. SRK is unaware of any environmental liabilities relating to the property. A sign-up fee of US$300. The resources report was reviewed by SCR and a Protocol (280-03-U) was produced in December 2003 giving approval for the contained resource estimates.8 ha of land to a depth of 500 m was assigned to Geoinvest by the Committee for Geology of the Ministry of Energy and Mineral Resources. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.
There is no permafrost. streams.5 to 2 m below surface. Aktobe is a city with a population of around 300 000. Agriculture is the major land use in the region. The new link allows ore to be exported to China directly through Kazakhstan. a mining town servicing the nearby chrome mines of Donskoy GOK. though the soil is of poor quality. 7. Frost penetration is to 1. but an 8 m deep gully follows the northern edge of the deposit. The surrounding area has also been substantially degraded and contaminated by historical mining practices precluding agriculture in some areas around the mine. CLIMATE. 7.doc . The vicinity of the project site also possesses extensive nearby railroad infrastructure. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The area is unsuitable for agriculture as soils are poor and stony and the land is covered with grass.SRK Consulting Voskhod FS Page 33 7 ACCESSIBLITY. Aktobe is a major regional centre and is well served with regular flights from Almaty and the capital Astana.3 PROMIXITY OF POPULATION CENTRE The deposit lies 110 km east of the city of Aktobe in the Aktubinskaya Oblast and just 7 km to the north northeast of the town of Khromtau. This road passes 7 km to the south and the site is bounded by a public road along the eastern boundary (unsealed). The main Aktobe – Khromtau road was fully upgraded in 2005 by the Turkish contractor Alarko. the wholly owned mining subsidiary of Kazchrome. The Molodezhnaya beneficiation plant for Donskoy’s subordinate ore lies approximately 3 km north of the site. ELEVATION AND VEGETATION The surface above the Voskhod deposit is topographically very flat with elevations varying between 400 and 412 m. low scrub and aromatic herbs. 7. houses or historical sites on the area directly overlying the deposit.4 CLIMATE & OPERATING SEASON Khromtau has an extreme continental climate with hot dry summers (+40oC) and severe winters (-40oC).2 MEANS OF ACCESS TO THE PROPERTY The site is easily accessed by motorised vehicles and workers would travel the 7km from the nearby town of Khromtau by company bus in the future. The area is semi-arid with mean annual rainfall is about 350 mm mainly in the autumn and winter. A Donskoy GOK owned rail line passes just a few kilometres to the west and the newly completed state owned east-west link is 14 km to the north.1 7. rivers. There are no trees. LOCAL RESOURCES INFRASTRUCTURE AND PHYSIOGRAPHY TOPOGRAPHY.
These cold masses of dry air under the influence of increased land surface area (steppe zones) become warm. During the year the region will experience unstable atmospheric conditions as follows: • dust storms typical occur for 17 to 19 days of the year between April and November.0 m/s. Frost conditions do not occur for approximately 4 .doc . The maximum recorded wind speed of the area is approximately 40 m/s. Winter conditions are cold and long. The lack of moisture is aggravated by strong winds. thunder storms typical occur in summer with the average number of days ranging between 17 to 23.SRK Consulting Voskhod FS Page 34 During the summer period masses of dry superheated tropical air are delivered from the south (Central Asia and Iran deserts). a typical attribute of continentality. with snow and blizzards that cause deep freezing of the ground. and blizzard conditions typical occur in winter with the average number of days ranging between 24 – 34. The prevailing wind direction recorded from the Aktobe station is from the southeast with an average velocity of 3.5 months of the year The maximum rainfall occurs during summer. • • • Mean and maximum monthly and annual rainfall for the Voskhod area is shown in Table 7. Snow cover begins at the start of November and from December a steady state of cover is evident until April the following year. which strengthen the development of droughts and dry winds.1 below. dehydrated and transformed into continental tropical masses. and from the north. The prevailing wind direction recorded at the Novorossiskoye weather station is from the west with an average velocity of 1. fog conditions typical occur during winter with the average number of days ranging between 28 and 32. which during the summer period causes frequent dust storms. The annual period with average daily temperature of air higher than 0ºС lasts between 209-230 days. Arctic tropical air masses due to the Ural Mountains.0ºС to -38.0ºС and minimum winter temperatures can range between -31.0ºС. The maximum temperatures of summer is around 39. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.2 m/s.
8 528.2 delineates the areas under licence to Oriel.2 25.6 29.8 53.4 24.4 120.SRK Consulting Voskhod FS Page 35 Table 7.9 39.3 60.2 31. The title is described more fully in Section 6 and subject of the concession boundaries indicated in Figure 6. The blue boundary shown in Figure 6. WATER AND PERSONNEL Surface Ownership The site plan shown in Figure 6.3 66 72.5 36 20.9 20.1 Month Rainfall and Evaporation Data Rainfall (mm) Evaporation (mm) * Maximum 24 hr Rainfall Mean 32. POWER.1 0 0 0 20 50 120 120 120 50 10 0 0 Monthly Lake Evaporation Monthly Maximum January February March April May June July August September October November December Total 58.5.1 * These evaporation values are assumptions and need to be investigated further during the final design phase.9 55.doc .1 22.9 33.3 91.1 RIGHTS.8 72.9 36.9 25.1.7 33.7 18.2 defines the boundary of surface rights secured by Oriel. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The red boundary around the deposit indicates the area held as a mining concession.9 102.4 29.9 83.6 35. SRK has not conducted a legal due diligence on this property but has verified that it is sufficient for the project needs as defined in this feasibility study.6 23.5 29. 7.4 23.7 55.5 30.5 7.2 85.4 62.4 12.3 349.
However. The Aktobe region is noted for its high level of unemployment and SRK considers that Oriel will experience no difficulties in finding sufficient manpower. Project capital costs could be significantly reduced if infrastructure could be shared. SRK has provided for the cost of a water treatment plant to provide drinking water. In addition.5 Staff The Donskoy mines have been operating for many years and source mining staff from Khromtau. SRK considers that the option of generation of electricity using gas turbines should also be further investigated as an alternative option to reduce capital. Analyses undertaken on water samples during the hydrogeological investigation program indicated that water from the boreholes is likely to be of potable quality. However. However.5.3 Water Supply The process water supply will principally be derived from mine dewatering operations as significant inflows are to be expected into the underground workings. in order to operate a mine using trackless technology SRK has assumed that a significant number of expatriates will be required in the early years of mine production to undertake training programmes for the local staff. Additional water supplies in the area that could be considered if required would be water from the Khromtau town system or the water filled open pits in the vicinity that belong to the Donskoy operation. SRK has assumed in this study that there will be no shared infrastructure with the neighbouring Donskoy mines.5. 7. The site for a tailings facility was chosen in a shallow gully that was topographically favourable. The processing facility and office have been located outside the statutory 500m exclusion zone around the tailings deposit. At the mine site it will be transformed to lower voltage for secondary distribution and usage within the mine and plant.doc . The waste dump has been positioned at the top of the box cut and will form the additional height required for trucks to tip into the primary crusher. 7.SRK Consulting Voskhod FS Page 36 7. 7.4 Power Supply Electricity to the mine site will be provided by 60 km of new power line from the HT substation at Kimpersai.5. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.5. several boreholes will be developed on the project site that will supplement water from underground as required.2 Surface General The flat topography at Voskhod lends itself to a mining and processing operation.
Over the period of the above extension to the licence (2001-2003). The resources report was reviewed by SCR and a Protocol (280-03-U) was produced in December 2003 giving approval for the resources. This contract provides exclusive 21 year rights to the minerals and their exploitation on completion of the exploration required and gives details of various minimum expenditures. The Committee Report (Protocol) of 2 April 2004 presents the results of negotiation with the Government in which Geoinvest will be assigned the right to mine ore from the Voskhod deposit for a 25 year period.1. The draft mining contract.1 HISTORY VOSKHOD HISTORY Ownership History Between 1994 and 1996. due to commitments elsewhere.8 ha. as prepared by Geoincentre. Only 23 of these holes have complete geological and assay information and are thus useable for resources estimation purposes. it had not completed a “Final Exploration” programme and received final formal approval for the resources. . was submitted in early June 2004 and 44. royalties (1% of the value of production) and fees payable. The area was also increased at this time to 44.8 ha of land to a depth of 500 m were assigned to Geoinvest by the Committee for Geology of the Ministry of Energy and Mineral Resources.8 8.3 ha exploration area. A “Reserves Calculation Report” dated September 2003 was produced by Geoinvest’s consultants Geological Innovational Centre (Geoincentre). The initial two year exploration licence was renewed for a further two years on 10 July 2001 and it eventually expired in July 2003. This licence was signed by the Deputy Prime Minister and contained the boundary coordinates for a 19. Donskoy GOK undertook a “Detailed Exploration” programme at Voskhod involving the drilling of a total of 62 holes. On 18 September 1999. the exploration licence (Licence No AE No 1556) was granted to Geoinvest by Government Decree 932.1 8.000 pa). A sign-up fee of US$300. This document also stipulates the expenditure on training (1% of mining costs) and of social payments to the Aktobe regional budget (US$150. Donskoy GOK was forced to relinquish the licence on the Voskhod deposit because.000 was paid within one month of signature of that contract which took place at the end of September 2004. A contract for the “Final Exploration” of the Voskhod chromite deposit (Contract No 425 with amendment N757) was submitted on 16 May 2000. Geoinvest drilled a total of 11 holes in order to more precisely define the boundaries between C2 and C1 resources and to provide additional hydro-geological and geotechnical information on the rock mass containing the deposit. taxes.
Many holes showed significant deflections from the original target positions.1).2 Previous Exploration A total of 145 drill holes are reported to have been completed within the Voskhod area prior to 2005 and to depths of between 200 and 500 m.1. OSC Geoinvest (Geoinvest). 4 to 5 intersections are made across the width of the orebody. Once each hole was completed. A share agreement was agreed with Energinvest Holding GmbH on 19 January 2005 by which Oriel acquired 100% of the issued share capital of Geoinvest and formal acquisition of the project was gained on 8 February 2005. Initially holes were collared vertically and commenced at 120 mm diameter (114 mm ID).1. The location of ore zone contacts and samples are thus located as accurately as possible in 3D space. Drill hole “Passports” from the Geoinvest programme were also examined during an audit by SRK in 2004 which indicated that logging had been very detailed and that a comprehensive database exists of geological. Casing was inserted as the holes advanced and internal directional surveys were made after every 20 m of advance.doc . now on 20 to 50 m centres on each line (see Figure 13. On average. geotechnical and geophysical data from bore holes. the spacing is typically 40 to 65 m. Core recoveries are recorded by drill run. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1 Phase Reconnaissance “Search and Estimation” “Preliminary Exploration” “Detailed Exploration” – Donskoy “Detailed Exploration” – Geoinvest Pre Oriel Drilling Campaigns Period 1965 – 67 1987 – 89 1990 – 92 1994 – 96 Grid Wide 100 x 100 50 x 50 50 x 25 Holes Drilled 6 22 55 51 Early Exploration 83 holes 2001 – 03 50 x 25 11 Detailed Exploration 62 Holes Drill holes were laid out on east-west lines 50 m apart and collars are. A breakdown of this work is summarized in Table 8. 8. neutron activation surveys were undertaken and the hole was then resurveyed from top to bottom as a check on the previous information. SRK thus has no concerns about the quality of primary data. and has been granted exclusive mining rights for 25 years and a land lease for 49 years by the local authorities. Table 8. Tricone bits were used to drill through overburden and heavily weathered ground for the first 1-3 m and then the remainder of the hole was cored at 96 mm reducing to 65 mm through the ore zone using saw-tooth bits with silicon carbide inserts.SRK Consulting Voskhod FS Page 38 Oriel has obtained 100% ownership of the project from the previous owners. horizontal distances between intersections along drill lines vary from 11 to 64 m while between lines. following the above drilling campaigns. As a result.
25 other holes. To provide fresh core for geotechnical logging and rock mechanics analysis as well as resource sampling. The first two rigs were Longyear machines and both were capable of drilling inclined holes. To provide holes for hydrogeological / hydrological study. Fe2O3 and SiO2 and were thus useable for the estimation of grade. To upgrade more resources to Indicated status by achieving a local intersection density of less than 50 m in all directions especially in the northern section of the orebody where a significant number of old holes lack assay data (neutron activation surveys only). however. Only the 11 Geoinvest holes have complete data records and drill cores are available for study for the mineralized zones in these holes. The location of all these resource holes is shown in Figure 13. To provide samples on which check SG measurements can be made. SRK supervised a drilling program at Voskhod with the following aims and objectives: • • To confirm existing grade information. XRD and SEM analysis can be made to determine mineralogical and petrographic characteristics of the ore and host rocks.2 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. To provide samples on which microscope. The Geoinvest drilling was undertaken for confirmatory purposes and to provide information on the hydro-geological and geotechnical conditions in preparation for underground mine design. The holes listed in Table 13. have downhole neutron activation survey data which allows recognition of the mineralized zone and these were thus used to assist in the definition of the orebody limits and morphology. The Russian rig which arrived later was only capable of drilling vertical holes to 500 m.doc . • • • • • • • The drilling programme commenced on 15 April 2005 under the direction of SRK. In 2005. To provide an explanation of sudden changes in thickness of the ore body and apparent offsets in the orebody fringe. the LF 90 to depths of in excess of 500 m and the LF 30 to depths of in excess of 300 m. but was best suited for shallower holes at the larger core size (HQ). To provide metallurgical samples. To gain a better understanding of the geological context of the orebody.2 were all diamond cored from surface and were drilled at either HQ or NQ size. All holes were internally directionally surveyed at 10m intervals.SRK Consulting Voskhod FS Page 39 Only 23 of the 62 detailed exploration holes have assay information for Cr2O3.
659.00 2.1 m).60 5.4 Production History There is no history of production at Voskhod as it is a new project P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.3 Geoinvest Resources Estimates The combined C1 plus C2 resources.046.SRK Consulting Voskhod FS Page 40 The resource and mine design drilling was completed on 27 September 2005 and totalled 13 955 m.351 425 2.6 Resource Estimate Tonnes (Mt) Grade ( % Cr2O3) 8. Table 8.10 452.614.70 185. as approved by the State Committee (SCR) were as follows: Category C1 + C2 Tonnes Mt 18.10 15.2 : 2005 Drilling Summary Phase Holes Proposed 9 5 13 1 10 9 6 Holes Drilled 9 5 13 1 9 10 6 Size Proposed Metres 3.6 14.575 5.1.35 Description 1 2 3 4 5 NQ HQ NQ HQ NQ NQ HQ Totals Confirmatory / Resources / Metallurgical Geotechnical / Metallurgical Resource Resource Mine design Ramp design Environmental Monitoring 8.2 SRK undertook an audit of the Soviet compiled Voskhod resource estimate in August 2004 and was sufficiently confident of the data set to place them into the AusIMM JORC (1999) classified Indicated and Inferred categories as described below: Table 8.7 m) and the monitoring holes on 28 September 2005 (185.80 905. the ramp holes were completed on 23 September 2005 (905.7 Grade % Cr2O3 46.200.970 1.doc .3 Historical Resources Estimates Historical Resource estimates at Voskhod are as follows: Table 8.7 46.05 1.475 846 180 14.1.2 Mineral Inferred Mineral Resource 0.4 SRK Preliminary Assessment Study Indicated Resource 18.029.822 Actual Metres 4.
East of the fault. although small amounts of feldspar and hornblende may also be present. while clinopyroxenes are characterized by the presence of Ca in the crystal lattice and have the general formula Ca(Mg. units of the Magnitogorsk island-arc are exposed. In the southern part of the Urals. and wehrlite (clinopyroxene dominant). P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1 represents a diagrammatic section through a typical ophiolite sequence in which mantle peridotites are overlain by mafic to ultramafic layered cumulates and then by gabbroic rocks. which are over-thrust by Precambrian to Early Proterozoic sedimentary-volcanic complexes. ophiolite massifs outcrop at the eastern tectonic boundary of the Urals.doc .Fe)SiO3 . then these rocks are referred to as dunites. Where the succession is complete.Fe)Si2O6. Where the percentage of olivine lies between 40 and 90%. three rocks types are recognized: harzburgite (orthopyroxene dominant). aligned parallel to the main Urals structure at the junction between the Uralides and the East European continental margin. Where olivine exceeds 90%. Figure 9. these in turn pass up into a zone in which there is intense dyke and sill intrusion which are feeders to the overlying basaltic lavas. The ophiolite sequences of Kazakhstan were thrust towards the west during Variscan thrusting onto Carboniferous to Permian shelf sediments of the West Uralian Zone. lherzolite (orthopyroxene and clinopyroxene). The Uralian belt of Russia and Kazakhstan contains numerous ultramafic ophiolite massifs. Where the content of pyroxene exceeds 60% of the rock then peridotites pass into pyroxenites. Orthopyroxenes are Mg and Fe rich pyroxenes with the general formula (Mg. and are bounded to the east by the Main Ural Deep-fault.SRK Consulting Voskhod FS Page 41 9 GEOLOGICAL SETTING Kazakhstan is situated at the southern tip of the Uralian mountain belt within the Central Uralian Uplift. which is a major north-south trending shear zone interpreted to be the trace of a subduction zone. Peridotites are granular rocks consisting dominantly of olivine and pyroxene.
9. lherzolites and podiform chromitites. and (5) late stage dykes and intrusions composed of wherlite. one of the largest of the Uralian ophiolite complexes. It covers an area of around 2000km2 and extends for 90km from north to south. and 32km from east to west (Fig. Thrust faults within the oceanic crust developed into subduction zones dipping eastwards beneath the Magnitogorsk island arc as the tectonic regime shifted from one of extension to one of compression.doc .1). in northwest Kazakhstan. forming oceanic crust in the Middle Ordovician. allocthonous blocks of the oceanic crust and Magnitogorsk island arc were thrust up over the shelf sediments of the east European continental margin to form the Uraltau anticlinorium. On the south eastern side of this major tectonic lineament. The MOF. During the Upper Carboniferous to Permian continent-continent collision between Kazakhstan and Laurussia. (3) a sheeted dyke complex. chromitite and rare lherzolite. which would later be obducted to form the ophiolite sequences exposed at present. The high degree of tectonism displayed by these units is the result of lateral movement away from oceanic ridges beneath which the basaltic magma is rising as plumes.9. This is particularly evident in the position of the chromite deposits which out-crop in two parallel bands on either side of the fold axis. One such allocthonous block contains the Kempirsai massif of Kazakhstan. The ophiolites were originally formed from a depleted mantle source in an oceanic environment in the Uralian palaeo-ocean during Palaeozoic times.2) Major lineaments include a NNE-SSW trending anticline which runs the length of the MOF.2) which is related to the Main Ural Deep fault. pyroxenite and gabbro (see Figure 9. Gabbro cumulates overlie the ultramafic rocks in the western and northern parts of the MOF (Fig.2). high-Cr chromite. (2) layered olivine gabbros. and causes repetition of lithologies on the eastern and western flanks of the block. The Kempirsai Massif is located east of the town of Aktyubinsk. (4) pillow lavas of mid-ocean ridge affinity. forming the Magnitogorsk island arc commenced in the Middle Ordovician. extends over a distance of 22km north northeast from the town of Khromtau. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.SRK Consulting Voskhod FS Page 43 The basal mantle units of ophiolite complexes represent the residual material following partial melting and the generation of basaltic magmas.9. which contains giant deposits of low-Al. harzburgite. It comprises dunite. Island arc volcanism. It is made up of a complete ophiolite sequence of: (1) mantle harzburgites. the sequence of mantle rocks exposed is referred to as the Main Ore Field (MOF) and is chemically distinct from the north-western part. which is the trace of the subduction zone. The complex is cut by a north south trending shear zone (Fig. dunites. Early continental rifting in the Lower Ordovician was followed by a period of spreading.
4 is a more detailed bedrock geological plan in the immediate vicinity of the deposit produced by Geoincentre.3 is a geological map of the MOF around Voskhod which shows the distribution of rock types in the area. it lies within the Sarsai orefield where it is associated with the “40 years of Kazakh Republic”. More specifically. Voskhod P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.SRK Consulting Voskhod FS Page 44 Figure 9. Figure 9. Molodezhnoye. showing the locality of the Voskhod deposit within the Main Ore Field of the massif. Geophysical IX and X and Karaagash deposits.2 Geological map of the Kempirsai massif.doc . The Voskhod deposit lies within the eastern zone of the MOF together with up to 80 other deposits discovered since 1936. Figure 9.
Serpentinized peridotites contain 10-15% olivine.4) whose surface expression is the Karaagash Creek and which is believed to dip to the north at 80º. The serpentine is described as fibrous chrysotile with platy antigorite.SRK Consulting Voskhod FS Page 47 is separated from the Karaagash deposit to the north by the east-west Karaagash Fault (Figure 9. pyroxene dunite and peridotites which are intimately mixed.7 m thick. Sulphides have been described in the dunite but are not abundant. spreadsheets and sections. These codes are listed in Table 9. pentlandite and rare chalcopyrite. The area is overlain by Palaeogene-Quaternary loams overlying sandy clays with rubble 0. 10-15% orthopyroxene and 5-10% bastite. Pyroxene dunites are interbedded with these rocks.1 together with colour codes used on drill logs.56-0. They are characterized by 3-10% orthopyroxenes and possess oval porphyroblasts of bastite. heavily fractured and brecciated to depths of 60-80 m. The serpentinized dunites and serpentinites are the main host rock to the orebody and are generally fine grained with abundant fractures. The underlying bedrock is described as partially serpentinized dunite. 60-80% serpentine. These rocks are weathered.doc . They include pyrrhotite. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Identification of lithologies on the basis of drill core examination alone is extremely difficult and subjective and thus thin section petrographic studies are necessary. For the purposes of drill core logging in the field a series of lithological codes and associated descriptions have been produced.
SRK Consulting Voskhod FS Page 48 Table 9.doc ZONES Mineralized .1: Lithological and Mineralogical Codes VOSKHOD COLOUR SCHEME NAME (ABB) OVB AHRZ ADUN APER HRZ CDUN PDUN TDUN SDUN ADUN/CDUN ADUN/TDUN ADUN/PDUN PDUN/CDUN CDUN/PDUN/ADUN TDUN/CDUN TDUN/CDUN/PDUN/ADUN COLOUR Overburden Altered Harzburgite Altered Dunite Altered Peridotite Harzburgite Cumulate Dunite Pyroxene/PoikiliticDunite Tectonised Dunite Serpentinised Dunite Altered Dunite and Cumulate Dunite Altered Dunite and Tectonised Dunite Altered Dunite and Porhyritic Dunite Poikilitic/Cumulate Dunite Poikilitic/Cumulate/ Altered Dunite Tectonised/Cumulate Dunite mixed Tectonised/Cumulate/Poikilitic/Altered Dunite mixed NAME (FULL) Tectonics Lithologies FZ SZ BZ MCR PCR OCR VCR DCR OVB ZONE ALT ZONE CUMULATE ZONE POIKILITIC ZONE TRANSITION ZONE TECTONIZED DUNITE ZONE MIN ZONE TECTONIC ZONE Fault Zone Shear Zone Breccia Zone Massive Chromite Powdery Chromite Orbicular Chromite Vein Chromite Disseminated Chromite Overburden Zone Altered Zone Cumulate Dunite Zone Poikilitic Dunite Zone Transition Zone Tectonised Dunite Zone Mineralized Zone Faulted.10 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.5 to 9. Sheared or Brecciated Zone Some of the lithologies listed above are illustrated in Figures 9.
SRK Consulting Voskhod FS Page 49 Figure 9.5: Typical example of the Cumulate Dunite (CDUN) lithology Figure 9.6: Typical example of the PDUN lithology P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc .
SRK Consulting Voskhod FS Page 50 Figure 9.7: Harzburgite with ovoid poikiloblasts of bastite Figure 9.doc .8: Alteration selvage around a deformed vein of massive chromite P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.
9: Altered Hartzburgite (AHRZ) Figure 9. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.SRK Consulting Voskhod FS Page 51 Figure 9. The red boundary represents the fringe of the orebody as defined by a vertical thickness of 4 m and a weighted ore zone grade of 20% Cr2O3.11 shows a contour plot of vertical thickness onto which the interpreted location of faults has been superimposed. Rapid but systematic changes towards the western and southern boundary of the deposit are strongly exhibited.doc .10: Altered Harzburgite with abundant veins and homogeneous Altered Dunite (ADUN) Figure 9.
Vertical Thickness (m) NEX DZ1 43000 120 110 43100 DZ2 100 90 80 DZ3 42900 70 60 50 40 SEX 42800 Main Zone (MZ) Eastern Boundary Fault Zone (EBFZ) 30 20 10 42700 15400 15500 15600 15700 15800 15900 16000 Contour Map of Vertical Thickness .2D Ore Zone FIGURE 9.11 .
if not three. has resulted in an apparent northerly offset of the NEX. however. rapid truncation and ore zone thinning are suggestive of a combination of faulting and fringe conditions. This may be an offset portion of the Karaagash Fault which forms the northern boundary of the NEX. there is increasing evidence from geophysical surveys that the latter boundary might be fault controlled.11 suggests that between DZ2 and DZ3 this section of the orebody has moved westwards by approximately 50 m between what are essentially tear faults.doc . South Eastern Extension (SEX) and the Main Zone. There are at least two of these zones (DZ 2 and DZ 3) and an indication of a third in the north of the deposit (DZ 1). approximately 40 m wide. This faulting is responsible for the subdivision of the deposit into the three areas. They subdivide the deposit into narrow corridors 100 to 140 m wide. There is a rapid cut-out of the MZ to the north which is currently interpreted as an east-west fault. North Eastern Extension (NEX). Their presence was further supported by the difficulty of manual contouring across these zones. The nature and location of these faults is not fully understood due to the lack of westerly inclined drill holes. To the north of the Main Zone (MZ) and along its eastern limits. parallel and closely spaced faults possibly exist along the eastern fringe of the MZ with a north northwest trend and forming the EBFZ (see Figure 9. This structure may be related to and parallel with. These zones were initially suspected by unusual offsets in the western and eastern orebody fringes and then by the offsetting of faults of the EBFZ. The evidence presented by Figure 9.12 is a contour map of the assay hangingwall of the orebody which demonstrates a northerly plunging domal structure in the western half of the MZ with a short westerly flank towards the western fringe and a longer easterly flank towards the EBFZ. No significant vertical displacement is suggested. At least two. combined with the impact of a north-easterly inclined orebody. The continuity of the above set of faults has been disrupted by a series of ENE trending socalled “Dislocation Zones”. This is an issue that needs to be addressed in future drilling campaigns. the main north northeast striking anticlinal fold reported for P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. These are believed to be early normal faults on which side-slip.11). Figure 9. other than that produced by lateral offsets of topographically higher regions of the orebody (see below).SRK Consulting Voskhod FS Page 53 suggestive of normal fringe conditions. Displacements of thick and thin sections of the orebody were apparent either side of these zones.
12: Hangingwall elevation (RL) contour map showing main faults .EBF 43100 DZ 1 DZ 2 43000 DZ 3 42900 42800 Dislocation Zones (DZ) Eastern Boundary Fault 42700 15400 15500 15600 15700 15800 15900 16000 FIGURE 9.
It is based on a plan showing the lithologies found on the hangingwall (HW) and footwall (FW) of the orebody in each of the new drill holes and also the depth of the TDUN contact. (Domain 3) the EBFZ is duplicated on the section in Figure 9. Further to the north east again.13 is a diagrammatic representation of the relationship between the orebody contacts and the host rocks in a section drawn from the south west to the north east of the orebody. The continuity of this structure has been disrupted by the “Dislocation Zones” described above.2. CDUN/PDUN appears once again on the HW with TDUN remaining on the FW. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Figure 9. The continuity of these north-south trending zones is clearly disrupted by DZ2 with a dextral displacement evident as is the case for the orebody itself. but further to the north east TDUN appears at the immediate FW. Between the NEX (Domain 1) and Domain 3 of the Main Zone. This section demonstrates that the orebody cross-cuts the lithological boundaries as one progresses eastwards. both the HW and FW contain TDUN. As the EBFZ is approached within Domain 3.SRK Consulting Voskhod FS Page 55 the MOF and illustrated in Figure 9. In the west and south west in particular. the TDUN is overlain by a Transition Zone in which TDUN lithologies appear to inter-finger with CDUN/PDUN lithologies.doc . In this area.13 by DZ2 beyond which the ore zone drops deeper into the TDUN. both the HW and FW lithologies are CDUN/PDUN. This is a common feature close to the northern fringes of the orebody.
It is 98 m deep in the south west and 450 m in the north east. The Voskhod deposit occurs with the Kempirsai complex which is a major ophiolite complex and thus is assigned to the podiform group of chrome bearing deposits. have high water contents and are subject to decompression. large ultramafic/mafic layered (stratiform) intrusions such as the Bushveld in South Africa. 11 MINERALIZATION The Voskhod deposit is a lens-shaped body with a variable dip to the northeast averaging close to 28º. The footprint area of all three areas totals 139. Chromite ores suitable for metallurgical purposes (ferrochromium for special steels) will typically grade 40-55% Cr2O3 and possess a Cr/Fe ratio of 1. or as podiform deposits associated with ophiolite complexes where peridotites are the dominant host rock. chromite and olivine are strongly fractionated with chromite microliths forming within the exsolved aqueous fluid and olivine in the silicate melt.8 to 4. They thus tend to occur in supra-subduction zones and are associated with dunite melts within harzburgites and lherzolites. but has a . MZ is 350 m long in a north northwest direction. the Northeast Extension (NEX) and the South East Extension (SEX). close to the transition with the underlying depleted lherzolite. Refractory ores suitable for foundry sands and briquettes are those with a Cr2O3 + Al2O3 > 60%. within this body there are intervals of low grade or barren rock. a length of 600 m in this direction. or close to the petrographic Moho at the top of the harzburgites or in the overlying dunites. A magmatic origin for the chromite is indicated. Within this plume. rising through the mantle. a width of 170-360 m and a thickness of between 2 and 123 m (average 39 m). the ophiolite hosted deposits are responsible for more than half of the world’s production and are the sole source of high grade metallurgical chrome.0. However. the Main Zone (MZ). During this early period of crystallization. Experimental work has shown that bubbles with <50% chromite will rise through the dunitic magma.0. These bubbles eventually coalesce to form larger fluid pools and the chromite crystals settle to the bottom where they accumulate. chromite grains aggregate into rounded nodules giving the typical nodular texture of chromitites. Chromite concentrates in fluid bubbles and migrates upward. Although stratiform deposits account for 90% of the world’s resources of chrome. Podiform chromite deposits occur in those tectonic settings where basaltic melts. Chemical grade ore (pigments and dyes) will grade >42% Cr2O3 and possess a Cr/Fe ratio of ≥2.10 DEPOSIT TYPE Economic concentrations of chromite occur in two principal geological environments. The orebody can be divided on structural grounds into three areas. Within the ophiolite sequence.600 m2. The downward subsidence also results in the formation of highly irregular deposits and also provides an explanation for keel-like structures at the base of these deposits including Voskhod. This continues until the weight can no longer be supported by the underlying silicate melt and the chromite body begins to subside forming a downward penetrating plume. they are usually deep in the tectonized harzburgite zone.
oval or sub-angular aggregates of chromite (OCR) in a serpentinized matrix. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Massive ores contain over 90% chromite and are generally coarse grained. compared with stratiform chromitites such as those of the Bushveld Complex. Deposits typically have Cr/Fe ratios of between 1. Pt. These sub-areas can be seen in Figure 9.Ir)S2 laurites in chromite (Os. lenses or pods of massive chromite 10-30cm thick with well developed selvages of serpentine and serpentinized dunite and thicker units of massive chromite up to 2 m thick which appear to have a sill or dyke like form. Ir and Ru (the IPGE) relative to Rh.0 to 1 and grades in the range 22.4% Cr2O3. In general. Fe+2)(Cr.doc . The chromite at Voskhod has Cr/Fe ratios up to 4:1 and ore grades range between 20 and 64% Cr2O3 and thus are at the high grade end of the spectrum. Where this ore type (MCR) has disaggregated. The nodules vary in size between 0. then the mineralization is referred to as Powdery Chromite (PCR) Orbicular ores consist of matrix-supported. SEX is elongated 170 m in an east northeast direction and has a width of up to 45 m. Matrix minerals are serpentine. that show enrichment in the PPGE. The chromite orebodies commonly have gradational boundaries with the host dunites over a few metres. Four main ore types are recognized at Voskhod. Disseminated ores consist of fine-grained (<1 mm) disseminated chromite (DCR) within serpentinized dunite. Within the nodules. olivine and accessory sulphides.5 and 10 cm in diameter.SRK Consulting Voskhod FS Page 58 width which is variable from 210 m (in the north) to 500 m (in the south). Euhedral Ru(Os. This IPGE enrichment is a characteristic of Voskhod.3 and 3.Al. Chromite is a chrome spinel and has the formula (Mg. The PGM minerals located include:• • • • • CuIr2 S4 cuproiridsite in chromite.5 to 51. Pd (the PPGE) and Au. although they occasionally display sharp contacts. with chromite grain sizes ranging from 2-20 mm. chromitites of ophiolitic affinity are enriched in Os.Fe+3)2O4. They occur along the margins and in the footwall of the massive orebodies. NEX is elongated 200 m in an east northeast direction and has a width of up to 80 m.Ir. South Africa.Ru)S2 erlichmanite in chromite An euhedral OsIrRu alloy in chromite A composite PGM with an RuOsIr-sulphide and a Ni-sulphide with approximately 1% Rh in solid solution enclosed in chromite. Vein type ores (VCR) contain a variety of mineralization types which include thin veins or veinlets of chromite following fractures. chromite is massive and consists of interlocking grains <1 mm in size. chlorite.11. rounded. brucite.
Between 1994 and 1996. ground electrical methods and down-the-hole logging techniques. the exploration licence (Licence No AE No 1556) was granted to a local Kazakh open stock company called Geoinvest by Government Decree 932. It should be noted that this classification was based on the decision at the time to place the deposit into Group 2 of geological complexity as defined by the SCR (stockworks and large massive deposits). due to commitments elsewhere. “Preliminary Exploration” was completed between 1990 and 1992 and technical conditions for the estimation of resources were approved in May 1993. not exposed at surface and was thus not discovered until 1963 when a gravity survey revealed a 1000 x 600-800 m anomaly at the site. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.894 Mt in the C1 category and 3. arsenides and pyromorphite (Pb5[PO4] 3Cl) are secondary.doc . On 18 September 1999. A range of geophysical methods were employed at this time including aeromagnetics. A hole was drilled in the centre of this anomaly and intersected high grade chromite mineralization at depths of between 246 and 316 m. The area was also increased at this time to 24 ha. Donskoy were forced to relinquish its licence on the Voskhod deposit because. This 19. A contract for the “Final Exploration” of the Voskhod chromite deposit (Contract No 425 with amendment N757) was submitted on 16 May 2000. 12 EXPLORATION Chrome ore was first discovered in the Kempirsai ultramafic complex in 1936 and development of resource projects quickly followed in 1938. A report was thus submitted in 1964 to the geological organization of Western Kazakhstan outlining the case for further investigations. The Voskhod deposit is.902 Mt in C2. however. however. Between 1987 and 1989 the results of this exploration work were evaluated and it was concluded that an underground mining operation was economically and technically viable and that a formal “Preliminary Exploration” programme should be initiated. The resulting resource estimates were approved and added to the State Balance and included 14. it had not completed a “Final Exploration” programme and received final formal approval for the resources. The ultramafic silicate rocks have a mixture of primary base metal sulphides and secondary alteration minerals.3 ha licence excludes the northern part of the orebody (Karaagash) which is separated from the main deposit by a fault. However. the formal report on this work was not completed. Base metal sulphides such as pentlandite and chalcopyrite are likely to be primary whereas heazlewoodite (Ni3S2 ). Between 1965 and 1967 six holes were drilled which indicated the size and attitude of the chromite bearing body. The initial two year exploration licence was renewed for a further two years on 10 July 2001 and it eventually expired in July 2003. Donskoy GOK undertook a “Detailed Exploration” programme at Voskhod involving the drilling of a total of 62 holes.SRK Consulting Voskhod FS Page 59 • IrOsRu alloy with minor Rh in a silicate interstitial to chromite grains. This contract provided exclusive 21 year rights to the minerals and their exploitation on completion of the exploration required.
the contract was signed by the Director of Geoincentre and the First Vice Minister in September 2004. a surface resistivity survey was completed in the area of this ramp but also extended to cover the footprint of the orebody. Following amendments. was submitted in early June 2004 and 0. was produced by Geoinvest’s consultants Geoincentre based on the conditions set in the earlier Foundations document. a geological subcontractor based in Aktobe. containing all geological plans and sections. and reviewed by. it also gave indications as to the location of faults at depth.SRK Consulting Voskhod FS Page 60 Over the period of the above extension to the licence (2001-2003). Geoinvest was given three months from the date of this protocol to draft a mining contract which was to include a programme of work for the development of the mining project and also to obtain the land necessary for the mine. This work was directly supervised by SRK on behalf of Oriel. The “Technical and Economic Foundations of Industrial Conditions” for the Voskhod deposit were specified in a report produced by “Zaprudgeologia”. This report contains much of the information in this earlier report together with a recalculation and reclassification of the Mineral Resources The resources report was reviewed by the SCR and a Protocol (280-03-U) was produced in December 2003 giving approval for the contained resource estimates. Oriel commissioned SRK to undertake a “Pre-Assessment Study” of the project which included a proposed programme of work. the State Committee for Reserves (SCR) and the parameters for calculation of resources was approved in a “Conditions for the Calculation of Reserves Protocol” No 251-03-K dated 3 September 2003. A “Reserves Calculation Report”. Though largely for geotechnical purposes. This programme included a drilling campaign which is discussed in more detail in Section 13 below but which consisted of 38 resource and geotechnical holes plus an additional 9 holes which were drilled for geotechnical purposes alone to determine the optimum location for a proposed ramp. was submitted to. In addition.doc . who supervised the drilling programme for Geoinvest. Following a period of negotiations.44 ha of land to a depth of 500 m were assigned to Geoinvest by the Committee for Geology of the Ministry of Energy and Mineral Resources. Geoinvest drilled a total of 11 holes in order to more precisely define the boundaries between C1 and C2 resources and to provide additional hydro-geological and geotechnical information on the rock mass containing the deposit. This report. In January 2004. as prepared by Geoincentre. dated September 2003. the project was sold to Oriel effective as of February 2005. This document provides the basic data and economic parameters for the later report on the calculation of resources. The draft mining contract. these resources were placed on the State Balance in a document entitled “Expert Opinion” In a Committee Report (Protocol) of 2 April 2004. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. At that time.
Fe2O3 and SiO2 and were thus useable for the estimation of grade. Table 13. SRK thus has no concerns about the quality of primary data. Casing was inserted as the holes advanced and internal directional surveys were made after every 20 m of advance. the spacing is typically 40 to 65 m. Initially holes were collared vertically and commenced at 120 mm diameter (114 mm ID). As a result. Core recoveries are recorded by drill run. following the above drilling campaigns. Only 23 of the 62 detailed exploration holes have assay information for Cr2O3. Drill hole “Passports” from the Geoinvest programme were also examined during an audit by SRK in 2004 which indicated that logging had been very detailed and that a comprehensive database exists of geological. Once each hole was completed. A breakdown of this work is summarized in Table 13. The location of ore zone contacts and samples are thus located as accurately as possible in 3D space. Tricone bits were used to drill through overburden and heavily weathered ground for the first 1-3 m and then the remainder of the hole was cored at 96 mm reducing to 65 mm through the ore zone using saw-tooth bits with silicon carbide inserts.doc . however.1. geotechnical and geophysical data from bore holes. Many holes showed significant deflections from the original target positions. have down- P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1: Pre Oriel Drilling Campaigns Phase Reconnaissance “Search and Estimation” “Preliminary Exploration” “Detailed Exploration” – Donskoy “Detailed Exploration” – Geoinvest Period 1965 – 67 1987 – 89 1990 – 92 1994 – 96 Grid Wide 100 x 100 50 x 50 50 x 25 Holes Drilled 6 22 55 51 Early Exploration 83 holes 2001 – 03 50 x 25 11 Detailed Exploration 62 Holes Drill holes were laid out on east-west lines 50 m apart and collars are.1). neutron activation surveys were undertaken and the hole was then resurveyed from top to bottom as a check on the previous information. 4 to 5 intersections are made across the width of the orebody. 25 other holes. now on 20 to 50 m centres on each line (see Figure 13. On average.1 DRILLING PRE ORIEL DRILLING (1965-2003) A total of 145 drill holes are reported to have been completed within the Voskhod area prior to 2005 and to depths of between 200 and 500 m.SRK Consulting Voskhod FS Page 61 13 13. horizontal distances between intersections along drill lines vary from 11 to 64 m while between lines.
doc . The Geoinvest drilling was undertaken for confirmatory purposes and to provide information on the hydro-geological and geotechnical conditions in preparation for underground mine design.1 represents a summary of the pre-Oriel drilling showing holes with and without assays. Figure 13. barren holes and the more recent Geoinvest drilling P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Only the 11 Geoinvest holes have complete data records and drill cores are available for study for the mineralized zones in these holes.SRK Consulting Voskhod FS Page 62 hole neutron activation survey data which allows recognition of the mineralized zone and these were thus used to assist in the definition of the orebody limits and morphology.
1 m). To upgrade more resources to Indicated status by achieving a local intersection density of less than 50 m in all directions especially in the northern section of the orebody where a significant number of old holes lack assay data (neutron activation surveys only). Table 13. The Russian rig which arrived later was only capable of drilling vertical holes to 500 m. The holes listed in Table 13. All holes were internally directionally surveyed at 10m intervals. To provide an explanation of sudden changes in thickness of the ore body and apparent offsets in the orebody fringe.2 ORIEL DRILLING PROGRAMME The aims and objectives of the Voskhod drilling campaign undertaken in 2005 were as follows. XRD and SEM analysis can be made to determine mineralogical and petrographic characteristics of the ore and host rocks.2 The resource and mine design drilling was completed on 27 September 2005 and totalled 13.7 m) and the monitoring holes on 28 September 2005 (185. the ramp holes were completed on 23 September 2005 (905. To provide samples on which check SG measurements can be made. The location of all these resource holes is shown in Figure 13. To gain a better understanding of the geological context of the orebody. The first two rigs were Longyear machines and both were capable of drilling inclined holes.955. • • • • • • • The drilling programme commenced on 15 April 2005 under the direction of SRK.2: 2005 Drilling Summary P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. To provide fresh core for geotechnical logging and rock mechanics analysis as well as resource sampling. To provide samples on which microscope. To provide metallurgical samples.2 were all diamond cored from surface and were drilled at either HQ or NQ size.doc .55 m. To provide holes for hydrogeological / hydrological study. • • To confirm existing grade information.SRK Consulting Voskhod FS Page 64 13. the LF 90 to depths of in excess of 500 m and the LF 30 to depths of in excess of 300 m. but was best suited for shallower holes at the larger core size (HQ).
70 185.60 5.00 2.05 1.SRK Consulting Voskhod FS Page 65 Phase Holes Proposed 9 5 13 1 10 9 6 Holes Drilled 9 5 13 1 9 10 6 Size Proposed Metres 3.doc .614.351 425 2.970 1.046.659.029.575 5.10 452.80 905.475 846 180 14.822 Actual Metres 4.10 15.200.35 Description 1 2 3 4 5 NQ HQ NQ HQ NQ NQ HQ Totals Confirmatory / Resources / Metallurgical Geotechnical / Metallurgical Resource Resource Mine design Ramp design Environmental Monitoring P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.
SRK Consulting Voskhod FS
RESULTS OF ORIEL DRILLING PROGRAMME
The following general conclusions can be drawn following the 2005 programme. • Many of the previous data deficiencies have been rectified and this has allowed not only a better global resource estimate but, for the first time, good local block grade estimates suitable for mine planning purposes. Core recovery is more than adequate to provide good quality assay data. Significant differences have been detected between some previous holes and new holes in relation to ore thickness and to the depth of both the assay hangingwalls and footwalls. There is evidence that previous geological interpretations were simplistic and did not, with the exception of the Karaagash Fault, recognise the existence of internal and marginal faults. Drilling has clearly suggested that these exist but further study is needed to confirm their true nature. Much of the mineralization can now be placed in the Indicated Resource category with confidence. Economic fringes of the orebody are now better defined though there are areas that would benefit from further drilling in 2006 especially where faulting is suspected. Drilling has confirmed that the deposit has the grade and physical continuity to allow its economic exploitation once the problem of access has been resolved. The average ore zone thickness is 63.8 m with a range of 11.8 to 134.55 m. Not all of this is, however, of potentially economic grade and no correction has been applied for intersection angle. A better understanding has been achieved of the geology of the orebody and its host rocks. The lack of geological logs from old Soviet drilling was originally a serious problem. A better appreciation of the mineral chemistry has been achieved. The new drilling and sampling has confirmed the levels of PGM minerals/elements within the deposit. Geotechnical drilling and studies suggest good ground conditions for footwall development but that some problems are likely in the driveage of the decline from surface due to poor ground conditions over the upper 70-100 m.
SRK Consulting Voskhod FS
SAMPLING METHOD AND APPROACH
DRILL CORE SAMPLING
Pre Oriel Sampling Core sampling during Soviet times was controlled by the results of down-the-hole neutron activation analysis and sample length is variable within this geophysically defined zone reflecting changes in chromite concentration and interbeds of low grade serpentinized dunite. Samples vary from 0.2 to 5.4 (most 0.6 – 3.2 m) and average 2.24 m. Core was split longitudinally by manual methods using hammer and chisel at the rig site despite a diamond core saw being available in the sub-contractor’s offices. Although the total amount of drilling completed totals 58,548.9 m, the total length of mineralized intersections used for resource estimation is 3,685.9 m. Although 2053 samples were chemically assayed, only 1678 were utilized for the estimation of resources by sectional methods. Amongst rejected samples were 228 samples whose recoveries were deemed to be too low at less than 70%.
14.1.2 Oriel Sampling Following completion of core recovery measurements and checking of core blocking and orientation, the core in each drill run was fitted together and a reference line drawn longitudinally down the core using a chinagraph pencil. The mineralized interval in each hole was then subdivided on the basis of material type and then further subdivided into sample lengths taking into account changes between material types. Attempts were made to keep samples between 1.0 and 1.5m in length, but the range achieved was 0.3 to 2.0 m, averaging 1.47 m. Two intervals at least were marked into the hangingwall and two into the footwall waste. Where internal intervals of low grade or waste existed they were also marked up for sampling either in the field or later in the core sheds. The decision was taken to analyse all such material so that, in the case of non-selective bulk mining, the true grade of internal as well as external dilution could be estimated. Marked core was then cut longitudinally along the reference line using a diamond saw. Each sample was logged for material type and the core recovery determined. A Sample Number Allocation sheet was then used to assign both laboratory assay numbers and SRK down-hole sample numbers to each sample. Half core samples for each sample interval were then placed into heavy duty plastic bags on which laboratory sample numbers were written and numbered tickets which were stapled into each bag.
SRK Consulting Voskhod FS
DRILL RECOVERY FACTORS
Pre-Oriel sample recoveries varied between 5 and 100% (most were >45%) and averaged 81.03% though it is reported that all samples with less than 70% recovery were rejected for resource estimation purposes. Core recoveries achieved during the 2005 programme were generally excellent given the bad ground conditions over the upper 100 m of all holes. Ore Zone core recoveries in the early holes were well above 90%, but towards the end of the programme, recoveries declined to as low as 74%, but averaged close to 80%. This is no reflection on the drillers, but on the poor ground conditions in the shallow southern end of the deposit drilled later in the programme.
SAMPLE QUALITY / BIAS
The manual method used for the splitting of core in Pre-Oriel times resulted in highly irregular breaks and bias is thus possible. Fortunately the high grade, combined with the uniformity (low nugget effect) of the mineralization, means that the impact will not be great. Much of the mineralized core from the Geoinvest is in bad condition with local poor recovery and intervals consisting of loose friable chromite sand. This will have some impact on the representativeness of analyses. SRK note that several intervals of low grade vein type and disseminated material had not been assayed. If a non-selective mining method is used then some of this material might be taken as internal or peripheral dilution and thus SRK have used default grade values for this material rather than assign zero grades. The preparation facilities at Zaprudgeologia required considerable effort to bring them to a reasonable standard of cleanliness as the equipment was old and little used since Soviet times. There is thus the possibility that some contamination might have taken place but the impact is not considered to be high since the grades of the samples are already very high. Some mislabelling of samples was also detected and corrected when possible.
DESCRIPTION OF ROCK TYPES / GEOLOGICAL CONTROLS / WIDTHS USED TO DETERMINE SAMPLING INTERVAL
Sampling intervals were controlled by changes in mineralization type and grade alone and the sample length is partly based on previous experience and on the need to define internal grade boundaries. Though sample lengths were flexible, they were constrained within set limits.
LIST OF INDIVIDUAL SAMPLES
Presentation of the details of individual samples is not possible due to the large number of samples taken; 2053 routine samples in Pre Oriel times and 1708 in 2005 by Oriel. This latter figure excludes those taken for QA/QC purposes (see Section 15.2.1)
crushed.SRK Consulting Voskhod FS Page 70 15 15.doc . In the case of Oriel samples. the geological institute in Aktobe but later. split and weighed as specified in flow sheets designed by SRK. ANALYSES AND SECURITY SAMPLE PREPARATION Pre-Oriel samples were jaw-crushed to -1 mm and then disk-milled to -0.1 shows that following a second 50:50 split of the primary crushed material one 25% fraction was pulverized to -200# and this pulp (approximately 1kg) submitted for routine analysis at the Aktubinsk Geological Laboratory (Aktobe). P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.071 mm. one at Karaganda and the other at Kostanai. This was initially undertaken at “Zaprudgeologia”. Samples were then cone and quartered and two opposite quarters combined and submitted for analysis at the laboratory. This procedure was undertaken under the direct control and supervision of an SRK field geologist.1 SAMPLE PREPARATION. due to slow productivity. Figure 15. they were dried. this work was undertaken at two other laboratories.
doc .1 Flow Sheet for Sample Preparation at Aktobe The slow throughput of samples and assays in Aktobe eventually led to the decision to use another laboratory in Karaganda for both preparation and analysis so bags of half core were sent by lorry direct from the core sheds at Aktobe.2. This meant some loss of control on sample preparation but the quality of their work was monitored by the QA/QC procedures established by SRK.SRK Consulting Voskhod FS Page 71 Figure 15. a three P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Following primary jaw crushing and scondary roll crushing (with screening). The flow sheet used at this second laboratory is presented in Figure 15.
Following primary jaw crushing and screening a two stage split reduced the sample to 1-2kg before secondary jaw crushing and screening. it was reluctantly decided to introduce a third laboratory at Kostanai.SRK Consulting Voskhod FS Page 72 stage split was applied resulting in the pupling of approximately 500g of -1mm material. This was then pulverized to -200# before spliting in preparation for assay. Again half core samples were shipped direct to this laboratory for preparation and analysis under the supervision of an Oriel Resources geologist. In order to complete all the sample preparation and analysis before Christmas 2005. A further two stage split further reduced the sample to 250-500g.doc . The flow sheet also shows the various samples that were retained for duplicate and referee analysis Figure 15. The flow sheet for this laboratory is presented in Figure 15.3. This was pulverized to -200# and split again prior to assay.2 Flow Sheet for Sample Preparation at Karaganda P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.
Translations of these standard methods are provided in the main Feasibility Study Report. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc . SiO2 Cr2O3 Al2O3 FeO (or Fe2O3) MgO CaO P S Analytical and quality control methods applied by these laboratories are governed by GOST standards introduced during Soviet times. These are specific to chrome ores and are all wet chemical methods.3 Flow Sheet for Sample Preparation at Kostanai 15.2 SAMPLE ANALYSIS Each of the three laboratories was required to provide analyses of the following eight elements on a routine basis.SRK Consulting Voskhod FS Page 73 Figure 15.
Table 15. the pulp is mixed with Na2O2 and then H2 SO4 added. FeO.25 hours. In addition. The end point occurs when the solution turns from cherry red to green and this is determined potentiometrically. Ru and Ir were also undertaken but only on referee samples submitted to OMAC Laboratories in Ireland and to UltraTrace Laboratories in Australia. A limited amount of additional analyses were requested on selected pulps to determine concentrations of the following elements: Ni As Ti In addition. digested and the resulting solution analysed by inductively coupled plasma mass spectrometry (ICPMS). After cooling.SRK Consulting Voskhod FS Page 74 In the case of chrome. 25g samples at this latter laboratory were mixed with a nickel carbonate/sulphur based flux and fused at 1120o C for 1. The resultant nickel sulphide button was then pulverized and a portion digested to remove the nickel sulphide base. Table 15.doc . analyses for Pt. Au. This list includes 15 repeat analyses of routine analyses considered suspect. CaO and MgO are determined by titrimetric methods whilst SiO2 is determined by photometric methods. Al2O3. Pd. Kostanai undertook the analysis of 47 samples for Ni and As. After half an hour H3PO4 is added and the solution brought to the boil until caustic soda is destroyed.1: Samples analysed during the 2005 drilling programme Laboratory Aktobe Karaganda Kostanai Ultratrace OMAC Totals Routine 574 762 372 Duplicates 35 42 20 Standards 19 + (10) 22 10 (10) 71 Blanks 16 + (10) 20 10 (10) 66 Referee Check 10 5 150 1708 97 150 15 Sample numbers in brackets represent multiple analyses of bulk blank or standard samples produced prior to routine analytical work Details of the non routine sample are provided in the following section. The platinoids were recovered in a reducing environment which is coupled with tellurium co-precipitation. Os. an organic indicator (phenylanthranyl acid) is added and then the amount of chrome is determined using titration (Mohr salt is added until the end point is reached). P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. MnSO4 is added as a catalyst and then more H2SO4. The insoluble platinoid sulphides are then separated by filtration.1 represents a breakdown of the number of samples analysed at each laboratory and broken down by type.
Table 15.SRK Consulting Voskhod FS Page 75 15. In addition. The results are summarized in the following sections. A referee laboratory was chosen to undertake check analyses on samples selected and submitted by SRK/Oriel. a field geologist’s manual was produced which covered all aspects of core logging and sampling and associated QA/QC procedures.2: SRK Sample Number Allocation Sheet P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1 Quality Assurance / Quality Control (QA/QC) Prior to the commencement of drilling.doc .2. the laboratories are required to undertake their own internal control procedures. This sheet requires the insertion of a duplicate of the last sample in each batch of 18 samples followed by either a “Blank” or a High Grade “Standard”.2 which shows the sample numbering system for drill hole V05-07. The amount of information available on previous (Pre Oriel) procedures is limited but tables of repeat and duplicate sample analyses are available for study. Some of these procedures are best illustrated by study of Table 15.
2).3 % Cr2O3.doc . SRK produced two bulk samples from existing Geoinvest core for submission on a 1 in 18 basis with routine samples (see Table 15. Pt and Pd in these samples. The “Blank” sample was collected from dunites high in the hangingwall which showed no visible chromite but all dunites contain some traces of chrome spinel which effectively means that they are not barren in the true sense of the word but contain background levels expected to lie between 0. Both samples were crushed. OMAC was also requested to determine levels of Au. homogenized and pulverized at the Zaprudgeologia facility under the supervision of the SRK field geologist and then 500g batches of each sent to OMAC Laboratories in Ireland and similar batches to the Aktobe Laboratory with the request that the full suite of routine elements be determined on 10 sub-samples of each. Diamond Drilling Sample ID V 7001 V 7002 V 7003 V 7004 V 7005 V 7006 V 7007 V 7008 V 7009 W 7010 V 7011 V 7012 V 7013 V 7014 V 7015 V 7016 V 7017 V 7018 V 7019 V 7020 V 7021 V 7022 V 7023 V 7024 V 7025 V 7026 V 7027 V 7028 V 7029 V 7030 V 7031 V 7032 V 7033 V 7034 V 7035 V 7036 V 7037 V 7038 V 7039 V 7040 Sample Number V05-07-01 V05-07-02 V05-07-03 V05-07-04 V05-07-05 V05-07-06 V05-07-07 V05-07-08 V05-07-09 V05-07-10 V05-07-11 V05-07-12 V05-07-13 V05-07-14 V05-07-15 V05-07-16 V05-07-17 V05-07-18 V05-07-18D Sample Comment Type PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP W' USED PULP PULP PULP PULP PULP PULP PULP PULP DUPLICATE STANDARD BATCH 07 V05-07-19 PULP V05-07-20 PULP V05-07-21 PULP V05-07-22 PULP V05-07-23 PULP V05-07-24 PULP V05-07-25 PULP V05-07-26 PULP V05-07-27 PULP V05-07-28 PULP V05-07-29 PULP V05-07-30 PULP V05-07-31 PULP V05-08-01 PULP V05-08-02 PULP V05-08-03 PULP V05-08-04 PULP V05-08-05 PULP V05-08-05D DUPLICATE BLANK BATCH 08 Sample ID V 7041 V 7042 V 7043 V 7044 V 7045 V 7046 V 7047 V 7048 V 7049 V 7050 V 7051 V 7052 V 7053 V 7054 V 7055 V 7056 V 7057 V 7058 V 7059 V 7060 V 7061 V 7062 V 7063 V 7064 V 7065 V 7066 V 7067 V 7068 V 7069 V 7070 V 7071 V 7072 V 7073 V 7074 V 7075 V 7076 V 7077 V 7078 V 7079 V 7080 Sample Number V05-08-06 V05-08-07 V05-08-08 V05-08-09 V05-08-10 V05-08-11 V05-08-12 V05-08-13 V05-08-14 V05-08-15 V05-08-16 V05-08-17 V05-08-18 V05-08-19 V05-08-20 V05-08-21 V05-08-22 V05-08-23 V05-08-23D Batch No: Sample Type PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP PULP DUPLICATE STANDARD BATCH 09 V05-08-24 PULP V05-08-25 PULP V05-08-26 PULP V05-08-27 PULP V05-08-28 PULP V05-08-29 PULP V05-08-30 PULP V05-08-31 PULP V05-08-32 PULP V05-08-33 PULP V05-08-34 PULP V05-08-35 PULP V05-08-36 PULP V05-08-37 PULP V05-08-38 PULP V05-08-39 PULP V05-08-40 PULP V05-08-41 PULP V05-08-41D DUPLICATE BLANK BATCH 10 Comment BATCH 11 Supervisor JAG Date 25/07/2005 Duplicate from coarse rejects Alternate blanks and standards Standards and Blanks In order to monitor the performance of the routine laboratories.SRK Consulting Voskhod FS VOSKHOD CHROME PROJECT BH No: V05-07 08 07-11 Comment Sample ID V V V V V V V 7081 7082 7083 7084 7085 7086 7087 Sample Number V05-08-42 V05-08-43 V05-08-44 V05-08-45 V05-08-46 V05-08-46D Sample Type PULP PULP PULP PULP PULP DUPLICATE STANDARD Page 76 Sample number allocation sheet. Similarly a bulk high grade standard was collected from intervals of massive chromite from an old Geoinvest hole. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1 and 0.
261* 0.308 Mean 0. Table 15.5 below.SRK Consulting Voskhod FS Page 77 With the exception of one sample analysed at Aktobe. There is.258 0.469 * Excludes one sample incorrectly labelled Internal Laboratory Repeats Information concerning the results of old internal and external quality control repeat analyses of pulps has been provided in tabular form by Geoincentre from which the following analytical precisions have been calculated by SRK.99 % * Analytical variance = Σdiffs2/(n-1) and Precision = 2*√Analytical variance * 100/Mean These results imply good reproducibility in the laboratory.396 Blanks Std Deviation 0.881 41.34% Cr2O3 (see Table 15.18%.33 before dropping again to close to 0.5: Internal Assay Control Laboratory Aktobe Karaganda Kostanai Frequency Repeat Assays Every 10 samples Every 5 – 8 samples Every 10 samples Total of Number of Repeats 60 159 36 255 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.14 then back to 0.22 % 29.4: Analytical Precisions – Pre Oriel Data Date 1987-88 2003 Control Lab Routine VUGRE Extn. The analyses of the blanks show more variability with Aktobe and Kostanai reporting higher values and variances than Karaganda. evidence of batch problems at Karaganda where the blank grade changes from close to 0. The average value from OMAC was 0.096 0.35% for a period to 0.26 % 1. Internal repeat analyses from assay pulps have been undertaken by all three laboratories for the 2005 drilling programme. Donskoy GOK Samples 28 36 Avg.36% Cr2O3 which lies between the values for the routine laboratories. however.29* 0.543 42 87 0. the variance of the standard analyses is excellent and the individual laboratory means are very similar and close to the original accepted standard value of 42. Table 15. Cr2O3 37. Details are listed in Table 15.3).67 0.491* 0.3: Comparison of “blank” and standard analyses for Cr2O3 Laboratory Aktobe Karaganda Kostanai Standards Mean Std Deviation 41.17 % Precision* 1.doc . Table 15.
7: Sampling and Analytical Precisions – Pre Oriel Data Control Lab Samples Avg.66% 1.7 and again provide confidence in the process from crushing.21% 2. the precisions are better than the 5% considered ideal.89% 7. pulping to analysis. Table 15.20% Karaganda Kostanai Duplicates The results of internal duplicate sampling and then analysis are available for the earlier Soviet drilling from Geoincentre reports.82 % VUGRE * Combined variance = Σdiffs2/(2n) and Precision = 2*√Combined variance * 100/Mean SRK submitted duplicate samples collected from coarse rejects after primary jaw crushing after every 18th sample (see Table 15.1 and totalled 97.08 31.25 % 1.09 32.77 10.6 shows the breakdown of results for the three laboratories for the three main elements under study in this project. The results are remarkably good as precisions. splitting.83 % VUGRE Routine 1990 80 30.41% 3.61 24.46 16.6: Internal Repeat Analyses (by laboratory) Lab Aktobe Analysis Cr2O3 SiO2 Fe2O3 Cr2O3 SiO2 Fe2O3 Cr2O3 SiO2 Fe2O3 Routine 34. with one exception.43 % 3.8: Sampling and Analytical Precisions – Oriel Data Date P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Details of samples submitted on a laboratory basis were presented earlier in Table 15. Table 15.16 11. based on the combined sampling and analytical variance of 10% or less.21 17. are considered acceptable.SRK Consulting Voskhod FS Page 78 This gives an excellent database for the determination of analytical precision. Cr2O3 Precision* Routine 1987-88 44 37.52% 2.96% 2.53 21. Table 15.20 Repeat 34.24 Precision 0.38% 3.46 16.03 9.2).75 10.6Table 15.55 21. Table 15. SRK are unable to confirm that the data provided are actually based on re-sampling and analysis of coarse rejects.16 17.52 24.doc .47% 2.02 9.16 11. It can be seen that the averages for the routine and repeat analyses are very close and that. The combined sampling and analytical variance determined from this data by SRK are shown in Table 15.
99 21.54 20. On receipt of the samples. The Aktobe coarse rejects show consistently higher grades at concentrations of chrome below 40% Cr2O3 suggesting that some contamination may have taken place whose impact is less significant for the higher grade samples.11% Table 15. less than 10%. splitting. Pulps were submitted to test the accuracy of analysis of each of the routine laboratories while comparisons between coarse rejects and pulps will reflect the quality of sample preparation (homogenization. However. and JSS 870-2). for the latter laboratory there is one point which is anomalous and this is due to an error in the original routine analysis which needs to be resolved. Referee Sampling and Analysis 150 samples. This conclusion was anticipated given the initial poor state of the preparation facility at Zaprudgeologia.35 29. • • • Careful analysis of the results of the full spectrum of elements indicates that reliance can be placed on the analyses of Cr2O3.71% 3. UltraTrace sorted. were submitted to the referee laboratory. SiO2 and MgO though there is evidence that poor sample preparation at Zaprugeologia may have detracted from the relatively good analyses in the P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. They were also selected to give a uniform coverage of the anticipated grade range of each element. SARM 9.8 shows that all precisions are now within acceptable limits.. Three different international standards were used for the routine elements (SARM-8C.doc . The samples were then cast into a glass bead using a 12:22 lithium borate flux and the eight routine elements were determined by X-Ray fluorescence spectrometry. dried and split them and then pulverized them as necessary using a vibrating disc pulverizer. The following observations can be made for the most important oxide Cr2O3. i.01% 7.979 Precision 5. UltraTrace in Australia.e. There is a very close correlation between pulp analyses suggesting that analytical procedures at all three laboratories are very satisfactory and that the results of analyses can be considered to be reliable. consisting of both coarse rejects and pulps from all three laboratories. The equivalent correlation for the Aktobe samples is less good especially below 40% Cr2O3 suggesting that the preparation procedures are at fault.43 27.SRK Consulting Voskhod FS Page 79 Lab Aktobe Karaganda Kostanai Samples 33 41 20 Routine Cr2O3 34. Inadequate cleaning of the crushers and disc mills is thus suspected. pulping and the control of contamination during these processes).29 Duplicate Cr2O3 35. • The correlation between the results for the pulps and coarse rejects for the Karaganda and Kostanai laboratories are excellent confirming good sample preparation procedures.
Not all of these anomalies have yet been resolved but resubmission of suspect samples will be undertaken during the 2006 drilling programme.doc .2. Zaprudgeologia. The core from all the other 134 old holes is now missing or disposed of and unavailable for inspection. Analytical precision is generally considered to be good though problems in relation to intra-lab comparisons have been highlighted with respect to the Karaganda and Aktobe Fe2O3 and Al2O3 analyses. Rigorous QA/QC procedures were followed for all three laboratories which ensured that quality was maintained but which also highlighted problems in relation to analytical errors and also to mislabelling of samples.65 % Precision for Al2O3 24. Initial P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.9: Intra-laboratory analytical precision for Fe2O3 and Al2O3 Laboratory Aktobe Karaganda Precision for Fe2O3 14. it was observed that some holes were stacked outside and had clearly been there for some time and the boxes and depth blocks were in poor condition. The remaining core from these holes is stored in a warehouse in Aktobe also under lock and key. Sample preparation at Karaganda and Kostanai seems to have been good at all times Concerns are present concerning the analyses of Fe2O3 and Al2O3 at Karaganda and Aktobe where a wider scatter of points about or below in the case of the latter element.33% Values of more than 10% would normally be considered excessive.2 Sample Security Core for the upper sections of all the old holes was logged and then disposed of in the field (often buried) so that only a few metres of barren hangingwall was originally retained for storage with the mineralized intersections. None are considered to have material impact on ore zone grades.65 % 46.2. 15. Only 11 partial sets of cores from old holes are stored at the offices of the sub-contractor. Core from the Geoinvest campaign is stored in poorly constructed wooden boxes in lock-up sheds but.SRK Consulting Voskhod FS Page 80 Aktobe laboratory. re-logging or re-sampling. 15. sample preparation and analysis were carefully monitored by SRK during the 2005 programme but this was not possible for previous campaigns. The intra-laboratory (Routine versus Referee) analytical precision of these analyses is as follows: Table 15. the 45o line. Unlike gold.82 % 34. during an audit visit by SRK to the core yard in Aktobe. security is not a significant issue but good core storage is very important to prevent deterioration in core quality by exposure to the weather. Only a limited amount of information exists on duplicate sampling during Soviet times.3 Adequacy of Procedures All aspects of sampling. All Oriel mineralized intersections are stored at Zaprugeologia under cover and lock and key.
pulps. assay number and an SRK assay number along with the assay grades and mineral codes based on the type of mineralization observed during logging (for example PCR). photographs of core or indeed any core left . Transition and Tectonized Dunite zones. it was entered into the EXCEL worksheet and the sample identification numbers cross checked. for example the hole identifier. These grades are presented in Table 16. the computer software (GEMCOM) would smooth the grades in the last assayed interval through the nonsampled interval possibly resulting in an inaccurate higher grade. the grade would have been underestimated as there appears. Barren intervals can be seen in Oriel core between the ore horizons. If SRK were to have assigned a Cr2O3 value of 0. On receipt of the raw data it was subjected to a visual check for missing data and when SRK were satisfied. such as collar information and depth of hole. from the Oriel holes. assay interval. No similar passports were available to check the Pre-Oriel data against. The Oriel drill hole data. Poikilitic. Comments were also recorded. comments and mineral codes. as there are no coarse rejects. to be a background Cr2O3 value which is typical of the dunites in the Cumulate. The assays were compiled into an EXCEL spread sheet recording the hole identifier. SRK is confident that errors induced by sample preparation and analysis are minimal.doc . The assay data for the Oriel holes was received by SRK via Oriel from the various laboratories used. There are intervals within the Pre-Oriel holes which have not been assayed and thus. If it was assumed that these intervals were not assayed and left as blanks. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. was cross checked against the original data recorded in the drill hole passports provided by the drillers. The decision has been made not to use this facility again. More information on the results can be found in the main Feasibility Study report. SRK have assumed that these intervals have not been assayed / sampled as they were considered to be barren. Visually barren intervals are commonly not assayed as a cost saving exercise but for modelling of internal dilution it is necessary to assign grade to these un-sampled intervals. As a result of the studies undertaken by SRK and summarized above.01 to these un-sampled intervals. 16 DATA VERIFICATION Each worksheet set up in EXCEL was subjected to validation using conditional formulas and graphical representation. the assay interval.SRK Consulting Voskhod FS Page 81 problems with the sample preparation facility at Zaprudgeologia were largely resolved.1. The spreadsheet used to house the assay data as it was received was already set up with the known data. assay identification numbers. SRK have taken length weighted averages from assays from these “barren” intervals in the Oriel holes and calculated a default low grade value and assigned it to the un-assayed intervals between ore zones in the Pre-Oriel holes.
6554 where Y = Fe2O3 and X = Cr2O3. V0020 has only been used for the QA/QC study and was not used in the resources.2 MgO 41 S 0. The regression equations identified this problem and the data was changed accordingly. either at the sample preparation laboratory or in the assay laboratory. Two assays from hole V05-28 showed that the Cr2O3 result from the laboratory is too high when compared with the photographs and the SiO2 results. 318 and 323. Several of these assays stood out as being suspicious as the grade seemed to be too high compared with the geologist’s mineralization code and what was observed in the interval from the photos of the core.Table 16. S and P assays were missing. the weighted low grades calculated from the Oriel barren intervals were also assigned Where Fe2O3 values were missing a regression equation based on Pre-Oriel data was used to calculate this grade from the Cr2O3 grade as an excellent linear relationship exists between the two elements. it became evident that for the first batch of assays from Oriel holes sent to the Aktobe laboratory there was a problem in that some of the assays had been mixed up.1: Default grades assigned to “barren” intervals Cr2O3 2 SiO2 34 Fe2O3 7 CaO 0. leaving no core for re-assay. there is also an indirect relationship between SiO2 and Cr2O3. Elemental plots were thus constructed which immediately identified any anomalous samples by the fact that they lay well beyond the normal cluster of data about the regression line. the samples considered to be anomalous values were sent for re-assay. and where the problem was not resolved. Though sample validation in EXCEL and the use of core photographs. the SiO2 grades and the FeO grades had been interchanged. silica being associated with interstitial serpentinite in the chrome ores. This equation is as follows: Y = 0.e.1336X + 6. The pulps for these four samples were re-submitted to Aktobe. which is not possible as there is an inverse relationship between these two elements. Unfortunately four of these assays were from hole V05-13.7 Where CaO. for the Oriel holes.5% which is clearly consistent with a sample of high-grade MCR and not a standard. In Pre-Oriel holes.1 P 0. a metallurgy hole from which the remainder of the split core had been sent for metallurgical test work. Where possible. Using the SiO2 regression . Regression plots were also used as a means of identifying erroneous data for not only is there a direct relationship between Cr2O3 and Fe2O3 as described above.002 Al2O3 0. giving a high grade SiO2 with a high grade Cr2O3. Standard sample V0020 had a grade of 59. coarse rejects were then sent for re-assay at Karaganda. i.
however. Within the defined mineralization envelope. 16. However. for the reason stated above this was not deemed a realistic option given the time constraints. Statistical analysis of raw and composite data suggested that separate modelling of high. The high grade massive ore has sharply defined boundaries and thus a third method was considered and finally adopted which involved the following stages. as little core remains. the old Pre-Oriel data could only be checked using regression plots and.SRK Consulting Voskhod FS Page 83 equation SRK calculated the Cr2O3 grades which were more in line with the surrounding assays and the photographs. Following this exercise.doc . There is an overall north-easterly trend of increasing depth but dips may vary from northwest to almost easterly. high grade or sub-ordinate grade zones are highly irregular in form and in attitude so that 3D modelling of such zones would be highly complex and time consuming. a) Production of 2m composites from the raw data P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. By its validation procedures.1 GRADE MODELLING The decision was made to produce a 2D resource estimate at an early stage in the project to gain an insight into the problems that might exist for the 3D exercise and to determine the likely magnitude of the mineable resource. re-analysis was not possible. the Karaganda laboratory ran further internal checks on the assay data they had provided to Oriel and spotted errors in other assays which they corrected. The final choice of method for interpolation of grades into a 3D resource model was based on the recognition that the orebody is far more complex than originally envisaged. The application of indicator variography and kriging was thus considered using a 40% Cr2O3 threshold but this was also rejected because of the high degree of smearing that could take place across ore boundaries. The dip and dip directions of both the hangingwall and footwall contacts of the potentially economic orebody are highly variable and may be locally reversed. SRK have been able to minimize the number of errors in the assay database. subordinate and low grade zones should be undertaken using hard envelopes. The exact locations and dips of these dislocations and also the eastern boundary faults are not precisely known. • • • The decision was also taken to estimate every block in the model by both Inverse Distance Weighting (IDW) and Kriging methods so that a comparison could be made. No attempt was made at this stage to subdivide the resource into structural domains. • The orebody is split into three main structural domains by two ENE trending dislocation zones (tear faults) and each must be modelled separately. Some of the problems faced are summarized below.
P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Histogram A for Cr2O3 demonstrates the bimodal nature of the population and hence the inability of standard descriptive statistics to accurately reflect the nature of the two separate sub-populations that exist. CaO. Separate variography for Cr2O3. The first is a strongly positively skewed population with a mode close to 5%. SiO2 and Al2O3 of which 2085 are derived from old (Pre-Oriel) databases and 1743 from the 2006 drilling programme (Oriel). This is to remove the impact of post ore fault displacement of this domain. Kriging and IDW grade interpolation by structural domain and by grade zone assigned to each block. while the second reflects the high grade MCR/PCR orebody with a mode at approximately 55%. Histogram B also shows the same bimodality with the low grade SiO2 sub-population reflecting the High Grade ore (low host rock matrix) and the high grade sub-population reflecting the low grade ore (abundant serpentinized dunite). Al2O3 and S. There is a close similarity between the old and new data but with a slight offset in the high grades in that the Oriel assay distribution has higher grades.1 Statistical Analysis The SRK assay database contains 3828 analyses for the three main elements Cr2O3. Effectively this places a block either into a high grade or low grade category. Full comparative descriptive statistical analysis was performed on these portions of the SRK database indicating that there are no major differences with perhaps the exception being CaO.1. The other routine elements in the database include MgO.1 shows the nature of the two populations for the three important elements. The drill holes from the two drilling programmes cover the same area and there is no significant spatial bias. This would mean that a block would only be evaluated on the basis of samples and composites which are compatible with the block indicator value (100 or 200). 16.SRK Consulting Voskhod FS Page 84 b) c) d) e) Tagging of all composites with an indicator code reflecting whether its mid point fell within the High Grade Zone (200) or Low Grade Zone (100). Figure 16. The shift in the old assay data for the former again reflects the lower grades obtained for the MCR/PCR mineralization. These indicator values would thus lie between 100 and 200.doc . IDW (n = 3) and Ordinary Kriging (OK) methods were then to be used to calculate a value for each block in the 3D resource model based on the indicator values captured in the search volume whose dimensions were to be determined by indicator variography. reflecting the vein and disseminated type mineralization. P. There is a full set of analyses from the Oriel sampling but only very limited numbers from the Pre-Oriel sampling. Those which were ≥ 150 were to be re-assigned the value 200 and those < 150 were to be given the value 100. Fe2O3 and SiO2 from high grade and low grade composite databases after coordinate translation for all composites lying with Domain 3.
P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc .SRK Consulting Voskhod FS Page 85 Histogram C for Fe2O3 shows very similar populations but again a slight excess of low grades in the second sub-population for the old data. This directly relates to the lower chrome grades.
30 7 9.7 57 12 .3 78 29 . 13 3 3.2 64 16 .2 0 7 16 .4 92 42 .0 62 34 .9 3 2 17 .8 21 23 .7 9 4 18 .7 70 46 .3 5 4 40 .0 32 10 . 99 0 11 .6 0 5 55 .2 1 3 39 .8 95 11 .5 42 19 .9 3 5 36 .7 69 27 .8 8 4 59 .2 82 17 . 69 7 4.2 5 6 38 .5 1 9 Assay % C Figure 16. 60 0 2. 85 8 5.6 20 13 .3 2 7 52 .0 87 13 .4 82 14 . 72 0 6. 70 7 9. 89 2 8. 99 5 4.8 67 29 .doc .9 64 32 .6 7 2 25 . 17 0 10 .3 4 4 15 . 15 0 3.4 4 1 Assay % A Distribution of N ew vs Old SiO2 Assays 160 New SiO2 140 Old SiO2 120 100 Frequency 80 60 40 20 0 0.0 48 49 . 79 5 6. 98 5 13 .3 7 9 19 .1: Comparative histograms of assay data (Pre-Oriel and Oriel) P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1 85 15 .1 6 2 62 . 42 8 6.6 5 6 32 .6 56 19 .5 7 4 23 .0 69 16 .4 7 7 21 .1 5 9 36 .4 5 1 Assay % B Distribution of New vs Old Fe2O3 Assays 200 New Fe2O3 180 Old Fe2O3 160 140 120 Frequency 100 80 60 40 20 0 3.SRK Consulting Voskhod FS Page 86 D istribution of New vs Old Cr2O3 Assays 300 New Cr2O3 Old Cr2O3 250 200 Frequency 150 100 50 0 0.0 9 9 26 . 44 5 8. 58 3 7.
but it is necessary to remove the impact of much longer sample lengths in the old data. irrespective of grade.5% and 10. Compositing was undertaken using 2m lengths. The population extracted on the basis of indicator values of 100 (Low Grade Zone) has a long negative tail.5). Grades of less than 20% Cr2O3 generally reflect zones of low grade sporadic mineralization while grades between 20 and 38% are usually typical of “subordinate” ore consisting of VCR type mineralization. The Low Grade population demonstrates an extreme positive skewness due to a second intermediate population. An extraction based on the 200 indicator values (the High Grade chrome zone) shows that the mode and mean are close to 13. In both cases there is no need to apply log-transformation to variography.75% Fe2O3. The above discussion is based on the assumption that the two databases can be combined for the purposes of resource modelling as some differences have already been identified which could reflect differences in the relative proportions of samples from the different grade zones. Composites tagged with the indicator value 200 (High Grade Zone) demonstrate a single but positively skewed population for SiO2 which.SRK Consulting Voskhod FS Page 87 In order to undertake variography and 3D block modelling it was necessary to composite raw grades to constant support as this is not only a requirement of geostatistics. Quantile – Quantile (Q-Q) plots were produced in which the average grade above a set of quantiles was compared for each P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. In order to determine whether there would be a serious problem of incompatibility between 2m composites from the old and new databases. This implies that variography would benefit from log-transformation of the data. Histograms for composite Fe2O3 values also show a bimodal distribution. on log-transformation approaches lognormality (skewness close to zero. All composites in each zone.6. were flagged with the zone code and grouped together in separate histograms. Grades above 38% are nearly always associated with the massive and powdery ore types (MCR/PCR). Statistical analysis of the composite grades within the combined database was undertaken and showed the same distribution as for the raw data. The exercise was repeated after a split which is not based on grade alone but on the basis of definition of High Grade and Low Grade zones in individual drill hole intersections. A low grade population with a mode close to 5% SiO2 reflects the high grade Cr2O3 population (inverse relationship) while the second reflects the low grade population with a mode close to 35% SiO2.1%.5% and the population is reasonably symmetrical but highly kurtotic with a kurtosis of 6. It should be noted that the drill holes on which the resources are based and on which variography has been undertaken. are uniformly distributed and no de-clustering is necessary before variographic analysis. partly the product of a lack of very high grades above 60% and by a chemical barrier at approximately 64. The High Grade population is negatively skewed. An extraction based on the 100 indicator value shows some evidence that bimodality exists with modes at approximately 7. Composited SiO2 values again show a bimodal population with a broad interval of intermediate values separating the two. kurtosis close to 3 and a COV of <0.doc .
SRK Consulting Voskhod FS Page 88 population. In this case. deciles (10%iles) were used though 95 and 5 percentile thresholds were added at the upper and lower tails of the populations. All default values for un-assayed barren intervals were removed leaving 2010 and 1008 composite values for the Pre-Oriel and Oriel data sets respectively. Figure 16. The conclusion of this study is that the two sets can be combined to produce a reliable database for resource estimation.2B indicates that the Q-Q plot for SiO2 essentially parallels the perfect regression line but that the Oriel data has higher silica values. Only Cr2O3. This is interpreted as showing that the SRK sampling included all internal waste zones which were left un-sampled by earlier workers.3%. Figure 16.5 % of values above 30% (equivalent to a Cr2O3 content of 10% based on regression analysis) but the equivalent Oriel figure is 24. The trend however follows the perfect regression line (red). SiO2 and Fe2O3 values were compared due to the lack of data for the other elements in the old database.2A reveals that the Cr2O3 means above the 40%ile (50.64%) are essentially very similar (Oriel Grades slightly higher) but below this level the Oriel data has an excess of lower grades bringing the means down.doc . Again this reflects the excess of low grade mineralization with high silica (>30%) An analysis of the two data sets shows that the Pre-Oriel data has only 13. Again this is explained by the impact of the sampling bias – high iron is associated with the presence of relatively more high grade samples.2C for Fe2O3 is the opposite of Figure 17.2B in that now the Q-Q plot is below and parallel to the perfect regression line. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Figure 16. It is believed that the underlying data populations are essentially the same.
SRK Consulting Voskhod FS Page 89 Q-Q Plot .Fe2O3 17 16 15 14 13 12 11 10 10 11 12 13 14 15 16 17 Pre-Oriel Composites Oriel Composites C Figure 16.doc .Cr2O3 70 65 Oriel Composites 60 55 50 45 40 35 30 30 35 40 45 50 55 60 65 70 Pre-Oriel Composites A Q-Q Plot .2: Q-Q plots for 2m Composites (Pre-Oriel versus Oriel) P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.SiO2 45 40 Oriel Composites 35 30 25 20 15 10 10 15 20 25 30 35 40 45 Pre-Oriel Composites B Q-Q Plot .
required that a coordinate transformation was necessary to remove the impact of lateral displacement of Domain 3 (between Dislocation Zones 2 and 3). variograms with a dip of 28o to the north east failed to show much improvement on those in the horizontal plane. however.SRK Consulting Voskhod FS Page 90 16. Below 30m the variogram is erratic due to lack of data in the inclined plane between boreholes. a 1m lower cut-off for the composite length was used and either an upper or lower threshold of 150 to select either low or high grade composites respectively. clearly influenced by the down-hole information and thus it was decided to undertake an isotropic search in the horizontal plane and to constrain information capture in the vertical direction using a limited angle of tolerance of ±10 vertically. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.03 and was modelled with a composite spherical model whose parameters are listed in Table 16. It was thus decided to produce omni-directional variograms to determine the isotropic ranges in the horizontal plane and their associated spatial and nugget variances but to use the down-the-hole variograms to determine the vertical ranges. A good variogram is obtained above 30m with longer ranges for both the two structures. Despite the transformation of composite mid point coordinates in Domain 3 as described above. In all cases. This effectively reconstitutes the orebody to its pre-tear faulting state and thus facilitates variography. both azimuth and dip are very variable on a local scale.1. In all other directions very noisy to pure nugget effect variograms were produced. There is clear evidence of drift at 80m thus limiting vertical search radii to less than this distance.94m to the north. attempts to produce good directional semi-variograms were generally unsuccessful in that they were either pure nugget effect or very noisy with only a poorly developed structure at low lags due to lack of data. With the exception of the indicator variogram. All 2m composites lying within Domain 3 were thus subject to a displacement of 48. As has been explained before.2 Geostatistical Analysis The recognition of four structural domains (1-4) within the orebody plus another (Domain 0) within the EBFZ. a problem exacerbated by the impact of the dislocation zones.2. Indicator Variable Variography The down-the-hole variogram was used to gain an indication of the nugget variance. These were.3m to the east and 13. True omni-directional variograms produced without any constraints relating to search directions and distances indicated a short range of 30m (or less) and a longer range of 120m.doc . It should be noted that this transformation was only applied for variography and that untransformed coordinates were used for block kriging within domain boundaries. The short range is now 50m and the longer range still 120m but with drift evident at approximately 180m. The variogram shows a low nugget variance of 0. Geostokos Toolkit software was used to produce both directional and omni-directional variograms for each of the three elements and also for the indicator variables. A directional variogram in the average dip direction of the orebody and at an average dip of 28o was produced. Composites outside domains were thus not used to interpolate grades into blocks within the domain being modelled.
3.03 0. Figure 16.06 0.16 0.3: Omni-directional Variogram for Cr2O3 (Filtered – High Grade Zone) P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.High Grade Zones (200) Cr2O3 Filtering the low grade tail of the population using a threshold of 38% Cr2O3 reduced the sill variance significantly as might be expected.13 C2 0. The variogram is illustrated in Figure 16.03 a1 25 30 50 60 a2 120 120 120 140 C1 0.doc .SRK Consulting Voskhod FS Page 91 Table 16. again with the low values filtered.3 and in Figure 16. The parameters for the down-the-hole variogram. Though a composite spherical model could have been fitted. are summarized in Table 16.16 0.13 0.09 0. a simple model was used in this case.03 0.09 Variography .03 0.06 0.2: Indicator Variogram Parameters Variogram Down-the-hole Omni-directional Constrained Omni-directional Directional (45o/-28o) Co 0.3.
94 and 9.7 12 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The raw variogram is interpreted as having a range of approximately 8m if a simple spherical model is assumed but both the sill (Co + C) and the nugget variance (Co) are lower than for the omni-directional variogram. there is a difference in the ranges with the log variogram giving a value of 65m compared to 100m for the raw equivalent.e. used for the kriging exercise. the raw variogram parameters in Table 17. The parameters produced were checked using a log-transformed variogram and back calculating the parameters. i. As the decision was made to use OK grade interpolation not LK because of the bias introduced by this method. As with Cr2O3. directional variograms were pure nugget effect.3 were used.4: Down the hole variogram (High Grade Zone – Cr2O3) The filtered variograms were used to determine the underlying structure of the model variogram and to control the selection of search radii.8 and 9.3: Variography for High Grade Zone – Cr2O3 Variogram Omni-directional Omni-directional (filtered) Down-the-hole (filtered) SiO2 A good omni-directional variogram can be achieved using raw data (1720 values). The unfiltered model parameters were.5 C1 26 10. Again this is probably the impact of sample support relative to the short range vertically. Co 38 17 6 a 100 110 16. The calculated values of 11. Table 16. Both the raw and logtransformed down-the-hole variograms showed short ranges but with strong hole effect.SRK Consulting Voskhod FS Page 92 Figure 16.doc ..97 for Co and C are close to those estimated from the raw model. 12. However. however.1.
Table 16. If the sill is modelled at a level equivalent to the data variance then this variogram could be interpreted as a composite spherical population with a short range of 9m and a longer range of 60m. However.8 6.08 0. the model parameters listed in Table 17. A simple spherical model has been fitted to the down-the-hole variogram through the experimental sill but at a level lower than the data variance. A log variogram was also produced in the down-the-hole direction which has an interesting structure.Low Grade Zones (100) Cr2O3 Variography is affected by the strong positive skew of the raw data (1543 values).5 Fe2O3 This dataset (1720 values) has a distribution close to normal and hence only raw variograms were produced. perhaps with some impact of hole-effect.5 a 60 8 C1 1.4 are accepted until more data is available. Table 16. or as the result of mixing of two different low grade populations.05 0. Also the situation is further complicated by evidence of a slight holeeffect. This is a distinct possibility which could reflect the . there is inadequate data at low lags to be confident in the range. Though a model can be fitted. There is again evidence of the impact of hole-effect.1 9.15 9.6 were fitted. Given the results of the down-hole variography. C=57 and a=50m) are fairly close to those listed below.4: Variography for High Grade Zone – SiO2 Variogram Omni-directional (Log) Omni-directional (Raw) Down-the-hole (Raw) Co 0. Variography .18 12. A log variogram was also produced to check these parameters and the back calculated results (Co=109.5: Variography for High Grade Zone – Fe2O3 Variogram Omni-directional (Raw) Down-the hole (Raw) Co 1. However a raw omni-directional variogram was produced to which the parameters in Table 16.9 The lower Co value for the down-the-hole variogram could reflect the fact that sample support (2m) is becoming significant in comparison with the short range (8m). a lower Co could have been fitted but there is inadequate data below 25m to confirm this.5 a 65 100 8 C1 0.
22% Fe2O3 and with a variance of 5. Alternatively a lower sill could be fitted at close to 25m. if the sill is modelled at the first structure and at a level well below the data variance as in raw data variogram.25 100 a1 9 9 50 a2 60 - C1 56 0.8.7. Though the ranges are identical at 9m. Table 16.52 - SiO2 In this case the histogram based on 1543 values for the Low Grade Zone (high SiO2) is strongly negatively skewed but it was possible to produce a raw data omni-directional variogram to which a simple spherical model could be fitted with the parameters shown in Table 16.doc .7: Variography for Low Grade Zone – SiO2 Variogram Down-the-hole (Raw) Omni-directional (Raw) Co 15 22 a1 8 40 a2 60 - C1 20 38 C2 17 - Fe2O3 This dataset consists of 1543 values ranging from 2. The parameters for the raw omni-directional variogram are listed in Table 16.22 to 20. The very flat distribution (platykurtotic) probably hides a bimodal population.6: Variography for Low Grade Zone – Cr2O3 Variogram Down-the-hole (Raw) Down-the-hole (Log) Omni-directional (Raw) Co 50 0. a composite model could be fitted but again there is the suspicion that two populations may exist reflecting different mineralization styles. The down-the-hole variogram and its parameters are also listed in this table. Table 16. the implication of the raw variogram is that the search radii should not exceed 35m. It is thus recommended that the short range be used and that the search radius should not exceed 25m. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.55 66 C2 0.SRK Consulting Voskhod FS Page 94 subordinate ore (>20%) lying above weakly disseminated mineralization with a longer range.28 %2. Again there is evidence of two different sill levels which is usually due to the mixing of incompatible data sets. This places a restraint on the distance of search in the vertical direction. As with the Cr2O3. However. The down-the-hole raw variogram clearly has a sill at a level much below the data variance but this variance is partly the product of the strong drift beyond 35m due to a breakdown in stationarity. then a simple spherical model could be fitted with drift at approximately 35m.
the results are considered robust enough to give a reasonable estimate of the block grades using both IDW and OK methods. The complex and perhaps two stage nature of some of the variograms especially within the Low Grade Zone suggests that some improvement could be gained by subdivision of this data on the basis of zones which correspond to subordinate ore and low grade mineralization.98 2. again once the new data is available. • • To gain an insight into the spatial variability of thickness for the potential ore zone. thickness and assay hangingwall and footwall elevations for the Voskhod orebody for use in preliminary mine design prior to the production of a 3D resource model. 16. More rigorous attempts should be made to produce directional variograms.SRK Consulting Voskhod FS Page 95 Table 16.8: Variography for Low Grade Zone – Fe2O3 Variogram Omni-directional (Raw) Down-the hole (Raw) Co 2.doc .0 Again the low Co from the down-the-hole variogram is a product of significant sample support in the direction of the variogram which has a short range. Total exclusion of the latter may be warranted given that dense media separation which effectively result in the non-recovery of disseminated or stringer type mineralization because it has a density below that at which the ore will sink. To define the economic and tectonic limits of the orebody prior to the production of 3D resource envelopes.3 Block Modelling and Grade Interpolation 2D Modelling 2D resource estimation was undertaken for a variety of reasons some of which are listed below. Conclusions and Recommendations This variographic study represents an initial investigation which should be fined tuned once additional information is available from the 2006 drilling programme.3 1.1 a 68 10 C1 2. To act as a cross-check for resource estimates produced by 3D modelling • • • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. To present the likely tonnages and grades expected from the orebody together with a preliminary classification of these resources. However.1. To provide grade.
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The original database available for resource estimation contained 143 old (pre 2005) holes together with 37 holes drilled during 2005, however, after removal of holes considered superfluous or unsatisfactory for some reason, the total number of holes used for 2D modelling was reduced to 124. Some holes without potentially economic mineralization (<20% Cr2O3) and / or thicknesses of <2m were retained in the database to constrain extrapolation and allow feathering out of the ore zone where normal fringe conditions exist.
Definition of 2D Resource Envelopes In order to produce the resource envelope it was necessary to determine potentially economic intervals in each borehole. An assay cut-off grade of 40% Cr2O3 was used for this purpose though some internal lower grades were accepted so long as the overall weighted grade did not drop below 40%. This weighted grade was determined using both length and SG for each sample, the latter value being determined from a regression equation relating SG and Cr2O3. These intervals were determined in preparation for the production of ore envelopes suitable for separate modelling of portions of the orebody amenable to selective high grade mining for direct shipment to smelters. Though most holes possessed only one such interval others had up to three intervals. Similarly subordinate ore intersections defined by assay cut-off grades of 20% Cr2O3 in each drill hole were identified and the weighted grade determined in the same way. For the purpose of global (non-selective) modelling, holes with both high grade and subordinate ore zones or with multiple intersections of both, were recalculated to produce new potential ore zones to capture all high grade material by accepting low grade (<20% Cr2O3) internal waste or even barren intervals where the thickness was not excessive (<10m). In the case of the old Geoinvest data, waste intervals were not always sampled and assayed so these were allocated grades of 0% Cr2O3, 33% SiO2 and 6% Fe2O3 based on visual examination of the assays for low grade material. If the weighted grade dropped below 20% Cr2O3 then the attempt was abandoned and two separate zones were determined either side of the internal waste. Though 2D modelling and resource estimation would be based on a minimum mining thickness (vertical thickness of 4m) and a minimum mining grade of 20% Cr2O3, thinner zones were accepted for the production of ore envelopes to allow “feathering out” of thickness and grade at orebody fringes assumed to be normal as opposed to tectonic (truncated by faults). The weighted grades for Cr2O3, SiO2 and Fe2O3 for each potential ore zone, together with the calculated vertical thickness, were combined with the de-surveyed coordinates of the mid point of the “non selective” ore zone in preparation for block modelling.
2D Block Modelling The interpolation of grade, thickness and elevation data was undertaken using Inverse Distance Weighting (IDW) methods using the software Surfer 8 and node spacings (block centres) of 20 x 20m. Tables 16.9A and 16.10B summarize the dimensions of the block
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matrix and search parameters used respectively. The latter were chosen to minimize data smearing given the evident variability of the ore zones in adjacent holes.
Table 16.9A: Grid Nodes covered by IDW Minimum 15370 42670 Maximum 16010 43190 Spacing 20 20 Number 33 27
Table 16.10 B: IDW Search Parameters Inverse weighting power (n) Sectors Maximum data Maximum data for each sector Minimum data in all sectors Blanking if sectors empty 3 4 5 3 1 4
A blanking file was used to constrain blocks to the limits of the orebody and models were then created for the following variables: • • • • Metal accumulation Cr2O3 Metal accumulation SiO2 Metal accumulation Fe2O3 Vertical thickness (VT)
These models and the X, Y coordinates of each block mid were then imported into an Excel spreadsheet so that block grades could be determined (Metal Accumulation / VT). Specific Gravities for each block were determined from the Cr2O3 block grades using the following regression equation (based on Pre-Oriel SG data) and thence block tonnages.
Density = 2.523 + 0.00683 * (Cr2O3) + 0.00035132 * (Cr2O3)2 Grades were weighted by tonnage for individual blocks and then the results summed in order to determine the global grades of the defined orebody. The results are also summarized in Table 16.11 under the heading “Unclassified Global Resources”.
Classification of 2D Resources Consideration of the density of sampling (25-50m) and the confidence in geological interpretations and assessment of the physical continuity of the orebody, led to its subdivision into four main sub-areas.
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The Main Orebody (MOB) This area contains a uniform distribution of holes but the rapid changes in thickness, the presence of internal transverse zones of dislocation, the uncertainties over the quality of previous drilling and sampling and finally, the existence of discrepancies between ore zone depths, thicknesses and grades between closely spaced old and new holes, led to the assignment of an Indicated status not Measured.
The North-Eastern Extension (NEX) This sub-area lies to the east of the EBFZ and immediately south of the Karaagash gulley and fault. Though not fully defined by drilling, most of the holes were drilled in 2005 under SRK’s supervision and it is thus considered that this area can be assigned to an Indicated Resource.
The Eastern Boundary Fault Zone (EBF) and South-Eastern Extension (SEX) These two sub-areas are investigated by only a limited amount of drilling and some of the holes contain incomplete intersections of the ore zone due to the impact of the faults. Mineralization is demonstrated to be present but its continuity is in doubt due to the lack of drilling and to uncertainties as to the location and hade of faults and the magnitude and direction of their throws. More inclined drilling is needed to resolve these problems. Their immediate proximity to areas of well drilled Indicated Resource allows their assignment to an Inferred Resource category and their combined resources can be determined by subtraction of the Indicated Resources from the Global Unclassified Resources (see Table 16.11) Table 16.11: 2D Resource Statement, Voskhod Resource Category Unclassified Global Indicated – Main Zone Indicated – NEX Indicated - Total Inferred Tonnes (MT) 21.331 18.639 1.118 19.757 1.574 % Cr2O3 45.82 45.96 50.23 46.20 41.05 % SiO2 9.76 9.66 7.33 9.53 12.65 % Fe2O3 12.67 12.70 12.71 12.70 12.29
The Voskhod orebody was modelled using sectional interpretations of the mineralization in 2D followed by the generation of wire-frame solids of the individual domains in 3D. does not have enough data to model in 3D despite containing 29 drill holes. midpoint and footwall contour maps in 2D. 3D tie-lines were then created tying together endpoints in order to make a wire-frame. The mineralised shell was digitised using the assay information selected by ore type from the “ore_zone” table. the subordinate and mineralized zones were combined into one low grade zone in an attempt to simplify the process. However. however. 2D modelling of the domains allowed the allocation of each drill hole to a specific domain. Domains 1 to 4 were modelled separately but Domain 0.5m either side of the borehole on the 25m sections. In the modelling described below. Whilst digitising. From this exercise it was decided that there was not enough information in old holes to model the deposit using lithology and that mineralization zones would have to be used. but to avoid over complicating the geology these smaller faults have not been modelled. Once created. a series of east-west. Following the creation of hangingwall. were eliminated. Though the existence of these domains is clearly evident on east-west and north-south vertical sections. east of the Eastern Boundary Fault. the mineralised outline was wobbled to honour the drill holes in 3D. Once digitised in 2D. digitising in 2D honouring all the drill holes where assays had been taken. High grade zones were defined on the basis of a 40% Cr2O3 cut-off grade. Where the envelope from the north-south sections crossed the east-west sections a common point was created which tied the two together. there is no information from the drilling as to the dip of the fault controlled domain boundaries and the sense and magnitude of movement. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. it was evident that there were 5 mineralised domains which have tectonic boundaries. This information was entered into GEMCOM in the “minzone” table and. It was originally planned to use the domain boundaries to create fault surfaces within which to model the separate domains.doc . The mineralised shell has taken all assayed material into account. a preliminary visualisation of the deposit was undertaken looking at the distribution of lithological zones and mineralization. Smaller faults may also exist which are synthetic and antithetic to the domain boundaries. The mineralised envelope was digitised on the east-west sections and also on the north-south sections. Prior to modelling the orebody. the lack of data on these faults made it very difficult to model the domain boundaries as fault surfaces. impossible to wire-frame each of the grade zones due to their complexity and also uncertainties as to correlation in 3D space. It was. subordinate ore zones contain 20-40% Cr2O3 material while “mineralised zones” generally had grades <20% Cr2O3. it was also inserted into the “2m composite” table. the wire frame was validated to ensure there were no overlapping triangles and any that did. Many of these are likely to contain incomplete intersections due to fault cut-outs.SRK Consulting Voskhod FS Page 99 3D Modelling Following the importation and validation of both the Pre-Oriel and Oriel drill hole data and the importation and creation of a topographic surface. north-south and north-east – south-west cross sections were set up using a 25m spacing. efforts were made to ensure that the drill holes were snapped to a clipping corridor of 12. using cross-table transfer in GEMCOM.
These points are created in preparation for kriging in GEMCOM. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. they were assigned a 200 code and similarly where a group of high grade (>40% Cr2O3) samples fall within the low grade zone (<40% Cr2O3) and have a thickness of <4m they were assigned a 100 code.SRK Consulting Voskhod FS Page 100 Once in GEMCOM. 3D Block Modelling A block model was set up in GEMCOM to house grades for the four main domains. this was done by using the “ore_zone” table. The block model covers 800m in the X direction. This procedure was undertaken to ensure that internal dilution in high grade zones was used when determining high grade blocks and similarly that narrow intervals of high grade material could be made to benefit low grade blocks. 10m in the Y direction and 5m in the Z direction. the valid 2m composite data was assigned low and high grade indicators. the main reason being that this block size supports half the sample spacing and secondly is suited to the stope dimensions used in the preferred mining method.doc . Any group of composites with >40% Cr2O3 over >4m was assigned a code 200 and any with grades of <40% Cr2O3 over >4m with a 100 code. The above coded information was transferred into the 2m Comp data tables in both of the drill hole workspaces and this data was used create points where grades for the high grade zone can be separated from the low grade zone using the 100 and 200 codes. Where a group of low grade samples (<40% Cr2O3) occur within a high grade zone (coded as 200) and have a thickness of <4m. The bock model was set up using a block size of 10m in the X direction. The size of the blocks was chosen for two reasons. 650m in the Y and 600m in the Z.
This percentage is then used to weight the grade within each portion of the block. 46 % of the blocks were flagged as being low grade by IDW against 47% in the case of OK.The decision was made to use an isotropic search in the horizontal plane and an anisotropic search in the vertical plane. The initial interpolation run for each oxide used search radii equivalent to the semi-variogram range but second and third interpolation runs were used to ensure that grade values had been assigned to all blocks in the mineralised model.variograms are not required for the IDW but were used to control the search radii. they were set to 250m in the X and Y plane and 50m in the Z.doc . Ordinary Kriging (OK) and Inverse Distance Weighting to the power of 3 (IDW) were used as interpolation methods using horizontal search ellipsoids with no preferred orientation as the strike and dip of the orebody in the hangingwall and footwall change rapidly. however. The minimum number of samples was set to 5 and a maximum to 50 with which to interpolate using both the OK and IDW methods. There were very few blocks in any of the domains which needed to be treated using the third larger search ellipse. For the second run the radii in all directions were doubled and for the third. 9 needles per block were used.5). GEMCOM uses a percent model. The interpolation of grade zone indicator values into blocks was undertaken by both IDW and OK methods.572 blocks. separate search ellipses were used for High Grade Ore (code 200) for the different oxides modelled and a separate search ellipse for the Low Grade Ore (code 100).SRK Consulting Voskhod FS Page 101 3D Block Grade Interpolation The digital drill hole database used for the Mineral Resource estimate presented in this report incorporates a total of 102 diamond drill holes (30 Oriel holes and 72 Pre Oriel holes) For all 4 domains modelled in 3D.2. After the initial set up of the GEMCOM block model. Rock code 2 for Domain 2 etc. Rock code 1 for Domain 1. Fe2O3 and SiO2. thus ensuring that grades were assigned to all blocks. the first interpolation was to determine how much of the model for each domain was to be coded high grade (code 200) and how much was low grade (code 100). All four domains use elliptical search radii for each of the oxides modelled (Cr2O3.1. both of which were controlled by the indicator variography described earlier. A comparison between the results of the two methods indicated that out of the total of 21. whereby a percentage is given to a particular block reflecting how much of that block lies within the model/domain. Fe2O3 and the SiO2). Blocks which cross domains are assigned a percentage depending on the amount of the block in one domain and the amount of the block in the other domain (see Figure 16. discussed in Section 16. This is not considered an excessive discrepancy. The interpolation was constrained by the high and low grade. scrutiny of the data suggested that the IDW method was giving more realistic results and hence this model P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Kriging weights have been set according to the semi-variogram parameters. Semi. These search radii are based on the semi-variogram ranges for high and low grade Cr2O3. The block modelling in GEMCOM uses needling vertically through the orebody to assign grades during the interpolation. The interpolation was limited to the rock code of each domain.
Blocks were then displayed with high grade in purple and low grade in light cyan as in Figure 16. The same is true for OK. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. All domains were interpolated using OK and IDW using this method of selection by high/low grade. OK is a more precise method of data interpolation as it takes in to account the block size as well as the nature of the mineralization expressed by the variogram parameters. Fe2O3 and SiO2 grades for each domain were extracted from the OK generic models by combining the values from the High Grade blocks with the values from the Low Grade blocks.7. The reported resources are thus based on the OK results. this is not the case for IDW. An example block section for Cr2O3 are presented in Figure 16.doc .6 (Domain 2). The global (Total) Cr2O3. Generic folders had been set up in the block model for each domain to separately contain the low grade IDW data for each oxide and the high grade IDW. All further interpolations for each domain were restricted by the high and low grade so that modelling of grade into the low grade blocks was achieved using the low grade semivariogram parameters and composites tagged as lying in the Low Grade Zone. A similar approach was used for the high grade.SRK Consulting Voskhod FS Page 102 was accepted.
Blocks shared by domains.doc .SRK Consulting Voskhod FS Page 103 Crossing domains. between domains 3 and 4.6: High and Low Grade Blocks in Domain 2 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. block percentage shown Domain 4 (purple outline) Domain 3 (green outline) Figure 16.5: Blocks on Domain Boundaries Figure 16.
12 45.14 23.46 More Frequency Cum ulative % Frequency 800 600 400 200 0 Bin .01 21.58 16. An example of the results can be seen in Figure 17.90 28.57 18.25 38.8 for the low grade Cr2O3.9 is a scatter plot showing the relationship of OK and IDW grades for each block. IDW has produced some abnormally high values (above the expected 40% upper threshold) suggesting that OK is the best method for interpolating grade into blocks.66 26.23 7.57 49. Good comparisons are obtained for SiO2 and Fe2O3 in the case of the low grade zones and for Fe2O3 in the high grade.68 11.69 31.12 14.03 8. the OK has a smaller data range and hence lower variance.21 33.Once the block modelling was complete.79 4. Figure 16. in order to compare block grades produced by OK and IDW.73 36. However.34 31. for the Cr2O3 and SiO2 values in the high grade zones there is clearly a problem with the IDW results as some blocks are being under-valued or over-valued respectively.8 Comparison of Block Grades (Cr2O3 . Figure 16. basic statistical analysis was undertaken including the production of histograms and regression plots.Low Grade Blocks) Cr2O3 Low OK 700 600 120% 100% 80% 60% 300 200 100 11.68 42.45 24.99 3.8 show that there is little difference between the results gained by using IDW and OK.10 18. This again confirms that OK is the preferred method.55 0 40% 20% 0% Frequency Cum ulativ % e Frequency 500 400 B in Cr2O3 Low IDW 1200 1000 120% 100% 80% 60% 40% 20% 0% 0.62 21.01 52.06 13. The histograms in Figure 16.17 28.79 35.23 38.77 M ore 0.51 6. Though the trend line fitted is close to 45o.
SRK Consulting Voskhod FS Page 106 Figure 16.5317+0. The density for each block in the model was calculated using the polynomial regression equation derived by SRK from new SG measurements and analyses of the core samples as follows: 2. 17 17. Historical production at Donskoy is stated in the same pamphlet at 117 Mt grading 49. Information in Donskoy pamphlets states that the reserves remaining (no classification was provided) are 60 Mt at 30 to 60% Cr2O3. was exported into EXCEL where the global tonnage.doc .9 Regression plot OK versus IDW for Low Grade Blocks Re gression plot show ing the relationship betwe en low grade CR2O3 block va lues by OK a nd IDW 60 50 Cr2O3 block values by IDW IDW 40 30 20 10 0 0 10 20 30 40 50 Cr2O3 block va lues by OK.019594* Cr2O3_TOTAL+0. densities and grades (by weighting by the block percentage) were calculated. once completed.0001365*CR2O3_TOTAL* CR2O3_TOTAL The block model. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.2 % Cr2O3.1 ADJACENT PROPERTIES DONSKOY GOK SRK notes that the Voskhod deposit is surrounded to the west and north by the extensive Donskoy GOK operations that have been in production for since the 1930’s.
P1 resources sometimes become inferred but often they cannot be classified. 17.2% of the worlds reserves. That report established the possibility of profitable underground mining of the deposit and recommended preliminary exploration which was carried out during 1990 – 1992.5 39.6 4. Therefore SRK cannot comment on the validity and appropriateness of the existing resource estimates. In that report the source is not stated and the classification is not explained. It is noted by SRK that there are several resource statements in the information provided and it should be noted that these are not consistent with each other. In SRK’s experience C2 generally becomes an inferred resource when classified in accordance with the JORC code. the USGS Minerals Yearbook 2004 states Donskoy as producing 5 Mtpa from both underground and open pits from a reserve of 350 Mt.9 Note: These numbers were estimated at chromite cut-off grade of 30% P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1 Karaagash Historical Resources Tonnes (Mt) C2 P1 Total C2 + P1 2. Table 17.doc . The table below summarises the historical resource estimates from the 1989 report. The mineral resources appear to have been assigned C2 and P1 status under the Soviet classification system. The documents sent by Oriel state that on the basis of prospecting and evaluation at Voskhod and Karaagash deposits during 1987-89 (Moskalev) the Kazakh Principle Coordination Geological Agency “KazGeology” drew up a Technical and Economic Considerations Report of possible commercial significance of the chrome ore of Karaagash and Voskhod deposits (1989). SRK therefore concludes that the Kazakhstan reserves of chromite stated by Pariser are those at the Donskoy operation. the property immediately to the north of Voskhod. Without further study SRK can not comment on the resource estimation carried out at Karaagash but can comment on the potential to increase the Voskhod Mineral Resource with further study. However.9 1. SRK has been aware of the existence of the Karaagash deposit but have not reviewed any data relating to it. The Karaagash deposit is reported to have been drilled at a spacing of 200 x 100m and 100 x 100 m grid.03.5 Grade % Cr2O3 41. Average core recovery was 62 % in the country rock and 74% in the ore.SRK Consulting Voskhod FS Page 107 Heinz Pariser in his report for the Voskhod Feasibility Study estimates reserves of chromite in Kazakhstan to be 320 Mt or 4.7 40.2 KARAGAASH DEPOSIT Immediately prior to the completion of the Feasibility Study SRK received a document from Oriel stating that as of 23. SRK has also not verified if the Karagaash deposit lies within the new concession area granted to Oriel.2006 Voskhod-Oriel LLP had acquired the right for exploration within Karaagash area.
The aim of the testwork was to confirm the flowsheet initially selected and to determine the necessary design parameters for the detailed design and costing exercise being undertaken by DRA. Two significantly different material types are identified in the Voskhod ore body. 9. milling and abrasion). The majority of the investigations were focused on cores 12 and 13 as these incorporated the majority of the identified ore types and included lower grade sections.2 METALLURGICAL TESTWORK The process flowsheet was selected before the testwork was undertaken based on the information from the PAS investigations. However as its description implies the material is very friable and will break up during mining. general data available on the Voskhod material and on the adjacent Donskoy operation and information from the treatment of chromite ores in South Africa. 13 and 19. Four holes were selected for the testwork investigations. The flowsheet selected incorporated a relatively simple process consisting of a once through circuit to produce lumps.doc . Data was also generated to predict the forecast products from the plant. and could be expected to generate a large proportion of product grade material. It should be noted that the deposit sections viewed by SRK personnel in Kazakhstan show the deposit to be of a lense nature and therefore not similar to the podiform nature of Voskhod. The metallurgical testwork was undertaken by Mintek in South Africa and mainly involved investigation into size distribution. The plant feed will also include approximately 15% low grade mining dilution. handling and processing to generate large quantities of fines and ultrafine material. The ultrafines. chips and fine concentrate.1 MINERAL PROCESSING AND METALLURGICAL TESTING METALLURGICAL TESTWORK SAMPLES AND ORE MINERALOGY Metallurgical samples were obtained from the 2005 drilling programme coordinated by SRK. although high grade. 18. washability using heavy liquid separation (HLS) and gravity separation using P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Competent ore varies from high grade massive chromite (55 . In total five different ore types are identified which will constitute the plant feed in varying proportions. 18 18. competent and powdery which are expected to behave differently through the circuit and to produce different ratios of products. The overall grades were around 46% Cr2O3 for Core 12 and 52% Cr2O3 for core 13. cannot be easily recovered in the process being generally < 50 micron and can be expected to report to tails as slimes. 12. Given that the deposit is adjacent to the planned Voskhod mining operation SRK considers there could be potential to extend the mine life by several years providing positive results are received from the confirmatory drilling.SRK Consulting Voskhod FS Page 108 SRK considers there to be considerable potential for the inclusion of the Karaagash deposit in a future mine plan providing that infil drilling confirms the Soviet resource estimate stated above. comminution parameters (crushing. The powdery ore is high grade. around 60% Cr2O3 .60% Cr2O3) to low grade poorly mineralised disseminated chromite ore.
which log the intersections by observed ore types. This data enables a split of the feed after crushing to be estimated to each process section of the plant. The yield is based on the washability data from the metallurgical testwork results which has been related back to the forecast plant feed grade and a nominal density cut point applied for the required Cr2O3 grade of product. <10%SiO2 (8% typical) -1mm. 45-48% Cr2O3. This data is used to predict the feed size distribution to the plant related to the split of high grade and low grade ore types and more importantly the quantity of competent and powdery ore. The possible recovery of a magnetic fraction from the fines was also tested. Washability data was used to provide information to forecast product yields. The testwork results confirmed that the selected flowsheet was the most appropriate for treating the Voskhod material and that no significant benefit could be achieved by retreating discard products generated from the first stage of beneficiation. 45-48% Cr2O3. Toxicity Characteristic Leaching Procedure (TCLP) evaluations.SRK Consulting Voskhod FS Page 109 tables on the fine material as insufficient material was available to undertake more representative spiral concentration testwork. Three products are envisaged from the process plant. Testwork was undertaken initially on cores 12 and 13. <10%SiO2 (8% typical) -10mm + 1mm. Lump Chip Fine concentrate -100/150mm + 10mm.doc . Other investigations included elemental scans of the product and tails streams. attritioning / tumbling tests to investigate degradation and the breakdown of the products and different size fractions. lumps (+10mm) and chips (-10mm + 1mm). 18. Samples from holes 12 and 13 were categorised geologically into high grade and subordinate ores and prior to the testwork were reclassified metallurgically into competent and powdery ore types. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.3 FORECAST PRODUCT SPLIT From the size distributions and washability data product yields were forecast. Additional tests were undertaken into the application of magnetic separation. Tabling tests were undertaken on both the natural fines and the fines generated during crushing although the results were not particularly informative particularly on the natural fines as the materials were generally high grade. >55-59% Cr2O3. medium or low grade. typically 48% Cr2O3. high. Testwork was subsequently undertaken on cores 9 and 19 to confirm the initial testwork results and to investigate optimising recoveries into products by the retreatment of low grade discard products from sections of the initial treatment circuit proposed. <3%SiO2 In summary the forecast product split was achieved by predicting the split of feed ore types to the plant over the LoM by analysing the drilling data. filtration and draining tests. by recrushing and milling. The different metallurgical categories were tested separately to provide washability data for the different ore types and at two different size fractions.
8 8.195 1.465.126 % of Feed (Yield) Grade % Cr2O3 40.1 8.5 18.456 552.523 5.398.SRK Consulting Voskhod FS Page 110 Forecast product splits for the overall LoM are presented in table 1.541 1.9 14 8.8. Table 18.6 69.350 594.805.298.8 48.050 52.567.924 1.doc .3 % Fe2O3 % SiO2 11.914.1.8 1-1.0 57.253 15.0 48. Further details of the products on a quarterly basis are presented in the TEM.5 19.9 11.771.3 8.314 12.2 which indicates the lower product yield in the initial years of the mine life while mining the lower grade area to the SW of the orebody.2 10.0 3.9 3.3 9.0 30.1 Forecast Product Split over LoM Production tonnes Plant Feed Products Lump Chip Concentrate Total Waste Lump Rejects Chip Rejects Fines Slimes Total 9.527.3 2.5 10.9 7.0 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. increasing in the later stages of the LoM. The annual product forecast is shown in Figure 1.8.0 11.
-25mm +10mm and -10mm. These include the limited data on the in-situ split of ore types in the resource and the noted degradation of material during handling which will be affected by mining and handling of the feed and in the plant.4 18.200. The circuit includes closed circuit crushing to nominally <150mm followed by dry screening of the crushed feed into different size fractions +25mm.4. This allows flexibility in the split between the two circuits to cater for varying feed size distributions and different loads on the two DMS .000 200.000.3 million tpa of feed material with a top size of 500mm.1 PROCESS PLANT Plant Design Parameters and Process Description The process plant is designed to treat 1. Typically the coarser material is treated in the DMS drum circuit while the -10mm +1mm material is fed to a DMS cyclone circuit.1 Forecast Production Forecast Production Graph 1.000 Production tpa 800. 18.000 600.Figure 18.000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fines Chips Lumps Several issues can be expected to affect the forecast product split which cannot be fully defined from the initial investigations and are exacerbated by the lack of bulk samples on which to undertake more extensive testwork evaluations. Facility is provided to allow material up to 25mm to be processed through the cyclone circuit with further provision to screen the product stream into +10mm and -10mm fractions.000 400. This could possibly affect the quantity of lump product and result in increased levels of chips and fines although is not expected to significantly affect the overall yield into products.000 1. The feed receipt bin of 45t capacity can received material either directly tipped by truck or rehandled by a FEL. Material from the mine is stockpiled on surface adjacent to the feed receipt bin and is blended for the circuit to provide a relatively consistent feed grade and ratio of competent to powdery ore.
The -10mm material is further wet screened before the DMS cyclone circuit to remove -1mm material and this is deslimed and processed through spiral concentrators. Thickener underflow and cyclone underflow are pumped to the tailings storage facility. Surge capacity equivalent to approximately 5 hours throughput is provided before the DMS drum and DMS cyclone circuits. The plant control system has been based on a Program Logic Controller (PLC) and Supervisory Control and Data Acquisition (Scada) system for the plant displays and operator control. rougher. The feed to the cyclone circuit is deslimed to remove material nominally < 50 micron and this is routed directly to the tails thickeners. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.SRK Consulting Voskhod FS Page 112 circuits. In the DMS circuits the ore is mixed with a fine slurry of ferrosilicon (FeSi) and water and in the process separation equipment the lighter fraction consisting of low grade minerals and gangue is floated off while the higher grade chromite sinks and is recovered as product. Products and discards from the DMS drum and DMS cyclone circuits are drained and washed to recover the FeSi dense medium and dewatered on vibrating screen before being routed to storage bins by belt conveyor. Facility is provided for emergency product storage on the site in the event of transport problems to the rail head. three for the lump product and a single bin for the chips.76 tph (40%) . cleaner and scavenger to produce a fine concentrate product of >57% Cr2O3. while the products are moved to the rail siding for loading into rail cars. The process plant is controlled from a central control room located within the DMS building. A common bin is provided for the two coarse waste streams with individual bins for the two products. DMS drum circuit DMS cyclone circuit Spiral circuit (after desliming) . Tails from all three stages are collected and pass through a de-grit cyclone with the cyclone overflow passing to the tails thickener.doc . The nominal feed rate to the washing plant is 190 tph. Product from the spirals is partially dewatered in dewatering cyclones with the cyclone spigot product being routed to dewatering screens. The individual circuits are rated at the following nominal maximum capacities and as a percentage of overall plant feed rate. The bins feed into road trucks with the waste transported to the walls of the tailings storage facility.42 tph (22%) Provision is made to handle up to 10% of the feed as slime that will report directly to tails. The spiral circuit treating the deslimed material consists of three stage of concentration. directly above the main plant MCC room.152 tph (80%) . From the screens the dewatered fine concentrate is routed by conveyor to storage bunkers where it is distributed using a shuttle conveyor and allowed to drain further before being loaded into 1t bulk bags for transfer to the rail siding and shipment by rail.
thickener drive. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. 18. 24 on maintenance and 9 in the laboratory. Process consumables are limited to ferrosilicon for the DMS operation and flocculent for the slimes thickener. Power consumption for the process plant excluding heating duties is calculated around 15 kWh/t.5 18. The necessary plant services including process and gland service water.4.SRK Consulting Voskhod FS Page 113 18.1 INFRASTRUCTURE AND SITE SERVICES Electric Power Supply Electric power will be supplied by a 110kV overhead power line from the HT supply at Kimpersai.5. The layout is relatively compact but allows for possible future expansion and the provision of additional future recrushing and milling circuits should these be required. compressed air and the DMS drum drive.2 Plant Description The plant is effectively fully enclosed with the necessary heating and ventilation to cater for the severe climatic conditions. These are discussed further under project opportunities. A fully equipped assay laboratory facility is provided adjacent to the main process building.4. 60km distant from the mine site.3 Plant Operations The process plant operation involves a total staff of 110 people including 3 expatriate management staff. on behalf of Oriel. 74 on production including product handling. power will be transformed to 10 kV in multiple parallel 25 MVA transformers for reticulation on surface and underground. 18. Further investigations are on going into utilising existing power transmission facilities and possibly the on-site generation of power from gas. In the long term the additional power generation capacity will act as emergency power for normal mine operations. flocculent make up for the thickener. Provision is made for extraction of dust generated in the crushing circuit. the Kazakh power utility company by AREVA. compressed and instrument air are included in the plant facilities. Power supply includes the generation of emergency power for critical process duties such as the agitation of medium. Application has been made to KEGOC. a local electrical contractor.doc . Interconnecting conveyors between the plant selections are also in fully enclosed galleries. On site generation capacity is provided rated at 2 MVA at a voltage of 10kV to supplement the existing construction power of 1MVA. This additional power will be required for development of the decline and ventilation shafts. which is reportedly available close to site. On the site.
5. All vehicles carrying product leaving the site will pass over a weighbridge. change-house. stores. Mobile equipment workshop Ventilation fan and vent buildings Access and Plant Roads.5. Water recovered from the tailings dam gravitates to the return water dam. The main access road to the mine site from the existing tarred public road will be sealed as far as the main gatehouse. 18. return water dam.3 Process Water Circuit and Potable Water Supply Thickener overflow is returned to process water tanks and is re-circulated to the various plant sections thus maintaining a relatively closed plant water circuit. 18. The property will be fully fenced with access via a single security point with traffic boom controls. canteen. Fencing and Security • • • Raised roads are included to reduce problems with drifting snow and flooding during the spring melt. DMS building (incorporating the central control room. A forecast potable water demand of 550 m3/day is estimated. Potable water will be supplied from a well field close to the plant site and this can also be used as process water make up until sufficient water is available from underground.5. crushing and screening buildings.doc .2 Heating and Ventilation Process and service building will be heated from a small diesel fired boiler facility with hot water or steam reticulated around the site to the surface buildings. The main heating duty requirement is for underground air and this will be by electric elements in the inlet to the ventilation fans. A gatehouse will be provided. On-site roads including the roads to remote facilities such as tailings dam. which acts as the main process water storage facility and from there water is pumped back to the plant as required. medical facilities.SRK Consulting Voskhod FS Page 114 18. etc.4 Service Buildings In addition to the surface process buildings including the ore receipt. Process make up water will be supplied predominantly from underground. plant workshop and laboratory) and product storage and waste load out buildings the following service buildings and facilities are included • • • MCCs HT and plant substations Central services building incorporating administration. boreholes will be graded and unsealed. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.
This can therefore be commenced in mid 2006. It is expected that only minimal changes will be requested resulting from the project approval procedure. which is dedicated for this duty. which is a standard 500ton installation.SRK Consulting Voskhod FS Page 115 18. it has been P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. However significant investigations have been undertaken and the following key issues are identified • There is a requirement for local technical project approval which will commence in earnest with the results of this study Locally approved design standards and specifications are required for gaining approval to construct the plant Climatic constraints on site restricting outside construction during certain periods of the year Availability of locally supplied equipment and services • • • 18. 18. Water for fire fighting purposes is supplied by 1.1 General It is understood that the information included in this feasibility study report is in sufficient detail to apply for project approval following detailed review by an authorised Design Institute either in Kazakhstan or the FSU.5.doc . in order to facilitate project design approval in Kazakhstan.5 Other Services A central fire fighting facility has been included designed for fire fighting in low temperature conditions. The diesel supplier will supply and install the required underground facility. with approval expected to take 6 – 8 months. with the capital cost being amortised into the price charged for the fuel. Only the basic engineering including the process and basic engineering design and equipment specifications would be undertaken by an international engineering contracting company and.6 PLANT AND INFRASTRUCTURE EXECUTION PHILOSOPHY The final project execution philosophy is still to be fully developed. The facilities as designed would typically satisfy fire insurance company stipulations. An underground storage facility has been included to cater for three months diesel usage of both the mine and plant.6. The plant will be serviced by telephone land-lines and will have an internal switchboard with extensions in all offices and workshops.500 m3 of water in the plant return water dam below the forecast icing level. Technical project approval is required before site construction can commence although basic and some detailed engineering can be undertaken concurrently. some of which is required for the approval process. This comprises an underground fire water ring main supplied by dual electric and diesel operated fire protection pumps located in a weather protected building. Shortwave walkie-talkies will connect all key operating and maintenance personnel and offices to a central hub.
fabrication and erection including buildings and finishes. FIOM3. Other equipment such as instruments and electrical equipment are available through agents in Kazakhstan or directly from European or South African suppliers. Fabrication facilities for steelwork and platework are available near to site. Structural steel. plate work.SRK Consulting Voskhod FS Page 116 assumed that detailed discipline design will be undertaken by local Kazakhstan subcontractors including engineering companies and where appropriate design institutes. Only key process and service equipment would be typically imported from Europe or South Africa. piping and insulation materials are readily available in Kazakhstan and would be purchased there.Eng.doc . 19 19. Alwyn Annels. C. conveyor structures and gantries Platework supply. fabrication and erection Instrument and electrical supply and installation Piping supply. although it may be possible to procure from a more local source once the detailed design and specifications are finalised and also subject to commercial acceptability.1 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES Mineral Resources The Qualified Person with overall responsibility for reporting of Mineral Resources is Dr. fabrication and erection Insulation and painting Construction management would be controlled by a Site Manager appointed by Oriel and supported by a qualified Construction Team.1. which is schedule for the first quarter 2008. who is a Principal Engineer employed with SRK. The plant would typically take 12 to13 months to design and construct with the overall project schedule governed to a major extent by project approval and the climatic window in the site area. No items of equipment have been identified with critically long delivery periods. It is anticipated that site construction can commence in May 2007. The construction and commissioning phase of the project is estimated to take nine months from site access to completion of commissioning and start of ramp up to full production. Dr. Annels P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Sub-contracts would therefore be awarded in Kazakhstan for:Earthworks and roads Civils and building work Mechanical erection Structural steel supply.
MIMM. The tonnage and grade above this threshold is listed later in Table 19. the tonnages are accumulated only between levels and also the associated grade.doc .Eng (Mining).3 Grade-Tonnage Curves The grade-tonnage curve is a cumulative grade-tonnage curve and is a useful way of displaying the results of block modelling in that it shows the tonnage and grade above a series of grade thresholds. in this case the spacing being 20m above and below the 1180m level pierce point of the orebody by the decline.1. but a significant proportion is below the breakeven threshold of 20%.5 M tonnes at a grade of 37. Figure 19. Figure 19. Michael Beare is a mining engineer with 13 years experience in the mining industry and has been involved in the reporting of Mineral Reserves on various properties in Europe and Africa during the past two years 19. C.1 is the plot for Voskhod which shows an interesting grade distribution relating to the three categories of mineralization recognized with breaks at 20 and 40% Cr2O3.Eng.1. who is an employee of SRK.2 Global Resources The global resource within the 3D resource envelope totals 27.SRK Consulting Voskhod FS Page 117 is a mining geologist with over 39 years experience in the geology and estimation of mineral resources and has been responsible for the reporting of Mineral Resources on various properties internationally during the past 10 years.1 Grade –Tonnage Curve for Cr2O3 Grade Tonnage Curve 70 60 50 G rade 40 30 20 10 0 0 10 20 30 40 50 60 30000000 25000000 Tonnes Grade Tonnes 20000000 15000000 10000000 5000000 0 Grade Threshold Another way of representing the global results of the modelling exercise is the production of grade tonnage curves subdivided by mine level and sublevel.1 19. The Qualified Person with overall responsibility for this report and for reporting of Mineral Reserves is Mr Michael Beare.6% Cr2O3. B. These breaks are also reflected in the tonnage with very few blocks and hence little incremental tonnage in the range 20-40%. This P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. In this case.
doc . Metallurgy and Petroleum CIM standards on Mineral Resources and Reserves (CIM Standards) and the guidelines of NI 43-101. SRK has classified the Mineral Resource following the definitions and guidelines of the CIM Standards. quality of the data provided. geological and grade continuity and drill hole spacing/depth has been used to derive contiguous zones in which Mineral Resources have been defined and classified.000 20.000 10. This difference relates to core recovery and quality and also sampling techniques employed. Uncertainties exist due to the postulated presence of structural dislocations which include both normal and tear faults of differing ages. • • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.000 900 920 940 960 980 1000 1020 1040 1060 1080 1100 1120 1140 1160 1180 1200 1220 1240 1260 1280 1300 3000000 2500000 2000000 1500000 1000000 500000 0 Grade Tonnes Tonnes Level 19.000 0.000 40. • The database is of variable quality containing both Oriel and Pre-Oriel data. semi-variogram parameters (sill and ranges).SRK Consulting Voskhod FS Page 118 diagram (Figure 20.2) shows a drop in grade upwards to 1120m level and then a further drop towards the 1260m level. Rapid fluctuations in thickness and in material type exist so that correlation of individual zones between holes is difficult. In attempting to classify the resources at Voskhod in accordance with the NI 43-101 guidelines. hades and throws/offsets of these faults are not known.2 Grade-tonnage Curves by Sublevel Grade Tonnage curve according to Levels Cr2O3 Grade (>20%) 60.000 30. These are summarized below. which has been classified following the definitions and guidelines of the Canadian Institute of Mining. Figure 19.000 50.1. there are many factors which have been taken into account.4 Mineral Resource Statement A Mineral Resource statement for the Voskhod project has been produced by SRK for the May 2006 Feasibility Study. The exact locations. data density. Peak resource availability lies between 1000 and 1120m levels. A combination of the quality of estimation.
During the interpolation of grades into the block model many blocks were not informed at the first pass and it was necessary to expand the search radii to achieve a completely filled model. and their inclinations and throws. Conversion to Measured status is not considered justified until underground access to the orebody is achieved allowing short-hole stope definition drilling and also bulk sampling. also requires that there are no uncertainties in relation to physical continuity of the orebody and quality of the data.SRK Consulting Voskhod FS Page 119 • Omni-directional variograms possess ranges between 60 and 100m and there are indications of composite structures with shorter ranges of less than 20m. however. Resources within the EBFZ and the south east extension (SEX) are demonstrated to exist but difficult to model due to incomplete intersections (fault cut-outs). which specifies a drill hole spacing which explains two thirds of the data variability (66% of the sill value or data variance). though locally some infill lines have been introduced by SRK. This. given an appropriate cut-off grade. it is considered that an Indicated Mineral Resource status can be assigned with confidence to Domains 1 to 4 and that Domain 0 be classified as Inferred until more drilling is completed in these areas.doc . Following the 2006 drilling programme. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. socio economic. marketing or political factors that could materially affect the Mineral Resources and Mineral Reserves stated in this report. The Voskhod deposit has been drilled and sampled using appropriate methods and at sufficient spacing to support the estimation of Indicated and Inferred Mineral Resources in accordance with the CIM Code. • • • Taking into account the above and also the fact that the orebody is drilled at a fairly uniform spacing. SRK has conducted a significant amount of detailed technical work and based upon this opines that it is unlikely that there are any environmental. The application of the “Two-Thirds” rule. It is considered by SRK that. Others will be completed during the 2006 programme. taxation. all the Mineral Resource could be potentially economic to underground mining methods. To some extent this was a product of the recognition of structural domains and the need to model each separately using only data from within that domain. requires a spacing of close to 25m in all directions in order to achieve Measured status. some areas of the southern portion of the orebody will be very close to Measured status especially as this area will be dominated by new holes drilled by Oriel. This is not likely in the near future. In the course of preparation of the Voskhod Feasibility Study. with the exception of the EBFZ and SEX. The current drill spacing is approximately at 25m centres along lines 50m apart. inadequate intersection coverage and lack of knowledge as to the location of individual faults of which there are believed to be several. permitting.
76 46.47 13. The statement in Table 19.1.1 presents a statement of the Mineral Resources for Voskhod. 19. Voskhod Resource Tonnes Estimation Cr2O3 % Fe2O3 % SiO2 % category (million) Methodology Indicated 19. In the detailed 3D model generated by SRK. The Voskhod reserves are summarised below.SRK Consulting Voskhod FS Page 120 Table 19.6 Probable Reserve Mt 18.3 %Cr2o3 40.05 12.29 12.57 41.1 are inclusive of the Mineral Reserves in Table 19.53 2D Indicated 19. The resources were generated by applying a strict cut-off grade of 20 % Cr2O3 to block grades within a resource envelope defined by a 1% Cr2O3 assay cut-off grade. The Mineral Reserves have been classified in accordance with the CIM code and adhering to the guidelines set out by NI 43-101.2 Probable Mineral Reserves Mineable Resource Mt 17. SRK has not included any inferred material in either the life of mine plan.12 8.1 has been estimated using drilling information collected up to October 2005 and is effective as of 24th May 2006. The Mineral Resources in Table 19.49 3D *Inferred 1.2.65 2D *Inferred Resources were only determined using 2D methods as there is insufficient data to support a 3D model for these resources. In this Summary Technical Report the economic evaluations are based solely upon the Reserves in Table 19.doc .2 12.2 has been estimated using drilling information collected up to November 2005 and is effective 24th May 2006.2 of this report. The SRK LoM plan forms the basis of the Feasibility Study and provides the economic basis for the generation of the Reserve statement. Table 19.5 %Cr2o3 48.5 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.7 9. The statement in Table 19.7 %Cr2o3 46.51 48. They thus do not take into account any internal dilution represented by blocks assigned grades of less than 20% Cr2O3.1 Classified Mineral Resource Statement.3 Indicated Mineral Resource Mt 19.5 Mineral Reserves SRK has estimated Reserves in accordance with the CIM Code by constructing an appropriately detailed Life of Mine (LoM) plan.3 Mtpa. Table 19. The current Mineral Reserves are sufficient for 14 years of production at 1. dilution and recovery have been applied to the Indicated Resources in order to estimate Probable Reserves.
The capacity assessment of the slimes dam should be conducted at a production rate of approximately 148. Volumetric calculations will be based on a hydraulically placed in situ dry density of the slimes of 1. Gwent. Registered in England and Wales Reg. The geotechnical parameters for the slimes and coarse tailings materials will be based on parameters previously used for chromite slimes materials of a similar nature. 21 Gold Tops.000 dry tonnes per annum at a slurry density of between 1. The disposal method proposed is the spigot method of deposition.55 t/m3.5 m/yr. Newport. Coarse tailings material (100 mm/+10 mm and -10 mm/+1 mm fractions) will be trucked to the disposal facility. 1575403 . Slimes (-1 mm fraction) will be hydraulically deposited on the slimes dam. Robertson and Kirsten (UK) Ltd.1. The life of the facilities will be for a period of 16 years.1 20.3 t/m3 The rate of rise of the slimes dam will be limited to 1.000 dry tonnes per annum at a moisture content of 4%. NP9 4PG Australia North America Southern Africa South America United Kingdom Steffen.1 OTHER RELEVANT DATA AND INFORMATION TAILINGS STORAGE Design Criteria The design criteria agreed with the project team and upon which the feasibility design is based are: The design of the tailings storage facilities should be for the slimes dam sited on Site 4 which was selected as the most preferred site during the SRK Preliminary Assessment Study conducted in July 2005. No. Tailings deposition will take place over a period of 14 years. The slimes dam will be constructed by means of conventional disposal methods above the starter wall. These parameters should be confirmed during the detailed design stage.20 20. The upstream method of wall raising will be employed above the starter wall. The dam will be constructed with an average outer slope of 1V:3H. The footprint of the slimes dams will be lined with a single geomembrane liner Offices in: Registered Address: system. The capacity assessment of the coarse tailings area should be conducted at a production rate of approximately 216.22 and 1.
During the Phase 1 period. A twin compartment silt trap structure will be installed upstream of the return water dam (RWD) to trap suspended solids.55 t/m3. and the high rate of rise.2 Capacity Assessment The impoundment design is dependent on the determination of an optimum layout which satisfies the capacity requirements. The new complex will be fenced off and an access gate will be provided. The system will comprise single intermediate intakes to facilitate pool control during the early stages of dam development. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. When the silt in the operating compartment reaches the level of the underside of the concrete foundation slab to the penstock outfall chamber. Bulk density of the coarse tailings material = 1. Maximum allowable rate of rise for slimes material = 1. The RWD will be lined with a single geomembrane liner system.3 t/m3.The slimes delivery system will comprise HDPE delivery pipes and ring main with deposition points.1.4 t/m3.doc . The silt in the silted compartment will then be allowed to dry out and then removed by front end loader and trucks via an access ramp provided. Year 1 to 14 production for coarse tailings material = 216 000 tpa @ 4% moisture content. The capacity assessment of the new slimes disposal facility was based on the following: Life of facility = 16 years (tailings deposition over 14 years). The flow from the penstock outfall pipe via a dissipater structure is directed to either one or the other compartment by means of sluice gates. The silt trap will be designed with twin compartments in order to facilitate alternate cleaning and operation of each compartment. Silt removed from the silt trap will be disposed off on top of the slimes dam. Year 1 to 14 production rate for slimes = 147 000 tpa @ slurry SG of between 1.22 and 1. In situ hydraulically deposited dry density = 1.5 m/yr. it is anticipated that the dry density of the slimes will be lower than 1. The final intake will comprise a double inlet structure. This is addressed through a capacity assessment which is optimised to reduce capital cost and provide adequate storage.3 t/m3 because of the proximity of the pool. The RWD will accommodate storm water run-off from the plant area as well as some water from the underground at a rate of approximately 2 500 m3/day. The decant system will be a vertical penstock structure and outfall pipe. the sluice gates will be closed and the gates to the adjacent clean compartment opened. 20.
Rate of rise at top of starter wall = 1.4 m/yr. Rate of rise at closure = 1.27 m/yr. The outer slope geometry of the slimes dam above the starter wall was designed to have 9 m wide step-ins at 7 m vertical intervals. The slope between step-ins is 1:2.5 with an overall resulting slope of just over 1:3 Height of facility at closure = 25 m. Top area at closure = 9.6 ha. The slimes capacity for Phase 1 will be exhausted in approximately 24 months.
Geochemical Classification of Slimes Material Evaluation of the geochemical characteristics of the slimes is currently ongoing. Geochemical tests were run on a number of core samples and results are available, but these cores are not considered fully representative and were taken from old cores. It is known from previous work that the ore can contain trace amounts of sulphides, therefore there could be some potential to generate acid. However, as the net acid generating potential also depends on the buffering capacity of the environment, currently, it is not certain that the tailings will be acid generating. A test program is currently underway to assess the geochemical properties of tailings. The test program involves static analysis and kinetic testing. For the purposes of this feasibility study it has been assumed that the tailings will not be totally benign. Acid or other toxins could be generated at some point in the future and environmental legislation is unclear. SRK therefore recommends that a liner system be included in the design and has budgeted for such. However, should the ongoing geochemical test-work indicate that the tailings will not be acid generating, a liner may not be necessary and could provide capital cost savings at the detailed design stage.
Liner Design A single geomembrane liner system will be installed on the slimes dam footprint. The liner system will comprise a 2 mm thick primary geomembrane and a geofabric bedding layer. The RWD will also be lined with a 2 mm thick single geomembrane liner system similar to that of the slimes dam. The coarse tailings storage area will however be lined with a single geomembrane.
Frost Heave The silty nature of the slimes makes it susceptible for frost heave during the winter months. Silts exhibit a structure in which frost heave is likely to take place due to the variation in pore size from larger voids in which individual crystals may start to grow to voids of such small dimensions that the associated heaving pressure is very high. It is therefore important to ensure that the under-drainage system is always in a good working condition which will facilitate the depression of the phreatic surface. The supernatant pool on top of the slimes dam must also be kept as small as possible.
Placement of Coarse tailings The coarse tailings material will be trucked to the facility. The coarse tailings will be placed on the outside of the slimes dam in phases, depending on the rate of rise of the slimes dam. During the first phase, the tailings material will be placed along the eastern flank of the slimes dam up to the top of the starter wall and along the far west of the site. It will take the
500 m² 17. the tailings will be placed closer to the slimes dam.000 m² 240. By that time.500 m³/month 1 450 mm Dry Slimes Volume Slurry Density SG (Dry Solids) Slurry Water pumped to the Slimes Dam Area of the Slimes Dam Approximate Area of Pool Approximate Area of Wet Beach Approximate Area of Dry Beach Evapotranspiration Factor from Wet Beach Evapotranspiration Factor from Dry Beach Plant Area Plant Losses Number of Penstocks required Penstock outlet pipe diameter (Primary) P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.1. the slimes would have raised to above the top of the starter wall.tailings less than two years to reach the top of the starter wall.000 m² 0. As part of the second and third phases.doc .22 t/m³ 2.7 Water Balance The management of water at the slimes dam complex forms an important aspect of the design of the facility.8 0. The placement of coarse tailings will also be a phased approach (placed in three phases) with the placement of the coarse tailings always being dependant on the rate of rise of the slimes.000 m² 64.4 502.833 t/month 1. Table 20.000 m² 16. The input information to the monthly water balance is in Table 20.6 t/m³ 30. 20. The coarse tailings will eventually totally enclose the slimes dam facility.1.1 Monthly Tailings Dam Water Balance 12. The principals of the management of water are to divert clean storm water run-off away from the slimes dam with a series of ditches & berms and to contain and reuse the dirty water emanating from the slimes dam complex and plant area. As the slimes dam is raised. the tailings will initially be placed along the far west and away from the slimes dam as the slimes dam level will be relatively low at that time.961 m³/month 320. The tailings will therefore “follow” the slimes.
26m³/s Depth of flow in Penstock outlet pipe Number of days to drain max expected storm 1. It is impractical to evaporate this (one would need a dam in excess of 1km by 1km possibly 3.000 m³/month 36.000 m³/month 1.000 m3/month 110.000 m3/mth and the water maximum requirement for processing could reach only 25 000m3/mth.500 m³/month 20.2.000 m³/month Component Storm Runoff from slimes dam Storm Rainfall on Return Water Dam Storm Run-off from plant area Operating Volume Surge storage for ground water Total RWD Storage (minimum) The groundwater was originally going to be stored in the RWD at 2500 m3/day it means that the groundwater inflow into the RWD would have been 75.doc .2 Storage Requirements for the RWD Required Storage (m3) 20.Velocity in Penstock outlet pipe at Flow = 0.5km by 3.5km). While geochemical work is still ongoing it is P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.8 Sizing of Return Water Dam The required capacity of the return water facility for the proposed new slimes dam has been determined based on the fact that it is required to contain the 1:50 year runoff from the slimes dam surface area. Table 20. The return water dam must also contain run-off water from the plant area as well as some of the water reporting from underground.500 m³/month 32. The return water dam embankment will be constructed with selected material excavated from the slimes dam and return water dam basins. In practical terms some groundwater will therefore need to be released.83 m/s 65% 2 days 20. The minimum required storage for the return water dam has been determined and is presented in Table 20. This means the mine will have an excess of about 50 000 m3/mth. as well as the 1:50 year rainfall on the return water dam surface area and the intermediate catchment.1.
SRK has therefore allowed a cost in the capital expenditure schedule to provide a facility for treatment of the excess water from the mine throughout its life. Results from the seepage assessment indicate that the rate of leachate flow into the foundation is 2. Peak design capacity for the canal is 9. Reticulation of slimes around the perimeter of the slimes dam will be achieved by means of HDPE spigot pipes. The required capacity of the return water facility for the proposed new slimes dam has been determined based on the fact that it is required to contain the 1:50 year runoff from the slimes dam surface area. thereby allowing deposition to occur from any point on the crest. The general storm water drainage is from west to east across the site. 20. The size of the canal is 1. Clean storm water upstream of the proposed slimes dam complex will be diverted around the complex to ensure that it is not impacted in any way. The slimes dam and tailings area will be constructed in three phases. as well as the 1:50 year rainfall on the RWD surface area and the intermediate catchment.000 m3. The stability analyses confirm that the overall slope of just over 1:3 results in a relatively low stability factor of safety with very conservative parameters and adverse drainage conditions during the long term.2 m depth with side slopes of 1:2. The coarse tailings will be placed on the outside of the slimes dam in phases. The stability assessment also confirms that the stability of the overall facility is governed by the stability of the coarse tailings material. The first phase capacity will be exhausted in two years. A canal was sized to take runoff from the plant to the RWD. The RWD has a capacity of 110.1.9 Final Points The conventional spigot method of deposition will be employed on the slimes dam.2 m bottom width. When the facility is lined the rate P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The factors of safety are acceptable and conform to industry accepted norms.uncertain at this point whether or not the water from underground will need more than skimming of oil and settling of solids to be sufficient for Kazakh legislatory requirements. depending on the rate of rise of the slimes dam. These spigot pipes will be laid as a complete ring main around the impoundment. extending from the two delivery stations. The coarse tailings material will be trucked to the facility.4e-08 m3/s when the facility is not lined. The RWD must also contain run-off water from the plant area as well as some of the water reporting from underground. The RWD embankment will be constructed with selected material excavated from the slimes dam and RWD basins. 1.2 m³/s. Two diversion canals are planned to ensure that clean storm water is diverted past the facility.doc .
000 US$110.2 GEOTECHNICAL STUDIES SRK have undertaken a geotechnical study of the Voskhod deposit to define the mining geotechnical design parameters for the feasibility study.5e-10 m3/s.doc .000 US$105.372 20. The capital costs to develop the facility is : Phase 1 Phase 2 Phase 3 The operating cost for the facility is : Slimes dam Trucking and spreading of coarse The closure costs for the facility are : Closure design Closure and sealing of penstocks Shaping of the dam top surface Placement of topsoil Dismantling and removal of pipelines US$45. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Full details of the geotechnical study are presented in the May 2006 SRK Feasibility Study report from which this summary has been extracted.613.000 US$800. i. Because the deposit is blind. In both cases.e.41/tonne US$3. the study has comprised the analysis of data from a programme of borehole core drilling undertaken in 2005 together with a review of geotechnical information presented in a previous Russian feasibility study (Geoincentre – 2004) and anecdotal information regarding geotechnical conditions at adjacent underground operations. A summary of the more important geotechnical issues is presented below. Consequently all of the recommended geotechnical design criteria presented herein have been developed using the rock mass classification systems of Laubscher (iMRMR) and Barton (Q).372 US$1.91/tonne US$0. there is no surface expression ore exposure of the orebody and surrounding rocks.000 US$0.614 US$1.122.drops to 1. the presence of the toe drain is a big factor in reducing downward seepage.000 US$90.122.
2 Mining Method A mining method selection study was undertaken using a modified version of the Nicholas (1981) method.2.2. unweathered dunite. A summary of the geotechnical characteristics of each zone is tabulated below. Zone of unweathered rock located 30 – 60 m above the ore zone hangingwall. Massive weak chromite ore Friable weak ore. From classical draw theory and experience of sub-level caving operations in similar ground conditions elsewhere in the world a sub-level interval of 20m vertical and 14m horizontal was chosen for feasibility level design.doc .39 Very Poor to Poor Weathered Zone WZ Far Hangingwall Intermediate Hangingwall Mining Hangingwall FHW IHW 34 41 20 . Because it was determined that geotechnical characteristics were independent of the lithological descriptions the rock mass has been characterised in terms of its relationship to the orebody. Zone of fractured unweathered rock forming the immediate hangingwall to the upper ore zone and extending 30 m into the hangingwall. Each of these ore types has different geotechnical characteristics but their distribution within the orebody is variable.51 Poor to Fair Ore Zone Massive Chromite Ore Powdery Chromite Ore Subordinate Chromite Ore Footwall MCR PCR SCR FW 38 19 55 41 24 . The orebody itself comprises three types of ore . competent ore Competent.1 Geotechnical Characteristic of the Deposit The characteristics of the deposit have been based on a total of 3. Zone of completely to highly weathered rock extending to a depth of 70-100 m below surface.56 Poor to Fair Poor to Fair MHW 36 21 . 29 19 .24 45 . P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. powdery chromite and subordinate (vein.500m of geotechnical logging. This allowed a deposit wide geotechnical database to be constructed. Zone of moderately weathered to unweathered rock extending to within 60 m of the ore zone hangingwall. Rock Mass Conditions Zone ID Description Mean iRMR Range Description Overburden OB Top 2-3 m of ground below surface weathered to a residual soil. orbicular and disseminated) ore. iRMR reflects the interbedded nature of PCR and MCR Strong.65 25 .48 26 .52 14 .20. The selection study confirmed that the best candidate mining method for the orebody geometry and ground conditions is sub-level caving.massive chromite. 20. Good Because only a small quantity of the boreholes drilled in 2005 was geotechnically logged rock mass rating s were estimated for all the core drilled using a site specific relationship between rock mass rating and core recovery.57 Poor to Fair Very Poor to Poor Fair to Good Poor to Fair occ.
2.doc . Full development of sub-levels will therefore begin on the 1180m level. Because of the limited orebody strike length above the 1180m level the maximum undercut dimensions were insufficient to guarantee the development of the cave. The magnitude of potential groundwater inflow still needs to be investigated. In particular it is considered that the hangingwall ends of the sub-level crosscuts and those crosscuts at the strike limits on each sub-level will fall within a high stress abutment.2. It would only be possible to draw off swell.5 Groundwater The current interpretation of the groundwater model is that the main groundwater storage is in the weathered zone located within 80m of the ground surface. For design purposes and location of surface infrastructure a cave angle of 55° has been chosen surrounded on surface by a 30m wide tension zone. 20.6 Support Requirements Support requirements have been estimated for four different categories of development (sublevel drives and crosscuts in ore.4m long.2.2. main haulage and ramp development in footwall waste. During mining and with the development of the cave it is anticipated that the rock mass will open up and that ground water may begin to migrate downwards along opening joints and the inferred vertical faults and will enter the caved rock mass.4m spacing with a 10cm thickness of fibre reinforced shotcrete. In terms of mining conditions it is possible that groundwater will infiltrate the orebody and may give rise to wet mining conditions. Initial mining on the sub-level will require that only the swell will be mined until the undercut has been opened up to allow full cave to occur. It has been assumed that the cave will propagate to surface. 20. From the deposit wide geotechnical database it has been estimated that this level of support will be required in about 90% of the sub-level development.4 Mining Induced Stresses There is no information currently available on the in-situ state of stress surrounding the orebody. From the 1180m downwards the strike length of the orebody increases and an undercut of sufficient dimensions can be created to induce cave.3 Caveability A caveability assessment was carried out on a level by level basis from the 1280m level to the 940m level using Laubscher’s stability graph. cement grouted rebar rock bolts installed on a 1. sub-level drives in footwall waste. Because of the variability in the angle of dip of the hangingwall mining of some of the sub-levels will begin under an uncaved back. footwall development intersections) using the Q support design chart. These areas will need particular attention with regards stability and support requirements. An allowance has been made for the installation of steel sets or fibre reinforced ribs in about 6% P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.20. Given the information on caveability there is the potential for the development of high mining induced stresses. The swell may be drawn from lower sub-levels. Because of the generally poor ground conditions in the orebody the standard support system for the orebody development will comprise 2. 20mm diameter. 20.
2.7 Mine Access Underground access will be achieved initially by driving an inclined ramp from the base of a box cut excavated to the south east of the orebody.3. the variability and distribution of the various ore types and their behaviour during mining. assessment of mine water requirements. However.1 WATER MANAGEMENT Introduction Water Management studies at Voskhod have included the assessment of the hydrogeology. A stability assessment of the vent shafts has also been undertaken. limited understanding of the groundwater regime and its behaviour as the cave propagates through the hangingwall.doc . A 2006 drilling campaign is underway which will go some way to improve project geotechnical knowledge and fill gaps in the structural and groundwater model. Mine design parameters may only be fully optimised during initial trial mining.3 20. 20. At brows the standard sub-level support will be supplemented by the installation of four 3m long cement grouted threaded rebar bolts with large face plates in a single line across the drawpoint. A specific geotechnical investigation campaign was conducted to determine ground conditions and support requirements along the ramp alignment. optimisation the dewatering of the mine and P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.8 Conclusions The geotechnical study has largely achieved its objectives.2. Once the additional information has been collected it is recommended that a more detailed analysis of the mine design parameters be undertaken to confirm and improve confidence in the work presented herein. In particularly poor ground the bolts will be connected by straps. The main areas of risk associated with the geotechnical work undertaken so far are related to: the current lack of structural data. the support criteria in particular are sufficiently robust and conservative to account for particularly adverse ground conditions and should provide an upper bound economic estimate of mine wide support costs. A geotechnical domain model was constructed to estimate support requirements along the ramp. A similar standard support will be required in the footwall development but the total percentage of development requiring this level of support should be about 60%. 20. although geophysics undertaken along the ramp alignment suggested that the apparent structural features were orientated perpendicular to the ramp. 20.of the sub-level orebody development.
as well as results and observations from the hydrogeological testwork. rising and falling head tests were undertaken in all holes.3. to input hydrogeological information to the conceptual hydrogeological model. with a step test and a constant discharge test also completed on borehole V05_R9. geophysical surveys.3. Geophysical sections reinforced this analysis.3 Hydrogeological Testwork Hydrogeological testwork was undertaken during October 2005 as part of the geotechnical and hydrogeological investigation for the mine ramp. Costs are proposed for this work. to investigate the options for water supply to the mine. Results suggested that the aquifer has low primary permeability in the rock mass with high secondary permeability which is highly controlled by the presence of fracture zones in the rock. The testwork involved the reaming out of existing geotechnical boreholes and then constructing piezometers down the hole. A zone of high permeability was recorded in the north eastern region of the project area. 20. The hydrogeological work to date is considered insufficient to make reasonably confident predictions into water inflows to the ramp and underground operations. and known geological structures along with the plan of the future mine.3. calculation of a site water balance and planning for the mine closure. 20.2 Summary of work completed The following studies were reviewed: Geoinvest Pre-Feasibility Study (2003) SRK PAS Report. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Provision for a small well field capable of providing approximately 4l/s was made. June 2005 AsiaEcolink Background Ecological Investigation (2005) SRK Voskhod Mine Ramp Hydrogeological Investigation October 2005 20. and hence rates of mine dewatering and volumes of water to be treated and discharged to the River Karagaash.doc . In the absence of packer systems. and to create a site water balance. The findings of this study were used to create a conceptual model of the hydrogeological regime.4 Conceptual Model Information from geological and geotechnical logging was collected.workings. indicating potential for siting a groundwater supply to the mine. Conclusions of this were used to estimate probable minewater inflows. establishing a groundwater monitoring programmes. overlaying topography. On top of this a GIS study was completed. The objectives of the study were to assess potential groundwater flows into the ramp workings.
The surplus of water is therefore to be treated and discharges to the River Karagaash.20. a consequence of the mining method of sub level caving is that a degree of subsidence is likely to occur on surface. as well as a contingency supply for the life of mine. an exact figure can only be estimated at this stage. The surface expression of this has been modelled. These will channel runoff water into the return water dam (RWD) to prevent contamination with plant material As the mine develops. Once the mine is developed. Although further hydrogeological work will improve confidence in groundwater inflows to the mine. resulting in the deterioration in water quality. Hydraulic properties used in the calculation were taken from fieldwork and testwork results.5 Water Supply & Mine water management The water requirement for the plant is in the region of 30m3/hour. or the lowering of the water table by dewatering which could result in cessation of spring flow.3. The RWD will be lined also. The tailings will be dispatched to the TMF as coarse and fine grained (slurry) tailings and will dealt with in different ways.3. It is probable that the spring used as the village water supply at Susanovka will be affected by the mine workings. Excess water will be pumped to the RWD where it will be settled and then returned for use at the plant. SRK propose to divert part of the river to prevent the Karagaash rerouting south to pond in the subsidence zone. It is proposed for a wellfield to supply water for this period. The footprint of the TMF is to be lined with a single membrane liner to reduce the risk of contaminant seepage into the groundwater regime. which was determined to be the water supply spring at the Susanovka village 1. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc . Potable and domestic water demand is likely to be in the region of 30m3 /day.5km to the south east. Geochemical and hydrochemical studies are ongoing to further characterise the potential for ARD from waste rock dumps. An allowance has been made for a potable water supply to be piped from the Surface water runoff from rainfall and snowmelt will be managed by a series of drainage ditches around site. it is considered probable that minewater inflows will be substantially greater than the plant requirements. 20. However allowance has been made for this volume to increase up to 35m3/hour if fine grained ore is processed. The results of the calculation concluded that due to the likely high physical and chemical attenuation properties of the geological and hydrogeological systems a low contamination risk was present for the project. A risk assessment was carried out on seepage from the TMF to the nearest receptor. requirements for water are likely to be greater than those expected from dewatering. and is observed to intersect the course of the River Karagaash.6 Tailings management Tailings from the plant are to be disposed of at the tailings management facility (TMF). During construction and early development of the mine however.
As mentioned in the dewatering section.doc . Although it is likely this will be hydraulically connected from surface to the underground mine through series of failure planes. At the time of writing this report (May 2006) it is unclear as to the exact Kazakh legislation for discharge of water to the environment. attenuation properties of the rock suggest that water quality will be of relatively good quality. 20. There is however a low perceived risk of contamination to groundwater. consumption of and discharge out of the mine. the formation of a subsidence lake will be a legacy of the mine on surface.3. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. This assumption requires confirmation on the receipt of results of the ongoing geochemical characterisation work of Voskhod rock samples. A site water balance has been created to assess and monitor water movement around site. and risks have been mitigated and costed. 20. plant and tailings area. SRK have allowed for costs for different degrees of water treatment depending on the level of minewater contamination.3. there are uncertainties to the exact volume of groundwater to be expected flowing into the mine. water supply and mine subsidence have been assessed. The volumes required by the plant are fairly precise. A qualitative assessment of flooding risks was carried out for the mine. These factors also affect the volume of return water from the dam. Monitoring of groundwater elevations and chemistry will be ongoing during the life of the mine and should continue into the closure phase of the project. As mentioned in the water management section. A full spreadsheet model is included in the Appendix.3. The TMF will be remediated and covered with vegetation to prevent soil erosion.8 Mine Closure The main impact on the hydrogeological regime following mine closure will be the rebound of the water table as dewatering pumps are turned off.7 Water balance A site water balance was generated in order to understand the overall water inflow to. Mine water supply is dependant on further hydrogeological work to confirm initial estimates The risk from contamination seepages from Tailings is deemed to be relatively low Mining induced subsidence will determine the requirement for a diversion of the River Karagaash to prevent flow into the mine from surface. and the discharge volumes and contamination limits determined by Kazakh legislation.20. plant and tailings disposal area. depending on the quality and grain size of the ore.9 Conclusions Water management issues including mine dewatering.
doc . Cover drilling will be required during ramp development to ensure that no aquifers are intercepted Provision for drainage and collection of water to be pumped to surface for water supply. with a mandate to investigate destinations in other regions of China. SRK has added provisions for water supply and water treatment. 20. current market conditions and a view on the ever-changing transportation situation world-wide. Chelyabinsk (Russia) and to consider spot sales.4 20. The principal destinations indicated were Tikhvin. the Baltic Sea and the western Pacific coast. Adjustments were applied to account for logistics P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Central and North-Western China. as well as the effect the mine will have on the village of Susanovka.3. SRK has assumed over the life of mine a flat US$145/t (at the Sarysai rail head) for all of the chromite products from Voskhod.10 Recommendations The following recommendations are proposed by SRK: Further hydrogeological testwork during water well drilling and ramp development is required to verify predicted inflows Pressure grouting and other measures to control water ingress must be available during ramp construction. In the case of China. commentary and recommendations concerning the feasibility of the successful transportation of indicated volumes. The scope of the study covered current costs for transportation of ore from Voskhod to the specified destinations background information. China’s eastern seaboard. Sweden.4. 20. near St Petersburg in Russia and Eastern. South Africa. consideration extended to overland transportation from Voskhod and to transportation by sea into China via the eastern seaboard. subject to information provided by the client.SRK is uncertain about the long term mine water treatment. This required consideration of a number of port regions including the Black Sea.1 LOGISTICAL STUDIES Introduction As part of the Voskhod Feasibility Study Ahlers BV were commissioned to provide an independent survey of the logistics of transporting 800-900 000 tpa of chromite products from Voskhod to a number of potential destinations worldwide.
92 and $17. Escalation to a higher level at the earliest opportunity by all involved parties is strongly recommended concerning these routes and routes to other chosen ports. Black Sea ports proved more economical than Baltic ports. For reference purposes only. plus ongoing maintenance costs as the equipment ages. depending on destination. 20. to ensure that most advantageous terms are secured.management. which is also higher than State rolling stock one-way costs due to the return leg of the empty wagons to Voskhod. SRK was provided with a range of potential markets by Oriel which were used to verify product transport volumes to the various destinations. all ore must move during the first part of its journey by rail. and the most economical option is the use of State rolling stock on a one-way basis.31 to transportation. 20.4 China Transportation options to West and Middle China were compared via overland and sea routes. The purchase of new rolling stock option shows a high capital outlay of $42. The chromite price used in this study assumes that the average US$46/t cost for transport from Sarysai to the final destination is paid by the end user. bagging.3 CIS Transportation costs to Tikhvin at $42. The cost from Voskhod overland to Karamay/Taihang in Western China is $46.75 per tonne have been the subject of preliminary discussions with relevant Rail Authorities and are the lowest base tariff costs at present time.000 per wagon. Rail rates for privately owned stock is lower than for State transportation for the outbound leg but there is a cost for the return journey.93 per ton and Cheliabinsk at $19. The option to find a return load is shown to be inadvisable.96 and $68. Therefore this is an additional cost (at best over $30 million in capital cost.doc .4. The option to contract ore transportation with State enterprises is therefore recommended. bringing the cost for the round trip to a slightly higher cost for all destinations than for State rolling stock. product loss and moisture.23 per ton. This currently holds few apparent operational risks if managed carefully and rolling stock bookings are made well in advance.4.2 Rail transportation Concerning rail movement within the Commonwealth of Independent States (CIS). 20. plus maintenance plus additional operational costs) and this option would therefore only be beneficial if the risk of rolling stock shortage were to be untenable. and no other route is competitive.35 respectively. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. the former Soviet Union. costs per tonne from Voskhod to Shanghai overland and by sea via Tuapse (Black Sea) are $86.4. rail operator’s commission. The leasing alternative adds direct costs of between $11.
For comparison purposes. Careful proactive management by the rail/freight operator’s agent at the Alashankoy border crossing will be essential as the Kazakh/Chinese rail gauge change currently requires manual reloading of rail wagons and little warehousing cover is available for this activity.83 overland by rail via Alashankoy and $100.75 42. but the long–term economies may be substantial and should be weighed against any such costs.93 46. It must be emphasised that there is no jeopardy to the routing of substantial volumes of ore into China. the transit time is known to be considerably longer by sea. Summary of Product Destinations Product shipped annually ktpa 100 340 200 70 186 896 Tariff transport cost US$/t 19. Should the volumes increase substantially in excess of those currently indicated. this border facility may be unable to handle high volumes using the present method of trans-loading and a different means of transhipment and/or transportation or less convenient alternative routes may have to share the volume. an important border crossing for rail transportation between the two countries. As indicated above. using Jinzhong in Central China as an example. as discussed in the report in detail. Careful attention must be given to this route as there is a capacity constraint that will challenge the indicated volumes to China.35 Destination Country Route Notes Chelyabinsk Tikvin Tai Hang / Karamai Uddevala Shanghai Russia North via rail Russia North via rail China (West) East via rail Sweden Rail to Baltic port then shipped China (East) Rail to Black Sea port then shipped Total product sales #1 #2 #3 #4 #5 P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. In addition to the need for an ecological permit at Tuapse discussed below. The general approach has been to ensure that the chromite product is marketed broadly across a number of markets to reduce risk and to avoid overloading transport infrastructure. limited infrastructure changes may be necessary.65 68.doc . it is simply a logistical assessment yet to be determined of the most appropriate methodology and routing. A visit was made to inspect the Dostik/Alashankoy border between Kazakhstan and China.23 54.35 via Black Sea and Shanghai. The route to Vladivostok is expensive at $85 per tonne. Product Destinations SRK has compiled the following summary table using the costs provided by Ahlers and notes from discussions with Oriel Resources regarding product offtakers. but as yet by an undetermined time. the costs per tonne from Voskhod are $81.
The cost equates to US 2.10/t per tonne of fine concentrate product. The cost of bagging equates to US$5.53/t of product moved.Rail Operators Commission SRK has applied 1% to transport costs to allow for the Rail Operators Commission. SRK estimates that the hot and dry summer months will sufficiently dry the material out whilst stock-piled at the rail siding. Losses are envisaged due to the following: • • • Rail siding spillage Cracks in rail cars Port losses Moisture penalty A moisture penalty has been applied to both road and rail transport equivalent to 4% moisture content which is required to be transported ‘free’. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. The 4% is applied to each tonne of product year round for trucking. Logistics Management SRK considers that logistics company would be appointed to manage the transport of chromite products from Voskhod at a cost of 5% of the total freight cost (based on above tariffs) which equates to US$2.5% (from all sources) for the purposes of this study. ease transhipment between rail and shipping and to comply with port rules which stipulate that fine granular products must be bagged The polyethylene bags would have a 1t capacity and be loaded in the process plant for fine concentrate only. but to only the 6 winter months for rail transportation. This cost will not be incurred by the chip and lump products.2/t of product for the 6 winter months of the year. Transportation losses SRK has made a transportation loss allowance of 0.doc . Bagging Experience from Donskoy operations and advice from Ahlers indicates that all fines products will need to be appropriately bagged.5% loss of revenue. Lump and chip products would be handled as loose products. This is necessary in order to void loss of product in transit that could breach environmental laws.51/t of product moved. This is a 0. This equates to US$0.
Regelation SRK has not provided for any additional cost to be incurred as a result of measures to prevent freezing of the chromite products. SRK has allowed for a CAT 14H grader (fitted with snow-plough equipment). Road Transport 30 tonne road trucks are envisaged to haul the Voskhod Chromite products 14kms along an existing road from the mine and plant to the new Sarysai rail load-out terminal. Fine concentrate will be placed in 1t bags which are a manageable size. provided that they are packed appropriately into the rail wagons. However. Material would be maintained in heated bins on-site to prevent regelation. In the event of the product freezing the bags will still be able to be handled. throughout the project life to ensure the roads stay usable throughout the year. A weighbridge on the site exit road will record all product leaving the site and will be used to calculate the contractor payments. This new line allows chromite P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. 24 hours per day with stock-piling to occur at the rail-head and only emergency stock-piling areas provided for on-site. and with 1-2 tonne bags by grab for the concentrate material. Road trucks would be loaded at the plant with loose bulk product via bins for lump and chip. a number of measures are anticipated that will mitigate any anticipated problems: Lump and chip products will be essentially free draining and are unlikely to carry sufficient moisture levels to allow freezing. SRK understands that a tarmac surface will not be required in the short term. The transportation costs allow for the products to be rehandled between carriers. Rail Transport Chromite products will be loaded into wagon trains at the Sarysai station by two CAT 988 loaders. Sarysai station was built in 2005 on a new 400km section of line that links Khromtau to an existing rail line going east to China. Product is to be trucked all year round. The existing public road that borders the east of the project requires a substantial upgrade to provide a reliable year round haulage surface that will be suitable for haulage trucks and general public transport.doc . Once at the rail load-out the trucks ‘paddock dump’ alongside the load-out tracks and the front end loaders will maintain these stock-piles in preparation for loading wagons. In these rates are costs for cleaning the rail wagons manually dealing with frozen cargoes. SRK has obtained a detailed quotation from a local contractor to upgrade the existing road to a gravel specification.
A cost has been provided by a local contractor to upgrade the Sarysai facilities to include new sidings and facilities for loading wagons. The facility would pass into the hands of the local rail authority which would be responsible for maintaining the facility in the long term. limited additional infrastructure may be called for. Rolling stock shortfall risks may be mitigated by forward contract planning. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc . Russia or elsewhere in Kazakhstan. subject to further study with the relevant parties. Port congestion risks within the region may be mitigated by forward contract planning and. no major operational transportation issues are foreseen at this time concerning the transportation of ore to the principal specified destinations. which also has the advantage of stabilising and locking-in discounted tariffs.products to travel either east to west from Sarysai to China. although to maximise the throughput into China through the economic land routes. as a last resort because of additional costs. by alternative routing options. Conclusion In general.
Investigations will continue into possibilities concerning shipments through Iranian ports. the recommended port is Liepaja in Latvia. Customs difficulties due to perceived or real losses and clean-up issues. experience. bad weather conditions and an excess of bulk traffic.35 per ton and $62. Ore to Sweden is costed at $54. As improvements and expansion continues to occur within the region. economy of location due to Russia’s proximity as a neighbour to Kazakhstan. with Tuapse as the preferred port at present. Azov & Rostov-on-Don) are also able to handle bulks. Lithuania are also capable of handling Voskhod ore. The situation will be carefully monitored.85 respectively. Latvia and Klaipeda. Baltic ports currently appear to offer operational advantages compared to Black Sea ports. where ferrochrome (and similar ferroalloys) is currently handled.65 to Uddevala. Several other ports in Russia on the Azov Sea of the Black Sea (Temryuk.Black Sea & Baltic Ports Favoured Black Sea ports are Tuapse and Novorossiysk due to their size.doc . Ore handling An issue that arose a number of times during the study concerned the handling of small fraction and fines. and consideration given to handling at ports and trans-loading locations to physical losses. Russia. Conclusion P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. central and western European destinations. Costs from Voskhod via Tuapse to Shanghai (China) and Richards Bay (South Africa) are $68. Black Sea ports have suffered recently from poor resources. this region should be considered only for European markets/spot sales. Consideration of the use of containers for fines and small fraction such as big bags is recommended. the position may improve. 3 Ukrainian ports (Ilichevsk. although this port is less favoured due to congestion. due to lower cost and congestion at Novo. but the costs are higher for shipments to South Africa and China compared to Black Sea routes. but are more expensive in terms of specified destinations. Both ports require an ecological certificate before handling chromite ore. for north. There are no constraints to shipments through most Baltic ports. For Baltic ports. and may be suitable for spot sales. Both ports offer services to China and South Africa. Taganrog. but with draft limits and the area prone to winter freezing. except for Sweden. Yuzhniy and Odessa) are available to handle bulk products. ecological/environmental issues. costs are higher and these ports should be considered only as an alternative if Russian ports are ruled out. Other Baltic ports of Ventspils. as is Kaliningrad. but because they are further away from source and an additional country is involved in the transition.
5 PROJECT IMPLEMENTATION AND PERMITTING SRK notes that one of the principal constraints to the project schedule is the inability to do large scale earthworks in winter due to the difficulties with frozen ground and pouring concrete at -40 degrees.The report shows that transportation of the tonnages indicated to the specified destinations may be undertaken successfully when managed efficiently. and Full Technical Project Approval: Planned completion 22 December 2006. The critical institute involvement is that of UralGiproRuda in Russia and Kazmechanober in Almaty who are carrying out the technical approvals for the mining and process plant approvals respectively. 20. drilling jumbo and underground loader. Exploration ramp approval: Due 28 July 2006. The most critical pathway to production is ore-body access and development thereafter. The indicative costs are relevant today and it is recommended that these are captured and continuously developed throughout the intervening project construction period to ensure that they are honed and finalised as early as possible prior to contract commencement. shotcrete machine. This dictates that the plant construction can only commence as of May in any year. To ensure this timeline is met Oriel have committed to the necessary equipment purchases for long lead items such as the batch-plant. The local permitting process applies the following restrictions to the project schedule: • • • • Boxcut excavation approval: Due 12 May 2006. Ventilation shaft approval: Planned completion 22 December 2006. Project Development Milestone Dates • Temporary power supply energised and temporary infrastructure establishment commences: 1st June 2006 Underground development commences: 20 September 2006 Primary ventilation raise sink commences: 25 December 2006 Technical project Approvals in place: 22 December 2006 Process plant and permanent site infrastructure works commence: 1 May 2007 Permanent Power connected to site: October 2007 Decline connected with Ventilation raise: October 2007 • • • • • • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Late September 2006 has the underground contractors commencing portal works and the start of the decline. along with a selection of electrical equipment.doc .
Area to the North of the deposit owned by Donskoy GOK. This land has been purchased for US$70. Institute (Kazakhstan) Technical Project Approvals Project Cost Start Finish $100. Electrical installations (by Areva) have commenced with 3. (Granted with lease) 2.023. 3.000.000 28/4/06 20/4/06 27/1/06 1/2/06 28/4/06 27/10/06 6/10/06 28/4/06 28/7/06 27/10/06 Institute name Status Estimate Tender Contract Contract Contract Asia Ecology (OVOS and Base-line) Energy (Permanent Power) Geo-Incentre (Resource) Geo-Incentre (Exploration Ramp) UralGiproRuda (Mining Technical) Kaz-Mechanober (Process.5kms of 10kV line and a 1MVA sub-station feed from the Susanovka facility is under construction. As such Oriel has opted for this approach to allow P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.000 30/5/06 on-going 22/12/06 Contract Estimate Total Institutes $1.000 $330.000 $116. Orebody access including mining of a bulk sample and level development can be carried out under an Exploration Mining Permit.000 Land Allotment Land allotment for Voskhod involves three steps: 1.000 $77. Other facilities to be installed are those to enable the decline works to commence in August of 2006. As such it is the intention to commence works in May 2006 by using temporary permits and the ‘Turkish Camp’ as a base. This final step involves paying ‘compensation’ for land loss of grazing (in the case of the Voskhod site). Mineral Lease area. Infrastructure and Permit leader) Documentation $180.doc .000 $50. The take-up of public grazing land within the allotment request area.000 $170.• • • • Process plant commissioning commences: 13 November 2007 Plant handover: 25 February 2008 Road upgrade and rail-load complete: 7 March 2008 First Ore Shipment: 14 March 2008 The approvals process for temporary installations is much less arduous than those for anything ‘permanent’.
The Technical Project. The OVOS is the Soviet Environmental impact assessment. Following this is a two month approvals process before the technical project is complete. A Pre-OVOS was completed in March 2006 by Asia Eco-link company in Almaty. Permits are to be sourced in a two step process in-line with the project timeline: • • Boxcut excavation: Due 12 May 2006. followed by 2.critical path development to commence whilst the full technical approvals carry on in parallel. The scheduled completion dates for the technical projects is the 27 October 2007. The specialised mining project has been sub-contracted to UralGiproRuda from Yekaterinburg in Russia. which involves the entire mine. and Exploration Decline: Due: 28 July 2006 Complete Technical Project The approvals for the overall ‘Technical Project’. targeted for 25 December 2006. Permitting approval for the exploration ramp along with the relevant designs has been contracted to the Geoincentre Institute in Almaty Kazakhstan (SRK has verified this contract is underway).6 RISKS AND OPPORTUNITIES A Risk Analysis was carried out by SRK which summarises the project risks with the level of information available during May 2006. plant and surface infrastructure is to be co-ordinated by Kazmechanober in Almaty. Ust Kamenogorsk based mining contractor Vostokshakhstroy has in conjunction with UralGiproRuda been contracted to complete the designs and approvals for the primary ventilation shaft. whilst the application is in progress. 20. Application for power from the utility owner.doc . Installing 25MVA of permanent power to site is a two step process: 1. During the investigations for the OVOS. Controls P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. SRK confirms that Oriel has contracted the same company to continue and complete the work required for the full OVOS in the time-frame to match the approvals process. Energia Institute has provided Oriel with a tender to complete the technical project. Oriel have awarded Asia Ecol-link a supplementary contract to complete under SRK supervision all requirements for the ESIA required for international financing.
Incorrect Estimation of Product Splits. Marketing and Product transport logistics). In general these controls included: • • Detailed studies in key areas (e. The permitting process (though with improving confidence) still remains an area of concern for any new projects in the FSU region. concrete batching plant. No individual off-take agreements are yet in place. To mitigate against this risk. there could be constraints on the plant throughput. These can easily be replaced in the future with triple start units in the same physical space. Additional capital costs have been included in some areas (e. Further orebody and hydrogeological drilling in 2006 to reduce geological and geotechnical risks Additional specifically targeted operating cost contingencies (applied to ground support and mining contractor rates). Independent mine and load-out infrastructure. mine water release treatment facility). Excessive Loss of Product to Slimes.A number of controls have been applied to mitigate against the identified risks. The definitive requirements and timing are issues SRK believes that Oriel will need to supervise on a daily basis. based on a predicted size distribution. because core data was a) not available at the time the plant design concepts were fixed and b) there is no reliable way to extrapolate from core data to full plant scale.g.g. (Project Approvals and understanding of legislation constraints • • • Risks Key areas of project risk are summarised as follows: • • Markets. performance at the neighbouring Donskoy operation suggests that this will not be an issue. Permits. the plant as proposed includes a great deal of flexibility in terms of: the size distribution by including the ‘swing’ fraction capability to swing the feed to either Drum or Cyclone plant. In the event that the actual size distribution is drastically different from that assumed. Early and closely monitored institute involvement. The inability of technical institutes to respond to changing project requirements on the run has caused delays for other recent mining projects in Kazakhstan. and the spiral plant uses twin start spiral separators for treating the fines. thereby increasing the capacity by 50%. Product split analysis cannot be performed to a definitive level based upon the metallurgical test-work performed to date. The plant has been designed. • • i) ii) P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc . However.
chip and fines products. The orebody has the capacity to produce at a rate considerably higher than the planned 1. as with most design codes and guidelines. Most importantly of these are the 2006 and 2007 summer earth-works and construction programs. have a disproportionate effect on the overall programme if specific “windows” of time are missed. The effect of this is unlikely to adversely impact the overall yield but could reduce the quantity of material reporting to the lump fraction.doc . Weather Effects on Project Execution. • • • • Project Opportunities There are a number of opportunities that exist to enhance the project commercial and technical performance.3 Mtpa and could be increased by purchasing additional mining equipment. • Increase Mine Production. This is both in terms of the actual activities (no earthworks can take place in freezing conditions for instance) and in the sequence of activities. As in all extreme climate conditions. there is still an element of risk involved in obtaining approval. • Personnel. The processing plant as proposed conforms to the chromite industry best practices available. GOST’s (standards) and applicable codes. To mitigate against this competitive salaries and work roster have been allowed. a shift in the size distribution may change the relative proportions of lumpy. since. Mitigation in the plant programme exists as float (slack) time. since it is based on being completed earlier than ore is available from the mining operations. Attracting and maintaining key staff at acceptable remuneration levels in the current minerals boom is becoming a difficult task. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. cover drilling and pressure grouting ahead of the ramp face. SRK notes that there is potential for water ingress to the underground workings. SRK notes that there is a reduced level of confidence with this volume of material versus a bulk sample. the construction programme may be significantly affected by the weather conditions. Delays or disruptions to the programme can. The samples were generally high grade of predominantly ‘powdery’ and ‘massive’ chromite lithologies. particularly during ramp development. Sample Representivity. Whilst care has been taken to review the relevant SNIP’s. Water ingress. The metallurgical test-work upon which the process plant has been designed was from four diamond drill cores which were taken to be representative of the entire orebody. The current limitation on chromite production is market capacity. although logistics would probably become an issue without some infrastructure improvements at key transfer points. there is still room for subjective judgment.Obviously. Process Plant Technical Approvals. therefore. This risk needs to be managed by additional hydrogeological investigations.
Should the slime prove to be consistently at a saleable Cr2O3 grade with acceptable SiO2 and Fe2O3 specifications and suitable markets can be found it would be possible to recover this material and increase the sales revenue from the chromite. Oriel have been approached by an entity owning at least part of one of the 110kv power lines from Kimpersay into the Chromtau sub-station (which is Donskoye controlled). However the design has been made with sufficient space left in the plant should operational experience show that adequate volumes of direct shipping material can be mined. These include. Direct Shipping Ore. there exists another 4 to 5 Mt of potential resources in the adjacent Karaagash deposit.5Mt @ 40. Better Usage of Cheaper Products out of the FSU Region. The slime fraction is mainly generated from the PCR fraction which is generally high grade Chromite.9% Cr2O3 classified as C2 and P1 resources under the Soviet system.05% Cr2O3. A modernisation of these regulations could help to save up to $3M off the project capital costs.6M new line installation. Sections of the Orebody are of product grade material and the ability to crush. Governmental Review of Mining Regulations. The exploration lease for this multi lense style deposit directly north of Voskhod across the Karaagash river has been awarded to Oriel resources (unverified by SRK). • • • • • • • P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. SRK has not reviewed these resources in detail or their supporting information. Time constraints on this feasibility study have meant that the opportunity still exists for ‘value engineering’ on some goods and services which as a default have been costed as imported items. Karaagash Deposit. The deposit is adjacent to the Voskhod underground workings and provides good potential for additional production capacity. The 1974 Soviet mining (ventilation) regulations on airflow per diesel engine kilowatt require a second ventilation shaft and corresponding parallel intake ventilation raise throughout the mine. screen and direct ship material has been discussed at length. The Voskhod Deposit contains 1. Inferred Resources.57Mt @ 41. These resources were historically Soviet classified and have only recently been licensed to Oriel. Reduced Power Capital Cost.• Extra Revenues from Discard Slimes at Saleable Grade. Increasing the Product Yield. Consequently the waste slime could be in the region of 50% Cr2O3 depending on the level of dilution caused by fine material generated during crushing from the competent ore types and gangue. At present approximately 100 000 tpa of slime is forecast to be generated. the purchase of it may prove advantageous over the current $12. In addition.doc . Another option involves a study underway by an Aktobe company to provide a total solution to power and heating requirements by gas which is locally available in low and high pressure pipelines and at a competitive unit rate. However given the dilution profile and non-selective nature of the mining method the extra capital for the bypass infrastructure was deemed too costly at this stage and removed from the plant design. This deposit contains 4. If this power line is available along its entire length to Kimpersay. A number of areas have been proposed that may be explored to increase the product yield. These have not been modelled into the existing production profile.
Rail lines from Sarysai (14km from the mine) can carry product to both China and Russia simultaneously. All of the above will incur significant capital and operating costs. Low costs.iv) Re-crushing the DMS drum plant lump waste (floats) in an attempt to liberate 'locked' particles and re-treating the crushed material through the DMS cyclone plant. it may be possible that the smaller particles will contain sufficient chromite to cause them to sink. Treating the slimes through a WHIMS (Wet High Intensity Magnetic Separation) circuit. SRK notes that the Voskhod project is situated in a favourable position for transporting product to both Russia and China. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. SRK opines that the Voskhod Chromite project can be developed into a profitable mining operation. SRK concludes that the feasibility study has met its objectives in determining the viability of the Voskhod project based upon the work undertaken and assumptions made. the deposit is high grade with favourable mining characteristics allowing bulk mining methods to be employed. Based upon the work carried out by SRK and other contributors.doc . 21 INTERPRETATION AND CONCLUSIONS The level of data adequacy is considered sufficient for a Feasibility Study but further work is required in the several areas in order to manage potential risks. The Voskhod operation is planned to adopt low cost bulk mining methods combined with a simple processing route with proven technology The work of Heinz Pariser indicates that the market fundamentals are positive for chromite with demand expected to exceed supply in the short to medium term Infrastructure. SRK notes that the project fundamentals are all positive as follows: Robust Mineral Resources. This will further liberate Chromite grains from the gangue minerals and allow the Chromite to be recovered in the spiral plant resulting in a further possible increased overall yield. Locked particles are those that contain discrete sections of valuable Chromite and waste. If the proportion of Chromite is small. v) vi) Initial tests on the samples available have shown that these conceptual approaches have only been marginally successful. there may be a recoverable fraction of magnetic Chromite in the slimes material. By re-crushing this lump into smaller pieces. In order to justify this additional costs against the potential benefits further studies area required. As suggested by the Uralmechanobr report provided by Oriel. Milling the <25mm >1mm discards chips (floats) from the DMS cyclone circuit. for a "similar" deposit. the average density of the lump will cause it to float in the DMS drum circuit and be rejected. thereby recovering more chromite to product.
May 2006. SRK Consulting (UK) Ltd Preliminary Assessment Study for the Voskhod Chromite Project. John F. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. Papp Feasibility Study for the Voskhod Chromite Project. August 2004. SRK recommends that Oriel will need to conduct the agreed program of activities at Voskhod in order to meet the schedule requirements. SRK Consulting (UK) Ltd USGS Minerals Industry Yearbook.doc .22 RECOMMENDATIONS SRK recommends that the Oriel management team continues with its planned program of fund raising and mine development at Voskhod. 2004. July 2005. In addition. Key activities are as follows: Aggressively pursue permits and other approvals 2006 resource infill drilling with additional geotechnical logging Drilling of water wells and further hydrogeological testwork Completion of the full Environmental and Social Impact Assessment (ESIA) Technical Report preparation for local permit applications Negotiation of definitive off take agreements with end users and traders Commencement of on site construction – in particular the box cut and portal need to be established before the last quarter of 2006 23 REFERENCES The following were referenced for this report: Voskhod ’Feasibility’ Study. SRK Consulting (UK) Ltd 24 DATE This report is effective 24th May 2006. 2002 Geoincentre (Almaty) Indicative Valuation Report.
This variation will depend on the ore width and the regularity of the ore boundaries. relatively low mining cost. The main reasons for this choice include: the geotechnical characteristics of the host rock and ore being applicable to a self caving method and not to open stoping. 25.1.25 ADDITONAL REQUIREMENTS FOR TECHNICAL REPORTS ON DEVELOPMENT PROPERTIES AND PRODUCTION PROPERTIES MINING Production Rate The Voskhod production rate has been set at 1.1. however. it is therefore important to keep a reasonable balance between the two. while taking into account metal expectations from the production blast rings.doc . This is realized by regular geological control of drawpoints (including inspection. no backfill required and surface subsidence is acceptable. SRK notes. sampling and mucking to tightly supervised controls) and stope geometry design. the geometry and orientation of the deposit are applicable to bulk mining.1 25. 25. to maximize net profit. the waste dilution factor will be affected by the recovery of the ore.2 Mining Method SRK considers that the preferred mining method will be sub-level caving (SLC). and method allows for reasonable ore recovery. Even though some ore is expected to be discarded as it becomes trapped behind caved waste at the drawpoint.1. that the podiform orebody is capable of sustaining a higher production rate with the proposed mining method.3 Mining Recovery Mining recovery for the Voskhod deposit is expected to vary throughout the orebody. not just the recovery. This can be accredited to the fact that remnants of the ore that cannot be completely recovered from a particular level can. in most cases be recovered on the level below. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. the life of mine is estimated at 14 years. the sub-level caving (SLC) method does allow for acceptable ore recovery. With the current mining reserves and proposed production rate. In SLC.1 25.3 Mtpa to match Oriel Resources identified product markets and as such is market constrained.
Kiirunavaara.1 Expected Zone of Subsidence P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. theoretical ellipsoid and gravity flow equations.doc . as well as carefully considering the orebody characteristics. To ensure. with a maximum diameter of no greater than 1.25. 25. SRK notes. while considering the Voskhod rock characteristics. plus a 30 m buffer to account for local disturbances.4 General The proposed development and stoping layout used to extract the deposit were based on the expected behaviour of the extraction ellipsoids and the gravity flow of the ore.3 m SRK notes that these resulting dimensions are based on industry common practice. Geotechnical studies suggest that this disturbance is estimated to occur at a 55º angle from the horizontal.000 m. the maximum surface area that will be affected by subsidence brought on by the underground mining operations is expected to be approximately 657. however.1. Stobie. Figure 25. the maximum cone limits were used when the designs were prepared. Using these parameters. Due of the remote location of the operation and the fact that no significant problems are expected to arise from the permitting authorities. however. that in reality the subsidence incurred by mining can be expected to be much smaller than the designed cone since the extreme case is modelled. that all permanent infrastructure be away from the zone of disturbance. The proposed stoping and development layout for the purpose of this study are: Sublevel spacing Height between main levels Horizontal spacing of sublevel drifts Production ring burdens 20 m 80 m 14 m 2. It is anticipated that these dimensions could be adjusted to increase mining efficiency as the rock behaviour is studied through the progression of the mine life. The neighbouring underground mines of Donskoy also practice self caving methods.000 m2. Telfer and Rideway Mines were also considered for this analysis. Craigmont. The history and the practical experience from other similar operations such as the Donskoy. A 3D representation of the maximum subsidence cone that can be expected was created (see Figure 25.1.1) using the expected subsidence at 55º.5 Ground Subsidence The use of a caving method will induce ground subsidence above the mined out area (dependent on thickness of extraction and depth) and will require approval from the mining authorities to undertake. ground subsidence is not expected to cause much concern with respect to the mine design.
000 m3. It is expected to have a volume of approximately 83. in order to prevent the effects of the above disrupting the mining activities.Expected Subsidence Voshkod Orebody 25.). and long term stability issues due to weathering. the portal location will require a boxcut excavation. a steel or concrete liner will be constructed P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. the boxcut can be managed with a sump on the ramp to catch the rain water and regular grading to keep the ramp clear. This excavation would be accomplished by using a combination of standard earthmoving equipment with drill and blast being used as the hard rock is encountered.6 Main Ramp and Boxcut The Voskhod main access ramp. as the surface topography above the deposit is significantly flat. including: water ingress due to rainfall and snow melt (During a rainfall event the boxcut has the effect of acting like a large funnel channelling water underground which can flood the ramp face and disrupt development. requiring on-going rehabilitation. However. • • • • SRK notes that. in the short term. sloughing of the walls of the boxcut can occur potentially blocking access to the mine and causing traction problems for vehicles on the ramp (personal safety could also be an issue if the slopes became unstable) and these occurrences incur production loses. icing of the ramp during winter causing traction problems for trackless equipment on the ramp.doc .1. SRK notes that there are certain adverse effects that would have an impact on the ongoing mining operations. Prior to backfilling. with almost 95% consisting of earthworks and the remaining being hard rock. The boxcut is a temporary excavation that provides access to the hard rock where a portal can be constructed. SRK recommends that a long term solution be implemented for the boxcut. This recommended solution comprises backfilling the boxcut with waste rock. • If the boxcut were to remain open to the elements.
as well as acting as a fresh air intake. The liner will allow vehicular access to the mine after backfilling of the box cut. situated well outside the expected zone of subsidence. the path for transporting the ore from underground workings. Because of the flatter dip of the orebody around the 1100 level and the expected subsidence which will be more pronounced in the upper regions of the deposit.7 Contractor Works All mining activities at Voskhod were assumed to be performed by contractors for the first 2. Mining productivities and equipment utilisations were assumed to be the same for both the contractor crews and the owner crews. As a result.2 Figure 25. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. a bypass ramp.5 years of the project (until end of 2008 in schedule). The main access ramp will serve as the mine’s main access for men and material.2 General Schematic of the Conceptual Access Ramp Main Ramp to Surface Orebody Bypass Ramp Internal Ramps 25. Internal spiral ramps will follow the orebody along the footwall and offer access to every main level and sublevel within the mine.1. The internal ramps below the 1100 level are situated outside of the zone of subsidence and will serve as main access and haulage way as mining progresses downward. there were advantages in locating the ramp section between 1180 and 1100 levels closer to the orebody and simply allow it to fail as mining progressed down the deposit. is necessary to ensure a safe and stable access way to surface.in the boxcut. It will be driven straight with an initial ‘dog leg’ aimed at channelling water into the sump and to avoid visibility problems associated with driving towards daylight at the portal. A general schematic of the ramp can be seen in Figure 25.doc .
3. However.doc . as a significant portion of the ore would possess the required product grade directly as ROM material. as may be seen in Section 18. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. a cost premium was added for the contractor works in the financial analysis. it was assumed that all material would be processed.8 Ore Transportation A simplified flowsheet of the ore transport system at Voskhod may be seen in Figure 25. and blended in order to yield the production suite. For the purpose of this study.However. 25. it is a possibility that some of the ROM may be directly shipped.1.
Robertson and Kirsten (UK) Ltd. No. 1575403 Registered Address: 21 Gold Tops. Gwent. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . Registered in England and Wales Reg.Figure 25. Newport.3 Production transport flowsheet Blast Ore Muck With LHD 50% Dump in Underground Stockpile 50% Muck With LHD Load in 45T Truck Haul to Surface ROM Stockpile Reclaim Loader to ROM Crusher Processing Plant Lumps Chips Fines Truck 14 kms to Sarysai Railhead Load into Wagons Off-Takers Steffen.
5 CAT AD45 25. 1575403 boom electric-hydraulic Registered Address: 21 Gold Tops.10 Lateral development Lateral development will consist of conventional drill and blast utilising: Twin Steffen. For the purpose of this analysis. . Registered in England and Wales Reg.1. NP9 4PG drill rigs (Tamrock Offices in: Australia North America Southern Africa South America United Kingdom Axera). it will either be temporarily stockpiled in the truck loading areas or tipped directly in to large capacity haulage trucks. Figure 25.9 Mucking and Trucking Both development and production mucking is via 5. Robertson and Kirsten (UK) Ltd. No. Gwent.1. Once the broken ore has been mucked.0m3 diesel LHD equipment.4 CAT-1700 LHD 25. it was estimated that 50% of the material would be stockpiled and 50 % tipped directly. modelled as a CAT 1700 (Figure 25. The modelled trucks comprise of the CAT AD45 (see Figure 25.4) for the study purposes.Figure 25.5) which has a proven reputation within the mining industry. Newport.
927 36. Registered in England and Wales Reg.5 Type Main Ramp Internal Ramps Level Accesses Truck Loading Areas Ventilation Accesses Sumps Safety Bays Ore Crosscuts TOTAL 25.138 Profile 5. Table 25.7 4.Emulsion explosives. power and a de-watering network. This machine has been chosen to suit the required drill hole diameters and has the most favourable boom configuration that will allow flexibility of usage of this machine for both up and down hole drilling and production and ‘clean-out’ functions (where the boom needs to reach out over the rill of material at the brow).1.1x4.250 2. Robertson and Kirsten (UK) Ltd.880 851 3.11 Vertical Development Vertical development will utilise the following technologies: Conventional sinking (will be required for the two ventilation raises to surface). and Cemented grouted steel bar rock bolts and steel sets. No. Modern fibre reinforced shotcrete technology (Normet Spraymech and agitator trucks).1.13 Mine Services The mine will be serviced by compressed air.1. Drop raising (in 20m legs by standard long-hole drilling equipment).5 2x2 4.5x4.7 5. for example.1x4. SRK recommends that a compact and flexible electro-hydraulic longhole drill rig to be used for all the production drilling.5 4.5x4. 1575403 Registered Address: 21 Gold Tops.291 288 66 21.585 5. and Timbered conventional raising for slot development 25.7 5.1 Lateral Development Requirements Total Metres 1. Steffen. the Tamrock SOLO 7-7V. laid out in a diamond shape above each extraction drift.5x4. 25.1x4.7 5. Gwent. Newport. water. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . The power network will comprise of a 10kv high voltage and 1000v low voltage network.1x4.12 Production Production drilling of the Voskhod ore will be entirely comprised of up-holes.
The heat simulation conducted in this study provided this verification but some parameters have been assumed as there were no actual data. The full equipment delivery schedule is displayed in Section 19 (financial evaluation).R 3 m /sec 48.Tamrock Axera 7-60 Integreated Toolcarrier .25.Tamrock SOLO 07-7V Mine equipment requirements kW 439 231 101 110 67 65 112 110 V. along with ducting size of 1200mm diameter. Gwent.1 Number Utilised 5 3 1 2 2 1 2 2 Allowing 80% availability and 80% utilisation Steffen. These must be verified with further studies.1 7. Primary ramp development will be secondary ventilated with dual staged fans having two 90kW rated motors and complemented by either 1400 mm or 1600 mm diameter ducting depending on the length of development.14 Ventilation The fresh air intake into a level would be sourced from the decline and the inter-level fresh air rises. The mine has two intakes and one exhaust airway system which has been designed to supply 350 m3/s in order to comply with the local laws and mining requirements.Cat AD45 Bogger .Normet Variomech Production Drill . The maximum average heat load required has been estimated to be 6.Cat 930G Shotcrete machine . Registered in England and Wales Reg.5MW with a peak of 15.5MW. In summer months the mine would be unlikely to suffer from any hot conditions in the work places as it depth is not great and the summer humidity is low.Normet Spraymech Agitator .2 Name Truck .37 7. Table 25. The proposed primary ventilation system has the capability to support up to two working levels.41 11.Cat 1700 Grader . Newport. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom .A.3. inclusive of production and development.32 12. Primary fans have been selected such that the air flow quantities could be easily controlled to an acceptable velocity during emergencies when the non travel airways would be utilized as an escape way. Robertson and Kirsten (UK) Ltd.11 12. The mine would require heating for up to five months of the year.Cat 120H Jumbo . 1575403 Registered Address: 21 Gold Tops. Level cross cuts would be secondary ventilated by a single staged fan with motor power rating of 55kW to supply sufficient air for diesel equipment.1.3 Mtpa production rate from the mine is described below in Table 25.15 12.29 25. 25. The intake shaft airway requires greater heating than the portal intake due to potential ice growth in the airway caused by ground water. No.1.15 Underground Equipment Requirements A list of the main underground mining equipment required for both the owner and the contractor to develop and sustain a 1.
18 Summary of Total Project Workforce The life of mine labour requirements for the Voskhod mine are estimated in the following table. including planners Expat workforce of 3 shifts National workforce of 4 shifts Each piece of equipment has an operator (hence contingency exists through machine availabilities Blasting/services crew of 3 per shift Shotcreting crew of 3 per shift One nipper (or supply man per shift) 8 tradesman per shift to maintain the mobile fleet 25. supervisors and crew trainers till 2010 Expat miners from the ramp start till the end of 2008 Ex-pat maintenance personnel. which was in-line with similar western operations.17 The Mining workforce in Summary: A technical services department heavy in ex-pats initially An ex-pat mining manager for the mines life Ex-pat foreman. SLC is a new mining method to Kazakhstan and SRK believe it is critical in achieving success and the calculated equipment productivities to utilise well targeted imported mining specialists. Training and communication need to be of utmost importance. In the process of compiling this study SRK visited two other mechanised operations in Kazakhstan (Suzdal and Malevsky) and were impressed by the standards of operation in particular the workforce size.1.25. The first four years of mining show relatively high ex-patriate numbers in technical services and in key underground supervision and training roles.doc .16 Mine Labour Requirements and Organisation SRK have built up the manpower schedule using a combination of ex-patriates in key specialised roles and a national workforce. Translators have been budgeted for and it should remain a top priority to maintain good communications in both languages. P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101. There are no government restriction on the usage of expatriate labour. Communication problems are almost certainly to be encountered.1.1. 25.
3 Summary of Mine Workforce Number 31 184 3 109 5 52 384 Notes Reduces to one by 2012 Reduces to zero by 2012 Reduces to zero by 2013 Department Mining (expats) Mining (nationals) Processing (expats) Processing (nationals) G & A (expats) G & A (nationals) Total P:\U2860 Voskhod Feasibility Study\Reports\Feasibility Study R1\01_Summary Report\017_Summary Tech Report_NI43-101.doc .Table 25.
The SRK assumption can be backed up by the prices realised at the Russian and Chinese borders for Kazakh ores from Donskoy GOK in recent times. Refer to Sections 8 and 9 for further details. The Pariser report supports the conclusion that the international chrome market can sustain a new player producing chromite product at the rate of 800-900 ktpa. No. 45-48% Cr2O3.SRK Consulting Voskhod FS Page 4 25. SRK has adopted a flat US$145/t as the price for all chromite products ex-mine.3 MARKETS As part of the Voskhod Feasibility Study a detailed market survey was commissioned by Oriel Resources. Steffen. In addition to the Pariser work. Gwent. 45-48% Cr2O3. Processing of Voskhod ores will primarily consist of crushing a screening followed by gravity separation. SRK has reviewed the Pariser report and considers the level of detail and scope is appropriate for a Feasibility Study. <10%SiO2 (8% typical) -1mm. The report covers all the necessary aspects including supply & demand. <10%SiO2 (8% typical) -10mm + 1mm. The specification for each of these products is expected to be: Lump Chip Fine concentrate -150mm + 10mm. Pariser report Section 6). potential and existing markets. SRK has assumed that the same prices will be paid for any of the three products. The Voskhod project will produce three types of chromite product. Oriel Resources has been undertaking discussions with end users of chromite products and potential off-takers. In Section 13 of this report the logistics study indicates that moving the product to various destinations can be achieved. Although Pariser has suggested higher prices for chrome products going forward. the price is close to US$145/t SRK has applied in this study. 1575403 Registered Address: 21 Gold Tops. If these prices are corrected to the Sarysai railhead. <3%SiO2 The Pariser work does not differentiate between prices for either of the three chromite products although the fine concentrate is expected to carry a higher grade. Robertson and Kirsten (UK) Ltd. Registered in England and Wales Reg.2 RECOVERABLITY SRK notes that the average product yield is 70 %. Heinz Pariser was commissioned to update his earlier report that was used for the SRK Preliminary Assessment Study. To this end. The current (2005) price for Kazakh ore at the Russian border was 158/t and 197/t at the Chinese border (H. Feedback from these discussions has been provided to SRK. competition and future prices. 25. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . Newport. >55-59% Cr2O3.
Other adjustments applied were allowances for moisture and transportation losses.4cents per lb of Chromium metal.5cents per lb of Chromium metal. 25.3 respectively. processors and traders which has provided guidance to SRK as to the likely product destinations. However. SRK has assumed that this does not contain any post processing costs and the run of mine grade is 45% Cr2O3. Newport. The chromite price used in this study assumes that the average US$46/t cost for transport from Sarysai to the final destination is paid by the end user.2/t to mine and process ore of a lower grade.2/t to mine and process ore. Voskhod has equivalent costs of US$20. This example when worked through gives a producer cost of US$5. This provided a basis to calculate logistical costs. 1575403 Registered Address: 21 Gold Tops. given the strong market fundamentals and the quality of the product historically mined from Khromtau the probability is considered unlikely. SRK currently lacks product price data at all of the destinations – different end users will have different price structures according to their end use of the chromite. the quality of the product and the transport costs. Therefore SRK has taken the following approach: Use a flat US$145/t price (ex mine) for all of chromite products for the life of mine supported by recent prices for Kazakh ore Using the table of destinations and proposed quantities the transport costs could be calculated. Registered in England and Wales Reg.4 and 25. Oriel Resources staff have been discussing potential product sales arrangements with a number of end users. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom .4 CONTRACTS SRK notes that no off take agreements have been signed between Oriel and potential off takers at the time of preparation of this report. The costs of these items were subtracted from the product revenue stream. When converted to lbs of metal the Voskhod cost equates to US$4. The Pariser report provides an example from a South African Chromite producer with on site costs of US$37. SRK notes that there is a risk that offtake terms will not match the estimates from the Pariser study. Steffen. SRK notes that the proposed mine at Voskhod has the potential to produce chromite at an ex-mine cost 20% less than the established South African producer cited in the Pariser report. Transport costs are significant and can confuse the product pricing issue if not carefully applied. SRK has not applied them to the various destinations proposed due to the lack of firm price agreements will product offtakers. The transport costs themselves were assumed to be covered by product off takers. Further details of product destinations and prices are given in Sections 20. No.SRK Consulting Voskhod FS Page 5 SRK notes from the Pariser report that chromite prices are highly dependent on where the product is actually sold. Robertson and Kirsten (UK) Ltd. The Ahlers study has provided costs for transporting the products to the proposed markets. Gwent. However. rail operators commission and bagging costs.
1 ENVIRONMENTAL CONSIDERATIONS Introduction This Environmental Feasibility report provides an overview of environmental and legislative requirements. Health and Safety Guidelines on Mining and Milling – Underground. However. 25. Robertson and Kirsten (UK) Ltd. No. evaluation of potential environmental impacts and mitigation and an estimation of environmental costs.25. 7 and 8. 5. 3. Pollution Prevention and Abatement Handbook. environmental and social issues. the results are not considered sufficient to quantify the full magnitude and significance of identified environmental impacts for the project at present. 1575403 Registered Address: 21 Gold Tops. 25. 2. and IFC Performance Standards 1. The impact assessment.2 Environmental Legislation The Voskhod project will be subject to laws.01. Environment. and IFC Environmental and Social Review procedure and guidance on ESIA. completion of the Environmental Baseline Study (EBS). A review of Kazakhstan laws and the World Bank and IFC guidance documents indicated that the following is relevant to the Voskhod project: Operating Policy 4. Steffen. standards and guidelines from the Republic of Kazakhstan and international institutions (World Bank/IFC. Environmental Assessment. The preliminary rounds of sampling and a desktop review of documentation are considered to be sufficient for background investigations and provide an indication of potential pollutants. The project is classified as Category A under World Bank Group/IFC criterion and therefore is subject to a full Environmental and Social Impact Assessment (ESIA) prepared in accordance with the relevant local and international legislative framework.5. regulations. 1998 [PPAH]: General Environmental Guidelines (GEG). Base Metal and Iron Ore Mining Guidelines (BMIM). NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . 4.5 25. In particular. WHO etc).5. including specialist studies and an ESIA is required. Newport. Registered in England and Wales Reg.3 Environmental Assessment Requirements The Voskhod Mine project requires a further Environmental Assessment (EA) to satisfy the Republic of Kazakhstan and WB/IFC requirements for project approvals and financing. Gwent. Terms of Reference (ToR) for undertaking the ESB and specialist studies will be developed to reflect the requirements of international guidelines and standards applicable to the proposed mine. potential mitigation measures and estimated environmental costs contained in this report will be subject to change based on final design options and the outcome of baseline studies.5. 6.
This has resulted in impacts to native flora communities and habitat disturbance. Gwent. A desktop review of project related information and the preliminary monitoring and sampling was performed as part of the background ecological investigation. PM10). Newport. The surrounding Donskoye GOK mining activities pose a number of potential air pollution sources. NP9 4PG Australia North America Southern Africa South America United Kingdom • . while artificial water sources such as abandoned open pits may be impacted by organic. Due to past disturbances and the proposed mine. at this stage soil contamination does not appear to be widespread and is confined to the southwest portion of the site.4 Environmental and Social Impacts It is considered likely that environmental impacts will occur due to historical mining activities of the area and the proposed mine operation itself.5. However. No. proposed haulage routes and railway siding to develop the EsIA and Environmental Monitoring and Management Plan (EMMP). The proposed mine also has the potential to impact on the air quality of the region. in: areas (flood Registered in England and Wales Reg. inorganic and heavy metal contaminants. Steffen. processing plant. the analysis did not determine the concentration of heavy metals or the fraction of fine particulate matter (for example. the information will be used.At the conclusion of the specialist studies. Robertson and Kirsten (UK) Ltd. 25. Further monitoring and analysis is required to determine the background air quality of the project area. together with the full design details of the mining process. Offices particularly in low lying Registered Address: plains) and riparian zones. 1575403 21 Gold Tops. post mining land uses may be restricted. transportation vehicles and a number of processing plant stacks. At this stage of the assessment process it is not possible to determine the degree or significance of these potential impacts. and indicated the following: • There are a number of potential soil pollution sources within close vicinity of the site. However. natural drainage pathways and flow pattern regimes. The analysis results indicate that sensitive surface and groundwater receptors are of reasonable water quality. in particular these include stockpiles of waste rock. • • • • • Potential impacts on the ecology of the site are considered to be minor due to the existing low biodiversity of plant and animals. It appears that the low lying areas of the Akzhar tributary in the southwest portion of the site are most heavily impacted. The mine site has undergone significant disturbance from surrounding mining activities and agricultural uses. The monitoring and analysis results did not indicate significant levels of air pollution. The site does not contain soils of high fertility or suitability for agricultural purposes. The surrounding mining activities and proposed mine have the potential to impact on the quality of surface water and groundwater resources.
• No assessment of background noise levels or predicted noise levels as a result of the proposed mining operation was made during the preliminary site investigation.5. noise sensitive receptors) potential impacts are considered low. Due to the distance between the mine and nearby settlements (that is. The potential risk of impacts to cultural heritage items or archaeological sites of State significance is considered low as no known sites are found with 20 km of the site. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom • Steffen. Registered Address: 21 Gold Tops. although impacts to noise sensitive receptors are likely to be low due to distance. Generally. these are considered minor in comparison to existing impacts from surrounding mining operations. regional and national economy and should contribute to the existing upward trend in monthly wages and decreasing trend in unemployment currently being experience in the region. No. local authorities and local non-governmental organizations. the attitude of the local citizens to the Voskhod project is considered positive. Newport. The ongoing public consultation process was attended by SRK and involved Interested and Affected parties (IAPs) such as the general public. No assessment of background noise levels or predicted noise levels as a result of the proposed mining operation was made during the preliminary site investigation. the heavy industrial nature of the area indicates that background noise levels are likely to be high. Whilst there will be some landform changes as a result of the Voskhod Mine operations. concerned public groups. The proposed mine development will result in an increase in traffic volumes of large vehicles along the proposed haulage route. The socio-economic benefits from the Voskhod Mine project are considered to be positive for the local. Robertson and Kirsten (UK) Ltd. 1575403 . However.5 Public Consultation Public consultation for the project was initiated in February 2006 to satisfy Kazakh requirements for environmental impact assessment of planned activity during preparation of preliminary and planning materials (the Pre-OVOS process). • • • • • 25. Gwent. The main areas considered important by IAPs for improvement of living conditions in the region were considered to be: • maximum involvement of local citizens in the construction and operation of the proposed mine development. investments in local budgets for infrastructure development. Registered in England and Wales Reg. No assessment of the existing visual impacts or potential visual impact posed by the proposed mine has been undertaken.
closure and post closure monitoring. generally submitted 1 or 2 years prior to closure. Significant long-term environmental and economic benefits will arise (and negative impacts be minimised) from the close coordination of the development and implementation of the environmental monitoring and closure plans for the site. 25. Duty rates vary from 5 to 15 % depending on the item Steffen. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . monitoring and reporting.5M over the mine’s lifespan. 25. The total costs are estimated to be in the order of US$5.6 TAXES In the feasibility study life of mine plan and financial model SRK has applied the following taxes and royalties: 15% VAT to all imported equipment and capital items It is assumed that all VAT on operating expenditure is recovered in the period expended. There is also a requirement to set aside sufficient money into a government held closure fund for the mine.7 Conclusion In general. which cannot be adequately managed through the implementation of suitable mitigation and management control measures. The issue of performance bonds or insurance for closure also needs to be addressed from the start of the project to ensure sufficient funding is available. Registered in England and Wales Reg. 25.• • improvement of the quality of the medical services.5. At completion of the Pre-OVOS review a Public Consultation and Disclosure Plan (PCDP) will be developed for the Voskhod Mine project outlining consultation requirements during the assessment phase of the project. 1575403 Registered Address: 21 Gold Tops. Newport. Robertson and Kirsten (UK) Ltd. Import duty has been applied as per the schedule from Kazakh authorities. and maintenance and construction of roads. The biggest challenge facing the operation is quantifying the nature and extent of existing contamination and ensuring these liabilities are not transfer to Oriel’s operations.5. Environmental costs for the project are associated with assessment. In the Feasibility Study a sum of US$3. the Voskhod project is unlikely to pose any significant environmental impacts to sensitive receptors. Gwent. No.6 Closure and Costs In the Republic of Kazakhstan a closure plan for mining operations is a legislative requirement.2 M has been allocated for closure rehabilitation with US$1 M for the tailings facility alone.
Newport. No. 25. Registered in England and Wales Reg.1 CAPITAL AND OPERATING COSTS Capital Costs Capital costs for Voskhod were estimated from a number of sources including quotes obtained locally. From the detailed economic model developed for the Voskhod feasibility study SRK has estimated the total capital requirement (excluding any project financing costs) is US$131 M.7 25. Gwent.Taxable profits (operating profit less depreciation charge) are taxed at a corporate tax rate of 30% 1% royalty applied to gross sales revenue SRK notes that under the terms of the concession agreement between Oriel and the Kazakhstan government there is provision for an Excess Profit Tax (EPT). Capital expenditure for the Voskhod project has been broken down into it constituent parts in the following tables: Steffen. input from consultants (mainly SRK and DRA-I) and estimates from international equipment suppliers. Robertson and Kirsten (UK) Ltd.7. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . SRK has not applied this tax to the economic evaluations for Voskhod. 1575403 Registered Address: 21 Gold Tops.
636 5.190.000 369.000 450.Out Site roads Site services reticulation Bore holes and pumps Potable water line from treatment plant to Susanovka Water treatment plant (potable water) Water treatment plant (environment realease) Sewage Treatment Plant Laboratory Fit-out Pre-liminary and General Infrastructure construction costs Mining workshop Perimeter Fencing Fire Pumps & Reticulation 7.138 21.728 50.400 6.516.111 97.348.584 130.185 2.000 0 0 450.317.347 390.379.000 0 281.548.779 575.995 20.458 1.177.685 87.423 25.000 0 2.037 333.784 25.000 0 0 0 0 0 0 0 0 0 0 0 1.779 5126.96.36.1996.000 1.127 0 0 0 0 0 0 0 0 0 0 0 0 50.364 46.476 250. Registered in England and Wales Reg.000 75.000 106.400 6.477 133.348.350 50.348.400 6.000 106.044 20.000 281.111 97.915 0 519.615 0 161.556 433.548.550 115.185 2.000 150.000 75.050 38.185 14.400. Robertson and Kirsten (UK) Ltd.139.000 427.476 250.492 76.350 120.000 40.458 1.980 337.222 750.026. Newport.064.928 180.500 0 0 0 0 0 0 37.200 2.406 153.350 120.805 76.416 8.500 519.991 64.347 390.138 21.805 76.983 151.701 56.200 0 300.779 575.4 General and Administration Owner cost General Capital Costs – Table 1 Cost Area Pre-Production Capex Working Capital Total Sustaining LOM 1. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom .400.000 300.178 750.Site Road Upgrade Site Rail Out Rail Load .023.200 0 300.000 359.352 75.139.350 120.000 75.555 44.980 337.000 40.620.231 12.784 25.580.350 50.519 100.548.500 26. No.960 0 56.000 1.370 29.808 23.723 65.726.347 390.000 427.000 1.SRK Consulting Voskhod FS Page 11 Table 25.000 150.431 7.400.282 266.995 40.701 18. 1575403 Registered Address: 21 Gold Tops.938 1.477 133.222 750.416 8.497 0 20.000 435.980 337.000 435.861 65.000 369.211 229.364 3.500 76.519 100.231 12.000 201.991 86.154.497 0 0 44.139.477 133.364 2.431 6.185 14.026.230 25.000 348.185 2.000 359.000 Institute Fees 2006 Drilling campaign Kaaragash River re-aligment On-going consultants fees (including ESIA) Closure Costs (excluding tailings dam) Land Allotment Geobyte water sampling for the Baseline Infrastructure and Process Plant Pre-project costs Bore-field establishment Cost Power Infrastructure Temporary Power Permanent Power Site Power re-ticulation Purchase of second hand 2006-2007 winter generators Technical Services Office Equipment Survey Equipment Computers & software Ventilation monitoring equipment Safety Initial personal Safety supplies General site safety supplies Cap lamps and personal self rescuers Mines Rescue Equipment (including Dragear units) Site & Local Infrastructure Short Term Infrastructure Turkish Camp Site Buildings Site Access Road Social ammentities for Camp Road Upgrade Donskoye .991 64.508 5.915 0 519.845 25.000 1.849 1.350 50.000 369.127 572.636 5.416 8.960 50.580.620.500 26.701 18.000 0 281.928 180.500 26.476 250.409 266.277 43.000 56.607 11.568 50.138 21.050 38.231 12.023.190.282 266.164 1.849 1.938.431 7.000 359.5 tonne Hiab truck Forklift Mobile Crane Fire Truck Ambulance Stores Truck Personnel Bus General light vehicles Manager vehicle (GM) Manager vehicle (Admin) Fuel Tanker Subtotal General & Administration Capital ($) 17.928 180.960 0 56.028 Steffen.023.000 106.458 1.579 5.330 34.861 65.995 76. Gwent.620.111 97.000 0 287.000 150.000 427.915 287.
034 2.034 0 0 755.350 872.997 VAT (Break-out up to end of Q1 2008) VAT on capital works and goods VAT (Mobile Equipment) VAT (total ) Pre-Production Capex 10.064 33.138 149.744 1.842 100.580 28.151. security.529.600 200.320 119.019.448.500 8.873 8.382 949.069.318.234 1.125 0 104.685 Capitalised Operating General and Administration Mining Processing Q2 .450 33.000 0 0 0 200.100 508.500 2.000 678.000 300.000 586.000 50.000 678.010 15.320 119.384.300 7.497 949.063 100.Grand Total 116.350 195.081 95.366 50.842 100.709 404.774 72.000 286.583 103.858.580 28.871 492.300 1.177.635 10. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom • Steffen.100 76.238.497 162.500 520.314 1.546 Sustaining 0 0 0 0 0 0 66.000 755.709 134. Gwent.120 34.366 50.777 100.600 200.623 292.050 54.000 286.032 Sustaining LOM 25.600 7.861 Working Capital Total 167.511 694.635 10.402.312 0 4.170.613 195.780.345 7.050 1.430 2.312 292.774 64.987 92.000 184. Competitive tenders for the supply of services such as product trucking.700 977.681.347.120 11.345.000 678.000 2.095 14.811.618.730 84.334.000 368.380 239.350 391.307.829 36.858.859 0 2. Registered in England and Wales Reg.500 2.500 520.510 Project .398 511.634.366 50.200 401.675.7.400 38.133 75.612 1.087.490 23.601 16.700 112. followed by quotations from suppliers external to the FSU.000 92.489.490 23.444.966.700 38.791 441.632.Cost Balance Capitalised Operating sub-total 6.941 147.000 50.600 200.150.871 492.243 150.250 16.897 10.972 75. 1575403 .500 0 0 0 269.056 16. Robertson and Kirsten (UK) Ltd.441 340.477.5 Mining Capital Costs – Table 2 Cost Area Batch Plant Batch Plant Civils Box Cut Boxcut liner + vent raise construction Mine water setler plus oil skimmer facility UG Electrical Infrastructure Surface LV's UG LV's Primary ventilation fans Primary Boosters fans Decline Fans (2x90 kkw) UG Dual stage fans (2 x 55 kw) UG Single Stage fans ( 1 x 55 kw) UG heating infrastructure 8kw Flyght Pumps 20kw Flyght Pumps 55kw mono pumps 135kw mono pumps Stench gas system Surface explosives magazine Egress system Hand held rock drills Initial Mobile workshop fit-out Mobile Refuges Manager Vehicle (Mining) VAT on Mobile equipment 0 Subtotal Mining Capital ($) Pre-Production Capex 167.368.941 LOM 167.398 511.625.961 130.2008 Revenue .497 441.595.150.490 23.742. Locally obtained quotes (FSU) for consumables in the first instance.314 8.124.000 50.497 4.500 520.917.829 32.185.312 292.580 28.150 115.433.590 113.492 324.946 23.130 1.995 162.844 3. Registered Address: 21 Gold Tops.635 0 0 0 0 0 184.091 Working Capital 364.300 10.989.000 286.892.504.200 0 3.744 1.608 200.375 192.375 192.050 38.487 0 146.006 92.398 511.430 Processing Ural 8x4 Rejects Truck Tailings Dam starter Tailings Dam Phase 2 and 3 Tailings Dam Closure Return Water Dam Plant Capital Plant Workshop fit-out Surface LV's Manager vehicle (Plant)) Capital spares for first two years First fill consumables Subtotal Processing Capital ($) Project sub-Total Contingency on capital items Capital .822.608 200.830 23.056 54.634.289 2.063 33.000 66.000 733.500 192.942 Total 10.185.829 32.000 100.592 508.Grand Total items 0 141.557.200 38.634.497 162.270 10.789.350 249.461.632. No.212.774 176.709 134. Newport.822.293.966.358 16.972 75.700 112.060 119.583 1.972 75.938.573 87.100 38.Table 25.741 1.2 Operating Costs Operating costs have been built up on the following basis: • • Engineered designs for the Voskhod project.000 733.650 11.376 226.811.244 3.565 0 2.071.803 456.231 96.276 7. etc.700 112.034 0 0 755.212.444.858.350 950.650 8.569 75.608 200.969. providing of camp services.
Costs have been grouped into the three classifications of General and Administration. and Rates are quoted using the most applicable. • • All operating costs up to and including Q1-2008 have been capitalised.4/ore tonne $3. for example per tonne of material. 1575403 Registered Address: 21 Gold Tops. Mining and Processing.8/ore tonne Table 25.4/ore tonne $20. The following numbers are post this period. No. Newport.9/ore tonne $14.SRK Consulting Voskhod FS Page 13 • Where required specific material contingencies have been applied (such as ground support) these have been stated. Robertson and Kirsten (UK) Ltd. Registered in England and Wales Reg. Steffen. Operating Costs are: • • • • Administration and General Mining Processing Total $2. Gwent.6 below shows the total project operating costs by major area excluding labour. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . per period or specifically as for power $/Kwhr.
Robertson and Kirsten (UK) Ltd.501.000 906.264 1.790.699.462.272 Cost units $/unit Admin and general $/quarter 41.00 $/quarter 35.907.326.600.421.201.0461 $/year 34.801.972 63.437.00 $/year 7.518.000 14.00 Process consumables and maintenance 988 FEL . NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom .00 $/quarter 83. Registered in England and Wales Reg.470.986. Newport.ROM operating 14H Grader (Ownership + operating) Permanent Grid Power Light vehicles Reject trucking cost Tailings dam (and RW D) mainteance Assay Laboratory 22.400 453.00 $/quarter/unit 3. Gwent.440 484.000.569 192.371 1.small tools.00 35.381.021.397 366.190.497 85.975.469.000 13.928.00 $/tonne 0.00 $/quarter/unit 3.750.201.6 Total Project Operating costs (excluding Labour) Item Aktobe + Chromtau Office running cost Aktobe office Rental + maintanenace London/Almaty Corporate Office Costs Camp running cost Social responsibility Site security Miscellaneous fuel Light vehicles Grid Power cost (temporary) Rail load-out maintenance 988 Rail Load-out Ownership Environment Land Rent Total General Cost ($) Mine Directs Equipment Ownership Equipment operating 0.103 547.00 15.00 15. No.192.740 326.540.088.610 1.476.391 1.00 $/quarter 150.614 232.00 $/year 150.700.373.00 7.000.737.296.500.400 Total Processing Cost ($) Total (Excluding Labour) 48.388 614.00 Mining variable variable variable $/kwhr $/quarter $/quarter $/quarter $/quarter $/quarter/unit $/quarter Processing $/tonne 1.000.875.469.00 $/quarter 243.432.000 2.00 $/quarter 25.ROM ownership 988 FEL .007 3.33 $/quarter 44.00 $/kwhr 0.000 45.943 2.119.575 558.234 2.854 27.000 5.00 $/quarter 7.000.916.00 $/tonne 0.192.400.00 4.100.938.0322 9. etc Underground Light vehicles PPE consumables Contractor Premium Total Mining Cost ($) Total Project Cost 2.098 2.272.694 2.41 $/tonne 0.615.699 86.500.000 2.450 7.733 5.400.000.00 Permanent Grid Power Explosives Magazine Fan and pump maintenance Other mining consumables UG maintanence dept.000 906.00 $/quarter 221.23 $/quarter 35.599.361 40.SRK Consulting Voskhod FS Page 14 Table 25.91 $/quarter 59.509 The total project labour costs are described in the following table: Steffen. 1575403 Registered Address: 21 Gold Tops.944 8.00 $/quarter 3.
SRK Consulting Voskhod FS Page 15 Table 25.865.363. Robertson and Kirsten (UK) Ltd.267. Newport. 1575403 Registered Address: 21 Gold Tops.015 Processing Total National Employee Costs Total Processing Employee Costs General and Administration Total National Employee Costs Total Gen and Admin Employee Costs Project Total Total Labour Cost Total Ex-pat Travel 47.616 9.220 8. It should be noted that these costs include those that are treated as capitalised operating costs during project start-up. Gwent.180.416 5.451 The table below provides a summary of mine operating costs.368. Steffen.883 883.348. No.7 Mining Life of Mine Labour Costs Total Life of Project Employee salary (incl burden) Costs $ Total National Employee Costs Total Mining Employee Costs 12.805.851 10. Registered in England and Wales Reg.855 27. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom .
381. 1575403 $/t fines $/t $/t $/t $/t $/t $/t Offices in: Australia North America Southern Africa South America United Kingdom Total Product handling Costs Registered Address: 21 Gold Tops.07 0.857 286.824.295.974 4.3/t of ore.063.190.880 48.272 26.173 20.74 Post Processing costs are those involved with product handling after beneficiation and are expressed as $/tonne of product or $/tonne of fines concentrate in the case of bagging.497 5. No. Gwent.8 represent operating costs after production has commenced.424 14. The table below summarises these.33 2.83 0.8 are life of mine numbers that include capitalised operating costs.367 Product Costs post Processing ($/t of product) Concentrate (fines only) Bagging Cost Mine to railhead Truck Transport Moisture penalty (truck transportation) Product Handling at Rail Siding Moisture penalty (rail transportation winter only) Rail Operators Commission (1% of freight charges) Rail Logistics Agent (5% of freight charges) Steffen.180.53 $ 7.1/t of product Table 25.51 2.236 32. Newport.513.363.94 27.301 61.402 23.801.740 5.02 0.863.280 232.36 9. Robertson and Kirsten (UK) Ltd.805.371. Table 25.447 12. The total operating cost per tonne of ore (including off site costs but excluding freight to end user) is estimated to be US$27.8 Summary of Unit operating Costs Project Total Operating Costs including contingency General and Administration Costs Labour $ Expats Travel $ All Other $ Contingency (10%) Total $ Total ($/tonne ore) Mining Labour $ Expats Travel $ All Other $ Contingency (10%) Total $ Total ($/tonne ore) Processing Labour $ Expats Travel $ All Other $ Contingency (10%) Total $ Total ($/tonne ore) Total ($) 10.9 Post processing Costs $/unit 5.451 169.The unit costs below in Table 25.44 Total .404 64.310.572. The cash totals in Table 25.702.416 56.131.440 3. NP9 4PG .060 45.1 1.022 893.298. Registered in England and Wales Reg.529 6.309 2.758 87.068.Operating Total ($/tonne ore) 412. The operating cost expressed per tonne of product is US$ 39.214.015 657.066.
NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom .3 Mtpa. Capital investment is depreciated on an annual fixed percentage basis as per the fiscal regime of Kazakhstan Is based on the SRK mining schedule and its production rate of 1. SRK has reviewed the data available and carried out additional investigations and research on the Voskhod project.25. This model reflects capital and operating expenditures and revenues from the second quarter 2006 onwards. described below. In addition. No.8 ECONOMIC ANALYSIS For the economic evaluation SRK has combined the capital and operating cost inputs with the mining schedule in order to generate a detailed economic model in MS Excel for the life of mine. . Newport. Based on this work SRK has derived an independent technical economic model termed the Base Case Model. The corporation tax rate of 30% has been used. Robertson and Kirsten (UK) Ltd. Is based upon process recoveries and a plant design provided by Mintek and DRA-I respectively Takes no account of the potential for the discovery of further Mineral Resources in the licence areas. Does not include any acquisition costs or previous corporate expenses. the SRK economic model: • Is expressed in terms of un-inflated United States Dollar (US$) with no allowances for inflation or escalation as at 24th May 2006 Delays all sales revenues by a quarter to simulate the product sales pipeline Is based on a chromite price used by SRK in this study for all chromite products is U$145/t at the Sarysai rail head Is expressed in post-tax and pre-financing terms which assumes 100 % equity. Reflects owner mining with a premium applied to reflect the planned approach of utilising a contractor for mine startup until the end of 2008. Most of the project capital that has been committed to date has been excluded. Gwent. Any allowable residual tax losses. Operating expenditures during commissioning and initial ramp up of mining/processing have been capitalised up to the end of the first quarter in 2008 Provides a 10% contingency for both capital and operating costs • • • • • • • • • • • • Steffen. that are able to be carried forward. 1575403 Registered Address: 21 Gold Tops. Registered in England and Wales Reg. have not been taken into account.
Therefore. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . The Internal Rate of Return (IRR) was calculated to be 41 %.SRK Consulting Voskhod FS Page 18 In terms of taxation the SRK Base Case model applies the following: 15% VAT to all capital items It is assumed that all VAT on operating expenditure is recovered in the period expended.6 is the sensitivity of the Voskhod project’s NPV to chromite price. SRK has not applied this tax to the economic evaluations for Voskhod. 1575403 Registered Address: 21 Gold Tops. Displayed in Figure 25. Newport. The NPV (Net Present Value) derived for the Base Case Model using the assumptions listed above is $US319. Gwent. discount rate. Robertson and Kirsten (UK) Ltd. Import duty has been applied as per the schedule from Kazakh authorities.6 M at a discount rate of 10 %. capital expenditure and operating expenditure. Registered in England and Wales Reg. Duty rates vary from 5 to 15 % depending on the item Taxable profits (operating profit less depreciation charge) are taxed at a corporate tax rate of 30% 1% royalty applied to gross sales revenue SRK notes that under the terms of the concession agreement between Oriel and the Kazakhstan government there is provision for an Excess Profit Tax (EPT). the conclusion of the SRK feasibility study is that the Voskhod Chromite project is technically and economically feasible based on the investigations and assumptions made in this report. Steffen. No.
Gwent. 25.000.6 M and the corresponding IRR is 50 %. Registered in England and Wales Reg.10 MINE LIFE Based upon Indicated Resources converted into Probable Reserves the mine life is currently 14 years (57 quarters) preceded by a two year construction period.000 $400.000. Robertson and Kirsten (UK) Ltd.000.000 $0 -40% -30% -20% -10% 0% % Variation 10% 20% 30% 40% SRK notes that substantial variations in the four variables do not result in a negative NPV for the Voskhod project. Steffen.9 PAYBACK The SRK financial model indicates that based upon the assumptions used in this Feasibility Study the project payback period is three years. 1575403 Registered Address: 21 Gold Tops. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . Newport.000.000 $100.SRK Consulting Voskhod FS Page 19 Figure 25. No.6 NPV Sensitivity Graph NPV Sensitivity (30% tax) $600. SRK notes that without corporation tax applied the NPV is USS471.000.000 $500.000.000 Initial Capex Opex $200.000 NPV Chromite price Discount Rate $300. 25.
854 $15.497 $5.236 $32.559 -$9.100.300.323.741 78.277 37.212 $980.722 -$764.813.474 $87.161 998.820.855 67.282 $1.813 $632.62 43.40 67.159 $1.513 235.176.101 $110.485 17.380 $61.750 1.026.440 $412.004.525 $539.033 62.403 $79.433.932 1.424 $64.247 102.89 781.26 707.618 62.976.186.755 1.066.771.378.845 $59.927 1.473 $12.592 $5.411.183 99.045 $4.743 $505.691 $17.877.678 $3.992.302.643 $478.516 $53.397 $1.408 30.470 86.779 84.473 849.525 $57.153.028 -$764.152 128.771 $1.337 $29.092 $21.083 $1.158.543.394 0 19.336 $54.917 -$766.795 42.515 $78.284 $518.208.721 $1.948.301.873 $2.411 39.216.721 $67.585 881.800 18.550 $ $ $ $ $ $ $ $ $ $7.753.282.561 35.714 $17.301.029 $30.432 0 -19.369.179 $2.799 67.021 $20.879 108.447 $12.240.533 1.454 1.974 $4.820 $21.846 $16.937.501.452.876 $339.373.567.735.715.432 .825.050 69.613 $4.373 $244.860 $14.420 $1.130 -$608.480 $907.173 1.598 $2.114.366.620 301.896 $152.601 108.277 $898.603 3.500.005 $792.747.617 199.805 30.425.733 1.272 $1.417 $8.377.267 $28.767 1.039 $4.853 0 -97.309 753.822 $145.140 $2.346 $693.158.636 -$703.438 $4.910 $19.158.648 61.853 -19.977 $73.423 $49.417.372 $100.334 $1.159.519 138.011 $4.073 18.675 $3.567.136.853.590 $8.133 $0 $7.804 $1.676.146.281 146.863 $1.951 220.755.786 $75.676.392.146 117.373 $312.349.679 $3.780.441 $1.080.612.697.619.898 $434.042 $793.569 $2.549 $10.856 937.272.769.986.866.345 $127.222.298.865 -97.877 1.233.645 $402.911 105.096 120.756 6.545 $16.525.821.692 -13.924 $15.553.820.480 $77.339 74.156.265.788 $244.118.670 $1.711 $2.012 $1.797.075.197 $2.296 $25.366 $1.744 $991.254 $69.587 $201.610.422 84.041 $4.221 39.976 600.660.276.376 $36.681 21.438.680.521.398 $21.682 -1.437 109.376.078.246.060.488 $1.009.233.650 $19.636 $1.956 $1.945.018.064.710 1.620 43.629.220 $7.242 0 -97.00 147.782 72.229.282.173 $18.815.702.743 -$617.170 $16.179.714 $15.179 $537.190.151 6.803 $25.944.531.869.577 948.498.276.038 $4.455 $29.754.939.080 83.420 $1.984.907.704.187.257 67.651.635 26.238 $986.310.959 64.599 $182.U pfront capital Su staining capital Co nting ency o capital items n Summary of Project Cashflows Unit LOM T otal 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $50.193.351.273.663 $483.362 1.474 $220.714 $16.344.505.830 $763.572 $252.221 1.156.927 $16.980.292.314 12.417.229 $4.573.295.371 852.481 1.787 $39.142.299.040 1.936.819 $348.230 898.309.229.574.938 $16.164 4.562.161.714 $16.485.739 $27.901 91.571 $28.407 $1.958 $6.763.833 $133.05 675.065.604 72.381.504.203 361.407 849.099 859.046 $89.554.017.760 6.991.784 $390.257.733 $60.783 88.046 $4.316 $88.011.503 132.990 $1.853.257.724.730 $291.097 147.157.896 $0 $18.088.523 $17.665 148.720 $1.621.821 $2.209.365 $121.301.134.257 782.824 $348.458 $872.521 $135.794 $61.089 121.851 $1.794 110.747 $472.329.034 $921.219 106.741 $0 $1.729.286 45.308 $1.565 14.764 1.521.526 $399.62 621.854.781.483 $488.691 101.232 $5.389 117.629 $1.780.251 65.669 $1.513 $21.214.088 $319.853 0 -19.037 $423.979 1.336.072 $3.861.908 91.549 $31.965 1.853 -19.220.43 108.264 $357.384.159.346 $5.459.018.549 $152.338 $4.104 $26.469 53.440 73.728 $23.430 $1.303.531 $26.033 78.207.946.10 653.239 $18.208 $1.389 $24.806 $404.285 $30.191 449.554.63 790.510 $12.898 126.41 762.593.558 113.402 1.111 120.674 $5.07 52.087.755 -$348.781.690 $33.017 $23.407.973.248.065.302.594.586 $20.686 $109.625 970.708.769 $24.714 $16.151 54.106.883 $24.960 85.586 49.398.586 $2.028.606 $2.364 48.378.022 $893.131 $4.649 332.425.143 700.940 1.444 134.298.799 18.907.326.571.293.806 20.828.803 $17.418.441.100.680.805 21.729.571 $113.842.280.924 $320.900 $957.591.783.478.430 $470.033 $4.198.154 $4.454.371 $4.918 $597.172 $66.938.489.607 $1.586 $20.117 $62.513.666 $281.853 3.958 $1.342 6.272.025 $4.022 $58.098 $1.614 $13.600.649 96.951.929.647 $28.892.576.057 524.414.454.271.204 $65.818.445 21.594.031 $27.487 $14.611.371.052 -$679.018.967 $4.246 68.588 $383.080.774 $35.891.018.431.468.015 1.308.568.SRK Consulting Voskhod FS Page 20 Figure 25.439 67.313 $443.141 $528.635 $20.971 $122.52 25.990.135.552 $872.823.200.816 $18.074.550 81.572.935 12.895 765.583 $10.288 -96.155 $3.199.514 38.665 $490.603.690.755.284 $860.325.410 $19.354 1.012 $890.900.529 $6.102 83.805.212.746 $2.602 $114.673.396.377.886 $287.959 $5.941 $329.546 126.502 6.877 $1.211.672 $114.299.673 $449.467.378 $2.337.375 -19.541 $1.276 1.496 $139.851 $182.932 -$540.873 $543.680 29.645.170 122.224.794 $18.482 18.019.314 $15.988 $126.799.025 $39.152 41.594.305 $104.923 92.531.691 71.286 $207.200 $256.775.748 $91.961 92.213 $2.872 $3.06 $ $ $ $ $1.422.653 $3.350.340 $901.867 23.79 510.038 $1.870.398.588.327 -$724.770 -31.613.70 90.099 -$596.374 65.095 $444.591.054.609 $309.890 $296.208 222.410 $21.960 $5.371.421.293.891 68.809 $258.572 $2.726.929 3.178 $3.415 $109.758 $87.912 $1.469.919 $17.707 869.181 73.507 $5.129 819.607.856.039 $884.936 $4.583 $87.086 $1.883 99.360.464 -$603.222.686 $117.301.293 $188.8.131.522.242.899 $6.465 $898.792 19.469.32 60.808 102.694 $237.151 0 t t t % 1.433 $430.095 18.996 662.878.135 138.056.466.668.688 $244.827 87.418.548 $30.531 1.768.41 592.417.299 $946.650 $4.011 113.921.344 $412.483.334.355 -$170.293 $3.096 $537.650 $1.087.563 961.148.542 $82.541 1.474.724 1.024 $846.919 144.772.381 109.405 $90.246 $26.83 0 301.582 -$730.282.036 $597.896 $4.749 $21.427.879 $441.399 $1.981 $5.737 $10.185 $543.015 $6.195 1.242 -116.425 $1.164.270 72.863.339.460.576 $20.220.256.435 78.288 -97.439.675.299.054 $231.122 75.508.483 $80.020 t 1.479.038.330.527.289 39.938 19.518.737 1.386 $768.309 $286.158.899.200.648.013 $7.068.141 $579.827 $73.746 $1.574 $18.988 60.75 654.338 $25.387 $144.957 $25.90 718.714 $19.925 $3.334.814.28 640.115 $1.050 $443.110.160 $15.609 $152.941 111.063.200 Cap ital Grand T otal Produ ction T otal waste produced Ore Ore produced from sublevel drifting Ore produced from sublevel cav ing Total R OM ore pro ductio n Grad e Saleab Prod le ucts Lump Chip Concentrate T otal Saleable Products Yield Revenues Lump Chip Concentrate (T ransport losses correction) Total Revenue Operating Co sts General and Administration C osts Mining Processing Subtotal Royalty Payment (1% on operating costs) To Operating C ts tal os Produ Co Pos Proces ing ct sts t s Concentrate Bagging C ost Mine to railhead T ruck T ransport Mois ture penalty (tru tran ortation) ck sp Product Handling at R Siding ail Mois ture penalty (transp ortation ) Rail Operators C ommission (1% of freight charges) Rail Logistics Agent (5% of freight charges) Total Prod uct H andling C ts os C ASHF LOW Cu mulative C hflo (pre tax) as w Depreciation Taxable Tax Payable (30% ) pos tax cas t h Cu mulative C hflo (pos tax) as w t $ $ $ $ $ $ $113.371 101.590 $12.475.055 33.470 $4.382 $72.846.290.598 $2.745 $2.332 $17.442 77.400.352 1.264 33.223 $13.118 31.114 $987.000 $1.177.594.559.868 $54.30 56.419 544.714 $17.364.077.619.926 110.937 79.872.929.425 69.123 $27.336.91 125.830 $21.844 102.649 $147.324 $1.299 - - $50.14 t t t t % 9.029 $1.706 $101.88 110.249.081.453 $25.036 $4.338 $0 $4.186 1.072 $595.092.895 $30.297 1.474 $684.130 $95.242 -116.571 $19.566 223.043 $494.126 607 - - 82.387.825 23.338 $1.169.318 1.195 $4.262 $92.318.662.466.739.057.589.381 5.649.92 182.594.488.622.934.66 698.922 64.918.246.411 306.364.704 138.477 $107.127.492 $465.008 $2.817 -$639.255.869.648 $25.341.160 106.740 $1.155 76.488 44.675.805 124.132.427.715 $430.54 8.309 60.599.256 $71.432.927.352.257 $445.190.805.819 $720.409 $458.664 36.545 $2.594 $14.461.679 459.811 137.106 81.740.763 $25.509 $261.785 $27.210.391.644.736.248 $361.631 754.904 $58.651 $1.905.612.210.018.011.131 80.394 $3.681.065 4.300 147.29 577.119.229 $9.317.668.191 41.141 $551.863 $2.159 $120.812 $1.467 $91.130 95.370.316 84.161 999.092 $6.193 $12.632 81.526.725.115 20.153.841 $928.282.426 $4.528 375.549 $579.298.327 17.147 $509.002 $1.330 83.835 1.852.417.586 $138.778 65.382.356.799.977 $29.805 $1.471 $118.367 $1.573 115.582.150.120 117.293 $6.337 $15.789 $120.491.505.397 $270.703.304 115.582.526 83.896.807 42.967.087.054.259.547 $86.838 25.012 $4.587 $935.454 $69.882.398.300.186 $120.859.333.103 $418.131.080 32.399.145.995.402 $23.190 1.231.319 $217.304.859 $90.977.924.260.726 $17.045.852 38.228.594.680.987 831.91 45.594.031 1.467 34.242 $202.356 77.521.597 1.081 1.862 $6.238.959 673.7 CA PITAL EXPEN DITUR E Su btotal General & A dmin istration C apital ($) Su btotal Mining C apital ($) Su btotal Proces ing Cap s ital ($) Su btotal .301.402.
affiliation with a professional association (as defined in NI 43-101) and past relevant work experience.. 5. C. 10. FIOM3. I am a Fellow of the Institution of Mining. University of London in 1967. Cardiff CF10 3BX. I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101. Alwyn E. University of London. Steffen. Robertson and Kirsten (UK) Ltd.SRK Consulting Voskhod FS Page 21 26 CERTIFICATES CERTIFICATE of AUTHOR 1. I graduated with an Upper Second Class Honours degree (B. Eng. I have visited the Voskhod property on six occasions during the period September 2004 November 2005 for a total of 39 days. No. the omission to disclose which makes the Technical Report misleading. I am a Principal Mining Geologist of SRK Consulting (UK) Ltd. I have read National Instrument 43-101 and Form 43-101F1. I am not aware of any material fact or material change with respect to the subject matter of the Technical Report that is not reflected in the Technical Report. in 1964 and with a PhD in volcanic geology from Imperial College. 4. do hereby certify that: 2. Newport. 1-3 Windsor Place. Metallurgy and Materials (IOM3) and a Chartered Engineer.Sc) in Geology from Kings College. 11. I have had no prior involvement with the property that is the subject of the Technical Report. and the Technical Report has been prepared in compliance with that instrument and form. I am responsible for the preparation of the geology and resources sections of the technical report titled “Voskhod Feasibility Study Summary Technical Report” and dated May 2006 (the “Technical Report”) relating to the Voskhod property. 6. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . Gwent. I am independent of the issuer applying all of the tests in section 1. Registered in England and Wales Reg. Windsor Court. 7. 9. 1575403 Registered Address: 21 Gold Tops.5 of National Instrument 43-101. UK 3. Annels. I have worked as a mining geologist for a total of 39 years since my graduation from university. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education. 8.
12. No. Gwent. Robertson and Kirsten (UK) Ltd. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . including electronic publication in the public company files on their websites accessible by the public. Registered in England and Wales Reg. Annels Steffen. Dated this 24th day of May. of the Technical Report. Newport. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes. Dr Alwyn E. 1575403 Registered Address: 21 Gold Tops. 2006.
Gwent. Annels. Dr Alwyn. Dated this 24th Day of May. Annels Steffen. Robertson and Kirsten (UK) Ltd. 2006. Registered in England and Wales Reg.SRK Consulting Voskhod FS CONSENT of AUTHOR TO: Ontario Securities Commission I. do hereby consent to the filing of the written disclosure of the Executive Summary of technical report titled “Voskhod Feasibility Study Summary Technical Report” and dated May 2006 (the “Technical Report”) and to the filing of the Executive Summary of the Technical Report with the securities regulatory authorities referred to above. Alwyn. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . 1575403 Registered Address: 21 Gold Tops. E. E. No. Newport.
3. Cardiff CF10 3BX. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . including electronic publication in the public company files on their websites accessible by the public.File Ref: Page No: 24th May 2006 CERTIFICATE of AUTHOR I. No.5 of National Instrument 43-101. Cornwall. 2006. 11. 10. Michael J. UK 2. do hereby certify that: 1. I am a Senior Mining Engineer of SRK Consulting Ltd. 9. 7. Registered in England and Wales Reg. 1-3 Windsor Place. UK in 1992. Eng. I visited the Voskhod property on one occasion during the April 2006 for a total of 3 days. 5. I graduated with a First Class Honours degree (B. Gwent. the omission to disclose which makes the Technical Report misleading. and the Technical Report has been prepared in compliance with that instrument and form. Dated this 24th day of May. 8. Windsor Court. Robertson and Kirsten (UK) Ltd. I am not aware of any material fact or material change with respect to the subject matter of the Technical Report that is not reflected in the Technical Report. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority and any publication by them for regulatory purposes. I fulfil the requirements to be a “qualified person” for the purposes of NI 43-101. I have worked as a mining engineer for a total of 14 years since my graduation from university. 6. I am responsible for the preparation of the technical report titled “Voskhod Feasibility Study Summary Technical Report” and dated May 2006 (the “Technical Report”) relating to the Aguas Teñidas property.Eng) in Mining Engineering from Camborne School of Mines. Beare. I am independent of the issuer applying all of the tests in section 1. I have had no prior involvement with the property that is the subject of the Technical Report. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education. Metallurgy and Materials (IOM3 ) and a Chartered Engineer. MIOM3. I have read National Instrument 43-101 and Form 43-101F1. 4. C. of the Technical Report. I am a Member of the Institution of Mining. affiliation with a professional association (as defined in NI 43-101) and past relevant work experience. Newport. Mr Michael Beare Steffen.. 1575403 Registered Address: 21 Gold Tops.
Beare. Newport. Robertson and Kirsten (UK) Ltd. 2006. No.CONSENT of AUTHOR TO: Ontario Securities Commission I. NP9 4PG Offices in: Australia North America Southern Africa South America United Kingdom . 1575403 Registered Address: 21 Gold Tops. Michael J. Mr Michael Beare Steffen. Registered in England and Wales Reg. do hereby consent to the filing of the written disclosure of the Executive Summary of technical report titled “Voskhod Feasibility Study Summary Technical Report” and dated May 2006 (the “Technical Report”) and to the filing of the Executive Summary of the Technical Report with the securities regulatory authorities referred to above. Gwent. Dated this 24th Day of May.