Mina Justa

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in LR14.63(2)(b)
securities, bank manager, solicitor, professional accountants or other professional adviser. LR14A.58(3)(b)
If you have sold or transferred all your shares in China Sci-Tech Holdings Limited, you should at once hand this circular
together with the enclosed form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom
the sale was effected for transmission to the purchaser or transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the LR14.58(1)
contents of this circular, make no representation as to its accuracy or completeness and expressly disclaims any liability LR14A.59(1)
whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe
for securities.
CHINA SCI-TECH HOLDINGS LIMITED App 1B- 1
(中國科技集團有限公司) *
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 985) LR13.51A
(1) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF

THE ENTIRE ISSUED SHARE CAPITAL OF CHARIOT RESOURCES LIMITED,
(2) PROPOSED SUBSCRIPTION BY CHIU TAO,
(3) SPECIFIC MANDATE TO ISSUE NEW SHARES,
(4) PROPOSED CHANGE OF NAME OF THE COMPANY,
AND
(5) NOTICE OF EXTRAORDINARY GENERAL MEETING
Financial Advisers to the Company in connection with the Chariot Acquisition
Placing Agents of the Company in connection with the Chariot Placing
Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders
in connection with the Chariot Subscription
All capitalised terms used in this circular have the meanings set out in the section headed “Definitions” of this circular.
A letter from the Board is set out on pages 11 to 73 of this circular. A letter from the Independent Board Committee containing
its recommendation to the Independent Shareholders in relation to the Chariot Subscription and the Chariot Subscription
Agreement is set out on pages 74 to 75 of this circular. A letter from Guangdong Securities containing its advice to the
Independent Board Committee and the Independent Shareholders in relation to the Chariot Subscription and the Chariot
Subscription Agreement is set out on pages 76 to 88 of this circular.
A notice convening an extraordinary general meeting of China Sci-Tech Holdings Limited to be held at Concord Room II-III,
8th Floor, Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Tuesday, 1 June 2010 at
10:00 a.m. or any adjournment thereof is set out on pages N-1 to N-4 of this circular. A proxy form for use in the extraordinary
general meeting is enclosed. Whether or not you propose to attend the meeting, you are requested to complete the enclosed
proxy form in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in
Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as
possible and in any event not later than 48 hours before the time appointed for holding of the extraordinary general meeting
or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person
at the extraordinary general meeting or any adjournment thereof should you so wish.
* For identification purpose only
30 April 2010
IMPORTANT
This circular is not an offer of securities for sale or solicitation of an offer to purchase securities.
The securities described herein have not been and will not be registered under the US Securities Act
of 1933 (the “US Securities Act”), and may not be offered or sold in the United States absent
registration under the US Securities Act, or an applicable exemption from the registration
requirements thereof. There will be no public offering of the securities described herein in the United
States.
This circular is being made by the Company. None of the Financial Advisers, the Chariot Placing
Agents nor any of their respective directors, supervisors, officers, employees, advisers, consultants or
agents makes any representation or warranty, express or implied, as to the accuracy, reliability or
completeness of the information in this circular, or shall be responsible for the accuracy, reliability
or completeness of any such information and nothing in this circular is, or shall be relied upon as, a
promise or representation by the Financial Advisers, the Chariot Placing Agents or any of their
respective directors, supervisors, officers, employees, advisers, consultants or agents.
Forward-looking Information
Certain information contained in this circular constitutes forward-looking information. Investors

and Shareholders are cautioned that forward-looking information is inherently uncertain and involves
risks and uncertainties that could cause actual results, performance or achievements of the Group or
the Chariot Group to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking information. These forward-looking statements include,
without limitation, statements relating to the completion and terms of the Chariot Acquisition, the
proposed strategies of the Group following Chariot Acquisition Completion, and the Chariot Placing
and the use of proceeds from the Chariot Placing. Factors that could cause actual results to differ
materially include, without limitation, the ability to complete the Chariot Acquisition, the ability to
satisfy the conditions of the Chariot Placing, the failure to receive regulatory approvals with respect
to the Chariot Acquisition and/or the Chariot Placing, changes in the price of commodities generally
or copper specifically, and changes in Hong Kong and other relevant securities markets. In addition,
specific reference is made to section 6 of Part A headed “Risks Associated with the Chariot
Acquisition” in the letter from the Board in this circular. There can be no assurance that future
developments affecting the Group will be those anticipated by the management. While the Company
may elect to update the forward-looking information at any time, the Company does not undertake to
update it at any particular time or in response to any particular event. Investors and Shareholders
should not assume that any forward-looking information in this circular represents the management’s
estimate as at any date other than the date of this circular.
Currency and Exchange Rates
In this circular, for the purpose of illustration only, (a) the amounts denominated in A$ have been
translated into HK$ at the exchange rate of A$1.00 to HK$7.1508; (b) the amounts denominated in C$
have been translated into HK$ at the exchange rate of C$1.00 to HK$7.7699; and (c) the amounts
denominated in US$ have been translated into HK$ at the exchange rate of US$1.00 to HK$7.7629.
Such translations should not be construed as a representation that the relevant amounts have been,
could have been, or could be converted at that or any other rate or at all.
— i —
CONTENTS
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board ................................................... 11
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Letter from Guangdong Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Appendix I — Audited Financial Information of the Group . . . . . . . . . . . . . . . . . I-1
Appendix II — Unaudited Financial Information of the Group . . . . . . . . . . . . . . . II-1
Appendix III — Accountant’s Report on the Chariot Group . . . . . . . . . . . . . . . . . . III-1
Appendix IV — Unaudited pro forma Financial Information

of the Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
Appendix V — Technical Report on the Mina Justa Project . . . . . . . . . . . . . . . . . V-1
Appendix VI — Valuation Report on the Mina Justa Project . . . . . . . . . . . . . . . . . VI-1
Appendix VII — Management Discussion and Analysis ...................... VII-1
Appendix VIII — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N-1
— ii —
DEFINITIONS
In this circular, unless the context otherwise requires, the following expressions shall have the
following meanings:
“A$” Australian dollars, the lawful currency of Australia
“Andes” Andes Resources Compañia Minera S.A.C., a corporation

incorporated under the laws of Peru on 22 August 2001 and
wholly-owned by Chariot
“Appointment Announcement” the announcement of the Company dated 25 March 2010 in

relation to the appointment of Mr. Barber as an executive
Director and the chief executive of the Company and Mr.
Hegarty as an executive Director and the vice chairman of the
Company
“Arrangement Agreement” the agreement dated 28 February 2010 entered into by the
Chariot Purchaser, the Company and Chariot for the
implementation of the Plan of Arrangement
“Arrangement Resolution” the special resolution of Chariot approving the Plan of

Arrangement which, to be effective, must be approved by (i)
at least two-thirds of the votes cast at a meeting by Chariot
Shareholders in person or by proxy, voting as a single class;
and (ii) if required by the applicable laws of provinces of
Canada, minority approval (as defined in the applicable laws
of provinces of Canada)
“associate(s)” has the meaning ascribed to it under the Listing Rules
“BCBCA” the Business Corporations Act (British Columbia) and the

regulations made thereunder, as promulgated or amended
from time to time
“Board” the board of Directors
“BOCI” BOCI Asia Limited, a corporation licensed for Type 1

(dealing in securities) and Type 6 (advising on corporate
finance) regulated activities under the SFO
“C1 Cash Cost” the direct cash cost incurred at each processing stage, from
mining through to recoverable copper delivered to market,
less net by-product credits (if any), and which covers, among
other things, mining, milling and concentrating, on-site
administration and general expenses, smelting and refining
“C$” Canadian dollars, the lawful currency of Canada
“Canadian Court” the Supreme Court of British Columbia
— 1 —
DEFINITIONS
“Canadian GAAP” General Accepted Accounting Principles of Canada
“Chariot” Chariot Resources Limited (formerly known as Hyperion

Resources Corp.), a corporation incorporated on 12 November
1996 under the laws of the Yukon and continued under the
BCBCA, whose shares are listed on the TSX
“Chariot Acquisition” the acquisition of the Chariot Sale Shares by the Chariot
Purchaser in accordance with the Arrangement Agreement
“Chariot Acquisition Completion” completion of the Chariot Acquisition in accordance with the
Arrangement Agreement
“Chariot Acquisition Completion the conditions precedent of the Arrangement Agreement

Conditions”
“Chariot Board” the board of directors of Chariot
“Chariot Circular” the notice of the Chariot Meeting and accompanying

management information circular, including all schedules,
appendices and exhibits thereto and information incorporated
by reference therein, to be sent to the Chariot Shareholders
and holders of Chariot Options in connection with the Chariot
Meeting, as amended, supplemented or otherwise modified
from time to time in accordance with the provisions of the
Arrangement Agreement
“Chariot Consideration” the consideration for the Chariot Acquisition
“Chariot Group” Chariot and its subsidiaries
“Chariot Long Stop Date” 15 July 2010 or such later date as may be agreed to in writing
by the parties to the Arrangement Agreement
“Chariot Meeting” the special meeting of the Chariot Shareholders, including

any adjournment or postponement thereof, to be called and
held on or about 31 May 2010 in accordance with the Interim
Order to consider the Arrangement Resolution
“Chariot Option(s)” as at the date of the Arrangement Agreement, the 16,529,190

issued and outstanding option(s) to purchase Chariot Sale
Shares granted under the Chariot Share Incentive Plan or
otherwise
“Chariot Placing” the proposed placing of the Chariot Placing Shares by the
Chariot Placing Agents pursuant to the terms of the Chariot
Placing Agreement
“Chariot Placing Agents” BOCI and Morgan Stanley International
— 2 —
DEFINITIONS
“Chariot Placing Agreement” a conditional placing agreement dated 25 March 2010 entered
into between the Company and the Chariot Placing Agents in
relation to the Chariot Placing
“Chariot Placing Completion” completion of the Chariot Placing
“Chariot Placing Completion the earlier of any date (i) on or before 3 September 2010; and
Date” (ii) within one month from Chariot Acquisition Completion,
or such other time or date as the Company and the Chariot
Placing Agents shall agree in writing, on which Chariot
Placing Completion shall take place
“Chariot Placing Price” the placing price per Chariot Placing Share
“Chariot Placing Shares” the proposed placing by the Chariot Placing Agents of up to
31,200,000,000 new Shares which may be allotted and issued
by the Company pursuant to the terms of the Chariot Placing
Agreement upon the granting of the Chariot Specific Mandate
“Chariot Purchaser” China Sci-Tech Minerals Limited (formerly known as

0874791 B.C. LTD.) an indirect wholly-owned subsidiary of
the Company incorporated under the laws of British
Columbia, Canada with limited liability
“Chariot Sale Shares(s)” the issued and outstanding common share(s) in the capital of
Chariot
“Chariot Shareholder(s)” holder(s) of Chariot Sale Share(s)
“Chariot Shareholder Rights Plan” the amended and restated shareholder rights plan agreement
dated 27 July 2009 entered into between Chariot and
Computershare Investor Services Inc., as amended from time
to time
“Chariot Share Incentive Plan” the stock option plan of Chariot, which became effective on
21 October 2004, as amended
“Chariot Specific Mandate” the authority to allot and issue the Chariot Placing Shares
under the Chariot Placing Agreement
“Chariot Subscription” the proposed subscription for the Chariot Subscription Shares
by Mr. Chiu upon the terms and subject to the conditions of
the Chariot Subscription Agreement
“Chariot Subscription Agreement” the subscription agreement dated 29 March 2010 relating to
the Chariot Subscription entered into between the Company
and Mr. Chiu
— 3 —
DEFINITIONS
“Chariot Subscription Closing the date on which the Chariot Subscription closes in
Date” accordance with the terms of the Chariot Subscription
Agreement
“Chariot Subscription Price” the subscription price per Chariot Subscription Share
(exclusive of brokerage, fee and levy, if any) at which the
Chariot Subscription Shares are to be subscribed by Mr. Chiu,
which will be the same as the Chariot Placing Price
“Chariot Subscription Shares” 3,120,000,000 new Shares to be subscribed by Mr. Chiu in

connection with the Chariot Placing
“Chariot Valuation Report” an independent valuation report on the Mina Justa Project
dated 30 April 2010 and prepared by Greater China Appraisal
Limited, as set out in Appendix VI to this circular
“closed corporation” a special kind of corporation that, in accordance with the

Peruvian General Companies Law, has the following main
characteristics: (i) it has no more than 20 shareholders; (ii) it
does not have shares registered before the Peruvian Securities
and Exchange Commission; (iii) shareholders enjoy the right
of first refusal (unless agreed otherwise in the by-laws); (iv)
shareholders do not need to attend a shareholders’ meeting
since voting can be carried out by electronic means; and (v)
it may not have a board of directors
“closed corporation by means of a closed corporation incorporated by means of a public deed,

public deed” which is a notarized and formal written instrument, that
contains the articles of incorporation and the by-laws of the
company to be incorporated
“CIRA” Certificate of Nonexistence of Archaeological Remains
“Company” China Sci-Tech Holdings Limited, a company incorporated in

the Cayman Islands with limited liability and the shares of
which are listed on the Stock Exchange
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“CRU” an independent business analysis and consultancy group

focused on the mining, metals, power, cables, fertilizer and
chemical sectors
“DFS” the definitive feasibility study on the Mina Justa Project

prepared by GRD Minproc Limited, a third party independent
of the Company and Chariot, in accordance with the reporting
guidelines under NI 43 — 101
“Director(s)” the directors of the Company
— 4 —
DEFINITIONS
“Dissenting Chariot registered Chariot Shareholder(s) who dissent in respect of

Shareholder(s)” the Plan of Arrangement in strict compliance with the Dissent
Rights and who are ultimately entitled to be paid fair value for
the Chariot Sale Shares
“Dissent Rights” the rights of dissent in respect of the Plan of Arrangement

available to Chariot Shareholders under the BCBCA
“Effective Date” the third business day after the satisfaction or, where not
prohibited and subject to applicable laws, the waiver of the
Chariot Acquisition Completion Conditions by the applicable
party(ies) to the Arrangement Agreement for whose benefit
such Chariot Acquisition Completion Conditions exist
(excluding such Chariot Acquisition Completion Conditions
that, by their terms, cannot be satisfied until the Effective
Date, but subject to the satisfaction or, where not prohibited,
the waiver of such Chariot Acquisition Completion
Conditions as at the Effective Date by the applicable
party(ies) to the Arrangement Agreement for whose benefit
such conditions exist), unless another date is agreed to in
writing by the parties to the Arrangement Agreement
“Effective Time” the time on the Effective Date that the Plan of Arrangement
becomes effective
“EGM” the extraordinary general meeting of the Company to be

convened to approve the matter(s) referred to in the “Notice
of Extraordinary General Meeting” set out in this circular
“Enlarged Group” the Group immediately after completion of the Chariot

Acquisition
“ESIA” the Mina Justa Environmental and Social Impact Assessment
“Final Order” the final order of the Canadian Court pursuant to section 291
of the BCBCA, in a form acceptable to Chariot, the Chariot
Purchaser and the Company, acting reasonably, approving the
Plan of Arrangement as such order may be amended by the
Court (with the consent of both Chariot and the Company,
each acting reasonably) at any time prior to the Effective Date
or, if appealed, then, unless such appeal is withdrawn or
denied, as affirmed or as amended (provided that any such
amendment is acceptable to both Chariot and the Company,
each acting reasonably) on appeal
“Financial Advisers” BOCI and Morgan Stanley Asia
— 5 —
DEFINITIONS
“Former Chariot Optionholder(s)” the holder(s) of the Chariot Option(s) immediately prior to the
Effective Time
“Former Chariot Shareholder(s)” the holder(s) of the Chariot Sale Share(s) immediately prior to
the Effective Time
“G-Resources” G-Resources Group Limited, a company incorporated in

Bermuda with limited liability and the shares of which are
listed on the Stock Exchange (Stock Code: 1051)
“Group” the Company and its subsidiaries from time to time
“Guangdong Securities” or Guangdong Securities Limited, a licensed corporation to

“Independent Financial carry out Type 1 (dealing in securities), Type 2 (dealing in
Adviser” futures contracts), Type 4 (advising on securities), Type 6
(advising on corporate finance) and Type 9 (asset
management) regulated activities under the SFO, being the
independent financial adviser to advise the Independent
Board Committee and the Independent Shareholders in
relation to the Chariot Subscription
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the People’s
Republic of China
“Independent Board Committee” an independent committee of the Board comprising Mr. Yu

Pang, Ms. Tong So Yuet and Mr. Chan Shek Wah, all of whom
are independent non-executive Directors, formed to advise
the Independent Shareholders in relation to the Chariot
Subscription
“Independent Shareholders” all Shareholders
“Interim Order” the interim order of the Canadian Court, in a form acceptable
to Chariot, the Chariot Purchaser and the Company, acting
reasonably, providing for, among other things, the calling and
holding of the Chariot Meeting, as the same may be amended
by the Canadian Court with the consent of Chariot and the
Company, each acting reasonably
“JORC Code” Australasian Code for Reporting of Identified Mineral

Resources and Ore Reserves (2004 Edition)
“Korean Partners” Korea Resources Company and LS-Nikko Copper Inc.

(formerly known as LG-Nikko Copper Inc.)
“kt” kilotonnes
— 6 —
DEFINITIONS
“Last Trading Date” 26 February 2010
“Latest Practicable Date” 23 April 2010
“Letter Agreement” the letter agreement entered into by the Company dated 9
January 2010 in relation to the consideration of a potential
acquisition of Chariot by the Company
“Listing Committee” the Listing Committee of the Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited
“LME” London Metal Exchange
“Locked-up Chariot Solway Finance Ltd., Lundin Mining Corporation and the
Shareholders” directors and officers of Chariot
“Marcobre” Marcobre S.A.C., a corporation incorporated under the laws

of Peru on 20 May 2004 and owned as to 70% by Chariot and
as to 30% by the Korean Partners
“Marcobre Concessions” the 46 concessions granted to Marcobre in relation to the

Marcona Copper Property
“Marcona Copper Property” the copper property located in five properties (known as Mina
Justa, Achupallas, Miramar, Clavelinas and La Apreciada) in
the Nazca Province, Peru
“Martabe Project” the Martabe Gold and Silver Project as defined in the
announcement of the Company dated 12 May 2009
“Material Adverse Effect” when used in connection with the Chariot Group, any fact,
change, effect, event, occurrence or state of facts that
individually or in the aggregate with other such facts,
changes, effects, events, occurrences or states of fact is or
would reasonably be expected to:
(i) prevent Chariot from performing its obligations under,

or prevent Chariot’s subsidiaries from performing (and,
for greater certainty, refraining from taking) the actions
contemplated by, the Arrangement Agreement or cause a
material delay in such performance, or
— 7 —
DEFINITIONS
(ii) be material and adverse to the business, prospects,

licences, assets, capital, properties, liabilities (including
contingent liabilities), condition (financial or
otherwise), operations or results of Chariot and its
subsidiaries taken as a whole, other than any fact,
change, effect, event, occurrence or state of facts in or
relating to:
(a) economic, business, regulatory or political

conditions in general;
(b) credit, financial or currency markets in general or

the state of the securities markets in general
(including any reduction in market indices);
(c) any change affecting the global mining industry

generally (including fluctuations in metal prices);
(d) any acts of terrorism, military action or war

(whether or not declared) or any escalation or
worsening thereof;
(e) a change in the market trading price of the Chariot

Sale Shares, either:
(1) directly related to the announcement of the

execution of the Arrangement Agreement or
the transactions contemplated thereby; or
(2) directly related to a change, effect, event or

occurrence excluded from the definition
under paragraph (a), (b), (c), (d) or (f);
(f) any generally applicable change in Canadian

GAAP; or
(g) any action or inaction taken by Chariot or any of its

subsidiaries to which the Chariot Purchaser and the
Company have expressly consented in writing or as
expressly permitted by the Arrangement
Agreement;
provided, however, that for the purposes of paragraphs (a),

(b), (c), (d) and (f) such fact, change, effect, event or
occurrence neither primarily relates to (or has the effect of
primarily relating to) Chariot and its subsidiaries, taken as a
whole, nor disproportionately adversely affects Chariot and
its subsidiaries, taken as a whole, compared to mineral
exploration companies of similar size
— 8 —
DEFINITIONS
“MEM” the Ministry of Energy and Mines of Peru
“Mina Justa Project” the copper project located within the Marcona Copper
Property and consists of two deposits, namely the Mina Justa
deposit and the Magnetite Manto deposit
“Mine Closure Plan” an environmental instruction which details the technical and
legal actions to be taken by developers of mining projects for
the purpose of determining the measures to be taken in order
to restore the area used for and/or disturbed by mining
activities
“Morgan Stanley Asia” a company incorporated in Hong Kong which is licensed for
Type 1 (dealing in securities), Type 4 (advising on securities),
Type 5 (advising on futures contracts), Type 6 (advising on
corporate finance), Type 7 (providing automated trading
services) and Type 9 (asset management) regulated activities
under the SFO
“Morgan Stanley International” Morgan Stanley & Co. International plc and, in so far as
Morgan Stanley & Co. International plc is “dealing in
securities”, as defined in Schedule 5 of the SFO, Morgan
Stanley & Co. International plc shall be doing so through its
agent, Morgan Stanley Asia, and only in circumstances such
that none of the sub-provisions (I), (II), (III), (IV) and (V) in
sub-paragraph (iv) to the definition of “dealing in securities”
in Part 2 of Schedule 5 of the SFO are applicable
“Mr. Barber” Mr. Damon G Barber
“Mr. Chiu” Mr. Chiu Tao
“Mr. Hegarty” Mr. Owen L Hegarty
“Mt” million tonnes
“Mt/a” million tonnes per annum
“NI 43-101” National Instrument 43-101 — Standards of Disclosure for

Mineral Projects of the Canadian Securities Administrators
“Plan of Arrangement” the plan of arrangement attached to the Arrangement

Agreement, and any amendments or variations thereto made
in accordance with the Arrangement Agreement or at the
direction of the Canadian Court in the Final Order with the
consent of the Company and Chariot, each acting reasonably
“PRC” The People’s Republic of China
— 9 —
DEFINITIONS
“Relevant Chariot Options” the Chariot Options in respect of which the exercise price of
each such Chariot Option is less than C$0.67
“Rio Tinto” Rio Tinto Mining and Exploration Limited, Sucursal del Peru
“SFO” the Securities and Futures Ordinance (Chapter 571 of the laws
of Hong Kong)
“Share(s)” ordinary share(s) of HK$0.10 each in the existing issued share

capital of the Company
“Shareholder(s)” holder(s) of the Share(s)
“SHP” Shougang Hierro Peru S.A.A.
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“t/a” tonnes per annum
“Target Area 1” the area originally within the CPS No. 1 mineral concession
defined by Rio Tinto pursuant to an option agreement between
SHP and Rio Tinto dated 6 August 2004, identified with code
number 48-D which title to concession was approved by
resolution number RJ 1731-2004-INACC/J dated 7 May 2004
and registered as entry 0001 of file 11668149 of the Book of
Mineral Rights, Registry Zone IX, Lima Office
“TSX” Toronto Stock Exchange
“US$” United States dollars, the lawful currency of United States of

America
“Voting Agreements” the various agreements dated 28 February 2010 entered into
by the Chariot Purchaser and the Company with the
Locked-up Chariot Shareholders, pursuant to which the
Locked-up Chariot Shareholders agreed to vote, subject to
certain terms and conditions, their Chariot Sale Shares (and
any Chariot Sale Shares issuable upon exercise of Chariot
Options) in favour of the Arrangement Resolution
“Warrants” the warrants in registered form created under the deed poll
dated 3 June 2009 entitling registered holders to subscribe for
Shares on the terms and conditions thereof
“%” per cent.
— 10 —
LETTER FROM THE BOARD
CHINA SCI-TECH HOLDINGS LIMITED

(Stock Code: 985)
Executive Directors: Registered office: LR2.14

Mr. Chiu Tao (Chairman) Ground Floor,
Mr. Chiu Kong Caledonian House,
Mr. Yeung Kwok Yu Mary Street,
Mr. Kwan Kam Hung, Jimmy P.O. Box 1043,
Mr. Hui Richard Rui George Town,
Mr. Tsui Ching Hung Grand Cayman,
Mr. Chung Nai Ting Cayman Islands
Mr. Lee Ming Tung
Mr. Damon G Barber Head Office and principal place of
business in Hong Kong:
Independent non-executive Directors: Room 4510,
Mr. Yu Pan 45th Floor,
Ms. Tong So Yuet China Resources Building,
Mr. Chan Shek Wah 26 Harbour Road,
Wanchai,
Hong Kong
30 April 2010
To the Shareholders
Dear Sir or Madam,
(1) VERY SUBSTANTIAL ACQUISITION IN RELATION TO

THE ACQUISITION OF THE ENTIRE ISSUED SHARE CAPITAL OF
CHARIOT RESOURCES LIMITED,
(2) PROPOSED SUBSCRIPTION BY CHIU TAO,
(3) SPECIFIC MANDATE TO ISSUE NEW SHARES,
(4) PROPOSED CHANGE OF NAME OF THE COMPANY,
AND
(5) NOTICE OF EXTRAORDINARY GENERAL MEETING
INTRODUCTION
On 25 March 2010, the Company announced that:
(a) the Chariot Purchaser (an indirect wholly-owned subsidiary of the Company), the Company LR14.60(1)
LR14.63(1)
and Chariot entered into the Arrangement Agreement on 28 February 2010, pursuant to LR14.63(2)(a)
* For identification purposes only
— 11 —
which the Chariot Purchaser agreed to acquire the Chariot Sale Shares, which represent the
entire issued and outstanding share capital of Chariot, at the aggregate cash consideration
of approximately C$244,580,000 (equivalent to approximately HK$1,900,362,000, subject
to adjustment) in accordance with the Plan of Arrangement;
(b) the Company and the Chariot Placing Agents entered into the Chariot Placing Agreement
on 25 March 2010, pursuant to which the Chariot Placing Agents agreed, subject to
satisfaction of the conditions precedent set out below and the other terms of the Chariot
Placing Agreement, on a several (but neither joint nor joint and several) basis and as agents
of the Company, to procure, on a best efforts basis, investors to subscribe for up to
31,200,000,000 new Shares at a placing price of no less than HK$0.20 per Chariot Placing
Share;
(c) it sought the Chariot Specific Mandate to authorise the allotment and issue of up to
31,200,000,000 new Shares for the purpose of the Chariot Placing; and
(d) the Board proposed to change the name of the Company from “China Sci-Tech Holdings
Limited” to “CST Mining Group Limited”. Subject to the new English name of the
Company becoming effective, the Company will adopt “中科礦業集團有限公司” as its new
Chinese name for identification purpose only.
On 29 March 2010, the Company further announced that it entered into the Chariot Subscription
Agreement with Mr. Chiu, pursuant to which Mr. Chiu agreed to subscribe for 3,120,000,000 new
Shares in connection with the Chariot Placing.
The Chariot Acquisition constitutes a very substantial acquisition under Chapter 14 of the Listing
Rules. Pursuant to Rule 14.49 of the Listing Rules, the Chariot Acquisition is subject to the approval
of the Shareholders at the EGM.
Since Mr. Chiu is the Chairman of the Company and an executive Director, he is a connected LR14A.59(2)(e)
person of the Company under the Listing Rules and the Chariot Subscription under the Chariot
Subscription Agreement constitutes a connected transaction for the Company and is subject to
reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of
the Listing Rules.
The purpose of this circular is to provide you with, among other things:
(a) further information on (i) the Chariot Acquisition, the Chariot Placing, the Arrangement
Agreement, the Chariot Placing Agreement and the Chariot Specific Mandate; (ii) the
Chariot Subscription and the Chariot Subscription Agreement; and (iii) the proposed change
of the name of the Company;
(b) the recommendation of the Independent Board Committee to the Independent Shareholders
in relation to the Chariot Subscription and the Chariot Subscription Agreement;
— 12 —
(c) the letter of advice from Guangdong Securities to the Independent Board Committee and
the Independent Shareholders in relation to the Chariot Subscription and the Chariot
Subscription Agreement;
(d) the financial information of the Chariot Group and the pro forma financial information on
the Enlarged Group;
(e) the Chariot Technical Report and the Chariot Valuation Report; and
(f) the notice of EGM at which ordinary resolutions will be proposed to consider and, if
thought fit, approve, among other things, (i) the Chariot Acquisition, the Chariot Placing,
the Arrangement Agreement, the Chariot Placing Agreement and the Chariot Specific
Mandate; and (ii) the Chariot Subscription and the Chariot Subscription Agreement.
This letter from the Board in this circular is divided into eight parts. Part A provides further
information on the Chariot Acquisition, the Chariot Placing, the Arrangement Agreement, the Chariot
Placing Agreement and the Chariot Specific Mandate; Part B sets out further information on the
Chariot Subscription and the Chariot Subscription Agreement; Part C sets out further information on
the proposed change of name of the Company; Part D sets out an overview of the copper mining
industry; Part E provides additional information on the Group and the Enlarged Group; Part F provides
addition information on the implications on the transactions under the Listing Rules; Part G sets out
additional information on the EGM; and Part H sets out the recommendations of the Board.
The letter from the Independent Board Committee containing its advice to the Independent
Shareholders is set out on pages 74 to 75 of this circular.
The letter from Guangdong Securities to the Independent Board Committee and the Independent
Shareholders is set out on pages 76 to 88 of this circular.
PART A — THE CHARIOT ACQUISITION, THE CHARIOT PLACING, THE ARRANGEMENT

AGREEMENT, THE CHARIOT PLACING AGREEMENT AND THE CHARIOT SPECIFIC
MANDATE
1. THE ARRANGEMENT AGREEMENT AND THE PLAN OF ARRANGEMENT
1.1 Date LR14.58(3)
28 February 2010
1.2 Parties
(a) Chariot Purchaser
(b) The Company
(c) Chariot Resources Limited LR14.58(3)

LR14.63(3)
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The Company confirms that, to the best of the Directors’ knowledge, information and belief,
having made all reasonable enquiries, as at the Latest Practicable Date, Chariot and its substantial
shareholders (being shareholders who hold 10% or more of the Chariot Sale Shares) were third parties
independent of the Company and were not connected persons of the Company or its subsidiaries or
their respective associates.
1.3 Assets to be acquired
The Chariot Sale Shares represent the entire existing issued share capital of Chariot. Upon LR14.60(2)
LR14.66(6)(a)
Chariot Acquisition Completion, Chariot will become an indirect wholly-owned subsidiary of the
Company, which will in turn own a 70% interest, through Marcobre, in the Marcona Copper Property
and the Mina Justa Project located in Peru.
1.4 Chariot Consideration
The Chariot Consideration for the Chariot Sale Shares payable by the Chariot Purchaser to the LR14.58(4)
Former Chariot Shareholders is approximately C$244,580,000 (equivalent to approximately
HK$1,900,362,000, subject to adjustment), representing C$0.67 (equivalent to approximately
HK$5.21) per Sale Share, and shall be satisfied in cash. At the time the Chariot Consideration becomes
payable, the Company intends to use cash raised from short-term bridge financing. Subject to
satisfaction or waiver (where applicable) of all the Chariot Acquisition Completion Conditions, the
Chariot Consideration shall be paid to the Former Chariot Shareholders in the manner set forth under
paragraph 1.9 below.
In the event the Former Chariot Optionholders elect to exercise all their Relevant Chariot
Options prior to the Effective Time, the Chariot Consideration will be adjusted upwards by
approximately C$8,601,000 (equivalent to approximately HK$66,829,000). In this connection,
Chariot should expect to receive an aggregate amount of approximately C$4,602,000 (equivalent to
approximately HK$35,757,000) by way of exercise price.
1.5 Basis of Chariot Consideration
The Chariot Consideration was arrived at after arm’s length negotiations between the Company LR14.58(5)
and Chariot. In considering the Chariot Consideration, the Board took into account various factors,
including but not limited to (i) the fact that Chariot ran a competitive sale process to sell the Chariot
Sale Shares; (ii) the prospects of the copper mining industry; and (iii) the existence and findings of
the independent DFS.
(a) Competitive sale process
The sale of the Mina Justa Project was understood by the Company to be a competitive sale
process with more than one bidder.
Since 2007, Chariot has been contemplating a strategic review process to maximise the value of
the Mina Justa Project, a process that formally started following the completion of the DFS in 2009.
In August 2009, Chariot announced that while such review was still ongoing, its board of directors
believed that the preferred outcome for its shareholders was to receive a control premium for their
Chariot Sale Shares in a sale of Chariot to a third party.
— 14 —
In October 2009, Chariot began a formal public sale process to solicit interest in an acquisition
of the Chariot Sale Shares. Interested parties were required to execute a confidentiality agreement and
were given the opportunity to carry out preliminary due diligence on the Chariot Group. As part of this
sale process, RBC Capital Markets, Chariot’s financial adviser, contacted over 60 parties of whom 20
parties entered into confidentiality agreements with Chariot and Marcobre and conducted due
diligence. On 9 January 2010, the Company, which was introduced to this business opportunity by
BOCI, and Chariot entered into the Letter Agreement, pursuant to which the Company agreed to
undertake and complete a due diligence review on the Chariot Group. On 5 February 2010, upon being
satisfied with the results of the due diligence review, the Company and Chariot entered into an
exclusivity period commencing on 8 February 2010 and ending on 1 March 2010. During such
exclusivity period, the Company and Chariot finalised the terms of the Arrangement Agreement and
Chariot agreed, among other things, that it would not, subject to the exercise of a fiduciary out with
respect to an unsolicited third party offer, solicit, initiate or knowingly encourage or facilitate any
proposal or offer for the Chariot Sale Shares from any person other than the Company or its affiliates.
The Arrangement Agreement was agreed and executed on 28 February 2010.
As far as the Company is aware, Chariot is not in any immediate financial difficulties.
(b) Prospects of the copper mining industry
The global market for copper is approximately 19 million tonnes per annum, of which
approximately 40% is supplied by South American countries including Peru. Copper’s chemical,
physical and aesthetic properties make it a material of choice in a wide range of domestic, industrial,
environmental and high technology applications. The price of copper re-bounded strongly in 2009
after a sharp decline following the financial crisis in 2008 and has remained robust so far in 2010. The
average copper price during the period from 1 October 2009 to 31 January 2010 was approximately
US$6,821 (equivalent to approximately HK$52,951) per tonne. This compares to the average price
during the five years ending 31 December 2009 of approximately US$5,940 (equivalent to
approximately HK$46,112) per tonne.
(c) Definitive feasibility study
The DFS, prepared according to the reporting guidelines under NI 43-101, was completed in June
2009 which showed that the Mina Justa Project is a viable project on the economic parameters
assumed.
The DFS identified oxide and sulphide indicated and inferred mineral resources of 401.4 million
tonnes grading 0.77 percent copper and stated that the Mina Justa Project has “Indicated” resources
of 336.8 million tonnes containing 2.6 million tonnes of copper and “Inferred” resources of 64.6
million tonnes containing 0.5 million tonnes of copper. It also identified reserves of approximately
163.4 million tonnes of ore at a grade of 0.80 percent copper, containing 1.3 million tonnes of copper
and 688.1 tonnes of silver (collectively, the “Reserves”) which has been assessed and classified in
accordance with the reporting guidelines under NI 43-101. The Reserves comprise that portion of the
resource which is planned to be mined incorporating mining dilution and allowing for mining losses.
— 15 —
The DFS confirmed the potential for conventional open pit mining, vat leach and flotation
operation to support annual production of approximately 100,000 tonnes of copper in cathode and
concentrate, which will be supplied predominantly to Asian markets. It further indicated that such
production will be at a competitive cash cost over a mine life of more than ten years based on the
existing reserves.
The Directors consider the Chariot Consideration as reasonable given that:
(a) a sell-side auction process was run by Chariot, which provided the Company and its legal,
technical and financial advisers the opportunity to conduct due diligence on the Chariot
Group;
(b) the Mina Justa Project is one of the more advanced development projects in Peru, the
second largest copper producing country in the world. The deposit is known to exist, and
resources and reserves have been established to recognised standards. Furthermore, the
DFS has been completed, which contains, among other things, details of mine design and
pit optimisation work, metallurgical testing, capital and operating cost estimates.
Infrastructure requirements have also been identified and progressed and the process of
obtaining the necessary permits has commenced;
(c) infrastructure, development and financing risks are relatively low for the Mina Justa Project
for the following reasons:
(i) there is no exploration risk since the deposit already exists;
(ii) proven mining methods and processing technology will be used, and the costs of
building and operating the mining and processing facilities are generally well
established;
(iii) copper is a highly sought after commodity with strong existing markets; and
(iv) there is relatively low sovereign risk since Peru is a stable country with a well
established mining industry; and
(d) the Korean Partners are highly credible and experienced who will help underwrite the
successful development of the Mina Justa Project. In particular, LS-Nikko Copper Inc.
(formerly known as LG-Nikko Copper Inc.) is a joint venture formed by LG Cable (one of
the world’s largest manufacturers of copper cables) and a Japanese consortium led by
Nippon Mining & Metals. It is the largest smelting group in Korea and has a long history
in the copper smelting business acquiring copper concentrates from off-shore producers.
Korea Resources Corporation (“KORES”) is a mining and resources company owned by the
South Korean Government. Its mandate is to secure overseas mineral resources for South
Korean corporations, assist in the rational development of domestic mining operations and
provide research and technical assistance services for the development and acquisition of
international mineral resources. KORES aims to become a global top 20 mining company
by 2020.
— 16 —
1.6 Comparison of the value of the Plan of Arrangement
The Chariot Consideration of C$0.67 (equivalent to approximately HK$5.21) per Chariot Sale LR14.58(6)
Share represents:
(a) a premium of approximately 8.06% over the closing price of C$0.62 (equivalent to
approximately HK$4.82) per Chariot Sale Share as quoted on the TSX on the Last Trading
Date;
(b) a premium of approximately 26.42% over the average closing price of approximately
C$0.53 (equivalent to approximately HK$4.12) per Chariot Sale Share for the last ten
trading days up to and including the Last Trading Date;
(c) a premium of approximately 45.65% over the average closing price of approximately
C$0.46 (equivalent to approximately HK$3.57) per Chariot Sale Share for the last 30
(d) a premium of approximately 63.41% over the average closing price of approximately
(e) a premium of approximately 76.32% over the average closing price of approximately
trading days up to and including the Last Trading Date; and
(f) a premium of approximately 1.52% over the closing price of C$0.66 (equivalent to
approximately HK$5.13) per Chariot Sale Share as quoted on the TSX on the Latest
Practicable Date.
1.7 Conditions precedent
(a) Mutual conditions precedent of the Chariot Purchaser, the Company and Chariot
The obligations of the Chariot Purchaser, the Company and Chariot to complete the transactions
contemplated by the Arrangement Agreement are subject to the fulfilment, at or before the Effective
Time, of each of the following conditions precedent, each of which may only be waived with the
mutual consent of the Chariot Purchaser, the Company and Chariot:
(i) the Arrangement Resolution shall have been approved and adopted by the Chariot
Shareholders at the Chariot Meeting in accordance with the Interim Order;
(ii) the ordinary resolution approving the Plan of Arrangement and the transactions
contemplated by the Arrangement Agreement shall have been approved and adopted by the
Shareholders at the EGM in accordance with the Listing Rules;
— 17 —
(iii) the Interim Order and the Final Order shall each have been obtained on terms consistent
with the Arrangement Agreement, and shall not have been set aside or modified in a manner
unacceptable to Chariot and the Company, acting reasonably, on appeal or otherwise;
(iv) there shall not exist any prohibition at law, including a cease trade order, injunction or other
prohibition or order at law or under applicable legislation, against any of the Company, the
Chariot Purchaser or Chariot which shall prevent the consummation of the Plan of
Arrangement;
(v) the relevant consents, approvals and notices required from any third party to proceed with
the transactions contemplated by the Arrangement Agreement and the Plan of Arrangement
shall have been obtained; and
(vi) the Arrangement Agreement shall not have been terminated in accordance with its terms.
(b) Additional conditions precedent to the obligations of the Chariot Purchaser and the Company
The obligations of the Chariot Purchaser and the Company to complete the transactions
contemplated by the Arrangement Agreement are subject to the fulfilment, at or before the Effective
Time, of each of the following conditions precedent, each of which may only be waived by the
Company on its behalf and on behalf of the Chariot Purchaser:
(i) all covenants of Chariot under the Arrangement Agreement to be performed at or before the
Effective Time which have not been waived by the Company shall have been duly
performed by Chariot in all material respects, and the Company shall have received a
certificate of the President and the Chief Financial Officer of Chariot addressed to the
Company and dated the Effective Date, confirming the same as at the Effective Time;
(ii) all representations and warranties of Chariot set forth in the Arrangement Agreement that
are (A) qualified by reference to a Material Adverse Effect or materiality shall be true and
correct in all respects at and as at the Effective Time as if made at and as at such time
(except for those expressly stated to speak at or as at an earlier time); and (B) not qualified
by reference to a Material Adverse Effect or materiality shall be true and correct in all
material respects at and as at the Effective Time (except for certain representations and
warranties specified in the Arrangement Agreement which shall be true and correct in all
respects), as if made at and as at such time (except for those expressly stated to speak at
or as at an earlier time), and the Company and the Chariot Purchaser shall have received
a certificate of two senior officers of Chariot addressed to the Company and dated the
Effective Time, confirming the same as at the Effective Time;
(iii) no action, suit or proceeding shall have been taken under any applicable laws or by any
governmental entity, and no laws, policy, decision or directive (having the force of law)
shall have been enacted, promulgated, amended or applied, in each case (A) to enjoin or
prohibit the Plan of Arrangement or the transactions contemplated by the Arrangement
Agreement; (B) which would render the Arrangement Agreement or the Voting Agreements
(save for the Voting Agreement executed between the Company, the Chariot Purchaser and
— 18 —
Solway Finance Ltd.) unenforceable in any way or frustrate the purpose and intent thereof;
or (C) resulting in any judgment or assessment of damages, directly or indirectly, which,
individually or in the aggregate, has had or would be reasonably expected to have a
Material Adverse Effect with respect to Chariot (including if the Plan of Arrangement were
to be consummated);
(iv) (A) all representations and warranties made by the Locked-up Chariot Shareholders (save
for Solway Finance Ltd.) in the Voting Agreements shall be true and correct in all respects,
without regard to materiality, as if made on and as at the Effective Date (except for
representations and warranties made as at a specified date, the accuracy of which shall be
determined as at that specified date); (B) the Locked-up Chariot Shareholders (save for
Solway Finance Ltd.) shall have complied in all material respects with all covenants set
forth in the Voting Agreements that are to be complied with on or before the Effective Date;
and (C) none of the Voting Agreements to which the Locked-up Chariot Shareholders (save
for Solway Finance Ltd.) are parties shall have been terminated, and no event shall have
occurred that, with notice or lapse of time or both, would give the Company the right to
terminate any of the Voting Agreements;
(v) since the date of the Arrangement Agreement, there shall not have occurred any fact,
change, effect, event, occurrence or state of facts that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect on Chariot and its
subsidiaries taken as a whole; and
(vi) holders of no more than 5% of the outstanding Chariot Sale Shares shall have exercised
Dissent Rights.
The foregoing conditions are for the sole benefit of the Chariot Purchaser and the Company and
may be waived by them in whole or in part at any time.
(c) Additional conditions precedent to the obligations of Chariot
The obligations of Chariot to complete the transactions contemplated by the Arrangement

Agreement are subject to the fulfilment, at or before the Effective Time, of each of the following
conditions precedent, each of which may only be waived by Chariot:
(i) all covenants of the Company and the Chariot Purchaser under the Arrangement Agreement
to be performed on or before the Effective Time shall have been duly performed by the
Company and the Chariot Purchaser in all material respects, and Chariot shall have received
certificates from the Chariot Purchaser and of two senior officers of the Company addressed
to Chariot and dated the Effective Date, confirming the same as at the Effective Time;
(ii) all representations and warranties of the Company and the Chariot Purchaser set forth in the
Arrangement Agreement that are (A) qualified by reference to materiality shall be true and
correct in all respects at and as at the Effective Time as if made at and as at such time
(except for those expressly stated to speak at or as at an earlier time); and (B) not qualified
by reference to materiality shall be true and correct in all material respects at and as at the
— 19 —
Effective Time as if made at and as at such time (except for those expressly stated to speak
at or as at an earlier time), and Chariot shall have received a certificate of two senior
officers of the Company addressed to Chariot and dated the Effective Time, confirming the
same as at the Effective Time; and
(iii) no later than 5:00 p.m. (Toronto time) on the business day prior to the Effective Date, the
Company shall have deposited or caused to be deposited with the depositary, which will be
an independent Canadian trust company jointly selected by the Company and Chariot, in
escrow the cash funds required to effect payment in full of the aggregate Chariot
Consideration to be paid pursuant to the Plan of Arrangement.
The above conditions are for the sole benefit of Chariot and may be waived by it in whole or in
part at any time.
1.8 Material covenants, representations and warranties of Chariot
In respect of the conditions under paragraph 1.7(b) above, the following sets out some of the
material covenants, representations and warranties of Chariot under the Arrangement Agreement:
(i) Chariot shall apply to the Canadian Court, in a manner acceptable to the Company and the
Chariot Purchaser, acting reasonably, pursuant to the BCBCA for the Interim Order and the
Final Order;
(ii) Chariot shall, subject to the terms of the Arrangement Agreement, convene and conduct the
Chariot Meeting in accordance with the Interim Order, the articles and by-laws of Chariot
and applicable laws on or before the date that is 35 days following the date of clearance of
this circular by the Stock Exchange (it being understood and agreed by the parties to the
Arrangement Agreement that the Chariot Meeting will occur on the business day
immediately preceding the EGM);
(iii) Chariot shall, subject to the terms of the Arrangement Agreement, use all reasonable efforts
to solicit proxies in favour of the approval of the Arrangement Resolution including, if so
requested by the Company, using proxy solicitation services;
(iv) Chariot shall prepare the Chariot Circular and file the Chariot Circular on a timely basis in
all jurisdictions where the same is required to be filed and mail the same as required by the
Interim Order and in accordance with all applicable laws, and in any event on or before the
date that is ten days after the date of clearance of this circular by the Stock Exchange, in
all jurisdictions where the same is required, complying in all material respects with all
applicable laws;
(v) Chariot shall ensure that the Chariot Circular complies in all material respects with all
applicable laws and, without limiting the generality of the foregoing, that the Chariot
Circular shall not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements contained therein not
misleading in light of the circumstances in which they are made (other than in each case
— 20 —
with respect to any information relating to the Company and its affiliates) and shall provide
the Chariot Shareholders with information in sufficient detail to permit them to form a
reasoned judgment concerning the matters to be placed before them at the Chariot Meeting;
and
(vi) Chariot shall, and shall cause each of its subsidiaries to, during the period from the date of
the Arrangement Agreement until the earlier of the Effective Time and the time that the
Arrangement Agreement is terminated in accordance with its terms (except as required or
permitted by the Arrangement Agreement, as required by applicable laws or any
governmental entities or as consented to by the Company in writing), conduct its and their
respective businesses only in, and not take any action except in, the ordinary and usual
course of business and in compliance with applicable laws and the material agreements of
the Chariot Group.
1.9 Effecting the Plan of Arrangement
The Plan of Arrangement is a court-supervised process carried out in accordance with the
BCBCA. At the Interim Order stage, the Canadian Court addresses various procedural matters,
including the process by which the Chariot Meeting will be convened. At the Final Order stage, the
Canadian Court undertakes a review of the transaction to determine whether it is “fair and reasonable”.
Upon making such finding, the Canadian Court would grant its approval of the Plan of Arrangement.
The arrangement shall be effected at the Effective Time and the following shall occur and shall
be deemed to occur sequentially in the following order without any further act or formality:
(a) the Chariot Shareholder Rights Plan shall be deemed to have been terminated (and all rights
issued thereunder shall expire) and shall be of no further force or effect;
(b) notwithstanding any vesting or exercise or other provisions to which a Chariot Option
might otherwise be subject (whether by contract, the conditions of grant, applicable law or
the terms of the Chariot Share Incentive Plan):
(i) each Chariot Option that has not been duly exercised prior to the Effective Time will,
without further action by or on behalf of any Former Chariot Optionholder, be
transferred by such Former Chariot Optionholder to Chariot free and clear of all
encumbrances and cancelled in exchange for a cash payment from Chariot equal to the
amount by which the Chariot Consideration exceeds the exercise price thereof;
(ii) with respect to each Chariot Option, the Former Chariot Optionholder will cease to be
the holder of such Chariot Option, will cease to have any rights (A) as a holder of such
Chariot Option and (B) under the Chariot Share Incentive Plan and such Former
Chariot Optionholder’s name will be removed from the register of Chariot Options and
all option agreements, grants and similar instruments relating thereto will be
cancelled; and
— 21 —
(iii) the Chariot Share Incentive Plan will be deemed to be terminated and cancelled and
all rights and entitlements of participants and all obligations of Chariot under the
Chariot Share Incentive Plan shall be terminated;
(c) each Chariot Sale Share held by a Dissenting Chariot Shareholder shall be deemed to be
transferred by the holder thereof, without any further act or formality on its part, to the
Chariot Purchaser free and clear of all encumbrances and such Dissenting Chariot
Shareholder shall cease to be a Chariot Shareholder and shall cease to have any rights as
a Chariot Shareholder other than the right to be paid the amount therefor determined and
payable in accordance with the Plan of Arrangement, and the name of such holder shall be
removed from the central securities register of Chariot as a holder of the relevant Chariot
Sale Shares and the Chariot Purchaser shall be recorded as the registered holder of such
Chariot Sale Shares so transferred and shall be deemed to be the legal owner of such
Chariot Sale Shares with good title free from any adverse claims;
(d) each Chariot Sale Share held by a Former Chariot Shareholder (other than a Dissenting
Chariot Shareholder) shall be transferred by the holder thereof, without any further act or
formality on its part, to the Chariot Purchaser free and clear of all encumbrances and in
consideration therefor the Chariot Purchaser shall pay the Chariot Consideration to such
Former Chariot Shareholder for each such Chariot Sale Share, subject to the Plan of
Arrangement, and such Former Chariot Shareholder shall cease to be a Chariot Shareholder
and shall cease to have any rights as a Chariot Shareholder other than the right to be paid
the Chariot Consideration, subject to the Plan of Arrangement, and the name of such Former
Chariot Shareholder shall be removed from the central securities register of Chariot as a
holder of the relevant Chariot Sale Shares and the Chariot Purchaser shall be recorded as
the registered holder of such Chariot Sale Shares so transferred and shall be deemed to be
the legal owner of such Chariot Sale Shares with good title free from any adverse claims;
(e) the stated capital in respect of the Chariot Sale Shares shall be reduced to C$1.00 without
any repayment of capital in respect thereof;
(f) the Chariot Purchaser and Chariot shall amalgamate to form one corporate entity (the
“Amalgamated Entity”);
(g) from and after the Effective Time, at the time of completion of the step referred to in
paragraph 1.9(f) above:
(i) the Amalgamated Entity shall own and hold all properties, rights and interests of
Chariot and the Chariot Purchaser and, without limiting the provisions of the Plan of
Arrangement, all rights of creditors or others will be unimpaired by such
amalgamation, and all liabilities and obligations of Chariot and the Chariot Purchaser,
whether arising by contract or otherwise, may be enforced against the Amalgamated
Entity to the same extent as if such obligations had been incurred or contracted by it;
— 22 —
(ii) the Amalgamated Entity shall continue to be liable for all of the liabilities and
obligations of Chariot and the Chariot Purchaser;
(iii) all property rights, contracts, permits and interests of Chariot and the Chariot
Purchaser shall continue as property rights, contracts, permits and interests of the
Amalgamated Entity and, for greater certainty, the amalgamation will not constitute
a transfer or assignment or any other disposition of the property rights or obligations
of either Chariot or the Chariot Purchaser under any such property rights, contracts,
permits and interests;
(iv) any existing cause of action, claim or liability to prosecution shall be unaffected;
(v) any civil, criminal or administrative action or legal proceeding being prosecuted or
pending by or against either Chariot or the Chariot Purchaser may be continued by or
against the Amalgamated Entity;
(vi) any conviction against, or ruling, order or judgment in favour of or against either
Chariot or the Chariot Purchaser may be enforced by or against the Amalgamated
Entity;
(vii) the Company shall receive on the amalgamation one common share of the
Amalgamated Entity in exchange for each common share of the Chariot Purchaser
previously held and all of the issued and outstanding Chariot Sale Shares shall be
cancelled without any repayment of capital in respect thereof;
(viii) the name of the Amalgamated Entity shall be “China Sci-Tech Minerals Limited”;
(ix) the Amalgamated Entity shall be authorised to issue an unlimited number of common
shares of the Amalgamated Entity;
(x) the articles of the Amalgamated Entity shall be substantially in the form of the articles
of the Chariot Purchaser;
(xi) the first annual general meeting of the Amalgamated Entity shall be held within 18
months from the Effective Date;
(xii) the first directors of the Amalgamated Entity following the amalgamation shall be Mr.
Kwan Kam Hung Jimmy and Mr. Hui Richard Rui; and
(xiii) the capital of common shares of the Amalgamated Entity will be an amount equal to
the aggregate amount of the stated capital account maintained by the Chariot
Purchaser for its common shares immediately prior to the amalgamation.
— 23 —
The Amalgamated Entity will be delisted from the TSX after the Chariot Acquisition Completion.
1.10 Termination
The Arrangement Agreement may be terminated and the Plan of Arrangement may be abandoned
at any time prior to the Effective Time (notwithstanding any approval of the Arrangement Agreement
or the Arrangement Resolution by the Chariot Shareholders or the Plan of Arrangement by the
Canadian Court):
(a) by mutual written agreement of the Company and Chariot; or
(b) by either the Company or Chariot, if:
(i) the Effective Time shall not have occurred on or before the Chariot Long Stop Date,
except that the right to terminate the Arrangement Agreement under this paragraph
shall not be available to any party to the Arrangement Agreement (including, in the
case of the Company, the Chariot Purchaser) whose failure to fulfil any of its
obligations or breach of any of its representations and warranties under the
Arrangement Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur by such Chariot Long Stop Date;
(ii) after the date hereof, there shall be enacted or made any applicable law that makes
consummation of the Plan of Arrangement illegal or otherwise prohibits or enjoins
Chariot, the Chariot Purchaser or the Company from consummating the Plan of
Arrangement and such applicable laws (if applicable) or enjoinment shall have
become final and non-appealable;
(iii) the Arrangement Resolution shall have failed to receive approval by the Chariot
Shareholders at the Chariot Meeting (including any adjournment or postponement
thereof) in accordance with the Interim Order;
(iv) the ordinary resolution approving the Plan of Arrangement and the transactions
contemplated by the Arrangement Agreement shall have failed to receive approval by
the Shareholders at the EGM; or
(c) by the Company, if:
(i) the Chariot Board (A) fails to make the determinations that the Plan of Arrangement
is fair to the Former Chariot Shareholders and holders of the Chariot Options and is
in the best interests of Chariot and has unanimously resolved to recommend, and
recommends, to the Chariot Shareholders that they vote in favour of the Arrangement
Resolution (the “Board Determinations”) in the Chariot Circular; (B) fails to
reaffirm the Board Determinations within three business days (and in any event prior
to the Chariot Meeting) after having been requested to do so in writing by the
Company in accordance with the Arrangement Agreement; (C) the Chariot Board
withdraws, amends, modifies or qualifies the Board Determinations in any manner
— 24 —
adverse to the Company (it being understood that the taking of a neutral position or
no position with respect to an acquisition proposal by a third party (other than the
Company and the Chariot Purchaser) beyond a period of three business days (or
beyond the day that is one day prior to the Chariot Meeting, if sooner) shall be deemed
to be an adverse modification); or (D) the Chariot Board recommends or approves or
publicly proposes to recommend or approve, an acquisition proposal by a third party
(other than the Company and the Chariot Purchaser);
(ii) any of the conditions set forth in paragraphs 1.7(a) and 1.7(b) is not satisfied, and such
condition is incapable of being satisfied by the Chariot Long Stop Date;
(iii) subject to the relevant section in the Arrangement Agreement, a breach of any
representation or warranty or failure to perform any covenant or agreement on the part
of Chariot set forth in the Arrangement Agreement (except for certain specified
covenants and agreements) shall have occurred (A) which breach or failure is or would
reasonably be expected to have a Material Adverse Effect or (B) that would cause the
conditions set forth in paragraphs 1.7(a) and 1.7(b) not to be satisfied, and such
conditions are incapable of being satisfied by the Chariot Long Stop Date; provided
that the Company and the Chariot Purchaser are not then in breach of the Arrangement
Agreement so as to cause any of the conditions set forth in paragraphs 1.7(a) and
1.7(c) not to be satisfied;
(iv) Chariot is in breach or in default of certain specified obligations or covenants set forth
in the Arrangement Agreement;
(v) at any time if the Chariot Meeting is cancelled, adjourned or delayed, except as
expressly permitted by the Arrangement Agreement or agreed to by the Company in
writing (except that the right to terminate the Arrangement Agreement under this
paragraph shall not be available to the Company if its (or the Chariot Purchaser’s)
failure to satisfy its obligations to provide to Chariot all such information regarding
the Company, its affiliates and the Shares as may be required by Chariot in the
preparation of the Chariot Circular has been the cause of the delay in the Chariot
Meeting); or
(vi) the Chariot Board authorizes Chariot to enter into any agreement, arrangement or
understanding relating to a superior proposal defined in the Arrangement Agreement
(with the sole exception of a confidentiality agreement in strict compliance with the
Arrangement Agreement); or
(d) by Chariot, if:
(i) prior to the Chariot Meeting, the Chariot Board authorises Chariot, subject to
complying with the terms of the Arrangement Agreement, to enter into a legally
binding agreement, undertaking or arrangement with respect to a superior proposal
— 25 —
received at any time following the date of the Arrangement Agreement and prior to the
Chariot Meeting; provided that prior to such termination, Chariot pays the Company
the termination payment (an amount equal to C$7,600,000) payable pursuant to the
Arrangement Agreement;
(ii) any of the conditions set forth in paragraphs 1.7(a) and 1.7(c) is not satisfied, and such
condition is incapable of being satisfied by the Chariot Long Stop Date;
(iii) subject to the Arrangement Agreement, a breach of any representation or warranty or

failure to perform any covenant or agreement on the part of the Company and the
Chariot Purchaser set forth in the Arrangement Agreement shall have occurred that
would cause the conditions set forth in paragraphs 1.7(a) and 1.7(c) not to be satisfied,
and such conditions are incapable of being satisfied by the Chariot Long Stop Date;
provided that Chariot is not then in breach of the Arrangement Agreement so as to
cause any of the conditions set forth in paragraphs 1.7(a) and 1.7(b) not to be
satisfied;
(iv) at any time if the EGM is cancelled, adjourned or delayed, except as permitted by the
Arrangement Agreement or agreed to by Chariot in writing (except that the right to
terminate the Arrangement Agreement under this paragraph shall not be available to
Chariot if (A) its failure to provide to the Company, in a timely and expeditious
manner, all information with respect to Chariot and its subsidiaries required by the
Company for inclusion in this circular and any amendments or supplements thereto,
has been the cause of the delay in the EGM, or (B) if the Chariot Meeting has been
cancelled, adjourned or delayed or the Chariot Shareholders have otherwise not voted
on the Arrangement Resolution); or
(v) the Company does not provide or cause to be provided to the depositary with sufficient
funds in cash to complete the transactions contemplated by the Arrangement
Agreement.
1.11 Dissent Rights
A Chariot Shareholder may exercise his Dissent Right by filing a written notice of dissent in the
manner set out in the BCBCA, the Interim Order and the Final Order. If a Chariot Shareholder
dissents, a process will be undertaken to determine the fair value, being the fair value of the Chariot
Sale Shares immediately before the approval of the Arrangement Resolution at the Chariot Meeting,
of the Chariot Sale Shares held by such Dissenting Chariot Shareholder. Chariot, following its
amalgamation with the Chariot Purchaser will be required to make an offer it believes represents the
fair value of the Chariot Sale Shares held by such Dissenting Chariot Shareholder. If the Amalgamated
Entity and the Dissenting Chariot Shareholder are unable to agree on the fair value, then the
Dissenting Chariot Shareholder may proceed to the Canadian Court and shall lead evidence of the fair
value of the Chariot Sale Shares held. The Canadian Court may determine that the fair value is more
than, less than or equal to the Chariot Consideration. Following agreement on fair value of the Chariot
Sale Shares between the Amalgamated Entity and the Dissenting Chariot Shareholder or the Canadian
— 26 —
Court’s determination of fair value, whichever is earlier, the Amalgamated Entity will have to pay the
fair value, which may be more than, lower than or equal to the Chariot Consideration, to the
Dissenting Chariot Shareholder. Only such Dissenting Chariot Shareholders who have complied with
the dissent procedures would be entitled to be paid the fair value of the Chariot Sale Shares.
The dissent procedures primarily occur after Chariot Acquisition Completion. As at the Latest
Practicable Date, it was not possible to determine the percentage of Chariot Shareholders who will
exercise their Dissent Rights, if any, or the fair value that the Canadian Court may ascribe to the
Chariot Sale Shares.
However, in connection with the determination of fair value of the Chariot Sale Shares, the
Canadian Court will likely take into account the trading value of the Chariot Sale Shares at the
relevant time. Given that (i) the Chariot Consideration represents a premium over the closing price and
the average closing prices of the Chariot Sale Shares as illustrated in the paragraph headed
“Comparison of the value of the Plan of Arrangement” in this circular and (ii) RBC Capital Markets,
Chariot’s financial adviser, provided an opinion on 27 February 2010 to the board of directors of
Chariot to the effect that, subject to the assumptions, limitations and qualifications described in such
opinion, the Chariot Consideration is fair from a financial point of view to the Chariot Shareholders,
the Company believes that the Chariot Consideration represents the fair value of the Chariot Sale
Shares.
1.12 Voting Agreements with Locked-up Chariot Shareholders
To facilitate the consummation of the transactions contemplated under the Arrangement

Agreement, the Chariot Purchaser and the Company entered into Voting Agreements with the
Locked-up Chariot Shareholders before the Arrangement Agreement was entered into (save for the
Voting Agreement with Solway Finance Ltd., which was entered into shortly after the Arrangement
Agreement was entered into). The Locked-up Chariot Shareholders held, in aggregate, approximately
36.19% of the Chariot Sale Shares as at the Latest Practicable Date. Each of the Voting Agreements
contains similar terms. Pursuant to and subject to certain terms and conditions of the Voting
Agreements, the Locked-up Chariot Shareholders agreed to vote in favour of the Arrangement
Resolution. The Company confirms that, to the best of the Directors’ knowledge, information and
belief, having made all reasonable enquiries, as at the Latest Practicable Date, the Locked-up Chariot
Shareholders and their ultimate beneficial owners were independent of the Company and were not
connected persons of the Company or its subsidiaries or their respective associates.
The table below sets out the shareholding of the respective Locked-up Chariot Shareholders in
the Chariot Sale Shares:
Number of Sale Percentage of

Name of Locked-up Chariot Shareholder Shares held shareholding
Solway Finance Ltd. 68,556,800 18.78%

Lundin Mining Corporation 60,190,500 16.49%
Directors and officers of Chariot 3,344,500 0.92%
Total 132,091,800 36.19%
— 27 —
2. TRANSACTION RATIONALE FOR THE CHARIOT ACQUISITION
The Company believes the following to be the key rationale for the Chariot Acquisition to
support the Company’s goal to become a globally competitive copper producer.
2.1 Large, high quality mineral resources base with low cost structure
The Mina Justa Project benefits from a large and high quality mineral resources base, with
probable mineral reserves of approximately 163.4 million tonnes of ore at a grade of 0.80 percent
copper, containing 1.3 million tonnes of copper and 688.1 tonnes of silver which has been assessed
and classified in accordance with NI 43-101 reporting guidelines. The DFS stated that the Mina Justa
Project has “Indicated” resources of 336.8 million tonnes containing 2.6 million tonnes of copper and
“Inferred” resources of 64.6 million tonnes containing 0.5 million tonnes of copper. C1 Cash Cost is
estimated to be approximately US$0.9 per pound of copper (including the mining royalty,
transportation, marketing fees, treatment and refining charges, and silver and gold by-product credits),
putting this operation in the second lowest quartile and lower half of global copper mines cash costs.
Source: Chariot Presentation
2.2 Beneficial location to key infrastructure
The Mina Justa Project benefits from its close proximity to key infrastructure. A 14.8-kilometre
access road has been surveyed and designed, linking National Route PE-30 (connecting the
Municipality of San Juan de Marcona to the Panamericana Highway) to the plant site and
accommodation camp. This road has been designed for sustained, long-term use, including adequate
foundations and a tarmac surface.
— 28 —
The Mina Justa Project intends to use two ports, one at San Martin, 250 kilometres by road to
the north, and the other at Matarani, 550 kilometres to the south. Further, the Peruvian government
is proposing to develop the San Juan de Marcona port, located 30 kilometres to the south, through a
private tender process, with start-up now projected for 2014. Marcobre intends to use the San Juan de
Marcona port for cathode, acid and concentrate supply and shipments for the latter part of the Mina
Justa Project, due to its proximity.
The Mina Justa Project also has good access to a reliable supply of water and electricity, which
are typically two key local inputs for mining operations. A dedicated 15 kilometre 220 kV overhead
power line will be constructed to connect from the grid, terminating at the plant’s HV switchyard on
the 220 kV bus. A reliable and sufficient supply of water is available on-site from nine water wells
located in the Jahuay aquifer. In addition, Peru is a leading global copper producer and export country
and has many established and long life mines with trained operational and maintenance personnel with
experience in the class of mining equipment specified for the Mina Justa Project.
2.3 Comprehensive independent DFS demonstrating robust economics
The independent DFS completed in June 2009 shows that the Mina Justa Project stands to be a
financially rewarding project with robust operating margins, strong rates of return, low-cost open-bit
mining and routine processing technologies.
According to the DFS, the Mina Justa Project has an operating life of approximately 12 years.
The Mina Justa Project is designed to process 12 Mt/a of oxide ore by crushing, vat leaching, solvent
extraction and electrowinning to produce up to 52,000 t/a of cathode copper. The Mina Justa Project
will be expanded during the second year of operation to include a 5 Mt/a concentrator to treat copper
sulphide ore underlying the oxide ore in certain portions of the Mina Justa deposit.
The DFS has also identified opportunities for potentially increasing the net present value of the
Mina Justa Project. These opportunities include:
(a) Potential acid port change — Opportunity to ship acid via an acid terminal that Naviera
Petral S.A. is considering for a site it owns on San Nicholas Bay. Naviera Petral S.A. is a
manufacturer and supplier of acid independent of Chariot, Marcobre or the Mina Justa
Project. In 2009, Marcobre received a memorandum of understanding from Naviera Petral
S.A. for supply of acid to Mina Justa from an acid-only terminal to be located in the Bay
of San Nicolas;
(b) Modification to the terms and conditions for the copper concentrate sales contract —
Replace the price-sharing portion of the volume that could be committed with market terms
and adopting market price participation terms on the market portion;
— 29 —
(c) Potential capital cost reduction — Potential reduction of capital cost by up to 20% through
a decrease in ore competency, a simplified tailings deposition system and inclusion of
second hand or cancelled-order equipment; and
(d) Addition ore reserve potential — Potential to add up to 4.3 years of oxide mine life for
oxides and 6.9 years to sulphides at a copper price of at least US$2.00 per pound.
2.4 Strong copper outlook
Copper demand is expected to remain robust driven by strong demand from emerging economies
and the steady economic recovery in the rest of world. Copper producers have been unable to keep
pace with global consumption leading to a sustained deficit into the medium term. With a current
copper spot price of US$7,772.5 per tonne as at 26 April 2010, copper continues to trade above
historical average prices. As at 26 April 2010, LME August 2010 and December 2010 copper futures
were trading at US$7,819 per tonne and US$7,842 per tonne, respectively. The average copper price
during the period from 1 October 2009 to 31 January 2010 was approximately US$6,821 per tonne,
compared to the average price during the five years ended 31 December 2009 of approximately
US$5,940 per tonne.
London Metal Exchange Copper Spot Price

US$ per metric tonnes
10,000
8,000
6,000
4,000
2,000
0
Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan- Jul- Jan-
05 05 06 06 07 07 08 08 09 09 10
Source: Bloomberg
— 30 —
World Copper Consumption/Supply Gap Forecast

(Gap=Consumption-Supply )
000 Metric Tonnes
300
200
100
-100
2010 2011 2012 2013 2014
Source: CRU
2.5 Potential to increase ore reserves
According to the Chariot Technical Report prepared by AMEC Minproc Limited and appended
as Appendix V to this circular, additional Whittle runs were performed to test the potential to expand
the reserve, based on the current DFS parameters. These parameters include the selling prices of
copper, process recoveries and concentrate grades, and costs associated with the transportation,
smelting and refinery of copper, etc. If DFS recoveries and costs are used at US$1.65 per pound copper
price, the potential ore reserves could result in a 19% increase in recovered metal. The mining (total
rock handling) increases by 29%. For US$2.00 per pound copper price, further marginal grade material
could be added with a potential of 30% more recoverable copper for a 40% increase in total mining.
Additional reserves have not been determined, but the potential to increase the life of the operation
constitutes an obvious opportunity to improve project economics.
In December 2009, Chariot announced results from an optimized mine plan that aims to increase
production by 17.5% or 427.4 million pounds of recovered copper over the mine plan used in the DFS
of the Mina Justa Project. The optimized mine plan could extend the life of the vat leaching operation
by about two years and could extend the life of the concentrator operation by about four years.
2.6 Potential for further exploration upside
Results of exploration drilling of 136 holes in and around the Mina Justa Project deposit
following October 2008 indicated that there is potential to expand the project’s resources and reserves.
Significant mineralisation was recorded in three key areas, namely: (i) the Northern Oxide and
Western Extension areas where copper oxides have been intersected outside the DFS pit boundaries
to the northeast and northwest; (ii) MA67 area to the west of the main pit, where oxide mineralisation
— 31 —
has been intersected in four adjacent holes, possibly indicating a new satellite pit area; and (iii)
Copper 40 area where there is continuing intersection of copper sulphide mineralistion over
significant intervals peripheral to the Cu40 pit. Three holes intersected over 100 metres at 1% copper
above 300 metres depth, and all three confirmed narrower high grade zones at moderate depths.
2.7 Government support
The Mina Justa Project has received a formal “National Interest” designation from the National
Government of Peru. The Mina Justa Project has been declared to be important under the provisions
of the General Mining Law specifically citing its overall future contributions to Peru. This declaration
places the Mina Justa Project into an elite category of projects and could potentially facilitate the
approval of certain permits.
3. STRATEGIES
The Company’s vision is to become a globally competitive copper company and intends to
achieve this vision through the following strategies.
3.1 Realise near-term value through completion of the Mina Justa Project development
The Company seeks to generate near-term value for Shareholders by completing the development
of the Mina Justa Project based on the parameters of the DFS on time, within budget and at or
exceeding the target quality of copper output. Furthermore, as announced in the Appointment
— 32 —
Announcement, the Company has recently appointed Mr. Barber as an executive Director and the chief
executive officer of the Company and Mr. Hegarty as an executive Director and the vice chairman of
the Company to bolster the Company’s copper mining business and to assist in the development of the
Mina Justa Project. Please refer to section 3 of Part E of this letter for details.
The Company intends to retain most of the staff in Peru who will continue to support the Mina
Justa Project through its development phase. The ESIA, designed to satisfy the requirements of
Peruvian legislation and to comply with internationally accepted guidelines for social and
environmental protection, was finalised and submitted to the MEM in September 2009 and was
subsequently approved for public distribution by the MEM in November 2009. A full public hearing
in the community was convened on 8 January 2010, during which the ESIA received “positive
community reaction”. It is expected that the ESIA will be approved by the MEM by July 2010, with
Oxide plant construction starting in February 2011 and completed by February 2013.
3.2 Enhance value through project optimization initiatives
The Company will seek value optimizing opportunities at the Mina Justa Project. These include
carrying on additional test work to determine a satisfactory ore variability test procedure and a
suitable test to estimate recovery and acid consumption; additional metallurgical test work to support
the design and costing of the sulphide concentrator at a DFS level; evaluation of an alternative port
for the shipment of sulphuric acid; and optimise the operational management of the mining fleet.
3.3 Undertake exploration initiatives to establish additional resources and reserves
The Directors anticipate undertaking additional drilling on the existing mineral resources of the
Mina Justa Project in an effort to convert additional mineral resources to reserves, to increase the
confidence levels of mineral resources from “Inferred” and “Indicated” to “Measured”, and to increase
the confidence levels of mineral reserves from “Probable” to “Proved”.
The Company also anticipates undertaking further exploration work within the Marcona Copper
Property, with a focus on leveraging on the regional exploration programme of geological mapping,
surface sampling, geophysical surveys (ground magnetic and IP surveys) and trenching initiated on the
Achupallas, Miramar, Clavelinas and La Apreciada deposits.
3.4 Pursue selective acquisitions and development of other high quality, low cost and
long-life copper
With a view of becoming a globally competitive copper mining company, the Group has set the
target of producing 250,000 tonnes of copper per annum by 2015 to 2017. Following completion of
the Chariot Acquisition, the Group will continue to seek for opportunities to acquire and develop other
high quality, low cost and long-life copper projects in other regions.
— 33 —
3.5 Manage safe, environmentally and socially conscious operations and maintain good
relations with government and community through application of “core values”
The management of the Company believes that careful management of environmental and social
aspects of the project is important for the continued success and expansion of its mining operations
in Peru and elsewhere. It has an ongoing commitment to the health and safety of its employees and
achieving sustainable development in harmony with the communities and environments in which it
operates. It proactively complies with and seeks to exceed the requirements of regulatory guidelines,
ensuring the safety of its employees, utilising environmentally friendly technologies in its operations
and implementing programs to support the local communities, all of which are core values of the
Company’s business.
The management of the Company aims to employ high standards to protect the environment, in
particular, water resources, and has plans in place to mitigate the risk of offsite water contamination
and to provide a clean and safe water supply to the local community. It actively initiates and
participates in a variety of programs that contribute to the health, education and livelihood of the
people of the local communities in which it operates, including providing support for local programs
that improve basic education, job skills training and infrastructure, providing emergency relief in the
wake of natural disasters and developing a community consultation committee comprised
representatives of local residents to give the local community a voice. The management of the
Company believes that the fostering of a cooperative relationship with local residents and investing
in local communities creates a mutual trust that adds to the stability of its operations and plans to
develop a community relations and development investment plan to provide a framework for strategic
social investments. The Board anticipates that a comprehensive plan of community activities will be
developed in consultation with the local community during the next few months.
4. INFORMATION ON THE CHARIOT GROUP AND THE MINA JUSTA PROJECT
To the best of the Directors’ knowledge, information and belief, having made all reasonable LR14.58(2)
enquiries, the following sets out the information relating to the Chariot Group and the Mina Justa
Project.
— 34 —
4.1 Introduction
The organisational structure of the Chariot Group immediately prior to Chariot Acquisition
Completion is as follows:
Chariot Resources
Limited
(British Columbia)
100% 100%
Andes Resources
Chariot Holding Inc.
Compañia Minera S.A.C.
(Cayman Islands)
(Peru)
100% 100%
Chariot Operating
Chariot Partners Limited
Limited
(Cayman Islands)
(Cayman Islands)
50% 20%
Marcobre S.A.C.
(Peru)
4.2 The Chariot Group
The Chariot Group is engaged in the acquisition, exploration and development of mineral
properties (principally copper) located in South America. Its principal asset is its interest in the
Marcona Copper Property.
(a) Chariot
Chariot was incorporated under the laws of the Yukon on 12 November 1996 under the name
Hyperion Resources Corp. On 21 February 2002, the shares of Chariot were consolidated on the basis
of one new for five old shares and the name of Chariot was changed to Chariot Resources Limited.
On 28 October 2004, Chariot was continued under the BCBCA. As at the Latest Practicable Date,
Chariot indirectly held 70% interest in the issued share capital of Marcobre and directly held all the
interest in the issued share capital of Andes. It was a development stage company engaged in mineral
exploration and development.
— 35 —
(b) Marcobre
Marcobre was incorporated as a closed corporation by means of public deed dated 20 May 2004.
As at the Latest Practicable Date, it was indirectly owned as to 70% by Chariot and as to 30% by the
Korean Partners. Marcobre was principally engaged in the holding of the interest in the Marcona
Copper Property.
having made all reasonable enquiries, as at the Latest Practicable Date, the Korean Partners and their
ultimate beneficial owners were independent of the Company and were not connected persons of the
Company or its subsidiaries or their respective associates.
(c) Andes
Andes was incorporated as a closed corporation by means of public deed dated 22 August 2001.
As at the Latest Practicable Date, Andes was directly wholly-owned by Chariot. Andes entered into
service agreements with Marcobre to provide management services to Marcobre with respect to the
Mina Justa Project.
4.3 The Marcona Copper Property and the Mina Justa Project
(a) Property description and location
The Marcona Copper Property covers an area of approximately 32,889 hectares and comprises
at least five prospects. The Mina Justa Project, which is the principal exploration and development
prospect within the Marcona Copper Property targeted by Marcobre, is located approximately 400
kilometres southeast of Lima in the Nazca Province, Peru. It lies approximately 25 kilometres
northeast of the coastal town of San Juan de Marcona and approximately 35 kilometres southwest of
the town of Nazca, and occurs at elevations ranging from 785 metres above sea level to 810 metres
above sea level. The geographic coordinates are 15⬚08’S and 75⬚04’W.
The Marcona Copper Property consists of a number of iron oxide-copper (silver-gold) deposits
and prospects that are part of a very large iron oxide-rich hydrothermal system associated with the
Marcona iron ore deposits located a few kilometres to the south and west.
The mineralisation to be exploited by the Mina Justa Project is contained in two deposits, namely
the Mina Justa deposit and the smaller Magnetite Manto deposit. The mineralisation is hosted by
sedimentary and volcanic rocks of mid to late Jurassic age that have been hydrothermally altered and
mineralised. The recent findings support the classification of the Mina Justa prospect as an iron ore
copper gold (IOCG) deposit.
The Mina Justa Project is designed to process 12 Mt/a of oxide ore by crushing, vat leaching,
solvent extraction and electrowinning to produce up to 52,000 t/a of cathode copper. It will be
expanded during the second year of operation to include a 5 Mt/a concentrator to treat copper sulphide
ore underlying the oxide ore in certain portions of the Mina Justa deposit. The concentrator plant
design is developed to prefeasibility study level.
— 36 —
(b) Marcobre Concessions
Under Peruvian mining law, the right to explore for and exploit minerals is granted by way of
concessions. Marcobre has acquired and is the sole and registered holder of all material mining
concessions in relation to the Marcona Copper Property. The deposits of the Mina Justa Project are
located on the Target Area 1 concession, which covers an area of approximately 3,969 hectares. The
remaining part of the Marcona Copper Property comprises 45 mining concessions covering an area of
approximately 28,920 hectares. The Target Area 1 concession was granted on 15 June 1956 and the
other Marcobre Concessions were granted between 31 August 1994 and 29 November 2006.
A mining concession is a property-related right which grants the concessionaire the right to
explore and exploit the mineral resources located in the subsoil of a particular area. Such right is
distinct and independent from the ownership of the land on which the mineral resources are located.
In other words, a mining concession grants a different and independent right from the property
ownership right or other real estates rights, such as surface rights over the land on which deposits are
located. A mining concessionaire must either acquire ownership of the surface rights to the land or
obtain authorisation from owners of the land. In respect of the Mina Justa Project, the government of
Peru owns all the lands over which Marcobre requires surface rights. Marcobre has initiated a direct
acquisition procedure to acquire the properties and the surface rights in respect of four lots of land
required to develop the Mina Justa Project. It has also engaged in discussion with the relevant
governmental authorities to obtain easements for, among other things, power lines, water pipeline,
water well-field and site access roads. It is estimated that the total acquisition cost for such properties
is approximately US$18.9 million (equivalent to approximately HK$146.7 million).
The term of each of the Marcobre Concessions is indefinite, provided that annual fees are paid
punctually, penalties for not reaching minimum production levels established by law are paid when
applicable, and the aforesaid minimum production levels are reached within the maximum term
established. As at the Latest Practicable Date, Marcobre was subject to payment of an annual fee of
US$3 per hectare in respect of the Marcobre Concessions, which fee is payable by 30 June annually.
In addition, under the current regime, Marcobre must achieve a minimum level of annual commercial
production of at least US$100 per hectare in gross sales within six years of the year following the date
on which the relevant mining concession was granted or, if the mining concession has not been put
into production within that period, pay a penalty equivalent to US$6 per hectare for the seventh
through the eleventh years following the date on which the relevant mining concession was granted.
If the mining concession has not achieved the minimum level of annual commercial production by the
twelfth year, the holder must pay a higher annual penalty of US$20 per hectare.
A mining concession would be cancelled in the event of a failure to pay the annual fee or
penalties for two consecutive years.
It is possible to be exempted from the annual penalty by proving per-hectare investments for the
previous year equivalent to not less than ten times the amount of the corresponding annual penalty.
— 37 —
As a result of a modification in the Peruvian mining laws introduced in 2009, by 2019, new
values of minimum annual production will be applicable (approximately US$1,300 per hectare in
gross sales), and in the event of not fulfilling this obligation, the annual penalty to be paid shall be
10% of the new minimum annual production. In case the holder cannot reach the new levels of
production by the fifteenth year (counted from 2009), this will cause the forfeiture of the concession
(the holder may be exempted for a maximum term of an additional five years from the forfeiture, if
he proves a cause of force majeure; or if he proves to have implemented mining investments for an
amount equivalent to ten times the annual penalty, in addition to the payment of the penalty).
In the event that the minimum production level is not reached by the end of the twentieth year
following 2009 (or the date on which the concession was granted, if the concession was granted after
2009), the concession would be cancelled.
As at the Latest Practicable Date, since no production has commenced yet, Marcobre has been
paying penalties for those Marcobre Concessions that have been granted for more than six years.
However since Marcobre has been fulfilling its obligation to pay such penalties, none of the Marcobre
Concessions including Target Area 1 concession) has been cancelled. According to the due diligence
findings, Marcobre has paid all such penalties up to 30 June 2008. The amount of penalties payable
in 2009 and 2010 are approximately US$234,000 (equivalent to approximately HK$1,817,000) and
US$313,000 (equivalent to approximately HK$2,430,000), respectively.
(c) Mining Mortgage
According to the due diligence findings, the mining mortgage over Target Area 1 amounts to
approximately US$27.6 million (equivalent to HK$214.3 million).
(d) Implementation plan for the Mina Justa Project
As at the Latest Practicable Date, the Mina Justa Project was in the development phase.
Exploration has essentially been completed but further delineation drilling may be carried out to test
lateral and vertical extensions or improve confidence levels. Upon Chariot Acquisition Completion,
the Company plans to carry out a review of the completed feasibility studies and may carry out some
extra work on sulphide ore processing. The Mina Justa Project will then move into the detailed
engineering phase, which is expected to commence in the fourth quarter of 2010 or the first quarter
of 2011.
Going forward, the Mina Justa Project will be implemented in two stages. The first stage involves
construction of equipment, plant and facilities to mine and process oxide ore and produce copper
cathode (the “Oxide Implementation Stage”). The second stage, which will commence while the
oxide plant is still under construction, involves construction of a sulphide concentrator plant and
related facilities (the “Sulphide Implementation Stage”).
The Oxide Implementation Stage is estimated to take 29 months from the commencement of
detailed engineering, with an additional three months to complete the commissioning and commence
cathode production.
— 38 —
The Sulphide Implementation Stage is also estimated to take 29 months from the commencement
of detailed engineering, with an additional three months to complete the commissioning.
(e) Permits and licences
Marcobre will be required to obtain the following permits and licences in order to operate the
Mina Justa Project:
(i) Mining and environmental authorisations
(A) Approval of the ESIA — The Mina Justa Project requires the approval of the MEM,
which is the authority to approve environmental management instruments. In this
regard, the ESIA has been prepared to identify baseline conditions and evaluate the
impact of the Mina Justa Project on the environment. The ESIA is designed to satisfy
the requirements of Peruvian legislation and to comply with internationally accepted
guidelines for social and environmental protection. It was finalised and submitted to
the MEM in September 2009 and was subsequently approved for public distribution
by the MEM in November 2009. A full public hearing in the community was convened
on 8 January 2010, during which the ESIA received “positive community reaction”.
Thereafter, a 30-day period for additional comments and observations by the public on
the ESIA began, following which the ESIA was moved to the following stage and the
MEM may raise observations to the ESIA. If observations are made and Marcobre
responds to them successfully, the MEM will approve the ESIA. It is expected that the
ESIA will be approved by the MEM by July 2010.
(B) CIRA — Under Peruvian law, a company that carries out an activity that can
potentially cause damage to archaeological heritage must obtain a CIRA, which
should be obtained prior to the exploration stage. According to the due diligence
findings, Marcobre has not obtained the CIRA prior to the exploration stage. It has
carried out exploration activities and is in the process of conducting an evaluation
archaeological project with respect to the Mina Justa Project. Approval of such
evaluation archaeological project is required in order for the relevant authority in Peru
to grant the CIRA. A fine in the range of US$315 to US$1.26 million may be imposed
by the relevant authority in Peru if a company carrying out an activity without a CIRA
causes actual damage to an archaeological remain. The Board was informed by
Marcobre, as at the Latest Practicable Date, no archaeological remains have been
discovered on Target Area 1 from the activities performed by Marcobre and Marcobre
has not been notified by any relevant authority regarding the absence of the CIRA
during the exploration stage. However, if the relevant authority is able to prove in the
future that Marcobre caused actual damage to archaeological remains during the
exploration stage, it may initiate sanctioning procedures against Marcobre.
(C) Mine Closure Plan — The Mine Closure Plan must be filed before the MEM for
evaluation and approval within one year counted from the date of approval of the
ESIA. It is not necessary to file the Mine Closure Plan before initiating exploitation
activities.
— 39 —
(D) Authorization to start exploitation operations — The authorization to start

exploitation operations must be obtained from the MEM prior to commencing
operations.
(E) Benefit Concession — The benefit concession grants its holder the right to extract or
concentrate the valuable part of a cluster of minerals and/or to fuse, purify or refine
metals by means of a group of physical, chemical and/or physical-chemical processes.
It is required before starting benefit activities.
(F) Mining operator certificate — All mining companies that use explosives shall obtain
a mining operator certificate of mining operations from the MEM before they start the
operations with explosives.
(G) Registration as a direct fuel consumer — The registration as a direct fuel consumer
before the MEM is required to allow an individual or legal entity, with a minimum
storage capacity of 264.17 gallons, to purchase fuel for its exclusive use.
(H) Direct fuel consumer favorable technical report — If a project of hydrocarbons

facilities complies with applicable regulations, the relevant authority will issue the
direct fuel consumer favorable technical report before Marcobre obtains the
registration as a direct fuel consumer in the MEM’s registry.
(I) Licence to the use of water — Water is a State property and it is the Peruvian State
which authorizes the use of water to third parties by means of permits. This licence
allows for the permanent and indefinite use of water during the time that the use of
water subsists (and for which the licence was granted).
(J) Authorizations for the discharge and treatment of waste water — The discharge
authorization allows an individual or entity to discharge industrial or household waste
water into a water source such as a river or a lake. Before being discharged, waste
water is usually treated to improve its quality and to have a lower impact on the water
source of discharge.
(ii) Land rights
(A) Property rights — The procedure to acquire the properties and the surface rights
required to develop the Mina Justa Project is being conducted. The estimated time for
completing this procedure is approximately eight months.
(B) Mining Concessions outside the areas requested to be granted in favor of Marcobre
— Some of the Marcobre Concessions fall outside the four lots of land which
Marcobre is in the process of acquiring. If Marcobre intends to carry out exploitation
activity on the areas outside such four lots of land, it must identify the owners of such
areas and enter into compensation agreements with them for the use of their lands.
— 40 —
(C) Access road to Target Area 1 — In the event Marcobre requires the use of access road
to Target Area 1, Marcobre shall enter into an authorization agreement with the holder
of the mining concession and the land owner through which such access road would
cross.
(iii) Administrative authorizations, permits and procedures
(A) Construction license (for civil works) — This license is needed in order to carry out
construction works in the facilities.
(B) Permits for the use of chemical and supervised products (“IQPF”) and IQPF user’s
certificate — The laws and regulations regarding IQPF exist in order to impede their
use for the production of narcotic substances.
(C) Registration of IQPF before the Ministry of Production — The unique registration
allows the Ministry of Production to monitor the use of IQPF for registered
companies.
(D) Permits for the use of explosives — Various permits are required to be obtained for the
use of explosives at the Mina Justa Project.
(iv) Electricity and energy
(A) Electricity supply — In order to obtain electricity from the National Interconnected
Electric System, Marcobre will need to enter into a power purchase agreement with
a provider, which can be a generator or a distributor of electricity.
(B) Transmission lines for supplying the Mina Justa Project with electricity — The Mina
Justa Project will obtain electricity from the National Interconnected Electric System
through two transmission lines which are being built. Marcobre is required to obtain
concessions and easements in respect of the two transmission lines.
As at the Latest Practicable Date, Marcobre has not obtained the licenses, permits and
authorizations needed for the exploitation or construction of the mining facilities, as they are not
yet required at this stage of the Mina Justa Project. However, as disclosed above, Marcobre has
already filed with the MEM the request for the approval of the ESIA, and the corresponding
public hearing has already taken place, as part of the regular procedure.
(f) Mining method
Open pit mining is proposed for the Mina Justa and the Magnetite Manto deposits. The bulk of
mining will be focused on the Mina Justa deposit which includes oxide (vat leach feed) and deeper
sulphide (concentrator feed) mineralisation. The smaller Magnetite Manto deposit contains oxide (vat
leach feed) mineralisation. The operating life of the Mina Justa Project is estimated to be
approximately 12 years, with the start-up of the sulphide concentrator occurring 18 months after the
oxide plant, and with both process circuits operating for ten years.
— 41 —
(g) Capital cost
It is envisaged that the development plan of the Mina Justa Project will be staged as follows:
(i) early award of an EPCM (Engineering, Procurement and Construction Management)

contract;
(ii) early award of critical items such as supply of cone crushers and mills and construction of
the camp;
(iii) maximum pre-assembly of some equipment such as tanks and platforms (where possible) to
minimise construction time;
(iv) award of contracts for construction facilities, infrastructure and mining process plans;
(v) construction; and
(vi) commissioning.
The total capital cost for developing the Mina Justa Project is, according to the DFS, estimated
to be US$745 million (equivalent to approximately HK$5,783 million) of which US$577 million
(equivalent to approximately HK$4,479 million) relates to infrastructure, open pit mine and oxide ore
processing facilities and US$168 million (equivalent to approximately HK$1,304 million) relates to
the sulphide ore processing facilities. As a 70% shareholder in the Mina Justa Project, the pro-rata
share of the total capital cost of the Chariot Group is approximately US$522 million (equivalent to
approximately HK$4,052 million).
5. REASONS AND BENEFITS OF THE CHARIOT ACQUISITION LR14.58(2), (8)

LR14A.58(1)
As at the Latest Practicable Date, the Company was an investment holding company and its
subsidiaries are principally engaged in investments in financial instruments and property investments.
After the Chariot Acquisition Completion, mining operations will constitute the Group’s principal
businesses and the Company’s other existing businesses will represent a much smaller proportion of
the Group’s business relative to its mining operation. The Company has no agreement, understanding,
negotiation (whether concluded or not) or intention of disposing and/or changing its existing
businesses.
The Company has been pursuing opportunities in the mining sector to diversify its income and
asset base with a view to enhancing Shareholders’ value. As disclosed in the Company’s annual report
for year ended 31 March 2007, in view of the increase in demand for natural resources and energy in
the world and the increase in the prices of metals over the past years, the Company is optimistic about
the future prospects for the demand for natural resources and the energy industry taking into account
the sustainable economic growth of the PRC and the national consumption of metal.
On 20 June 2007, Power East Investments Inc. (“Power East”), an indirect wholly-owned
subsidiary of the Company, entered into a conditional sale and purchase agreement to acquire all the
— 42 —
issued shares in and a shareholder loan of Front Wave Group Limited (“Front Wave”). Upon
completion of the transaction, the Company would have 95% equity interest in Xing City Hong Ji
Mining Industry Company Limited, which would have the exploration rights to and mining licence for
the Liaoning Province Xing City Guojiazhen Renhe Molybdenum Mine.
On 2 November 2007, Think Smart International Corp, a wholly-owned subsidiary of the

Company, entered into a conditional sale and purchase agreement to acquire all the shares of Global
Winner International Holdings Limited (“Global Winner”). Global Winner and its subsidiaries had
entered into 13 acquisition agreements with various molybdenum mine owners in PRC to acquire the
controlling stake of these mines.
Both the Front Wave and Global Winner transactions were terminated in 2008 due to
unfavourable developments in the PRC regulatory regime. The Catalogue of Foreign Investment
Business Guidance (revised in 2007), which took effect on 1 December 2007, prohibited foreign
investment in molybdenum exploration and mining in the PRC.
In early 2009, the Company facilitated G-Resources’ acquisition of the Martabe Project from OZ
Minerals Agincourt Pty Ltd (“OML”) by first purchasing the Martabe Project from OML and granting
G-Resources an option to buy the Martabe Project from the Company, which G-Resources
subsequently exercised. The Company made a net gain of approximately HK$59 million from the sale
of the Martabe Project to G-Resources.
In late 2009, the Board identified an investment opportunity in the copper mining industry after
Chariot formally initiated a competitive sale process. The Board is of the view that investing in a
copper mining project will be a good opportunity for the Company to take advantage of the rising
demand for and positive pricing trend of copper. The Board considers that the Chariot Acquisition will
be a good opportunity for the Group to enter into this promising industry. The DFS was concluded in
June 2009. According to the DFS, Mina Justa has copper equivalent reserves of 1.3 million tonnes of
copper and resources of 3.1 million tonnes of copper at a cut-off grade of 0.3 percent. On 8 January
2010, the Mina Justa Project completed the final public hearing stage of the ESIA review process,
which received “positive community reaction” as noted by the MEM. On 1 February 2010, Chariot
announced that the Mina Justa Project has been officially declared to be of “National Interest”, a
designation that may potentially facilitate the approval of the ESIA and other permits.
The Board considers that the Chariot Acquisition will not have any effect on the business of
Marcobre given that the Board has no current intention to change the existing operational management
of Marcobre.
The Company has engaged an independent valuer, Greater China Appraisal Limited, to conduct
a valuation analysis pertaining to the fair value of the business enterprise of Chariot, the full report
of which is appended as Appendix VI to this circular. As at 28 February 2010, being the date of
valuation, the valuation of Chariot of C$254 million based on the income approach has approximately
12% premium over the market capitalization (subject to adjustments), which falls within a reasonable
range of control premium when a controlling interest of a business is acquired.
— 43 —
Having taken into account, among other things, the valuation report prepared by Greater China
Appraisal Limited, the Directors consider that the terms of the Arrangement Agreement and the Voting
Agreements are on normal commercial terms, fair and reasonable and are in the interests of the
Company and Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to
vote in favour of the ordinary resolution to approve the Chariot Acquisition at the EGM.
6. RISKS ASSOCIATED WITH THE CHARIOT ACQUISITION
6.1 Investments in new business and country risk
The Chariot Acquisition constitutes an investment in a new business sector including the
exploration, development and production of copper in Peru, which the Company has not previously
had exposure to or experience in. The Company may encounter risks and uncertainties frequently
experienced by companies developing and operating new copper mines. If the Company is unable to
address such risks and uncertainties, its financial condition and operating results may be materially
and adversely affected. Any change in the political and economic conditions in Peru may adversely
affect the Company. Consequently, the Company is not in a position to assure the timing and amount
of any return or benefits that may be received from the new business.
6.2 Significant capital investment and construction risk
Mina Justa is in the early stage of development and as such is exposed to the normal range of
risks in mining projects. It requires significant capital investment and involves significant
construction risk. The Mina Justa Project may not be completed and ramped up to intended capacity
in the time planned, may exceed the original budgets and/or may not achieve the intended economic
results or commercial viability. Actual capital expenditures for the new business may significantly
exceed the Company’s budgets due to various factors beyond the Company’s control, which in turn
may affect the Company’s financial condition.
6.3 Government policies and regulations
The Mina Justa Project is subject to extensive laws, governmental regulations, policies, controls,
standards and requirements in Peru. There can be no assurance that the relevant government
authorities will not change such laws and regulations or impose additional or more stringent laws or
regulations or the Company will be able to comply with any such new laws or regulations applicable
to the Mina Justa Project economically or at all. Failure to comply with the relevant laws and
regulations in the mine development and natural resources production projects may adversely affect
the Company.
6.4 Comm odity price risk and foreign exchange risk
The future profitability and long-term viability of Mina Justa Project will depend in large part
on the market price and worldwide consumption of copper. Market prices for copper have been volatile
and are affected by numerous factors beyond the Company’s control, including expectations regarding
inflation, global and regional demand, speculative activities, political and economic conditions and
— 44 —
production costs in major-producing regions. The aggregate effect of these factors on copper prices
and consumption is impossible for the Company to predict. There can be no assurance that a decline
in the price and/or consumption of copper and other metals will not have a material adverse impact
on the financial conditions, results of operations and cash flow results of the Company.
The Mina Justa Project will generate revenue in US$ from the sale of copper, while construction
and operating costs will be incurred in Peruvian nuevo sol and other foreign currencies. Fluctuating
foreign exchange rates may have a material impact on the ongoing financial performance and position
of the Mina Justa Project and/or the Company.
6.5 Exploration, development and operating risk
Companies engaged in mining activities are subject to all of the hazards and risks inherent in
exploring for and developing natural resource projects. These risks and uncertainties include, but are
not limited to, environmental hazards, industrial accidents, labour disputes, social unrest,
encountering unusual or unexpected geological formations or other geological or grade problems,
unanticipated metallurgical characteristics or less than expected mineral recovery, encountering
unanticipated ground or water conditions, cave-ins, pit wall failures, flooding, rock bursts, periodic
interruptions due to inclement or hazardous weather conditions and other acts of God or unfavourable
operating conditions and losses.
These risks and hazards could delay the production, increase the cost of mining, result in liability
to the Company, and/or adversely affect the Company’s financial condition and results of operations.
6.6 The resources and reserves of the Mina Justa Project contained in this circular are
estimates and may have large deviation to its actual mining results
The information presented in this circular on the resources and reserves of the Mina Justa Project
has been assessed and classified in accordance to the reporting guidelines under NI 43-101. The data
on the resources and reserves are only estimates and may differ materially from the Company’s actual
mining results of the Mina Justa Project. There are various factors, assumptions and variables beyond
the Company’s control that could result in inherent uncertainties in estimating the resources and
reserves. If any of these factors, assumptions and variables proves to be incorrect, the actual amounts
of the resources and reserves may be adjusted accordingly. Such adjustment could materially and
adversely affect the operation results of the Mina Justa Project and the Company’s financial condition.
6.7 Environmental risks
Marcobre’s current or future operations, including exploration and development activities, are
subject to environmental regulations which may negatively affect their economic viability or prohibit
them altogether. Marcobre is subject to potential risks and liabilities associated with pollution of the
environment and the disposal of waste products which could occur as a result of mineral exploration,
development and production. To the extent that Marcobre is subject to environmental liabilities, the
payment of such liabilities or the costs that it may incur to remedy environmental pollution would
reduce the funds otherwise available to it and could have a material adverse effect on the financial
condition, results of operations or cash flow results of the Company.
— 45 —
6.8 Risk of shortages in water supply or supply of other utilities or raw materials
After Chariot Acquisition Completion, the Group will use water in various stages of its
processing operations. Water for the Mina Justa Project is supplied by the Jahuay aquifer. Any climate
change that results in unstable or reduced rainfall or any other event that causes a shortage of water
supplies may force the Group to limit or delay its production. There is no assurance that water supply
from the Jahuay aquifer will be sufficient for the Group’s needs. In the event of shortages in water
supply, the Group’s production schedule may be delayed and its business, financial condition and
results of operations may be materially and adversely affected.
After Chariot Acquisition Completion, the Group will use electricity in all its operations. There
is no assurance that electricity supply will not be interrupted or that its price will not increase.
6.9 Am ortization expenses related to mining rights may adversely affect the Group’s results of
operations
The Group amortizes its mining rights over the shorter of the period of the rights on a
straight-line basis or the useful lives of our mines in accordance with the production plans and
reserves of the mines on the unit-of-production method. Any material decrease in the amount of
reserves of the mines may cause impairment on the carrying value of the Group’s mining rights, which
may have a material adverse effect on its business, financial condition and results of operations.
6.10 Risks relating to relationship with the local community
The Mina Justa Project is located near the San Juan de Marcona District, which has a population
of approximately 11,600 habitants. The successful construction and the operation of the Mina Justa
Project depends on the Group’s ability to maintain good working relationships with the local
community. The local community may become disenchanted due to employment, immigration,
environmental impact issues such as water supply, noise, dust disturbance and waste management,
disturbance from traffic or other social issues. If the Group fails to manage its relationship with the
local community, the operation of the Mina Justa Project may be adversely affected, which in turn will
adversely affect the Group’s business, results of operations and financial condition.
6.11 Environmental health and production safety matters
The associated by-products, residues and tailings generated from the construction and operation
of the Mina Justa Project are subject to environmental risks and hazards. In particular, run-off of site
contaminated water, acid rock drainage from the tailing storage facilities, excess tailings decant or
tailings seepage following an earthquake event and settlement of the tailing storage facilities main
embankment may cause offsite water contamination. Any failure of the tailing storage facilities may
pose a risk to both the project workers and the communities located downstream from the mine site.
The operation of the Mina Justa Project is subject to stringent laws, rules and regulations imposed by
the Peruvian government regarding environmental matters, such as the treatment and discharge of
hazardous wastes and materials.
— 46 —
Environmental hazards may occur in connection with our operations as a result of human
negligence, force majeure or otherwise. The occurrence of any environmental hazards may delay
production, increase production costs and cause personal injuries or property damage, resulting in
liability to the Group and/or damage the Group’s reputation. Such incidents may also result in breach
of the conditions of the Mina Justa Project mining permits and exploration permits, or other consents,
approvals or authorisations, which may result in fines or penalties or even possible suspension
(temporary or permanent) of the Mina Justa Project mining permits and/or exploration permit. In the
future, the Mina Justa Project may face increased costs of operation arising from compliance with
environmental laws and regulations. Moreover, the development of the Peruvian economy and the
improvements in the living standards of the population may lead to a heightened awareness of
environmental protection. As a result, it is possible that more stringent environmental laws,
regulations, and policies may be implemented in the future, or the existing environmental laws,
regulations and policies may be more strictly enforced, which could result in significantly higher
operating costs for the mine. The operation of the Mina Justa Project may not always be able to comply
with existing or future laws, regulations or policies in relation to environmental protection
economically or at all. Should the Group fail to comply with any such existing or future laws,
regulations and policies, the Group may be subject to penalties and liabilities under Peruvian laws and
regulations, including but not limited to warnings, fines, suspension of operation and closure of the
facility that fails to comply with the relevant environmental standards and may adversely affect the
results of operation of the Group.
The exploration and mining operations of the Mina Justa Project involve the handling and storage
of explosives and other dangerous articles. The Mina Justa Project may experience in the future
increased costs of production arising from compliance with production safety in relation to the mining
industry. There can be no assurance that the existing laws, regulations and policies in relation to
production safety applicable to the Mina Justa Project will not change, or will not be more stringently
enforced. The Group may not be able to comply with all existing or future laws, regulations and
policies in relation to production safety economically or at all. Should the Group fail to comply with
any production safety laws or regulations, the results of operation of the Group may be adversely
affected.
The operations of the Mina Justa Project are subject to a number of operating risks and hazards,
some beyond our control, including, mechanical or equipment failure, operator failure, force majeure
events (including but not limited to adverse weather conditions, earthquakes and other natural
disasters, industrial and environmental accidents, social or political unrest industrial disputes, delays
due to government actions and outbreak of war), infrastructure availability, power interruptions,
unexpected variations in mineralisation and unexpected shortages or increases in the costs of, or
delays in the delivery of, labour, plant, transportation and equipment.
There can be no assurance that the above will not occur in the future. These risks and hazards
could delay the production, increase the cost of mining of the Mina Justa Project, result in liability
to the Group and/or harm the Group’s reputation. In extreme circumstances, the occurrence of these
risk or hazards may disrupt the operations of the Mina Justa Project for extended periods or result in
the suspension (temporary or permanent) of the Mina Justa Project.
— 47 —
6.12 Risks associated with natural resources sector
In common with other entities undertaking business in the natural resources sector, certain risks
are substantially outside the control of the Group. These risks include abnormal stoppages in
production or delivery due to factors such as industrial disruption, major equipment failure, accident,
fire, power failure or supply disruption, unforeseen adverse geological or mining conditions and/or
changes to predicted ore or mineral quality, the state of supply and demand for copper in global
markets and the effect of the copper price, changes in government regulations (including
environmental regulations) and government imposts such as royalties, rail freight charges and taxes
and risks to land titles, mining titles and the use thereof as a result of native title claim.
6.13 Risks relating to the seismicity of the Mina Justa Project area
The Mina Justa Project is located in a seismically active area. Any damage to of failure of the
tailing storage facilities and/or any stormwater interception and diversion structures may pose serious
risks to both the project workers and communities located downstream from the mine site, and
severely affect the operations of the Mina Justa Project. In the event of an earthquake, the production
facilities may be damaged and production may be slowed down or temporarily brought to a standstill,
resulting in delay in production schedule. In light of the seismicity of the region, unanticipated design
precautions may be required, such as large embankments to support the tailing storage facilities, which
may significantly increase the costs of construction and production and cause delays to the
construction and production schedule. As a result, the Group’s business, results of operations and
financial condition may be adversely affected.
6.14 Controversies with SHP related to tailings, water availability, passage right and easement
rights
The Mina Justa Project is located adjacent to the properties owned by SHP. There have been
disputes between Marcobre and SHP in relation to, among other things, tailings, water rights, passage
rights and easement rights. In particular, in respect of power, although the concession for transmission
lines is granted for an indefinite term, SHP may oppose to such concession or may not be cooperative
with Marcobre for the granting of any required easement rights for the transmission lines. Such
disputes may have a material adverse impact on the feasibility and timetable of the Mina Justa Project.
6.15 Risks relating to failure to obtain surface rights and related land titles
As disclosed in paragraph 4.3(b) above, Marcobre is required to acquire ownership of the surface
rights to the land or obtain authorisation from owners of the land, the government of Peru. There is
no guarantee that such surface rights can be acquired, or can be acquired at the cost estimated.
6.16 Risk for obtaining and/or renewing relevant permits and licenses
A number of permits and licences with respect to the environment are in process, including,
among other things, the approval of the ESIA and the obtaining of the CIRA. There can be no
assurance that the Company will be able to obtain all the necessary permits and licences. If the
Company is unable to obtain any of such permits or licences, the development and operations of the
Mina Justa Project may be adversely affected.
— 48 —
The ability of Marcobre to obtain future permits and authorizations may, over time, be
susceptible to increased scrutiny, resulting in increased costs or delays in receiving appropriate
authorizations. In particular, Marcobre may experience delays in obtaining permits and authorizations
necessary for their operations, including those required to exploit the Marcobre Concessions.
6.17 Failure on the Korean Partners to contribute capital could delay the project development
timetable, or cause the Company unable to complete the construction
As the 30% minority shareholder of Marcobre, the Korean Partners are required to contribute
30% of the future capital costs of the Mina Justa Project. If the Korean Partners fail to contribute their
share of capital costs, it could delay the project development or make the completion of development
impossible.
Support from the Korean Partners is a key factor for the successful development of the Mina
Justa Project. However there can be no assurance that the Company’s relationship with the Korean
Partners will sustain and the Korean Partners will continue to contribute the capital required for the
project development pursuant to the timetable. The occurrence of such risks could delay the
production, disrupt the operations of the Mina Justa Project or result in the closure of the Mina Justa
Project.
6.18 The Chariot Placing may not complete or raise sufficient proceeds and therefore the
Company may not be able to complete the project development
The Completion of the Chariot Placing is subject to the satisfaction of the conditions precedent
set out in the Chariot Placing Agreement, not all of which are in the control of the Company and the
Chariot Purchaser. In particular, there is no assurance that the Shareholders of the Company will
approve the Chariot Placing at the EGM. A number of other factors set out in the Chariot Placing
Agreement may also result in the termination of the Chariot Placing. Moreover, if there is not enough
demand for the Chariot Placing Shares in the stock market, the net proceeds raised from the Chariot
Placing may not be able to satisfy the capital costs required for the development of the Mina Justa
Project. The occurrence of such risks could delay the construction or result in the closure of the Mina
Justa Project.
6.19 Political and foreign risks
Political and related legal and economic uncertainty may exist in Peru where Marcobre operates.
The Company’s mineral exploration and mining activities may be adversely affected by political
instability and changes to government regulations relating to the mining industry. There can be no
assurance that changes in the laws of Peru or changes in the regulatory environment for mining
companies or for non-domiciled companies in Peru will not be made that would adversely affect the
Company. It is also possible that current or future social unrest in Peru will adversely affect the
Company’s operations.
As the mining industry is critical to Peru’s economy, employment, and export, the Peruvian
government is expected to remain committed to making Peru an investment friendly economy.
However, industrial and other forms of unrest have erupted in 2009, with numerous mines facing
temporary production delays or stoppages due to strikes, blockades and protests. Many relate to efforts
— 49 —
by workers to gain a greater share of the profits of Peru’s mining boom and were spurred by substantial
job losses. The government is making efforts to mediate with union representatives. Measures to more
equitably distribute the wealth created by Peru’s mining boom are also expected to be adopted to help
defuse the tension.
6.20 Ability to attract, retain and train key personnel
The future performance of the Group depends, to a significant extent, upon its ability to continue
to attract, retain and motivate key qualified personnel, key senior management and other employees
in the copper mining business. There is no assurance that these key qualified personnel will continue
to provide services to us or will honour the agreed terms and conditions of their employment or service
contracts. Moreover, the Group does not maintain insurance for the loss of any key qualified
personnel. Any loss of key qualified personnel or failure to recruit and retain personnel may have a
material adverse effect on the Group’s copper mining business, financial condition, results of
operations and future prospects.
In addition, the Group’s ability to train operating and maintenance personnel is a key factor for
the success of its copper mining business activities. If the Group is not successful in recruiting,
training and retaining such personnel, its business and results of operations could be materially and
adversely affected.
6.21 Information in this circular regarding future plans reflects current intentions and is subject
to change
Whether the Group ultimately implements the business plans described in this circular, and
whether it achieves the objectives described in this circular, will depend on a number of factors
including, but not limited to, (i) the availability and cost of capital; (ii) current and projected copper
prices; (iii) copper markets; (iv) costs and availability of drilling services, costs and availability of
heavy equipment, supplies and personnel; (v) success or failure of activities in similar areas to those
in which its projects are situated; and (vi) changes in estimates of project completion costs. The Group
will continue to gather information about its projects, and it is possible that additional information
will cause the Group to alter its schedule or determine that a project should not be pursued at all.
Accordingly, the Group’s plans and objectives may change from those described in this circular.
6.22 Failure to integrate future acquired businesses successfully into the existing operations
In light of the Group’s vision to become a globally competitive copper mining company, the
Company intends to pursue selective acquisitions of other high prospective, quality projects. The
implementation of such acquisition strategy is subject to a number of uncertainties, including:
(a) failure to identify material risks or liabilities associated with the acquisition;
(b) failure to integrate the acquired business, its personnel or products into the existing
business;
(c) higher costs of integration than the Company may anticipate;
— 50 —
(d) difficulties in obtaining regulatory approvals;
(e) changes in market circumstances and demands; and
(f) difficulties in retaining key employees of the acquired business who are necessary to
manage the acquired business.
The Group’s ability to grow through acquisitions further depends upon its ability to identify,
negotiate and complete suitable acquisitions, to integrate the business it acquires and to obtain any
necessary financing for such acquisitions. There can be no assurance that the Company will be able
to implement its strategy successfully or that it will be able to make acquisitions or investments on
favorable terms or within a desired time frame. Even if the Company is able to successfully acquire
suitable businesses or assets, there can be no assurance that it will achieve the expected returns on
such acquisitions. If the Company fails to successfully integrate any acquired businesses or assets into
its existing operations, its business, financial condition and results of operations may be materially
and adversely affected
6.23 Completion risks
Completion of the Chariot Acquisition is subject to satisfaction of the Chariot Acquisition

Completion Conditions, not all of which are within the control of the Group. In particular, you should
note that there is no assurance that the Chariot Shareholders will approve the Plan of Arrangement and
the transactions contemplated under the Arrangement Agreement at the Chariot Meeting, and even if
such approval were obtained, there is no assurance that such approval will not be or be proposed to
be revoked. There is also no assurance that the Plan of Arrangement and the transactions contemplated
under the Arrangement Agreement will be approved by the majority of the Shareholders at the EGM,
and even if such approval were obtained, there is no assurance that such approval will not be or be
proposed to be revoked.
7. FINANCIAL EFFECTS OF THE CHARIOT ACQUISITION
Upon completion of the Chariot Acquisition, the Amalgamated Entity will become a LR14.66(5)
wholly-owned subsidiary of the Company and the financial information of the Amalgamated Entity
will be consolidated into the consolidated financial statements of the Company.
As referred to in the annual report of the Group for the year ended 31 March 2009, the audited
consolidated net assets of the Group (including minority interest) as at 31 March 2009 was
approximately HK$2,123,686,000, comprising total assets of approximately HK$2,221,741,000 and
total liabilities of approximately HK$98,055,000, and the net loss of the Group for the year ended 31
March 2009 attributable to equity holders was approximately HK$366,522,000.
According to the unaudited pro forma financial information of the Enlarged Group as set out in
Appendix IV to this circular (assuming that the Chariot Placing is not completed), the unaudited pro
forma net assets of the Enlarged Group would be approximately HK$2.57 billion, comprising
unaudited pro forma total assets of approximately HK$3.50 billion and unaudited pro forma total
liabilities of approximately HK$0.93 billion, and the unaudited pro forma profit of the Enlarged Group
would be approximately HK$13.05 million.
— 51 —
The professional fees and other expenses of the Chariot Acquisition were approximately US$10.0
million (equivalent to approximately HK$77.6 million).
As stated in the unaudited pro forma financial information of the Enlarged Group as set out in
Appendix IV to this circular (assuming that the Chariot Placing is not completed), the Enlarged Group
has an unaudited consolidated pro forma cash and bank balances of approximately HK$164.97 million
as at 30 September 2009. The unaudited pro forma consolidated balance sheet of the Enlarged Group
as at 30 September 2009 is prepared based on (i) the unaudited consolidated balance sheet of the
Group as at 30 September 2009, as extracted from the interim report of the Company for the period
then ended; and (ii) the audited balance sheet of Chariot as at 31 October 2009, prepared under
International Financial Reporting Standards for the purpose of the Chariot Acquisition, after
incorporating the unaudited pro forma adjustments described in the accompanying notes, as if the
Chariot Acquisition were completed on 30 September 2009.
8. THE CHARIOT PLACING AGREEMENT
8.1 Date LR14.58(3)
25 March 2010
8.2 Parties
(a) The Company
(b) BOCI Asia Limited
(c) Morgan Stanley & Co. International plc
8.3 Chariot Placing Agents
The Chariot Placing Agents have agreed with the Company, subject to satisfaction of the
conditions precedent set out below and the other terms of the Chariot Placing Agreement, on a several
(but neither joint nor joint and several) basis and as agents for the Company, to procure, on a best
efforts basis, investors to subscribe for up to 31,200,000,000 new Shares at a minimum Chariot
Placing Price of HK$0.20 per Chariot Placing Share. It is envisaged that if the Chariot Specific
Mandate is obtained and the Chariot Placing is successful, the Company will raise a gross amount of
approximately US$800 million (equivalent to approximately HK$6,210 million), assuming full
placement of all the 31,200,000,000 Chariot Placing Shares at a minimum Chariot Placing Price of
HK$0.20 per Chariot Placing Share. Each of the Chariot Placing Agents will receive a placing
commission of 0.5% on the gross proceeds of the actual number of Chariot Placing Shares placed by
it together with related expenses. Such placing commission was arrived at after arm’s length
negotiations between the Company and the Chariot Placing Agents under normal commercial terms.
having made all reasonable enquiries, as at the Latest Practicable Date, the Chariot Placing Agents
were not connected persons of the Company or its subsidiaries or their respective associates. The
ultimate beneficial owners of BOCI and Morgan Stanley International were listed companies on the
Stock Exchange and the New York Stock Exchange, respectively.
— 52 —
8.4 Placees
It is expected that there will be not less than six placees, and the placees (and their ultimate LR14.58(3)
beneficial owner(s), where applicable) will be third parties independent of the Group and not
connected persons of the Group. In the event that any placee or its ultimate beneficial owners will not
be independent of the Company prior to Chariot Placing Completion, the Company will issue a further
announcement and ensure that subscription for the Chariot Placing Shares by such placee will comply
with the Listing Rules (including the obtaining of Independent Shareholders’ approval at a general
meeting of the Company). The Company does not intend to place the Chariot Placing Shares to any
placee to an extent that such placee would become a controlling shareholder of the Company after
Chariot Placing Completion.
8.5 Chariot Placing Shares
The aggregate number of Chariot Placing Shares to be placed under the Chariot Placing App 1B-10
Agreement will be up to 31,200,000,000 new Shares, which represents (i) approximately 9.79 times
the existing issued share capital of the Company; and (ii) approximately 90.73% the issued share
capital of the Company as enlarged by the allotment and issue of the Chariot Placing Shares upon
Chariot Placing Completion. The aggregate nominal value of the Chariot Placing Shares would amount
up to HK$3.12 billion.
8.6 Ranking of Chariot Placing Shares
The Chariot Placing Shares, when allotted, issued and fully paid, will rank pari passu in all
respects among themselves and with the Shares in issue on the date of allotment and issue of the
relevant Chariot Placing Shares.
8.7 Chariot Placing Price
The Chariot Placing Price, which shall not be less than HK$0.20 per Chariot Placing Share, shall
be determined by agreement between the Company and the Chariot Placing Agents after market
demand for the Chariot Placing Shares has been determined by the Chariot Placing Agents.
The minimum Chariot Placing Price of HK$0.20 per Chariot Placing Share represents:
(i) a discount of approximately 50.62% to the closing price of HK$0.405 per Share as quoted
on the Stock Exchange on the Last Trading Date;
(ii) a discount of approximately 49.11% to the average closing price of approximately

HK$0.393 per Share for the last five trading days up to and including the Last Trading Date;
(iii) a discount of approximately 45.95% to the average closing price of approximately

HK$0.370 per Share for the last ten trading days up to and including the Last Trading Date;
and
— 53 —
(iv) a discount of approximately 27.27% to the closing price of HK$0.275 per Share as quoted
on the Stock Exchange on the Latest Practicable Date.
The minimum Chariot Placing Price has been negotiated and arrived at after arm’s length
negotiations between the Company and the Chariot Placing Agents. In determining the minimum
Chariot Placing Price, the Company and the Chariot Placing Agents took into account the large size
of the Chariot Placing and the significant dilutive effect on the shareholding of Shareholders following
the issue of the Chariot Placing Shares (assuming all the Chariot Placing Shares are fully placed) and
came to the view that such a deep discount would be necessary to attract the interest of placees.
The Company will issue an announcement when the final Placing Price has been fixed by
agreement between the Company and the Chariot Placing Agents and the net price per Chariot Placing
Share is determined.
8.8 Conditions Precedent
The obligations of each of the Chariot Placing Agents under the Chariot Placing Agreement are
conditional upon, amongst others:
(a) there shall not have occurred any breach of, or any event rendering untrue or inaccurate,
any of the representations, warranties or undertakings under the Chariot Placing Agreement
in all respects, and not misleading in any respect, as given (i) on the date of the Chariot
Placing Agreement; (ii) on the date of Chariot Placing Completion, (iii) on the date of this
circular; and (iv) on the date of public launch of the Chariot Placing;
(b) the Listing Committee granting the approval of listing of and permission to deal in the
Chariot Placing Shares (and such listing and permission not subsequently revoked);
(c) the Company having obtained the approvals of the Shareholders in the EGM for the Plan
of Arrangement and the Chariot Placing and such approvals not having been or proposed to
be revoked;
(d) the Plan of Arrangement and the transactions contemplated under the Arrangement
Agreement having been completed (i) in accordance with the terms (without any material
variation, amendment or waiver, unless with the prior written consent of each of the Chariot
Placing Agents) set out in the announcement of the Company dated 25 March 2010 in
relation to the Chariot Acquisition and the Chariot Placing; and (ii) before or at the same
time as Chariot Placing Completion;
(e) there not having been any capital restructuring and/or capital reorganisation or redemptions
or repurchase of any Shares or other securities (including any options, warrants or
convertible securities) by the Company proposed, effected or completed after the date of the
Chariot Placing Agreement;
— 54 —
(f) there not having occurred any change or development (whether or not permanent)
including, but not limited to, a prospective change in the condition, financial or otherwise,
or in the general affairs, management, shareholders’ equity, earnings, operations or business
affairs or in the financial or trading position or prospects of the Company or any member
of the Group which, in the opinion of either Chariot Placing Agent, in its sole discretion:
(i) is or is likely to be materially adverse to or materially or prejudicially affect, the

business, financial or trading position, condition or prospects of the Company or the
Group;
(ii) has or is likely to have a material adverse effect on or impair the Chariot Placing or
the marketing or distribution of the Chariot Placing Shares or dealings in the Chariot
Placing Shares in the secondary market; or
(iii) makes it inadvisable, inexpedient or impracticable to proceed with the Chariot Placing
in the manner contemplated by the Chariot Placing Agreement,
provided that if either Chariot Placing Agent terminates the Chariot Placing Agreement by
reason of this paragraph, the other Chariot Placing Agent may elect to continue to enjoy and
be subject to its rights and obligations under the Chariot Placing Agreement;
(g) the Chariot Placing Agents not becoming aware, after the date of the Chariot Placing
Agreement, of any information or other matter (including any matter relating to financial
models and underlying assumptions related to projections) affecting the Company and its
subsidiaries, the Plan of Arrangement or the Chariot Placing that (in the Chariot Placing
Agents’ sole judgment) is inconsistent in a material and adverse manner with any such
information or other matter disclosed to the Chariot Placing Agents prior to the date of this
Agreement or would reasonably be expected to impair the Chariot Placing or the Plan of
Arrangement; and
(h) the Company and the Chariot Placing Agents having entered into a price determination
agreement and the Chariot Placing Price being fixed at not less than HK$0.20 per Chariot
Placing Share.
If the conditions precedent set out in the Chariot Placing Agreement are not satisfied or waived
by the Chariot Placing Agents by the Chariot Placing Completion Date, the Chariot Placing Agreement
and the obligations of each of the parties to the Chariot Placing Agreement shall cease and determine
forthwith.
— 55 —
8.9 Termination of Chariot Placing
The Placing Agreement contains provisions granting the Chariot Placing Agents the right to
terminate the Chariot Placing Agreement by giving notice in writing to the Company at any time prior
to the Chariot Placing Completion on the occurrence of the following:
(a) if there shall develop, occur, exist or come into effect:
(i) trading generally having been suspended or materially limited on, or by, any of the
Stock Exchange, the Shanghai Stock Exchange, the New York Stock Exchange, the
London Stock Exchange or the TSX;
(ii) trading of any securities of the Company being suspended on the Stock Exchange or
in any over the counter market;
(iii) a material disruption in securities settlement, payment or clearance services in the

United States, Hong Kong, the PRC or Canada having occurred;
(iv) any moratorium on commercial banking activities having been declared by Canada,
the PRC, any Federal or New York State or Hong Kong authorities;
(v) any event or series of events (whether or not permanent) in the nature of force majeure
(including, without limitation, acts of government, labour disputes strikes, lock-outs,
riots, public disorder, fire, explosion, flooding, civil commotion, acts of war, acts of
God, acts of terrorism, outbreak of diseases or epidemics, interruption or delay in
transportation, economic sanction and any local, national, regional or international
outbreak or escalation of hostilities, or other state of emergency or calamity or crisis),
in each case, which in the opinion of either Chariot Placing Agent, in its sole
discretion, is or may be or is likely to materially prejudice the success of the Chariot
Placing or distribution of the Chariot Placing Shares or dealings in the Chariot Placing
Shares in the secondary market, or makes it impracticable or inadvisable or
inexpedient to proceed with the Chariot Placing;
(vi) any new law or regulation or change in existing laws or regulations which in the
opinion of either Chariot Placing Agent, in its sole discretion, has or may be or is
likely to have a material adverse effect on the financial position of the Company or
any of its subsidiaries as a whole; or
(vii) any change (whether or not permanent) in local, national or international financial,
political, monetary or economic conditions, banking, capital markets, currency
exchange rates, credit default swap prices, secondary bond prices, exchange controls,
or the occurrence of any event or series of events outside of either Chariot Placing
Agent’s control, in each case, which in the opinion of either Chariot Placing Agent is
or may be or is likely to materially prejudice the success of the Chariot Placing or
distribution of the Chariot Placing Shares or dealings in the Chariot Placing Shares in
the secondary market, or makes it impracticable or inadvisable or inexpedient to
proceed with the Chariot Placing; or
— 56 —
(b) there is any breach of any of the representations, warranties and undertakings by the
Company in the Chariot Placing Agreement which comes to the knowledge of either Chariot
Placing Agent or any event occurring or any matter arising on or after the date of the
Chariot Placing Agreement and prior to Chariot Placing Completion which, if it had
occurred or arisen before the date of the Chariot Placing Agreement, would have rendered
any of such representations, warranties and undertaking untrue or incorrect in any material
respect in such a manner as in the opinion of either Chariot Placing Agent is or may be or
is likely to materially and adversely affect the financial position or business of the Group
as a whole or there has been a breach of, or failure to perform, any other provision of the
Chariot Placing Agreement on the part of the Company.
If the Chariot Placing Agents exercise such right to terminate the Chariot Placing Agreement, the
Chariot Placing will not proceed.
8.10 Completion of the Chariot Placing
Chariot Placing Completion will take place on or before the Chariot Placing Completion Date.
Shareholders and potential investors should note that the Chariot Placing has not been
launched and the Chariot Placing is subject to various conditions which may or may not be
fulfilled. There is therefore no assurance that the Chariot Placing will proceed and, if it proceeds,
on what terms it may proceed. Shareholders and potential investors are reminded to exercise
caution when dealing in the Shares.
9. REASONS FOR THE CHARIOT PLACING AND USE OF PROCEEDS
The company is an investment holding company and its subsidiaries are principally engaged in LR14.58(2)
LR14.58(8)
investments in financial instruments and property investments.
The Chariot Acquisition constitutes a very substantial acquisition of the Company under Chapter
14 of the Listing Rules. The raising of finance by means of the Chariot Placing will provide the
Company with the opportunity to broaden its business scope which is in line with the Company’s
strategy to explore and invest in potential businesses.
The Board considers that the Chariot Placing is the preferred way for raising additional funds for
the following reasons, notwithstanding that the Chariot Placing Completion will result in a significant
dilution of the shareholding of the existing Shareholders:
(a) the Chariot Placing represents the most efficient way to raise additional funds in terms of
time and cost as compared to other means of equity fund raising, such as rights issue and
open offer, which may not be easily implemented within a short and reasonable period of
time given the wide-spread shareholding base of the Company with no substantial
shareholder holding more than 5% of the Shares;
— 57 —
(b) given the expected future development costs of the Mina Justa Project and the lack of cash
inflow during the development phase of the Mina Justa Project, debt financing would
adversely affect the gearing ratios of the Company and the associated interest expense
would put pressure on the Company’s cash flow;
(c) proceeds from the Chariot Placing will provide the Company with immediate funding and
eliminate any uncertainty related to future fund raising; and
(d) the Chariot Placing will broaden the shareholder base and enhance the profile of the
Company given that the placees are individual, institutional and/or professional investors
(as the case may be).
Upon the Chariot Placing Completion, assuming full placement of all the 31,200,000,000 Chariot
Placing Shares at a minimum Chariot Placing Price of HK$0.20 per Chariot Placing Share, it is
anticipated that the gross proceeds from the Chariot Placing will be approximately US$800 million
(equivalent to approximately HK$6,210 million). The proceeds of the Chariot Placing are intended to
be utilised in the following manner:
(a) approximately US$260 million (equivalent to approximately HK$2,018 million) will be

used to finance the Chariot Acquisition indirectly, through the repayment of any short-term
bridge financing which the Company may raise to satisfy its obligations to pay the Chariot
Consideration in cash, and the fees and expenses related to the Chariot Acquisition;
(b) approximately US$530 million (equivalent to approximately HK$4,114 million) will be

used to fund the capital costs for the development of the Mina Justa Project (such amount
was forecasted as at the end of June 2009 according to the DFS, which may be subject to
change depending on the actual circumstances); and
(c) the balance will be used for general corporate purposes.
Notwithstanding the significant dilutive effect on the shareholding of existing Shareholders, the
Board is of the opinion that the terms of the Chariot Placing Agreement are on normal commercial
terms, fair and reasonable based on the current market conditions and in the interests of the Company
and Shareholders as a whole as the proceeds will be used to fund the Chariot Acquisition indirectly,
through the repayment of any short-term bridge financing which the Company may raise to satisfy its
obligations to pay the Chariot Consideration in cash, and the long-term development of the Mina Justa
Project, which will become a key asset of the Company following Chariot Acquisition Completion. As
such, the proceeds raised from the Chariot Placing are to be used entirely to enhance long-term value
to the Shareholders. Although it is envisaged that there may be a short-term impact on the market price
of the Shares upon completion of the Chariot Placing given the significant dilution of the shareholding
of existing Shareholders, the Board remains of the view that the long-term value to each Shareholder
will be enhanced by the Chariot Acquisition and the continuing development of the Mina Justa Project.
In addition, Shareholders are afforded the opportunity at the EGM to consider whether or not the
Chariot Placing is in their best interests and to vote accordingly.
The Company will issue an announcement when the net proceeds and the net price per Placing
Share are determined.
— 58 —
10. CHARIOT SPECIFIC MANDATE
Upon Chariot Placing Completion, a total of up to 31,200,000,000 new Shares will be issued by
the Company. At the EGM, the Shareholders will be asked to consider and, if thought fit, approve,
among other things, the grant of the Chariot Specific Mandate to allot and issue up to 31,200,000,000
new Shares for the purpose of the Chariot Placing. The Shareholders will also be asked to consider,
and if thought fit, authorise the Board to, on behalf of the Company, determine and deal with, at its
discretion and with full authority, matters relating to the Chariot Placing (including, but not limited
to, the specific timing of the issue, the final number of Chariot Placing Shares to be issued, the
determination of the Chariot Placing Price and identities of the placees).
The Chariot Specific Mandate, if granted, is conditional upon the satisfaction of the conditions
to the Chariot Placing in accordance with the terms of the Chariot Placing Agreement, and will lapse
on the Chariot Placing Completion Date.
Application will be made to the Stock Exchange for listing of, and permission to deal in, the App 1B-9(1)
Chariot Placing Shares.
PART B — THE CHARIOT SUBSCRIPTION AND THE CHARIOT SUBSCRIPTION

AGREEMENT
1. THE CHARIOT SUBSCRIPTION AGREEMENT
On 29 March 2010, the Company entered into the Chariot Subscription Agreement with Mr. Chiu LR14A.58(1)
LR14A.59(2)(a)
for the subscription by Mr. Chiu for the Chariot Subscription Shares. LR14A.59(2)(c)
LR14A.59(2)(d)
1.1 Subscription Price
Subject to the terms and conditions of the Chariot Subscription Agreement, Mr. Chiu has agreed App 1B-10
LR14A.59(2)(b)
to subscribe for the Chariot Subscription Shares at a Subscription Price which shall be the same as the
Chariot Placing Price and which shall not be less than HK$0.20 per Chariot Subscription Share
(exclusive of brokerage, trading fee and transaction levy, if any), as part of the Chariot Placing and,
at the discretion of the Company, through the Chariot Placing Agents in their capacity as the placing
agents of the Chariot Placing.
The Company will issue an announcement when the final Share Subscription Price for the
Chariot Subscription Shares has been fixed.
1.2 Chariot Subscription Shares
The number of Shares to be subscribed by Mr. Chiu under the Chariot Placing shall be LR14A.59(2)(f)
3,120,000,000.
— 59 —
1.3 Listing application
As disclosed in this circular, application will be made to the Stock Exchange for listing of, and App 1B-9(1)
permission to deal in, the Chariot Subscription Shares (which constitute part of the Chariot Placing
Shares).
1.4 Closing
Closing of the Chariot Subscription shall occur contemporaneously with closing of the Chariot
Placing.
1.5 Conditions precedent
The respective obligations of each party to the Chariot Subscription Agreement to effect the
closing of the Chariot Subscription pursuant to the Chariot Subscription Agreement shall be subject
to the satisfaction on or prior to the Chariot Subscription Closing Date of each of the following
conditions:
(a) the Chariot Placing Agreement shall have been entered into and become effective and all
of the conditions precedent to completion set forth in the Chariot Placing Agreement shall
have been satisfied (or waived by the relevant parties);
(b) approval by the Independent Shareholders of the Chariot Subscription Agreement and all
transactions contemplated thereunder (including the issue of the Chariot Subscription
Shares) as connected transactions at the EGM in accordance with the Listing Rules;
(c) no statute, rule or regulation shall have been enacted or promulgated by any governmental,
regulatory or administrative authority, agency or commission or any court, tribunal or
judicial body of Hong Kong, the United States or any other relevant jurisdiction which
prohibits the consummation of the closing of the Chariot Subscription and there shall be no
order or injunction of a court of competent jurisdiction in effect precluding or prohibiting
consummation of the closing of the Chariot Subscription; and
(d) the respective representations, warranties, acknowledgments and undertakings of Mr. Chiu
in the Chariot Subscription Agreement are accurate.
If the above conditions are not fulfilled by or before 3 September 2010, the rights and obligations
of the parties under the Chariot Subscription Agreement shall lapse and be of no further effect and,
in such event, the parties shall be released from such obligations without any liability save as to any
antecedent breach of the Chariot Subscription Agreement occurring before such date.
2. LOCK-UP PERIOD
Mr. Chiu has, pursuant to the Chariot Subscription Agreement, agreed and undertaken that unless
he has obtained the prior written consent of the Company to do otherwise, he will not (i) offer, sell,
contract to sell, or otherwise transfer or dispose of, either directly or indirectly, conditionally or
unconditionally, any of the Chariot Subscription Shares; (ii) enter into any swap or other arrangement
— 60 —
that transfers to another, in whole or in part, any of the economic consequences of ownership of the
Chariot Subscription Shares; (iii) enter into any transaction with the same economic effect as any
transaction described in (i) or (ii) above; or (iv) agree or contract to, or publicly announce any
intention to enter into, any transaction described in (i) or (ii) or (iii) above, in each of (i) through (iv)
above during the two-year period commencing from the Chariot Subscription Closing Date (the
“Chariot Subscription Lock-up Period”) and whether any such transaction described in (i) or (ii) or
(iii) above is to be settled by delivery of such Chariot Subscription Shares in cash or otherwise.
3. REASONS FOR ENTERING INTO THE CHARIOT SUBSCRIPTION AGREEMENT
The Directors consider that the Chariot Subscription would not only put the interests of Mr. Chiu LR14A.59(13)
in line with the interests of the Shareholders, the Subscription Lock-up Period would further
strengthen the senior management’s incentive to develop and operate the Mina Justa Project on a long
term basis. Moreover, acquisition of interests in the shareholding of the Company through the Chariot
Subscription by Mr. Chiu can demonstrate to the Shareholders and the Company’s investors the
confidence of the senior management in the Mina Justa Project.
The Directors (including the independent non-executive Directors) consider that the terms of the
Chariot Subscription under the Chariot Subscription Agreement, which were negotiated and arrived at
after arm’s length negotiations between the Company and Mr. Chiu, are on commercial terms, fair and
reasonable and are in the interests of the Company and the Shareholders as a whole.
4. PROPOSED USE OF PROCEEDS
The Chariot Subscription constitutes part of the Chariot Placing, the primary purpose of which
is to allow the Company (i) to finance the Chariot Acquisition; (ii) to fund the capital costs for the
development of the Mina Justa Project; and (iii) for general corporate purposes.
PART C — PROPOSED CHANGE OF NAME OF THE COMPANY
1. PROPOSED CHANGE OF NAME OF THE COMPANY
The Board proposes to change the name of the Company from “China Sci-Tech Holdings
Limited” to “CST Mining Group Limited”. Subject to the new English name of the Company becoming
effective, the Company will adopt “中科礦業集團有限公司” as its new Chinese name for
identification purpose only. The proposed change of Company name is subject to, among other things,
the approval of the Shareholders at the EGM. A further announcement will be made when the proposed
change of the name of the Company becomes effective.
The Board believes that the change of the name of the Company will provide the Company with
a new corporate identity which is in the interests of the Company and the Shareholders as a whole.
— 61 —
2. CONDITIONS
The proposed change of the name of the Company is subject to the following conditions being
fulfilled:
(a) the passing of the necessary resolution by the Shareholders at the EGM; and
(b) the Registrar of Companies in the Cayman Islands approving the proposed change of the
name of the Company.
The proposed change of the name of the Company will take effect from the date on which the
new name is entered onto the register by the Registrar of Companies in the Cayman Islands in place
of the existing name. Upon the proposed change of the name of the Company becoming effective, all
existing share certificates bearing the current name of “China Sci-Tech Holdings Limited” will
continue to be evidence of title to shares of the Company and will continue to be valid for trading,
settlement and registration purposes and the rights of the Shareholders will not be affected as a result
of the change of the name of the Company. There will not be any free exchange of the existing share
certificates of the Company for new share certificates under the new name of the Company. If the
proposed change of the name of the Company becomes effective, any issue of share certificates
thereafter will be in the new name of the Company and the securities of the Company will be traded
on the Stock Exchange in the new name of the Company.
PART D — OVERVIEW OF COPPER MINING INDUSTRY
1. GLOBAL COPPER MARKET
1.1 Background
Copper is a non-magnetic metal with high conductivity, tensile strength and resistance to
corrosion. Copper consumption can be divided into three main product groups: copper wire rods,
copper products and copper alloy products.
Copper wire rods are used in wire and cable products such as general and industrial cable, utility
power cables, telecommunication cable, other insulated wire and winding wire. In addition, copper has
several non-electrical applications such as tubes for air conditioners and refrigerators, foils for printed
circuit boards and other industrial and consumer applications. Copper is also used in a number of
alloys, including brass (copper and zinc), bronze (copper and tin), nickel silver, phosphor bronze and
aluminium bronze.
In general, wire and cable and copper products are consumed in five broad sectors: (i)
construction, (ii) electric and electronic products, (iii) industrial machinery and equipment, (iv)
transportation equipment and (v) consumer and general products.
The copper industry can be divided into three broad categories:
(a) Copper miners which mine ore to produce copper concentrates;
— 62 —
(b) Copper custom smelters which smelt and refine copper from the concentrates obtained from
copper mines; and
(c) Integrated copper producers who undertake mining, smelting, and refining or leaching to
produce copper. Integrated copper producers account for a large part of world copper
capacity.
1.2 World copper demand and supply
The following table sets forth world refined copper production and consumption for 2005 to
2009.
2005 2006 2007 2008 2009
World refined production (m tonnes) 16.6 17.3 18.0 18.3 18.3

World refined consumption (m tonnes) 17.0 17.5 17.9 18.0 17.3
Market balance (m tonnes) (0.4) (0.2) 0.1 0.3 1.0
Average copper cash price (USD/t) 3,682 6,727 7,122 6,966 5,170
Average copper cash price (USc/lb) 167 305 323 316 234
(a) Copper demand
The economic crisis in 2008 clearly affected metals demand globally. In the United States,
copper demand fell by 10.4% during 2008 to just under 2 Mt and dropped further to approximately
1.5 Mt in 2009, a level last seen in 1986. Copper demand in Europe contracted for a third consecutive
year in 2009 after price volatility had prompted increased substitution during 2007. On the whole,
however, the Chinese demand has expanded significantly. The PRC itself consumes 38% of the world’s
copper supplies in 2009. Given the drop in demand in 2008, the PRC has effectively taken a higher
proportion of global copper consumption than ever before.
2009 Global Refined Copper Consumption by region
W. Europe
Other 15%
10%
North America
10%
Africa
2%
Other Asia (ex China)

25%
China
38%
Source: Brook Hunt, Q4 Outlook
— 63 —
(b) Copper supply
From the supply side, the twelve largest copper mines in the world constitute about 33% of total
copper supply and the copper market is highly dependent on these operations. However, while these
mines were the major contributors to copper supply growth during the 90’s and early ’00s, over the
past five years, this has reversed and now output appears to be falling. Global copper mine production
capability totalled 16.0Mt in 2009. Chile was by far the largest producer of mined copper with a
market share of approximately 34%, followed by Peru (7.9%), the USA (7.6%), China (6.6%),
Indonesia (6.2%), Australia (5.3%), Zambia (4.3%) and Russia (4.2%).
World copper mine production (kt Copper in Concentrate and Leach)
2009 production
Western Europe 211

The United States 1,217
Canada 483
Australia 840
Indonesia 995
Chile 5,426
Rest of western world 3,799
The PRC 1,055
CIS 1,272
Rest of world 678
Total 15,976
(c) Copper prices
The price of copper re-bounded strongly in 2009 after a sharp decline following the financial
crisis in 2008 and has remained robust in 2010. The average copper price during the period from 1
October 2009 to 31 January 2010 was approximately US$6,821 (equivalent to approximately
HK$52,945) per metric tonne. This compares to the average price during the five years ending 31
December 2009 of approximately US$5,940 (equivalent to approximately HK$46,106) per metric
tonne. The copper price reached US$7,548 per tonne on 30 March 2010, more than a two-fold increase
from the same time last year. At this level the copper price is well above the global cost curve allowing
the industry to enjoy strong profits.
— 64 —
Historical Copper Prices from 1 January 2004 to 30 March 2010 (US$ / tonne)
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Jan-04
Jun-04
Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07
Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Source: Bloomberg 30 March 2009
The Company is optimistic that the recent strength in copper prices and the demand for copper
will continue. Some of the key drivers that are expected to influence the copper price include:
(i) fluctuations of US$;
(ii) copper import flows from the PRC and the rest of Asia’s continued demand for copper;
(iii) limited mine supply growth due to declining grades and the difficulty of new projects
keeping up with demand; and
(iv) rising costs of construction and operation in the mining sector generally.
2. PERUVIAN MINING INDUSTRY
2.1 Overview of the Peruvian mining industry
Peru is a South American country with a population of approximately 29.5 million. The country
is divided into 25 regions and the province of Lima. Peru is a democratic republic with a multi-party
system and directly elected government.
Peru is the leading producer of gold, lead, silver, tellurium, tin, and zinc in Latin America and
the second largest producer of bismuth, copper, and molybdenum. The mining and mineral processing
industries account for nearly 1.7% of the GDP in 2007 and has attracted significant investment
inflows. According to the MEM, investment in 2009 totalled around US$2.8 billion, and it is expected
to rise further to US$4.3 billion in 2010. Peru’s mining sector experienced rapid development after the
sector reform in the 1990s that allowed the country to become an important gold, silver and base
— 65 —
metals supplier. Peru’s comparative advantages include rich mineral deposits, relatively low recovery
costs and an attractive investment environment for foreign mining companies, which now dominate
the sector. Improvements in the political framework have also helped provide free trade of minerals,
supplies and services in a free market economy.
2.2 The Peruvian copper market
The US Geological Survey estimated Peru’s copper reserves to be 57.9 million metric tonnes as
at 2007. Peru’s copper output in 2009 was approximately 1.3 million metric tonnes.
The following table sets out the existing largest copper producing projects in Peru:
2009
Production
Project Operator (ktpa)
Cuajone and Toquepala Southern Copper Corp 316

Antamina Minera Antamina 312
Cerro Verde Freeport-McMoRan 308
Tintaya Xstrata 115
Source: Company filings
The following table sets out some of the large-scale copper projects that have been proposed in
Peru that are expected to achieve production before 2014:
Target
Production
Project Operator (ktpa)
Toromocho Chinalco 220

Antapaccay Xstrata 160
Tia Maria Southern Copper Corp 120
Los Chancas Southern Copper Corp 100
2.3 Legal environment
The Peruvian laws have attempted to ensure more favorable minerals exploration and production
contract terms for investors. According to the MEM, Peru was the seventh most attractive area for
investments in exploration after, in order of exploration investments in 2007, Tasmania (Australia),
Nevada and Alaska (United States), Northwest Territories (Canada), Western Australia (Australia), and
Indonesia.
— 66 —
The Peruvian Constitution establishes equal protection for domestic and foreign investors who
enter into agreements with the Government and guarantees free access and full convertibility of
foreign currency. The mining reforms in the early 1990s abolished the Government’s exclusive
management of the exploration, mining, smelting, and refining of metals and fuel minerals. In the
legal framework for investment and taxation, no distinction is made among domestic and foreign
investors, corporations, joint ventures, and consortia formed in Peru or abroad. The enactment of
complementary legislation Supreme Decree law No. 018 of July 9, 1992 in particular has made legal
procedures to obtain mining rights easier. Individuals and private companies are allowed to hold
mining permits in Peru. There are no restrictions on the remittance of depreciation, dividends, and
royalties abroad.
The 2004 Mining Royalty Law imposed an ad-valorem royalty based on the value of the mineral
concentrate as a compensation that title holders must pay to the State in reward for them exploiting
mineral resource. The rate varies in a sliding scale range of 1% to 3%. However, many ongoing
operations remain unaffected by the royalty due to previous contracts with the government. Many of
the current ‘stabilization contracts’ were signed during the second half of the 1990s and will expire
between 2015 to 2025.
Another key piece of recent legislation is the Mine Closure Law that sets out the obligations and
procedures that title holders must follow to close a mine. Supreme Decree law No. 066-2005-EM of
May 2006 established the Dirección de Gestión Social to administer corporate social responsibility
programs in the mining sector. The MEM is authorized to manage environmental affairs in the mineral
sector, such as by establishing the environmental protection policy and maximum allowable levels for
effluents, signing environmental administrative stability agreements, overseeing the impact of
operations, determining responsibilities, and imposing administrative sanctions.
2.4 Government policies and regulations
Pursuant to the Peruvian Constitution, natural resources belong to the Nation and the State is
sovereign in their exploitation. The rights to explore are granted to private parties by means of
concessions. A mineral concession is a license granted by the State that allows the holder thereof the
exclusive right to explore and exploit the mineral resources located within a certain area of the
subsoil. A single concession allows for exploration, development and mining production. Accordingly,
there is no need to apply for a different concession as the stages of a project unfold.
The exclusive rights granted by virtue of a concession are irrevocable, provided the
concessionaire complies with the legal and regulatory obligations that are imposed by law to maintain
in good standing the concession.
The main laws for regulating mining activities are: (i) the General Mining Law and its
implementing regulations; (ii) the regulation for mining procedures; (iii) the regulation for citizen
participation in mining activities; and (iv) the regulation for environmental protection in mining
activities.
— 67 —
The MEM is responsible for issuing the majority of the mining regulations. Within the MEM, the
General Bureau for Mining Environmental Affairs establishes the environmental regulations and and
approves environmental impact assessments. The Supervisory Agency for the Investment in Energy
and Mining is a government agency that supervises mining security and environmental impact of
mining activities. The Environmental Surveillance and Enforcement Agency — OEFA is a
governmental agency within the scope of the Environmental Ministry which supervises the
environmental impact related to mining activities. The Mining, Geological and Metallurgic Institute
is an autonomous entity which is part of the mining sector, and includes the Office of Mining Leases,
which handles applications for leases all over Peru; and the Mining Cadastre, which keeps the
inventory of leases in Peru. The mining lease procedure is fully carried out at the Mining, Geological
and Metallurgic Institute.
Furthermore, mining exploitation activities in Peru are subject to extensive environmental,

health and safety laws and regulations. Environmental laws and regulations promulgated in Peru
impose substantial restrictions on, among other things, use of natural resources, interference with the
natural environment, location of facilities, handling and storage of hazardous materials such as
hydrocarbons, use of radioactive material, disposal of waste and emission of noise and other activities.
Concessionaires are also subject to several municipal and administrative regulations, in

particular regulations relating to the transport sector, explosives and chemical substances.
PART E — INFORMATION ON THE GROUP AND THE ENLARGED GROUP
1. INFORMATION ON THE GROUP AND THE CHARIOT PURCHASER
The Company is an investment holding company and its subsidiaries are principally engaged in
investments in financial instruments and property investments. The Shares of the Company, an
exempted company with limited liability incorporated in the Cayman Islands, are listed on the main
board of the Stock Exchange.
The Chariot Purchaser is a company incorporated in British Columbia, Canada on 25 February

2010 and is an indirect wholly-owned subsidiary of the Company. The directors of the Chariot
Purchaser are Mr. Kwan Kam Hung Jimmy and Mr. Hui Richard Rui, both of whom are also the
Directors.
2. BUSINESS MODEL AND PROSPECTS OF THE ENLARGED GROUP
The Board was aware of the limitation of growth and development in the Company’s existing
businesses prior to the Chariot Acquisition. Accordingly, the Board has been searching for investment
opportunities in the energy and natural resources sectors.
Fundamentals for the copper industry remain structurally sound, supported by demands from
emerging economies led by the continued and sustainable consumption growth in the PRC, and steady
economic recoveries in the rest of the world. In the short term, copper price is expected to be
supported by a lag in scrap supply, as industrial production and construction activity in developed
markets remain well below pre-crisis levels, combined with a limited primary supply response in
— 68 —
2010. In the medium term, the Company envisions copper supply struggling to keep pace with
recovering demand in global consumption, leading to a supply/demand deficit, as producers have been
cautious to invest in new world-class projects to protect cash flow due to the recent economic
downturn. It is anticipated that these factors will support the upward trend of the copper price and
improve the Enlarged Group’s financial performance once the Mina Justa Project commences
production.
The Company’s vision is to become a globally competitive copper mining company and intends
to achieve this vision through the strategies set out in section 3 of Part A of this letter. Upon
completion of the Chariot Acquisition, the Mina Justa Project will form the basis to grow towards the
Group’s target of producing 250,000 tonnes of copper per annum, in both copper cathode metal and
copper in concentrate. As at the Latest Practicable Date, the Mina Justa Project was expected to
produce 100,000 tonnes per annum in a mix of copper cathode metal and copper in concentrate. With
a view of achieving the target of producing 250,000 tonnes of copper per annum, the Enlarged Group
will continue to seek for opportunities to acquire and develop other high quality, low cost and long-life
copper projects in other regions.
The Enlarged Group will seek to complete the development of the 70%-owned Mina Justa Project
to the production stage on time, within budget and at or exceeding the target quality of copper output.
Construction is expected to commence towards the end of 2010 or the first quarter of 2011 after final
permitting, with a 29-month construction program to follow and copper production expected to
commence in 2013. As estimated by the DFS, the total capital cost for developing the Mina Justa
Project is estimated to be US$745 million (equivalent to approximately HK$5,783 million). As a 70%
shareholder in the Mina Justa Project, the pro-rata share of the total capital cost of the Chariot Group
is approximately US$522 million (equivalent to approximately HK$4,052 million). Annual operating
costs are expected to average approximately US$180 million (equivalent to approximately HK$1,397
million), which equates to a C1 Cash Cost of approximately US$0.9 (equivalent to approximately
HK$7.0) per pound of copper. It is envisaged that customers for copper concentrates from the Mina
Justa Project will be Asian copper smelters, whereas customers for copper cathode metal will be Asian
and North American metal fabricators including wire and rod manufacturers and brass mills. A key
customer for the copper concentrate will be LS-Nikko Copper Inc., who has an off-take arrangement
as part of their 30% equity share in the Mina Justa Project.
3. MANAGEMENT EXPERTISE OF THE ENLARGED GROUP IN THE COPPER MINING

BUSINESS
With a view of bolstering the Company’s knowledge of the copper mining business and to assist
in the development of the Mina Justa Project, as announced in the Appointment Announcement, the
Board has resolved to appoint Mr. Barber as an executive Director and the chief executive officer of
the Company and Mr. Hegarty as an executive Director and the vice chairman of the Company to
supplement the management of the Company at the executive level. Mr. Barber has over 17 years of
experience in advisory and management roles in the natural resources industry, whereas Mr. Hegarty
has over 35 years of direct experience in the global mining industry. To the best of the Directors’
knowledge, information and belief, neither Mr. Barber nor Mr. Hegarty has any relationship with the
Chariot Group or its substantial shareholders.
— 69 —
Following the appointment of Mr. Barber and Mr. Hegarty to the Board and the management of
the Company, the Company believes that it has a strong mix of mining industry and capital markets
expertise. In addition, the Chariot Acquisition would also include the retention of the following key
personnel to run the respective projects upon Chariot Acquisition Completion:
(a) Mr. Ulrich Rath (existing Chief Executive Officer of Chariot) — Mr. Rath has over 35 years
of experience in the mining industry and has led or been a senior member of the project
management teams responsible for the development of three mines in South America; and
(b) Mr. David Brownrigg will remain as Operations General Manager.
Save as disclosed above, the Company has no intention to change its existing board composition.
4. SHAREHOLDING STRUCTURE OF THE COMPANY
The table below summarises the shareholding structure of the Company (i) as at the Latest
Practicable Date; (ii) immediately after Chariot Placing Completion, assuming full placement of all
the 31,200,000,000 Chariot Placing Shares (of which the Chariot Subscription forms part) at a
minimum Chariot Placing Price of HK$0.20 per Chariot Placing Share; and (iii) after (ii) above and
the full exercise of all the Warrants of the Company at an initial exercise price of HK$0.20 per Share
(subject to adjustment):
Shareholding immediately Shareholding immediately after

after Chariot Placing Chariot Placing Completion,
Completion, assuming assuming full placement at a
full placement at a minimum placing price of
Shareholding minimum placing price HK$0.20 per Chariot Placing
as at the Latest of HK$0.20 per Share and full exercise of all
Name of Shareholder Practicable Date Chariot Placing Share the Warrants (NOTE)
Approx. % Approx. % Approx. %
of issued of issued of issued
No. of Shares Shares No. of Shares Shares No. of Shares Shares
Mr. Chiu 0 0.00% 3,120,000,000 9.07% 3,120,000,000 8.94%

Placees under the Chariot
Placing 0 0.00% 28,080,000,000 81.62% 28,080,000,000 80.42%
Other public Shareholders 3,204,587,644 100.00% 3,204,587,644 9.31% 3,714,539,542 10.64%
Total 3,204,587,644 100.00% 34,404,587,644 100.00% 34,914,539,542 100.00%
Note: The assumption does not take into consideration the possible adjustment of the exercise price of the Warrants as a result
of the Chariot Placing.
— 70 —
5. POSSIBLE ADJUSTMENT TO THE WARRANTS
The Chariot Placing may lead to adjustments to the exercise price of the Warrants. The Company
will notify the holders thereof and the Shareholders by way of announcement regarding the
adjustments to be made (if any) pursuant to the terms of the Warrants (as and when appropriate).
6. FUND RAISING ACTIVITIES IN THE 12 MONTHS IMMEDIATELY PRECEDING THE

DATE OF THIS CIRCULAR
On 23 February 2009, the Company announced the proposed rights issue on the basis of five
Shares for every Share held (the “Rights Issue”). The Rights Issue was completed on 2 June 2009 with
2,653,242,530 new Shares allotted and issued. The net proceeds in the amount of approximately
HK$386 million was intended to be used for the Group’s principal activities of investments in
financial instruments and property investments. As at the Latest Practicable Date, the entire amount
of net proceeds has been utilised on the intended use as described above.
On 23 February 2009, the Company also announced the issue of the Warrants (in the proportion
of one Warrant for every five Shares subscribed for under the Rights Issue) entitling holders thereof
to subscribe, during a specified period, for new Shares at an initial exercise price of HK$0.20 per
Share (subject to adjustment). 530,648,506 Warrants were issued on 3 June 2009. The full exercise of
all the Warrants would raise net proceeds in the amount of approximately HK$106 million, which was
intended to be used for the general working capital of the Group and/or investments in the Group’s
principal activities of investments in financial instruments and property investments. As at the Latest
Practicable Date, approximately HK$4.14 million has been raised from the exercise of some of the
Warrants. Such amount was used for the general working capital of the Group.
Save as disclosed in this circular, the Company has not conducted any fund raising activities in
the past twelve months prior to the Latest Practicable Date.
7. SUFFICIENCY OF PUBLIC FLOAT
The Company intends to maintain the listing status of the Shares on the Stock Exchange and the
25% minimum public float requirement upon the issue of the Chariot Placing Shares.
For the purpose of determining the public float of the Company, the Stock Exchange will not
regard any connected person of the Company as a member of “the public” or shares held by a
connected person as being “in public hands”. In addition the Stock Exchange will not recognise as a
member of “the public”:
(a) any person whose acquisition of securities has been financed directly or indirectly by a
connected person; or
— 71 —
(b) any person who is accustomed to take instructions from a connected person in relation to
the Chariot Acquisition, disposal, voting or other disposition of securities of the issuer
registered in his name or otherwise held by him.
Accordingly, the Company will not issue the Chariot Placing Shares to a placee if the Company
is of the opinion that the issue of such Shares to such placee will result in the public float requirement
under the Listing Rules not being complied with immediately upon Chariot Placing Completion.
PART F — IMPLICATIONS UNDER THE LISTING RULES
The Chariot Acquisition constitutes a very substantial acquisition under Chapter 14 of the Listing
Rules. Pursuant to Rule 14.49 of the Listing Rules, the Chariot Acquisition is subject to the approval
of the Shareholders at the EGM.
Since Mr. Chiu is the Chairman of the Company and an executive Director, he is a connected LR14A.59(2)(e)
person of the Company under the Listing Rules and the Chariot Subscription under the Chariot
Subscription Agreement constitutes a connected transaction for the Company and is subject to
reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of
the Listing Rules.
As no Shareholder has an interest in (i) the Chariot Acquisition, the Chariot Placing, the LR2.17(1)
LR14.63(2)(d)
Arrangement Agreement, the Chariot Placing Agreement and the Chariot Specific Mandate; (ii) the LR14A.59(5)
Chariot Subscription and the Chariot Subscription Agreement; or (iii) the proposed change of the name
of the Company which is materially different from the other Shareholders, no Shareholder is required
to abstain from voting on the resolutions to be proposed at the EGM to approve, among other things,
(i) the Chariot Acquisition, the Chariot Placing, the Arrangement Agreement, the Chariot Placing
Agreement and the Chariot Specific Mandate; (ii) the Chariot Subscription and the Chariot
Subscription Agreement; and (iii) the proposed change of the name of the Company.
To the best knowledge, information and belief of the Directors, having made all reasonable
enquiries, there is (i) no voting trust or other agreement or arrangement or understanding entered into
by or binding upon Shareholders; and (ii) no obligation or entitlement of any Shareholder as at the
Latest Practicable Date, whereby they have or may have temporarily or permanently passed control
over the exercise of the voting right in respect of their Shares to a third party, either generally or on
a case-by-case basis.
PART G — EGM
A notice convening the EGM is set out on pages N-1 to N-4 of this circular. The EGM will be LR14.63(2)(a)
held at Concord Room II-III, 8th Floor, Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road,
Wanchai, Hong Kong on Tuesday, 1 June 2010 at 10:00 a.m. or any adjournment thereof. Ordinary
resolutions will be proposed to consider and, if thought fit, approve, among other things, (i) the
Chariot Acquisition, the Chariot Placing, the Arrangement Agreement, the Chariot Placing Agreement
and the Chariot Specific Mandate; and (ii) the Chariot Subscription and the Chariot Subscription
Agreement.
— 72 —
Proxy form for use in the EGM is enclosed. Whether or not you propose to attend the meeting,
you are requested to complete the enclosed proxy form in accordance with the instructions printed
thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis
Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible
and in any event not later than 48 hours before the time appointed for holding of the EGM or any
adjournment thereof. Completion and return of the proxy form will not preclude you from attending
and voting in person at the extraordinary general meeting or any adjournment thereof should you so
wish.
PART H — RECOMMENDATIONS
The Directors (including the independent non-executive Directors) consider that the proposed LR14.63(2)(c)
ordinary resolutions for approval of (i) the Chariot Acquisition, the Chariot Placing, the Arrangement
Agreement, the Chariot Placing Agreement and the Chariot Specific Mandate; (ii) the Chariot
Subscription and the Chariot Subscription Agreement; and (iii) the proposed change of the name of
the Company, are in the best interests of the Company and the Shareholders as a whole. Accordingly,
the Directors (including the independent non-executive Directors) recommend the Shareholders to
vote in favour of (i) the Chariot Acquisition, the Chariot Placing, the Arrangement Agreement, the
Chariot Placing Agreement and the Chariot Specific Mandate; (ii) the Chariot Subscription and the
Chariot Subscription Agreement; and (iii) the proposed change of the name of the Company, at the
EGM.
By order of the Board

China Sci-Tech Holdings Limited
Hui Richard Rui
Executive Director and General Manager
— 73 —
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
LR14A.58(3)(c)
LR14A.59(7)

(Stock Code: 985)
30 April 2010
To the Independent Shareholders
Dear Sir or Madam,
PROPOSED SUBSCRIPTION BY MR. CHIU TAO
We refer to the circular to the Shareholders dated 30 April 2010 (the “Circular”) of which this
letter forms part of. Terms defined in the Circular shall have the same meanings when used herein
unless the context otherwise requires.
The Independent Board Committee has been formed to give recommendations to the Independent
Shareholders on the terms of the Chariot Subscription Agreement and the Chariot Subscription
contemplated thereunder. Guangdong Securities has been appointed to act as the Independent
Financial Adviser and to advise the Independent Board Committee and the Independent Shareholders
in this regard.
We wish to draw your attention to the “Letter from Guangdong Securities” as set out on pages
76 to 88 of the Circular. We have considered the terms and conditions of the Chariot Subscription
Agreement, the letter of advice from Guangdong Securities and the other factors contained in the
“Letter from the Board” as set out on pages 11 to 73 of the Circular.
In our opinion, the terms of the Chariot Subscription Agreement and the Chariot Subscription are
fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of
the Company and the Shareholders as a whole. We also consider that the Chariot Subscription
— 74 —
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
Agreement is on normal commercial terms and in the ordinary course of business of the Group.
Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary
resolutions to be proposed at the EGM to approve the Chariot Subscription Agreement.
Yours faithfully,
Independent Board Committee
Mr. Yu Pan Ms. Tong So Yuet Mr. Chan Shek Wah
Independent Independent Independent

Non-Executive Director Non-Executive Director Non-Executive Director
— 75 —
LETTER FROM GUANGDONG SECURITIES
Set out below is the text of a letter received from Guangdong Securities, the Independent
Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding
the Chariot Subscription Agreement and the Chariot Subscription for the purpose of inclusion in this
circular.
Units 2505-06, 25/F.

Low Block of Grand Millennium Plaza
181 Queen’s Road Central
Hong Kong
30 April 2010
To: The independent board committee and the independent shareholders

of China Sci-Tech Holdings Limited
Dear Sirs,
PROPOSED SUBSCRIPTION BY CHIU TAO
INTRODUCTION
We refer to our appointment as the Independent Financial Adviser to advise the Independent
Board Committee and the Independent Shareholders in connection with the Chariot Subscription
Agreement and the Chariot Subscription, details of which are set out in the letter from the Board (the
“Board Letter”) contained in the circular dated 30 April 2010 issued by the Company to the
Shareholders (the “Circular”), of which this letter forms part. Capitalised terms used in this letter
shall have the same meanings as defined in the Circular unless the context requires otherwise.
As disclosed by the Company in the announcement of the Company dated 25 March 2010 in
relation to the Chariot Acquisition, the Company entered into the Chariot Placing Agreement with the
Chariot Placing Agents on 25 March 2010 for, among other things, indirectly financing the Chariot
Acquisition. As further referred to in the announcement of the Company dated 29 March 2010 in
relation to, among other things, the Chariot Subscription, the Company entered into the Chariot
Subscription Agreement with Mr. Chiu on 29 March 2010, pursuant to which Mr. Chiu has agreed, as
part of the Chariot Placing, to subscribe for the Chariot Subscription Shares at the Subscription Price
(exclusive of brokerage, fee and levy, if any) at discretion of the Company, through the Chariot
Placing Agents in their capacity as the placing agents of the Chariot Placing.
Since Mr. Chiu is the chairman of the Company and an executive Director, he is a connected
person of the Company under the Listing Rules. Accordingly, the Chariot Subscription under the
Chariot Subscription Agreement constitutes a connected transaction for the Company and is subject
to the reporting, announcement and independent shareholders’ approval requirements under Chapter
14A of the Listing Rules.
— 76 —
As no Shareholder has an interest in the Chariot Subscription Agreement and the Chariot
Subscription which is materially different from the other Shareholders, no Shareholder is required to
abstain from voting on the relevant resolution(s) to be proposed at the EGM to approve, among other
things, the Chariot Subscription Agreement and the transactions contemplated thereunder.
An Independent Board Committee comprising Mr. Yu Pan, Ms. Tong So Yuet and Mr. Chan Shek
Wah (all being independent non-executive Directors) has been established to advise the Independent
Shareholders on (i) whether the terms of the Chariot Subscription Agreement are on normal
commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned;
(ii) whether the Chariot Subscription is in the interests of the Company and the Shareholders as a
whole; and (iii) how the Independent Shareholders should vote in respect of the relevant resolution(s)
to approve the Chariot Subscription Agreement and the transactions contemplated thereunder at the
EGM. We, Guangdong Securities Limited, have been appointed as the Independent Financial Adviser
to advise the Independent Board Committee and the Independent Shareholders in this respect.
BASIS OF OUR OPINION
In formulating our advice and recommendation to the Independent Board Committee and the
Independent Shareholders, we have relied on the statements, information, opinions and representations
contained or referred to in the Circular and the information and representations as provided to us by
the Directors. We have assumed that all information and representations that have been provided by
the Directors, for which they are solely and wholly responsible, are true, complete and accurate in all
material respects at the time when they were made and continue to be so as at the Latest Practicable
Date. We have also assumed that all statements of belief, opinion, expectation and intention made by
the Directors in the Circular were reasonably made after due enquiries and careful considerations. We
have no reason to suspect that any material facts or information have been withheld or to doubt the
truth, accuracy and completeness of the information and facts contained in the Circular, or the
reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which
have been provided to us. We consider that we have taken sufficient and necessary steps on which to
form a reasonable basis and an informed view for our recommendation in compliance with Rule 13.80
of the Listing Rules.
The Directors have collectively and individually accepted full responsibility for the accuracy of
the information contained in the Circular and have confirmed, having made all reasonable enquiries,
which to the best of their knowledge and belief, there are no other facts the omission of which would
make any statement in the Circular misleading.
We consider that we have been provided with sufficient information to reach an informed view
and to provide a reasonable basis for our recommendation. We have not, however, conducted any
independent in-depth investigation into the business and affairs of the Company, Mr. Chiu or their
respective subsidiaries or associates, nor have we considered the taxation implication on the Group or
the Shareholders as a result of the Chariot Subscription Agreement and the Chariot Subscription. In
addition, we have no obligation to update this opinion to take into account events occurring after the
issue of this letter. Nothing contained in this letter should be construed as a recommendation to hold,
sell or buy any Shares or any other securities of the Company.
— 77 —
Lastly, where information in this letter has been extracted from published or otherwise publicly
available sources, the sole responsibility of Guangdong Securities is to ensure that such information
has been correctly extracted from the relevant sources.
PRINCIPAL FACTORS AND REASONS CONSIDERED
In arriving at our opinion in respect of the Chariot Subscription Agreement and the Chariot
Subscription, we have taken into consideration the following principal factors and reasons:
(1) Background and reasons for the Chariot Subscription
Business overview of the Group
The Company is an investment holding company and its subsidiaries are principally engaged in
investments in financial instruments and property investments.
Set out below is a summary of the consolidated financial information on the Group for the six
months ended 30 September 2009 and the two years ended 31 March 2009 as extracted from the
Company’s interim report for the six months ended 30 September 2009 (the “2009 Interim Report”)
and its annual report for the year ended 31 March 2009 respectively:
For the six For the For the

months ended year ended year ended
30 September 31 March 31 March
2009 2009 2008
(unaudited) (audited) (audited)
HK$’000 HK$’000 HK$’000
Revenue 23,529 21,396 6,597

Profit/(Loss) before taxation 53,464 (367,217) (305,478)
Profit/(Loss) attributable to the
Shareholders 41,986 (366,522) (305,526)
— 78 —
As at As at As at
30 September 31 March 31 March
2009 2009 2008
(unaudited) (audited) (audited)
HK$’000 HK$’000 HK$’000
Cash and bank balances 882,729 1,535,265 1,996,305

Convertible notes Nil 68,182 Nil
Total equity 2,568,170 2,123,686 2,453,434
Gearing ratio (total amount of net
book value of liability component
of the convertible notes and the
balance of all outstanding loans
and borrowings from financial
institutions over total equity) Nil 3.21% Nil
From the above table, we noted that the revenue of the Group for the year ended 31 March 2009
had increased substantially by approximately 224.33% as compared to the prior year. However, the
Group recorded net losses for the two years ended 31 March 2009. We noted from the 2009 Interim
Report that the Group turned around its loss making position for the six months ended 30 September
2009. As advised by the Directors, the profit was mainly attributable to (i) a gain from fair value
changes of investments held for trading of approximately HK$20.32 million as opposed to a loss of
approximately HK$405.10 million for the corresponding period of the previous year with the rebound
of the financial market of Hong Kong and the United States being the case; and (ii) a net gain of
approximately HK$59 million for the six months ended 30 September 2009 from the sale of OZ
Minerals Martabe Pty Ltd by the Group to G-Resources Group Limited (stock code: 1051) (formerly
known as Smart Rich Energy Finance (Holdings) Limited).
As for the asset and liability position of the Group, we noted from the above table that the level
of cash and bank balances of the Company were approximately HK$882.73 million as at 30 September
2009. As confirmed by the Directors, the Group’s latest cash and bank balances in hand remain
insufficient for settlement of the Chariot Consideration as well as the consideration for other material
proposed acquisition(s) which the Group is currently contemplating to get involved in.
According to the 2009 Interim Report, the Directors believed that the global economy was still
struggling for recovery although the financial market did rebound in the first half of the 2009-2010
financial year. Hence, the Group was cautious on the performance of financial instruments investments
and it would continue to explore potential business opportunities in order to improve its business
portfolio and diversify the market risk that the Group will confront in long run.
On 25 March 2010, the Board announced the Chariot Acquisition which is subject to the
Shareholders’ approval. As confirmed by the Directors, the Mina Justa Project will become a major
operating asset of the Group and the mining business will thereby constitute one of the Group’s
principal businesses upon completion.
— 79 —
Reasons for the Chariot Subscription and the proposed use of proceeds
As extracted from the Board Letter, the Directors consider that the Chariot Subscription would
not only put the interests of Mr. Chiu in line with the interests of the Shareholders, the Chariot
Subscription Lock-up Period would further strengthen the senior management’s incentive to develop
and operate the Mina Justa Project on a long term basis. Moreover, acquisition of interests in the
shareholding of the Company through the Chariot Subscription by Mr. Chiu can demonstrate to the
Shareholders and the Company’s investors the confidence of the senior management in the Mina Justa
Project.
In addition, the placing of the Chariot Subscription Shares to Mr. Chiu is part of the Chariot
Placing, the primary purpose of which is to allow the Company to raise sufficient capital (i) for
indirectly financing the Chariot Acquisition; (ii) for funding the capital costs for the development of
the Mina Justa Project; and (iii) for general corporate purposes.
In light of the above, we consider that the reasons for the Chariot Subscription are justifiable and
the Chariot Subscription would likely to be beneficial to the Group.
Financing alternatives available to the Group
As extracted from the Board Letter and as further confirmed by the Directors, save as and except
for (i) the rights issue for the net proceeds of approximately HK$386 million which was completed
on 2 June 2009; and (ii) the issue of bonus warrants for the net proceeds of approximately HK$106
million as announced by the Company on 23 February 2010, the Group had not carried out other equity
fund raising activities during the past 12 months immediately prior to the Latest Practicable Date.
As mentioned in the foregoing, the Group’s existing cash in hand is not sufficient for settlement
of the Chariot Consideration as well as the consideration for other material proposed acquisition(s)
which the Group is currently contemplating to get involved in. We have thus enquired into the
Directors and were informed by the Directors that the Group has considered various methods, namely
debt financing and equity financing, for fund raising. Nevertheless, with the current uncertain market
condition in mind, the Directors confirmed that the Company prefers not to create additional debt
liabilities to the Group (if possible), and hence considers debt financing to be inappropriate for the
Group at present.
With regard to equity financing, the Directors advised us that although both open offer and rights
issue would allow Shareholders to maintain their respective pro-rata shareholdings in the Company,
such fund raising exercises require the Company to procure commercial underwriting and would also
be relatively time consuming as compared with the Chariot Subscription.
— 80 —
Having considered (i) the funding requirements of the Group for indirectly financing the Chariot
Acquisition as well as for funding the capital costs for development of the Mina Justa Project and the
intended use of proceeds from the Chariot Subscription as outlined under the section headed “Reasons
for the Chariot Subscription and the proposed use of proceeds” of this letter; and (ii) the Chariot
Subscription being a rather appropriate and speedy financing alternative currently available to the
Group, we concur with the Directors that the Chariot Subscription, which is not in the ordinary and
usual course of business of the Group, is in the interests of the Company and the Shareholders as a
whole.
(2) Principal terms of the Chariot Subscription Agreement
The table below summarises the major terms of the Chariot Subscription Agreement:
Date: 29 March 2010
Parties: (i) the Company

(ii) Mr. Chiu
Number of Chariot 3,120,000,000 new Shares in connection with the Chariot

Subscription Shares Placing
to be subscribed:
The Subscription Price: Subject to the terms and conditions of the Chariot
Subscription Agreement, Mr. Chiu has agreed to subscribe for
the Chariot Subscription Shares at a Subscription Price which
shall be the same as the Chariot Placing Price and which shall
be not less than HK$0.20 per Chariot Subscription Share
(exclusive of brokerage, trading fee and transaction levy, if
any), as part of the Chariot Placing and, at the discretion of
the Company, through the Chariot Placing Agents in their
capacity as the placing agents of the Chariot Placing.
As referred to in the Board Letter, the Company will issue an

announcement when the final Subscription Price has been
fixed.
— 81 —
Chariot Subscription Mr. Chiu has, pursuant to the Chariot Subscription

Lock-up Period: Agreement, agreed and undertaken that unless he has obtained
the prior written consent of the Company to do otherwise, he
will not (i) offer, sell, contract to sell, or otherwise transfer or
dispose of, either directly or indirectly, conditionally or
unconditionally, any of the Chariot Subscription Shares; (ii)
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic
consequences of ownership of the Chariot Subscription
Shares; (iii) enter into any transaction with the same
economic effect as any transaction described in (i) or (ii)
above; or (iv) agree or contract to, or publicly announce any
intention to enter into, any transaction described in (i) or (ii)
or (iii) above, in each of (i) through (iv) above during the
two-year period commencing from the relevant Subscription
Closing Date and whether any such transaction described in
(i) or (ii) or (iii) above is to be settled by delivery of such
Chariot Subscription Shares in cash or otherwise.
As confirmed by the Directors, the terms of the Chariot Subscription Agreement (including the
Subscription Price) were arrived at after arm’s length negotiations between the Company and Mr.
Chiu.
The Subscription Price
As aforementioned, the Subscription Price shall be not less than HK$0.20 per Chariot
Subscription Share.
The minimum Subscription Price of HK$0.20 per Chariot Subscription Share represents:
(i) a discount of approximately 27.27% to the closing price of HK$0.275 per Share as quoted
on the Stock Exchange as at the Latest Practicable Date;
(ii) a discount of approximately 50.62% to the closing price of HK$0.405 per Share as quoted
on the Stock Exchange as at the Last Trading Date;
(iii) a discount of approximately 49.11% to the average of the closing prices of HK$0.393 per
Share as quoted on the Stock Exchange for the last five trading days up to and including
the Last Trading Date; and
(iv) a discount of approximately 45.95% to the average of the closing prices of HK$0.370 per
Share as quoted on the Stock Exchange for the last ten trading days up to and including the
Last Trading Date.
— 82 —
To assess the fairness and reasonableness of the minimum Subscription Price of HK$0.20, we set
out the following informative analyses for illustrative purpose:
Review on Share prices
The highest and lowest closing prices and the average daily closing price of the Shares as quoted
on the Stock Exchange in each of the months during the period commencing from 1 March 2009 up
to and including the Last Trading Date (the “Review Period”) are shown as follows:
Average
Highest Lowest daily Number
closing closing closing of trading
Month price price price days
(HK$) (HK$) (HK$)
2009
March 0.246 0.229 0.235 22
April (Note) 0.260 0.212 0.237 16
May (Note) 0.385 0.315 0.352 12
June 0.345 0.270 0.285 22
July 0.280 0.236 0.253 22
August 0.330 0.255 0.291 21
September 0.280 0.238 0.265 22
October 0.255 0.230 0.241 20
November 0.280 0.239 0.260 20
December 0.260 0.234 0.247 22
2010
January 0.390 0.241 0.321 20
February (up to and including 0.410 0.300 0.347 18
the Last Trading Date)
Source: the Stock Exchange web-site (www.hkex.com.hk)
Note: Trading in the Shares was suspended from 27 April 2009 to 12 May 2009.
During the Review Period, the average daily closing price of the Shares ranged from HK$0.235
to HK$0.352 per Share in each month. Moreover, the minimum Subscription Price of HK$0.20 per
Chariot Subscription Share had been below the closing prices of the Shares within the entire Review
Period. As being shown in the below section, the Shares had been rather illiquid in the open market.
In view of the prevailing circumstances, taking into account the large size of the Chariot Placing and
the dilutive effect on the shareholding of the existing public Shareholders following the issue of the
Chariot Placing Shares, the Directors advised us that the Chariot Placing Price and the Subscription
Price were all set at discounts to the market prices of the Shares in order to enhance the attractiveness
of the Chariot Placing (of which the Chariot Subscription forms part).
— 83 —
Review on trading liquidity of the Shares
The number of trading days, the average daily number of the Shares traded per month, and the
respective percentages of the Shares’ monthly trading volume during the Review Period as compared
to (i) the total number of issued Shares held by the public as at the Last Trading Date; and (ii) the total
number of issued Shares as at the Last Trading Date are tabulated as follows:
% of the
Average Volume
to total number % of the
of issued Shares Average Volume
held by the to total number
Average daily public as at the of issued Shares
Number trading volume Last Trading as at the Last
of trading (the “Average Date Trading Date
Month days Volume”) (Note 2) (Note 3)
2009
March 22 49,872,897 1.57% 1.57%
April (Note 1) 16 1,974,845 0.06% 0.06%
May (Note 1) 12 8,320,593 0.26% 0.26%
June 22 80,047,658 2.51% 2.51%
July 22 23,708,390 0.74% 0.74%
August 21 59,316,054 1.86% 1.86%
September 22 8,672,565 0.27% 0.27%
October 20 3,865,043 0.12% 0.12%
November 21 12,836,913 0.40% 0.40%
December 22 7,150,266 0.22% 0.22%
2010
January 20 49,241,705 1.55% 1.55%
February (up to and 18 20,239,799 0.64% 0.64%
including the Last
Trading Date)
Source: the Stock Exchange web-site (www.hkex.com.hk)
Notes:
1. Trading in the Shares was suspended from 27 April 2009 to 12 May 2009.
2. Based on 3,185,637,817 Shares held in public hands as at the Last Trading Date.
3. Based on 3,185,637,817 Shares in issue as at the Last Trading Date.
— 84 —
The above table illustrates that the average daily trading volume of the Shares per month was thin
during the Review Period. Save as and except for March 2009, June 2009, August 2009 and January
2010, the trading average of the Shares was below 1% of the total number of issued Shares held by
the public as at the Last Trading Date. As such, the Shares were rather illiquid in the open market.
Comparison with other share subscription exercises
As part of our analysis, we have identified share subscription exercises under specific mandate
from 1 January 2010 up to the Last Trading Date as announced by companies listed on the Stock
Exchange (the “Comparables”). To the best of our knowledge and as far as we are aware of, we found
eight companies which met these criteria. Shareholders should note that the businesses, operations and
prospects of the Company are not the same as the Comparables and thus the Comparables are only
used to provide a general reference for the recent common market practice of Hong Kong listed
companies in share subscription exercises under specific mandate. Summarised below is our relevant
finding:
Discount of the
subscription price
to closing price per
share on the last
trading day prior to
Date of the date of relevant
announcement Company name Stock code announcement
%
19 January 2010 New Times Energy Corporation Ltd. 166 10.10

21 January 2010 Dragon Hill Wuling Automobile 305 23.42
Holdings Ltd.
27 January 2010 Tonic Industries Holdings Ltd. 978 94.90
4 February 2010 Winteam Pharmaceutical Group Ltd. 570 2.30
11 February 2010 Biosino Bio-Technology and Science 8247 22.60
Incorporation
17 February 2010 Imagi International Holdings Ltd. 585 93.10
8 March 2010 China Southern Airlines Co. Ltd. 1055 8.39
12 March 2010 Air China Ltd. 753 2.22
Minimum 2.22
Maximum 94.90
25 March 2010 The Company 985 50.62
— 85 —
As shown by the above table, the subscription prices of the Comparables ranged from a discount
of approximately 94.90% to a discount of approximately 2.22% to the respective closing prices of their
shares on the last trading days prior to the release of the relevant share subscription announcements.
The minimum Subscription Price which represents a discount of approximately 50.62% to the closing
price of the Shares on the Last Trading Date is hence within the said market range.
From the above table, we also noted that the subscription prices of all of the Comparables were
set at discounts to their last trading day’s share prices.
Given (i) the low trading liquidity of the Shares during the Review Period; (ii) the market
phenomenon that subscription prices are set at discounts to share prices in the open market as
demonstrated by the above table, and having also balanced the reasons for the Chariot Subscription
and the possible benefits of the Chariot Subscription to the Group, we consider that the Subscription
Price is acceptable and is in line with market practice.
Other terms of the Chariot Subscription Agreement
With the stipulation of the Chariot Subscription Lock-up Period, we concur with the Directors
that the Chariot Subscription will put the interests of Mr. Chiu in line with the interests of the
Shareholders and that the Chariot Subscription Lock-up Period can further strengthen Mr. Chiu’s
incentive to develop and operate the Mina Justa Project on a long term basis.
Lastly, we have also reviewed other major terms of the Chariot Subscription Agreement and are
not aware of any terms which are unusual. We are therefore of the opinion that the terms of the Chariot
Subscription Agreement are fair and reasonable so far as the Independent Shareholders are concerned.
— 86 —
(3) Dilution effect on the shareholding interests of the existing public Shareholders
The table below demonstrates the possible shareholding structure of the Company (i) as at the
Latest Practicable Date; and (ii) immediately after completion of the Chariot Placing (of which the
Chariot Subscription forms part), assuming full placement of the shares under the Chariot Placing at
a minimum placing price of HK$0.20 per Share:
Shareholding immediately
after completion of the
Chariot Placing (of which
the Chariot Subscription
forms part), assuming
full placement of the
shares under the
Chariot Placing at a
Shareholding as at the minimum placing price
Name of Shareholder Latest Practicable Date of HK$0.20 per Share
No. of Shares % No. of Shares %
Mr. Chiu 0 0.00 3,120,000,000 9.07
Public
Placees (other than Mr. Chiu) 0 0.00 28,080,000,000 81.62
under the Chariot Placing
Other public Shareholders 3,204,587,644 100.00 3,204,587,644 9.31
Sub-total 3,204,587,644 100.00 31,284,587,644 90.93
Total 3,204,587,644 100.00 34,404,587,644 100.00
As depicted by the above table, the Chariot Placing (of which the Chariot Subscription forms
part) would result in a substantial enlargement in the share capital of the Company, but at the same
time lead to an inevitable extensive dilution to the shareholding interests of the existing public
Shareholders in the Company.
Shareholders should note that the above table is for illustrative purpose only and demonstrates
the possible effect on the shareholding structure of the Company as a result of the Chariot Placing (of
which the Chariot Subscription forms part).
— 87 —
(4) Financial effects of the Chariot Subscription
Effect on net asset value
Based on the 2009 Interim Report, the unaudited consolidated net asset value (“NAV”) of the
Group was approximately HK$2,568.17 million as at 30 September 2009. As confirmed by the
Directors, the Chariot Subscription would increase the NAV of the Group.
Effect on gearing
As at 30 September 2009, the Group’s gearing level (being calculated as the total amount of net
book value of liability component of the convertible notes and the balance of all outstanding loans and
borrowings from financial institutions over total equity) was nil. Since the Chariot Subscription would
not lead to any changes in the total borrowings of the Group, the Directors expected that the Group
would continue to record nil gearing level after the Chariot Subscription.
Effect on working capital
Upon completion of the Chariot Subscription, the working capital of the Group would be
increased by the net proceeds from the Chariot Subscription.
It should be noted that the aforementioned analyses are for illustrative purpose only and does not
purport to represent how the financial position of the Group will be upon completion of the Chariot
Subscription.
RECOMMENDATION
Having taken into account the above factors and reasons, we are of the opinion that (i) the terms
of the Chariot Subscription Agreement are on normal commercial terms and are fair and reasonable
so far as the Independent Shareholders are concerned; and (ii) the Chariot Subscription, which is not
in the ordinary and usual course of business of the Group, is in the interests of the Company and the
Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the
Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM
to approve the Chariot Subscription Agreement and the transactions contemplated thereunder and we
recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.
Yours faithfully,
For and on behalf of
Guangdong Securities Limited
Graham Lam
Managing Director
— 88 —
APPENDIX I AUDITED FINANCIAL INFORMATION OF THE GROUP
1. FINANCIAL SUMMARY
Set out below are the audited consolidated income statement and audited consolidated balance
sheet extracted from the relevant annual reports of the Company.
CONSOLIDATED INCOME STATEMENT

For the year ended 31 March
2009 2008 2007

HK$’000 HK$’000 HK$’000
Revenue 21,396 6,597 6,661

Other income 23,509 22,541 1,750
Administrative expense (71,889) (48,463) (12,503)
Gain (loss) arising from fair value changes of
investments held for trading (293,743) (190,884) 6,244
Impairment loss recognised in respect of
available-for-sale investments — — (975)
investment properties (600) 3,719 1,573
Loss on redemption of convertible notes — — (6,710)
Loss arising from fair value changes of derivative
financial instruments (38,429) (9,221) (454)
Loss arising from fair value changes of conversion
option derivative — (82,997) (10,561)
Finance costs (7,461) (6,770) (9,026)
Loss on transfer of subsidiaries — — (38,918)
Loss before taxation (367,217) (305,478) (62,919)

Taxation 695 (92) (126)
Loss for the year (366,522) (305,570) (63,045)
Attributable to:
Shareholders of the Company (366,522) (305,526) (63,045)
Minority interests — (44) —
(366,522) (305,570) (63,045)
Loss per share — basic and diluted (69.07) cents (108.28) cents (91.77) cents
— I-1 —
CONSOLIDATED BALANCE SHEET

At 31 March
2009 2008 2007

HK$’000 HK$’000 HK$’000
Non-current assets
Property, plant and equipment 16,106 743 17
Investment properties 85,492 26,092 22,373
Available-for-sale investments — — —
101,598 26,835 22,390
Current assets
Other receivables, deposits and prepayments 13,191 20,679 21,618
Investments held for trading 571,687 415,115 318,314
Derivative financial instruments — — 278
Bank balances and cash 1,535,265 1,996,305 42,419
2,120,143 2,432,099 382,629
Current liabilities
Other payables and accrued charges 27,874 2,290 20,872
Derivative financial instruments — — 22,949
Amounts due to directors — 417 300
Amount due to a minority shareholder 1,999 1,999 —
Taxation payable — 794 794
29,873 5,500 44,915
Net current assets 2,090,270 2,426,599 337,714
Total assets less current liabilities 2,191,868 2,453,434 360,104
Non-current liability
Convertible notes 68,182 — 60,976
2,123,686 2,453,434 299,128
Capital and reserves

Share capital 1,326,621 1,326,621 171,748
Reserves 797,109 1,126,857 127,380
Equity attributable to equity holders of the

Company 2,123,730 2,453,478 299,128
Minority interests (44) (44) —
Total equity 2,123,686 2,453,434 299,128
— I-2 —
2. AUDITORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2007 AND 2008
Set out below is the auditors’ report for the year ended 31 March 2007 and 2008, which is the
reproduction of pages 15 to 16 of the 2007 annual report and pages 17 to 18 of the 2008 annual report
of the Company.
TO THE MEMBERS OF CHINA SCI-TECH HOLDINGS LIMITED

中國科技集團有限公司
(incorporated in the Cayman Islands with limited liability)
We have audited the consolidated financial statements of China Sci-Tech Holdings Limited (the
“Company”) and its subsidiaries (collectively referred to as the “Group”) set out on pages 17 to 56,
which comprise the consolidated balance sheet as at 31 March 2007, and the consolidated income
statement, the consolidated statement of changes in equity and the consolidated cash flow statement
for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Directors’ responsibility for the consolidated financial statements
The directors of the Company are responsible for the preparation and the true and fair presentation of
these consolidated financial statements in accordance with Hong Kong Financial Reporting Standards
issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and the disclosure
requirements of the Hong Kong Companies Ordinance. This responsibility includes designing,
implementing and maintaining internal controls relevant to the preparation and the true and fair
presentation of the consolidated financial statements that are free from material misstatement, whether
due to fraud or error; selecting and applying appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit and to report our opinion solely to you, as a body, and for no other purpose. We do not assume
responsibility towards or accept liability to any other person for the contents of this report. We
conducted our audit in accordance with Hong Kong Standards on Auditing issued by the HKICPA.
Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance as to whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
— I-3 —
internal controls relevant to the entity’s preparation and true and fair presentation of the consolidated
financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the directors, as well as evaluating the overall presentation of the
consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Basis of qualified opinion
As more fully explained in notes 9 and 15 to the consolidated financial statements, the Group’s interest
in an associate was transferred to an independent third party on 9 January 2007. However, the Group
was unable to obtain financial information of its associate from 1 April 2006 to 9 January 2007 (date
of transfer) in order to equity account for the result of its associate, in accordance with the
requirements of Hong Kong Accounting Standard (“HKAS “) 28 “Investment in Associates” issued by
HKICPA, which requires the Group to account for its share of results of operations and net assets of
its associate up to the date of transfer in the financial statements. We are unable to obtain sufficient
information to quantify the impact of this departure from these requirements. Any adjustments found
to be necessary would affect the share of result of an associate and loss on transfer of subsidiaries as
disclosed in the consolidated income statement.
Qualified opinion arising from disagreement about accounting treatment
In our opinion, except for the effect on the financial statements of the matter described in the basis
for qualified opinion paragraph, the financial statements give a true and fair view of the state of the
Group’s affairs as at 31 March 2007 and of its loss and cash flows for the year then ended in
accordance with Hong Kong Financial Reporting Standards and have been properly prepared in
accordance with the disclosure requirements of the Hong Kong Companies Ordinance.
Deloitte Touche Tohmatsu

Certified Public Accountants
Hong Kong
27 July 2007
— I-4 —
TO THE MEMBERS OF CHINA SCI-TECH HOLDINGS LIMITED

中國科技集團有限公司
(incorporated in the Cayman Islands with limited liability)
We have audited the consolidated financial statements of China Sci-Tech Holdings Limited (the
“Company”) and its subsidiaries (collectively referred to as the “Group”) set out on pages 19 to 64,
which comprise the consolidated balance sheet as at 31 March 2008, and the consolidated income
statement, the consolidated statement of changes in equity and the consolidated cash flow statement
for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Directors’ responsibility for the consolidated financial statements
The directors of the Company are responsible for the preparation and the true and fair
presentation of these consolidated financial statements in accordance with Hong Kong Financial
Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”)
and the disclosure requirements of the Hong Kong Companies Ordinance. This responsibility includes
designing, implementing and maintaining internal controls relevant to the preparation and the true and
fair presentation of the consolidated financial statements that are free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on

our audit and to report our opinion solely to you, as a body, and for no other purpose. We do not
assume responsibility towards or accept liability to any other person for the contents of this report.
We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the HKICPA.
Those standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance as to whether the consolidated financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal controls relevant to the Group’s preparation and true and fair presentation of the consolidated
financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls. An
audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the directors, as well as evaluating the overall presentation of the
consolidated financial statements.
— I-5 —
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Basis for qualified opinion
As explained in note 8 to the consolidated financial statements, the Group’s interest in an

associate was transferred to an independent third party during the year ended 31 March 2007. The
Group was unable to obtain financial information in respect of this associate from 1 April 2006 to 9
January 2007 (date of transfer) in order to equity account for the Group’s share of net assets and
results of operation of its associate, in accordance with the requirements of Hong Kong Accounting
Standard 28 “Investment in Associates” issued by HKICPA, which requires the Group to account for
its share of results of operations and net assets of its associate up to the date of transfer in the
consolidated financial statements. We were unable to obtain sufficient information to quantify the
impact of this departure from these requirements. Any adjustments found to be necessary would affect
the share of result of an associate and loss on transfer of subsidiaries as disclosed in the consolidated
income statement for the year ended 31 March 2007. This caused us to qualify our audit opinion on
the consolidated financial statements in respect of the year ended 31 March 2007. It is not practicable
for us to quantify the effect of such departure on the corresponding figures in the consolidated
financial statements for the year ended 31 March 2007.
Qualified opinion arising from disagreement about accounting treatment in prior year
In our opinion, except for the effect on the corresponding figures for the year ended 31 March
2007 of the matters described in the basis for qualified opinion paragraph, the consolidated financial
statements give a true and fair view of the state of the Group’s affairs as at 31 March 2008 and of its
loss and cash flows for the year then ended in accordance with Hong Kong Financial Reporting
Standards and have been properly prepared in accordance with the Hong Kong Companies Ordinance.

Hong Kong
25 July 2008
— I-6 —
3. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE

YEAR ENDED 31 MARCH 2009
Set out below is the audited consolidation financial statements of the Group for the year ended
31 March 2009 together with the notes to the financial statements, which is the reproduction of pages
20 to 66 of the 2009 annual report of the Company.
CONSOLIDATED INCOME STATEMENT

For the year ended 31 March
NOTES 2009 2008

HK$’000 HK$’000
Revenue 7 21,396 6,597

Other income 23,509 22,541
Administrative expense (71,889) (48,463)
Loss arising from fair value changes of
investments held for trading (293,743) (190,884)
(Loss) gain arising from fair value changes of
investment properties (600) 3,719
derivative financial instruments (38,429) (9,221)
conversion option derivative — (82,997)
Finance costs 9 (7,461) (6,770)
Loss before taxation 10 (367,217) (305,478)

Taxation 11 695 (92)
Loss for the year (366,522) (305,570)
Attributable to:
Shareholders of the Company (366,522) (305,526)
Minority interests — (44)
(366,522) (305,570)
Loss per share — basic and diluted 12 (69.07) cents (108.28) cents
— I-7 —
CONSOLIDATED BALANCE SHEET

At 31 March
NOTES 2009 2008

HK$’000 HK$’000
Non-current assets
Property, plant and equipment 13 16,106 743
Investment properties 14 85,492 26,092
Available-for-sale investments 15 — —
101,598 26,835
Current assets
Other receivables, deposits and prepayments 16 13,191 20,679
Investments held for trading 17 571,687 415,115
Bank balances and cash 18 1,535,265 1,996,305
2,120,143 2,432,099
Current liabilities
Other payables and accrued charges 27,874 2,290
Amounts due to directors 19 — 417
Amount due to a minority shareholder 19 1,999 1,999
Taxation payable — 794
29,873 5,500
Net current assets 2,090,270 2,426,599
Total assets less current liabilities 2,191,868 2,453,434
Convertible notes 20 68,182 —
2,123,686 2,453,434

Share capital 21 1,326,621 1,326,621
Reserves 797,109 1,126,857
Equity attributable to equity holders of the Company 2,123,730 2,453,478

Minority interests (44) (44)
Total equity 2,123,686 2,453,434
— I-8 —
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Company

Convertible
notes Other
Share Share Capital equity capital Exchange Accumulated Minority
capital premium reserve reserve reserve reserve losses Total interests Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(note a) (note b)
At 1 April 2007 171,748 168,166 7,700 — 396,347 870 (445,703) 299,128 — 299,128
Transfer to profit or
loss on disposal
of foreign
operations — — — — — (870) — (870) — (870)
Loss for the year — — — — — — (305,526) (305,526) (44) (305,570)
Total recognised
expense for
the year — — — — — (870) (305,526) (306,396) (44) (306,440)
Recognition of equity
component of
convertible notes — — — 30,537 — — — 30,537 — 30,537
Shares issued at
premium on
conversion of
convertible notes 189,923 143,422 — (30,537) — — — 302,808 — 302,808
Shares issued at
premium for cash 964,950 1,217,000 — — — — — 2,181,950 — 2,181,950
Transaction costs
attributable to
issue of shares — (54,549) — — — — — (54,549) — (54,549)
At 31 March 2008 1,326,621 1,474,039 7,700 — 396,347 — (751,229) 2,453,478 (44) 2,453,434
Loss for the year and

total recognised
expense for
the year — — — — — — (366,522) (366,522) — (366,522)
Recognition of equity
component of
convertible notes — — — 37,717 — — — 37,717 — 37,717
Transaction costs
attributable to
issue of
convertible notes — — — (943) — — — (943) — (943)
At 31 March 2009 1,326,621 1,474,039 7,700 36,774 396,347 — (1,117,751) 2,123,730 (44) 2,123,686
(a) The capital reserve of the Group represents the difference between the nominal value of the shares of the subsidiaries
acquired, over the nominal value of the share capital of the Company issued in exchange, in connection with the Group
reorganisation completed in January 1994.
(b) The other capital reserve of the Group represents the balance of the credit arising from the cancellation of paid up capital
in previous years.
— I-9 —
CONSOLIDATED CASH FLOW STATEMENT
NOTE 2009 2008

HK$’000 HK$’000
OPERATING ACTIVITIES
Loss before taxation (367,217) (305,478)
Adjustments for:
Interest income (20,784) (22,091)
Interest expenses 7,461 6,770
Dividend income (19,493) (5,055)
Depreciation 868 197
Exchange gain — (870)
Loss arising from fair value changes of investments held
for trading 293,743 190,884
Loss on disposal of property, plant and equipment — 2
Loss (gain) arising from fair value changes of
investment properties 600 (3,719)
Loss on fair value change of commodity futures contracts — 278
Loss on fair value change of conversion option derivative — 82,997
Operating cash flows before movements in working capital (104,822) (56,085)

Decrease in other receivables, deposits and prepayments 7,578 939
Increase in investments held for trading (450,315) (287,685)
Increase (decrease) in other payables and accrued charges 25,228 (18,582)
(Decrease) increase in amounts due to directors (417) 117
Net cash used in operations (522,748) (361,296)

Interest received 20,784 22,091
Dividend received 19,493 5,055
Taxation arising from other jurisdictions paid (99) (92)
NET CASH USED IN OPERATING ACTIVITIES (482,570) (334,242)
INVESTING ACTIVITIES
Purchase of property, plant and equipment (16,108) (925)
Acquisition of property interests 26 (59,857) —
NET CASH USED IN INVESTING ACTIVITIES (75,965) (925)
— I-10 —
2009 2008
HK$’000 HK$’000
FINANCING ACTIVITIES
Interest paid (5) (2,047)
Increase in amount due to a minority shareholder — 1,999
Proceeds on issue of convertible notes 100,000 165,000
Transaction costs on issue of convertible notes (2,500) (3,300)
Proceeds from issues of shares — 2,181,950
Expenses on issue of shares — (54,549)
NET CASH FROM FINANCING ACTIVITIES 97,495 2,289,053
NET (DECREASE) INCREASE IN CASH AND CASH

EQUIVALENTS (461,040) 1,953,886
CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE YEAR 1,996,305 42,419
CASH AND CASH EQUIVALENTS AT THE END OF
THE YEAR, representing bank balances and cash 1,535,265 1,996,305
— I-11 —
NOTES TO THE FINANCIAL INFORMATION
1. GENERAL
The Company is incorporated in the Cayman Islands as an exempted company with limited liability and its shares are
listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The addresses of the registered office and
principal place of business of the Company are disclosed in the corporate information section of the annual report.
The consolidated financial statements are presented in Hong Kong dollars, which is also the functional currency of the
Company.
The Company is an investment holding company and is also engaged in investment in financial instruments and property
investment. The principal activities of its principal subsidiaries are set out in note 27.
2. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS
In the current year, the Group has applied the following amendment and interpretations (“new HKFRSs”) issued by the
Hong Kong Institute of Certified Public Accountants (“HKICPA”), which are or have become effective.
HKAS 39 & HKFRS 7 (Amendments) Reclassification of Financial Assets

HK(IFRIC) — Int 12 Service Concession Arrangements
HK(IFRIC) — Int 14 HKAS 19 — The Limit on a Defined Benefit Asset, Mininum Funding
Requirements and their Interaction
The adoption of the new HKFRSs had no material effect on how the results and financial position for the current or prior
accounting periods have been prepared and presented. Accordingly, no prior period adjustment has been required.
The Group has not early applied the following new and revised standards, amendments or interpretations that have been
issued but are not yet effective.
HKFRSs (Amendments) Improvements to HKFRSs 1

HKFRSs (Amendments) Improvements to HKFRSs 2009 2
HKAS 1 (Revised) Presentation of Financial Statements 3
HKAS 23 (Revised) Borrowing Costs 3
HKAS 27 (Revised) Consolidated and Separate Financial Statements 4
HKAS 32 & 1 (Amendments) Puttable Financial Instruments and Obligations Arising on Liquidation 3
HKAS 39 (Amendment) Eligible Hedged Items 4
HKFRS 1 & HKAS 27 (Amendments) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate 3
HKFRS 2 (Amendment) Vesting Conditions and Cancellations 3
HKFRS 3 (Revised) Business Combination 4
HKFRS 7 (Amendments) Improving Disclosures about Financial Instruments 3
HKFRS 8 Operating Segments 3
HK(IFRIC)-Int 9 & HKAS 39 Embedded Derivatives 5
(Amendments)
HK(IFRIC)-Int 13 Customer Loyalty Programmes 6
HK(IFRIC)-Int 15 Agreements for the Construction of Real Estate 3
HK(IFRIC)-Int 16 Hedges of a Net Investment in a Foreign Operation 7
HK(IFRIC)-Int 17 Distributions of Non-cash Assets to Owners 4
HK(IFRIC)-Int 18 Transfer of Assets from Customers 8
1
Effective for annual periods beginning on or after 1 January 2009 except the amendments to HKFRS 5, effective
for annual periods beginning on or after 1 July 2009
— I-12 —
2
Effective for annual periods beginning on or after 1 January 2009, 1 July 2009 and 1 January 2010, as appropriate
3
Effective for annual periods beginning on or after 1 January 2009
4
Effective for annual periods beginning on or after 1 July 2009
5
Effective for annual periods ending on or after 30 June 2009
6
7
Effective for annual periods beginning on or after 1 October 2008
8
Effective for transfers on or after 1 July 2009
The adoption of HKFRS 3 (Revised) may affect the accounting for business combination for which the acquisition date
is on or after the beginning of the first annual reporting period beginning on or after 1 July 2009. HKAS 27 (Revised) will affect
the accounting treatment for changes in a parent’s ownership interest in a subsidiary. The directors of the Company anticipate
that the application of the other new and revised standards, amendments or interpretations will have no material impact on the
results and the financial position of the Group.
3. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared on the historical cost basis, except for the investment
properties and certain financial instruments, which are measured at fair values, as explained in the accounting policies set out
below.
The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards
issued by the HKICPA. In addition, the consolidated financial statements include applicable disclosures required by the Rules
Governing the Listing of Securities on the Stock Exchange and by the Hong Kong Companies Ordinance.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies
of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement
from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into
line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Minority interests in the net assets of consolidated subsidiaries are presented separately from the Group’s equity therein.
Minority interests in the net assets consist of the amount of those interests at the date of the original business combination and
the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the
minority’s interest in the subsidiary’s equity are allocated against the interests of the Group except to the extent that the
minority has a binding obligation and is able to make an additional investment to cover the losses.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable.
— I-13 —
Dividend income from investments held for trading is recognised when the Group’s rights to receive payment have been
established.
Rental income from operating leases is recognised on the consolidated income statement on a straight line basis over the
term of the relevant leases.
Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected
life of the financial asset to that asset’s net carrying amount.
Property, plant and equipment
Property, plant and equipment including leasehold land and building held for administrative purposes are stated at cost
less subsequent accumulated depreciation and any accumulated impairment losses.
Depreciation is provided to write off the cost of items of property, plant and equipment over their estimated useful lives
and after taking into account of their estimated residual value, using the straight line method.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the item) is included in the consolidated income
statement in the year in which the item is derecognised.
Leasehold land and building
The land and building elements of a lease of land and building are considered separately for the purpose of lease
classification, unless the lease payments cannot be allocated reliably between the land and building elements, in which case,
the entire lease is generally treated as a finance lease and accounted for as property, plant and equipment. To the extent the
allocation of the lease payments can be made reliably, leasehold interests in land are accounted for as operating leases.
Investment properties
Investment properties are properties held to earn rentals and/or for capital appreciation.
On initial recognition, investment properties are measured at cost, including any directly attributable expenditure.
Subsequent to initial recognition, investment properties are measured at their fair value using the fair value model. Gains or
losses arising from changes in the fair value of investment property are included in profit or loss for the period in which they
arise.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from
use and no future economic benefits are expected from its disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
consolidated income statement in the year in which the item is derecognised.
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet when a group entity becomes a party to the
contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
— I-14 —
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit
or loss.
Financial assets
The Group’s financial assets are mainly classified into financial assets at fair value through profit or loss (“FVTPL”),
loans and receivables and available-for-sale financial assets. All regular way purchases or sales of financial assets are
recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets
that require delivery of assets within the time frame established by regulation or convention in the marketplace.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial assets and of allocating interest
income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts
(including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.
Interest income is recognised on an effective interest basis for debt instruments other than those financial assets
designated as at FVTPL, of which interest income is included in net gains or losses.
Financial assets at fair value through profit or loss
Financial assets at FVTPL including financial assets held for trading.
A financial asset is classified as held for trading if:
• it has been acquired principally for the purpose of selling in the near future; or
• it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent
actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
At each balance sheet date subsequent to initial recognition, financial assets at FVTPL are measured at fair value, with
changes in fair value recognised directly in profit or loss in the period in which they arise. The net gain or loss recognised in
profit or loss included any interest earned on the financial assets but excluded any dividend earned.
Loans and receivables
Loans and receivables (including other receivables and bank balances and cash) are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active market. At each balance sheet date subsequent to initial
recognition, loans and receivables are carried at amortised cost using the effective interest method, less any identified
impairment losses (see accounting policy in respect of impairment loss on financial assets below).
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated or not classified as financial assets at
FVTPL, loans and receivables or held-to-maturity investments. The Group designated unlisted equity securities as
available-for-sale financial assets.
— I-15 —
For available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value
cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity
instruments, they are measured at cost less any identified impairment losses at each balance sheet date subsequent to initial
recognition (see accounting policy in respect of impairment loss on financial assets below).
Impairment of financial assets
Financial assets, other than those at FVTPL are assessed for indicators of impairment at each balance sheet date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected.
For an available-for sale equity investment, a significant or prolonged decline in the fair value of that investment below
its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:
• significant financial difficulty of the issuer or counterparty; or
• default or delinquency in interest or principal payments; or
• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For financial assets carried at amortised cost, an impairment loss is recognised in profit or loss when there is objective
evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value
of the estimated future cash flows discounted at the original effective interest rate.
For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s
carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a
similar financial asset. Such impairment loss will not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly. Subsequent recoveries of amounts
previously written off are credited to profit or loss.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of impairment loss decreases and
the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously
recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the
impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
Financial liabilities and equity
Financial liabilities and equity instruments issued by a group entity are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of
its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.
— I-16 —
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Interest expense is recognised on an effective interest basis.
Convertible notes
Convertible notes contain liability and equity components
Convertible notes issued by the Group that contain both the liability and conversion option components are classified
separately into respective items on initial recognition. Conversion option that will be settled by the exchange of a fixed amount
of cash or another financial asset for a fixed number of the Company’s own equity instruments is classified as an equity
instrument.
On initial recognition, the fair value of the liability component is determined using the prevailing market interest of
similar non-convertible debts. The difference between the gross proceeds of the issue of the convertible notes and the fair value
assigned to the liability component, representing the conversion option for the holder to convert the notes into equity, is
included in equity (convertible notes equity reserve).
In subsequent periods, the liability component of the convertible notes is carried at amortised cost using the effective
interest method. The equity component, representing the option to convert the liability component into ordinary shares of the
Company, will remain in convertible notes equity reserve until the embedded option is exercised (in which case the balance
stated in convertible notes equity reserve will be transferred to share premium). Where the option remains unexercised at the
expiry date, the balance stated in convertible notes equity reserve will be released to the retained profits. No gain or loss is
recognised in profit or loss upon conversion or expiration of the option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in
proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are charged directly to
equity. Transaction costs relating to the liability component are included in the carrying amount of the liability portion and
amortised over the period of the convertible notes using the effective interest method.
Convertible notes contain liability component and conversion option derivative
Convertible notes issued by the Group that contain both liability and conversion option components are classified
separately into respective items on initial recognition. Conversion option that will be settled other than by the exchange of a
fixed amount of cash or another financial asset for a fixed number of the Company’s own equity instruments is a conversion
option derivative. At the date of issue, both the liability and conversion option components are recognised at fair value.
In subsequent periods, the liability component of the convertible notes is carried at amortised cost using the effective
interest method. The conversion option derivative is measured at fair value with changes in fair value recognised in profit or
loss.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and conversion option
components in proportion to their relative fair values. Transaction costs relating to the conversion option derivative is charged
to profit or loss immediately. Transaction costs relating to the liability component are included in the carrying amount of the
liability portion and amortised over the period of the convertible notes using the effective interest method.
— I-17 —
Derivative financial instrument
Derivative financial instrument is initially measured at fair value on the contract date, and is remeasured to fair value
at subsequent reporting dates. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is
designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the
nature of the hedge relationship.
Derivatives embedded in non-derivative host contracts are separated from the relevant host contracts and classified as
held-for-trading when the economic characteristics and risks of the embedded derivatives are not closely related to those of the
host contracts, and the host contracts are not measured at fair value through the consolidated income statement.
Other financial liabilities
Other financial liabilities, including other payables, amounts due to directors and a minority shareholder, are measured
at amortised cost, using the effective interest method.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the assets expire or, the financial assets are
transferred and the Group has transferred substantially all the risks and rewards of ownership of the financial assets. On
derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received
and the cumulative gain or loss that had been recognised directly in equity is recognised in profit or loss.
Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or
expires. The difference between the carrying amount of the financial liability derecognised and the consideration paid or
payable is recognised in profit or loss.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred taxation.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date.
Deferred taxation is recognised on differences between the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred taxation liabilities are generally recognised for all taxable temporary differences and
deferred taxation assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises
from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
The carrying amount of deferred taxation assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
— I-18 —
Deferred taxation is calculated at the tax rates that are expected to apply in the period when the liability is settled or
the asset is realised. Deferred taxation is charged or credited to profit or loss, except when it relates to items charged or credited
directly to equity, in which case the deferred taxation is also dealt with in equity.
Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than the functional
currency of that entity (foreign currencies) are recorded in its functional currency (i.e. the currency of the primary economic
environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At each balance
sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are
recognised in profit or loss in the period in which they arise.
Retirement benefit costs
Payments to the Mandatory Provident Fund Scheme are charged as expense when employees have rendered service
entitling them to the contributions.
Operating leases
Leases are classified as operating leases whenever the terms of the lease do not transfer substantially all the risks and
rewards of ownership to the leasee.
The Group as lessor
Rental income from operating leases is recognised in the consolidated income statement on a straight line basis over the
term of the relevant lease.
The Group as lessee
Rentals payable under operating leases are charged to the consolidated income statement on a straight line basis over the
term of the relevant leases. Benefits received and receivable as an incentive to enter into an operating lease are recognised as
a reduction of rental expense over the lease term on a straight-line basis.
Impairment loss of tangible assets
At each balance sheet date, the Group reviews the carrying amounts of its tangible assets to determine whether there is
any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised
as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised
as income immediately.
— I-19 —
4. KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in note 3, the directors of the Company are
required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year,
are discussed below:
(a) Fair Value of Investment Properties
Investment properties are carried in the balance sheet at 31 March 2009 at their fair value of HK$85,492,000. The fair
value was based on a valuation on these properties conducted by an independent firm of professional valuers using property
valuation techniques which involve certain assumptions of market conditions. Favourable or unfavourable changes to these
assumptions would result in changes in the fair value of the Group’s investment properties and corresponding adjustments to
the amount of gain or loss reported in the consolidated income statement.
(b) Fair Value of Convertible Notes
As described in note 6c and note 17, the fair value of the unlisted convertible note has been arrived at on the basis of
a valuation carried out by an independent firm of professional valuers using discounted cash flows method at a market interest
rate for the equivalent non-convertible note for its straight debt component and using the binomial model for its derivative
components. The following key assumptions have been used in determining the fair value:
Risk free rate 0.762%

Expected volatility 121.57%
Yield to maturity 24.23%
Expected option life 1.75 years
Dividend yield 0%
Exercise price
From issue date to 31 December 2008 HK$0.33
1 January 2009 to 31 December 2009 HK$0.36
1 January 2010 to 31 December 2010 HK$0.39
The carrying amount of the unlisted convertible note is HK$19,332,000 at 31 March 2009.
5. CAPITAL RISK MANAGEMENT
The Company manages its capital to ensure that the entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy
remains unchanged from prior year.
The capital structure of the Group consists of convertible notes and equity attributable to equity holders of the Company,
comprising issued share capital and reserves as disclosed in consolidated statement of changes in equity.
— I-20 —
The management of the Group reviews the capital structure periodically. As part of this review, the management of the
Group considers the cost of capital and the risks associated with each class of capital, and take appropriate actions to adjust
the Group’s capital structure.
6. FINANCIAL INSTRUMENTS
(a) Categories of financial instruments
2009 2008
HK$’000 HK$’000
Financial Assets
Loans and receivables (including cash and cash equivalents) 1,535,265 2,012,132
Investments held for trading 571,687 415,115
Financial Liabilities
Amortised cost 94,941 2,416
(b) Financial risk management objectives and polices
The management of the Group manages the financial risks relating to the operations through the monitoring procedures.
These risks include market risk (including currency risk, cash flow interest rate risk, fair value interest rate risk and price risk),
credit risk and liquidity risk. The management manages and monitors these exposures to ensure appropriate measures are
implemented on a timely and effective manner.
The Group does not enter into derivative financial instruments for hedging purpose. There has been no significant change
to the Group’s exposure to market risks or the manner in which it manages and measures.
Market risk
Foreign currency risk management
Certain subsidiaries of the Group have investments held for trading denominated in Renminbi and Singapore dollars
which are other than the functional currency of the relevant group entity (i.e. Hong Kong Dollars), which expose the Group
to foreign currency risk. The Group currently does not have a foreign currency hedging policy. However, management monitors
foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.
The carrying amount of the Group’s foreign currency denominated investments at the reporting date is as follows:
Assets
2009 2008
HK$’000 HK$’000
Renminbi 21,441 29,955

Singapore dollars 18,544 36,198
The following table details the Group’s sensitivity to a 5% increase or decrease in the Renminbi and Singapore dollars.
5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents
— I-21 —
management’s assessment of the possible change in foreign exchange rate. The sensitivity analysis includes only outstanding
foreign currency denominated investments items and adjusts their translation at the year end for a 5% change in foreign
currency rate. A positive number indicates a decrease in loss where Renminbi and Singapore dollars strengthen 5% against the
Hong Kong dollars. For a 5% weakening of Renminbi and Singapore dollars against Hong Kong dollars, there would be an equal
and opposite impact. The analysis is preformed on the same basis for 2008.
The following table indicates the approximate change in the Group’s profit or loss in response to reasonably possible
changes in the foreign exchange rates to which the Group have significant exposure at the balance sheet date.
Profit or loss
2009 2008
HK$’000 HK$’000
Renminbi 895 1,236

Singapore dollars 774 1,493
In management’s opinion, the sensitivity analysis is unrepresentative of the foreign exchange risk as the year end
exposure does not reflect the exposure during the year.
Fair value interest rate risk
The Group’s fair value interest rate risk relates to fixed rate or zero coupon convertible notes. The Group currently does
not have an interest rate hedging policy. The management considers the risk is insignificant to the Group.
Price risk
The Group is exposed to equity security price risk through its investments held for trading. The management of the Group
manages this exposure by maintaining a portfolio of investments with different risk and return profiles. If the market prices of
the investments held for trading had been 10% higher/lower while all other variables were held constant, the Group’s loss for
the year ended 31 March 2009 would decrease/increase by HK$47,736,000 (2008: HK$34,247,000).
Credit risk
The Group’s principal financial assets which are exposed to credit risk are convertible notes held for trading, other
receivables and bank balances.
The Group’s maximum exposure to credit risk in the event of the counterparties failure to perform their obligations at
the balance sheet date in relation to each class of recognised financial assets is the carrying amount of those assets stated in
the consolidated balance sheet. The Group reviews the recoverable amount of each individual receivable at each balance sheet
date to ensure that adequate impairment losses, if necessary, are made for irrecoverable amounts. In this regard, the directors
of the Company consider that the Group’s credit risk is significantly reduced.
The Group will closely monitor the credit rating of convertible notes held for trading to ensure that adequate impairment
losses, if necessary, are made for irrecoverable amounts.
The Group has no significant concentration of credit risk on other receivables, with exposure spread over a number of
counterparties.
Although the bank balances are concentrated on certain counterparties, the credit risk on liquid funds is limited because
the counterparties are banks with high credit ratings assigned by international credit rating agencies.
— I-22 —
Liquidity risk
In the management of the liquidity risk, the Group monitors and maintain a level of cash and cash equivalents deemed
adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The
following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The table has been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be
required to pay. The table includes both interest and principal cash flows.
Total
0-180 181- 365 1-2 Over undiscounted Carrying
days days year 2 years cash flows am ount
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 31 March 2009
Non-interest bearing
Other payables 24,760 — — — 24,760 24,760
Amount due to a minority shareholder 1,999 — — — 1,999 1,999
Convertible notes — — — 100,000 100,000 68,182
26,759 — — 100,000 126,759 94,941
Total
0-180 181- 365 1-2 Over undiscounted Carrying
days days year 2 years cash flows am ount
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
As at 31 March 2008
Non-interest bearing
Amounts due to directors 417 — — — 417 417
Amount due to a minority shareholder 1,999 — — — 1,999 1,999
2,416 — — — 2,416 2,416
(c) Fair value of financial instruments
The fair value of financial assets and financial liabilities are determined as follows:
• the fair value of financial assets with standard terms and conditions and traded on active liquid markets are
determined with reference to quoted market bid prices;
• the fair value of the unlisted convertible note is determined by using the discounted cash flows method at a market
interest rate for the equivalent non-convertible note for its straight debt component and using the binomial model
for its derivative components;
• the fair value of the investment fund is determined with reference to the net asset value of the fund which is
provided by the counterparty financial institution; and
— I-23 —
• the fair values of other financial assets and financial liabilities are determined in accordance with generally
accepted pricing models based on discounted cash flow analysis using prices or rates from observable current
market transactions as input.
The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at
amortised cost in financial statements approximate to their fair values.
7. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
For management purposes, the Group is currently organised into two operating divisions (i) investments in financial
instruments and (ii) property investment. These divisions are the basis on which the Group reports its primary segment
information.
Principal activities are as follows:
Investments in financial instruments — trading of securities, convertible notes and derivatives financial instruments
Property investment — properties letting
Segment revenue about these businesses is presented below:
2009 2008
HK$’000 HK$’000
Dividend income from investments in financial instruments 19,493 5,055

Rental income from property investment 1,903 1,542
21,396 6,597
— I-24 —
Segment information about these businesses is presented below:
Income statement
2009
Investments
in financial Property
instruments investment Total
HK$’000 HK$’000 HK$’000
Revenue 19,493 1,903 21,396
Segment result (335,328) 1,105 (334,223)
Other income 23,509

Unallocated corporate expenses (49,042)
Finance costs (7,461)
Loss before taxation (367,217)

Taxation 695
Loss for the year (366,522)
2008
Investments
HK$’000 HK$’000 HK$’000
Revenue 5,055 1,542 6,597
Segment result (208,996) 4,889 (204,107)
Other income 22,541

Unallocated corporate expenses (34,145)
Loss arising from fair value change of conversion
option derivative (82,997)
Finance costs (6,770)
Loss before taxation (305,478)

Taxation (92)
Loss for the year (305,570)
— I-25 —
Balance sheet
2009 2008
Assets Liabilities Assets Liabilities
HK$’000 HK$’000 HK$’000 HK$’000
Investments in financial instruments 571,687 24,760 415,115 —

Property investment 85,492 761 26,092 1,614
Segment assets/liabilities 657,179 25,521 441,207 1,614

Unallocated corporate assets/liabilities 1,564,562 72,534 2,017,727 3,886
2,221,741 98,055 2,458,934 5,500
Other information
Investments
HK$’000 HK$’000 HK$’000
Year ended 31 March 2009

Loss arising from fair value changes of derivative
financial instruments (38,429) — (38,429)
Loss arising from fair value changes of investments held
for trading (293,743) — (293,743)
Loss arising from fair value changes of investment
properties — (600) (600)

Loss arising from fair value changes of derivativ financial
instruments (9,221) — (9,221)
Loss arising from fair value changes of investment held
for trading (190,884) — (190,884)
Gain arising from fair value changes of investment
properties — 3,719 3,719
— I-26 —
Geographical segments
Geographical breakdown of the Group’s revenue by geographical market based on location of customers or location of
stock exchanges where listed securities are traded is as follows:
Revenue
2009 2008
HK$’000 HK$’000
The People’s Republic of China (the “PRC”), other than Hong Kong 13,144 1,874
Hong Kong 7,686 4,723
Singapore 566 —
21,396 6,597
The following table provides an analysis of segment assets and additions to property, plant and equipment and investment
properties, analysed by the geographical areas in which the assets are located or listed securities are traded:
Additions to
property, plant
Carrying am ount of and equipment, and
segment assets investment properties
2009 2008 2009 2008
HK$’000 HK$’000 HK$’000 HK$’000
The PRC, other than Hong Kong 46,433 56,047 — —

Hong Kong 592,203 348,962 76,231 925
Singapore 18,543 36,198 — —
657,179 441,207 76,231 925
— I-27 —
8. DIRECTORS’ AND EMPLOYEES’ EMOLUMENTS
(a) Directors
The emoluments paid or payable to each of the twelve (2008: eleven) directors were as follows:
Basic Salaries Contributions

allowances and Performance to retirement
Name Fees benefits-in-kind related bonus benefit scheme Total
HK’000 HK’000 HK’000 HK’000 HK’000
Chiu Tao (Chairman) — 5,146 1,000 5 6,151

Chiu Kong — 4,275 4,150 12 8,437
Kwan Kam Hung Jimmy — 858 300 12 1,170
Hui Richard Rui — 1,161 200 12 1,373
Tsui Ching Hung — 1,040 150 12 1,202
Chung Nai Ting — 1,055 300 12 1,367
Lee Ming Tung — 786 300 12 1,098
Yeung Kwok Yu — 105 — 3 108
Chiu Si Mary — 615 — 12 627
Yu Pan 100 — — — 100
Tong So Yuet 150 — — — 150
Chan Shek Wah 200 — — — 200
450 15,041 6,400 92 21,983
Basic Salaries Contributions

allowances and Performance to retirement
Name Fees benefits-in-kind related bonus benefit scheme Total
HK’000 HK’000 HK’000 HK’000 HK’000
Chiu Kong (Chairman) — 3,516 5,150 12 8,678

Kwan Kam Hung Jimmy — 783 300 12 1,095
Hui Richard Rui — 1,196 300 12 1,508
Tsui Ching Hung — 918 150 11 1,079
Chung Nai Ting — 803 300 11 1,114
Chiu Si Mary — 423 200 10 633
Lee Ming Tung — 406 450 6 862
Miu Frank H. 25 — — — 25
Yu Pan 100 — — — 100
Tong So Yuet 150 — — — 150
Chan Shek Wah 167 — — — 167
442 8,045 6,850 74 15,411
— I-28 —
The performance related bonus payable to executive directors is determined based on the performance of the
individual directors.
(b) Information regarding employees’ em oluments
Of the five individuals with the highest emoluments in the Group, all are directors of the Company whose
emoluments are included in note 8(a).
9. FINANCE COSTS
2009 2008
HK$’000 HK$’000
Interest on borrowings wholly repayable within five years:

Other borrowings (5) (1,484)
Convertible notes (note 20) (7,456) (5,286)
(7,461) (6,770)
10. LOSS BEFORE TAXATION
2009 2008
HK$’000 HK$’000
Loss before taxation has been arrived at after charging:
Directors’ remuneration (note 8(a)) 21,983 15,411

Contributions to the Mandatory Provident Fund 211 102
Other staff costs 8,585 4,892
Total staff costs 30,779 20,405
Auditor’s remuneration 970 850

Exchange loss — 986
Loss on disposal of property, plant and equipment — 2
Minimum lease payments under operating lease in respect of rented premises 2,122 2,166
and after crediting:
Gross rental income less direct operating expenses from investment

properties that generated rental income during the year of HK$394,000
(2008: HK$225,000) 1,509 1,317
Exchange gain 224 —
Interest income 20,784 22,091
— I-29 —
11. TAXATION
On 26 June 2008, the Hong Kong Legislative Council passed the Revenue Bill 2008 which reduced corporate profits tax
rate from 17.5% to 16.5% effective from the year of assessment 2008/2009.
No provision for Hong Kong Profits Tax has been made since the Group had no assessable profits derived in Hong Kong
for both years.
Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.
2009 2008
HK$’000 HK$’000
Current tax (99) (92)

Overprovision in respect of prior years 794 —
Tax credit (charge) for the year 695 (92)
The tax credit (charge) for the year can be reconciled to the loss before taxation per the consolidated income statement
as follows:
2009 2008
HK$’000 HK$’000
Loss before taxation (367,217) (305,478)
Tax credit at the domestic income tax rate of 16.5% (2008: 17.5%) (Note) 60,591 53,459
Tax effect of expenses not deductible for tax purpose (13,061) (19,512)
Tax effect of income not taxable for tax purpose 6,905 5,663
Overprovision in respect of prior years 794 —
Tax effect of tax losses not recognised as deferred tax asset (54,598) (39,928)
Effect of different tax rate of subsidiaries operating in other jurisdictions 64 69
Others — 157
Tax credit (charge) for the year 695 (92)
Note: The rate represents the Hong Kong Profits Tax rate as the major operations of the Company and its subsidiaries
are located in Hong Kong.
At the balance sheet date, the Group had unused tax losses of approximately HK$759,516,000 (2008: HK$428,619,000)
available to offset against future profits. No deferred taxation asset has been recognised in respect of such losses due to the
unpredictability of future profit streams. The losses may be carried forward indefinitely. There were no other significant
temporary differences arising during the year or at the balance sheet date.
— I-30 —
12. LOSS PER SHARE
The calculation of basic loss per share attributable to shareholders of the Company is based on the following data:
2009 2008
HK$’000 HK$’000
Loss
Loss for the purpose of basic and diluted loss per share
attributable to equity holders of the Company (366,522) (305,526)
2009 2008
Number of shares
Weighted average number of ordinary shares in issue during the year 13,266,212,650 7,054,386,204
Effect of the capital reorganisation completed on 1 April 2009 (note 28) (12,735,564,144) (6,772,210,756)
Weighted average number of ordinary shares for the purpose of basic and
diluted loss per share 530,648,506 282,175,448
The computation of diluted loss per share does not assume the conversion of the Company’s outstanding convertible
notes since their exercise would result in a decrease in loss per share during the year presented.
— I-31 —
13. PROPERTY, PLANT AND EQUIPMENT
Land and Leasehold Furniture and Motor

buildings improvements equipment vehicles Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
COST
At 1 April 2007 — 262 217 — 479
Additions — — 85 840 925
Disposals — (262) (135) — (397)
At 31 March 2008 — — 167 840 1,007

Acquisition of property interests — 59 64 — 123
Additions 13,191 475 261 2,181 16,108
At 31 March 2009 13,191 534 492 3,021 17,238
DEPRECIATION
At 1 April 2007 — 262 200 — 462
Provided for the year — — 22 175 197
Eliminated on disposals — (262) (133) — (395)
At 31 March 2008 — — 89 175 264

Provided for the year 242 103 69 454 868
At 31 March 2009 242 103 158 629 1,132
CARRYING VALUES
At 31 March 2009 12,949 431 334 2,392 16,106
At 31 March 2008 — — 78 665 743
The above items of property, plant and equipment are depreciated using straight line method at the following rates per
annum:
Land and buildings 2%

Leasehold improvements 20% - 33%
Furniture and equipment 15% - 25%
Motor vehicles 25%
As the allocation of lease payments between leasehold land and buildings elements cannot be made reliably,
owner-occupied leasehold land is classified as property, plant and equipment and stated at cost less subsequent accumulated
depreciation and accumulated impairment losses.
At 31 March 2009, land and buildings with carrying amounts of HK$12,949,000 (2008: nil) were situated in Hong Kong
under long-term leases.
— I-32 —
14. INVESTMENT PROPERTIES
2009 2008
HK$’000 HK$’000
FAIR VALUE
At the beginning of the year 26,092 22,373
Acquisition of property interests (note 26) 60,000 —
(Loss) gain arising from fair value changes recognized
in the consolidated income statement (600) 3,719
At the end of the year 85,492 26,092
An analysis of the Group’s investment properties is as follows:
2009 2008
HK$’000 HK$’000
Land and buildings in Hong Kong held under long-term leases 60,500 —
Land and buildings in the PRC held under medium-term leases 24,992 26,092
85,492 26,092
The fair values of the Group’s investment properties at both year ends have been arrived at on the basis of valuations
carried out as of these days by Asset Appraisal Limited, independent qualified professional valuers not connected with the
Group. The valuation was arrived at by reference to market evidence of transaction prices for similar properties.
The properties were rented out under operating leases.
15. AVAILABLE-FOR-SALE INVESTMENTS
Details of available-for-sale investments as at 31 March are set out below:
2009 2008
HK$’000 HK$’000
Unlisted equity securities 5,100 5,100

Less: Impairment loss (5,100) (5,100)
— —
The unlisted investments represent approximately 0.20% (2008: 0.26%) investment in Hennabun Capital Group Limited,
a company incorporated in the British Virgin Islands and engaged in securities trading, investment holding and provision of
brokerage and financial services. They are measured at cost less impairment at each balance sheet date because the range of
reasonable fair value estimates is so significant that the directors of the Company are of the opinion that their fair values cannot
be measured reliably.
— I-33 —
16. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
2009 2008
HK$’000 HK$’000
Other receivables — 15,827

Deposits and prepayments 13,191 4,852
13,191 20,679
At 31 March 2008, the Group has other receivables balance of HK$15,827,000 with brokerage firms. The entire amount
was recovered during 2009.
17. INVESTMENTS HELD FOR TRADING
Investments held for trading stated at fair value as at 31 March are set out below:
2009 2008
HK$’000 HK$’000
Equity securities listed in Hong Kong 438,350 348,962

Equity securities listed outside Hong Kong 39,984 66,153
Convertible notes:
— listed in Hong Kong 42,802 —
— unlisted 19,332 —
Debt securities 1,170 —
Investment fund 30,049 —
571,687 415,115
The fair values of the listed equity securities are determined based on the quoted market bid prices available on the
relevant stock exchange. The fair value of the investment fund is determined with reference to the net asset value of the
underlying assets of the funds which is provided by the counterparty financial institution.
The convertible notes are redeemable, non-interest bearing and are repayable upon maturity which is ranging from 3 to
5 years from the date of issue. The Group has the right to convert, on any business day, the convertible notes into ordinary shares
of the issuer from the date of acquisition of the convertible notes to their maturity dates. The issuers may also redeem the
convertible notes at par value or above at any time prior to maturity. As the Group holds the convertible notes for trading
purpose, the convertibles notes are classified as investments held for trading.
The fair value of those convertible notes listed on the Stock Exchange and the debt securities issued by a company listed
in the New York Stock Exchange are determined based on the quoted market prices in an active market. The fair value of the
unlisted convertible note of HK$19,332,000 (2008: nil), which was issued by a company listed on the Stock Exchange, has been
arrived at on the basis of a valuation carried out as of that day by Asset Appraisal Limited, independent qualified professional
valuers not connected with the Group. The fair value of the unlisted convertible note is calculated using the discounted cash
flows method at a market interest rate for the equivalent non-convertible note for its straight debt component and using the
binomial model for its derivative components.
— I-34 —
18. BANK BALANCES AND CASH
Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of three
months or less at prevailing market interest rates. The effective interest rate ranges from 0.4% to 3.7% (2008: 1.1% to 3.6%)
per annum.
19. AMOUNTS DUE TO DIRECTORS/A MINORITY SHAREHOLDER
The amounts are unsecured, interest-free and repayable on demand.
20. CONVERTIBLE NOTES
HK$’000
At 1 April 2007 60,976

Interest charged 5,286
Interest paid (563)
Issued during the year 131,163
Converted during the year (196,862)
At 31 March 2008 —
Issued during the year 60,726
At 31 March 2009 68,182
2005, 2006 and 2007 Convertible Notes
The 2005 Convertible Notes are unsecured, carry interest at 3% per annum and are repayable upon maturity 3 years from
the date of issue. Holders of the 2005 Convertible Notes have the right to convert, on any business day, the 2005 Convertible
Notes into ordinary shares of the Company during a period of 3 years from the date of issue of the 2005 Convertible Notes at
varying conversion prices stipulated in the convertible note agreement. The Company may redeem the 2005 Convertible Notes
at par value to the extent of the entire principal amount outstanding at any time prior to maturity.
The 2006 Convertible Notes are unsecured, carry interest of 5% per annum and are repayable upon maturity 3 years from
Notes into ordinary shares of the Company during a period of 3 years from the date of issue of the 2006 Convertible Notes at
varying conversion prices stipulated in the convertible note agreement. The Company may redeem the 2006 Convertible Notes
at par value to the extent of the entire principal amount outstanding at any time prior to maturity.
The 2007 Convertible Notes are unsecured, carry interest of 4% per annum and are repayable upon maturity 3 years from
Notes into ordinary shares of the Company during the period of 3 years from the date of issue of the 2007 Convertible Notes.
An initial conversion price is HK$0.11 per share from the date of issue to 29 February 2008, HK$0.12 per share from 1 March
2008 to 28 February 2009 and HK$0.13 per share from 1 March 2009 to the maturity date on 28 February 2010. The conversion
prices of the 2007 Convertible Notes are subject to anti-dilutive adjustments. The Company may redeem the 2007 Convertible
Notes at par value to the extent of the entire principal amount outstanding at any time prior to maturity.
The effective interest rates of the liability components in relation to the 2005 Convertible Notes, 2006 Convertible Notes
and 2007 Convertible Notes ranged from 11.25% to 13.33%.
— I-35 —
All of the 2005 Convertible Notes, 2006 Convertible Notes and 2007 Convertible Notes have been converted to ordinary
shares of the Company during the year ended 31 March 2008. Details of conversion are set out in note 21.
2008 Convertible Notes
On 21 July 2008, the Company issued zero coupon convertible notes with face value of HK$100,000,000 (the “2008
Convertible Notes”). The 2008 Convertible Notes are unsecured, non-interest bearing and repayable upon maturity which is 3
years from the date of issue. Holders of the 2008 Convertible Notes have the right to convert, on any business day, the 2008
Convertible Notes into ordinary shares of the Company during the period of 3 years from the date of issue. An initial conversion
price is HK$0.10 per share from the date of issue to 20 July 2009, HK$0.11 per share from 21 July 2009 to 20 July 2010 and
HK$0.12 per share from 21 July 2010 to the maturity date on 20 July 2011. The conversion prices of the 2008 Convertible Notes
are subject to anti-dilutive adjustments. The Company may redeem the 2008 Convertible Notes at par value to the extent of the
entire principal amount outstanding at any time prior to maturity. As the capital reorganization of the Company was completed
and share consolidation was effected on 1 April 2009, the conversion prices were adjusted from HK$0.10, HK$0.11 and
HK$0.12 to HK$2.50, HK2.75 and HK$3.00 respectively. The conversion prices were further adjusted from HK$2.50, HK$2.75
and HK$3.00 to HK$0.635, HK$0.699 and HK$0.762 respectively due to the rights issue of the Company. Details of the capital
reorganization and the rights issue of the Company are set out in note 28.
The 2008 Convertible Notes are compound financial instruments containing two components, liability and equity
elements. The fair value of the liability component was calculated using the discounted cash flows method at a market interest
rate for the equivalent non-convertible notes. The residual amount, representing the value of the equity conversion option is
included in shareholders’ equity as convertible notes equity reserve. The effective interest rate of the liability component is
approximately 17.11%.
No 2008 Convertible Notes have been converted to ordinary shares of the Company during the year.
21. SHARE CAPITAL
Nominal value Number of shares Share capital

per share 2009 2008 2009 2008
HK$ HK$’000 HK$’000
Authorised:
At 1 April 0.1 50,000,000,000 5,000,000,000 5,000,000 500,000
Increase during the year — 45,000,000,000 — 4,500,000
At 31 March 50,000,000,000 50,000,000,000 5,000,000 5,000,000
Issued and fully paid

At 1 April 0.1 13,266,212,652 1,717,484,600 1,326,621 171,748
Shares issued at premium for cash — 9,649,496,000 — 964,950
Shares issued at premium on

conversion of convertible notes — 1,899,232,052 — 189,923
Shares buy-back (2) — — —
At 31 March 13,266,212,650 13,266,212,652 1,326,621 1,326,621
— I-36 —
On 4 April 2007, 21 June 2007, 27 September 2007, 15 November 2007 and 27 December 2007, the Group issued and
allotted 343,496,000, 436,000,000, 870,000,000, 6,000,000,000 and 2,000,000,000 new shares at HK$0.1, HK$0.45, HK$0.22,
HK$0.22 and HK$0.22 each, respectively, for cash by placing. The shares issued rank pari passu in all material respects with
the then existing shares.
On 7 May 2007, 1 June 2007 and 6 June 2007, a total of 120,000,000, 80,000,000 and 143,448,274 shares were allotted
and issued respectively by the Company at the conversion price of HK$0.145 per share according to the terms and conditions
under the 2006 Convertible Notes.
On 13 June 2007, a total number of 43,783,782 shares were allotted and issued by the Company at the conversion price
of HK$0.37 per share according to the terms and conditions under the 2005 Convertible Notes issued on 31 January 2005. On
5 July 2007, a total of 12,000,000 shares were allotted and issued by the Company at the conversion price of HK$0.4 per share
according to the terms and conditions under the 2005 Convertible Notes issued on 31 March 2005.
On 4 July 2007, 5 July 2007 and 9 July 2007, a total of 663,636,361, 236,363,636 and 599,999,999 shares were allotted
and issued respectively by the Company at the conversion price of HK$0.11 per share according to the terms and conditions
under the 2007 Convertible Notes.
Details of changes in share capital subsequent to 31 March 2009 are set out in note 28.
22. RETIREMENT BENEFIT SCHEME
The Group operates a Mandatory Provident Fund Scheme for all qualifying employees. The assets of the scheme are held
separately from those of the Group, in funds under the control of trustees. The Mandatory Provident Fund Scheme is funded
by monthly contribution from both employees and the Group at a rate of 5% of the employee’s relevant payroll with maximum
employee’s contribution of not exceeding HK$1,000 a month.
The retirement benefit cost charged to the consolidated income statement of HK$302,000 (2008: HK$176,000) represents
contributions payable to the scheme by the Group at rate specified in the rules of the scheme.
23. OPERATING LEASE ARRANGEMENTS
The Group as lessee
At the balance sheet date, the Group had commitments for future minimum lease payments payable under non-cancellable
operating leases which fall due as follows:
2009 2008
HK$’000 HK$’000
In respect of rented premises:

Within one year 4,311 2,229
In the second to fifth year inclusive 1,242 94
5,553 2,323
Operating lease payments represent rentals payable by the Group rented premises. Leases are negotiated for an average
term of two years.
— I-37 —
The Group as lessor
At the balance sheet date, the Group had contracted with tenants for the following future minimum lease payments:
2009 2008
HK$’000 HK$’000
Within one year 2,069 494

In the second to fifth year inclusive — 63
2,069 557
Leases are negotiated for an average term of two years.
24. CAPITAL COMMITMENTS
At 31 March 2008 and 2009, the Group had commitments authorised but not contracted for in relation to an agreement
with a third party to establish a joint venture in which the Group will invest approximately HK$51,000,000 for investment in
the property market in the PRC.
2009 2008
HK$’000 HK$’000
Capital expenditure in respect of the acquisition of property,

plant and equipment contracted but not provided for — 14,321
25. SHARE OPTION SCHEME
The Company has a share option scheme (the “Scheme”) which was adopted on 11 May 2007. The Scheme is valid and
effective for a period of ten years from the date of adoption.
Pursuant to the Scheme, the Company may grant options to employees (including existing and proposed directors),
adviser, consultant, agent, contractor, client and supplier of any members of the Group (collectively the “Participants”). The
purpose of the Scheme is to attract, retain and motivate Participants to strive for future development and expansion of the Group
and to provide incentive to encourage the Participants to enjoy the results of the Company attained through their efforts and
contributions. The total number of shares of the Company available for issue under the Scheme is 218,098,060 which represents
10% of the issued share capital of the Company as at 11 May 2007. No Participants shall be granted an option if the total number
of shares of the Company issued and to be issued upon exercise of the options granted and to be granted (including both
exercised and outstanding options) in twelve month period up to and including the date of grant to such Participants would
exceed 1% of the shares of the Company for the time being in issue unless the proposed grant has been approved by the
shareholders of the Company in general meeting with the proposed grantee and his associates abstaining from voting. An option
may be exercised in accordance with the terms of the Scheme at any time during a period as the board of the directors of the
Company (the “Board”) may determine which shall not be more than ten years from the date of grant of the option subject to
the provisions of early termination thereof and the Board may provide restrictions on the exercise of an option during the period
an option may be exercised. The subscription price of the option shall be determined by the Board but in any case shall not
be less than the higher of (i) the closing price of the shares of the Company as stated in the daily quotations sheet of The Stock
Exchange of Hong Kong Limited on the date of grant which must be a trading day, (ii) the average closing price of the shares
of the Company as stated in the daily quotations sheet of The Stock Exchange of Hong Kong Limited for the five trading days
immediately preceding the date of grant and (iii) the nominal value of a share of the Company. Upon acceptance of the option,
the grantee shall pay HK$1.00 to the Company by way of consideration for the grant.
— I-38 —
Up to 31 March 2009, no share options have been granted by the Company since the adoption of the Scheme.
26. ACQUISITION OF PROPERTY INTERESTS
On 11 February 2009, the Group has acquired the residential property interests in Hong Kong and its related assets and
liabilities (“Property Interests”) held by Jabour Limited (“Jabour”) and Isenberg Holdings Limited (“Isenberg”), through
acquisition of the entire issued share capital of Ocean Capital Investments Limited which is the immediate holding company
of Jabour and Isenberg.
HK$’000
Property Interests acquired:

Investment properties 60,000
Property, plant and equipment 123
Other receivables 90
Bank balances 1,043
Other payables (356)
Total consideration, satisfied by cash 60,900
HK$’000
Net cash outflow arising on acquisition:

Cash consideration (60,900)
Bank balances acquired 1,043
(59,857)
The Property Interests contributed a profit of HK$769,000 to the Group’s loss for the period between the date of
acquisition and the balance sheet date.
— I-39 —
27. PARTICULARS OF PRINCIPAL SUBSIDIARIES
Particulars of the Company’s principal subsidiaries as at 31 March 2009 and 2008 are as follows:
Issued share Proportion of nominal

capital/ value of issued share
Place of registered capital/registered and
incorporation/ and paid-up paid-up capital held
Name of subsidiary operation capital by the Company Principal activities
Directly Indirectly
China Sci-Tech Secretaries Hong Kong HK$10,000 100% — Provision of

Limited secretarial services
and investment
holding
Cyber Range Limited British Virgin US$1 100% — Investment holding

Islands*
Harbour Fair Overseas British Virgin US$1 100% — Investment holding

Limited Islands*
Isenberg Holdings Limited # Hong Kong HK$2 — 100% Property investment
Jabour Limited# Hong Kong HK$2 — 100% Property investment
Millennium Riders Limited British Virgin US$1 100% — Investment holding

Islands*
Perfect Touch Technology British Virgin US$2 100% — Investment holding

Inc. Islands*
Smart Ease Limited Hong Kong HK$2 100% — Investment holding
Sky Falcon Investments British Virgin US$1 100% — Investment holding

Limited Islands*
Kingarm Company Limited Hong Kong HK$2 — 100% Property investment
Partner United Limited British Virgin US$1 — 100% Investment holding

Islands*
Skytop Technology Limited Hong Kong HK$3 — 100% Securities investment
Unigolden Limited Hong Kong HK$2 — 100% Property investment
* These companies are engaged in investment business and have no specific principal place of operations.
#
Newly acquired during the year.
In the opinion of the directors of the Company, the above companies will principally affect the operations of the Group.
To give details of other subsidiaries would, in the opinion of the directors, result in particulars of excessive length.
None of the subsidiaries had any debt securities at 31 March 2009 or at any time during the year.
— I-40 —
28. POST BALANCE SHEET EVENTS
Capital Reorganisation
On 10 October 2008, the Company made a proposal of capital reorganisation to the shareholders that: (1) the nominal
value of all the existing issued shares be reduced from HK$0.10 each to HK$0.004 each by cancelling HK$0.096 paid up on
each existing issued share by way of reduction of capital; (2) every 25 reduced issued shares of HK$0.004 each be consolidated
into one consolidated share of HK$0.10; and (3) the credit arising from such reduction of capital will be applied to offset against
the accumulated losses of the Company and the remaining balance of the credit being credited to the capital reduction reserve
account of the Company. The capital reorganisation was completed and the consolidation was effected on 1 April 2009.
Rights Issue
On 23 February 2009, the Company proposed to have a rights issue exercise on the basis of five rights shares for every
reorganised share held on the record date (with warrants to subscribe for warrant shares in the proportion of one warrant for
every five rights shares subscribed for), the subscription price is HK$0.15 per rights share.
The number of rights shares to be issued would be not less than 2,653,242,530 rights shares (with warrants) and not more
than 2,853,242,530 rights shares (with warrants and assume full exercise of the rights attached to the 2008 Convertible Notes).
Although the proposed rights issue has been approved by the shareholders on 9 April 2009, it is conditional upon (i) the
obligations of the underwriter under the underwriting agreement not being terminated; and (ii) the Listing Committee of the
Stock Exchange granting or agreeing to grant and not having withdrawn or revoked the listing of and permission to deal in all
the rights shares, in both nil-paid and fully-paid forms, the warrants and the warrant shares. In addition, the trading in shares,
nil-paid rights shares and shares in temporary counter of the Company has been suspended from 24 April 2009 to 12 May 2009
in relation to a very substantial acquisition transaction and a potential very substantial disposal transaction. Therefore, the
completion date of the proposed rights issue is extended to 3 June 2009.
Very Substantial Acquisition
On 24 April 2009, Maxter Investments Limited (the “Purchaser”), a wholly-owned subsidiary of the Company, and the
Company, as the Purchaser’s guarantor, entered into a conditional sale and purchase agreement with OZ Minerals Agincourt Pty
Ltd (the “Vendor”) and OZ Minerals Limited, as the Vendor’s guarantor, to acquire from the Vendor the entire issued share
capital of OZ Minerals Martabe Pty Ltd (the “Target Company”) at a consideration being the aggregate of US$211 million and
a reimbursement amounted not exceeding US$11.4 million. The Target Company indirectly holds 95% interest in Martabe Gold
and Silver project in the Western side of the island of Sumatera in the Province of North Sumatera, in the Batangtoru
sub-district, Indonesia. The acquisition constitutes a very substantial acquisition for the Company under the Rules Governing
the Listing of Securities of the Stock Exchange of Hong Kong Limited (the “Listing Rules”) and will be subject to the approval
of the shareholders.
Very Substantial Disposal
On 24 April 2009, Polytex Investments Inc. (the “Grantor”), a wholly-owned subsidiary of the Company and the
immediate holding company of the Purchaser, granted Acewick Holdings Limited (the “Grantee”), a wholly-owned subsidiary
of Smart Rich Energy Finance (Holdings) Limited (the “SR”), a call option to acquire the entire issued share capital of the
Purchaser. The option price shall be the aggregate of US$10 million, which shall be satisfied by the allotment and issue of
ordinary shares of the SR, and the consideration aggregate assumed or sum paid or contributed by the Group in the acquisition
of the Target Company. On 9 May 2009, the Grantee exercised the call option. The possible disposal constitutes a very
substantial disposal for the Company under the Listing Rules and will be subject to the approval of the shareholders.
— I-41 —
APPENDIX II UNAUDITED FINANCIAL INFORMATION OF THE GROUP
The following is an extract of the unaudited financial statements of the Group from the interim
report of the Company for the six months ended 30 September 2009.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended

30 September
NOTES 2009 2008
HK$’000 HK$’000
(Unaudited) (Unaudited)
Revenue 4 23,529 17,014

Other income 5 61,184 14,552
Administrative expenses (37,914) (24,765)
investments held for trading 20,322 (405,103)
Gain arising from fair value changes of investment
properties 8,577 —
Loss on early redemption of convertible notes 15 (27,328) —
derivative financial instruments 5 9,964 (19,725)
Finance costs 6 (4,870) (2,048)
Profit (loss) before taxation 53,464 (420,075)

Taxation 7 (11,478) (49)
Profit (loss) for the period 8 41,986 (420,124)
Other comprehensive income

Gain arising from fair value changes of
available-for-sale investments 13 14,393 —
Total comprehensive income (expense) for the period 56,379 (420,124)
Profit (loss) for the period attributable to:

Owners of the Company 41,986 (420,124)
Minority interests — —
41,986 (420,124)
Total comprehensive income (expense) attributable to:

Owners of the Company 56,379 (420,124)
Minority interests — —
56,379 (420,124)
(Restated)
Earnings (loss) per share

Basic 9 HK1.85 cents HK(39.80) cents
Diluted 9 HK1.49 cents HK(39.80) cents
— II-1 —
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 30 SEPTEMBER 2009
As at As at
30 September 31 March
NOTES 2009 2009
HK$’000 HK$’000
(Unaudited) (Audited)
Non-current Assets
Property, plant and equipment 11 15,554 16,106
Investment properties 12 94,069 85,492
Available-for-sale investments 13 101,857 —
211,480 101,598
Current Assets
Other receivables, deposits and prepayments 40,365 13,191
Investments held for trading 14 1,450,941 571,687
Bank balances and cash 882,729 1,535,265
2,374,035 2,120,143
Current Liabilities
Other payables and accrued charges 3,911 27,874
Amount due to a minority shareholder 1,999 1,999
Tax payable 11,435 —
17,345 29,873
Net Current Assets 2,356,690 2,090,270
2,568,170 2,191,868
Capital and Reserves

Share capital 16 318,423 1,326,621
Reserves 2,249,791 797,109
Equity attributable to owners of the Company 2,568,214 2,123,730

Minority interests (44) (44)
2,568,170 2,123,686
Non-current Liability
Convertible notes 15 — 68,182
2,568,170 2,191,868
— II-2 —
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
Attributable to owners of the Company

Convertible
notes Other Investment
Share Share Capital equity capital revaluation Accumulated Minority
capital premium reserve reserve reserve reserve losses Total interests Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(note a) (note b)
At 1 April 2008 (audited) 1,326,621 1,474,039 7,700 — 396,347 — (751,229) 2,453,478 (44) 2,453,434
Loss for the period and

total comprehensive
expense for the period — — — — — — (420,124) (420,124) — (420,124)
Recognition of equity component

of convertible notes — — — 37,717 — — — 37,717 — 37,717
Transaction costs attributable to
issue of convertible notes — — — (943) — — — (943) — (943)
At 30 September 2008 (unaudited) 1,326,621 1,474,039 7,700 36,774 396,347 — (1,171,353) 2,070,128 (44) 2,070,084
At 1 April 2009 (audited) 1,326,621 1,474,039 7,700 36,774 396,347 — (1,117,751) 2,123,730 (44) 2,123,686
Profit for the period — — — — — — 41,986 41,986 — 41,986

Gain arising from fair value
changes of available-for-sale
investments (note 13) — — — — — 14,393 — 14,393 — 14,393
Total comprehensive income

for the period — — — — — 14,393 41,986 56,379 — 56,379
Cancellation and consolidation of

paid up share capital due to
capital reorganisation (note 16) (1,273,556) — — — 604,196 — 669,360 — — —
Issue of shares (note 16) 265,358 132,697 — — — — — 398,055 — 398,055
Transaction costs attributable
to issue of shares — (9,950) — — — — — (9,950) — (9,950)
At 30 September 2009 (unaudited) 318,423 1,596,786 7,700 36,774 1,000,543 14,393 (406,405) 2,568,214 (44) 2,568,170
(a) The capital reserve of the Group represents the difference between the nominal value of the shares of the subsidiaries
acquired, over the nominal value of the share capital of the Company issued in exchange, in connection with the Group
reorganisation completed in January 1994.
(b) The other capital reserve of the Group represents the balance of the credit arising from the cancellation of paid up capital
in previous years and during the six months ended 30 September 2009.
— II-3 —
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
Six months ended

30 September
2009 2008
HK$’000 HK$’000
Operating activities
Adjustments for:
Interest income (1,574) (12,267)
Dividend income (21,554) (16,273)
(Gain) loss arising from fair value changes of investments held
for trading (20,322) 405,103
Gain arising from fair value changes of investment properties (8,577) —
Loss on early redemption of convertible notes 27,328 —
Finance costs 4,870 2,048
Other non-cash items 640 19,976
Operating cash flows before movements in working capital 34,275 (21,488)

Increase in available-for-sale investments (87,464) —
Increase in investments held for trading (858,932) (553,355)
Other working capital items (51,137) (42,220)
Cash used in operations (963,258) (617,063)

Income tax paid (43) (49)
Interest received 1,574 12,267
Dividend received 21,554 16,273
Net cash used in operating activities (940,173) (588,572)
Investing activities
Purchase of property, plant and equipment (88) (15,411)
Increase in time deposits — (601,117)
Net cash used in investing activities (88) (616,528)
— II-4 —
Six months ended

30 September
2009 2008
HK$’000 HK$’000
Financing activities
Proceeds from issue of shares upon rights issue and
exercise of warrants 398,055 —
Redemption of convertible notes (100,000) —
Share issue expenses (9,950) —
Interest paid (380) (5)
Proceeds on issue of convertible notes — 100,000
Transaction costs on issue of convertible notes — (2,500)
Net cash from financing activities 287,725 97,495
Net decrease in cash and cash equivalents (652,536) (1,107,605)
Cash and cash equivalents at the beginning of the period 1,535,265 1,996,305
Cash and cash equivalents at the end of the period,

represented by bank balances and cash 882,729 888,700
— II-5 —
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The Company is incorporated in the Cayman Islands as an exempted company with limited liability and its shares are
listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The addresses of the registered office and
principal place of business of the Company are disclosed in the corporate information section of the interim report.
The condensed consolidated financial statements are presented in Hong Kong dollars which is also the functional
currency of the Company.
The Company is an investment holding company and the Group is engaged in investment in financial instruments and
property investment.
2. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with the applicable disclosure
requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and
with the Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of
Certified Public Accountants (“HKICPA”).
3. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis, except for investment
properties and certain financial instruments, which are measured at revalued amounts or fair values, as appropriate.
The accounting policies used in the condensed consolidated financial statements are consistent with those followed in
the preparation of the Group’s annual consolidated financial statements for the year ended 31 March 2009. In addition, the
following accounting policies were adopted during the period:
Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated or not classified as financial assets at
fair value through profit or loss, loans and receivables or held-to-maturity investments. The Group designated certain listed
equity investments as available-for-sale financial assets.
At the end of each reporting period subsequent to initial recognition, available-for-sale financial assets are measured at
fair value. Changes in fair value are recognised in equity, until the financial asset is disposed of or is determined to be impaired,
at which time, the cumulative gain or loss previously recognised in equity is removed from equity and recognised in profit or
loss.
Early redemption of convertible notes
On early redemption of convertible notes by the Group through exercising an embedded redemption option which was
closely related to the liability component of the convertible notes at initial recognition, the difference between the carrying
amount of the liability component of the convertible notes derecognised and the redemption amount paid is recognised in profit
or loss.
— II-6 —
In the current interim period, the Group has applied, for the first time, the following new and revised standards,
amendments and interpretations (“new and revised HKFRSs”) issued by the HKICPA.
HKAS 1 (Revised 2007) Presentation of Financial Statements

HKAS 23 (Revised 2007) Borrowing Costs
HKAS 32 & 1 (Amendments) Puttable Financial Instruments and Obligations Arising on Liquidation
HKFRS 1 & HKAS 27 Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
(Amendments)
HKFRS 2 (Amendment) Vesting Conditions and Cancellations
HKFRS 7 (Amendment) Improving Disclosures about Financial Instruments
HKFRS 8 Operating Segments
HK(IFRIC) - Int 9 & HKAS 39 Embedded Derivatives
(Amendments)
HK(IFRIC) - Int 13 Customer Loyalty Programmes
HK(IFRIC) - Int 15 Agreements for the Construction of Real Estate
HK(IFRIC) - Int 16 Hedges of a Net Investment in a Foreign Operation
HK(IFRIC) - Int 18 Transfers of Assets from Customers
HKFRSs (Amendments) Improvements to HKFRSs issued in 2008, except for the amendment to HKFRS 5
that is effective for annual periods beginning or after 1 July 2009
HKFRSs (Amendments) Improvements to HKFRSs issued in 2009 in relation to the amendment to
paragraph 80 of HKAS 39
Except as described below, the adoption of these new HKFRSs had no material effect on the condensed consolidated
financial statements of the Group for the current or prior accounting periods.
HKAS 1 (Revised 2007) Presentation of Financial Statements
HKAS 1 (Revised 2007) has introduced a number of terminology changes, including revised titles for the condensed
consolidated financial statements, and has resulted in a number of changes in presentation and disclosure.
The Group has not early applied the following new and revised standards, amendments or interpretations that have been
issued by the HKICPA but are not yet effective.
HKFRSs (Amendments) Amendment to HKFRS 5 as part of Improvements to HKFRSs 2008 1

HKFRSs (Amendments) Improvements to HKFRSs 2009 2
HKAS 24 (Revised) Related Party Disclosures 3
HKAS 27 (Revised) Consolidated and Separate Financial Statements 1
HKAS 32 (Amendment) Classification of Rights Issues 4
HKAS 39 (Amendment) Eligible Hedged Items 1
HKFRS 1 (Amendment) Additional Exemptions for First-time Adopters 5
HKFRS 2 (Amendment) Group Cash-settled Share-based Payment Transactions 5
HKFRS 3 (Revised) Business Combinations 1
HKFRS 9 Financial Instruments 6
HK(IFRIC) - Int 17 Distribution of Non-cash Assets to Owners 1
1
2
Amendments that are effective for annual periods beginning on or after 1 July 2009 and 1 January 2010, as
appropriate
3
4
Effective for annual periods beginning on or after 1 February 2010
5
6
— II-7 —
The adoption of HKFRS 3 (Revised 2008) may affect the Group’s accounting for business combinations for which the
acquisition dates are on or after 1 April 2010. HKAS 27 (Revised 2008) will affect the accounting treatment for changes in the
Group’s ownership interest in a subsidiary and HKFRS 9 will affect the accounting treatment and disclosure requirements for
the Group’s available-for-sale investments. The directors of the Company anticipate that the application of other new and
revised standards, amendments or interpretations will have no material impact on the results and the financial position of the
Group.
4. SEGMENT INFORMATION
The Group has adopted HKFRS 8 “Operating Segments” with effect from 1 April 2009. HKFRS 8 requires operating
segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief
operating decision maker, i.e. the board of directors, in order to allocate resources to segments and to assess their performance.
In contrasts, the predecessor standard (HKAS 14 “Segment Reporting”) required an entity to identify two sets of segments
(business and geographical), using a risks and returns approach, with the entity’s “system of internal financial reporting to key
management personnel” serving only as the starting point for the identification of such segments. In the past, the Group’s
primary reporting format was business segments. The application of HKFRS 8 has not resulted in a redesignation of the Group’s
reportable segments as compared with the primary reportable segments determined in accordance with HKAS 14. Nor has the
adoption of HKFRS 8 changed the basis of measurement of segment profit or loss.
The identification of the Group’s reportable segments under HKFRS 8 is consistent with the prior years’ presentation of
business segments under HKAS 14. Information report to the Group’s chief operating decision maker for the purposes of
resource allocation and assessment of performance is focused on two main operating divisions: investments in financial
instruments and property investment. The divisions are the basis on which the Group reports its segment information. The
Group’s reportable segments under HKFRS 8 are as follows:
Investments in financial — trading of securities, available-for-sale investments, convertible notes and

instruments derivative financial instruments
Property investment — properties letting
— II-8 —
The following is an analysis of the Group’s revenue and result by operating segment for the periods under review:
Segment revenue Segment profit (loss)

Six m onths ended Six m onths ended
30 September 30 September
2009 2008 2009 2008
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited)
Investments in financial instruments 21,554 16,273 30,671 (415,181)

Property investment 1,975 741 10,072 518
23,529 17,014 40,743 (414,663)
Other income 61,184 14,552

Gain arising from fair value change of a derivative financial
instrument 9,964 —
Loss on early redemption of convertible notes (27,328) —
Central administration costs (26,229) (17,916)
Finance costs (4,870) (2,048)

Taxation (11,478) (49)
Profit (loss) for the period 41,986 (420,124)
All of the segment revenue reported above is generated from external customers.
Segment profit (loss) represents the profit (loss) earned/incurred by each segment without allocation of other income,
gain arising from fair value change of a derivative financial instrument in respect of the equity shares of G-Resources Group
Limited (“G-Resources”) (formerly known as Smart Rich Energy Finance (Holdings) Limited), a company listed on the Stock
Exchange, as set out in note 5, loss on early redemption of convertible notes, central administration costs and finance costs.
This is the measure reported to the chief operating decision maker for the purposes of resource allocation and performance
assessment.
The following is an analysis of the Group’s assets by operating segment:
As at As at
2009 2009
HK$’000 HK$’000
Segment assets
- Investments in financial instruments 1,552,798 571,687
- Property investment 94,069 85,492
1,646,867 657,179
Unallocated corporate assets 938,648 1,564,562
2,585,515 2,221,741
— II-9 —
5. OTHER INCOME
Included in other income is a net gain of HK$59,342,000 arising from the following transactions:
On 24 April 2009, Maxter Investments Limited (the “Purchaser”), a wholly-owned subsidiary of the Company, and the
Company, as the Purchaser’s guarantor, entered into a conditional sale and purchase agreement with OZ Minerals Agincourt Pty
Ltd (the “Vendor”) and OZ Minerals Limited, as the Vendor’s guarantor, to acquire from the Vendor the entire issued share
capital of OZ Minerals Martabe Pty Ltd (the “Target Company”) for a consideration being the aggregate of US$211 million and
a reimbursement amounted to not exceeding US$11.4 million (the “Consideration”). The Target Company indirectly holds 95%
interest in Martabe Gold and Silver project in the Western side of the island of Sumatera in the Province of North Sumatera,
in the Batangtoru sub-district, Indonesia.
On the same date, Polytex Investments Inc., a wholly-owned subsidiary of the Company and the immediate holding
company of the Purchaser, granted Acewick Holdings Limited (“Acewick”), a wholly-owned subsidiary of G-Resources, a call
option to acquire the entire issued share capital of the Purchaser. The exercise price of the option was the aggregate of the
Consideration plus US$10 million which was satisfied by the allotment and issue of ordinary shares of G-Resources. On 9 May
2009, Acewick exercised the call option for a total consideration of US$221 million plus a reimbursement of US$6.56 million.
US$211 million out of US$221 million and the reimbursement were settled by cash and US$10 million was settled by
221,428,571 equity shares of G-Resources at HK$0.35 per share.
Upon the completion of these two transactions, a gain of HK$77,500,000 after netting off a transaction cost of
HK$18,158,000 which could not be reimbursed from G-Resources, were recognised in other income. In addition, a gain on a
derivative financial instrument of HK$9,964,000 arising from the fair value change of 221,428,571 equity shares of
G-Resources from 9 May 2009 to the transaction’s completion date were recognised in profit or loss. At 30 September 2009,
221,428,571 equity shares of G-Resources were classified as available-for-sale investments.
6. FINANCE COSTS
Six m onths ended 30 September

2009 2008
HK$’000 HK$’000
(unaudited) (unaudited)
Interest on borrowings wholly repayable within five years:

Other borrowings (380) (5)
Convertible notes (note 15) (4,490) (2,043)
(4,870) (2,048)
7. TAXATION

2009 2008
HK$’000 HK$’000
Current tax:
Hong Kong Profits Tax (11,435) —
Other jurisdiction (43) (49)
(11,478) (49)
— II-10 —
Hong Kong Profits tax is recognised based on management’s best estimate of the annual income tax rate expected for
the full financial year. The estimated annual tax rate used is 16.5% for the six months ended 30 September 2009.
For the six months ended 30 September 2008, no provision for Hong Kong Profits Tax had been made in the condensed
consolidated financial statements since the Group had no assessable profits arising in Hong Kong.
The taxation charge in jurisdictions other than Hong Kong for both periods is recognised based on management’s best
estimate of the weighted average annual income tax rate expected for the full financial year.
8. PROFIT (LOSS) FOR THE PERIOD

2009 2008
HK$’000 HK$’000
Profit (loss) for the period has been arrived at after charging:

Staff costs
Directors’ remuneration 8,580 4,930
Contributions to the Mandatory Provident Fund 42 42
Other staff costs 2,291 4,064
Total staff cost 10,913 9,036
Exchange loss 239 —

Minimum lease payments under operating leases in respect of rented premises 2,821 1,817
and after crediting:
Bank interest income (note) 1,574 12,267

Commission income — 1,750
Exchange gain — 269
Gross rental income less direct operating expenses from investment
properties that generated rental income during the period of HK$337,000
(2008: HK$149,000) 1,638 592
Note: For the six months ended 30 September 2009, bank interest income arose from bank deposits with maturity of
3 months or less. For the six months ended 30 September 2008, bank interest income included those arising from
bank deposits with maturity more than 3 months but less than 6 months. The interest rates were ranged from
0.03% to 0.20% (for six months ended 30 September 2008: 0.89% to 3.25%) per annum.
— II-11 —
9. EARNINGS (LOSS) PER SHARE
The calculation of the basic and diluted earnings (loss) per share attributable to the owners of the Company is based on
the following data:

2009 2008
HK$’000 HK$’000
Earnings (loss)
Earnings (loss) for the purposes of basic earnings (loss) per share attributable
to the owners of the Company 41,986 (420,124)
Effect of dilutive potential ordinary shares: Interest on convertible notes 4,490 —
Earnings (loss) for the purposes of diluted earnings (loss) per share
attributable to the owners of the Company 46,476 (420,124)

2009 2008
(‘000) (‘000)
(as restated)
Number of shares
Weighted average number of ordinary shares for the purpose of basic
earnings (loss) per share 2,270,601 1,055,622
Effect of dilutive potential ordinary shares:

Convertible notes (Note) 754,098 —
Warrants 92,198 —
Weighted average number of ordinary shares for the purpose of diluted

earnings (loss) per share 3,116,897 1,055,622
The weighted average number of ordinary shares for the six months ended 30 September 2008 for the purpose of
calculating the basic and diluted loss per share has been adjusted to reflect the effects of capital reorganisation, rights issue
and exercise of warrants as set out in note 16.
Note: The computation of diluted loss per share for the six months ended 30 September 2008 does not assume the
conversion of the Company’s outstanding convertible notes since their exercise would result in a decrease in loss
per share in prior period.
10. DIVIDEND
No dividends were paid, declared or proposed during the current period. The directors do not recommend the payment
of an interim dividend (2008: Nil).
— II-12 —
11. PROPERTY, PLANT AND EQUIPMENT
During the six months ended 30 September 2009, the Group has additions of leasehold improvements of HK$88,000 (six
months ended 30 September 2008: HK$475,000).
During the six months ended 30 September 2008, the Group purchased leasehold land and buildings located in Hong
Kong of HK$13,191,000, motor vehicles of HK$1,484,000 and furniture and equipments of HK$261,000.
12. INVESTMENT PROPERTIES
The fair values of the Group’s investment properties at 30 September 2009 and 31 March 2009 have been arrived at on
the basis of valuations carried out as of these dates by Asset Appraisal Limited, an independent qualified professional valuers
not connected with the Group. The valuation was arrived at by reference to market evidence of transactions prices for similar
properties.
13. AVAILABLE-FOR-SALE INVESTMENTS
During the six months ended 30 September 2009, the Group received 221,428,571 ordinary shares of G-Resources as a
part of the consideration for the transactions as set out in note 5.
The investments were measured at their fair values. At their initial recognition date, the fair value of the investments was
HK$87,464,000. The fair value of the investments at 30 September 2009 was HK$101,857,000, resulting in a gain of
HK$14,393,000. The fair value is determined based on the quoted market bid prices available on the Stock Exchange.
14. INVESTMENTS HELD FOR TRADING
Investments held for trading are set out below:
As at As at
2009 2009
HK$’000 HK$’000
Equity securities
- listed in Hong Kong 1,224,903 438,350
- listed outside Hong Kong 49,794 39,984
Convertible notes
- listed in Hong Kong 5,595 42,802
- unlisted 30,245 19,332
Debt securities 1,053 1,170
Investment funds 139,351 30,049
1,450,941 571,687
The fair values of the listed equity securities are determined based on the quoted market bid prices available on the
relevant stock exchange. The fair values of the investment funds are determined with reference to the net asset values of the
underlying assets of the funds which are provided by the counterparty financial institutions.
— II-13 —
The convertible notes are redeemable, non-interest bearing and are repayable upon maturity which is ranging from 3 to
5 years from the date of issue. The Group has the right to convert, on any business day, the convertible notes into ordinary shares
of the issuer from the date of acquisition of the convertible notes to their maturity dates. The issuers may also redeem the
convertible notes at par value or above at any time prior to maturity. As the Group holds the convertible notes for trading
purpose, the convertibles notes are classified as investments held for trading.
The fair values of those convertible notes listed on the Stock Exchange and the debt securities issued by a company listed
in the New York Stock Exchange are determined based on the quoted market prices in active markets. The fair value of the
unlisted convertible note, which was issued by a company listed on the Stock Exchange, has been arrived at on the basis of a
valuation carried out at the end of each reporting period by Asset Appraisal Limited, independent qualified professional valuers
not connected with the Group. The fair value of the unlisted convertible note is calculated using the discounted cash flows
method at a market interest rate for the equivalent non-convertible note for its straight debt component and using the binomial
model for its derivative components.
15. CONVERTIBLE NOTES
HK$’000
Convertible notes
At 1 April 2009 (audited) 68,182
Redeemed during the period (72,672)
At 30 September 2009 (unaudited) —
On 21 July 2008, the Company issued zero coupon convertible notes with face value of HK$100,000,000 (the “2008
Convertible Notes”). The 2008 Convertible Notes are unsecured, non-interest bearing and repayable upon maturity which is 3
years from the date of issue. Holders of the 2008 Convertible Notes have the right to convert, on any business day, the 2008
Convertible Notes into ordinary shares of the Company during the period of 3 years from the date of issue. An initial conversion
price is HK$0.10 per share from the date of issue to 20 July 2009, HK$0.11 per share from 21 July 2009 to 20 July 2010 and
HK$0.12 per share from 21 July 2010 to the maturity date on 20 July 2011. The conversion prices of the 2008 Convertible Notes
are subject to anti-dilutive adjustments. The Company may redeem the 2008 Convertible Notes at par value to the extent of the
entire principal amount outstanding at any time prior to maturity. As the capital reorganization of the Company was completed
and share consolidation was effected on 1 April 2009, the conversion prices were adjusted from HK$0.10, HK$0.11 and
HK$0.12 to HK$2.50, HK2.75 and HK$3.00 respectively. The conversion prices were further adjusted from HK$2.50, HK$2.75
and HK$3.00 to HK$0.635, HK$0.699 and HK$0.762 respectively due to the rights issue of the Company. Details of the capital
reorganization and the rights issue of the Company are set out in note 16.
The 2008 Convertible Notes are compound financial instruments containing two components, liability and equity
elements. The fair value of the liability component was calculated using the discounted cash flows method at a market interest
rate for the equivalent non-convertible notes. The residual amount, representing the value of the equity conversion option is
included in shareholders’ equity as convertible notes equity reserve. The effective interest rate of the liability component is
17.29%.
On 17 August 2009, the Company redeemed the 2008 Convertible Notes for a consideration of HK$100,000,000 through
exercising the early redemption option which was closely related to the liability component at initial recognition. The difference
between the redemption amount and the carrying amount represent a loss of HK$27,328,000 to profit or loss.
— II-14 —
16. SHARE CAPITAL
Number of shares Share capital

HK$’000
Ordinary shares of HK$0.1 each:
Authorised
At 30 September 2009 and 31 March 2009 50,000,000,000 5,000,000
Issued and fully paid

At 1 April 2009 13,266,212,650 1,326,621
Cancellation of paid up share capital arising from the capital
reorganisation (12,735,564,144) (1,273,556)
Issue of shares upon rights issue 2,653,242,530 265,324
Issue of shares upon exercise of warrants 343,892 34
At 30 September 2009 3,184,234,928 318,423
On 10 October 2008, the Company made a proposal of capital reorganisation to the shareholders that: (1) the nominal
value of all the existing issued shares to be reduced from HK$0.10 each to HK$0.004 each by cancelling HK$0.096 paid up
on each existing issued share by way of reduction of capital; (2) every 25 reduced issued shares of HK$0.004 each to be
consolidated into one consolidated share of HK$0.10; and (3) the credit arising from such reduction of capital to offset against
the accumulated losses of the Company and the remaining balance of the credit being credited to the other capital reserve of
the Company. The capital reorganisation was completed and the consolidation was effected on 1 April 2009. 12,735,564,144
issued and fully paid shares, amounting to HK$1,273,556,000, were being cancelled due to the capital reorganisation. Included
in the reduced share capital of HK$1,273,556,000, HK$669,360,000 were used to offset against the accumulated losses of the
Company as at 1 April 2009 and the remaining balance of HK$604,196,000 was transferred to other capital reserve.
In addition, the Company issued 2,653,242,530 ordinary shares at a subscription price of HK$0.15 each in the capital
of the Company, by way of rights issue, on the basis of five rights shares for every reorganised share held on 3 April 2009.
The transaction was completed on 3 June 2009. The net proceeds of approximately HK$388,036,000 were received and the new
shares rank pari passu in all respects with the then existing issued shares.
Together with the rights issue, the Company also issued 530,648,506 warrants on the basis of one warrant for every five
rights shares subscribed for. The exercise price of the warrants is HK$0.20 per share (subject to adjustment), and the warrant
can be exercised by warrant holders on or before 2 June 2011.
During the period, 343,892 warrants were exercised, resulting in the issuance of 343,892 ordinary shares of HK$0.10
each of the Company at a subscription price of HK$0.20 per share. The new shares rank pari passu with the then existing shares
in all respects.
17. COMMITMENTS
At 30 September 2009, the Group has no commitment authorised but not contracted or contracted but not provided for.
At 31 March 2009, the Group had commitment authorised but not contracted for in relation to an agreement with a third
party to establish a joint venture in which the Group would invest HK$51,000,000 in the property market in the People’s
Republic of China. The transaction was terminated during the six months ended 30 September 2009.
— II-15 —
APPENDIX III ACCOUNTANT’S REPORT ON THE CHARIOT GROUP
The following is the text of a report received from Chariot’s reporting accountant,
PricewaterhouseCoopers LLP, Chartered Accountants, Vancouver, Canada, for the purpose of
incorporation in this circular.
PricewaterhouseCoopers LLP
Chartered Accountants
PricewaterhouseCoopers Place
250 Howe Street, Suite 700
Vancouver, British Columbia
Canada V6C 3S7
Telephone +1 604 806 7000
Facsimile +1 604 806 7806
April 30, 2010
THE DIRECTORS LR14.58(7)

LR14.67(6)(a)(i)
CHARIOT RESOURCES LIMITED LR14.69(4)(a)(i)
App1B-31(1)
Dear Sirs,
We set out below our report on the financial information (the “Financial Information”) of Chariot
Resources Limited (the “Company”) and its subsidiaries (together, the “Group”), for inclusion in the
circular of China Sci-Tech Holdings Limited (“China Sci-Tech”) dated April 30, 2010 (the “Circular”)
in connection with the proposed acquisition of the Company by China Sci-Tech. The Financial
Information comprises the balance sheets and the consolidated balance sheets of the Company as at
April 30, 2007, 2008 and 2009 and October 31, 2009, the consolidated statements of loss and
comprehensive loss, cash flows and changes in shareholders’ equity for each of the years ended April
30, 2007, 2008 and 2009 and for the six-month periods ended October 31, 2008 (unaudited) and 2009
(the “Relevant Periods”), and a summary of significant accounting policies and other explanatory
notes.
The date of incorporation and domicile of incorporation of the Company and its interests in its
subsidiaries are set out in note 1 to the Financial Information.
The consolidated financial statements of the Company, prepared in accordance with Canadian
generally accepted accounting principles (“Canadian GAAP”), for each of the years ended April 30,
2007, 2008 and 2009 were audited in accordance with Canadian generally accepted auditing standards
by PricewaterhouseCoopers LLP, Vancouver, Canada.
The Financial Information has been prepared based on the audited or, where appropriate, the
unaudited consolidated financial statements of the Company for the Relevant Periods, with no
adjustment made thereon.
— III-1 —
Management and directors’ responsibility
The management of the Company during the Relevant Periods are responsible for the preparation
and the fair presentation of the consolidated financial statements of the Company in accordance with
Canadian GAAP. This responsibility includes designing, implementing and maintaining internal
control relevant to the preparation and the fair presentation of consolidated financial statements that
are free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
For the financial information for each of the years ended April 30, 2007, 2008 and 2009 and the
six months ended October 31, 2009, the directors of the Company are responsible for the preparation
and the fair presentation of the financial information in accordance with International Financial
Reporting Standards (“IFRS”). This responsibility includes selecting and applying appropriate
accounting policies and making accounting estimates that are reasonable in the circumstances.
For the financial information for the six months ended October 31, 2008, the directors of the
Company are responsible for the preparation and the presentation of the financial information in
accordance with the accounting policies set out in Note 3 of the Financial Information, which are in
conformity with IFRS.
Reporting accountant’s responsibility
For the financial information for each of the years ended April 30, 2007, 2008 and 2009 and the
six months ended October 31, 2009, our responsibility is to express an opinion on the financial
information based on our examination and to report our opinion to you. We examined the audited
consolidated financial statements, or where appropriate, the unaudited consolidated financial
statements of the Company used in preparing the Financial Information, and carried out such
additional procedures as we considered necessary in accordance with the Auditing Guideline 3.340
“Prospectuses and the Reporting Accountant” issued by the Hong Kong Institute of Certified Public
Accountants. (the ‘HKICPA’).
For the financial information for the six months ended October 31, 2008, our responsibility is to
express a conclusion based on our review and to report our conclusion to you. We conducted our
review in accordance with International Standard on Review Engagements 2410 “Review of Interim
Financial Information Performed by the Independent Auditor of the Entity”. A review of the financial
information consists of making inquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less
in scope than an audit conducted in accordance with International Standards on Auditing and
consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the
finanicial information for the six months ended October 31, 2008.
— III-2 —
Opinion and review conclusion
In our opinion, the financial information for each of the years ended April 30, 2007, 2008 and
2009 and the six months ended October 31, 2009, for the purpose of this report, gives a true and fair
view of the financial position of the Company and the Group as at April 30, 2007, 2008 and 2009 and
October 31, 2009 and of the Group’s results and cash flows for the respective years and period then
ended.
Based on our review, which does not constitute an audit, nothing has come to our attention that
causes us to believe that the financial information for the six months ended October 31, 2008, for the
purpose of this report, are not prepared, in all material respects, in accordance with the accounting
policies set out in Note 3 of the Financial Information, which are in conformity with IFRS.
— III-3 —
CONSOLIDATED BALANCE SHEETS

(expressed in Canadian dollars)
April 30, April 30, April 30, October 31,

2007 2008 2009 2009
$ $ $ $
Assets
Current assets
Cash and cash equivalents 27,515,555 23,102,090 589,383 23,072,309
Short term investments — 6,116,661 16,001,529 65,983
Other receivables 417,006 1,182,076 519,175 408,970
Prepaid expenses 204,976 214,427 58,214 31,371
28,137,537 30,615,254 17,168,301 23,578,633
Non-current assets
Deferred financing costs (Note 12) 205,684 1,849,403 2,747,006 —
Mineral property interests (Note 6) 44,520,529 60,721,252 71,233,338 73,514,131
Property, plant and equipment (Note 5) 366,949 330,924 261,923 225,413
Peruvian sales tax receivable (Note 7) 4,750,128 7,846,085 9,232,217 9,864,588
Total assets 77,980,827 101,362,918 100,642,785 107,182,765
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,604,083 2,557,451 1,685,224 1,546,352
Non-current liabilities
Asset retirement obligation 314,225 314,225 314,225 314,225
Total liabilities 1,918,308 2,871,676 1,999,449 1,860,577
Equity
Share capital (Note 10) 86,151,882 108,814,267 109,194,259 120,080,581
Contributed surplus 3,145,173 4,160,151 4,626,856 4,673,499
Deficit (13,234,536) (14,483,176) (15,177,779) (19,431,892)
Total equity 76,062,519 98,491,242 98,643,336 105,322,188
Total equity and liabilities 77,980,827 101,362,918 100,642,785 107,182,765
Net current assets 26,533,454 28,057,803 15,483,077 22,032,281
Total assets less current liabilities 76,376,744 98,805,467 98,957,561 105,636,413
Subsequent events (Note 18)
— III-4 —
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

Six months Six months

Year ended Year ended Year ended ended ended
April 30, April 30, April 30, October 31, October 31,
2007 2008 2009 2008 2009
$ $ $ $ $
(Unaudited)
Expenses
Amortization 43,159 36,125 7,109 11,250 11,476
Filing fees 61,025 112,712 34,907 32,473 23,951
Investor relations 192,523 154,311 170,159 49,130 88,710
Legal and audit fees 339,479 191,020 545,768 306,266 259,183
Office and other expenses 604,882 472,232 75,343 165,369 198,601
Staff and directors’ costs 1,729,522 1,128,688 936,127 414,034 469,479
Transaction costs — — — — 166,972
Dissident shareholder proxy
costs — — — — 644,809
2,970,590 2,095,088 1,769,413 978,522 1,863,181
Write off deferred financing

costs (Note 12) — — — — 2,902,611
Foreign exchange (gain)/loss (476,059) (36,641) (345,776) 157,803 (397,088)
Interest income (1,059,481) (809,807) (729,034) (405,464) (114,591)
Total loss and comprehensive

loss attributable to equity
owners of the Company 1,435,050 1,248,640 694,603 730,861 4,254,113
Weighted average number of

shares 244,055,042 315,883,396 328,517,886 328,513,463 328,961,061
Loss per share (Note 10(c))

Basic and diluted (0.006) (0.004) (0.002) (0.002) (0.013)
— III-5 —
CONSOLIDATED STATEMENTS OF CASH FLOWS


2007 2008 2009 2008 2009
$ $ $ $ $
(Unaudited)
Cash flows from operating

activities
Loss for the period (1,435,050) (1,248,640) (694,603) (730,861) (4,254,113)
Adjustment for items not
affecting cash:
Amortization 43,159 36,125 7,109 11,250 11,476
Stock-based compensation 1,109,738 559,063 282,510 109,151 33,401
Deferred financing costs — — — — 2,902,611
(282,153) (653,452) (404,984) (610,460) (1,306,625)

Changes in non-cash working
capital
Change in prepaid expenses (147,376) (9,451) 156,213 3,080 26,843
Change in other receivables (28,751) (765,070) 662,901 656,230 110,205
Change in accounts payable
and accrued liabilities (145,748) 189,561 (79,789) 465,416 590,253
Net cash inflow/(outflow)

from operating activities (604,028) (1,238,412) 334,341 514,266 (579,324)
Cash flows from investing

activities
(Purchase) sale of plant and
equipment (91,795) (35,151) 20,257 (7,212) —
Expenditures on mineral
property interests (17,233,594) (14,591,368) (10,959,058) (7,705,167) (2,894,187)
(Purchase) sale of short-term
investments — (6,116,661) (9,884,868) (14,023,059) 15,935,546
Peruvian sales tax receivable (1,676,064) (3,095,957) (1,386,132) (401,851) (632,371)

from investing activities (19,001,453) (23,839,137) (22,209,801) (22,137,289) 12,408,988
— III-6 —

2007 2008 2009 2008 2009
$ $ $ $ $
(Unaudited)
Cash flows from financing

activities
Shares issued for cash - net of
issue costs 25,889,535 22,307,803 260,356 260,356 10,808,867
Deferred financing costs (205,684) (1,643,719) (897,603) (665,345) (155,605)

from financing activities 25,683,851 20,664,084 (637,247) (404,989) 10,653,262
Net increase (decrease) in

cash and cash equivalents 6,078,370 (4,413,465) (22,512,707) (22,028,012) 22,482,926
Cash and cash equivalents -

Beginning of period 21,437,185 27,515,555 23,102,090 23,102,090 589,383
Cash and cash equivalents -

End of period 27,515,555 23,102,090 589,383 1,074,078 23,072,309
— III-7 —
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Share capital
Number of Contributed
Shares Amount surplus Deficit Total
$ $ $ $
Balance - April 30, 2006 227,838,267 59,899,717 2,077,035 (11,799,486) 50,177,266
Exercise of warrants 73,604,304 25,312,064 — — 25,312,064

Exercise of stock options 2,021,667 577,471 — — 577,471
Stock-based compensation — — 1,492,790 — 1,492,790
Transfer of fair value on
exercise of options — 362,630 (362,630) — —
Stock options forfeited — — (62,022) — (62,022)
Net loss for the year — — — (1,435,050) (1,435,050)
Balance - April 30, 2007 303,464,238 86,151,882 3,145,173 (13,234,536) 76,062,519
Public offering 23,204,500 23,204,500 — — 23,204,500

Exercise of stock options 1,633,465 647,377 — — 647,377
Share issue costs — (1,544,074) — — (1,544,074)
Stock-based compensation — — 1,369,560 — 1,369,560
Net loss for the year — — — (1,248,640) (1,248,640)
Balance - April 30, 2008 328,302,203 108,814,267 4,160,151 (14,483,176) 98,491,242
Exercise of stock options 393,298 260,356 — — 260,356

Stock-based compensation — — 699,772 — 699,772
Net loss for the year — — — (694,603) (694,603)
— III-8 —
Share capital
Number of Contributed
Shares Amount surplus Deficit Total
$ $ $ $
Balance - April 30, 2009 328,695,501 109,194,259 4,626,856 (15,177,779) 98,643,336
Subscription agreement 35,740,000 10,774,000 — — 10,774,000

Share issue costs — (61,703) — — (61,703)
Net loss for the period — — — (4,254,113) (4,254,113)
Balance - October 31, 2009 364,917,101 120,080,581 4,673,499 (19,431,892) 105,322,188
Balance - April 30, 2008 328,302,203 108,814,267 4,160,151 (14,483,176) 98,491,242

Net loss for the period — — — (730,861) (730,861)
Balance - October 31, 2008

(Unaudited) 328,695,501 109,194,259 4,228,997 (15,214,037) 98,209,219
— III-9 —
BALANCE SHEET OF THE PARENT COMPANY


2007 2008 2009 2009
$ $ $ $
Assets
Current assets
Cash and cash equivalents 22,819,063 22,010,280 10,397 22,459,031
Short term investments — 6,116,661 16,001,529 65,983
Other receivables 232,258 541,093 459,089 70,502
Prepaid expenses 66,580 23,646 18,105 8,992
23,117,901 28,691,680 16,489,120 22,604,508
Non-current assets
Equipment 16,546 9,577 8,372 7,268
Receivable from subsidiaries 2,114,916 2,700,083 1,819,572 1,561,278
Investment in Andes Resources 848,470 848,470 848,470 848,470
Investment in Chariot Holdings Inc. 52,873,869 69,144,422 81,645,798 85,740,924
Total assets 78,971,702 101,394,232 100,811,332 110,762,448
Liabilities
Current liabilities
Accounts payable and accrued liabilities 336,006 484,578 252,111 864,008
Total liabilities 336,006 484,578 252,111 864,008
Equity
Share capital 86,151,882 108,814,267 109,194,259 120,080,581
Contributed surplus 3,145,172 4,160,151 4,626,855 4,673,498
Deficit (10,661,358) (12,064,764) (13,261,893) (14,855,639)
Total equity 78,635,696 100,909,654 100,559,221 109,898,440
Total equity and liabilities 78,971,702 101,394,232 100,811,332 110,762,448
Net current assets 22,781,895 28,207,102 16,237,009 21,740,500
Total assets less current liabilities 78,635,696 100,909,654 100,559,221 109,898,440
— III-10 —
NOTES TO FINANCIAL INFORMATION
1 NATURE OF OPERATIONS
Chariot Resources Limited (“the Company”) was incorporated on November 12, 1996 under the Business Corporations
Act (Yukon). On October 28, 2004, the Company was continued under the Business Corporations Act (British Columbia).
The consolidated financial information include the accounts of the Company and its wholly owned subsidiaries (together
referred to as the Group): Chariot Holdings Inc., Chariot Partners Limited, Chariot Operating Limited, Andes Resources S.A.C.
and the Company’s 70% interest in Marcobre S.A.C.
The Company is engaged in the exploration and development of the Marcona property in Peru. The recoverability of the
amounts shown as mineral property interests is dependent upon the existence of economically recoverable reserves, the
continuance or rights to tenure of the areas of interest, the results of future exploration, the successful development and
exploitation of the areas of interest or, alternatively, their sale or partial sale.
2 FIRST-TIME ADOPTION OF IFRS
These are the first consolidated financial information of the Company prepared in accordance with International
Financial Reporting Standards (“IFRS”). The date of transition to IFRS is May 1, 2006.
The Company applied IFRS1 First-time Adoption of International Financial Reporting Standards in preparing these IFRS
consolidated financial information. The impact of the transition to IFRS on equity, comprehensive income and reported cash
flows is presented in Note 17.
First-time adoption exemptions applied
IFRS 1 which governs the first-time adoption of IFRS, in general requires accounting policies to be applied
retrospectively to determine the opening balance sheet at the Company’s transition date of May 1, 2006, and allows certain
exemptions on the transition to IFRS. The only election we have chosen is not to apply the recognition and measurement
requirements of IFRS 2 Share-based Payments to equity instruments granted before November 7, 2002.
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial information are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.
3.1 Basis of preparation
This financial information has been prepared in accordance with International Financial Reporting Standards.
3.2 Consolidation
a) Subsidiaries
All companies in which the Company holds or controls more than 50% of the votes or where the Company alone, through
agreement or in another manner, exercises control, are consolidated as subsidiaries.
— III-11 —
b) Joint Ventures
Jointly controlled entities are defined as companies in which the Company together with other parties through an
agreement has shared control over operations. Joint ventures are reported according to the proportional consolidation method.
3.3 Foreign currency translation
a) Functional currency and presentation currency
The companies in the Group prepare their financial information in the currency used in the primary economic
environment in which they operate. This is known as the functional currency.
The consolidated financial information are prepared in Canadian Dollars, which are the Company’s functional currency
and the Group’s presentation currency.
b) Translation of foreign Group companies
The Company’s foreign subsidiaries are reliant upon the Canadian parent entity for all of their financing requirements.
Accordingly, these foreign subsidiaries are considered to have the Canadian dollar as their functional currency.
Transactions in foreign currency are translated into Canadian dollars using the exchange rate on the transaction date.
Monetary items denominated in foreign currency are re-measured at closing day rates at each balance sheet date. Non-monetary
items are carried at historical cost based on the exchange rate at the date of the original transaction. Exchange gains and losses
that arise from such re-measurement and on settlement of the transaction are recognized in the income statement. Expense items
for these foreign subsidiaries are translated at the average exchange rate for the period in question.
3.4 Property, plant and equipment
a) Property, plant and equipment
i) Owned assets
All property, plant and equipment are stated at historical cost which includes expenditure that is directly
attributable to the acquisition of the items. Where an item of property, plant and equipment includes major components
having different useful lives, they are accounted for as separate items of property, plant and equipment.
ii) Subsequent costs
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. All other costs are recognized in profit and loss as incurred.
— III-12 —
iii) Amortization
Property, plant and equipment is stated at cost after deduction for accumulated amortization and any accumulated
impairment. All forms of repair and maintenance are reported as expenses in the income statement in the period in which
they are incurred. Depreciation of other property, plant and equipment is performed on a straight-line basis down to the
estimated residual value of the asset over the anticipated useful life of the asset. Useful lives are assessed as:
Vehicles 5 years
Equipment and furniture 10 years
Software 4 years
b) Asset impairment
The value of depreciated assets is tested for impairment whenever there are indications that the carrying amount may not
be recoverable. In cases in which the carrying amount of an asset exceeds its estimated recoverable amount, an impairment loss
is recognised on the asset down to the recoverable amount. An impairment loss that has been previously recognized is reversed
if the reasons for the earlier impairment no longer exist. When testing for impairment, the assets are grouped in cash-generating
units and assessments are made on the basis of the future cash flows, of these units.
3.5 Mineral properties
Acquisition costs are capitalized within mineral properties. Expenditure on exploration and evaluation relating to an area
of interest is carried forward at cost where rights to tenure of the area of interest are current and;
• it is expected that expenditure will be recouped through successful development and exploitation of the area of
interest or alternatively by its sale and/or;
• exploration and evaluation activities are continuing in an area of interest but have not yet reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. A regular
review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs
in relation to that area of interest. Where uncertainty exists as to the future viability of certain areas, the carrying
value of the area of interest is written off to the income statement or provided against.
Impairment
The carrying value of capitalised acquisition, exploration and evaluation expenditure is assessed for impairment
at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may
exceed its recoverable amount. An impairment exists when the carrying amount of an asset or cash-generating unit
exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable
amount. Any impairment losses are recognised in the income statement.
3.6 Financial instruments
3.6.1 Financial instruments
A financial instrument is recognized if the Company becomes a party to the contractual provisions of the instrument.
Financial instruments are derecognized if the Company’s contractual rights to the cash flows from the financial instruments
expire or if the Company transfers the financial instruments to another party without retaining control or substantially all risks
and rewards of the financial instrument.
— III-13 —
Non-Derivative Financial Instruments
Cash and cash equivalents, other receivables, accounts payable and accrued liabilities are carried at cost which
approximates fair value due to the short-term maturity of these instruments. Unless otherwise noted, the Group is not
exposed to significant interest, currency or credit risks arising from these financial instruments.
Financial assets at fair value through profit and loss
The Group’s short term investments are classified as held for trading financial assets. Held for trading financial
assets are recorded at fair value with changes in fair value recorded in income.
3.6.2 Recognition and measurement
Recognition
Purchases and sales of financial instruments are recorded in the accounts on the trade date. Financial instruments
are initially recognised at cost which corresponds to the fair value of the instrument including transaction costs. Financial
assets are derecognised from the balance sheet when the risk and the right to receive cash flows from the instrument have
ceased or been transferred to another counterparty. Financial liabilities are derecognised from the balance sheet when the
Company has met its commitments or they have been otherwise extinguished. The Company reports financial instruments
with a remaining maturity of less than 12 months as current assets and liabilities and those that exceed 12 months as
non-current assets and liabilities.
Measurement
The fair value of financial instruments is calculated on the basis of prevailing market listings on the closing date.
For financial assets and listed securities, the actual prices on the closing date are used. The fair value of short-term
investments is considered to correspond to the carrying amount since a change in market interest rates does not have a
significant effect on market value.
3.7 Share-based payments
Share-based compensation benefits are provided to directors and employees. The fair value of options granted to
directors and employees is recognized as an employee benefit expense with a corresponding increase in contributed surplus.
The fair value is measured at grant date and recognized over the period during which the recipient becomes unconditionally
entitled to the options. The fair value at grant date is determined using an option pricing model that takes into account the
exercise price, the term of the option, the vesting, the share price at grant date and expected price volatility of the underlying
share, the expected divided yield and the risk-free interest rate for the term of the option.
3.8 Other receivables
Other receivables are recognised at their cost, less impairment losses.
Collectability of other receivables is reviewed on an ongoing basis. Receivables which are known to be uncollectible are
written off. An impairment allowance is established when there is objective evidence that the Company will not be able to
collect all amounts due according to the original terms of receivables.
— III-14 —
3.9 Short-term investments
Short term investments are defined as deposits or debt instruments with a maturity of more than three months and less
than one year from the acquisition date.
3.10 Lease payments
Leases for non-current assets in which the Company substantially carries all the risks and rewards incidental to
ownership of an asset are classified as finance leases. Other leases are classified as operating leases. The leased asset is
recognised as a non-current asset and a corresponding financial liability is reported among interest-bearing liabilities at the
lower of the fair value of the assets or the present value of the minimum lease payments. Future lease payments are divided
between amortisation of the liability and financial expenses. The leased asset is depreciated according to the same principles
that apply to other assets of the same type. If it is uncertain whether the asset will be taken over at the end of the leasing period,
the asset is depreciated over the lease term if this is shorter than the useful life. The lease payments for operating leases are
recognised as an expense on a straight-line basis over the lease term.
3.11 Current and deferred income tax
Income tax comprises current and deferred tax. Income tax is recognised in the consolidated statement of loss, except
to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at balance date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and for taxation purposes. Deferred tax is measured at the tax
rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted
or substantively enacted by the balance sheet date.
A deferred tax asset is recognised to the extent that it is probable that future taxable loss will be available against which
temporary differences can be utilised. Deferred tax assets are reviewed at each balance date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised.
3.12 Asset retirement obligation
The Company recognizes a liability for its legal and constructive obligations associated with reclamation of mineral
properties. A liability is recognized initially at fair value if a reasonable estimate of the fair value can be made and the resulting
amount is capitalized as part of the asset. In subsequent periods, the Company adjusts the carrying amounts of the asset and
liability for changes in estimates of the amount or timing of underlying future cash flows. It is reasonably possible that the
Company’s estimates of its ultimate reclamation and site restoration liability could change as a result of changes in regulations
or cost estimates.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the consolidated financial information in conformity with IFRS requires management to make
estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of commitments and contingent
liabilities at the date of the financial information, and the reported amounts of expenses during the reported period. Significant
management estimates relate to the determination of recoverability of mineral property and deferred exploration expenditures
and stock-based compensation. Actual results could differ materially from these estimates.
— III-15 —
5 PROPERTY, PLANT AND EQUIPMENT — CONSOLIDATED

2007 2008 2009 2009
$ $ $ $
Cost 493,085 528,236 489,139 485,886

Accumulated depreciation 126,136 197,312 227,216 260,473
Net book am ount 366,949 330,924 261,923 225,413
Opening net book amount 348,476 366,949 330,924 261,923

Net additions for the period (disposals) 91,794 35,150 (20,253) (22,093)
Depreciation charge (73,321) (71,175) (48,748) (14,417)
Net book am ount 366,949 330,924 261,923 225,413
6 MINERAL PROPERTIES
Marcona Project
On January 3, 2005 the Company and KORES and LS-Nikko, jointly the “Korean Partners”, paid the first of two
payments to acquire a 100% undivided interest in the Marcona Copper Project (“Marcona”). Marcona is owned by
Marcobre, a Peruvian limited liability company. The Company indirectly owns 70% of Marcobre and the Korean Partners
own 30%.The Company’s share of the first payment was $18,695,535 representing payments to the former owners of
Marcona in the amount of $17,023,464 and a payment in respect of Peruvian General Sales Tax (“IGV”) in the amount
of $1,672,071. The payment in respect of IGV is considered to be eventually recoverable as a credit against IGV
otherwise payable in respect of future mineral production from Marcona.
On January 3, 2007 the Company and the Korean Partners made the second of the two mandatory payments
required under the abovementioned Marcona acquisition agreement. The Company’s 70% share of this second payment
was $10,646,090 and a payment in respect of IGV of $1,163,085.
In the event that the Company and the Korean Partners approve the start of construction of a mine and plant to
process mineralized material from Marcona, additional contingent payments will be required to complete the acquisition
of an undivided 100% interest in Marcona as follows:
An amount of US $3.0 million will be payable to Rio Tinto Mining and Exploration, Sucursal del Peru and
Shougang Hierro Peru S.A.A (the “Vendors”) if the total mineral resource on the Target Area 1 concession (which
includes the Mina Justa deposit and the Magnetite Manto deposit) is greater than the equivalent of 2.58 million tonnes
of contained copper metal using a copper equivalent cut-off grade of 0.3%. The Company’s share of this payment is
US$2.1 million.
An additional amount of US $7.0 million will be payable to the Vendors if the total mineral resource on the Target
Area 1 concession is greater than the equivalent of 3.44 million tonnes of contained copper metal using a copper
equivalent cut-off grade of 0.3%. The Company’s share of this payment is US$4.9 million.
These contingent payments to the Vendors will not exceed US $10.0 million and the amounts of such payments
will be determined by whether Marcobre approves commencing the construction of mine and processing facilities on the
Target Area 1 concession and the amount of copper equivalent contained in the mineral resource on the Target Area 1
concession.
— III-16 —
Each of the Company and the Korean Partners have guaranteed, to the extent of their respective pro rata ownership
of Marcobre, the contingent payments described above and each has pledged its shares of Marcobre as security in respect
of such payments. In addition, Marcobre has granted a security interest with respect to the Marcona Project as security
in respect of the contingent payments described above.
Expenditures on the Marcona properties have been identified as intangible assets and are as follows:
Marcona Copper Project
Balance - April 30, 2006 25,859,999
Second property payment 10,646,090

Resource development 2,932,378
Metallurgical test work 239,267
Feasibility study 1,764,231
Environmental health, safety and community relations 968,518
Project support costs 2,110,046
Balance - April 30, 2007 44,520,529

Metallurgical test work 1,080,645
Environmental health, safety and community relations 1,750,431
Balance - April 30, 2008 60,721,252

Balance - April 30, 2009 71,233,338
Resource development 47,953

Feasibility study 834,686
Balance - October 31, 2009 73,514,131
Balance - April 30, 2008 60,721,252

Balance - October 31, 2008 (Unaudited) 67,525,078
— III-17 —
7 PERUVIAN SALES TAX RECEIVABLE
The Company have recorded the sales tax paid in Peru as a recoverable asset. This amount is considered to be refundable
either as a credit received from the export of mineral production or under the sales tax early recovery program established by
the Peruvian government.
During the year ended April 30, 2009, the Company recovered $368,551 (2008 - $437,565; 2007 - $1,315,212) under the
early recovery program.
During the six months ended October 31, 2009, the Company recovered $258,165 (2008 - $365,626) under the early
recovery program.
8 RELATED PARTY TRANSACTIONS
Key management compensation
Key management personnel are those persons, including all directors having authority and responsibility for planning,
directing and controlling the activities of the Company, such as officers and directors of the Company.
2007 2008 2009 2008 2009
$ $ $ $ $
(Unaudited)
Salaries 547,218 535,610 571,376 206,322 248,978

Stock-based compensation 319,105 276,823 187,853 84,317 39,667
866,323 812,433 759,229 290,639 288,645
— III-18 —
9 JOINT VENTURE
The principal activity of Marcobre is the development of the Marcona Copper project. The Company’s share of the assets
and liabilities and cash flows of the Marcobre joint venture is as follows:
2007 2008 2009 2008 2009
$ $ $ $ $
(Unaudited)
Current assets 1,345,114 1,405,332 498,557 548,227 832,853

Current liabilities (1,076,890) (1,839,551) (1,047,115) (839,615) (471,479)
Mineral property interests 44,520,529 60,721,252 71,233,338 67,525,078 73,514,131
Other non-current assets 4,972,024 8,073,220 9,423,361 8,461,028 10,035,506
Non-current liabilities (314,225) (314,225) (314,225) (314,225) (314,225)
Net assets 49,446,552 68,046,028 79,793,916 75,380,493 83,596,786
Net cash flows from financing

activities 20,877,695 16,759,930 13,286,898 8,441,785 3,956,687
Net cash flows used for
investing activities (18,909,658) (17,687,325) (12,345,190) (8,107,018) (3,526,558)
10 EQUITY
a) Share capital
The Company’s authorized share capital is an unlimited number of common shares of which 364,917,101 were issued and
outstanding as at October 31, 2009.
On October 30, 2009 the Company completed a private placement for 35,740,000 common shares at a price of Cdn$ 0.30
per share for gross proceeds of $10,774,000.
On March 20, 2008, the Company completed a public offering of 22,000,000 common shares at a price of $1.00 per share.
In addition to the shares issued to the public, the underwriters of the offering syndicate exercised an over allotment option to
purchase up to an additional 1,204,500 common shares at $1.00 per share. The gross proceeds of the underwriting and exercise
of the underwriters’ option amounted to $23,204,500.
b) Share options
The Company has established a share option plan for the granting of options to employees and service providers. The
plan provides for the Board to issue non-assignable, non-transferable options, with a term of up to 10 years, terminating within
30 to 90 days after the option ceases to be associated with the Company, at an exercise price not less than the TSX specified
Discounted Market Price, such options vesting over 18 months.
— III-19 —
The following table sets out information concerning stock options granted and outstanding:
Number of Number of
Number of options Exercise Months to
Date options vested Price Expiry date expiry
$ $
250,000 250,000 0.16 March 6, 2008 11

1,100,000 1,100,000 0.45 December 4, 2008 20
41,333 41,333 0.45 April 23, 2009 24
2,125,000 2,125,000 0.27 January 3, 2015 92
120,000 120,000 0.27 January 26, 2015 93
200,000 200,000 0.28 March 10, 2015 95
2,465,000 2,465,000 0.34 April 5, 2015 96
2,312,500 1,542,438 0.44 February 7, 2016 106
200,000 66,667 0.60 October 25, 2016 114
3,685,000 1,228,210 0.57 January 11, 2017 117
440,000 146,652 0.67 January 26, 2017 117
As at April 30, 2007 12,938,833 9,285,300 0.43 96
750,000 750,000 0.45 December 4, 2008 8

41,333 41,333 0.45 April 23, 2009 12
1,975,000 1,975,000 0.27 January 3, 2015 81
100,000 100,000 0.27 January 26, 2015 81
200,000 200,000 0.28 March 10, 2015 83
2,285,000 2,285,000 0.34 April 5, 2015 84
1,965,675 1,965,675 0.44 February 7, 2016 94
200,000 133,320 0.60 October 25, 2016 102
3,361,693 2,133,315 0.57 January 11, 2017 105
426,667 280,012 0.67 January 26, 2017 105
550,000 183,315 1.00 August 27, 2017 112
3,655,000 1,218,217 0.88 January 7, 2018 117
As at April 30, 2008 15,510,368 11,265,187 0.56 95
— III-20 —
Number of Number of
Number of options Exercise Months to
Date options vested Price Expiry date expiry
$ $
1,975,000 1,975,000 0.27 January 3, 2015 69

100,000 100,000 0.27 January 26, 2015 69
200,000 200,000 0.28 March 10, 2015 71
2,285,000 2,285,000 0.34 April 5, 2015 72
1,865,700 1,865,700 0.44 February 7, 2016 82
200,000 200,000 0.60 October 25, 2016 90
3,111,688 3,111,688 0.57 January 11, 2017 93
426,667 426,667 0.67 January 26, 2017 93
550,000 366,685 1.00 August 27, 2017 100
3,040,000 1,996,459 0.88 January 7, 2018 105
3,255,000 1,084,025 0.15 January 9, 2019 117
150,000 50,000 0.15 February 13, 2019 118
As at April 30, 2009 17,159,055 13,661,224 0.47 93
1,875,000 1,875,000 0.27 January 3, 2015 63

100,000 100,000 0.27 January 26, 2015 63
100,000 100,000 0.28 March 10, 2015 65
2,285,000 2,285,000 0.34 April 5, 2015 66
1,865,700 1,865,700 0.44 February 7, 2016 76
200,000 200,000 0.60 October 25, 2016 84
3,111,688 3,111,687 0.57 January 11, 2017 87
426,667 426,667 0.67 January 26, 2017 87
300,000 300,000 1.00 August 27, 2017 94
2,965,000 1,946,740 0.88 January 7, 2018 99
2,828,399 754,962 0.15 January 9, 2019 111
150,000 50,000 0.15 February 13, 2019 112
As at October 31, 2009 16,207,454 13,015,756 0.47 86
— III-21 —
Stock options transactions are as follows:
Year ended Year ended

April 30, 2007 April 30, 2008
Weighted Weighted
average average
exercise exercise
Number price Number price
$ $
Balance - Beginning of year 10,938,833 0.34 12,938,833 0.43
Granted 4,325,000 0.58 4,205,000 0.90

Exercised (2,021,667) 0.29 (1,633,465) 0.40
Cancelled (30,000) 0.44 — —
Forfeited (273,333) 0.34 — —
Balance - End of year 12,938,833 0.43 15,510,368 0.56
Period ended Period ended

Year ended October 31, October 31,
April 30, 2009 2008 (Unaudited) 2009
Weighted Weighted Weighted
average average average
exercise exercise exercise
Number price Number price Number price
$ $ $
Balance - Beginning of period 15,510,368 0.56 15,510,368 0.56 17,159,055 0.47
Granted 3,405,000 0.15 — — —

Exercised (393,298) 0.66 (393,298) 0.66 (481,601) 0.20
Cancelled (791,333) 0.45 — — — —
Forfeited (571,682) 0.82 (531,682) 0.81 (470,000) 0.72
Balance - End of period 17,159,055 0.47 14,585,388 0.56 16,207,454 0.47
— III-22 —
Granting stock options results in a stock-based compensation charge. Stock-based compensation expense is determined
by a Black-Scholes option pricing model. Option pricing models include the use of assumptions and estimates. The volatility
is determined based on the expected term of the stock options. The following table sets out the principal assumptions and
estimates used in the determination of the fair value of options granted and the estimation of stock-based compensation expense
for the years ended.
April 30, April 30, April 30,

2007 2008 2009
Number of options 4,325,000 4,205,000 3,405,000
Estimated life of options 3 years 3 years 3 years
Share price on date of grant $0.58 $0.90 $0.15

Option exercise price $0.58 $0.90 $0.15
Risk free interest rate 4.12% 3.36% 1.38%
Estimated volatility 65% 59% 85%
Expected dividend yield 0% 0% 0%
Option value $0.27 $0.38 $0.08
Fair value of options granted $1,151,801 $1,597,429 $280,866
c) Loss per share - basic and diluted
Loss per share computations are based upon the weighted average number of common shares outstanding during the
period. The Company uses the treasury stock method to compute the dilutive effect of options. This method assumes that the
proceeds from exercise of in the money options would be used to purchase common shares at the average market price during
the period. The effect of conversion of outstanding options would be anti-dilutive when the Company incurs a loss and
therefore, basic and diluted losses per share are the same.
— III-23 —
11 INCOME TAXES — CONSOLIDATED
The income tax expense differs from that computed by applying the applicable statutory rate before taxes as follows:

2007 2008 2009 2009
$ $ $ $
Statutory rates 36.1% 35.2% 33.3% 32.7%
Income tax recovery computed at statutory rates 518,053 439,938 231,534 441,490
Permanent differences
Other (124,850) (278,138) (159,995) (83,757)
Rate differential for foreign entities (45,801) 39,552 19,185 1,216
Stock-based compensation (400,615) (196,977) (233,257) (48,139)
Total permanent differences (571,266) (435,563) (374,067) (130,680)
Book to tax differences (204,906) 1,696,417 (915,443) 695,107

Change in valuation allowance 459,419 (1,461,434) 1,018,892 (266,741)
Change in tax rate (201,300) (239,358) 39,084 (739,177)
Provision for (recovery of) income taxes — — — —
The tax effects of temporary differences that give rise to significant components of future income tax assets or liabilities
are as follows:

2007 2008 2009 2009
$ $ $ $
Future tax assets

Share issuance costs 678,089 705,475 362,009 246,464
Non-capital loss carryforwards 2,260,000 2,517,289 3,059,264 2,866,420
Other 13,834 9,798 7,784 65,974
Resource properties 190,527 — 1,969,968 343,546
Total future income tax assets 3,142,450 3,232,562 5,399,025 3,522,404

Less: Valuation allowance (3,142,450) (2,988,816) (5,348,888) (3,472,769)
Net future income tax assets — 243,746 50,137 49,635

Less: Future income tax liabilities — (243,746) (50,137) (49,635)
Net future income tax asset (liability) — — — —
No income taxes are currently payable by the Company in any of the jurisdictions in which it operates.
— III-24 —
At October 31, 2009, the Company has non-capital losses of $11,347,354 which may be carried forward to apply against
future taxable income for Canadian income tax purposes, subject to final determination by taxation authorities expiring as
follows:
2010 238,502
2011 521,528
2015 1,753,438
2016 2,475,465
2027 1,110,104
2028 2,032,763
2029 1,554,536
2030 1,661,018
11,347,354
At October 31, 2009, the Company’s subsidiaries have non-capital losses, which may be carried forward to apply against
future years income for Peruvian income tax purposes, subject to final determination by taxation authorities expiring as follows:
2010 11,781
2011 51,357
2012 22,148
2013 13,320
98,606
In addition, as at October 31, 2009, the Company has capital losses of approximately $2,590,958, which may be carried
forward indefinitely to apply against future years capital gains for Canadian income tax purposes, subject to final determination
by taxation authorities.
12 DEFERRED FINANCING COSTS
In 2007 the Company entered into agreements with financial institutions for advice and assistance in all aspects of
preparation for senior finance. All related direct costs were capitalized as deferred financing costs. During the period ended 31
October 2009, the financial institutions’ in question communicated to the Company that debt financing would no longer be
available and therefore deferred financing costs totaling $2,902,611 were written off.
— III-25 —
13 SEGMENT INFORMATION
The Company’s two operating segments are corporate and Peru. Corporate comprises head office activities and support
for operations. Peru includes all of the Company’s exploration and development activities.
Corporate Peru Total

$ $ $
April 30, 2007

Cash and cash equivalents 26,492,172 1,023,383 27,515,555
Mineral property interests — 44,520,529 44,520,529
Other assets 316,798 5,627,945 5,944,743
Assets 26,808,970 51,171,857 77,980,827

Liabilities 337,293 1,581,015 1,918,308
Net Assets 26,471,677 49,590,842 76,062,519
April 30, 2008

Short-term investments 6,116,661 — 6,116,661
Other assets 574,311 10,848,604 11,422,915
Assets 28,722,826 72,640,092 101,362,918

Liabilities 484,572 2,387,104 2,871,676
Net Assets 28,238,254 70,252,988 98,491,242
April 30, 2009

Cash and cash equivalents 12,832 576,551 589,383
Other assets 484,566 12,333,969 12,818,535
Assets 16,498,927 84,143,858 100,642,785

Liabilities 251,113 1,748,336 1,999,449
Net Assets 16,247,814 82,395,522 98,643,336
October 31, 2009

Cash and cash equivalents 22,461,884 610,425 23,072,309
Short-term investments 65,983 — 65,983
Other assets 833,911 9,696,431 10,530,342
Assets 23,361,778 83,820,987 107,182,765

Liabilities 864,006 996,571 1,860,577
Net Assets 22,497,772 82,824,416 105,322,188
The amounts provided to senior management with respect to total assets are measured in a manner consistent with that
of the financial information.
— III-26 —
14 FINANCIAL AND CAPITAL RISK MANAGEMENT
Financial risk management
Because the Company is in the development stage, its principal source of funds is from the issuance of common
shares. It is the Company’s objective to safeguard its ability to continue as a going concern so that it can continue to
explore and develop its projects for the benefit of its stakeholders. The Company is not subject to any externally imposed
capital requirement. The Company manages the capital structure and makes appropriate adjustments to it based upon
changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital
structure, the Company may attempt to issue shares, issue debt, acquire or dispose of assets. The Company’s investment
policy is to invest its available cash in Canadian chartered banks and from time to time in guaranteed term deposits at
fixed interest rates established at the time of investment. All its funds are available for project and corporate objectives.
As at October 31, 2009, the Company had no bank indebtedness or long-term debt and had accounts payable and accrued
liabilities of $1,546,352. The Company pays suppliers in accordance with their credit terms and all accounts payable at
October 31, 2009 were aged less than 90 days.
The Company’s activities expose it to a variety of financial risks, which include foreign exchange risk, interest
rate risk, credit risk and liquidity risk.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company manages liquidity risk through monitoring and prospective analysis of cash flow projections, by raising
additional capital for investment or operations as required from time to time.
Foreign exchange risk
The Company operates internationally with offices and operations in Canada and Peru, which gives rise to the risk
that its financial instruments may be adversely impacted by exchange rate fluctuations. A significant portion of the
Company’s expenses are also incurred in US dollars and to a lesser extent other foreign currencies. A significant change
in the currency exchange rates between the Canadian dollar relative to the Peruvian currency or US dollar could have
an effect on the Company’s results of operations, financial position or cash flows. The Company has not entered into
foreign currency contracts to hedge its risk against foreign currency fluctuations. However, because some of the
Company’s obligations are denominated in U.S. dollars, the impact of foreign exchange differences on U.S. dollar
denominated financial assets would be naturally hedged to an extent.
Interest rate risk
The interest rate risk refers to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. All short-term deposits are accruing interest at fixed rates. As the
Company has no significant interest-bearing borrowings, the Company’s income and operating cash flows are
substantially independent of changes in market interest rates.
Credit risk
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and
other receivables. The Company has an investment policy requiring that cash and cash equivalents only be deposited in
permitted investments with certain minimum credit ratings. Cash and cash equivalents are maintained with financial
institutions of reputable credit and are redeemable on demand.
— III-27 —
15 FINANCIAL INSTRUMENTS BY CATEGORY
Fair values
The Company’s financial instruments consist of cash and cash equivalents, short-term investments, other
receivables and accounts payable. Financial instruments are initially recognized at fair value with subsequent
measurement depending on classification. Classification of financial instruments depends on the purpose for which the
financial instruments were acquired or issued, their characteristics, and the Company’s designation of such instruments.
The Company’s financial instruments are either carried at fair value or their carrying value approximates fair value.
16 COMMITMENTS — CONSOLIDATED
Leases
The Company holds operating lease contracts for office premises in Toronto and Lima in addition to storage
facilities in Peru. The terms of the leases and expected payments under the lease contracts are tabled below:
2010 2011 Total

$ $ $
As at October 31, 2009

Toronto office
October 13, 2009 - October 12, 2010 9,378 46,890 56,268
Lima office
November 1, 2009 - November 30, 2010 10,920 43,291 54,211
Lima storage facility
December 21, 2008 - December 20, 2010 2,111 13,280 15,391
Contingencies and pledged assets
In the event that the Company and the Korean Partners approve the start of construction of a mine and plant to
process mineralized material from Marcona, additional contingent payments would be required to complete the
acquisition of an undivided 100% interest in Marcona to Rio Tinto Mining and Exploration, Sucursal del Peru and
Shougang Hierro Peru S.A.A. (the “Vendors”). These contingent payments to the Vendors would not exceed US $10.0
million and the amounts of such payments would be determined by whether Marcobre approves commencing the
construction of mine and processing facilities on the Target Area 1 concession (or any event analogous to the foregoing
by any successor to Marcobre) and the amount of copper equivalent contained in the mineral resource on the Target
Area 1 concession.
The Company has agreed to guarantee the payment obligations of Marcobre to the Vendors under the terms of the
Target Area 1 Transfer Agreement, entered into by Shougang Hierro Peru S.A.A. Marcobre and the Company, dated
August 6, 2004 (as amended on December 30, 2004), the option Assignment Agreement, entered into by Rio Tinto Mining
and Exploration, Sucursal del Peru. Marcobre and the Company, dated August 6, 2004 (as amended on December 30,
2004) and the claims Transfer Agreement, entered into by Rio Tinto Mining and Exploration, Sucursal del Peru. Marcobre
and the Company, dated August 6, 2004 (as amended on December 30, 2004).
— III-28 —
17 FIRST-TIME ADOPTION OF IFRS
The first-time adoption of IFRS did not result any adjustments to the amounts previously reported under Canadian GAAP.
18 SUBSEQUENT EVENTS
On November 20, 2009, the Company granted options to purchase 450,000 shares of the Company at a price of $0.33
per share to a consultant to the Company.
On March 1, 2010, the Company announced that it has entered into an arrangement agreement (the “Arrangement
Agreement”) with China Sci-Tech pursuant to which China Sci-Tech has agreed to acquire through an indirect, wholly owned
subsidiary, by way of a court-approved plan of arrangement (the “Arrangement”), all of the issued and outstanding common
shares of the Company at a price of $0.67 in cash per common share (the “Consideration”).
The completion of the Arrangement is subject to, among other things, the approval by 66 2 ⁄ 3 % of the votes cast by the
Company’s shareholders at a special meeting of the Company’s shareholders to be held to approve the Arrangement, the
approval by a majority of the votes cast by China Sci-Tech’s shareholders at a meeting of China Sci-Tech’s shareholders to be
held to approve the transaction as a “very substantial acquisition” in accordance with the listing rules of The Stock Exchange
of Hong Kong Limited and receipt of court approvals. The Arrangement is expected to close in the first half of 2010.
19 TRANSITION FROM IFRS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRS”)
The Financial Information has been prepared in accordance with IFRS. For the purpose of the Financial Information, no
adjustments were considered necessary to comply with HKFRS.
20 SUBSEQUENT FINANCIAL STATEMENTS
No financial statements has been prepared by the Company or any subsidiaries of the Group that has been audited in
respect of any period subsequent to October 31, 2009.
Yours faithfully,
PricewaterhouseCoopers LLP
Chartered Accountants
Vancouver, Canada
— III-29 —
APPENDIX IV UNAUDITED PRO FORMA FINANCIAL INFORMATION
OF THE ENLARGED GROUP
A. INTRODUCTION
Pursuant to various agreements as set out in the Circular, the Company through its indirect
wholly-owned subsidiary, China Sci-Tech Minerals Limited (formerly known as 0874791 B.C.
Limited, the “Purchaser”), entered into the Arrangement Agreement on 28 February 2010 with Chariot
Resources Limited (the “Vendor”) to acquire, on a conditional basis, the Subscription Shares, which
represent the entire issued and outstanding share capital of Chariot Resources Limited (“Chariot”,
together with its subsidiaries are hereinafter collectively referred to as the “Chariot Group” and
together with the Group are hereinafter collectively referred to as the “Enlarged Group”) at an
aggregate cash consideration of C$244,580,395 (equivalent to approximately HK$1,748,750,000),
estimated based on the entire issued and outstanding share capital of Chariot as at 28 February 2010
and representing C$0.67 (equivalent to approximately HK$4.79) per Chariot Sale Share, in accordance
with the Plan of Arrangement (the “Acquisition”). The actual cash consideration is subject to
adjustment on the account of exercise of Chariot Options by Former Chariot Optionholders prior to
the Acquisition.
The Company has entered into a placing agreement (the “Placing”) for the proposed placing of
31.2 billion new shares of the Company for a gross proceeds of HK$6,240 million, which takes place
upon the due and proper completion of the Arrangement Agreement. However, the Acquisition is not
conditional upon the Placement; the accompanying unaudited pro forma financial information of the
Enlarged Group has been prepared to illustrate the effect of the Acquisition only.
The unaudited pro forma combined statement of financial position of the Enlarged Group as at
30 September 2009, is prepared based on (i) the unaudited condensed consolidated statement of
financial position of the Group as at 30 September 2009, as extracted from the interim report of the
Company for the six months ended 30 September 2009; and (ii) the audited consolidated balance sheet
of the Chariot Group as at 31 October 2009, as extracted from the accountants’ report thereon sets out
in Appendix III to this Circular (after grouping of certain items for presentation purpose), as if the
Acquisition had been completed on 30 September 2009.
The unaudited pro forma combined income statement and statement of cash flows of the Enlarged
Group for the period ended 30 September 2009 are prepared based on (i) the unaudited condensed
consolidated statement of comprehensive income and unaudited condensed consolidated statement of
cash flows of the Group for the six months ended 30 September 2009, as extracted from the interim
report of the Company for the six months ended 30 September 2009; and (ii) the audited consolidated
statements of loss and comprehensive loss and the audited consolidated statement of cash flows of the
Chariot Group for the six months ended 31 October 2009, as extracted from the accountants’ report
thereon sets out in Appendix III to this Circular (after grouping of certain items for presentation
purpose), as if the Acquisition had been completed on 1 April 2009.
The unaudited pro forma financial information is prepared to provide information on the
Enlarged Group as a result of the completion of the Acquisition. As it is prepared for illustrative
purpose only and because of its nature, it may not give a true picture of the financial position or the
results or cash flows of the Enlarged Group upon completion of the Acquisition.
These transactions are to be accounted for in the unaudited pro forma financial information as
acquisition of assets and liabilities as the companies proposed to be acquired do not constitute
business under Hong Kong Financial Reporting Standard 3 “Business Combinations”. The principal
assets of the Chariot Group are mining property interests and bank balances and cash.
— IV-1 —
B. UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION OF

THE ENLARGED GROUP
The Chariot
The Group Group
as at as at Pro Forma
30 September 31 October Pro Forma Enlarged
2009 2009 Adjustments Notes Group
HK$’000 HK$’000 HK$’000 HK$’000
Note 4
Non-current assets
Property, plant and equipment 15,554 1,612 17,166
Investment properties 94,069 — 94,069
Mining property interests — 525,626 1,029,978 1 1,555,604
Peruvian sales tax receivable — 70,532 70,532
Available-for-sale investment 101,857 — 101,857
211,480 597,770 1,839,228
Current assets
Other receivables, deposits and
prepayments 40,365 3,148 43,513
Investments held for trading 1,450,941 — 1,450,941
Short term investments — 472 472
Bank balances and cash 882,729 164,967 (882,729) 2 164,967
2,374,035 168,587 1,659,893
Current liabilities
Other payables and accrued charges 3,911 11,057 900,302 2 915,270
Amount due to minority shareholder 1,999 — 1,999
Taxation payable 11,435 — 11,435
17,345 11,057 928,704
Net current assets 2,356,690 157,530 731,189
Total assets less current liabilities 2,568,170 755,300 2,570,417
Asset retirement obligation — 2,247 2,247
2,568,170 753,053 2,568,170

Share capital 318,423 858,575 (858,575) 3 318,423
Reserves 2,249,791 (105,522) 105,522 3 2,249,791
Equity attributable to owners

of the Company 2,568,214 753,053 2,568,214
Minority interests (44) — (44)
Total equity 2,568,170 753,053 2,568,170
— IV-2 —
Notes:
1. The transaction is to be accounted for as acquisition of the assets and liabilities as the companies proposed to be acquired
do not constitute business under Hong Kong Financial Reporting Standard 3 “Business Combinations”. As the principal
assets of the Chariot Group are mining property interests and bank balances and cash, the cost of acquisition in excess
of the carrying amounts of the assets and liabilities of the Chariot Group other than the mining property interests as at
the date of acquisition (which deemed to be the approximation of their fair value at that date) are considered to be
incurred for the acquisition of mining property interests and therefore allocated to the mining property interests only.
2. This represents the net effect of (i) cash consideration of C$244,580,395 (equivalent to approximately
HK$1,748,750,000), estimated based on the entire issued and outstanding share capital of Chariot as at 28 February 2010
and representing C$0.67 (equivalent to approximately HK$4.79) per Chariot Sale Share, for the Acquisition; and (ii) the
estimated professional fees attributable to the Acquisition of HK$34,281,000. The cash consideration is translated into
HK$ at the exchange rate as at 30 September 2009 of C$1 to HK$7.15. The Acquisition is to be financed through
placement of shares of the Company. The actual cash consideration is subject to adjustment on the account of exercise
of Chariot Options by Former Chariot Optionholders prior to the Acquisition.
3. This represents the effect of elimination of pre-acquisition reserves and the share capital of the Chariot Group.
4. The unadjusted information of the Chariot Group is extracted from the accountant’s report set out in Appendix III to this
circular and translated into HK$ at the exchange rate as at 30 September 2009 of C$1 to HK$7.15.
— IV-3 —
C. UNAUDITED PRO FORMA COMBINED INCOME STATEMENT OF THE ENLARGED

GROUP
The Chariot
The Group Group
for the six for the six
months ended months ended Pro Forma
2009 2009 Adjustment Note Group
HK$’000 HK$’000 HK$’000 HK$’000
Note 2
Revenue 23,529 — 23,529

Other income 61,184 3,508 64,692
Administrative expense (37,914) (7,207) 229 1 (44,892)
Gain arising from fair changes of
investment held for trading 20,322 — 20,322
Gain arising from fair changes of
investment properties 8,577 — 8,577
Loss arising from fair changes of
derivative financial instruments 9,964 — 9,964
Loss on early redemption of
convertible notes (27,328) — (27,328)
Transaction costs — (1,145) (1,145)
Dissident Shareholder Proxy Costs — (4,420) (4,420)
Write off deferred financing costs — (19,897) (19,897)
Finance costs (4,870) — (4,870)
Profit (loss) before taxation 53,464 (29,161) 24,532

Taxation (11,478) — (11,478)
Profit (loss) for the period 41,986 (29,161) 13,054
Notes:
1. Upon executing the Plan of Arrangement, each Chariot Option that has not been duly exercised prior to the Acquisition
will be cancelled. Accordingly, stock-based compensation of HK$229,000 is reversed.
2. The unadjusted information of the Chariot Group is extracted from the accountant’s report as set out in Appendix III to
this Circular and translated into HK$ at the average exchange rate for the six months period ended 30 September 2009
of C$1 to HK$6.855.
— IV-4 —
D. UNAUDITED PRO FORMA COMBINED STATEMENT OF CASH FLOWS OF THE

ENLARGED GROUP
The Chariot
The Group Group
for the six for the six
months ended months ended Pro Forma
HK$’000 HK$’000 HK$’000 HK$’000
OPERATING ACTIVITIES
Profit (loss) before taxation 53,464 (29,161) 229 1 24,532
Adjustments for:
Interest income (1,574) — (1,574)
Dividend income (21,554) — (21,554)
Other non-cash items 640 79 719
investments held for trading (20,322) — (20,322)
investment properties (8,577) — (8,577)
Loss on early redemption of convertible
notes 27,328 — 27,328
Finance cost 4,870 — 4,870
Deferred financing costs — 19,897 19,897
Stock-based compensation — 229 (229) 1 —
Operating cash flows before movements

in working capital 34,275 (8,956) 25,319
Decrease in other receivable and prepaid
expenses — 939 939
Increase in accounts payable and accrued
liabilities — 4,046 4,046
Increase in available for sales investments (87,464) — (87,464)
Increase in investments held for trading (858,932) — (858,932)
Other working capital items (51,137) — (51,137)
Net cash used in generated from

operations (963,258) (3,971) (967,229)
Income tax paid (43) — (43)
Interest received 1,574 — 1,574
Dividend received 21,554 — 21,554
NET CASH USED IN OPERATING

ACTIVITIES (940,173) (3,971) (944,144)
— IV-5 —
The Chariot
The Group Group
for the for the
six months six months
ended ended Pro Forma
HK$’000 HK$’000 HK$’000 HK$’000
INVESTING ACTIVITIES
Purchase of property, plant and equipment (88) — (88)
Expenditures on mining property interests — (19,840) (19,840)
Increase in Peruvian sales tax receivables,
net — (4,335) (4,335)
Short-term investments — 109,238 109,238
Net cash outflow for acquisition of
subsidiaries — — (1,483,254) 2 (1,483,254)
NET CASH (USED IN) FROM

INVESTING ACTIVITIES (88) 85,063 (1,398,279)
FINANCING ACTIVITIES
Proceeds on issue of shares upon rights
issue and exercise of warrants 398,055 398,055
Shares issued for cash-net of issue cost — 74,095 (74,095) 3 —
Redemption of convertible notes (100,000) — (100,000)
Share issue expenses (9,950) — (9,950)
Interest paid (380) — (380)
Deferred financing costs — (1,067) (1,067)
NET CASH FROM FINANCING

ACTIVITIES 287,725 73,028 286,658
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (652,536) 154,120 (2,055,765)
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE YEAR 1,535,265 3,617 (3,617) 2 1,535,265
CASH AND CASH EQUIVALENTS AT

THE END OF THE YEAR,
representing bank balances and cash and
overdraft 882,729 157,737 (520,500)
Notes:
1. Upon executing the Plan of Arrangement, each Chariot Option that has not been duly exercised prior to the Acquisition
will be cancelled. If the Chariot Consideration exceeds the exercise price of the relevant option, Chariot would pay the
difference by cash to the grantees of the options as compensation. Pro forma cash payment of HK$25,695,000, calculated
based on 13,142,388 options outstanding at 1 April 2009 (extracted from the accountants’ report of Chariot in Appendix
III assuming no grant, exercise, cancellation or forfeiture of Chariot Option during April 2009) which would have been
subject to such compensation, is assumed to be paid by Chariot immediately prior to the Acquisition. Also, stock-based
compensation of HK$229,000 is reversed.
— IV-6 —
2. The amount represents the net cash outflow of (i) cash consideration of C$244,580,395 (equal to HK$1,500,990,000),
estimated based on the entire issued and outstanding share capital of Chariot as at 28 February 2010 and representing
C$0.67 (equivalent to approximately HK$4.79) per Chariot Sale Share, mentioned in the Arrangement Agreement,
pursuant to which the Purchaser conditionally agreed to acquire issued and outstanding share capital of Chariot; (ii) the
estimated professional fees attributable to the Acquisition of HK$34,281,000; (iii) the adjustment on the cash and cash
equivalents of HK$3,617,000 as acquired from the Chariot Group as at 1 April 2009; (iv) the pro forma cash payment
of HK$25,695,000 to the grantees of the options which the Chariot Consideration exceeds their exercise price as
mentioned in note 1 above; and (v) the proceeds from issue of shares (net of issue costs) of HK$74,095,000 by Chariot
to its previous owners as mentioned in note 3 below. The cash consideration is translated into HK$ at the exchange rate
as at 1 April 2009 of C$1 to HK$6.137. The actual cash consideration is subject to adjustment on the account of exercise
of Chariot Options by Former Chariot Optionholders prior to the Acquisition.
3. The amount represents the reversal of proceeds from issue of shares (net of issue costs) by Chariot to its previous owners
assuming such transaction occurred immediately prior to the Acquisition.
4. The Acquisition is to be financed through placement of shares of the Company.
5. The unadjusted information of the Chariot Group is extracted from the accountant’s report as set out in Appendix III to
this Circular and translated into HK$ at the average exchange rate for the six months period ended 30 September 2009
of C$1 to HK$6.855.
— IV-7 —
E. ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION
We report on the unaudited pro forma financial information of China Sci-Tech Holdings Limited
(the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), which has
been prepared by the directors of the Company for illustrative purposes only, to provide information
about how the proposed acquisitions of the entire issued and outstanding share capital of Chariot
Resources Limited (together with its subsidiary and the Group are hereinafter collectively referred to
as the “Enlarged Group”) might have affected the financial information presented, for inclusion in
Appendix IV of the circular dated 30 April 2010 (the “Circular”). The basis of preparation of the
unaudited pro forma financial information is set out on page IV-1 to the Circular.
Respective responsibilities of directors of the Company and reporting accountants
It is the responsibility solely of the directors of the Company to prepare the unaudited pro forma
financial information in accordance with paragraph 29 of Chapter 4 of the Rules Governing the Listing
of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference
to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants
(“HKICPA”).
It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the

Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We
do not accept any responsibility for any reports previously given by us on any financial information
used in the compilation of the unaudited pro forma financial information beyond that owed to those
to whom those reports were addressed by us at the dates of their issue.
Basis of opinion
We conducted our engagement in accordance with Hong Kong Standard on Investment Circular
Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment
Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial
information with source documents, considering the evidence supporting the adjustments and
discussing the unaudited pro forma financial information with the directors of the Company. This
engagement did not involve independent examination of any of the underlying financial information.
We planned and performed our work so as to obtain the information and explanations we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that
the unaudited pro forma financial information has been properly compiled by the directors of the
Company on the basis stated, that such basis is consistent with the accounting policies of the Group
and that the adjustments are appropriate for the purpose of the unaudited pro forma financial
information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.
— IV-8 —
The unaudited pro forma financial information is for illustrative purpose only, based on the
judgements and assumptions of the directors of the Company, and, because of its hypothetical nature,
does not provide any assurance or indication that any event will take place in future and may not be
indicative of:
• the financial position of the Enlarged Group as at 30 September 2009 or any future date;
or
• the results and cash flows of the Enlarged Group for the six months ended 30 September
2009 or any future period.
Opinion
In our opinion:
a) the unaudited pro forma financial information has been properly compiled by the directors
of the Company on the basis stated;
b) such basis is consistent with the accounting policies of the Group; and
c) the adjustments are appropriate for the purposes of the unaudited pro forma financial
information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Hong Kong
30 April 2010
— IV-9 —
APPENDIX V TECHNICAL REPORT ON THE MINA JUSTA PROJECT
China Sci-tech Holdings Limited
Marcona Project ± Mina Justa Definitive

Feasibility Study
Technical Report to Hong Kong Stock Exchange
Document No. 60254-00000-00-002-001
AMEC Minproc
19 April 2010
— V-1 —
Marcona Project ± Mina Justa Definitive Feasibility Study

Approved
Revision Date Description Prepared Reviewed
Study
Sign-off Client
Manager
R.Oliver
A 02/03/10 Issued for review D.Greig D.David B.Grbovic
G.Kalivitis
R.Oliver
D.David
0 04/03/10 Issued to client D.Greig B.Grbovic
G.Kalivitis
D Pether
G.Kalivitis
1 16/03/10 Final Issue D.Greig B.Grbovic
D.Pether
2 11/04/10 Minor Corrections Incorporated D.Greig P,Nofal B.Grbovic
3 15/04/10 Minor Corrections Incorporated D.Greig D.Pether B.Grbovic
4 16/04/10 Minor Corrections Incorporated D.Greig B.Grbovic
5 19/04/10 Reissued for HKSE D.Greig D.Pether B.Grbovic
Item Page Section Comments
* Use after Rev. 0
Rev 5 ± Issued to Client ± 19 Apr 2010
60254-00000-00-002-001
Page i
— V-2 —

Disclaimer
This Technical Report (Report) has been prepared for China Sci-tech Holdings Limited by
AMEC Minproc Limited (AMEC Minproc), based on assumptions as identified throughout the text and
upon information and data supplied by others.
The Report is to be read in the context of the methodology, procedures and techniques used,
AMEC Minproc¶V DVVXPSWLRQV DQG WKH FLUFXPVWDQFHV DQG FRQVWUDLQWV XQGHU ZKLFK WKH 5HSRUW ZDV
written. The Report is to be read as a whole, and sections or parts thereof should therefore not be
read or relied upon out of context.
AMEC Minproc has, in preparing the Report, followed methodology and procedures, and exercised
due care consistent with the intended level of accuracy of the Technical Report, using its professional
judgment and reasonable care. However, no warranty should be implied as to the accuracy of
estimates or other values and all estimates and other values are only valid as at the date of the Report
and will vary thereafter.
Parts of the Report have been prepared or arranged by third party contributors, as detailed in the
document. While the contents of information supplied by others has been generally reviewed by
AMEC Minproc for inclusion into the Report, it has not been fully audited or sought to be verified by
AMEC Minproc. AMEC Minproc is not in a position to, and does not, verify the accuracy or
completeness of, or adopt as its own, the information and data supplied by others and disclaims all
liability, damages or loss with respect to such information and data.
This disclaimer must accompany every copy of this Report, which is an integral document and must be
read in its entirety.
60254-00000-00-002-001
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— V-3 —

Table of Contents
Disclaimer....................................................................................................................... i
1. INTRODUCTION AND PROJECT OVERVIEW .......................................................... 1
2. EXECUTIVE SUMMARY .......................................................................................... 3

2.1 BACKGROUND .................................................................................................................................. 3
2.2 PROJECT SETTING ........................................................................................................................... 3
2.2.1 Location ............................................................................................................................... 3
2.2.2 Topography and Vegetation ................................................................................................ 3
2.2.3 Climate ................................................................................................................................. 5
2.2.4 Local Resources and Infrastructure ..................................................................................... 5
2.3 LAND OWNERSHIP ........................................................................................................................... 5
2.3.1 Mining Concessions ............................................................................................................. 5
2.3.2 Surface Rights ..................................................................................................................... 6
2.3.3 Construction Materials ......................................................................................................... 6
2.4 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT .............................................................. 6
2.4.1 Permitting ............................................................................................................................. 6
2.4.2 ESIA Studies ........................................................................................................................ 6
2.4.3 Community Relations ........................................................................................................... 7
2.4.4 Environmental Management ................................................................................................ 7
2.4.5 Mine Closure ........................................................................................................................ 7
2.5 GEOLOGY, MINERALISATION AND EXPLORATION ...................................................................... 8
2.5.1 Geological Setting ................................................................................................................ 8
2.5.2 Mineralisation and Alteration ............................................................................................... 9
2.5.3 Exploration ........................................................................................................................... 9
2.5.4 Logging, Sampling, Sample Preparation and Analysis ..................................................... 10
2.5.5 Data Verification ................................................................................................................ 10
2.6 MINERAL RESOURCE ESTIMATION.............................................................................................. 11
2.6.1 Introduction ........................................................................................................................ 11
2.6.2 Block Model Generation .................................................................................................... 11
2.6.3 Resource Modelling ........................................................................................................... 11
2.6.4 Mineral Resources ............................................................................................................. 12
2.7 MINING ............................................................................................................................................. 13
2.7.1 Introduction ........................................................................................................................ 13
2.7.2 Pit Optimisation .................................................................................................................. 13
2.7.3 Pit and Dump Design ......................................................................................................... 13
2.7.4 Mineral Reserve ................................................................................................................. 15
2.7.5 Mine and Process Schedules ............................................................................................ 16
2.7.6 Mine Fleet Assessment ..................................................................................................... 19
2.7.7 Mine Operating Cost .......................................................................................................... 20
2.7.8 Mine Capital Cost .............................................................................................................. 21
2.8 METALLURGY AND PROCESSING ................................................................................................ 23
2.8.1 Vat Leach Circuit ............................................................................................................... 23
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2.8.2 Sulphide Ore Processing ................................................................................................... 25

2.9 PLANT ENGINEERING .................................................................................................................... 27
2.9.1 Geotechnical Investigations ............................................................................................... 27
2.9.2 Oxide Plant ........................................................................................................................ 28
2.9.3 Sulphide Ore Plant ............................................................................................................. 32
2.10 INFRASTRUCTURE ......................................................................................................................... 35
2.10.1 Roads................................................................................................................................. 36
2.10.2 Buildings ............................................................................................................................ 36
2.10.3 Construction and Accommodation Camp .......................................................................... 38
2.10.4 Waste Treatment ............................................................................................................... 38
2.10.5 Project Water Supply ......................................................................................................... 38
2.10.6 Power Supply and Distribution .......................................................................................... 40
2.11 WASTE DISPOSAL .......................................................................................................................... 41
2.11.1 Mine and Ripios Waste Dumps ......................................................................................... 41
2.11.2 Magnetite Manto Waste Dump and Low Grade Stockpile Design .................................... 42
2.11.3 Tailings Storage Facility..................................................................................................... 42
2.12 FUEL SUPPLY .................................................................................................................................. 46
2.13 PORT AND ROAD TRANSPORT ..................................................................................................... 46
2.14 PROJECT IMPLEMENTATION ........................................................................................................ 46
2.15 CAPITAL COSTS .............................................................................................................................. 47
2.15.1 Cost Update from 1Q09 to 1Q10 ....................................................................................... 47
2.15.2 Initial Project Capital .......................................................................................................... 48
2.15.3 Sustaining Capital .............................................................................................................. 52
2.16 OPERATING COSTS........................................................................................................................ 52
2.17 MARKETING AND PRODUCT PRICING ......................................................................................... 57
2.17.1 Copper Cathode Sales ...................................................................................................... 57
2.17.2 Copper Concentrates Sales .............................................................................................. 57
2.17.3 Market Review (Copper and Sulphuric Acid)..................................................................... 57
2.17.4 Off-site Operating Costs (Transport, Marketing and Realisation) ..................................... 58
2.18 RISK AND OPPORTUNITY .............................................................................................................. 59
2.18.1 Hazard Identification .......................................................................................................... 59
2.18.2 Technical Risks.................................................................................................................. 59
2.18.3 Commercial Risks .............................................................................................................. 60
2.18.4 Legal Risks to Infrastructure Development........................................................................ 60
2.18.5 Opportunities ..................................................................................................................... 60
2.18.6 Cost and Implementation ................................................................................................... 62
2.19 POST-DFS ACTIVITIES ................................................................................................................... 62
2.19.1 Exploration Drilling ............................................................................................................. 62
2.19.2 Additional Mine Planning ................................................................................................... 62
2.19.3 Alternative Infrastructure Access Routes .......................................................................... 62
2.19.4 Revised Project Schedule.................................................................................................. 63
3. PROJECT RISK SUMMARY ................................................................................... 64

3.1 INTRODUCTION............................................................................................................................... 64
3.2 PROJECT RISK ................................................................................................................................ 64
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3.3 RISK MITIGATION FACTORS ......................................................................................................... 70
4. PROJECT DETAILS ............................................................................................... 73

4.1 PROJECT LOCATION, CLIMATE AND REGIONAL INFRASTRUCTURE ...................................... 73
4.1.1 Location ............................................................................................................................. 73
4.1.2 Topography and Vegetation .............................................................................................. 73
4.1.3 Climate ............................................................................................................................... 73
4.1.4 Local Resources and Infrastructure ................................................................................... 73
4.2 LAND OWNERSHIP ......................................................................................................................... 74
4.2.1 Mining Concessions ........................................................................................................... 74
4.2.2 Surface Rights ................................................................................................................... 76
4.2.3 Construction Materials ....................................................................................................... 80
4.3 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT (ESIA) ................................................ 80
4.3.1 Legal Framework ............................................................................................................... 80
4.3.2 Permitting ........................................................................................................................... 81
4.3.3 ESIA Scope ....................................................................................................................... 81
4.3.4 Baseline Studies ................................................................................................................ 81
4.3.5 Community Relations and Public Consultation.................................................................. 82
4.3.6 Identification and Evaluation of Effects .............................................................................. 83
4.3.7 Environmental Management .............................................................................................. 83
4.3.8 Mine Closure ...................................................................................................................... 84
4.3.9 Socio-economic Conditions ............................................................................................... 84
4.4 GEOLOGY, EXPLORATION AND DATA QUALITY ......................................................................... 85
4.4.1 Geology.............................................................................................................................. 85
4.4.2 Deposit Type ...................................................................................................................... 86
4.4.3 Mineralisation ..................................................................................................................... 86
4.4.4 Exploration History............................................................................................................. 87
4.4.5 Adjacent Properties ........................................................................................................... 88
4.4.6 Drilling ................................................................................................................................ 90
4.4.7 Sampling Method and Approach ....................................................................................... 92
4.4.8 Sample Preparation, Analysis and Security ...................................................................... 93
4.4.9 Data Verification ................................................................................................................ 94
4.5 MINERAL RESOURCE ESTIMATE.................................................................................................. 95
4.5.1 Introduction ........................................................................................................................ 95
4.5.2 Database and Block Model ................................................................................................ 95
4.6 GEOTECHNICAL STUDIES ........................................................................................................... 115
4.6.1 Introduction ...................................................................................................................... 115
4.6.2 Open Pit Geotechnical Design Parameters ..................................................................... 118
4.6.3 Site Geotechnical Investigations: Tailings Storage and Process Facility Areas ............. 120
4.6.4 Borrow Materials .............................................................................................................. 121
4.6.5 Groundwater .................................................................................................................... 121
4.6.6 Site Stability ..................................................................................................................... 121
4.6.7 Seismic Risk Analysis ...................................................................................................... 121
4.7 MINING ........................................................................................................................................... 122
4.7.1 Introduction ...................................................................................................................... 122
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— V-6 —

4.7.2 Pit Optimisation ................................................................................................................ 124

4.7.3 Pit and Dump Design ....................................................................................................... 124
4.7.4 Mineral (Ore) Reserve ..................................................................................................... 127
4.7.5 Mine and Process Schedules .......................................................................................... 127
4.7.6 Mine Fleet Assessment ................................................................................................... 131
4.7.7 Mine Operating Cost ........................................................................................................ 131
4.7.8 Mine Capital Cost ............................................................................................................ 133
4.8 METALLURGY ................................................................................................................................ 135
4.8.1 Oxide Ore ........................................................................................................................ 135
4.8.2 Sulphide Ore .................................................................................................................... 140
4.9 PROCESS PLANT DESIGN ........................................................................................................... 147
4.9.1 Oxide Ore Plant ............................................................................................................... 147
4.9.2 Sulphide Ore Plant ........................................................................................................... 157
4.10 GENERAL INFRASTRUCTURE ..................................................................................................... 163
4.10.1 Access Roads .................................................................................................................. 164
4.10.2 Internal Roads ................................................................................................................. 164
4.10.3 Buildings .......................................................................................................................... 164
4.10.4 Communications .............................................................................................................. 165
4.10.5 Construction and Accommodation Camp ........................................................................ 167
4.10.6 Waste Treatment ............................................................................................................. 167
4.11 WATER SUPPLY SYSTEM ............................................................................................................ 168
4.11.1 Project Water Balance ..................................................................................................... 168
4.11.2 Hydrological Testwork and Studies ................................................................................. 169
4.11.3 Water Supply System ...................................................................................................... 172
4.12 POWER SUPPLY SYSTEM............................................................................................................ 175
4.12.1 Power Supply and Distribution ........................................................................................ 175
4.12.2 Site Power Supply ........................................................................................................... 176
4.12.3 Control Systems .............................................................................................................. 177
4.13 WASTE DISPOSAL ........................................................................................................................ 177
4.13.1 Mine and Ripios Waste Dumps ....................................................................................... 177
4.13.2 Tailings Storage Facility (TSF) ........................................................................................ 181
4.14 DIESEL FUEL SUPPLY .................................................................................................................. 186
4.15 PORT AND TRANSPORT .............................................................................................................. 186
4.15.1 Port Facilities ................................................................................................................... 186
4.15.2 Transport ......................................................................................................................... 189
4.16 PROJECT IMPLEMENTATION PLAN ............................................................................................ 189
4.16.1 Implementation Schedule ................................................................................................ 189
4.16.2 Schedule Risks ................................................................................................................ 193
4.16.3 Post-DFS Developments ................................................................................................. 193
4.16.4 Contracting Strategy ........................................................................................................ 194
4.16.5 Implementation Scope of Work ....................................................................................... 194
4.16.6 Organisation .................................................................................................................... 195
4.16.7 Health, Safety, Environment and Community.................................................................. 195
4.16.8 Project Management........................................................................................................ 196
4.16.9 Project Phases ................................................................................................................. 196
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— V-7 —

4.17 PROJECT OPERATIONAL PLAN .................................................................................................. 200

4.17.1 Operational Labour Levels and Sourcing ........................................................................ 200
4.17.2 Closure/Post-closure Plan ............................................................................................... 201
4.18 CAPITAL COST .............................................................................................................................. 201
4.18.1 Preamble ± Cost Escalation from 1Q09 .......................................................................... 201
4.18.2 Project Capital ................................................................................................................. 202
4.18.3 Estimation Methodology .................................................................................................. 206
4.18.4 Sunk Costs ...................................................................................................................... 207
4.18.5 Sustaining Capital ............................................................................................................ 207
4.19 OPERATING COSTS...................................................................................................................... 208
4.19.1 Mining Cost ...................................................................................................................... 209
4.19.2 Oxide Plant ...................................................................................................................... 209
4.19.3 Sulphide Plant .................................................................................................................. 210
4.19.4 Transport ......................................................................................................................... 210
4.19.5 General and Administration ............................................................................................. 210
4.19.6 Environmental .................................................................................................................. 210
4.20 MARKETING AND PRODUCT PRICING ....................................................................................... 214
4.20.1 Copper Cathode Sales Contract ...................................................................................... 214
4.20.2 Copper Concentrates....................................................................................................... 214
4.20.3 Market Review (Copper and Sulphuric Acid)................................................................... 216
4.20.4 Transport, Marketing and Realisation Costs ................................................................... 217
4.21 DFS RISK ASSESSMENT .............................................................................................................. 218
4.21.1 Hazard Identification ........................................................................................................ 218
4.21.2 Technical Risks................................................................................................................ 220
4.21.3 Commercial Risks ............................................................................................................ 220
4.21.4 Legal Risks to Infrastructure Development...................................................................... 221
4.22 OPPORTUNITIES ........................................................................................................................... 222
4.22.1 Additional Ore Reserves .................................................................................................. 222
4.22.2 Sulphide Ore Processing Only Option ............................................................................. 222
4.22.3 Vat Leach Operation ........................................................................................................ 223
4.22.4 Sulphide Circuit ................................................................................................................ 223
4.22.5 Plant Design .................................................................................................................... 225
4.22.6 Cost and Implementation ................................................................................................. 226
4.23 POST DFS ACTIVITIES.................................................................................................................. 226
4.23.1 Exploration Drilling ........................................................................................................... 226
4.23.2 Additional Mine Planning ................................................................................................. 229
4.23.3 Identification of Alternative Access Routes ..................................................................... 230
4.23.4 Project Schedule .............................................................................................................. 231
5. REFERENCES ...................................................................................................... 232
6. STATEMENT OF CAPABILITY ............................................................................. 233
7. STATEMENT OF INDEPENDENCE....................................................................... 234
8. LIMITATIONS AND CONSENT ............................................................................ 235
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— V-8 —

List of Tables
Table 2.1 Global Classified Resources ................................................................................................... 12

Table 2.2 Global Classified Resources for Silver and Gold .................................................................... 12
Table 2.3 Mina Justa Probable Mineral Reserve (1), (2), (3) ................................................................. 15
Table 2.4 Annual Production Schedule: Mining and Processing ............................................................ 18
Table 2.5 Key Operating Cost Inputs ...................................................................................................... 20
Table 2.6 Equipment Fleet and Hourly Costs ......................................................................................... 20
Table 2.7 Mining: Capital, Sustaining and Replacement Costs (US$ M, July 2009) .............................. 22
Table 2.8 Predictive Metallurgy Summary .............................................................................................. 26
Table 2.9 Oxide Plant DFS Capital Cost Estimate, Summarised by Area (1Q09) ................................. 49
Table 2.10 Oxide Plant DFS Capital Cost Estimate: Escalated to IQ10 .................................................. 49
Table 2.11 Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area (1Q09) ................. 50
Table 2.12 Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area, Escalated to
1Q10 ....................................................................................................................................... 50
Table 2.13 Exchange Rates (1Q09) ......................................................................................................... 51
Table 2.14 Sustaining/Deferred Capital Summary (1Q09) ....................................................................... 52
Table 2.15 Sustaining/Deferred Capital Escalated to 1Q10 ..................................................................... 52
Table 2.16 Key Unit Costs Provided by Marcobre (1Q09) ....................................................................... 53
Table 2.17 Summary of Project Operating Costs (US$/t ROM processed) Model 090821 (1Q09
basis) ...................................................................................................................................... 54
Table 2.18 Summary of Project Operating Costs, Escalated to 1Q10 (US$/t ROM processed) .............. 54
Table 2.19 Summary of Project Closure Costs (US$, 1Q09 Basis) ......................................................... 55
Table 2.20 Summary of Project Closure Costs, Escalated to January 2010 ............................................ 55
Table 2.21 Summary of Forecast Prices and Terms, Q1 2009 US$ terms, 2012 to 2023 Average ........ 58
Table 2.22 Transportation, Marketing and Realisation Costs (1Q09) ...................................................... 59
Table 4.1 Exploration History of the Mina Justa Prospect ...................................................................... 88
Table 4.2 Drilling Conducted on the Mina Justa Prospect ...................................................................... 91
Table 4.3 Details of Block Model Density Assignment by Deposit ......................................................... 97
Table 4.4 Top-cuts Applied: Cut by Domain ........................................................................................... 99
Table 4.5 Variogram Parameters: October 2008 Resource Update..................................................... 103
Table 4.6 Search Volume Parameters .................................................................................................. 104
Table 4.7 Model Validation: Global Mean Grade Comparisons by Domain ......................................... 108
Table 4.8 Mina Justa Prospect Global Classified Resource for Total Cu ............................................. 114
Table 4.9 Global Classified Resource for Ag and Au ........................................................................... 114
Table 4.10 Mina Justa Prospect Global Classified Resource: Sequential Copper Data ........................ 115
Table 4.11 Pit Slope Design Criteria ....................................................................................................... 120
Table 4.12 Probabilistic Analysis: Peak Ground Acceleration in Rock ................................................... 122
Table 4.13 Pit Inventory .......................................................................................................................... 125
Table 4.14 Mina Justa Probable Mineral Reserve (1), (2), (3) ............................................................... 127
Table 4.15 Annual Production Schedule: Mining and Processing .......................................................... 129
Table 4.16 Key Operating Cost Assumptions ......................................................................................... 132
Table 4.17 Equipment Fleet and Hourly Costs ....................................................................................... 132
Table 4.18 Mine Initial and Sustaining Capital Costs: Bare Costs ($M) ................................................. 134
Table 4.19 First Phase Bulk Flotation Testwork: Grade and Mass Pull ................................................. 141
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Table 4.20 Flash Flotation Concentrate Performance ............................................................................ 142

Table 4.21 Predictive Metallurgy Summary ............................................................................................ 144
Table 4.22 Copper Concentrate Specifications by Ore Type ................................................................. 145
Table 4.23 Summary Operations Manning Levels.................................................................................. 201
Table 4.24 Oxide Plant DFS Capital Cost Estimate (1Q09), Summarised by Area ............................... 204
Table 4.25 Oxide Plant DFS Capital Cost Estimate, Escalated to 1Q10 ............................................... 204
Table 4.26 Sulphide Concentrator PFS Capital Cost Estimate (1Q09), Summarised by Area .............. 205
Table 4.27 Sulphide Concentrator PFS Capital Cost Estimate, Escalated to 1Q10 .............................. 205
Table 4.28 Exchange Rates (1Q09) ....................................................................................................... 206
Table 4.29 Sustaining/Deferred Capital Summary (1Q09) ..................................................................... 208
Table 4.30 Total Sustaining/Deferred Capital, Escalated to 1Q10 ......................................................... 208
Table 4.31 Key Unit Costs Provided by Marcobre (1Q09) ..................................................................... 209
Table 4.32 Summary of Project Operating Costs (US$/t ROM Processed) Model 090821 ................... 212
Table 4.33 Summary of Operating Costs (US$/t ROM Process Model 090821, Escalated to IQ10) ..... 212
Table 4.34 Summary of Project Closure Costs....................................................................................... 213
Table 4.35 Summary of Project Closure Costs: Escalated to IQ10 ........................................................ 213
Table 4.36 Summary of Forecast Prices and Terms .............................................................................. 217
Table 4.37 Transportation, Marketing and Realisation Costs (1Q09) .................................................... 218
Table 4.38 DFS and Updated Pit Inventories ......................................................................................... 229
Table 4.39 Pit Optimisation Shell Comparisons ..................................................................................... 230
Table 4.40 Comparison of Distances of Affected Infrastructure Items (km) ........................................... 231
List of Figures
Figure 2.1 Marcona Copper Project Location Plan .................................................................................... 4

Figure 2.2 Ultimate Pit Designs................................................................................................................ 14
Figure 2.3 Waste Storage Areas and Stockpiles ..................................................................................... 15
Figure 2.4 Mining by Pit Stage (Mt) ......................................................................................................... 16
Figure 2.5 Ore Mining by Material Type (Mt) ........................................................................................... 17
Figure 2.6 Long Term Stockpile Inventories (Mt) ..................................................................................... 19
Figure 2.7 Operating Costs by Time (US$/t) ............................................................................................ 21
Figure 2.8 Mina Justa Oxide Circuit Flow Sheet ...................................................................................... 29
Figure 2.9 Plant Layout ............................................................................................................................ 30
Figure 2.10 Mina Justa Sulphide Circuit Flow Sheet ................................................................................. 33
Figure 2.11 Mina Justa Project Plan .......................................................................................................... 37
Figure 2.12 Tailings Storage Facility .......................................................................................................... 44
Figure 4.1 Location of Mina Justa Project ................................................................................................ 75
Figure 4.2 Mina Justa Lot AA-CB ............................................................................................................ 77
Figure 4.3 Mine Justa Prospect Geology Showing Location of Mina Justa (east) and Magnetite
Manto (west) Deposits ............................................................................................................ 85
Figure 4.4 Copper Prospects Identified Within the Marcona Copper Property Area ............................... 90
Figure 4.5 Mina Justa Prospect Drill Hole Location Plan (as at August 2008) ........................................ 92
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— V-10 —

Figure 4.6 Example Variograms and Variogram Models for Oxide Domains in the Mina Justa
Prospect ................................................................................................................................ 101
Figure 4.7 Example Variograms and Variogram Models for Selected Transition and Sulphide
Domains in the Mina Justa Prospect .................................................................................... 102
Figure 4.8 W-E Section through Mina Justa Prospect, Coded by Resource Category ......................... 106
Figure 4.9 Comparison of Grade Trends between Block Model and Input Drill Hole Data ................... 109
Figure 4.10 Local Grid West-East Cross-Sections through the Mina Justa Prospect Resource
Model, Colour Coded According to Total Cu ........................................................................ 110
Figure 4.13 Geotechnical Plan: West Sector Plant .................................................................................. 116
Figure 4.14 Geotechnical Plan: East Sector Plant ................................................................................... 117
Figure 4.15 Final Pit and Dump Layout Plan ........................................................................................... 123
Figure 4.16 Ultimate Pit Designs.............................................................................................................. 125
Figure 4.17 Waste Storage Areas and Stockpiles ................................................................................... 126
Figure 4.18 Total Mining Tonnage by Pit Stage (Mt) ............................................................................... 128
Figure 4.19 Ore Mining Tonnage by Material Type (Mt) .......................................................................... 128
Figure 4.20 Vat and Float Ore Processing (Mt) ....................................................................................... 130
Figure 4.21 Long Term Stockpile Inventories (Mt) ................................................................................... 130
Figure 4.22 Operating Costs per Tonne by Time (US$/t) ........................................................................ 133
Figure 4.23 Mina Justa Oxide Circuit Flow Sheet .................................................................................... 149
Figure 4.24 Plant Layout .......................................................................................................................... 151
Figure 4.25 Vat Leaching Layout ............................................................................................................. 153
Figure 4.26 Mina Justa Sulphide Circuit Flow Sheet ............................................................................... 158
Figure 4.27 Concentrator Layout ............................................................................................................. 160
Figure 4.28 Mina Justa Project Plan ........................................................................................................ 166
Figure 4.29 Locations MPA-1 Lomas, MPA-2 Jahuay and Proposed Test-Production Wells ................. 171
Figure 4.30 Ripios and Mine Waste Dumps ............................................................................................ 178
Figure 4.31 Tailings Storage Facility ........................................................................................................ 182
Figure 4.32 Tailings Dam ......................................................................................................................... 183
Figure 4.33 Mina Justa Project: Oxide Project Implementation Schedule (DFS Version) ....................... 191
Figure 4.34 Mina Justa Project: Sulphide Project Implementation Schedule (DFS Version) .................. 192
Figure 4.35 Drill Hold Location Plan ± Recent Exploration Drilling .......................................................... 228
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— V-11 —

1. INTRODUCTION AND PROJECT OVERVIEW
The Marcona Copper Property, located approximately 400 km southeast of Lima in the province of
Nazca, department of Ica, is owned by Marcobre S.A.C. (Marcobre), a private closed corporation with
limited liability existing under the laws of Peru. Marcobre was incorporated in Peru in 2004.
Chariot Resources Limited (Chariot) indirectly owns 70% of Marcobre, while Korea Resources
Corporation (Korea Resources) and LS-Nikko Copper Inc. (LS-Nikko) indirectly own 30%. Chariot,
Korea Resources, LS-Nikko, their respective shareholder entities, and Marcobre have entered into a
shareholders agreement with respect to the corporate governance of Marcobre and the ownership,
development and operation of the Marcona Copper Property.
China Sci-tech Holdings Limited (China Sci-tech) has recently concluded an exclusivity agreement with
Chariot to investigate the purchase of Chariot and acquire its 70% interest in the Marcona Copper
Property.
The Marcona Copper Property consists of a number of iron oxide-copper (silver-gold) deposits and
prospects, the most advanced of which is the Mina Justa prospect, which has been the subject of a
Definitive Feasibility Study (DFS), completed by GRD Minproc Limited ± now AMEC Minproc Limited
(AMEC Minproc), with assistance from other consultants, in July 2009. The DFS covers the whole
Project combining the mine, process plant, metals production facility and associated infrastructural
facilities proposed for the Project.
The mineralisation to be exploited by the Mina Justa Project is contained in two deposits, the Main or
Mina Justa deposit and the much smaller Magnetite Manto deposit, which are separated by 1 km of
barren ground.
The Mina Justa Project is designed to process 12 Mt/a of Oxide ore by crushing, vat leaching, solvent
extraction, and electrowinning to produce up to 52 000 t/a of cathode copper. The Project will be
expanded during operating Year 2 (quarter 7) to include a 5 Mt/a concentrator to treat copper sulphide
ore underlying the oxide ore in certain portions of the Mina Justa deposit. The Concentrator plant
design is developed to Prefeasibility Study (PFS) level.
Additional studies and other activities since completion of the DFS comprise:
x Continued drilling in the vicinity of the Mina Justa Project, with 125 additional holes and extensions
to existing holes added to the database.
x Mining studies ± assessment of potential increases in the pit inventory and project life.
x Preliminary studies into re-routing of certain infrastructure elements to avoid possible conflict with
expansion plans on a neighbouring mining property.
x Project implementation schedule revision: the start date for the Project has been deferred to
1 October, 2010.
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x Progress in the Environmental and Social Impact Assessment (ESIA) application, which was
submitted in November 2009, approved for PuEOLF GLVWULEXWLRQ E\ 3HUX¶V 0LQLVWU\ RI (QHUJ\ DQG
Mines. Public workshops were then conducted in the town of San Juan de Marcona on 10
December 2009 and a full public hearing in the community on 8 January 2010.
Through the intermediary of Chariot, AMEC Minproc has been commissioned by China Sci-tech
Holdings Limited to prepare a Technical Report comprising a technical review and summary of the DFS
and subsequent work completed on the Mina Justa Project (the Project), suitable for inclusion as
Appendix V to a Hong Kong listing document. This Technical Report covers the geology, exploration,
resource and reserve estimation, mining, processing, infrastructure, environmental and social aspects
of the Project, life of mine production plans, project implementation, capital and operating costs and
project risks and opportunities.
AMEC Minproc has been involved continuously with the Mina Justa Project since 2005, and has
completed a scoping study, option studies and the DFS. Consequently, it is well acquainted with the
Project, infrastructure requirements and environmental issues affecting the Project. AMEC Minproc
geologists, mining engineers, process plant and project implementation engineers have visited the site
several times over that period. In addition, a major Peruvian group has provided engineering services
and capital and operating cost estimates for power, water supply, accommodation, port and other
transport infrastructure.
The currency used in the Technical Report is United States dollars (US$) unless otherwise stated.
Resources and Reserves have been developed and are in accordance with the regulations and
guidelines of Canadian National Instrument 43-101 (NI43-101). AMEC Minproc considers that the
Resources and Reserves are also in accordance with the JORC Code, December 2004.1
AMEC Minproc /LPLWHG¶VDGGUHVVLV/HYHO6W*HRUJHV7HUUDFH3HUWK:HVWHUQ$XVWUDOLD

Australia.
AMEC Minproc is a subsidiary of AMEC Limited, an international supplier of consultancy, engineering

DQG SURMHFW PDQDJHPHQW VHUYLFHV WR WKH ZRUOG¶V QDWXUDO UHVRXUFHV QXFOHDU FOHDQ HQHUJ\ ZDWHU DQG
environmental sectors, with its head office in London, UK.
This Technical Report is provided to the Directors of China Sci-tech for the purpose of assisting them in
evaluating the Mina Justa Project. The Technical Report should not be used or relied upon by other
parties. Neither the whole nor any part of this Technical Report nor any reference thereto may be
included in, or with, or attached to any documents or used for any purpose without AMEC Minproc¶V
written consent as to the form and context in which it appears.
1
Australasian Code for Reporting of Mineral Resources and Ore Reserves prepared by the Joint Committee of the
Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia
60254-00000-00-002-001
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2. EXECUTIVE SUMMARY
2.1 BACKGROUND
AMEC Minproc completed a DFS in July 2009, with the final DFS report being issued in August 2009,
regarding the development of the Mina Justa Project. Since that time, minor additional work has been
completed in revising the open pit optimisation and mine designs to match the latest operating costs,
and revising the project development schedule to reflect the latest development strategy. Chariot has
provided additional information regarding the progress in finalising the ESIA, and has released results
of further exploration drilling in the vicinity of the deposits.
Alternative routes for 220 kV power, fresh water and road access to site have been identified at a
preliminary level, in order to avoid potential conflict with an adjacent mine operator over the proposed
DFS routes. The new routes are considered viable and the changes are relatively minor, with limited
cost implications, but geotechnical, archeological and engineering studies have not been completed to
provide new cost estimates.
At China Sci-tech¶VUHTXHVWAMEC Minproc has compiled this Technical Report incorporating results of
the DFS and subsequent activities, in accordance with Rule 18.09 of the Hong Kong Stock Exchange
Listing Rules.
Section 2 provides a summary of the findings of the technical review; Section 3 is a review of technical
risk and an indication of mitigation activities that are or could be contemplated; details of all technical
areas of the Project are found in Section 4; Section 5 provides a list of key references, and Section 6
provides a summary of the qualification of the technical reviewers, Section 7 is a statement of
independence and Section 8 outlines limitations and consents accompanying the document.
2.2 PROJECT SETTING
2.2.1 Location
The Mina Justa Project is located approximately 400 km southeast of Lima within the Nazca Province,
Ica Department of the southern Peruvian coastal belt (Figure 2.1). The Project lies approximately
25 km north of the coastal town of San Juan de Marcona and 35 km south-southwest of the town of
Nazca.
2.2.2 Topography and Vegetation
The Project is located within the coastal plain area of Peru approximately 20 to 30 km from the Pacific
Ocean. The topography is relatively subdued, ranging in elevation from 630 to 880 metres above sea
level (masl), although the eastern flank of the Mina Justa deposit is marked by a north-northwest
trending, steep, fault-bounded scarp.
Due to the desert climate, vegetation on the property is almost non-existent. None of the property is
used for agricultural purposes.
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Figure 2.1
Marcona Copper Project Location Plan
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2.2.3 Climate
The climate is arid and windy. Annual rainfall averages approximately 27 mm and the annual mean
temperature is 19°C. Average monthly maximum temperatures range between 22°C and 28°C, and
minimum monthly average temperatures range between 15ºC and 26°C. Relative humidity is generally
65-85%. During the winter months (June to August), thick fogs are common.
2.2.4 Local Resources and Infrastructure
Limited infrastructure exists at the small town of San Juan de Marcona, which was developed to
support large-scale mining of the Marcona Iron ore deposits by Shougang Hierro Peru S.A.A.
(Shougang). The town has a population estimated at 11 500 of which nearly 1800 are employed by
Shougang. The other neighbouring towns of Nazca and Vista Alegre have a combined population of
approximately 20 000.
The region can provide the basic goods, services, medical care and some accommodation to assist in
project development, as well as meet some labour requirements for various stages of exploration and
development projects.
6DQ-XDQGH0DUFRQDDQG6KRXJDQJ¶VPLQLQJRSHUDWLRQVDUHFRQQHFWHGWRWKH1DWLRQDO3Rwer Grid. A
220 kV powerline passes within 10 km of the Mina Justa Project.
There is no surface water on the Project site; sub-surface water has been intersected at a depth of
450 m at the Mina Justa GHSRVLW :DWHU IRU 6KRXJDQJ¶V RSHUDWLRQV DQG WKH 6Dn Juan de Marcona
community is obtained from the Jahuay aquifer located 30 km southeast of the Mina Justa Project.
The nearest suitable ports exist at San Martin, 250 km by road to the north, and Matarani, 550 km to
the south.
Cellular phone coverage is available to a limited extent in the Project area, but the grid is expanding.
Communications between site and Lima currently are via satellite telephone.
2.3 LAND OWNERSHIP
2.3.1 Mining Concessions
Marcobre is currently the sole and registered titleholder of the TA1 mining concession, which covers the
Mina Justa Project as well as a group of 45 other mining concessions abutting the TA1 concession, for
a total landholding of 32 889 ha.
All concessions are in good standing and free of any liens and mortgages except for a first and
preferential mortgage over the TA1 concession amounting to US$27.6 M granted by Marcobre in favour
of the previous owners, Shougang and Rio Tinto Exploration (Rio Tinto) in order to guarantee payment
obligations in connection with the transfer of the TA1 concession.
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Based on the resources at Mina Justa and Magnetite Manto covered by the DFS, a contingent payment
totalling $3 M will be payable following a production decision. Upon making such payment, the
PRUWJDJHRQWKH7$PLQLQJFRQFHVVLRQDQGWKHSOHGJHRI0DUFREUH¶VVKDUHVZRXOGEHGLVFKDUJHG
2.3.2 Surface Rights
Surface rights are required for the processing facilities, open pits, waste dumps, and tailings and ripios
storage areas. In addition, other surface rights such as rights-of-way and easements for the access
road, power lines and water pipeline are required.
Marcobre has initiated a procedure to acquire these rights and estimates that the total cost of
acquiring the surface rights and easements will be approximately $3.1 M.
2.3.3 Construction Materials
Separate industrial minerals mining concessions are required to access materials on site for
construction purposes, although the project can also make use of waste rock from the Mina Justa and
Magnetite Manto pits where these are suitable. Studies have identified sites with materials suitable for
construction elsewhere on the TA1 concession. The relevant concessions will be applied for in due
course.
2.4 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT
The ESIA for the Mina Justa Project, which was submitted in November 2009, forms the principal
mechanism for identifying baseline conditions and evaluating the impact of the project. Under current
legislation, the Ministry of Energy and Mines (MINEM) is the responsible environmental authority for
approving the ESIA and authorising project development. The ESIA has been designed to satisfy the
requirements of Peruvian Legislation and to comply with internationally accepted guidelines for social
and environmental protection, including those followed by such organisations as the World Bank and
International Finance Corporation (IFC) and followed by commercial banks through the Equator
Principles.
2.4.1 Permitting
The MINEM central office in Lima is in charge of conducting the ESIA evaluation process and issuing
permits, although other agencies may be involved in the evaluation of the ESIA. The evaluation
process also includes making the ESIA availabe to affected local communities for review and comment,
publication of findings by the agencies, a period for the applicant to respond, and then a period of final
evaluation before approval and issuance of a concession to operate.
2.4.2 ESIA Studies
Baseline studies indicate that Mina Justa Project site conditions are typical of a desert, with no surface
water, saline and poor soils, and the area is judged to be generally unsuitable for the development of
any another activity outside mining. Surveys have recorded scanty presence of desert flora and fauna,
which are represented throughout the San Juan de Marcona district.
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No communities or population centres occur inside the zone of direct environmental influence of the
Project. Some archaeological vestiges have been recorded, and these will have to receive the
treatment that the legislation dictates in order to delimit or preserve them as required.
Anticipated environmental and socio-economic impacts from the proposed project were identified. The
main effects from the construction, operating and closure stages are related mainly to dust and water,
and corresponding mitigation measures will be readily implemented.
Given the presence to the north of the Project of the San Fernando Zone, MINEM is required to seek
the opinion of the National Institute of Natural Resources, prior to issung permits. The ESIA
FRQVXOWDQW¶V evaluation of the impacts of the Project concluded that there will be no direct or indirect
influence on the San Fernando Zone, and no complications are expected in obtaining the permissions
of that authority.
In addition, it is necessary to obtain agreement to the results of the archaeological evaluation from the
National Institute of Culture, which is authorised to issue the required Certificate of Nonexistence of
Archaeological Remains.
2.4.3 Community Relations
In order to optimise relations between the community and the Project, an integrated community
relations program has been implemented by Marcobre, including the establishment of an office in San
Juan de Marcona to establish ties with community leaders and enhance understanding of the social
conditions of the neighbouring populations, their concerns and hopes for development.
Information about the Project has been shared with the community at public meetings, and community
members have been involved in the baseline studies. The local population has been fully briefed
regarding the proposed operation, and have proven to be very supportive. Concerns exist regarding the
influx of immigrant labour during the construction and operations phases, and Marcobre intends to
provide significant skills training to allow the local population to participate.
2.4.4 Environmental Management
Marcobre has committed to instituting best practices for the environmental management of the Project.
The position of Environmental Manager, responsible for the control and environmental management of
operations will be established, and will report directly to the Operations Manager.
2.4.5 Mine Closure
Legislation requires that every operation must have an approved closure plan and financial guarantees
of ability to cover the estimated closure costs. The closure plan must be elaborated within a year
following the approval of the ESIA, and it must be approved by MINEM prior to receipt of permission to
operate.
A conceptual closure plan has been developed, with the objective of ensuring the physical and
chemical stability of the diverse components of the project after closure and returning the environment
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to a condition similar to that found before implementation of the Project. Principal closure activities
relate to the reduction in slopes of waste dumps, in order to assure physical stability, and covering
potential acid generating material with inert material.
In addition, the closure plan confirms the demolition of infrastructure and leveling of the involved areas.
Finally, and depending on the requirements of Government regulators and the local communities, it is
possible that ownership of some of the infrastructure, eg, the water pipeline and/or the electrical
transmission line, might be transferred to the community for its use post-closure.
2.5 GEOLOGY, MINERALISATION AND EXPLORATION
2.5.1 Geological Setting
The Marcona Copper Project is located in the Coastal Belt of Peru, a northwest trending linear belt
where the Nazca Plate subducts beneath the South American Plate, forming an active continental
margin.
The district geology comprises Precambrian basement unconformably overlain by Neoproterozoic and
Phanerozoic sedimentary rocks. Monzogranite, granodiorite and gabbro-diorite rocks of the San
Nicolas batholith (dated at approximately 425 Ma) intrude pre-Mesozoic rocks. The pre-Mesozoic rocks
are unconformably overlain by a series of volcano-sedimentary sequences ranging in age from late
Triassic to Holocene. The volcano-sedimentary rock sequences are intruded by porphyritic andesite
G\NHV VLOOV DQG SOXJV RI WKH 7XQJD $QGHVLWH DOVR WHUPHG ³RFRLWH´ DQG LQ WKH HDVWHUQ SDUWV RI WKH
district, by granitoid plutons of the circa 109 Ma Coastal Batholith. Tertiary age shallow water marine
sediments and Quaternary age marine terrace deposits unconformably overlie the volcano-plutonic arc
succession.
The Mina Justa Prospect comprises two deposits, the Mina Justa and Magnetite Manto deposits, which
are hosted by the Jurassic Upper Rio Grande Formation, dominated by andesitic lavas and
pyroclastics, intercalated with minor sandstone, siltstone and carbonate units. This
volcano-sedimentary package displays a prolonged deformation history that includes a southeast
verging overturned folding stage, followed by a shear faulting stage that generated curvilinear fault
systems. The youngest deformation stage is normal block faulting along northwest trending structures
that are closely associated with late stage emplacement of ocoite dykes.
Recent work suggests that the Mina Justa Prospect is significantly younger (approximately 104 Ma to
95 Ma) than, and geochemically distinct from, the neighbouring Marcona iron deposits (approximately
162 Ma to 156 Ma). The Mina Justa Prospect is now interpreted as a hydrothermal deposit formed by
the incursion of exotic and probably evaporite-sourced brines that were expelled from an adjacent
sedimentary basin. The recent findings support the classification of the Mina Justa Prospect as an Iron
Oxide Copper Gold (IOCG) deposit.
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2.5.2 Mineralisation and Alteration
The highest-grade copper sulphide mineralisation occurs with massive, brecciated, elongated
magnetite bodies, the location of which appears to be controlled primarily by a northeast striking and
southeast dipping system of faults (the Mina Justa fault system). The mineralised bodies have
subsequently been dislocated by northwest striking and northeast dipping faults, and by associated
ocoite dykes, the latter ranging from less than a few metres to 70 m in thickness (typically 15 m to 30 m
in thickness).
Seven stages of hydrothermal alteration have been recognised, with the main copper sulphide stage
being relatively late, replacing precursor magnetite mineralisation in stratabound and structurally
controlled ore bodies. Earlier alteration included prominent albite-actinolite and magnetite alteration
stages.
Weathering has produced supergene copper oxide mineralisation (predominantly atacamite and
chrysocolla), hosted mainly in rock fractures, to an average depth of about 180 m, although the depth
influenced by the degree of faulting.
The Mina Justa deposit extends over an area of approximately 2100 m north-south by approximately
1500 m east-west, and ranges in thickness from a few metres up to 150 m. The mineralisation is at or
FORVHWRWKHVXUIDFHLQWKHQRUWKHUQDQGZHVWHUQSDUWVRIWKHGHSRVLWWKH³1RUWKHUQ2[LGHV´³:HVWHUQ
([WHQVLRQV´ DQG ³&X´ ]RQHV), extending to depths approaching 550 m in the southeastern parts of
WKH GHSRVLW WKH ³6XOSKLGH ([WHQVLRQV´ ]RQH 7KH PLQHUDOLVHG ERGLHV DUH JHQHUDOO\ IODW-lying in the
upper parts of the deposit, while, at depth, the mineralisation follows the curvilinear faults, and
resembles a flat bowl-like structure with an overall shallow plunge of approximately 15° to the
southeast. The sulphide mineralisation at depth is zoned: a central core of bornite and chalcocite is
surrounded by predominantly chalcopyrite mineralisation. A narrow transition zone separates the
sulphide mineralisation from the overlying oxide mineralisation.
The Magnetite Manto deposit strikes approximately northeast-southwest, with a moderate dip of
approximately 60o to the northwest. The tabular body is some 700 m long by 350 m wide, ranging
between 25 m and 35 m in thickness. The Magnetite Manto deposit is characterised by copper oxide
mineralisation.
2.5.3 Exploration
Although surface mapping, geophysical and geochemical exploration have contributed, drilling has
been the dominant tool used in the exploration of the Mina Justa Prospect. Prior to 2005, Rio Tinto
completed a total of 102 drill holes (31 025 m) at the Mina Justa Prospect. From 2005 to 2008,
Marcobre drilled a further 227 844 m in 938 drill holes on the Mina Justa prospect, and 28 607 m in 137
drill holes on the Magnetite Manto deposit. Drill hole spacing is now between 25 m and 50 m apart on
both deposits. RC drilling has been the predominant method used.
Drill hole collars have been professionally surveyed, and down-hole surveys undertaken using
gyroscopic instruments.
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2.5.4 Logging, Sampling, Sample Preparation and Analysis
Drill core was logged for geotechnical and geological features prior to being marked for sampling. Core
sample intervals were generally 1 m for mineralised core and 2 m for non-mineralised core, although
major geological contacts have been honoured. Drill core sample recovery is generally better than
95%.
Density measurements were conducted on selected core intervals after logging and before sampling.
The conventional weight-in-water-weight-in-air technique was used.
RC chips were collected at regular intervals and logged. Samples were collected over 2 m intervals,
weighed and riffle split to approximately 10 kg sub-samples. All samples were dry: weighing indicated
an acceptable average recovery of over 85%.
RC samples were dried and crushed to 95% passing 10 mesh. The crushed samples were riffle split to
250 g, and pulverised to 95% passing 200 mesh. Sample pulps were submitted to the SGS laboratory
in Lima for analysis. Diamond core was sawn and half-core samples prepared in the same manner.
The SGS laboratory in Lima was used as the primary laboratory for all Marcobre drilling samples.
Samples were analysed for total Cu (CuT) and sequential leaching (CuSeq ± sulphuric acid extractable,
cyanide extractable and residual Cu2) with an AAS finish. Sulphide and transition zone samples were
also analysed for Ag and other elements by ICP-OES analysis, while Au analyses were carried out
using a 30 g fire assay with an AAS finish.
0DUFREUH¶VVLWHVHFXULW\LQFOXGHVDSULYDWHURDGHQWUDQFHJDWHDQGDURXQG-the-clock site-based security

guards. The SGS site-based preparation facility is securely locked. SGS takes custody of all samples
on site, once they have been appropriately bagged and labelled. Following sample preparation, sample
pulps are transported by road (in the care of SGS) to SGS Lima for analysis. The SGS laboratory in
Lima is completely surrounded by a security wall and all access is security controlled.
2.5.5 Data Verification
Marcobre established a quality assurance and quality control (QAQC) programme in 2005 to monitor
SGS assay quality. The QAQC programme established protocols for insertion of standard reference
materials, blank and duplicate samples at a rate of approximately 10%. In addition, 5% of the drill hole
samples were submitted to an external laboratory for repeat analysis.
Analytical results were continually monitored by independent consultants, who evaluated accuracy,
sample contamination, precision and bias on a routine basis.
Independent review of drilling, sampling, sample preparation and assaying has been undertaken
SHULRGLFDOO\IURPZKLFKLWKDVEHHQFRQFOXGHGWKDW0DUFREUH¶s drill hole data is of adequate quality to
support the generation of mineral resource and mineral reserve estimates to DFS standard. Similar
conclusions have previously been reached for Rio Tinto¶VGDWD
2
CuSS or Cu_SS, CuCN or Cu_CN and CuR or Cu_R, respectively
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2.6 MINERAL RESOURCE ESTIMATION
2.6.1 Introduction
Snowden Mining Industry Consultants (Snowden) has prepared an updated resource estimate for the
Mina Justa and Magnetite Manto deposits based on all drilling data available as of May 23, 2008
(October 2008 resource). This forms the basis for the Mina Justa DFS completed by AMEC Minproc.
2.6.2 Block Model Generation
A three dimensional (3-D) geological model of lithology, mineralisation, structure and ocoite dyke
LQWUXVLYH XQLWV ZDV GHYHORSHG E\ $WWLFXV DQG $VVRFLDWHV LQ /LPD LQ FRQMXQFWLRQ ZLWK 0DUFREUH¶V
Lima-based geologists. The mineralisation outlines roughly corresponded to 0.2% CuT, although
significant internal waste was incorporated in some areas, and isolated zones of >0.2% material were
excluded. Modelled solids and surfaces were verified and used, in conjunction with the validated drill
hole database, in the generation of the October 2008 mineral resource estimate.
2.6.3 Resource Modelling
Assay (CuT, CuSeq, Ag and Au), lithological and mineralogical desurveyed drill hole files were created
from the validated database. The drill hole data were then domain-coded according to mineralisation
domains, prior to being composited to 2 m. Grade capping (top-cuts) was applied to the assay data,
where required, to minimise the influence of extreme values in grade estimation. Variography was
conducted on the assay variables in the various domains to model mineralisation continuity for grade
estimation.
A sub-celled, and appropriately coded (deposit, lithological unit, weathering zone and mineralisation
domain) block model was generated using Datamine Studio 3 mining software. Average densities were
determined for different lithological units in the oxide, transition and sulphide zones for each deposit,
and applied to the relevant blocks as per the deposit, lithological and weathering codes.
CuT, Cu_SS, Cu_CN, Cu_R, Ag and Au grades were estimated into the block model using Ordinary
Kriging with an expanding search. Alphanumeric mineralogical data, were estimated into the block
model using the Nearest Neighbour technique.
Block model grade estimates were reviewed in detail following completion of the estimation process, to
ensure that the estimation process was valid. Sequential copper data were estimated into blocks using
variogram and search volume parameters defined for total copper to honour ratios between the
variables and the relationship CuT = Cu_SS + Cu_CN + Cu_R as far as possible. Following estimation,
the sequential copper data were normalised to the total copper data on a block-by-block basis in order
to retain the ratios between the three sequential copper components. Detailed validation checks were
conducted on the normalised sequential copper data to ensure that this process worked correctly. In
general, only minor adjustments were made to the individual sequential copper components during the
normalisation process.
The Indicated resource category portion of the resource model was validated by detailed comparison
between the block model and input (composite) data using visual and statistical methods. From this,
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Snowden determined that the October 2008 resource model was valid, with the block estimates
honouring the input drill hole data.
Resource model classification was completed by Snowden in accordance with CIM3 (2005) definitions
and guidelines, taking account of data quality, geological and grade continuity, spatial representivity of
density data, kriging efficiency and drill hole spacing. Total copper, sequential copper, silver and gold
data were judged to be of sufficient quality and sufficiently well spaced to support Indicated and Inferred
Mineral Resource classifications, but the mineralogical data is considered subjective and was not
classified.
2.6.4 Mineral Resources
The mineral resources at CuT cut-offs of 0.2%, 0.3% and 0.4% are summarised in Table 2.1. Detailed
reporting by domain and over a range of cut-off grades is included in Section 4.5.2.7.
The Mineral Resources are as reported by Snowden in October 2008, and reviewed by AMEC Minproc
as part of this technical report. No mining has occurred subsequently to deplete the resource.
Table 2.1
Global Classified Resources
Cut-off grade Million CuT Cu_SS Cu_CN Cu_R Contained Cu
(CuT%) Tonnes (%) (%) (%) (%) (Million lb)
Indicated
0.2 411.3 0.67 0.26 0.19 0.22 6070
0.3 336.8 0.76 0.29 0.23 0.25 5650
0.4 246.9 0.91 0.31 0.29 0.30 4960
Inferred
0.2 77.5 0.72 0.08 0.12 0.53 1240
0.3 64.6 0.82 0.08 0.14 0.60 1170
0.4 50.9 0.94 0.08 0.15 0.72 1060
Silver and gold grades are reported only for the transition and sulphide zones (Table 2.2).
Table 2.2
Global Classified Resources for Silver and Gold
Tonnage Ag Au Contained Ag Contained Au
(Mt) (g/t) ppb (oz) (oz)
Indicated Resource
161.8 8.75 55.95 45 530 000 291 000
Inferred Resource
58.3 5.03 79.22 9 430 000 148 500
3
Canadian Institute of Mining and Metallurgy
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It should be noted when considering the grade and tonnage estimates, that mineral resources that are
not mineral reserves do not have demonstrated economic viability.
2.7 MINING
2.7.1 Introduction
The deposits are located at relatively low altitude, in an arid area with moderate topographic relief.
Rock strengths are low to moderate. There is no groundwater and insignificant rainfall. Consequently,
open pit mining should be routine and relatively low cost. Some difficulties will arise from the presence
of barren dykes that are pervasive throughout the mineralisation. In order to minimise dilution and
mining losses, selective mining on 10 m benches (5 m mining flitches) is specified, using excavators in
backhoe configuration.
2.7.2 Pit Optimisation
Pit optimisation of the mining model (Indicated mineralisation only) was carried out using Whittle Four-X
software, based on a regularised model with 10 x 10 x 5 m blocks which was selected following a study
of the impact of regularisation at different block sizes. Optimisation input parameters were based on
then-current information, including overall slope input (41° to 44°) from Knight Piésold and a copper
price of $1.65/lb provided by Marcobre. Revenue was received from both Vat (Oxide) and Concentrator
(Sulphide) ore processing streams. The optimisation was constrained to prevent mining on the
adjacent Shougang property. A number of different scenarios and sensitivities were produced and
shells were selected to form the basis for the ultimate and staged pit designs.
2.7.3 Pit and Dump Design
Ultimate and staged pit designs were created from the selected optimisation shells, incorporating
access ramps.
Pit slope geotechnical investigations were carried out by Knight Piésold based on 15 geotechnical holes
plus geotechnical data gathered from logging of another 17 exploration holes. Pit slope stability is most
influenced by major structures and block faulting, with four major fault systems identified in the pit area.
A number of pit design sectors were established to group areas of the proposed pits with similar
geometric, geological and rock mass quality characteristics. Stability analysis results indicate that a
bench face angle of 65o to 70o is expected to be achievable for the Mina Justa pits. A 20 m high
double-benching configuration is recommended for pit development. Recommended inter-ramp slope
angles range from 45o to 50o depending on the design sector.
Access was generally by a single ramp of 30 m width at a maximum grade of 10%. Ramps were
narrowed to one-way at depth to minimise associated waste. There are four discrete pits, of which two
are developed in stages to defer waste stripping and improve ore presentation.
The ultimate pit designs are shown in Figure 2.2.
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Figure 2.2
Ultimate Pit Designs
The Project will generate approximately 402.5 Mt of waste rock, of which 383 Mt will be placed in the
Main waste dump, 14 Mt in the Magnetite Manto waste dump and the remaining 5.5 Mt, comprising non
potentially acid generating (PAG) material, will be used for construction of the tailings dam. Waste
storage areas and stockpiles are illustrated in Figure 2.3.
The Main waste dump is located northeast of the Main pit and it also serves as the containment
structure for ripios storage. The ripios dump, which has been designed to have a capacity of
approximately 110 Mt, will be surrounded by mine waste rock to maintain adequate physical stability of
the material.
A separate dump is provided for Magnetite Manto pit waste, some of which will be used for tailing dam
embankment construction. Some mine waste will be directed to enlarge the ROM pad to provide a
suitable configuration for dumping, storing and rehandling of crusher feed. Opportunistic backfill of
waste into the Northern Oxide pit may be feasible near the end of the mine life.
The small quantities of PAG waste rock will be dumped, then contained and covered with non-PAG
material in the Main waste dump.
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A large, long-term stockpile is allowed for excess, lower grade vat leach feed (LGO) that accumulates
during the early years of mining.
Figure 2.3
Waste Storage Areas and Stockpiles
2.7.4 Mineral Reserve
The Mina Justa Project Mineral Reserve is that portion of the Indicated Resource that is contained
within the ultimate pits and has recoverable metal values that allow economic treatment. The Mineral
Reserve, tabulated by process plant feed type, is identified in Table 2.3.
Table 2.3
Mina Justa Probable Mineral Reserve (1), (2), (3)
Classification Tonnes CuT CuSS Ag
(Mt) (%) (%) (ppm)
Vat Feed 114.6 0.56 0.46 -
Concentrator Feed 48.8 1.37 - 14.1
Total 163.4 0.80 - -
(1) Reported according to NI 43-101 reporting guidelines, QP is Ross Oliver, an employee of AMEC Minproc.
(2) No Measured resource so no Proven Mineral Reserve.
(3) Mineral Reserve cut-off for both vat and concentrator feed is based on a Net Smelter Return calculation and a
copper price of $1.65/lb.
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The Mineral Reserve was determined by AMEC Minproc as of June 2009, as part of the DFS. The
Mineral Reserve is based on the most recent resource model, which was developed by Snowden in
October 2008, and reviewed by AMEC Minproc as part of this technical report. No mining has occurred
subsequently to deplete the Mineral Reserve.
2.7.5 Mine and Process Schedules
Bench reporting of reserve information was performed for the pit stages and imported into a
purpose-built mine scheduling spreadsheet. A variety of mining rates and vat leach cathode production
profiles were investigated. A final mining rate of 60 Mt/a was adopted as a sustainable rate that will
bring forward the mining and treatment of higher grade concentrator feed, and also sustain a cathode
production rate of 52 000 t/a of copper.
Mine and process scheduling was carried out on a monthly basis for the pre-strip period (Yr-1) and first
year of production, quarterly for years 2 through 5 and annually thereafter. An annual production
schedule is provided in Table 2.4.
Figure 2.4 illustrates the mining production rate by pit stage over the mine life, while Figure 2.5 shows
the ore types mined.
Figure 2.4
Mining by Pit Stage (Mt)
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Figure 2.5
Ore Mining by Material Type (Mt)
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Table 2.4
Annual Production Schedule: Mining and Processing
Mining Total Yr-1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12
Vat Ore (kts) 114 602 4 640 14 791 20 568 8 977 8 866 14 836 12 811 8 158 10 059 8 762 2 134
APPENDIX V
Cu (%) 0.56% 0.44% 0.47% 0.54% 0.57% 0.57% 0.58% 0.54% 0.71% 0.60% 0.69% 0.47% 0.00%
CuSS (%) 0.46% 0.37% 0.40% 0.42% 0.44% 0.46% 0.47% 0.39% 0.58% 0.51% 0.62% 0.36% 0.00%
Float Ore (kts) 48 794 2 380 5 055 5 059 4 670 5 301 5 043 5 005 5 014 5 081 6 183
Cu (%) 1.37% 1.17% 1.43% 1.33% 2.79% 1.19% 1.04% 1.01% 1.07% 1.09% 1.53%
Au (g/t) 0.029 0.016 0.016 0.020 0.037 0.026 0.022 0.021 0.033 0.044 0.048
Ag (g/t) 14.1 8.8 12.2 11.8 32.0 12.9 10.7 11.7 10.8 9.6 18.2
Total Ore (kts) 163 396 4 640 14 791 22 948 14 032 13 925 19 506 18 112 13 201 15 064 13 776 7 216 6 183
Waste (kts) 402 363 27 942 44 972 37 251 46 446 46 550 40 724 42 330 47 157 45 038 14 442 7 544 1 968
Total Mining (kts) 565 759 32 582 59 763 60 199 60 478 60 475 60 231 60 442 60 358 60 102 28 219 14 760 8 151
Strip Ratio 2.46 6.02 3.04 1.62 3.31 3.34 2.09 2.34 3.57 2.99 1.05 1.05 0.32
Closing Stockpiles
HG Vat Feed (kts) 1 180 147 1 651 1 406 825 795 2 223
MG Vat Feed (kts) 1 940 4 101 4 950 2 383
LG Vat Feed (kts) 1 520 5 934 12 150 13 344 12 593 14 024 16 241 11 574 9 663 4 998
Float Ore (kts) 461 515 574 243 544 587 592 606 687 1 871
Total (kts) 4 640 10 183 19 212 16 241 13 167 15 673 16 785 12 986 11 050 7 827 687 1 871
Processing
Vat Ore (kts) 114 602 9 248 12 000 12 001 12 000 12 000 12 000 12 000 12 000 12 000 9 355
Cu (%) 0.56% 0.56% 0.61% 0.59% 0.53% 0.56% 0.61% 0.58% 0.56% 0.54% 0.48%
CuSS (%) 0.46% 0.47% 0.47% 0.47% 0.43% 0.47% 0.45% 0.46% 0.47% 0.47% 0.39%
— V-29 —
CuRec (%) 0.42% 0.43% 0.43% 0.43% 0.39% 0.43% 0.42% 0.43% 0.43% 0.43% 0.36%
Acid (kg/t) 40.66 40.15 40.32 40.39 41.10 40.49 40.67 40.91 40.39 40.48 41.89
Cu Recovery (%) 74.5% 78.1% 71.5% 72.2% 73.4% 76.2% 68.8% 75.2% 77.4% 79.7% 74.0%
Cu in Cathode (t) 481 596 40 100 51 999 51 513 46 867 51 601 50 157 52 010 51 997 52 056 33 295
Float Ore Feed (kts) 48 794 1 919 5 001 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 1 871
Cu (%) 1.37% 1.23% 1.43% 1.33% 2.57% 1.31% 1.04% 1.01% 1.07% 1.10% 1.73% 0.73%
Au (g/t) 0.029 0.016 0.016 0.020 0.035 0.028 0.022 0.021 0.033 0.044 0.055 0.018
Ag (g/t) 14.1 9.3 12.3 11.9 28.9 14.1 10.7 11.7 10.8 9.7 20.8 8.9
Cu Rec to Con (%) 93.0% 90.1% 91.9% 92.5% 95.3% 92.9% 91.8% 91.5% 92.6% 92.3% 95.0% 87.8%
Au Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Ag Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Concentrate (dry t) 1 643 741 56 279 164 301 144 397 291 496 176 948 126 276 125 066 150 083 151 018 224 479 33 399
Cu Con Grade (%) 37.8% 37.7% 40.1% 42.7% 42.1% 34.5% 38.0% 37.1% 33.0% 33.7% 36.7% 35.9%
Au Con Grade (g/t) 0.70 0.44 0.39 0.56 0.48 0.63 0.70 0.67 0.88 1.17 0.98 0.81
Ag Con Grade (g/t) 335 255 299 329 397 319 340 375 288 256 370 399
Cu in Con (t) 621 373 21 192 65 867 61 618 122 596 61 053 47 945 46 431 49 528 50 834 82 319 11 989
Au in Con (ozs) 36 978 792 2 082 2 608 4 516 3 565 2 850 2 679 4 261 5 700 7 057 867
Ag in Con (kozs) 17 725 461 1 579 1 528 3 718 1 817 1 381 1 508 1 391 1 244 2 669 429
Total Copper (t) 1 102 969 40 100 73 191 117 379 108 485 174 198 111 210 99 955 98 428 101 584 84 129 82 319 11 989
Note: Metal in concentrate is total contained metal.

TECHNICAL REPORT ON THE MINA JUSTA PROJECT
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Figure 2.6 shows the stockpile inventory over the life of mine (LOM). Large vat leach inventories are
accumulated in the early years in order to accelerate access to sustainable feed for the concentrator.
Figure 2.6
Long Term Stockpile Inventories (Mt)
2.7.6 Mine Fleet Assessment
A 20 m3 backhoe excavator was selected as the primary digging unit, in order to minimise dilution and
mining losses, and maximise the mined ore grade. A large front end loader (FEL) has been specified to
serve as a back-up loading unit and provide truck loading for rehandle of long-term vat feed stockpiles,
plus rehandle (by tramming) from short-term operational stockpiles located on the ROM pad.
A fleet of 220 t class haul trucks and support equipment have been selected. Crawler-mounted diesel
drills capable of single pass drilling have been selected for productivity and operational flexibility.
A computerised dispatch system has been allowed, to monitor equipment, provide production statistics
and provide the information to measure and improve fleet productivity.
Table 2.6 includes a summary of the major equipment selected.
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2.7.7 Mine Operating Cost
The mine equipment will be owned, operated and maintained by the Owner with support by specialist
contractors for down-the-hole explosive supply, diesel supply, storage and dispensing services and
vendor-provided preventative maintenance services for major equipment.
Since the conditions are dry, ANFO has been specified as the sole explosive. Following a review of
rock conditions, powder factors of 0.20 kg/t in waste and 0.24 kg/t in ore have been adopted.
Key operating cost drivers are summarised in Table 2.5.
Table 2.5
Key Operating Cost Inputs
Item Value Unit Comment
Diesel 0.636 $/litre includes storage & dispensing
AN explosive 540 $/t Dry, 100% ANFO used
3
Powder factor - ore 0.24 kg/m
3
Powder factor - waste 0.20 kg/m
Truck tyre life 5 000 hrs
The proposed major equipment fleet make-up is summarised in Table 2.6, together with key equipment
assumptions used to build up the operating cost estimate. Actual fleet configuration will be subject to a
further tendering and evaluation process to establish the most cost-effective mining solution.
Table 2.6
Equipment Fleet and Hourly Costs
Type Equipment Fleet Operating Operating Purchase Expected
Class Units Hours Costs Price Life
(h/yr) (US$/h) (US$ M) (h)
3
Excavator 20 m 3 6701 435 5.55 60 000
Dump truck 228 tonne 23 6701 219 3.65 65 000
3
FEL 20 m 1 5585 280 4.67 50 000
Track dozer 433 kW 4 5046 105 1.22 30 000
Wheel dozer 372 kW 1 4840 89 1.01 50 000
Grader 221 kW 3 5606 64 0.82 40 000
Water truck 45 kl 2 3723 91 1.11 60 000
Production drill 229 mm 4 4906 44 1.61 50 000
The average mine operating cost for the life of the mine is $1.14/t mined (1Q09 base). Unit costs are
seen to increase in later years as haul distances increase and the total tonnages mined decrease.
Figure 2.7 shows the major operating cost components and the changes over time. The mining costs
are inclusive of all material handling from stockpiles, and the transport and placement of ripios on the
ripios dump.
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Figure 2.7
Operating Costs by Time (US$/t)
2.7.8 Mine Capital Cost
The total mine capital cost (including replacement, rebuilds and sustaining capital) has been estimated
at $139 M as of July 2009, as summarised in Table 2.7. This cost excludes pre-production mining
costs, although these are also capitalised for accounting purposes.
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APPENDIX V
Table 2.7
Mining: Capital, Sustaining and Replacement Costs (US$ M, July 2009)
Mine Area Yr-1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Total
Loading 21.78 21.78
Hauling 65.70 14.59 0.45 0.45 3.65 0.45 85.28
Drill & Blast 6.45 6.45
Support 8.52 2.04 3.65 1.23 15.44
Other 7.42 0.60 0.03 0.63 0.09 0.81 0.20 0.21 0.04 10.02
Total 109.87 17.24 0.48 0.63 0.45 7.39 1.25 1.43 0.00 0.21 0.00 0.04 0.00 138.97
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2.8 METALLURGY AND PROCESSING
Extensive metallurgical testwork has been completed on Oxide ores as a basis for the vat leach circuit
design at a DFS level of detail. Metallurgical testwork for the Sulphide ore flotation plant is more
preliminary in nature, but suitable for a PFS design.
2.8.1 Vat Leach Circuit
2.8.1.1 Comminution Testwork
A comprehensive testwork programme was completed by Phillips Enterprises LLC (Phillips) in

Colorado, USA, and by Ammtec Limited (Ammtec) facility in Perth, Western Australia.
This work determined that there was little difference in crushing work index (CWi) results for different
lithologies, depths or geographic locations. A large range of values was recorded for different
specimens within each sample tested, greater competency occurring for those samples with minimal
inherent fractures. As the material is crushed finer (and the rock fractures are removed), the
competency of the ore is expected to increase. This trend has been used in the selection of CWi
values for the design criteria; a Bond CWi of 10 kWh/t has been selected for the primary, secondary
and tertiary crushing stages, increasing to 16 kWh/t for the quaternary stage.
UCS testwork was undertaken by Advanced Terra Testing Inc (under the direction of Phillips). The
overall dataset showed an average UCS value of 48.2 MPa, and a maximum UCS value of 130.2 MPa.
The results of Bond abrasion index tests conducted by Phillips showed an average abrasion index at
Mina Justa ranging from 0.13 in sediments to 0.22 for andesite and 0.24 for amygdaloidal andesite.
Limited crushing data was obtained for the Magnetite Manto deposit, which showed a large variation in
results (between 0.08 to 0.32) for the different lithologies tested. On average, the Mina Justa deposits
are expected to be moderately abrasive with an abrasion index value of 0.19.
Modelling of potential crushing circuits to achieve the required particle size of P80 8 mm determined the
most cost-effective design to be a quaternary crushing circuit, with the secondary stage in open circuit,
and the tertiary and quaternary stages in closed circuit.
2.8.1.2 Leach Testwork
Testwork on the Oxide material has consisted of bottle roll leaching, column tests and an integrated
pilot program run continuously in locked cycle. Pilot testing was followed by an on-going program of
variability testing on material from various areas of the proposed open pits.
Bottle roll tests demonstrated that the Oxide ore is inherently leachable, recovery being dependent on
crush size and pH. Both andesite and sedimentary material achieved 100% extraction of the acid
soluble copper (CuSS) at fine crush sizes (1 and 3 mm top size) and high acid levels (pH <1.5).
A column testing program followed, focussed initially on identifying the design parameters for a heap
leach operation. However, the results were discouraging; high recoveries could be achieved (>90%),
but long leach cycles (3 to 5 months) and high acid levels were needed.
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The problem was shown to be one of relative kinetics. The initial copper leach rate was fast, with about
half the total recovery occurring in the first 10 days, after which the leach rate slowed dramatically,
typically taking another 3 or 4 months for the recovery to double. The rate of acid consumption
behaved quite differently, rising linearly with time over the entire leach cycle. Thus after 10 days,
recovery was reasonably good and acid consumption was still very low. However, after another 3 to
4 months of leaching, copper extraction doubled, but GAC increased by a factor of 14 or 15 times.
The results of a series of tests led to the conclusion that vat leaching with its high flow rate, short cycle
time and good wash efficiency might be the most effective process route for the Oxide material. A vat
testwork program was developed, starting with a series of batch trials, the results of which suggested
that operating on a 6 day leach cycle with material crushed to between 6.0 mm and 9.5 mm would
provide an optimum vat process. Subsequent testwork demonstrated that there was little difference in
leach results between 6 mm and 8 mm, but 9.5 mm proved to be too coarse.
Batch vat tests were followed by testing of an integrated vat pilot plant operating continuously in locked
cycle. The results indicated that while copper extraction is influenced to some degree by the various
deposit parameters, the key relationship is between recovery and head grade. Regression analysis
showed that the grade-recovery relationship has the following form:
Recovery of CuT (%) = (86.5 + 9.3 x CuSS) x (CuSS/CuT)
Maximum copper recovery is capped at 95% of CuT, to prevent the projection of 100% extraction from
high grade ore.
The other important numerical expression is the relationship between head grade and acid
consumption. Regression analysis demonstrated that GAC was related to head grade, but that the
relationship was negative (GAC declined as the grade increased), due to the increased acid credit from
higher grade material. Numerically, the relationship can be expressed as:
GAC (kg/t) = 50.07e(-0.47 x CuSS)
Other design parameters determined in conjunction with the pilot plant tests included:
x Total suspended solids (TSS) in the vat overflow.
x Clarification tests on the pregnant leach solution (PLS) to provide the design basis for the PLS
clarifier.
x Viscosity of the leach solution averaged 1.5 cP, but increased gradually during the tests and ended
at 1.8 cP.
x Final moisture in the leach residues ranged from 9.0% to 16.4%, with an average of 11%.
x Void space in the ore bed, which decreased from 42% to 37.5% during the 6 day leach cycle.
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2.8.1.3 Solvent Extraction Testwork
Solvent extraction (SX) testwork and modelling was conducted by Cognis Corporation (Cognis) in Chile
and Peru, with additional testing at the Cognis laboratory in Chile. Solutions were derived from pilot
plant test runs.
Modelling of the SX process demonstrated that the optimum circuit required to achieve the mass
transfer of copper involved 2 extraction stages, 1 stripping stage and 1 washing stage (ie, 2E+1S+1W).
Cognis conducted further modelling using the selected 2E+1S+1W circuit at a copper tenor of 8 g/L and
revised pH of 1.9 to determine the preferred reagent (LIX84-l).
Solution analyses showed high chloride levels of up to 6 g/L, which have been taken into account in
subsequent design work.
An extraction of 94% of the soluble copper in the PLS stream is expected to be recovered through the
2E+1S+1W circuit, based on a PLS stream containing 8 g/L copper at a pH of 1.9. An extractant
concentration of 25% v/v is required for effective extraction of the soluble copper. Stripping of the
copper from the extractant is carried out using an electrolyte solution containing 35 g/L copper and
180 g/L sulphuric acid. These electrolyte parameters are relatively standard for copper SX systems in
plants world-wide.
Full ICP scans of the PLS solution show several impurities, primarily iron, manganese, silicon (colloidal
silica) and chlorides. Mitigation measures to manage these contaminants include a wash mixer/settler
and coalescer tank to remove aqueous entrainment carrying iron, manganese and chloride. Equipment
for treating the organic stream with activated clay to mitigate the effects of colloidal silica has been
included in the crud treatment area of the SX plant.
2.8.2 Sulphide Ore Processing
Several testwork campaigns were completed during the PFS evaluation of the Mina Justa sulphide
deposit. Three ore types were recognised, namely Primary (chalcopyrite), Secondary (bornite-
chalcocite) and Transition or Mixed (oxides and sulphides) ores. Sample collection and testwork was
directed by Transmin Metallurgical Consultants (Transmin) based in Lima.
Comminution testwork was carried out by SGS Lakefield Research in Chile, Laboratorio Plenge in Peru
and by JKTech in Australia. Findings are based on a limited number of samples tested.
It was concluded that:

x The ores are generally moderately abrasive, hard to very hard, with poor to moderate grindability.
x Results are quite variable. Considerable additional testwork is required to characterise a broad
range of materials from the most relevant parts of the orebody and provide definitive comminution
design criteria.
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2.8.2.2 Flotation Testwork
Three phases of testwork were completed to investigate the optimum flow sheet, concentrate regrind
size and reagent regime for the float plant. The results showed that concentrates of saleable grade can
be produced from all three ore types, although recoveries and grades vary by ore type as shown in
Table 2.8.
Rougher concentrates require regrinding and cleaning to produce acceptable grades, although optimum
grind size and cleaner requirements vary for the three ore types.
Flash flotation test results indicate that flash flotation could be feasible, but regrinding and cleaner
flotation would be required at least for Primary ore, which forms the bulk of the sulphide deposit.
A reagent scheme consisting of promoter A-3477 (isobutyl dithiophosphate) with collector Z-11 (sodium
isopropyl xanthate) was evaluated at different dosage rates. For Primary ore, the addition of sulphidiser
did not result in significant grade improvement, but final recovery was negatively affected. Secondary
ore concentrate grade and recovery showed some improvement when sulphidiser was added.
Regrind and cleaner tests were conducted on Primary and Secondary sulphide rougher flotation
concentrates. The results indicate that >25% copper concentrate can be produced without cyanide
addition.
Copper recovery and concentrate grade versus copper grade were plotted for locked cycle tests to
estimate basic correlations for a metallurgical model. However, insufficient data was available to
establish variable relationships, and the majority of the correlations were constant values (Table 2.8).
Table 2.8
Predictive Metallurgy Summary
Recovery Concentrate Grade
Mineralisation Type Metal
(%) (% Cu)
Transitional (Oxide plus sulphide) Copper (Cu) 85 32
Copper (Cu) min of (5.3892Ln(CuT)+90.956)
Secondary (Bornite-Chalcocite) or 96 45
Primary (Chalcopyrite) Copper (Cu) 94 23.5
Precious metals Gold (Au) 80 -
Silver (Ag) 80 -
Precious metals recoveries of 80% are based on the average metal recovery observed from the trials.
Preliminary investigation of the chemical composition of the concentrates suggests that contaminant
elements will not incur treatment penalties.
2.8.2.3 Magnetite Testwork
Preliminary magnetic separation tests were performed to evaluate the feasibility of producing a saleable
magnetite concentrate from rougher/scavenger flotation tailings. It was concluded a 63% iron
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magnetite concentrate can be generated by wet magnetic separation, provided intermediate processing
(regrinding, slimes removal and finishing magnetic separation) is undertaken.
2.8.2.4 Geochemical Characterisation of the Tailings
Knight Piésold performed geochemical characterisation testing to assess the acid generation and
neutralisation potential as well as the leachability and supernatant quality associated with samples of
flotation tailings from metallurgical pilot plant. The results, which were used to formulate the tailings
disposal strategy, were found to be dependant on the dominant sulphide mineralisation of the ore.
The test results showed that the cleaner scavenger tailings (CST), rougher scavenger tailings (RST)
and thus a combined CST and RST tailings produced from bornite-chalcocite ore are likely to be non-
acid generating. However, CST and combined tailings from the chalcopyrite ore are likely to be acid
generating while the RST is likely to be non-acid generating.
Leachability and supernatant quality tests on the same samples indicated that many of trace elements
were below detection limits or were not defined as potential problems under the relevant water quality
guidelines. Aluminium and iron were found to be higher than the regulatory limits in at least one of the
RST supernatant samples from the chalcopyrite and bornite-chalcocite samples. The CST supernatant
from the chalcopyrite ore was found to have slightly elevated nickel and manganese, while there was
slightly elevated antimony from the bornite-chalcocite ore.
2.9 PLANT ENGINEERING
2.9.1 Geotechnical Investigations
2.9.1.1 Site Conditions
Site geotechnical investigations were undertaken to determine foundation conditions, sources of borrow
material, the groundwater situation and other site stability issues.
Bedrock consists of andesitic volcanics and epiclastic sediments, intruded by porphyritic andesite. The
basement is covered by Quaternary aeolian deposits typically 0.5 to 4 m thick over the majority of the
site, with alluvial materials to depths of as much as 65 m in broad valley bottoms, such as in the tailings
storage facility (TSF) area.
Beneath the aeolian sand there is a thin layer of poor quality and heavily weathered rock. Bedrock is
fair to good quality rock (RMR value between 45 and 55), except for the upper few metres which display
lower RMR values of approximately 29.
In the TSF area, the aeolian sands are underlain by dense alluvial sand and gravel deposits with a
basal conglomeratic sandstone layer, overlying basement rocks.
The plant site area is founded on fair to good quality bedrock (average RMR of 51). The thin overlying
aeolian sands and any poor quality rock will be removed to reach the foundation level.
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2.9.1.2 Borrow Materials
Suitable common fill and fine-grained construction materials have been located and tested on the
property.
Non-PAG waste rock from the Magnetite Manto Pit is suitable for construction of the tailings dam.
Waste rock in the upper part of the Main Pit may also be suitable for this purpose, but testwork is
required to confirm this source.
2.9.1.3 Groundwater
Results obtained from a vibrating wire piezometer in the Main pit area indicate that the phreatic level
(depth to ground water) is 470 m deep (312 masl), or approximately 90 m below the base of the
deepest pit, which, consequently, will be developed under dry conditions.
2.9.1.4 Site Stability and Seismic Design Criteria
The slopes, hills and low mountains in the area display stable conditions, and there is no risk of flash
floods, landslides or other mass displacement phenomena.
A seismic hazard study was completed, showing that the area is subject to high intensity seismic events
capable of causing serious damage. Deterministic analysis identified the maximum event as a
magnitude Mw 8.0 earthquake, producing a mean plus one standard deviation peak ground
acceleration (PGA) at the site of 0.48 g. PGAs at the site were determined for selected return period
events, and appropriate seismic coefficient values were determined and applied in designs for each
mine facility according to the risk, flexibility and life of the corresponding structure.
2.9.2 Oxide Plant
The overall processing flow sheet for the Oxide ore is depicted in Figure 2.8, with the plant layout as
Figure 2.9. The plant has a design throughput of 12 mt/a, and, in summary, comprises:
x Crushing and Screening: A four stage crushing circuit consisting of:
Primary Crushing and Stockpiling: run-of-mine (ROM) ore is delivered by direct tipping from
mine haul trucks, supplemented as necessary by ore fed by FEL from the Oxide stockpile.
Primary crushing by a 54" x 75" gyratory crusher feeding to a coarse ore stockpile with a live
capcity of 12 hours.
Secondary, Tertiary, and Quaternary Crushing: a secondary 750 kW cone crusher operating
in open circuit is followed by screening. Two by 750 kW cone crushers operating in closed
circuit are utilised for the tertiary crushing stage. The quaternary crushing stage comprises
three 750 kW cone crushers operating in closed circuit. Metal detectors and/or electro-
magnets are included to detect and/or remove tramp metal. The detectors are tuned to allow
for the high magnetite content of some of the ore.
Dust Control: Dust is controlled by a combination of dust suppression and dust collection
systems, including wetting sprays, ducted dust collection systems and high-efficiency wet
scrubbers with extraction hoods at all major dust generating locations.
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Figure 2.8
APPENDIX V
Mina Justa Oxide Circuit Flow Sheet
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Marcona Project – Mina Justa Definitive Feasibility Study
Figure 2.9
Plant Layout
APPENDIX V
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Rev 5 – Issued to Client – 19 Apr 2010
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x Vat Leaching: ore crushed to 100% passing 8 mm is delivered to the fine ore bin, which has a
surge capacity of 1 hour. After the crushed ore is drawn from the fine ore bin, it is sprayed with
dilute sulphuric acid, and transported by conveyor to the vat leaching area, where it is loaded into
vats for leaching, by means of a tripping conveyor. The vat is flooded with a dilute sulphuric acid
solution introduced through the base of the vat, under a filtration bed, and which overflows from the
top of the vat into a launder from which the solution is piped to the next vat or to a storage pond.
The vats are reinforced concrete shells, each measuring 30 m wide, 40.5 m in length and 7.6 m
high, and capable of holding 12 800 t of ore for a 6 day leaching cycle. At any one time, 16 vats
participate in the leaching process, with an additional two vats provided to allow for loading,
unloading, filling, draining and maintenance.
At the end of the 6 day leach cycle, the vat is drained and the moist waste solids (ripios) are
removed by a clamshell grab, placed into a hopper and discharged onto a conveyor system for
transfer to the ripios dump.
Solution management is counter-current. Solution advances progressively to fresher ore in order
to maximise the copper content of the leach solution before treatment in the SX/EW plant. The
final leach solution is clarified in a pin-bed clarifier and stored in a covered holding pond for
pumping to the SX circuit.
Dilute acid solution (raffinate) returning from the SX plant is used for final leaching of ore before it
is removed from a vat and sent to the ripios dump. The residual moisture in the ripios
(approximately 11% by weight) is essentially raffinate and provides a bleed for impurities.
The PLS and raffinate ponds are 6 m deep, sized to contain 24 500 m3 and 16 400 m3 of solution,
respectively, and are double-lined with HDPE. The dimensions include an allowance to contain
precipitation from a 100 year, 24 hour rainfall event. The raffinate pond also serves as an
emergency reservoir should a vat be drained by accident or intentionally in an emergency.
The ripios is transported to the ripios area via three discharge conveyors, the last of which loads a
truck loading bin. Haul trucks are used for final disposal in the adjacent ripios dump.
x Solvent Extraction: The SX mixer/settler units are configured for 2 stages of extraction, 1 stage of
wash and 1 stage of stripping. Here, PLS is contacted with an organic phase to extract copper
from the aqueous phase. Loaded organic reports to the wash stage to remove any entrained
impurities, such as iron, manganese and chloride.
Copper-rich electrolyte flows by gravity to the strong electrolyte tank. Any particulate solids and
entrained organic are removed using CoMatrix dual media filters.
Crud is split by centrifuge into aqueous, organic and solids phases. The aqueous phase is
returned to the SX circuit, whilst cleaned organic phase is either returned to the SX circuit or
treated further with activated clay. Contaminated solids are collected for separate disposal.
The fire protection system is based of foam suppression to the SX bunds, SX settlers and tanks
containing organic, and a fire detection system for the bund and inside of each of the vessels
described above.
x Electrowinning: EW utilises 122 electrolytic cells (26 polishing cells and 96 commercial cells)
operating at a nominal current density of 320 A/m2. Copper is recovered as cathode over a six day
period. Polishing cells receive strong electrolyte and act as organic entrainment protection for the
commercial cells. Each cell contains 69 cathodes (stainless steel blanks) and 70 anodes.
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Copper is removed from the cathodes by an automated cathode stripping machine. Approximately
3 t of copper sheets are accumulated before the bundles are sampled, strapped and transferred by
forklift to a dedicated storage area prior to dispatch.
The copper electrowinning cells are housed in a fully enclosed building. Primary acid mist
suppression is by a layer of polyolefin prills, while a forced cross-flow ventilation system provides
secondary mist suppression.
x Reagents involved in the leaching process are:
Sulphuric Acid: delivered by road tankers to two storage tanks (total 14 day supply). The
tanks are sited within a HDPE-lined earth bund capable of containing 110% of the entire
storage capacity.
Flocculant: delivered by road in 25 kg bags and prepared with fresh water in a batching plant.
Extractant (LIX984 or Acorga M5640): delivered in 1 m3 intermediate bulk containers (IBCs),
stored in a covered shed.
Diluent (Shelsol 2046 or equivalent): delivered by road tanker and off-loaded into a diluent
storage tank, with storage capacity for 45 days production.
Guar: received in 25 kg bags, with storage on-site equivalent to 28 days of usage.
Cobalt sulphate: received in 25 kg bags, with storage on-site equivalent to 28 days of usage.
x Services include:
Raw Water: supplied from the Jahuay borefield, 30 km to the southeast. Water is pumped to
the raw water pond sited in the plant area for redistribution as process water, fire water, dust
control, camp, mine water trucks and other purposes.
Fire Water: the raw water pond and pumps are configured to ensure a minimum amount of
fire water (4 hours) is always available in the pond. The fire water pump set comprises an
electrically powered main centrifugal pump, a diesel powered pump, and an electrically
powered jockey pump.
Raw Water: treated through a chlorination plant to produce potable quality water for safety
showers, drinking water, and ablution facilities. Potable water is transferred to the 80 m3
potable water storage tank.
Plant and Instrument Air: plant compressed air at 750 kPag is stored in the plant air receiver
and reticulated to the plant air utility stations. A separate portable air compressor is provided
for the crusher plant areas.
A stream of plant air is filtered and dried to generate instrument quality air.
2.9.3 Sulphide Ore Plant
The overall processing flow sheet for the Sulphide ore is depicted in Figure 2.10. Design is to a PFS
level. The plant is designed to treat 5 Mt/a, and comprises the following areas:
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Figure 2.10
APPENDIX V
Mina Justa Sulphide Circuit Flow Sheet
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x Comminution: a separate comminution circuit, designed to produce a product size of P80 150 µm,
comprising:
Primary Crushing of ROM ore tipped directly by mine haul truck, or fed from the adjacent
sulphide ore stockpile by FEL. A 54" x 75" primary gyratory crusher feeds to a coarse ore
stockpile with 12 hours of surge capacity. Wetting sprays and ducted dust collection systems
with high-efficiency wet scrubbers are included at all major dust generating locations.
Primary Grinding and Pebble Crushing: an open circuit semi-autogenous (SAG) mill with a
pebble crushing circuit. The SAG mill has a diameter of 9.15 m, with an effective grinding
length of 5.3 m, powered by twin variable speed 4000 kW hyper-synchronous wound rotor
motors. Oversize pebbles are transferred to a 600 kW cone crusher, and crushed pebbles are
returned to the SAG mill.
Secondary Grinding and Classification: this consists of a ball mill in closed circuit with a
cyclone cluster, and targets a product size of 80% passing 150 µm. The ball mill has a 6.57 m
diameter, an effective grinding length of 10.75 m, and is powered by twin 4200 kW motors.
x Flotation: the flotation circuit comprises bulk flotation, concentrate regrind, cleaner flotation and
on-stream analysis. Cyclone overflow from the grinding circuit, at a pulp density of 35% solids and
pH of 9 reports to the rougher/scavenger circuit. The rougher flotation stage consists of two 70 m3
tank cells, and the scavenger flotation stage consists of four 70 m3 tank cells. Total installed
residence time for this section is 20 minutes.
Rougher/scavenger concentrates are pumped to the regrind circuit, while scavenger flotation
tailings are transferred to the tailings disposal circuit. A single 3.8 m diameter ball mill operates in
closed circuit with hydrocyclones to achieve a P 80 in regrind cyclone overflow of approximately
49 µm. The regrind mill is powered by a 1300 kW motor and uses 40 mm balls as grinding media.
Cleaner Flotation is achieved using collector and frother and by increasing the pulp pH to 11. It is
carried out in four 38m3 cells with a total nominal residence time of 10 minutes. Cleaner
concentrate is transferred to the recleaner circuit, consisting of three 16 m3 u-shaped flotation cells
with a total nominal residence time of 10 minutes. Recleaner concentrate is pumped to the
concentrate handling area.
Cleaner flotation tailings flow to cleaner scavenger flotation in three 38 m3 u-shaped flotation cells
with a total nominal residence time of 10 minutes. The cleaner scavenger flotation tailings are
transferred to the tailings disposal circuit.
Various in-stream samplers collect samples and direct the streams to a multiple stream XRF
analyser, while in-stream particle size determination is carried out on rougher feed and regrind
overflow samples.
x Concentrate Handling: recleaner concentrate is screened and thickened in a 15 m diameter high-
rate thickener to produce a product at 65% solids, which is transferred to a filter feed tank
(12 hours capacity) ahead of dewatering by a pressure filter. Concentrate is dumped onto a
storage slab below the filter, while the filtrate is returned to the concentrate thickener. Concentrate
is then transferred to a storage shed with an FEL, and subsequently loaded onto trucks for
transport to port.
x Tailings Thickening and Disposal: two tailings streams are produced by the concentrator, namely
the cleaner scavenger tailings (CST) stream which has potential for acid generation, and the
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rougher scavenger (RST) tailings stream which has low acid generation potential. The two
streams are disposed of separately. RST are thickened in a 28 m diameter high-rate unit.
Thickened RST (60% solids) is pumped to the RST section of the TSF. CST are pumped to a
11 m diameter thickener, and underflow, at 60% solids, is pumped to the CST section of the TSF.
x Reagents comprise:
Collector (Sodium Isopropyl Xanthate): delivered in 1 t bulka bags. A 2 t monorail hoist lifts
the bags into a bag splitter chute above a 6 m3 agitated collector mixing tank. A 20% solution
is prepared with raw water and pumped to the collector header tank for distribution.
Promoter (Aerofloat 3477): delivered in 210 L drums, with storage being provided for
75 drums. The promoter is transferred from the drums to a 1 m3 promoter storage tank, from
where it is dosed into the flotation circuit.
Frother (Dow 250): Dow 250 is received in 210 L drums and storage is provided for 75 drums.
The frother is transferred to a 1 m3 frother storage tank, from where it is dosed in the flotation
circuit with dedicated metering pumps.
pH Modifier (Lime): hydrated lime (85% Ca(OH)2) is delivered as a bulk solid and stored in a
60 t hopper. Lime solution is prepared with raw water and transferred to a 20 m3 agitated lime
storage tank prior to distribution to the plant through a ring main.
Flocculant: transported to site in 25 kg bags. Storage is provided for 400 bags. Flocculant is
mixed in an automated system and delivered to the respective thickeners using dedicated
variable-speed metering pumps. Flocculant solution is diluted prior to dosage.
Sodium Sulphide (Na2S): delivered in 1 t bulka bags, with storage allowance in a secured
area on-site for 15 t. A 2 t monorail hoist lifts the bulka bags into a bag splitter chute above a
6 m3 agitated mixing tank. Na2S is made up to a 15% solution concentration with raw water,
transferred to a 10 m3 storage tank sited in a concrete containment area capable of storing the
entire contents of the tank, and metered to the rougher flotation feed box.
x Services:
Raw Water: raw water requirements are pumped from the Oxide plant raw water pond.
Fire Water: supplied from the Oxide fire water system.
Potable Water: potable water is provided from the Oxide Plant potable water system.
Process Water: the process water pond has a capacity of 4500 m3.
Plant and Instrument Air: the concentrator has a dedicated plant and instrument air system
similar to that at the Oxide plant. Two independent flotation air blower systems are utilised for
bulk flotation and cleaner flotation air supply.
2.10 INFRASTRUCTURE
Infrastructure requirements for the Mina Justa Project include an access road, power and water
supplies, and camp accommodation, for which the bulk of the engineering and costing was undertaken
by GMI, a subsidiary of Grana y Mmontero, a major Peruvian engineering and construction group. On-
site infrastructure engineering such as internal roads, buildings and electrical distribution was
undertaken by AMEC Minproc. A plan showing major infrastructure is included as Figure 2.11.
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2.10.1 Roads
A 14.8 km gravel two-lane access road linking National Route PE-30 to the plant site and
accommodation camp has been surveyed and designed.
A network of internal roads provides access from the main gate to the offices, stores, process plants,
mine, waste and ripios dumps, stockpiles and the TSF. Roads in and around the processing plant are
sealed with bitumen, and the remainder are gravel.
2.10.2 Buildings
The following buildings are additional to the main processing plant structures:
x Common facilities: administration building, main security building, first aid and fire station, gate
and sentry box, workshop and offices, warehouse and offices, laboratory, change rooms, plant
dining room, site toilets, sewage treatment plants, Mina Justa main substation, camp, water
borefield pump stations, water transfer pump station No. 1, water transfer pump station No. 2.
x Oxide processing plant: Oxide reagents store, Oxide control room, Oxide primary crushing
substation, secondary screening substation, crushing and creening substation, tertiary screening
substation, quaternary screening substation, Oxide process substation, SX substation, EW
substation, rectiformer A substation, rectiformer B substation, Oxide services substation.
x Sulphide processing plant: Sulphide administration building, Sulphide control room, Sulphide
reagents store, concentrate store, grinding substation, flotation substation, HV substation,
thickening and concentrate substation, Sulphide primary crushing substation, pebble crushing
substation, administration and services substation.
x Mine facilities: mine offices, heavy vehicle workshop and lube store, mine warehouse, mine
change rooms, mine dining room, vehicle washdown, vehicle refuelling, diesel storage facility, tyre
bay and battery store, explosives and detonator store, ammonium nitrate storage, core shed, mine
office substation, mine workshop substation.
x Fuel facilities: a vendor will supply storage and distribution facilities as required under the fuel
supply contract.
x Communications: a radio link to the town of Marcona to provide telephone and broadband data
communications to site. A single mode fibre optic cable connects the operations centre to all
offices, substations, laboratory and gatehouse. This supports the plant information network,
computer networking, redundant process control system network (PCS), communication system,
fire alarm system and CCTV signals. A multi-channel radio system, suitable for maintenance and
security/emergency communications, provides coverage for the mine, plant and tailings dam areas.
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Figure 2.11
Mina Justa Project Plan
APPENDIX V
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2.10.3 Construction and Accommodation Camp
The fully-equipped accommodation camp, located 4.4 km away from the plant site, will serve both the
construction and operations phases of the project. The maximum capacity of the camp is 990 people
during the construction phase and 270 people during the operation phase.
2.10.4 Waste Treatment
2.10.4.1 Solid and Hazardous Waste
Solid waste facilities are designed to process and store organic waste and industrial non-dangerous
waste. Dangerous industrial wastes will be stored in a temporary area and transported off-site for
subsequent final disposal using accredited groups.
Hazardous wastes include waste with dangerous metallic elements, reactant residues explosive and
flammable materials. Specific procedures will be established for waste collection, temporary disposal
on site and final transportation off-site for treatment and final disposal. A separately fenced temporary
storage facility will be constructed next to the solid waste landfill site.
2.10.4.2 Sewage
Sewage treatment plants will be sited at the camp, plant areas and mine.
2.10.5 Project Water Supply
2.10.5.1 Water Balance
A site-wide water balance has been developed by Knight Piesold to estimate the amount of make-up
water required to sustain operations, as follows:
x Leaching operations: outside source make-up water for the vat leaching operation is estimated to
be 141 m3/hr. The majority of this is required to offset the residual water retained in the ripios.
x Sulphide plant operations: principal water losses are associated with tailings disposal. The
associated make-up water requirements are estimated to be 403 m3/hr. It has been deemed
impractical to reclaim water from this pond.
x Other areas: approximately 45 m3KURI³RWKHU´PDNH-up is estimated for the operation of the camp
and for water for dust suppression on the roads.
x Total operational requirements: the total make-up requirement for the project is estimated at
approximately 186 m3/hr from Year 1 through Q7 in Year 2 (Oxides only), increasing to 589 m3/hr
for Years 2 to 7 (Oxides + Sulphides), but then decreasing to 420 m3/hr for Years 10 through 12
(Sulphides only).
x Closure and Reclamation Water Balance: climatological data analysis shows that there is
significant net evaporation at the site, which indicates that there will be no net accumulation of
precipitation on the site, with the exception of short duration storm events. The TSF will have the
capacity to temporarily store the run-off produced from a PMP event on the undiverted catchment,
and this water will then be evaporated so that no release is required.
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2.10.5.2 District Water Resources
Field investigations and studies by MWH Peru S.A. (MWH, formerly GWI) and Vector determined that
the Jahuay aquifer, 31 km east-southeast of the site, is capable of supplying Project demand. The
aquifer displays high hydraulic conductivity and storativity values, based on pump testing. A safe long-
term yield of 34 L/s per well has been estimated.
The water is fresh, pH-neutral with slightly elevated levels of iron (0.3 to 0.6 mg/L). Corrosion potential
is anticipated to be minimal over the proposed life of the project.
The aquifer is fed almost exclusively by rainwater and snow-melt from the mountains to the east. The
best estimate of annual water surplus for the basin is about 73 L/s. The aquifer is currently utilised by
6KRXJDQJ¶VLURQRSHUDWLRQVDQG0DUFRQDWRZQDQGWRWDODQQXDOZLWKGUDZDOVPD\H[FHHGWKHDYHUDJH
annual water surplus for the basin, ie, there may be some draw-down of water resources from the
aquifer. However, following closure of the Mina Justa operation, water levels will gradually recover to
pre-operation levels.
The Lomas aquifer, 50 km southeast of the Project represents a viable back-up water supply source,
should this be required, although pump tests indicated a long-term safe yield of 5 L/s, water quality is
slightly poorer and there is potential to affect neighbouring wells in the area.
2.10.5.3 Well Field Design
The design basis considers an average well yield of 25 L/s. Two stages of well installation are
proposed: Stage 1 (Year -1) ± 3 wells and Stage 2 (Year 2) ± 5 wells; providing 1 back-up well in
Stage 1 and 2 back-up wells in Stage 2.
Well sites have been proposed, but may not be optimal; additional surficial resistivity surveys are
recommended to investigate potential water resources on the east side of the Jahuay valley, which
would reduce the need for pipeline crossings of the valley, and provide additional information for
characterising the aquifer.
2.10.5.4 Water Supply System
A pipeline has been designed with an intermediate pump station required to manage the 300 m
difference in elevation, and the 31 km pumping distance.
The water supply system includes the following elements:

x Borefield/water collection and transfer system: a total of 8 wells will be installed to supplement the
1 existing well. Pump intakes are located at 20 m below the dynamic level (120 to 170 m below
surface). The pumps are turbine type with submersible motors/drives. Water is transferred from
the wells via a single pipeline to a 300 m3 collection tank.
x Pump station No. 1: pump station No. 1 includes the collection tank, and pumps which are located
in a custom-designed, ventiled building. Pumps are of vertical turbine, can type, with 295 m3/h
capacity and 326 m TDH.
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Two pumps will be installed in the station initially, one operating and the other on stand-by. As
project requirements increase, a third pump will be installed.
x Transfer pump station No. 2: transfer pump station No. 2 includes a transfer tank with a capacity of
300 m3, and utilises identical pumps, housed in a building of similar construction.
x Transfer pipeline: there are 2 pipeline sections, 1 of 18.1 km and the other 13 km. For the first
section between pump stations, the pipeline will be steel, 14" diameter for 16 km, reduFLQJWR´
HDPE for the final 2.1 km. The second section from the Pump Station No. WRVLWHZLOOEHRI´
UHGXFLQJ WR ´ VWHHO IRU km, followed by 2 NP RI ´ +'3( 6WHHO SLSHV ZLOO KDYH FRQFUHWH
sleepers installed every 6 m and anchor blocks where direction changes. HDPE pipes will be
restrained with earth anchors. Pipes will be protected with venting/vacuum breaker valves.
x Fire protection system: BC type carbon dioxide fire extinguishers will be installed in each pump
station. The detection system signals will be transferred to local detection and alarm control panels
communicating with the central control room.
x Fresh water storage and distribution system at site: water will be discharged in the pond located at
the plant site, from where it will be distributed to internal facilities.
x Power supply and distribution ± borefield/water collection system: electrical power supply to the
well pumps will be by means of a 22.9 kV overhead line from the project site. A secondary line will
be installed to each well using a 315 kVA transformer of 22.9/0.48 kV.
x Power supply and distribution ± water transfer system: the 22.9 kV transmission line will supply the
pump stations via a 1500 kVA transformer which will feed the 4.16 kV motor control centre that
supplies the pumps. Auxiliary supplies such as the control system, lighting and small power, etc.
will be supplied via an auxiliary transformer.
x Control and Instrumentation System: instrumentation is provided throughout the system to provide
adequate information for remote control/operation of the water collection and transfer system.
2.10.6 Power Supply and Distribution
2.10.6.1 Power Supply
The plant site is located approximately 15 km from the existing Marcona 220 kV substation, which is
connected into the regional 220 kV network. A dedicated 14.7 km 220 kV overhead power line
VXSSRUWHGE\VWHHOWRZHUVZLOOFRQQHFWWRWKH3URMHFW¶V+9VZLWFK\DUG$ kV power line supported
on wooden poles will run from site 31 km to the Jahuay borefield. An outdoor switchyard will
accommodate a 220/22.9 kV transformer to supply the plant and associated HV switchgear feeding a
22.9 kV switchboard located indoors at the main plant substation.
Power is distributed from the 22.9 kV main substation switchboard to major plant loads via an overhead
line to the boundary of the process plants, within which power cables are used. Plant load centres have
varying secondary voltages supplied by step-down power transformers adjacent to the each of the load
centres.
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2.10.6.2 On-site Distribution
x Oxide plant electrical load: the total connected load for the oxide plant and mine infrastructure is
36 394 kW. The application of relevant utilisation factors, power factor correction and harmonic
filtering equipment gives a predicted maximum demand of 33 441 kVA.
x Sulphide plant electrical load: the sulphide plant total connected load is 29 061 kW. The
application of relevant utilisation factors power factor correction and harmonic filtering equipment
produces a predicted maximum demand of 24 211 kVA.
x Other electrical loads: in addition to process plant loads, other loads are the camp (824 kVA),
lighting for internal access road (190 kVA), wells substation (695 kVA) and transfer pumping station
(842 kVA).
x Power reticulation: total of 19 substations services the combined process plant facilities. The
Oxide plant HV switchboards are located within the oxide crushing and screening area HV
substation and the oxide process area HV substation. The sulphide plant HV switchboard is
located within the sulphide plant HV substation and handles the sulphide primary crusher as well.
x Emergency generation: emergency power is provided by individual small generators for the
following:
Oxide plant: total 2321 kW consisting of 2027 kW fixed loads (building loads, plant lighting and
small power) and 294 kW process loads.
Sulphide plant: total 922 kW consisting of 690 kW fixed loads (building loads, plant lighting
and small power) and 232 kW process loads.
2.10.6.3 Control Systems
The Oxide plant is provided with a process control system (PCS) with a moderate level of control
complexity. It is designed to be operated primarily from the central control room (CCR) located
adjacent to the EW building. Local field operator stations provide control room type information, and
allow interaction from the field operators on a secured basis.
A CCR is provided for the Sulphide plant and is located near the grinding building.
2.11 WASTE DISPOSAL
2.11.1 Mine and Ripios Waste Dumps
Designs have been prepared for the two mine waste rock dumps (the Main Mina Justa and Magnetite
Manto waste dumps), the ripios dump and the low grade stockpile, taking account of the physical and
geochemical stability of the structures and closure requirements.
The estimated amount of waste rock to be generated by the Project is approximately 402.5 Mt, of which
383 Mt will be placed in the Main waste dump, 14 Mt in the Magnetite Manto waste dump and the
remaining 5.5 Mt (non-PAG material) will be used for construction of the tailings dam. The ripios dump
has been designed with a capacity of approximately 114 Mt, and the low grade stockpile with a capacity
of 20 Mt.
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Geotechnical and geochemical investigations were conducted by Knight Piésold to characterise the
foundations, rock waste and ripios materials, from which it was concluded:
x Geological units underlying the waste dumps and stockpile areas are expected to provide
adequate foundations. However, aeolian material located beneath the final outer toe of the mine
waste dump will be removed to improve the stability of the final outer slope.
x The water table lies some 400 to 500 m below the ground surface. Seepage analysis performed
for the main waste rock dump and ripios dump indicate that the potential for any seepage reaching
groundwater is minimal.
The design of the mine waste dump includes for the placement of the ripios material within its limits.
The ripios material will be placed in the Northern sector of the dump, buttressed by mine waste. The
configuration of the dump and butressing embankment takes account of the results of stability analysis
by Knight Piesold. The analyses indicated that a security zone of approximately 25 m should be
established beyond each advancing lift of ripios as some minor (superficial) unravelling or sloughing of
the ripios may be expected during placement. In addition, a security or buffer zone will be established
beyond the final downstream toe of the dump since some minor and localised ravelling may occur.
In order to monitor slope movements on the Main mine waste dump, marker points will be installed
during and after operations. Underdrain systems will be installed at the base of the ripios dump to
monitor any potential seepage from the ripios area. A liner system will be placed below the underdrain
system to limit vertical seepage potential, and potential flow will be conducted to a water monitoring
station.
The PAG mine waste rock (estimated at approximately 15 Mt) will be placed in a designated area within
the southern portion of the main waste dump and will be encapsulated by non-PAG material. At
closure, the upper surface of the PAG waste rock in the dump will be covered with a 1 m layer of non-
PAG material to limit the potential for acid dust generation and dermal contact
2.11.2 Magnetite Manto Waste Dump and Low Grade Stockpile Design
The Magnetite Manto waste dump and the low grade stockpile will each be constructed in three layers.
Again, Knight Piésold undertook stability analysis of the design slopes, the results indicating that
industry accepted static and dynamic (earthquake) factors of safety (FoS) will be achieved.
2.11.3 Tailings Storage Facility
The TSF has been designed to a DFS level with a capacity for 49 Mt (dry tonnes) of tailings, consisting
of 7.5 Mt of CST and 41.5 Mt of RST, that will be deposited seperately and managed in adjacent
portions of the facility over a period of 10 years. The two tailings delivery systems have been designed
to a pre-feasibility level.
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The TSF is located in a north-south trending depression just to the southwest of the planned mill site. It
will cover a surface area of approximately 372 ha at full build-out, and this arrangement is shown on
Figure 2.12. The location of the TSF was selected based on an alternatives analysis study of seven
options for which environmental, economic and technical aspects were considered.
The design of the TSF was developed by Knight Piésold based on:
x Site geotechnical, hydrogeological, hydrological and climate data
x Geotechnical and geochemical data for the tailings
x Geotechnical and geochemical data for the mine waste that will be used in the dam
x The mining and mill processing
x Production schedule.
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Figure 2.12
Tailings Storage Facility
APPENDIX V
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The tailings dam will be constructed out of non-PAG mine waste rock from the Magnetite Manto open
pit and possibly the Main open pit pending further characterisation studies on the Main pit materials. At
full build-out, the dam will have a length of 1.8 km and a height of 27 m. The dam will be constructed in
three stages using the downstream construction method. A geosynthetic liner will be included on the
upstream face of the dam and will be extended to underly the southern portion of the TSF basin where
the CST tailings will be stored.
The dam was assessed for its consequence classification according to the Canadian Dam Association
'DP 6DIHW\ *XLGHOLQHV DQG ZDV IRXQG WR KDYH D ³/RZ´ classification. This ranking is due to the
absence of a population at risk and the remote nature of any surface or groundwater resources that
could be affected.
The CST tailings will be deposited into the southern portion of the TSF through frequently rotated
spigots located along the upstream crest of the dam while the RST will be discharged into the northern
side of the TSF from a few off-take points above the northeast side. The CST will be stored above a
liner while the RST will not. A separation dike will be constructed between the CST and the RST areas
in the TSF. The overall tailings management plan will involve keeping a shallow supernatant water
pond over as much of the CST deposit as possible in order to keep it saturated and reduce its potential
for oxidation and acid generation. However, it is expected that the pond will not cover the whole CST
deposit at all times and thus the management plan will also involve frequently blanketing the surface of
the CST with a fresh layer of CST. This will keep the areas that are not submerged also in a saturated
condition to the greatest extent possible. The CST deposition spigots will be closely spaced along the
entire crest length of the dam to facilitate this. The liner under the CST will assist in keeping the deposit
saturated by keeping any seepage losses to a minimum.
The RST deposited from above the northeast side of the TSF will form a drained and consolidated
mass that will confine the CST into the southern side of the TSF. The surface of the RST deposit will
slope to the south and west and will confine the small supernatant pond in this area to cover a
significant portion of the CST. The RST will be non acid generating and will be largely above the pond
and exposed to air to increase its drying, consolidation and densification. The liner under the CST will
not be extended under the RST so that bottom drainage from the RST can occur thus further increasing
its consolidation.
Leachate generation and seepage is expected to be low or negligible due to the strong evaporation
potential at the site, which will desiccate the RST and produce a regime of low and possibly negative
pore pressures in the deposit with little to no propensity for causing seepage. Any small amounts of
seepage from the base of the RST are likely to be intermittent and either retained in the geological units
well above the groundwater (at >400 m depth), or have their trace elements attenuated to levels that
will be unlikely to negatively impact the groundwater. A preliminary seepage model showed that the
potential seepage will reach a depth of 140 m during a period of 15 years considering an unlined facility
and a constant supernatant pond.
The closure plan for the TSF has been developed to a concept level only at this time. The plan calls for
covering the final CST surface with a layer of non-PAG material in order to limit the potential for
oxidation and acid generation.
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2.12 FUEL SUPPLY
Fuel supply will be contracted under a long-term supply contract, and will cover transport to site,
storage and facilities management, in-pit refuelling vehicles, and 24 hour per day dispensing service.
2.13 PORT AND ROAD TRANSPORT
Port and road transport facilities are key infrastructure components for the project, allowing movement
of significant tonnages of products (copper cathode and copper concentrate) and reagents (particularly
sulphuric acid).
A multi-port strategy is proposed for the Project, as recommended in the report from Sandwell (2009),
as follows:
x San Martin, 250 km by road to the north of Mina Justa, is selected for cathode and acid shipments
for the first 5 years. The existing port IDFLOLWLHVDUHVXIILFLHQWIRU0DUFREUH¶VUHTXLUHPHQWV, with the
exception of the tank farm for liquid bulk storage that will be expanded.
x Matarani, 550 km by road to the south is used for shipment of concentrate for 1 year. Matarani
already handles significant qualtities of copper concentrates and cathodes from other operations.
The existing port infrastructure and shipping facilities are adequate for handling concentrates from
Mina Justa.
x San Juan de Marcona, 30 km to the south, is preferred for cathode, acid and concentrate supply
and shipments for the latter part of the Project, due to its proximity. The government is proposing
to develop San Juan de Marcona port through a private tender process, with start-up now projected
for 2014. Marcobre has assumed that the start of operation of the bulk mineral handling facilities
will be delayed to 2015, at which time concentrates from Mina Justa will be shipped out of this port.
Marcobre has further assumed that cathodes and acid will also be handled by the new port in
2017.
The Mina Justa Project is located approximately 400 km south of Lima, and is easily accessible by the
Panamerica Sur and local hard-top roads to within 5 km of the project. Road distances from the project
to the towns of San Juan de Marcona and Nazca are 30 km and 50 km, respectively.
A number of employees will be transported between Lima and site by aircraft. Minor airfields exist at
Nazca and on the edge of San Juan de Marcona, but neither airfield has lighting and no commercial
flights are available.
2.14 PROJECT IMPLEMENTATION
The Mina Justa Project will be implemented in two stages, the Oxide phase and the Sulphide phase,
which will commence while the Oxide plant is still under construction.
A timeframe of 29 months is projected for completion of the Oxide plant, with an additional 3 months to
complete the commissioning and commence cathode production. It is assumed that all necessary
permitting and environmental approvals are obtained within the timeframe indicated.
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Similarly, a 29 month timeframe is projected for the sulphide plant implementation, plus 3 months for
commissioning.
The key drivers of the schedules are the very long delivery lead times for some critical equipment (eg,
crushers and mills), the large quantity of concrete works required for the vat leaching area, and the time
required to construct camp accommodation.
The Project will be implemented with a general strategy of multiple horizontal discipline-oriented
contract packages, with the inter-discipline construction interfaces managed by an EPCM Contractor,
whose primary areas of responsibility relate to construction and commissioning of the process plants
and infrastructure.
0DUFREUH¶V WHDP ZLOO PDQDJH WKH EPCM Contractor, and manage or execute several other activities
needed to complete the Project, including those related to financing, permits and approvals, mining,
waste disposal, and contracts for power supply, port usage, transport of cathodes, copper concentrate,
acid, other reagents and consumables, etc.
A Project HSEC Management Plan will be developed prior to project execution, and will identify the
HSEC requirements, allocate duties and responsibilities, and detail the processes and procedures that
are used to manage HSEC during the implementation of the project. Public meetings, consultations,
systems, procedures and management plans will be used to align the key stakeholders, namely the
Marcobre Project Team, the Marcobre Operating Team, the EPCM Contractor, contractors, vendors,
the workforce and the community in order to achieve the HSEC objectives.
2.15 CAPITAL COSTS
2.15.1 Cost Update from 1Q09 to 1Q10
Capital and operating costs estimated for the DFS have a base date of 15 February 2009, shown as
1Q09 in this report.
China Sci-tech requested an update of both capital and operating costs to 31 January 2010 as part of
this Technical Report. An accurate update would require immensely time-consuming revalidation of
every quotation received from vendors and contractors, and well as an update of the foreign currency
rates of exchange. Due to time constraints, AMEC Minproc has adopted a simplified approach using
information from the US Bureau of Economic Analysis website, as explained in more detail in
Section 4.17.1.
This approach equates to a percentage increase over the period of 0.23% which AMEC Minproc has
used to adjust both capital and operating cost estimates from 1Q09 to 1Q10. No adjustments have
been made to foreign currency exchange rates.
Amounts shown in key tables in this report have not been changed from the original DFS report, but
additional tables have been included below each of these key tables showing the original cost at 1Q09,
the adjustment percentage, adjustment amount and the final updated cost to 1Q10. Apart from these
tables, all other costs in the report have a base date of 1Q09 costs unless otherwise stated.
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2.15.2 Initial Project Capital
AMEC Minproc developed or supervised the capital cost estimates for the mining equipment, mine
development, process plant, and associated in-plant and ex-plant infrastructure. Additional information
and costs were supplied by Knight Piésold IRU WKH 76) ZKLOH 0DUFREUH GHYHORSHG WKH 2ZQHU¶V &RVW
estimates.
The estimated total capital costs are summarised in Table 2.9 (Oxide Plant and Mine ± Base Date
1Q09), Table 2.10 (Oxide Plant and Mine ± Escalated to 1Q10), Table 2.11(Sulphide Plant ± Base Date
1Q09) and Table 2.12 (Sulphide Plant ± Escalated to 1Q10). Details of mine capital costs are included
in Section 2.7.8.
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Table 2.9
Oxide Plant DFS Capital Cost Estimate, Summarised by Area (1Q09)
Area Area Description Bare Cost Accuracy Provision Total Cost
No. ($) (%) ($) ($)
001 General Plant 11 055 834 11.4% 1 261 807 12 317 641
010 Crushing and Screening 1 097 296 10.0% 109 731 1 207 027
011 Primary Crushing 12 011 627 8.9% 1 063 609 13 075 236
012 Primary Stockpile and Reclaim 5 399 360 9.3% 501 547 5 900 907
013 Secondary Screening/Crushing and Tertiary Crushing 20 287 527 6.1% 1 228 564 21 516 091
014 Tertiary Screening and Quaternary Crushing 22 968 439 6.0% 1 387 639 24 356 078
015 Quaternary Screening 10 418 274 7.3% 758 199 11 176 473
020 Vat Leaching 67 288 240 9.3% 6 248 419 73 536 659
030 Solvent Extraction 18 772 003 11.2% 2 094 912 20 866 915
040 Electrowinning 29 898 230 7.6% 2 262 348 32 160 578
050 Reagents ± Oxide 2 391 151 10.3% 246 951 2 638 102
060 Services ± Oxide 3 469 873 11.4% 395 997 3 865 870
070 Infrastructure ± Oxide 21 533 336 9.7% 2 097 806 23 631 142
079 Mobilisation and Demobilisation 2 949 703 10.7% 315 812 3 265 515
080 Temporary Facilities 4 354 608 10.0% 435 461 4 790 069
081 Commissioning ± Oxide 2 020 961 10.0% 202 096 2 223 057
082 Vendor Representatives 1 058 439 10.0% 105 844 1 164 283
083 First Fills and Spares 11 512 650 10.0% 1 151 265 12 663 915
084 Loose Tools and Equipment 1 221 938 10.0% 122 193 1 344 131
095 Power Supply 11 545 443 10.0% 1 154 545 12 699 988
096 Plant Access Road 7 134 713 13.6% 968 895 8 103 608
097 Construction Camp and Village 17 008 679 10.0% 1 700 868 18 709 547
098 Water Supply 16 576 532 13.7% 2 270 740 18 847 272
200 Mining 123 150 502 0.2% 224 776 123 375 278
Direct Costs ± Subtotals 425 125 358 6.7% 28 310 024 453 435 382
EPCM 51 080 140 10.0% 5 108 014 56 188 154
Indirect Costs ± Subtotals 476 205 498 7.0% 33 418 038 509 623 536
2ZQHU¶V&RVWV 37 242 013 0.0% 0 37 242 013
Totals 513 447 511 6.5% 33 418 038 546 865 549
Table 2.10
Oxide Plant DFS Capital Cost Estimate: Escalated to IQ10
Description Total Cost Escalation Total Cost
1Q09 (%) ($) 1Q10
($) ($)
Total Escalated Oxide DFS Capital Cost Estimate 546 865 549 0.23% 1 257 791 548 123 340
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Table 2.11
Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area (1Q09)
No. ($) (%) ($) ($)
001 General Plant 4 651 645 18.5% 860 088 5 511 733
098 Water Supply 3 598 297 12.8% 460 312 4 058 609
110 Sulphide Primary Crushing 15 066 043 14.3% 2 157 212 17 223 255
120 Sulphide Grinding 36 804 910 9.6% 3 545 430 40 350 340
130 Sulphide Flotation 17 230 211 15.2% 2 615 714 19 845 925
140 Sulphide Concentrate Thickening and Filtration 7 579 799 13.8% 1 045 210 8 625 009
160 Sulphide Tailings Thickening and Disposal 15 102 265 18.2% 2 753 420 17 855 685
170 Sulphide Reagents 2 444 480 16.9% 414 113 2 858 593
180 Sulphide Services 7 592 634 16.7% 1 265 847 8 858 481
191 Commissioning 485 763 14.3% 69 596 555 359
192 Vendor Representatives 535 528 15.0% 80 329 615 857
193 First Fills and Spares 3 681 004 19.9% 732 099 4 413 103
EPCM 22 129 233 0.0% 0 22 129 233
2ZQHU¶V&RVWV 10 529 709 0.0% 0 10 529 709
Totals 151 693 661 11.0% 16 613 409 168 307 070
Table 2.12
Sulphide Concentrator PFS Capital Cost Estimate Summarised by Area, Escalated to 1Q10
1Q09 (%) ($) 1Q10
($) ($)
Total escalated Sulphide concentrator capital cost estimate 168 307 070 0.23% 387 106 168 694 176
The unescalated capital cost estimate for the Oxide plant as shown in Table 2.9 has a level of accuracy
of ±10%, while the unescalated estimate for the Sulphide plant in Table 2.11 has a level of accuracy of
±20%. Costs originally in currencies other than US$ have been converted to US$ at the exchange
rates shown in Table 2.13.
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Table 2.13
Exchange Rates (1Q09)
Currency Unit Units per US$
AUD Australia Dollars 1.54
CLP Chile Pesos 595
EUR Euro 0.785
JPY Japan Yen 91.7
PEN Peru Nuevos Soles 3.26
USD United States Dollars 1
ZAR South Africa Rand 10.1
CAD Canadian Dollar 1.24
Note: Base date 16 February 2009
Generally, for earthworks, concrete, structural steelwork and platework fabrication and installation,
supply rates and unit man-hours are based on information provided by GMI, a major local contractor
and checked against other Peruvian contractors by AMEC Minproc. Quantities were determined from
material take-offs based on preliminary designs and layout drawings.
Budget equipment prices (including electrical equipment) were obtained for major equipment items, the
remainder being derived from AMEC Minproc¶VGDWDEDVH
In-plant piping is derived from the actual costs of similar plants designed or completed by
AMEC Minproc, adjusted to Peruvian costs and productivity. The basis of the piping estimate is
installed piping to number of pumps per area, for equivalent type areas.
A budget quotation was received from a local contractor for buildings. Building area costs were
compared and verified against similar buildings on current projects.
Transport of concrete-related bulk materials is included in the all-in concrete rate. Transport rates for
steelwork and platework bulk materials were derived from rates received from installation contractors.
Transport for all equipment items is based on information received for steelwork and platework
transport. Where this method of calculating freight costs was inappropriate, an allowance varying from
5% to 12% was applied, based on historical information, depending on original source of equipment,
volume, weight, etc.
Sunk costs are not included in the capital cost estimate.
$W0DUFREUH¶VGLUHFWLRQQRSURMHFWFRQWLQJHQF\RUHVFDODWLRQZDVLQFOXGHG for the original estimate.
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2.15.3 Sustaining Capital
Sustaining capital includes deferred capital such as a tailings dam lift, and sustaining capital such as
the replacement of mining equipment, other heavy mobile equipment, computer hardware, light
vehicles, etc.
Summaries of the sustaining capital requirements are presented in Table 2.14 (base date 1Q09) and
Table 2.15 (escalated to 1Q10).
Table 2.14
Sustaining/Deferred Capital Summary (1Q09)
Total Cost
Plant Description
($)
Deferred Capital
Sulphide Recleaner concentrate pump 2 28 600
Sulphide Tailings Storage Facility ± Phase 2 3 220 000
Sulphide Pressure Filter Upgrade 510 000
Sub-Total Deferred Capital 8 398 600
Sustaining Capital
Oxide/Sulphide Replacement of computers 1 411 000
Oxide/Sulphide Mining Sustaining Capital 15 185 638
Oxide/Sulphide Vehicles Sustaining Capital 7 859 997
Sub-Total Sustaining Capital 24 456 635
Total 32 855 235
Table 2.15
Sustaining/Deferred Capital Escalated to 1Q10
IQ09($) (%) ($) IQ10
($)
Total escalated sustaining/deferred capital 32 855 235 0.23% 75 567 32 930 802
2.16 OPERATING COSTS
Project operating costs are summarised in Table 2.17and Table 2.18(unescalated 1Q09 and escalated
1Q10 respectively), and closure costs in Table 2.19 and Table 2.20 (unescalated and escalated).
Operating costs are in US$. Foreign currency conversion rates are as shown in Table 2.13. The
unescalated operating cost estimate has an accuracy of ±10% (except for the Sulphide plant which is to
±20%).
IGV tax is not included as it is expected to be fully recovered by Marcobre with a 3 month lag.
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No allowance has been made in the operating cost estimate for financing charges, contingency,
escalation or exchange rate variations, depreciation and accounting effects, sustaining capital (which is
included in capital expenditures), and exploration on other prospects.
Key unit operating cost inputs provided by Marcobre are summarised in Table 2.16.
Table 2.16
Key Unit Costs Provided by Marcobre (1Q09)
Item Unit Cost
Diesel (delivered to site, including site storage and dispensing) US$/L 0.636
Electricity (including transmission) US$/MWh 55.00
Sulphuric acid (delivered to site)
Via San Martin US$/t 90.40
Via San Juan US$/t 62.50
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Table 2.17
APPENDIX V
Summary of Project Operating Costs (US$/t ROM processed) Model 090821 (1Q09 basis)
Area Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Mining 0 9.88 5.47 3.72 3.60 3.68 3.84 3.74 3.74 2.98 1.85 2.24 2.07
Oxide Plant 0 5.76 5.68 5.68 5.69 5.69 4.50 4.49 4.52 4.52 4.46 4.57 -
Sulphide Plant 0 - - 4.90 4.82 5.20 5.12 5.06 4.81 5.24 4.80 5.16 4.92
General and Administration 0 2.14 1.30 1.08 1.04 1.05 1.05 1.05 1.05 1.04 1.03 1.88 2.95
Corporate Office (Lima) 0 0.25 0.15 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.22 0.38
Transport/ Marketing 0 0.23 0.23 3.42 3.08 4.74 4.88 2.65 2.60 2.66 2.61 7.18 11.92
Total 0 18.27 12.84 18.91 18.34 20.46 19.49 17.10 16.83 16.54 14.85 21.24 22.25
Table 2.18
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Summary of Project Operating Costs, Escalated to 1Q10 (US$/t ROM processed)
Description Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total cost IQ09 0 18.27 12.84 18.91 18.34 20.46 19.49 17.10 16.83 16.54 14.85 21.24 22.25
Total escalated cost IQ10 0 18.30 12.86 18.95 18.38 20.52 19.54 17.14 16.87 16.59 14.89 21.30 22.29

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APPENDIX V
Table 2.19
Summary of Project Closure Costs (US$, 1Q09 Basis)
Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Progressive 688 468 323 212 155 209 1 656 698 851 302 - - -
1)
Closure
2)
Final Closure - - - - 3 008 260 5 556 186 3 217 554 144 125
Total 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
1)
Progressive closure costs include costs related to pits mined out before cessation of production and closure of the oxide treatment facilities (including the ripios dump) which cease
operation prior to the concentrator.
2)
Final closure costs include sulphide processing facilities, waste dumps, tailings pond, concentrator facilities, camp and infrastructure.
— V-66 —
Table 2.20
Summary of Project Closure Costs, Escalated to January 2010
Description Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Total Cost IQ09 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
Total escalated 690 051 323 955 155 566 1 660 508 3 868 440 5 568 965 3 224 954 144 456
cost IQ10

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Mining Cost
Mine operating costs represent Owner mining costs, and include appropriate allowances for technical
labour and materials to control the mining operation.
Mining equipment maintenance and repair costs are assumed to be carried out under a maintenance
and repair contract with the mining equipment vendor, while blasting is assumed to be carried out by
the explosives supplier under contract to Marcobre.
The average mine operating cost for life of the mine is $1.14/t mined (February 2009 basis). Costs in
the earlier years are lower, but increase in later years as haul distances increase and the total tonnage
mined decreases. Further details are supplied in Section 4.7.7.
Oxide and Sulphide Plant

Plant operating costs have been developed under the categories of Labour, Power, Maintenance
materials, Reagents, Consumables and Miscellaneous items.
Reagents and consumables have been priced by suppliers on the basis of delivery to site where
possible, or shipped via the port of Callao (Lima). Additional road transport costs from Callao to site are
based on a transportation cost assessment undertaken by Marcobre and Sandwell.
Costs associated with shipping, sales and off-site treatment are reported separately (Section 2.17.4).
General and Administration (G&A)

The G&A costs cover labour and miscellaneous items required to support and manage site operations.
The Labour cost include administration, community relations, environmental, safety, security,
accounting, logistics, laboratory and centralised maintenance personnel. Miscellaneous items include
administration costs, insurance, personnel transport and accommodation, site services, administration
vehicles, road maintenance, consultants and health, safety and environmental management related
costs.
G&A costs encompass both site administration and Lima corporate office costs, but exclude costs
DWWULEXWDEOHWRH[SORUDWLRQRQ0DUFREUH¶VRWKHUSURVSHFWV
Environmental Costs
The cost of environmental monitoring includes costs associated with monitoring atmospheric conditions,
air and water quality, noise, biological conditions, inspection and audit costs by governmental
authorities, related to health, safety and environment, and other costs including dust control program,
management of efluents and management of domestic and industrial solid wastes.
Closure costs were estimated by Vector, following review of Knight Piésold¶VGHVLJQV
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2.17 MARKETING AND PRODUCT PRICING
2.17.1 Copper Cathode Sales
Under the Shareholders Agreement, current plans commit 100% of the first 10 \HDUV¶ SURGXFWLRQ RI
copper cathodes to LS-Nikko Copper (70%) and Norddeutsche Affinerie AG (NA ± 30%). Formal sales
contracts have yet to be negotiated, but there are understandings covering such items as marketing
fees and cathode premiums.
2.17.2 Copper Concentrates Sales
Pursuant to the Shareholders Agreement, Marcobre will sell 90% of its copper concentrate production
to LS-Nikko for 10 years from the commencement of copper concentrate production. The sales
contract has not been finalised, but the Shareholders Agreement specifies the principal terms relating to
price basis, payable metal, treatment and refining charges, copper price participation, refining charges
and payment terms
The 10% balance of the copper concentrates is insufficient to support a long-term sales contract.
Marcobre intends to sell the uncommitted production on a spot basis, most likely to smelters in the Far
East to take advantage of freight savings from combining shipments with the volume going to
LS-Nikko. For the purposes of the DFS, it was assumed that the 10% balance of production is sold to
LS-Nikko on the same terms as the market portion of the long-term contract.
2.17.3 Market Review (Copper and Sulphuric Acid)
Brook Hunt and Associates Limited (Brook Hunt) provided a market review of a range of issues which
included forecasts of copper price, concentrate treatment and refining charges, copper cathode
premium, penalty elements and standard penalty rates, freight rates, and sulphuric acid price.
Table 2.21 summarises the key forecasts from the Brook Hunt report, and compares the forecasts with
the assumptions used in the DFS financial analysis.
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Table 2.21
Summary of Forecast Prices and Terms, Q1 2009 US$ terms, 2012 to 2023 Average
1)
Brook Hunt Cases DFS
Low Base High Case
Price
/0(*UDGH³$´&RSSHUOE 1.82 1.93 2.12 2.00
Cathode premium, $/tonne
South Korea 63.82 69.17 77.50 69.55
Germany 82.08 89.17 100.42 89.55
Reagents
Sulphuric Acid, $/t, CIF Main Peruvian Ports 33.33 44.17 57.50 45.00
Ocean Freight Rates
Cathodes: South Korea, $/t 53.83 57.08 61.50 56.91
Cathodes: Germany, $/t 59.58 64.00 67.58 63.64
Concentrates: South Korea, $/t 41.83 45.17 61.00 45.50
Market Treatment and Refining Charges, Copper Concentrates
Treatment Charge US$/t 79.17 86.25 87.50 87.00
Refining Charge c/lb 0.07917 0.08625 0.0875 0.087
Price Participation Base commencing 2015 1.50 1.60 1.75 1.60
Precious Metal Refining Charges
Au (US$/payable oz) 5.00 5.00 5.00 5.00
Ag (US$/payable oz) 0.35 0.35 0.35 0.35
1)
Brook Hunt cases copyright Brook Hunt and Associates Limited
The Brook Hunt forecasts are cyclical. For the DFS base case cash flow projections, Marcobre elected
to use the simple average of the Brook Hunt base case projections over the relevant period.
2.17.4 Off-site Operating Costs (Transport, Marketing and Realisation)
The off-site operating costs include product trucking, port storage and handling, ship loading, ocean
freight, marketing fee (copper cathodes), concentrate treatment and refining charges, and marine cargo
insurance.
Cost estimates were developed by Marcobre based on Brook Hunt and other inputs, and are shown in
Table 2.22. The costs in this table have a base date of 1Q09.
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Table 2.22
Transportation, Marketing and Realisation Costs (1Q09)
Category Units $
Copper Cathodes
Truck to port, San Martin/San Juan US$/t 19.59/5.48
Port handling and storage charges, Martin/San Juan US$/t 18.20/14.50
Ocean freight: South Korea US$/t 56.91
Ocean freight: Northern Europe US$/t 63.64
Marine cargo insurance % of CIF value 0.15125%
Marketing fee US$/t 13.00
Copper Concentrates
Truck to port, Matarani/San Juan US$/wmt 35.72/5.48
Port handling and storage charges, Matarani/ San Juan US$/wmt 10.50/22.00
Ocean freight US$/wmt 45.50
Market Portion (60% of LS-Nikko and 100% of other)
Copper concentrate treatment charge US$/dmt 87.00
Copper refining charge US¢/payable lb Cu 8.7
Price-Sharing Portion (40% of LS-Nikko)
Note 1
Combined treatment and refining charge % of Copper Price 24.5%
Gold refining charge US$/payable oz Au 5.00
Silver refining charge US$/payable oz Ag 0.35
Note 1: 24% for first 5 years, 25% for second five years, floor of 19 cents per payable pound.
2.18 RISK AND OPPORTUNITY
2.18.1 Hazard Identification
A formal hazard identification and risk assessment study was conducted by AMEC Minproc to identify
issues affecting the safety and health of people working in the oxide plant, while Indec S.A, conducted
its own review and produced a separate Hazard Identification report for the vat leach section.
Seven extreme risk areas were identified, and mitigating strategies developed, including redesign
where required.
2.18.2 Technical Risks
BatteryLimits Pty Ltd conducted a technical risk assessment for the Project. Thirty-four risks were
identified, although the technical risk profile contains a relatively low number of top priority risks.
The key issue identified is that the Sulphide project, which is a major contributor to project economics,
has been studied only at a PFS level of detail. This risk is expected to be mitigated by further studies.
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2.18.3 Commercial Risks
As with any project, there are commercial risks related to reliance on key operating cost inputs. For
Mina Justa, prices for acid, diesel and electricity represent 21%, 13% and 12% of site costs
respectively, and unexpected increases in price of these consumables constitute a significant risk to the
economics of the project. Acid prices and diesel prices have varied over a large range in the past few
years, and there is an unknown degree of risk relating to the Brook Hunt costs used in the operating
costs.
Security of supply is important for sulphuric acid, a vital input to the Oxide process with no practical
substitute. Marcobre intends to enter into long term supply contracts to ensure delivery, although prices
would not be fixed.
Land transportation and port costs for cathodes, concentrates and acid form a significant part of project
operating costs, particularly in the early years when the more distant ports of San Martin and Matarani
are used. Should the development of the nearby proposed port of San Juan de Marcona be delayed for
several years, the cost to the project of trucking acid and concentrates over far greater distances will
run to several million dollars per annum, with a modest impact on total operating costs and Project
NPV.
2.18.4 Legal Risks to Infrastructure Development
Water Supply
Marcobre¶V intension is to PHHWWKH3URMHFW¶VZDWHUUHTXLUHPHQWVE\REWDLQLQJDZDWHUOLFHQVHRYHUWKH
Upper Jahuay aquifer. Options exist in the event that this is not possible, but there would be significant
additional capital and operating cost implications.
2.18.5 Opportunities
2.18.5.1 Additional Ore Reserves
During and subsequent to the DFS several scenarios were identified with potential to increase the
pit size and contained ore reserve, and extend the project life. The viability and economic benefit
of these scenarios is subject to future conditions and operating parameters.
2.18.5.2 Sulphide Ore Processing Only Option
A Sulphide-Only option would have relatively high pre-production stripping costs, although this would be
offset by the capital cost reduction through not building the Oxide facilities. It could be considered as a
response to sustained high acid costs, such as were seen in 2007.
A Sulphide-Only mine plan was developed, along with mining capital and operating costs. Capital costs
for process and infrastructure were factored from the DFS capital costs. Process and G&A operating
costs for the Sulphide-Only case were already available.
The preliminary economic analysis of the Sulphide-Only case indicates that this alternative is feasible.
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2.18.5.3 Vat Leach Operation
Assay Accountability
Check analyses at the end of the Phase 2 pilot tests indicated that estimated metallurgical recoveries
could be biased low by about 0.5% for average grade ore and as much as 1% for high grade ore.
pH Control
There is evidence to suggest that acid levels for many of the pilot plant tests were too low which may
have retarded extraction to some degree. Once the commercial plant is in operation, it may be possible
to increase recovery through better control of the acid level in the final stage of leaching, provided that
the cost of the additional acid does not exceed the value of the addition copper recovery.
Crusher Circuit Design

Potential exists to optimise the crushers, as CWi testwork data was not available for the DFS design.
The crusher specifications were based on correlations of CWi from Drop Weight Index (DWi) data,
which indicated the ore as competent. The primary crusher selected is on the upper limit in terms of
power, and the design can be revisited when test data is available.
2.18.5.4 Sulphide Circuit
A number of risks and opportunities exist in the sulphide circuit as a result of the limited testwork
completed to-date. Assumptions may or may not be conservative, and potential exists for relatively
significant variations in capital and operating costs when DFS-level testwork is undertaken. Major
uncertainties exist in the following areas:
Magnetite recovery circuit
Grinding circuit design
Flash flotation circuit
Bulk flotation optimisation
Cleaner flotation circuit optimisation
Regrind circuit optimisation
2.18.5.5 Tailings Storage Facility
Additional tailings characterisation studies are required to investigate whether combined RST and CST
disposal will result in non-acid generating tailings, thereby resulting in capital, operating and closure
cost savings.
2.18.5.6 Plant Design
Ripios Disposal System

Substitution of a modular conveying system could provide an operating and capital cost saving. A cost
comparison and detailed technical evaluation is required to confirm this opportunity.
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Dual Media Electrolyte Filters

Comatrix filters can offer a significant cost saving over dual media filters due to higher specific flowrates
and hence smaller vessels. The opportunity to save on capital cost by the use of Comatrix filters
should be investigated.
EW Building Ventilation System

A proprietary ventilation system has been selected as it included a performance guarantee. There is an
opportunity to reduce capital cost and complexity of the system using a non-proprietary system.
However careful checking is required to ensure that the system is sufficient to ensure exposure levels
are not exceeded.
2.18.6 Cost and Implementation
x Changed market conditions: market conditions are highly uncertain and could impact negatively or
positively on costs.
x Secondhand plant and cancelled orders: there may be an opportunity to source secondhand plant
and cancelled orders, thereby reducing capital costs.
x Oxide and Sulphide plant overlap: increased overlap between the Oxide and Sulphide construction
programs could result in greater synergies between the two projects and therefore cost savings
such as more efficient utilisation of the accommodation camp.
2.19 POST-DFS ACTIVITIES
2.19.1 Exploration Drilling
Results of exploration drilling since the October 2008 resource model indicate extensions to the known
mineralisation, with potential for incremental DGGLWLRQWRWKHSURMHFW¶VUHVRXUFHVDQGUHVHUYHV
2.19.2 Additional Mine Planning
Subsequent to the DFS AMEC Minproc performed the following mine planning tasks:
x 3LWGHVLJQDQGVFKHGXOLQJEDVHGRQ')6SLWRSWLPLVDWLRQ³5XQ´WRFRQILUPWKHSRWHQWLDOLQFUHDVH
in pit inventory and recoverable metal.
x Pit optimisations to simulate the potential impact on pit inventory if mining was allowed to proceed
across the TA1 6KRXJDQJERXQGDU\³5XQD´ and, sequentially, to then simulate the cumulative
impact if Inferred mineralisation was treated as potential ore ³5XQE´
2.19.3 Alternative Infrastructure Access Routes
Subsequent to the DFS, Shougang has submitted an EIA that indicates conflict between its mine
expansion plans and the DFS access routes selected for:
x 220 kV powerline
x 22.9 kV powerline
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x Fresh water pipeline

x Access road.
GMI has identified alternative access routes for each of these items and it has been determined that
they are of low impact environmentally and socio-culturally. Distances for the alternatives have
increased in most cases, but not dramatically. No engineering has been undertaken for these
alternatives; minor additional capital cost is anticipated assuming that the shortest alternatives are
adopted.
2.19.4 Revised Project Schedule
The DFS assumed that the ESIA application would be filed for approval by July 1, 2009. Given that the
actual date of filing was November 6, 2009, there is an impact on the overall project schedule and
timing to obtain the main consents to construct and operate the facilities of the Mina Justa Project.
Estudio Osterling, Macobre¶s legal counsel, has reassessed the project permitting schedule and
advised on the following changes to key project dates:
x ESIA approval End of July 2010 (end of March 2010 in the DFS)
x Oxide plant construction start 1 February 2011 (1 April 2010 in the DFS)
x Oxide plant construction complete 6 February 2013 (6 April 2012 in the DFS)
x Oxide plant commissioning complete 29 April 2013 (29 June 2012 in the DFS).
The sulphide plant schedule will consequently be delayed in accordance with this new oxide plant
schedule.
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3. PROJECT RISK SUMMARY
3.1 INTRODUCTION
In comparison with many industrial and commercial enterprises, mining is a relatively high-risk
business. Every ore deposit is unique, and the nature of the deposit, the occurrence and grade of ore,
and its behaviour during mining and processing is not entirely predictable. Estimation of the tonnes,
grade and overall metal content of the deposit are not precise calculations, but are based on
interpretation and extrapolation of samples from drilling, which, even with closely drilled deposits
represent a small fraction of the total deposit. Similarly, comprehensive metallurgical testwork will
reduce processing risk, but questions of sample representativity and scale-up remain.
Estimations of capital and operating cost are rarely more accurate than ±10% for DFS work, and for the
Sulphide plant at PFS-level are considered to be ±25%.
However, greater risk is typically associated with non-technical issues such as variations in metal prices
and exchange rates, or with social risk, sovereign risk and acts of god, none of which have been
evaluated by AMEC Minproc.
Risk has been assessed considering both likelihood of occurrence and consequence of occurrence, ie,
the impact on project economics. Ultimately, risk is assigned qualitatively on a scale as follows: low,
low/medium, medium, medium/high, high. No high risk issues are identified for the Mina Justa Project;
the highest risks recognised relate to resources, processing of Oxide ore, capital cost estimation and
SURMHFWLPSOHPHQWDWLRQHDFKRIZKLFKLVGHILQHGDV³0HGLXP5LVN´
3.2 PROJECT RISK
Risk Area Comments

Resources AMEC Minproc considers the geological database to be acceptable,
Medium Risk although the use of RC drilling as the predominant tool in resource
drilling results in more limited geological, ,density and geotechnical
information than would be the case for diamond drilling. Survey data
is considered adequate although questions remain concerning down-
hole surveys from a number of early drill holes.
Sampling and assaying methods conform to industry standards and
are supported by QAQC data.
The mineralisation is structurally controlled, but the exact nature and
location of individual structures is not clearly defined or predictable,
at the current drill hole spacing, particularly at Mina Justa.
Consequently, the mineralisation model incorporates a significant
proportion of sub-cut-off drill intervals.
Resource modelling has been completed independently by
Snowden, based on interpreted mineralisation boundaries supplied
by Marcobre. Grade modelling follows conventional practice,
including statistical and geostatistical analysis, top-cutting, and
ordinary kriging for different copper species, silver and gold.
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Statistical and visual validation of the resource model have been

undertaken. Indicated and Inferred resources have been classified
according to NI43-101 and JORC guidelines; no Measured
Resources were recognised by Snowden, even in closely drilled
areas, due to limitations in the density data.
Mineralogical information was added to the block model to assist in
mine planning and scheduling, but confidence in this part of the
model is not high.
AMEC Minproc considers that the quality of the resource model
meets the requirements of NI43-101 and the JORC code, at the
Indicated and Inferred classifications applied. It does not
believe that uncertainty in density information will have a
material effect on the total resource. AMEC Minproc agrees that
the greater part of the risk lies in incomplete understanding of
the structures controlling mineralisation, Definition of different
mineralogical zones is relatively poor, with some consequences
for mine planning.
Open Pit Mining AMEC Minproc considers that open pit mining of the Mina Justa and
Low Risk Magnetite Manto deposits should be straightforward in a physical
sense, ie, for drilling/blasting and load/haul. The site is relatively flat,
unvegetated and very dry, and groundwater lies below the base of
the pit.
Pit designs are based on adequate geotechnical studies, although
care will be required in shaping final walls, and some changes may
be required based on experience from early mining. Localised wall
failure is expected, however. Dumps have been designed with
geotechnical input. Seismic stability has been taken into account in
pit and dump design.
No dilution or mining loss is considered in Resource to Reserve
conversion, since the resource model is considered to be fully
diluted. Ore reserves have been derived solely from Indicated
resources lying within open pits that have been optimised and for
which designs have been completed. Adequate consideration has
been given to processing, infrastructure, environmental, cost and
other issues to allow the definition of ore reserves under NI43-101
and JORC.
The mining targets are considered achievable using the proposed
equipment fleet.
Mining risk is seen in relation to maintaining ROM head grade, with
potential for additional dilution from barren ocoite dykes and due to
interfingering of ore and waste along uncertain boundaries.
In addition, careful grade control is required in-pit to ensure delivery
of higher grade Oxide and Sulphide ores to the ROM pad, while
identifying and stockpiling lower grade for later processing. A further
complicating factor is the need to consider GAC for Oxide ores in
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determining higher and lower grade ore and waste.

AMEC Minproc considers there to be low/ risk associated with
mining, although it may provedifficult delivering anticipated
grades and tonnages to the process plant without major
stockpile re-handling. Additional equipment may be required if
problems materialise.
Processing and plant design A large body of testwork has been undertaken in developing the
- Oxides Oxide process flow sheet, but it must be recognised that a wide
Medium Risk range of leaching responses (primarily recovery and GAC) were
obtained, and that these are not readily predictable within the
geological and resource models. Further optimisation is expected
once operations commence, but, until then, risk in achieving
recoveries while containing acid consumption is recognised.
Quaternary crushing is required to achieve the necessary 8 mm
crush size. This results in a relatively complex and expensive circuit.
Vat leaching is used occasionally on a commercial scale elsewhere
in South America, and appears applicable to the Mina Justa and
Magnetite Manto ores. Vat design and proposed operation have
taken on-board lessons from other projects. The approach is
significantly more expensive and less flexible than traditional heap
leaching, but is a necessary response to the specific metallurgy of
the ore.
Ripios disposal will take place within the main waste dump.
Plant design has been completed to a level sufficient to define
equipment requirements, and to support capital and operating cost
estimates to a DFS level.
AMEC Minproc considers that there is a medium level of risk in
achieving the target copper recoveries and GAC figures, and
that there are limitations to the flexibility that can be built into
the vat system to adapt to unexpected outcomes.
Processing and plant design Preliminary testwork has been completed to demonstrate that
± Sulphides saleable copper concentrates can be produced from the three types
Medium Risk of sulphide ore at Mina Justa. The proposed flow sheet is
conventional, but cannot be considered optimised; there is potential
for both upside and downside in terms of final plant requirements
once DFS-level testwork has been completed.
Depending on the similarity in optimum process conditions finally
determined for each ore type, and the degree of separation that can
be maintained between ore types during mining, recoveries projected
in this PFS may be compromised to some degree.
Preliminary testwork has shown that a potentially saleable magnetite
concentrate can be produced from the flotation tailings, but this
option has not been included in the financial analysis.
Two types of tailings will be produced. CST are potentially acid
generating, whereas the RST (85% by volume) are not. A tailings
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storage site has been identified and a facility has been designed to
DFS standard, including geotechnical and tailings quality studies.
The structure is very simple and low risk, particularly given the lack
of surface and groundwater, and the absence of any inhabitants in
the area.
AMEC Minproc considers sulphide processing to involve
low/medium risk at this stage as reflected in the PFS level of
work undertaken to-date. It accepts that this is a conventional
process, and that saleable concentrates can be produced, but
uncertainties relate to the final process flow sheet (including
primary grinding and regrinding requirements) and the
achievable recoveries. It may be difficult to operate under
conditions suitable for all three ore types, and there are limits to
how much segregation of ore is possible without recourse to
extensive stockpiling.
Both upside and downside exist in the sulphide process area.
Infrastructure While some additional work may be require to bolster the regional
Low/Medium Risk grid to ensure adequate HT power supplies, a 220 KV sub-station
exists within 15 km. Even if adjustments are required to the new
power line route to site, there appears to be little risk in this area.
Adequate water supplies have been demonstrated 30 km from site
and the pipeline route is relatively flat. Water rights still have to be
REWDLQHG EXW 0DUFREUH¶V DGYLFH LV WKDW WKLV VKRXOG EH D
straightforward procedure. Again, any necessary changes to the
access route are unlikely to have significant implications.
Good road infrastructure passes very close to site. However, road
accidents are frequent in Peru, and the contractor fleet transporting
acid, cathode and concentrates will require careful management.
There should be no material impact on the project should a new
access road route be required to avoid Shougang¶VFRQFHVVLRQV
Adequate port facilities exist at San Martin and Matarani port,
250 km and 500 km from the site. These will be used for several
years until a new port is constructed 25 km from site at San Juan de
Marcona. The possibility of an acid terminal being constructed by
Petral at nearby Saint Nicholas would also have positive benefits.
AMEC Minproc considers infrastructure aspects of the project
to be relatively low risk, subject to confirmation of grid power
supply upgrades and obtaining water rights. A slightly higher
level of risk relates to whether and when the Marcona port will
be constructed, since the benefits have been realised in the
DFS in the middle and later years. Significant additional
transport costs would be incurred in later years, if the Marcona
Port is deferred.
Tenement/title AMEC Minproc is not qualified to comment about title to the property,
Low Risk but information provided by other parties indicates that Marcobre
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owns 100% of the relevant mining concession and should be in a

position to acquire the necessary surface rights for mine, plant site
and necessary rights of way.
These efforts need to be expanded to include new access routes
avoiding Shougang property.
Social Information from Marcobre indicates that serious attention has been
Low Risk given to communications concerning the project over the past
4 years, and that the local communities are positive about the
SURMHFW¶VGHYHORSPHQW,QWKLVFRQWH[WLWLVLPSRUWDQWWRQRWHWKDWQR
people live within several kilometres of the project, and no grazing
areas, water or other resources will be affected.
The feedback from Marcobre about the outcomes from the recent
public workshop and community consultations confirms this
statement.
Environmental Information within the DFS supplied by Marcobre¶V HQYLURQPHQWDO
Low Risk consultants indicates that the ESIA work has been completed without
unearthing any issues that would limit development of the project.
The ESIA has been submitted, and feedback from public workshop
and community consultations reportedly has raised no serious
issues.
AMEC Minproc considers that conditions at the site and the
processes involved are such that environmental approval and
environmental compliance should be low risk areas.
Project implementation Serious consideration has been given to project implementation, and
Medium Risk a strategy and schedule developed as part of the DFS. The 29-
month schedule is considered to be aggressive, and provides limited
time for obtaining approvals and permits, project financing and
construction. Indeed, a 10 month delay to commencement of the
schedule is now predicted, due to slower than expected progress
with the ESIA and approval for initial permits.
Once underway, the schedule relies heavily on early award of the
EPCM contract, early ordering of critical path items, as well as
maximum pre-assembly off-site. It also assumes that Marcobre can
quickly assemble an experienced, high quality management team for
the construction phase, and undertake work in several other areas in
a timely manner.
The need to undertake new geotechnical, environmental and
archaeological investigations along new access routes for power,
water and roads could further delay site activities.
AMEC Minproc considers that the proposed schedule could be
difficult to achieve, particularly as the resource industry
recovers and pressure is applied to manpower resources,
equipment waiting times, etc. There is a moderate risk that
project implementation will be extended by 6 to 12 months,
particularly in the project permitting approval and financing
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areas.
Production levels While AMEC Minproc considers that mine production and
Low/Medium Risk process throughput levels are achievable, there are risks
associated with cathode and concentrate production
expectations. These relate both to head grade (resource risk
and dilution) and to process recovery levels, both of which have
been assigned low/medium risk.
Capital costs Capital costs for mining projects have been subject to significant
Medium Risk over-runs in recent years, due partly to pressure on manpower and
rising costs of equipment, materials and labour.
The estimating methodology employed for the mine, Oxide plant and
infrastructure has been rigorous and appropriate although an
accuracy of ±10% is difficult to achieve with feasibility level designs.
The accuracy provision is designed to cover expected under-design.
No project contingency has been applied by Marcobre to account for
unanticipated events such as delays to construction due to political
or social unrest, industrial disputation, an unexpected escalation of
costs or significant adjustments in exchange rates.
The estimating methology applied to the Sulphide plant at PFS level
is considered appropriate for ±20% accuracy.
The methodology used to update capital costs from 1Q09 to 1Q10 is
very simplistic and foreign currency rates of exchange have not been
applied as part of this update. All quotations should be re-validated
and foreign currency exchange rates updated to meet the target
estimate accuracy range of +/-10%.
AMEC Minproc considers that the capital cost estimate is a
medium risk area for the sulphide phase since this is only to a
PFS level.
More importantly, capital cost over-runs have been
experienced for most mining projects over the last several
years for a variety of reasons, including unforeseen events
such as increases in prices for steel and diesel. The absence of
a contingency in the total capital cost estimate leaves the
project exposed to a significant cost over-run.
Operating costs As for capital costs, the methodology adopted and resulting accuracy
Low/Medium Risk of operating cost estimates are appropriate for the Oxide and
Sulphide operations at their stated levels of accuracy. Nevertheless,
most operations have experienced unanticipated upward pressure
on operating costs in the past 10 years, and this is inevitably an area
of risk.
Costs are in 1Q09 dollars, and Marcobre should monitor that costs
for key inputs, particularly power (5.5 c/kWh), acid ($90.40/t
delivered, through San Martin) and fuel ($0.636/L)4 remain
4
Marcobre has advised that an updated price for diesel is $0.819/L as of 1Q10, based on the current exchange rate
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appropriate. Equally, costs for other process reagents, crushing and

grinding media should be confirmed.
Off-site costs such as TC/RC and shipping are on an international
basis and, while governed to some extent by the Shareholders
Agreement, can be expected to vary appreciably over time. The
Brook Hunt review of potential future costs (including also acid costs)
is a sound basis for the DFS financial evaluation, but remains a
projection, with attendant uncertainty.
Additional risk exists in tems of acid usage. GAC varied appreciably
between test samples, and could not be predicted with any certainty
in relation to lithology, mineralogy, alteration, depth or location. Thus
expectaions of average GAC may not be realised during production.
The methodology used to update operating costs from 1Q09 to 1Q10
is very simplistic and foreign currency rates of exchange have not
been applied as part of this update. All quotations should be re-
validated and foreign currency exchange rates updated to meet the
target estimate accuracy range of +/-10%.
AMEC Minproc considers operating cost projections to be a
Low/Medium risk area, but with a reasonable prospect for a 10%
increase.
Price Escalation AMEC Minproc notes that PPI price escalation as applied to the
Low/Medium Risk 1Q09 estimates to get to 1Q10, is very low, and the approach as
adopted is not considered to be particularly accurate. Neither is
it considered possible to make accurate predictions of
escalation rates over the period of Project implementation.
Exchange rate changes could have a greater impact on capital
and operating costs, but again accurate prediction is not
possible into the future.
3.3 RISK MITIGATION FACTORS
A number of factors are expected to reduce some of the risks identified in Section 3.2, principally:
x Resource and Mining:
In-fill drilling is likely to be undertaken in some areas to increase confidence in resources,
particularly any Inferred resources in and immediately adjacent to the open pits.
Exploration drilling: Success has been reported from recent drilling in and around the
deposits, intersecting additional mineralisation, some of which can most likely be incorporated
into planned open pits without much change to the design.
Density measurements: Snowden expressed concern about the limitations of the density
database and recommended additional measurements be made. Some additional diamond
holes are likely to be required to provide more samples.
Conditional simulation (CS): Snowden recommended a CS study as a means to quantify the
likely range of ROM grades over time. AMEC Minproc agrees that there would be benefits
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from a CS approach, and that it may also prove appropriate for grade control definition of ore
and waste.
Detailed drilling: RC drilling of several benches at close spacing is recommended ahead of
mining in order to better define the distribution of the mineralisation and examine the potential
to reduce dilution and increase head grade.
Grade control drilling: during operations sampling of blast holes will assist in ore definition,
reducing dilution by waste blocks.
x Oxide processing:
GAC: further testwork is required to relate GAC to geological or grade characteristics, so that
GAC can be predicted from the resource model. In addition, a rapid test for GAC should be
developed, in order to differentiate ore from waste on the basis of acid consumption as well as
copper grade.
Ripios disposal: to further optimise costs, investigation into alternative methods of ripios
disposal, such as by enclosed conveyor system, should be continued.
x Sulphide processing:
Additional testwork to DFS level: more detailed comminution testwork is required to provide
greater certainty in crusher and mill design. Additional flotation testwork is required to
optimise the flow sheet, flotation conditions and reagent addition.
Tailings disposal: the current design calls for separate disposal of PAG CST and RST.
However, it is possible that a combined CST/RST stream would be non-PAG, thereby allowing
a much simpler tailings transfer and disposal system, and eliminate the need for a synthetic
liner.
Magnetite concentrate: further testwork and design is required to determine the viability of
separating magnetite concentrates from Sulphide plant tails. This should be combined with
approaches to potential buyers to confirm interest in the product.
x Infrastructure:
San Juan de Marcona port: there will be significant operating cost savings involved with the
use of the proposed San Juan de Marcona port. Marcobre has been monitoring progress with
this project and also the proposal by Petral to develop a facility to import acid at a nearby
location. Efforts to promote these options should continue as a way to reducing operating
costs.
Water rights: it is important that Marcobre obtains rights to required water resources at
Jahuay, as these are absolutely fundamental to the Project.
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x Capital cost:
Uncertainty in the capital cost estimate relates partly to the passage of time. Updated quotes
are required for key mine, Oxide plant and infrastructure equipment, for major material (eg,
concrete and steel), and for relevant installation labour costs, in order to bring the previous
(1Q09) estimate to current date with ±10% accuracy.
x Operating cost:
As with capital costs, it is recommended that operating costs should be confirmed for key
inputs, particularly power, fuel, acid, other process reagents, crushing and grinding media, in
order to return accuracy to ±10% for the Oxide plant.
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4. PROJECT DETAILS
4.1 PROJECT LOCATION, CLIMATE AND REGIONAL INFRASTRUCTURE
4.1.1 Location
The Mina Justa Project is located approximately 400 km southeast of Lima within the Nazca Province,
Ica Department of the southern Peruvian coastal belt. The Project lies approximately 25 km north of
the coastal town of San Juan de Marcona; the town of Nazca, on the Pan Americana Sur highway, is
located approximately 35 km to the north-northeast Figure 4.1). Driving time from Lima to site is
approximately 7 hours.
The nearest airfields are at Nazca and at San Juan de Marcona. Neither are serviced by scheduled
flights, but both are suitable for chartered aircraft. Flying time from Lima to San Juan de Marcona is
approximately 1 hour.
4.1.2 Topography and Vegetation
The Project is located within the coastal plain area of Peru approximately 20 to 30 km from the Pacific
Ocean. The topography in the immediate vicinity of the Mina Justa project is relatively subdued,
ranging in elevation from 630 to 880 masl. The eastern flank of the Mina Justa deposit is marked by a
north-northwest trending, steep fault-bounded scarp.
Due to the desert climate, vegetation on the property is almost non-existent with less than 1% cover
and limited to a few scattered clumps of Clavelinas that depend on moisture from the thick fogs. None
of the property is used for agricultural purposes.
4.1.3 Climate
The Project area has an arid climate with strong prevailing southerly winds during the day, alternating
with northerly winds at night. Annual rainfall ranges between 0 mm and 80 mm, averaging
approximately 27 mm. The annual mean temperature is approximately 19°C average. Monthly
maximum temperature averages range between 22°C and 28°C and minimum monthly average
temperatures range between 15ºC and 26°C. Relative humidity generally is between 65% and 85%.
During the winter months (June to August), thick fogs are common.
4.1.4 Local Resources and Infrastructure
Some infrastructure exists at the small town of San Juan de Marcona, which was developed to support
on-going large-scale mining of the Marcona iron ore deposits by Shougang Hierro Peru S.A.A.
(Shougang) over the past 50 years. The town San Juan de Marcona has a population estimated at
11 500 with nearly 1800 employed by the mine. The towns of Nazca and Vista Alegre have a combined
population of approximately 20 000.
The region can provide the basic goods, services, medical care and some accommodation to assist in
project development, as well as meet some labour requirements for various stages of exploration and
development projects.
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San Juan de Marcona and the Marcona mine operations are connected to the National Power Grid. A
high tension line passes within 10 km of the Mina Justa Prospect.
There is no surface water on the Project site; sub-surface water has been intersected at a depth of
450 m at the Mina Justa deposit. Water for the San Juan de Marcona community is obtained from the
Jahuay aquifer located 30 km southeast of the Mina Justa Prospect. A second underground water
source is located approximately 20 km further to the southeast at the Lomas aquifer. Water rights will
have to be acquired and developed by Marcobre.
The nearest suitable ports are at San Martin, 250 km by road to the north, and Matarani, 550 km to the
south. A deep-water port facility for shipping the Shougang iron concentrates has been constructed at
Puerto San Nicholas, 20 km southwest of the Mina Justa Prospect, but it is appears unlikely that
suitable access to this facility can be negotiated with Shougang.
Cellular phone coverage is available to a limited extent in the Project area, but the grid is expanding.
Communications between site and Lima currently are via satellite telephone.
4.2 LAND OWNERSHIP
4.2.1 Mining Concessions
Pursuant to Peruvian law, title to a mining concession granted by the Peruvian state is required to carry
out exploration and exploitation activities within the area covered by the mining concession.
Marcobre has acquired all material mining concessions related to the Mina Justa Project and the wider
0DUFRQD &RSSHU 3URSHUW\ 0DUFREUH¶V WLWOH WR VXFK PLQLQJ FRQFHVVLRQV KDV EHHQ UHJLVWHUHG ZLWK WKH
Mining Public Registry and is fully enforceable before the Peruvian State and third parties.
The Mina Justa and Magnetite Manto deposits are located on the Target Area 1 (TA1) mining
concession, which covers approximately 3969 ha. Marcobre owns a group of 45 other mining
concessions covering approximately 28 920 KD MRLQWO\ UHIHUUHG WR KHUHLQ DV WKH ³0DUFREUH
&RQFHVVLRQV´DEXWWLQJWKHTA1 concession (Figure 4.1).
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Figure 4.1
Location of Mina Justa Project
4.2.1.1 The TA1 Mining Concession
Shougang and Rio Tinto Mining and Exploration Limited Sucursal del Peru (Rio Tinto) were parties to
DQ RSWLRQ DJUHHPHQW UHODWLQJ WR 6KRXJDQJ¶V &36 1R 1 mining coQFHVVLRQ WKH ³2SWLRQ $JUHHPHQW´
dated December 14, 2000. By resolution No. 1731-2004-INACC/J, dated May 7, 2004, the competent
Peruvian governmental agency approved the legal division of the CPS No. 1 mining concession, and
granted title to the newly created TA1 mining concession. The area granted for TA1 was 3969.31 ha.
Pursuant to an amendment to the Option Agreement dated August 5, 2004 and formalised by public
deed dated January 3, 2005, Rio Tinto and Shougang each consented to the other selling its respective
interest in the Marcona Copper Property to Marcobre, including Shougang consenting to Rio Tinto
assigning to Marcobre its rights and obligations under the Option Agreement.
Considering the above, by means of a transfer agreement dated August 6, 2004 and formalised by
public deed dated January 3, 2005 granted before public notary of Lima, Marcobre acquired (i)
Rio Tinto¶VLQWHUHVWXQGHUWKH2SWLRQ$JUHHPHQWWRJHWKHUZLWKWKHUHOHYDQWVWXGLHVDQGLQIRUPDWLRQZLWK
respect of TA1 area, (ii) ShouganJ¶VWLWOHWR7$
As a consequence of the execution of the agreements mentioned above, Marcobre is currently the sole
and registered titleholder of the TA1 mining concession. Likewise, this concession is in good standing
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and free of any liens and mortgages except for a first and preferential mortgage amounting to
US$ 27 600 000.00 granted by Marcobre in favour of Shougang and Rio Tinto in order to guarantee
payment obligations described above in connection with the transfer of the TA1 concession.
4.2.1.2 The Marcobre Concessions
At the same time as the transaction described in the previous section, Marcobre and Rio Tinto entered
into a Claims Transfer Agreement, under which Marcobre acquired 45 contiguous claims covering
approximately 28 930 ha bordering the TA1 mining concession on its northern and eastern margins.
These claims were subsequently converted to mining concessions, as a result of which Marcobre is the
sole and registered titleholder of the 45 concessions jointly referred to herein as the Marcobre
Concessions. All of the Marcobre Concessions are in good standing and free of any liens and
mortgages as of the date hereof.
Based on the resources at Mina Justa and Magnetite Manto covered by the DFS, a contingent payment
totalling $10 M will be payable following a production decision. Upon making such payment, the
PRUWJDJHRQWKH7$PLQLQJFRQFHVVLRQDQGWKHSOHGJHRI0DUFREUH¶VVKDUHVZRXOGEHGLVFKDUJHG
4.2.2 Surface Rights
4.2.2.1 Mine Site Surface Rights
Pursuant to Peruvian law, a mining concession does not grant its holder ownership of the overlying
surface area. In order for a mining concessionaire to develop a mine, it must either acquire ownership
of the required surface rights or obtain authorisation from the owners. Surface rights are required for
the processing facilities, the open pits, waste dumps, and tailings and ripios storage. Additional surface
rights, such as rights-of-way and easements for the access road, power lines and water pipeline are
also required.
In order to secure the surface lands required for the development of the Mina Justa Project, Marcobre
has initiated a direct acquisition procedure before the National Superintendence of Goods (SBN), which
is the National Authority in charge of the administration and management of the lands (among other
assets) that belong to the Peruvian State. On October 7, 2008, the SBN informed Marcobre about the
viability of the acquisition procedure regarding lot AA-CB (which covers most of the TA1 mining
concession), and ordered an on-site inspection and the valuation of this lot. After the valuation and
determination of its commercial value, Marcobre will be entitled to acquire the lot. On the basis of the
current DFS design, Marcobre considers that approximately 70% of lot AA-CB will ultimately be
required for the Mina Justa Project and has designed the project in such way that all surface facilities,
including waste and ripios dumps, remain within its border.
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Figure 4.2
Mina Justa Lot AA-CB
APPENDIX V
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Other rights, such as rights-of-way and easements would be required for Marcobre to facilitate and
achieve the development of the Mina Justa Project, as explained in the following subsections.
4.2.2.2 220 kV Power Line Right-of-Way
An electricity transmission concession granted by the Ministry of Energy and Mines (MEM) is required
in order to construct a transmission line if the line requires the imposition of easements or affects the
property of the State. Electricity transmission concessions allow the use of State property and grant the
right to obtain the imposition of easements on property owned by third parties in order to build and
operate generating stations and ancillary works, substations and transmission lines. It should be noted
that the easements granted over State property are totally free, but in cases where the easement is
granted over private property, the owner must be compensated.
In order to obtain the transmission concession and easements, procedures must be followed before the
National Institute of Culture (INC) and the MEM evidencing fulfilment of the obligations related to the
SURWHFWLRQRIWKH1DWLRQ¶VFXOWXUDOKHULWDJHDQGHQYLURQPHQWDOSURWHFWLRQ
The proposed 220 kV powerline crosses 13.7 km of Shougang mining concession lands. Although
requesting the imposition of the easements with the previous consent of Shougang is the fastest and
easiest way to acquire the surface rights needed for the installation of the transmission power lines, if
Marcobre cannot reach an agreement with Shougang, Marcobre has other legal alternatives to obtain
the easements.
4.2.2.3 22.9 kV Power Line Right-of-Way to Borefield
The proposed alignment of the 22.9 kV powerline requires 30.3 km of easement, 8.8 km being over the
Shougang mining concession lands5.
Matters concerning this procedure are the same as those referred to in the above subsection.
However, the 22.9 kV power line passes through lands owned by the Peruvian State that are
theoretically reserved for the development of the Pampas Verdes Project. Should the Pampas Verdes
Project oppose the imposition of the easement, Marcobre has two possibilities, either obtain its
permission and/or to challenge the alleged rights of the Pampas Verdes Project over such lands. This
is due to the fact that such entity has not complied with the requirements needed in order to acquire the
lands during the term established by the SBN.
4.2.2.4 Water Pipeline Right-of-Way
The building of pipelines and the right to impose the corresponding easements that may be required
also must be authorised by the pertinent authority, Autoridad Nacional del Agua (ANA). The proposed
alignment of the water pipeline requires 32.7 km of easement, 7 km of which crosses the Shougang
mining concessions.
5
For discussions concerning changes to the power line, water pipeline/powerline and road access right of way see
Section 4.23.3.
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As for the 220 kV Power Line right-of-way, Marcobre intends to first negotiate with Shougang to obtain
consent to the imposition of the easements access into mining concession, but will use other legal
alternatives if agreement is not forthcoming.
Regarding the lands reserved to the Pampas Verdes Project, theoretically it could be possible that the
entity opposes the imposition of the easements. In that scenario, Marcobre has a strong argument to
challenge the Pampas Verdes Project alleged rights.
4.2.2.5 Well Field Surface Rights
The well field consists of several well locations covering a distance of approximately 7 km.
According to article 21 of Resolution No. 470-2008-INRENA/IRH, in order to obtain the license to drill,
dig or perform any work to locate underground water, Marcobre must provide proof to the ANA of its
right over the surface land. However, in principle it is not necessary to obtain superficial rights over the
area in order to initiate the administrative procedure.
The surface rights at the well field are owned by the State, and theoretically reserved for the
development of the Pampas Verdes Project. In order to obtain superficial rights over the area,
Marcobre intends to request the imposition of a compulsory easement, on the basis that the Pampas
Verdes Project is in breach of its conditions for development.
Although the imposition of an easement is the fastest and easiest way in order to acquire the surface
right needed for the installation of the well field, Marcobre has other alternatives in order to acquire the
right over the required lands.
4.2.2.6 Site Access Road Right-of-Way
The proposed access road requires an easement of 5.5 km, all of which lies within Shougang mining
concession lands6. The access road will be private, and therefore no permits or licenses are required
for its construction. However, standards set by the Ministry of Transportation and Communications
(MTC) related to the construction and connection with public roads will be met. Easements will be
negotiated with owners of the affected lands except where it is possible to impose legal easements
thereon.
4.2.2.7 Total Costs
Marcobre considers that the total cost of acquiring the surface rights and easements referred to above
will be $3.1 M.
6
For discussions concerning changes to the power line, water pipeline/powerline and road access right of way see
Section 4.23.3
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4.2.3 Construction Materials
While Marcobre is the titleholder of the TA1 concession and is in the process of acquiring surface
rights, these rights will not give Marcobre the ability to freely use materials on site for construction
purposes.
Marcobre can, however, freely use waste rock extracted from the Mina Justa and Magnetite Manto pits
for construction materials. In the event that such waste rock is not suitable for construction materials,
Marcobre has identified quarry sites with materials that have been tested and found suitable for
construction elsewhere on the TA1 concession. Marcobre can freely utilise such materials provided
that it first carves a separate industrial minerals mining concession out of the TA1 concession. The
procedure required to do this is simple and inexpensive.
4.3 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT (ESIA)
The ESIA for the Mina Justa Project forms the principal mechanism for identifying baseline conditions
and evaluating the impact of the project. The ESIA has been designed to satisfy the requirements of
Peruvian Legislation and to comply with internationally accepted guidelines for social and
environmental protection followed by such organisations as the World Bank and International Finance
Corporation, and followed by commercial banks through the Equator Principles.
The ESIA has been completed and approved for public distribution by MINEM in November 2009. A
local community workshop was held in December 2009, and public hearings in the community took
place on 8 January 2010.
4.3.1 Legal Framework
The legal and institutional framework in Peru is represented by a number of authorities that have the
jurisdiction to permit and regulate implementation of mining projects. Primary among these is the
Ministry of Energy and Mines (MINEM). The legal framework applicable to the Mina Justa Project is
outlined by a number of environmental protection laws and documents. Key among these is Peruvian
General Environmental Law (Law 28611).
The Peruvian environmental legislation is in the process of being updated, primarily through the
creation of the Ministery of Environment, which, in the future, will be the entity responsible for
monitoring, controlling and promoting the care of the environment in the country.
The intention is that in the future all the controls, permissions and authorisations are centralised in this
Ministry, but the process of developing and adapting the legislation and other organisms of the State for
this purpose is still underway.
It is clear that under current legislation, MINEM is the responsible environmental authority for approving
the ESIA and authorising project development. However, the ESIA has fulfilled all requirements that
the new authority is likely to request.
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4.3.2 Permitting
The ESIA is submitted to regional and central offices of MINEM. The central office in Lima is in charge
of conducting the evaluation process and, eventually, issuing permits. Depending on the location of the
project and its characteristics, other agencies may be involved in the evaluation of the ESIA. The
evaluation process also includes making the ESIA availabe to affected local communities for review and
comment, publication of findings by the agencies, a period for the applicant to respond, and then a
period of final evaluation before approval and issuance of a concession to operate.
Given the presence to the north of the project of the San Fernando Zone, MINEM will seek the opinion
of the National Institute of Natural Resources, prior to issung permits. The evaluation of the impacts
from construction, operation and closure of the Project concludes that there is no direct or indirect
influence on the San Fernando Zone, and no complications are expected in obtaining the permissions
of that authority.
In addition, it is necessary to obtain agreement to the results of the archaeological evaluation from the
National Institute of Culture, which is authorised to issue the required Certificate of Nonexistence of
Archaeological Remains.
4.3.3 ESIA Scope
The key objectives of the ESIA were:

x Determine baseline environmental conditions in the Project area, ie, establish the physical,
biological and socio-cultural conditions before the establishment of the project.
x Identify environmental and socio-economic resources that could potentially be affected by the
project.
x Predict positive and negative effects resulting from the Project, and determine to what degree the
negative effects can be mitigated.
x Quantify and evaluate the significance of the effects wherever possible.
x Outline requirements for monitoring of the resources that could be affected by the Project.
x Provide a conceptual closure plan for the mine site and associated facilities.
x Complete a cost-benefit analysis of the Project.
4.3.4 Baseline Studies
A detailed description of environmental and social aspects of the project area was developed; the
studies began in 2006 and were completed in 2008. All of the baseline studies were developed by local
professionals.
The baseline study has not been restricted to the Mina Justa Project area, but covers the district of San
Juan de Marcona.
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The environmental and socio-economic impacts were identified by measuring the characteristics of the
area, and comparing them with results anticipated following project implementation. In some cases
(particularly in air and water studies), models were developed to evaluate the magnitude and extent of
potential effects.
The results of the studies indicate that Mina Justa Project site conditions are typical of a desert, with no
surface water, saline and poor soils, generally unsuitable for the development of any another activity
outside mining.
Surveys have recorded scanty presence of flora and fauna typical of the desert environment, which are
represented elsewhere throughout the San Juan de Marcona district.
No communities or population centres occur inside the zone of direct environmental influence of the
Project.
Some archaeological vestiges have been recorded, and these will have to receive the treatment that
the legislation dictates in order to delimit or preserve them as required.
4.3.5 Community Relations and Public Consultation
In order to optimise relations between the community and the project, an integrated community
relations program has been developed by Marcobre with the following objectives:
x Establishment of ties with community leaders to enhance understanding of the social conditions of
the neighbouring populations, their concerns and hopes for development.
x Disclosure and consultation regarding the technical and economic aspects of the project.
x Identification and establishment of mechanisms to support local development processes
throughout and after operations.
x Strengthening of the institutions through development of consensual programs based on mutual
respect and transparency.
From the beginning of the environmental studies, Marcobre has implemented a policy of involvement
with representative sectors of the community as part of the ESIA process.
Peruvian legislation recommends a minimum of three public consultation meetings during the
elaboration of the ESIA. The initial meeting is designed to introduce the communities to the ESIA
process, help them understand their rights and responsibilities, and to describe the baseline studies
that form a part of the permitting process. Information about the general characteristics of the project
(scale, lifecycle, etc.), the complexity of the mining activity, and the relations that will be established
with the local community are shared in each of these meetings. The local population is involved in the
baseline studies, with community members participating in the field teams specializing in fauna, flora,
water and soil surveys.
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Marcobre has successfully conducted workshops during the last 3 years of studies, which has allowed it
to communicate the development of the feasibility study, and to receive contributions and suggestions
from the community.
The Office of Community Relations located in San Juan de Marcona has permanent contact with the
community and has joined in the life of the population, continuously informing the community about the
project and providing feed-back to Marcobre.
4.3.6 Identification and Evaluation of Effects
The environmental and socio-economic impacts were identified and compared with the anticipated
impacts of the implementation of the project. The main effects and corresponding mitigation measures
for the construction and operating stages are related mainly to water and land usage for the mine site.
Some of the impacts identified are:

x Changes in the current use of the soils.
x Changes in the topography and soil due to the presence of tailings and ripios, open pit and waste
rock facilities.
x Generation of dust during the construction and operation phases.
x Generation of noise in the construction and operation areas.
x Minor loss of vegetation coverage.
x Migration of some fauna species due to the presence of the operation.
x An increase in immigrants during the construction phases; a reduction is expected during mine
operation and closure.
4.3.7 Environmental Management
Marcobre has committed to instituting best practices for the environmental management of the Project.
The implementation process will begin once the authorities have granted permission to proceed with
the project. This will provide a global mechanism to ensure that appropriate environmental
management is maintained during the life of the mine.
Environmental management is conceived for three principal stages of the project: construction,
operation and closing.
The principal components of the Plan of Environmental Management are:

x Monitoring program
x Program of management of domestic and industrial residues
x Program of management of domestic and industrial effluents
x Policy regarding the behaviour of Marcobre and contractor personnel
x Contingency plans.
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Marcobre will establish the position of Environmental Manager, responsible for the control and
environmental management of operations. This area will report directly to the Operations Manager, and
will be in charge of supervising and controlling all the environmental programs related to the Project.
4.3.8 Mine Closure
Closure legislation (Peruvian Law 28090) requires that every operation must have an approved closure
plan and financial guarantees of ability to cover the estimated closure costs. The closure plan must be
elaborated within a year following the approval of the ESIA, but it must be approved by MINEM prior to
receipt of permission to operate.
The ESIA has developed the conceptual closure plan for the operation, with the objective of ensuring
the physical and chemical stability of the diverse components of the project after closure and returning
the environment to a condition similar to that found before implementation of the Project.
The principal closure activities relate to the reduction in slopes of waste dumps, in order to assure
physical stability, and covering potential acid generating material with inert material.
In addition, the closure plan confirms the demolition of infrastructure and leveling of the involved areas.
Finally, and depending on the requirements of Government regulators and the local communities, it is
possible that ownership of some of the infrastructure, eg, the water pipeline and/or the electrical
transmission line, might be transferred to the community for its use post-closure.
4.3.9 Socio-economic Conditions
Details of the socio-economic conditions, as well as the projected benefits of the Mina Justa Project and
Marcobre´s community relations efforts, are detailed in the ESIA report.
The Mina Justa Project is located in the Department of Ica an important agricultural region, where
grapes, cotton, asparagus, olives and other produce is cultivated and the place where the biggest
deposits of iron on the Pacific coast have been formed. Ica has experienced approximately 1.8%
population growth between 1993 and 2005; however, a portion of the population still lacks access to
basic services. Ica also has significant poverty rates, with about 29% of the population classified as
below the poverty line (INEI 2007). More than half the population earn their living through agriculture
and fishing. Mining is also a significant contributor to the economy.
Most of the affected local people live in the town of San Juan de Marcona, which has a population of
aproximately 11 600 habitants and is located approximately 24 km from the Mina Justa Project.
The Mina Justa Project will contribute to the local community through jobs, local purchases of goods
and services, and through taxes.
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4.4 GEOLOGY, EXPLORATION AND DATA QUALITY
The Mina Justa Prospect, which includes the Mina Justa deposit and the Magnetite Manto deposit
(Figure 4.3), is thHIRFXVRI0DUFREUH¶V)HDVLELOLW\6WXG\DQGFRYHUVDQDUHDRIDSSUR[LPDWHO\ ha.
Figure 4.3
Mine Justa Prospect Geology Showing Location of Mina Justa (east) and Magnetite Manto (west) Deposits
Note: Conceptual pit outlines included for reference.
4.4.1 Geology
4.4.1.1 Geological Setting
The Mina Justa Prospect is located in the Coastal Belt of Peru. This northwest trending linear belt
represents the westernmost part of the Central Andean Cordillera where the Nazca Plate is subducting
beneath the South American Plate, forming an active continental margin along the Peru-Chile Trench.
The geology of the district consists of a Precambrian high grade metamorphic basement (the Arequipa
Massif), unconformably overlain by Neoproterozoic and Phanerozoic sedimentary rocks. Palaeozoic
sediments (the Ordovician Marcona Formation) host the majority of the economic magnetite orebodies
at the Marcona iron mine. Monzogranite, granodiorite and gabbro-diorite rocks of the post-kinematic
San Nicolas batholith (dated at approximately 425 Ma) intrude the pre-Mesozoic rocks.
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The pre-Mesozoic rocks are unconformably overlain by a series of volcano-sedimentary and volcano-
plutonic arc sequences that range in age from late Triassic to Holocene. The volcano-sedimentary rock
sequences are intruded by porphyritic andesite dykes, sills and plugs of the Tunga Andesite (also
WHUPHG ³2FRLWH´ DQG LQ WKH HDVWHUQ SDUWV RI WKH GLVWULFW E\ JUDQLWRLG SOXWRQV RI WKH FLUFD Ma
Coastal Batholith. Tertiary-age shallow water marine sediments and Quaternary-age marine terrace
deposits unconformably overlie the volcano-plutonic arc succession.
The Mina Justa and Magnetite Manto copper deposits are hosted by the Jurassic Upper Rio Grande
Formation, which is dominated by andesitic lavas and andesitic pyroclastics, intercalated with minor
sandstone, siltstone and carbonate units. This volcano-sedimentary package displays a prolonged
deformation history that includes a southeast verging overturned folding stage followed by a shear
faulting stage that generated curvilinear fault systems. The youngest deformation stage is normal block
faulting along northwest trending structures that are closely associated with the late-stage ocoite
intrusives.
4.4.2 Deposit Type
Until recently it was believed that the Marcona iron mine and the Mina Justa copper deposits were
associated, both being part of a large iron-rich hydrothermal system formed in an extensional
environment along a subduction-related continental margin. Recent work (Chen, 2008) has indicated
that the Mina Justa Prospect is significantly younger than (approximately 104 Ma to 95 Ma), and
geochemically distinct from, the Marcona iron deposit (approximately 162 Ma to 156 Ma). The
Mina Justa Prospect is now interpreted as a hydrothermal deposit that was formed by the incursion of
exotic and probably evaporite-sourced brines expelled from an adjacent sedimentary basin. The recent
findings support the classification of the Mina Justa Prospect as an Iron Oxide Copper Gold (IOCG)
deposit, and suggest the Marcona iron deposits are a distinctly different style of deposit.
The Mina Justa and Magnetite Manto deposits share many mineralogical and textural characteristics
with other major exo-contact Andean Cu-rich IOCG deposits, eg, Raúl-Condestable (Peru), and
Mantoverde and La Candelaria (Chile).
4.4.3 Mineralisation
Massive to brecciated, elongate magnetite (-pyrite) bodies host the highest-grade copper sulphide
mineralisation at Mina Justa. The location of these bodies appears to be controlled primarily by a
northeast striking and southeast dipping system of faults (the Mina Justa fault system). The
mineralised bodies have, however, been dislocated by northwest striking and northeast dipping faults
(Huaca faults) and associated ocoite dykes, the latter ranging from less than a few metres to 70 m in
thickness (typically 15 m to 30 m in thickness).
Seven stages of hydrothermal alteration and hypogene mineralisation are recognised at the Mina Justa
prospect, providing evidence of protracted hydrothermal evolution linked to the deformational history of
the Marcona-Mina Justa District. A sequence of four distinct hydrothermal alteration stages including
albite-actinolite alteration, potassium-iron metasomatism, calcium metasomatism and an early
haematite alteration stage was followed by intense iron metasomatism that formed the magnetite
bodies in the Mina Justa deposit at circa 104 Ma to 101 Ma. The subsequent main copper sulphide
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mineralisation stage of chalcopyrite, chalcocite and bornite (at approximately 95 Ma to 99 Ma)

frequently replaced the precursor magnetite mineralisation in stratabound and structurally controlled ore
body geometries. The Mina Justa hydrothermal alteration sequence concluded with late-stage specular
haematite deposition.
Weathering, modified by post-mineralisation faulting, produced supergene copper oxide mineralisation

(predominantly atacamite and chrysocolla), hosted mainly in rock fractures, to an average depth of
about 180 m.
The mineralised bodies of the Mina Justa deposit extend over an area of approximately 2100 m
north-south by approximately 1500 m east-west, and range in thickness from a few metres up to
150 m. The mineralisation lies at or close to the surface in northern and western parts of the deposit
WKH ³1RUWKHUQ 2[LGHV´ ³:HVWHUQ ([WHQVLRQV´ DQG ³&X´ ]RQHV H[WHQGLQJ WR GHSWKV DSSURDFKLQJ
550 PLQWKHVRXWKHDVWHUQSDUWRIWKHGHSRVLWWKH³6XOSKLGH([WHQVLRQV´]RQH7KHPLQHUDOLVHGERGLHV
are generally flat-lying in the upper parts of the deposit (ie, in the oxide zone), but at depth the
mineralisation follows the curvilinear faults, and resembles a flat bowl-like structure with an overall
shallow plunge of approximately 15° to the southeast. Sulphide mineralisation at depth displays a
central core of bornite and chalcocite surrounded by predominantly chalcopyrite mineralisation. A
narrow transition zone separates the sulphide mineralisation from the overlying oxide mineralisation.
Sulphide mineralised bodies appear to increase in thickness from west to east, and with increasing
depth.
The Magnetite Manto mineralised body strikes approximately northeast-southwest, with a moderate dip
of approximately 60° to the northwest. The tabular body is approximately 700 m long by approximately
350 m wide, ranging between 25 m and 35 m in thickness. The Magnetite Manto deposit is
characterised by copper oxide mineralisation.
4.4.4 Exploration History
A summary of the exploration history of the Marcona Copper Property, with emphasis on the Mina Justa
Prospect, is presented in Table 4.1.
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Table 4.1
Exploration History of the Mina Justa Prospect
Period Event
Late 1800s to mid-1980s Episodic small-scale artisanal mining for copper oxides in the Marcona district.
1950-1972 Regional airborne magnetic survey and follow-up geological mapping, geochemical
sampling and drilling conducted by Marcona Mining Company (subsidiary of Utah Mining
Corporation), operators of Marcona Iron Mine.
1975-1980s Small-scale mining of Marcona Iron Mine and (possibly) parts of the Mina Justa Prospect
by Propiedad Minas Justa S.A., following nationalisation of the Marcona Iron Mine.
1992-2000 Surface mapping, rock chip sampling, trenching, electromagnetic surveys and preliminary
resource estimation exploration work conducted by Jindi (a subsidiary of Shougang Hierro
Peru S.A.; SHP) throughout the Marcona Iron Mina mining concession, including the area
of the Mina Justa Prospect.
1993-2003 Exploration conducted by Rio Tinto: regional airborne magnetic and radiometric surveys,
property acquisition, limited initial exploration drilling of Clavelinas Prospect (1995), joint
venture agreement with SHP (2000), geological mapping, geochemistry, geophysics,
exploration drilling, limited metallurgical testing, resource estimation and economic
studies on Mina Justa Prospect. Rio Tinto conducted limited drill testing of other targets,
including Achupallas, Miramar, Clavelinas and La Apreciada Prospects. The Mina Justa
Prospect failed to meet Rio Tinto¶VPLQLPXPVL]HUHTXLUHPHQWDQG6KRXJDQJDQG
Rio Tinto put the property up for sale.
Aug to Dec, 2004 Chariot acquires Marcona Copper Project, in a joint venture agreement with
Korea Resources and LG-Nikko, from Rio Tinto and SHP. Peruvian-registered Marcobre
S.A.C. incorporated. Owned 70% by Chariot, 15% LS-Nikko and 15% by
Korea Resources.
March 2005 Marcobre commenced first phase drilling programme on the Marcona Copper Property.
Initial results reported in April 2005.
2005-present ExSORUDWLRQE\0DUFREUHWKHSULPDU\IRFXVRI0DUFREUH¶VH[SORUDWLRQSURJUDPPHZDV
(and is) exploration and resource definition drilling on the Mina Justa Prospect. A
regional exploration programme of geological mapping, surface sampling, geophysical
surveys (ground magnetic and IP surveys) and trenching was initiated on the Achupallas,
Miramar, Clavelinas and La Apreciada deposits, which occur on lands surrounding the
Mina Justa Prospect, within the Marcona Copper Property. Limited drill testing of targets
in Achupallas (2005) and Clavelinas (2008).
4.4.5 Adjacent Properties
7KH ZHVWHUQ SRUWLRQRI 0DUFREUH¶V7$ SURSHUW\ ERXQGDU\ LV FRLQFLGHQW ZLWK WKH HDVWHUQ ERXQGDU\ RI
the Marcona iron mine. It is the largest known magnetite deposit in South America, estimated at
approximately 1400 Mt of iron ore grading 54.1% Fe and 0.11% Cu dispersed in at least 8 major and 47
minor orebodies (AMEC, 2004). Current production is believed to be 8 Mt/a, with intentions for an
expansion to 18 Mt/a over the next 13 years.
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Recent research indicates that the Marcona iron deposit and Mina Justa Prospect are not coeval,
despite their proximity, but instead their parageneses represent separate mineralising events occurring
approximately 60 Ma apart under widely different conditions (Chen, 2008).
Although not situated adjacent to the Mina Justa deposit, the district is host to another giant magnetite
deposit, the Pampa de Pongo. This deposit is located approximately 30 km to the southeast of the
Mina Justa Prospect and contains an inferred resource of 863 Mt at 41.3% Fe, 0.1% Cu and 0.07 g/t Au
at a 15% Fe cut-off grade (Cardero Resource Corporation News Release NR08-27, 29 October, 2008),
hosted in Jurassic andesites and intercalated sedimentary strata.
The Marcona Copper Property completely surrounds the Milagros property owned by Minera del Norte
S.A. (Figure 4.4). This property is characterised by a magnetic anomaly in the vicinity of historic
workings with weak copper and molybdenum anomalies hosted in andesite. Unoxidised primary
magnetite in the matrix of the volcanic rocks is thought to be the cause of the magnetic anomaly in this
area. Marcobre is unaware of any additional work conducted on the Milagros property.
Four copper prospects have been identified elsewhere within the Marcona Copper Property, including:
x Achupallas Prospect, located about 6 km to the north of Mina Justa
x Miramar Prospect, 18 km to the northwest of Mina Justa
x Clavelinas Prospect, located about 5 km east of Mina Justa
x La Apreciada Prospect, some 15 km to the east of Mina Justa.
Limited exploration has been conducted on these prospects to-date, and they have not been
considered further in the DFS.
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Figure 4.4
Copper Prospects Identified Within the Marcona Copper Property Area
4.4.6 Drilling
Drilling has been the dominant tool used by Marcobre in the exploration of the Mina Justa Prospect.
Marcobre drilled a total of 256 451.18 m in 1075 drill holes on the Mina Justa Prospect from 2005 to
2008. The majority of the drilling was conducted on the Mina Justa deposit with 227 843.98 m in
938 drill holes, while a total of 28 607.20 m in 137 drill holes was drilled on the Magnetite Manto
deposit.
A summary of the drilling conducted on the Marcona Copper Property, with emphasis on the Mina Justa
Prospect, is presented in Table 4.2. Drill hole locations are presented in Figure 4.5.
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Table 4.2
Drilling Conducted on the Mina Justa Prospect
Period Company Details
Pre-2005 Rio Tinto Rio Tinto drilled a total of 41 142.65 m in 298 holes on the Marcona Copper Property. A
total of 31 024.85 m in 102 drill holes was completed on the Mina Justa Prospect using a
combination of diamond core (total of 7448.85 m) and RC (total of 23 576.00 m) drilling
techniques. In addition, 159 short RC reconnaissance drill holes totalling 1982 m were
drilled in the prospect.
2005 Marcobre Marcobre drilled a total of 50 401.60 m in 141 drill holes on the Mina Justa Prospect in 2005.
Drilling was predominantly RC (122 holes), with just 2 diamond core drill holes. Diamond
core tails were completed in 17 RC drill holes.
2006 Marcobre Marcobre drilled a total of 66 473.50 m in 300 drill holes in 2006. Drilling was predominantly
RC (274 holes), plus13 diamond core drill holes (including 9 metallurgical drill holes).
Diamond core tails were completed in 13 RC drill holes (including 4 metallurgical holes).
2007 Marcobre A total of 75 233.98 m was completed in 357 drill holes on the Mina Justa Prospect in 2007.
Drilling was predominantly RC (261 holes totalling 57 354.00 m), with 96 diamond core holes
totalling 17 879.98 m.
2008 Marcobre A total of 37 935.80 m in 145 drill holes was drilled and compiled into the mineral resource
database as of 8 August 2008. Drilling was predominantly RC (127 holes totalling
33 460.00 m), with 18 diamond core drill holes totalling 4475.80 m.
A total of 63 600.80 m in 277 drill holes was drilled for the full year. This comprised 225 RC
holes (total of 52 386.00 m), 51 diamond core holes (total of 10 764.80 m) and one
combined RC and diamond core drill hole (450.00 m). In addition, 5 RC holes drilled in 2007
were extended by 4 RC tails totalling 516.00 m and a single diamond core tail of 225.30 m.
Notes: RC = reverse circulation.
Numerous drilling contractors were used, including Bradley (Lima), Geotec (Lima), HYS Drilling (Lima),
MCA (Lima), and Sonda Sur (Lima). Several drilling rigs were used, including Longyear LF 70, Marca
CBC model CS-1000, Marca CBC model CS-3000, Schramm T-660 Rotadrill, Foremost W750
Prospector and CSR-3000.
A combination of reverse circulation (RC; 5.25 inch diameter) and diamond core drilling (HQ diameter
core reducing to NQ diameter with depth, where necessary) was used. Drill hole inclinations and
directions were selected and adjusted to intersect the mineralisation perpendicular to the interpreted
trend of the mineralisation. Appropriately labelled concrete drill hole collar monuments with capped
PVC piping permanently mark the location of each drill hole collar.
Drill hole collars were surveyed using a Leica Total Station Model PCR 305 digital theodolite with
millimetre-scale accuracy and a range of up to 3.5 km. Gyroscopic down hole surveys were completed
using an SRG borehole gyroscope with a ±0.1° accuracy manufactured by Goodrich Corporation of the
USA on the drill holes by independent surveying contractors (Proyectistas Tecnicos y Servicios S.A. of
Lima, and Comprobe S.R.L. of Chile). Continuous down-hole survey readings were collected, with time
average readings made every 10 m down-hole. Additional check readings were made every 50 m on
WKHSUREH¶VUHWXUQXSWKHGULll hole.
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Drilling in the Mina Justa deposit covers an area of approximately 7.5 km2, with drill holes spaced
between 25 m and 50 m apart (generally 35 m to 40 m) and drilled to a maximum depth of 630 m.
Drilling in the Magnetite Manto copper deposit covers an area of approximately 0.23 km2, with drill holes
spaced between 25 m and 50 m apart (generally 25 m to 30 m) and drilled to depths of approximately
410 m.
Figure 4.5
Mina Justa Prospect Drill Hole Location Plan (as at August 2008)
4.4.7 Sampling Method and Approach
A total of 127 868 drill samples were collected in and around the Mina Justa Prospect. Consistent
sampling methods were maintained by Marcobre over the exploration period.
Drill Core
Drill hole core was logged for geotechnical and geological features prior to being marked and sawn for
sampling. Core sample intervals were generally 1 m for mineralised core and 2 m for non-mineralised
core, but significant geological boundaries were honoured. Drill hole core sample recovery was
generally better than 95% (with more than 90% of the recovery data displaying a recovery of better than
90%). Density measurements were conducted on selected core intervals after logging and before
sampling. The standard weight-in-water-weight-in-air technique was used.
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RC Drill Cuttings
RC chips were collected at regular 2 m intervals, geologically logged and riffle split to achieve 12.5%
splits of approximately 10 kg. Marcobre recorded sample weights at the rig to quantify RC sample
recovery; results indicated a recovery of better than 85%, which is considered to be adequate.
Reject and reference samples were stored in camp. Prepared coarse and fine blanks, oxide and
sulphide standards as well as field, crush and pulp duplicates were inserted into the sample stream.
4.4.8 Sample Preparation, Analysis and Security
For all Marcobre drilling, sample preparation was carried out at an on-site preparation facility operated
by SGS del Peru SAC (SGS) laboratory personnel. The RC samples were dried and crushed to 95%
passing 10 mesh. The crushed samples were riffle split to produce 250 g samples, which were
pulverised to 95% passing 200 mesh. Sample pulps were submitted to the SGS laboratory in Lima for
analysis in complete drill hole batches. Coarse sample rejects were bagged and stored on site.
Following analysis, the pulp sample was returned to Marcobre for storage on site.
Half-core samples were prepared following the same sample preparation protocol as the RC samples
through to the pulp sample stage on site.
The SGS laboratory in Lima was the primary laboratory to which all drilling samples collected from
0DUFREUH¶VGULOOLQJSURJUDPPHVZHUHVXEPLWWHG7KH6*6/DERUDWRULHV4XDOLW\$VVXUDQFH6\VWHPKDV
ISO 9002 accreditation and participates on a regular basis in round-robin testing with analytical
laboratories in Canada, Sweden, and the USA, amongst others.
All sample pulps received were entered into the laboratory management system and uniquely bar-
coded for Quality Assessment and Quality Control (QAQC) and tracking purposes. All preparation and
analytical data recorded for the samples was done electronically. Marcobre submitted a total of
142 750 samples (including QAQC samples) during the 2005 to 2008 drilling campaigns at the
Mina Justa prospect.
All of the samples were analysed for total Cu (CuT) and sequential leaching (sulphuric acid extractable,
cyanide extractable and residual Cu7) with an AAS finish, resulting in four Cu assay values per sample.
In addition, sulphide and transition zone samples were analysed for Ag using ICP-OES analysis with an
aqua regia digest as part of a multi-element package (Al, As, Ba, Be, Bi, Ca, Cd, Co, Cr, Fe, Ga, Hg, K,
La, Mg, Mn, Mo, Na, Nb, Ni, P, Pb, S, Sb, Sc, Se, Sn, Sr, Te, Ti, Tl, U, V, W, Y, Zn and Zr). Au
analyses were carried out using a 30 g fire assay with AAS finish.
The assay data was loaded into the database and verified against the original laboratory certificates
that are kept on file in the Marcobre DDWD5RRP0DUFREUH¶V-RKQ'.DSXVWD3*HR9LFH-President
([SORUDWLRQ DQG *HRORJLFDO 6HUYLFHV LV WKH 4XDOLILHG 3HUVRQ UHVSRQVLEOH IRU 0DUFREUH¶V H[SORUDWLRQ
drilling, sampling and data quality.
7
Cu_SS, Cu_CN and Cu_R, respectively
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0DUFREUH¶VVLWHVHFXULW\LQFOXGHVDSULYDWHURDGHQWUDQce gate and around-the-clock site-based security

guards. The SGS site-based laboratory is securely locked. SGS takes custody of all samples on site,
once they have been appropriately bagged and labelled. Following sample preparation, sample pulps
are transported by road (in the care of SGS) to SGS Lima for analysis. The SGS laboratory in Lima is
completely surrounded by a security wall and all access is security controlled.
The quality of the sampling, sample preparation, security and analytical procedures is considered to be
adequate to support the generation of mineral resource and mineral reserve estimates to JORC
standards.
Details of the pre-2005 Rio Tinto sample preparation, analyses and security were presented in AMEC
(2004), and the procedures were considered to meet industry standards.
4.4.9 Data Verification
Marcobre established a QAQC programme in 2005 to verify and monitor total copper, sequential
copper, Au, and Ag assay results provided by SGS. The QAQC programme established protocols for
insertion of Quality Control (QC) samples, evaluation criteria, and secondary laboratory check analyses.
The QC samples inserted into the sample batches submitted to SGS included standard reference
materials (SRMs), blank materials, and duplicate samples (core or RC drill cuttings, coarse reject
material and pulps). The rate of QC sample insertion was approximately 10% throughout the drill
programme. In addition, 5% of the drill hole samples were randomly selected and submitted to
secondary (external) laboratories, and the results evaluated.
Analytical results were monitored by independent consultants, who evaluated accuracy, sample
contamination, precision and bias on a routine basis.
Based on observations made during several laboratory and site visits between September 2005 and
-XQH DQG IURP LQGHSHQGHQW DVVHVVPHQW RI 0DUFREUH¶V GDWD 6QRZGHQ 0LQLQJ ,QGXVWU\
&RQVXOWDQWV 6QRZGHQ FRQFOXGHG WKDW 0DUFREUH¶V GULOO KROH VXUYH\ GHQVLW\ DQG DVVD\ GDWD LV RI
adequate quality to support the generation of mineral resource and mineral reserve estimates to CIM
standards.
Details of data verification conducted on the pre-2005 Rio Tinto data are presented in AMEC (2004),
and the data was deemed to be adequate.
AMEC Minproc has visited site and reviewed drilling, sampling and sample preparation activities. The
data acquisition procedures are considered to be in accordance with current industry practice, and,
while AMEC Minproc has not conducted a audit of the database or independently analysed QAQC data,
LWKDVUHYLHZHG6QRZGHQ¶VUHSRUWVDQGFRQVLGHUVWKDWWKHGDWDKDVEHHQULJRURXVO\DVVHVVHGSULRUWR
use in resource modelling.
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4.5 MINERAL RESOURCE ESTIMATE
4.5.1 Introduction
Marcobre commissioned Snowden to complete several resource estimates between 2006 and 2008,
including the October 2008 resource estimate used as the basis for the DFS.
The October 2008 resource estimate was generated using a comprehensive database that includes
drilling data from the pre-2005 Rio Tinto exploration programme and the Marcobre drilling programmes
up to a cut-off date of 23 May 2008. Previous Mina Justa resource estimates have been reported in
NI43-101 Technical Reports by Snowden in October 2005, February 2007 and June 2008, and by
AMEC in November 2004.
Mineral resources were prepared by Dr. Warwick S. Board, P.Geo., formerly Senior Consultant with
Snowden, and independent of Marcobre.
4.5.2 Database and Block Model
4.5.2.1 Database
Marcobre supplied the database comprising survey, assay, density, geological, mineralogical and
structural data, together with QAQC data (standard, blank and duplicate assays). Snowden conducted
a series of validation tests and made recommendations to Marcobre to fix several minor errors and
inconsistencies, following which the database was adopted for the October 2008 resource model.
The database included:

x 1070 drill hole collar records.
x 133 170 assays (excluding QAQC results). Results include CuT, Cu_CN, Cu_SS, Cu_R, Ag, Au,
and H2SO4_Kg/t, although there was insufficient information available for H2SO4 to generate a
meaningful estimate for this variable.
x 3768 density measurements.
The database was uploaded into Datamine Studio 3 mining software for resource modelling. Basic
validation checks were undertaken, less than detection values converted to half the detection limit, and
zero values set as missing data.
The data was desurveyed, and a final resource database produced, excluding 17 holes without surveys
and those drilled for metallurgical purposes. The final database contained 132 165 records.
4.5.2.2 Wireframes and Domain Coding
Marcobre supplied the following wireframes to constrain the resource model:

x 0.2% Cu grade shells for Mina Justa and Magnetite Manto
x Wireframes for the ocoite dykes at Mina Justa and Magnetite Manto
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x Wireframes for the various lithological units at Mina Justa and Magnetite Manto
x Topography, base-of-oxide and top-of-sulphide surfaces
x A bornite-chalcocite solid for Mina Justa.
Drill hole data was coded by these wireframes and the coding verified by visual comparison with the
wireframe solids.
4.5.2.3 Mineralogy Data
Mineralogical data (57 545 records) were imported as alphanumeric codes, validated and desurveyed.
4.5.2.4 Lithology and Density Data
Lithological data were imported for wireframe validation. Some Rio Tinto lithological logging was
included, but, for the most part, relogging of Rio Tinto drill holes was undertaken by Marcobre, and
given priority. This data, too, was desurveyed, and compared to the lithological wireframes provided by
Marcobre, which were found to be reasonable. However, Snowden noted the presence of a number of
ocoite intersections which were not captured by the dyke wireframes, particularly near the Cu40 area.
Density data were imported and desurveyed. This file was coded according to the base-of-oxide and
top-of-sulphide surfaces, the portion between the two being classified as Transition mineralisation. The
sulphide portion was further sub-divided into Bn-Cc or Cpy types. Semi-massive to massive magnetite
zones were separately identified by the lithology code.
Snowden considered that there was insufficient density data to allow interpolation into the resource
model. Consequently, average values were calculated for each combination of lithology and
weathering (Table 4.3). The density data was particularly inadequate for the Bn-Cc domain; this data
was combined with that from the Cpy domain and the overall average applied to the entire sulphide
domain.
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Table 4.3
Details of Block Model Density Assignment by Deposit
Density
Details Deposit 3
(t/m )
Air Both 0.00
Mina Justa 2.81
Default oxide
Magnetite Manto 2.82
Default transition Mina Justa 3.08
Default sulphide Mina Justa 3.12
Oxidised dyke Both 2.81
Transition dyke Both 2.88
Fresh dyke Both 2.90
Oxidised magnetite manto lithology
Mina Justa 3.41
Magnetite manto lithology in transition zone Mina Justa 3.70
Magnetite manto lithology in sulphide zone Mina Justa 3.53
Oxidised andesite
Mina Justa 2.73
Andesite in transition zone Mina Justa 3.04
Andesite in sulphide zone Mina Justa 3.12
Oxidised crystal tuff
Mina Justa 2.81
Crystal tuff in transition zone Mina Justa 3.04
Crystal tuff in sulphide zone Mina Justa 3.12
Oxidised arkose
Mina Justa 2.80
Arkose in transition zone Mina Justa 3.04
Arkose in sulphide zone Mina Justa 3.12
Oxidised volcanosedimentary rocks Mina Justa 2.81
Volcanosedimentary rocks in transition zone Mina Justa 3.08
Volcanosedimentary rocks in sulphide zone Mina Justa 3.12
4.5.2.5 Block Model Generation
Prototype
The block size was set at 25x25x5 m, with sub-celling to 5x5x1 m to honour wireframe boundaries. The
block size was selected to take account of drill hole spacing and the scale of mining being considered.
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Model Compilation
The block model was generated by sequential addition involving three steps, namely:
x Mineralisation (Grade shell model): the copper grade shell models were interpreted based on a
0.2% Cu cut-off from cross-VHFWLRQV ZLWK DVVLVWDQFH IURP 0DUFREUH¶V JHRORJLVWV ,QGLYLGXDO GULOO
hole intercepts were snapped to the wireframe during generation, to honour the sample data.
Barren, post-mineralisation (ocoite) dykes were ignored during the interpretation, but were
superimposed subsequently in Datamine.
x Lithological Model: Lithological data recorded during core logging were electronically stored as
LithoType and LithoSubType fields. Atticus and Associates, a Lima-based geological consultancy,
used these fields in the generation of lithological models for the Mina Justa Prospect.
Separate lithological models were generated for the volcanic, sedimentary, intrusive (dyke) and
metasomatic (magnetite manto) lithological units. Spatial continuity of the volcanic and
sedimentary units was interpreted and modelled using north-south sections spaced at 50 m
intervals. Modelling of the ocoite dyke and magnetite manto units was conducted directly in three
dimensions rather than on a sectional basis, due to their complex geometries. All surfaces and
solids were generated using the Leapfrog modelling software and were then exported in Datamine
Studio wireframe format for validation and subsequent use in resource modelling.
x Mineralogical Model: The mineralogical model created by Atticus and Associates was divided into
Oxide, Transition, Sulphide, and Bornite-Chalcocite domains. The Oxide domain was defined by a
minimum CuSS/CuT ratio of 60%. Mineralogical information from drill logs was used to
supplement the interpretation when sparse sequential copper data was encountered. A maximum
CuSS/CuT ratio of 30% defined the Sulphide domain. The Transition zone was defined as the
zone between the Oxide and Sulphide domains.
Definition of the Bornite-Chalcocite domain used a CuCN/CuT ratio of 50%, although
experimentation with a 90% CuCN/CuT ratio showed little variation in the defined volume.
For the purposes of resource estimation, the Transition zone three-dimensional solid was not used
by Snowden. Instead, the Transition domain was defined in Datamine Studio software by using
overlapping relationships, where the block moGHO ZDV JLYHQ D GHIDXOW ³WUDQVLWLRQ ]RQH´ FRGH
(CODE=152), and other domains were superimposed on top of it.
4.5.2.6 Grade Modelling
Sample Composites
A composite length of 2 m was selected following analysis of sample data. The domain-coded raw drill
hole data were composited to 2 m, retaining all residual composites regardless of length, with
compositing controlled by domain. The resulting drill hole file was validated by comparison against the
input domain-coded drill hole file, as well as by ³metal content´ (ie, comparing the sum of length x grade
pre- and post-compositing).
Top-cuts
Statistical analysis indicated the presence of extreme outlier values in the raw and composited data for
the variables of interest. Snowden undertook grade capping analysis on the composited,
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domain-coded drill hole data for each of the variables of interest, and top-cuts were applied to the
domain-coded and composite data.
Top-cuts for the sequential copper data were set at the same percentile as those determined from the
total copper data, to preserve relationships between these variables.
Details of the top-cuts applied to CuT in each domain are presented in Table 4.4. Validation of the
top-cut application was focussed on total copper as this is the economically most important constituent
of the deposit. Top-cuts applied to the total copper data were validated globally against the input uncut
domain-coded composited drill hole data, as well as in terms of ³metal´ loss. Top-cuts were also
determined for Ag and Au data.
Table 4.4
Top-cuts Applied: Cut by Domain
Domain Variable Top-cut No data No. top-cut Top-cut Mean Mean
(uncut) Percentile (Uncut) (Top-cut)
10 Cu 7.0% 18 701 39 99.79% 0.485% 0.478%
151 Cu No TC 1258 0 - 0.742% -
152 Cu 7.00% 771 2 99.74% 0.755% 0.747%
153 Cu 2.25% 556 9 98.38% 0.338% 0.300%
201 Cu 9.4% 2988 8 99.73% 0.755% 0.751%
202 Cu 8.4% 3333 7 99.79% 0.745% 0.742%
211 Cu 22.3% 1913 4 99.79% 2.073% 2.064%
212 Cu 2.29% 405 4 99.01% 0.523% 0.516%
100 Cu 6.4% 2018 10 99.48% 0.620% 0.616%
Note: Limited Ag and Au data in Oxide and Magnetite Manto domains due to relative absence of silver and gold in these
domains, and so top-cut analysis not undertaken for this data.
The top-cuts applied do not significantly reduce the mean grade, either globally or on a domain basis
except for domain 153, in which a 12% loss of metal occurred, due probably to the small number of
samples involved and the presence of a mixed population. OtherwiVHWKHGHFUHDVHLQµPHWDO¶FRQWHQWLV
within acceptable limits for all other domains.
Variography
Variographic analysis was conducted on the total copper and sequential copper data for the Oxide and
Magnetite Manto domains, and on the copper, silver and gold data for the Transition, Cpy sulphide and
Bn-Cc sulphide domains.
Horizontal, across-strike and dip-plane continuity directions were defined based on variogram fans,
JHRORJLFDO FRQVWUDLQWV DQG GLVFXVVLRQV ZLWK 0DUFREUH¶V JHRORJLVW ([SHULPHQWDO YDULRJUDPV ZHUH
generated for the three principle directions of the modelled continuity ellipsoid, using normal scores
transformed data, with all modelled variances back-transformed prior to estimation. Variogram models
generated in normal scores space were checked against untransformed and log-transformed
experimental variograms, and results indicated that the selected model parameters were robust.
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Variogram directions and model parameters for total copper were superimposed on variograms of
sequential copper data for each domain and found to be a close approximation of the continuity of this
data. Thus the total copper data variogram parameters were applied for all the sequential copper data
in the estimation process in order to maintain the relationship between the different copper components
during grade interpolation.
Results of the continuity analyses and variogram model parameters for total copper are presented in
Table 4.5. Example experimental variograms and variogram models are presented for total copper
data along the major, semi-major and minor directions for selected domains in Figure 4.6 and Figure
4.7.
Search Volume Parameters

An expanding search strategy was used, based on the results of the variography. Ranges for the first
search pass were defined on the basis of the variogram and were generally set within the variogram
range. Details of the search volume parameters are presented in Table 4.6.
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Figure 4.6
APPENDIX V
Example Variograms and Variogram Models for Oxide Domains in the Mina Justa Prospect
— V-112 —
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Figure 4.7
APPENDIX V
Example Variograms and Variogram Models for Selected Transition and Sulphide Domains in the Mina Justa Prospect
— V-113 —
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APPENDIX V
Table 4.5
Variogram Parameters: October 2008 Resource Update
Range1 Range2 Range3
Direction Datamine
(m) (m) (m)
Domain ZXZ Angles Nugget Sill1 Sill2 Sill3
Semi Major
Major (D1) Minor (D3) (Y=D1) D1 D2 D3 D1 D2 D3 D1 D2 D3
(D2)
Total copper (Cu)*
10 -ĺ -ĺ -ĺ {-90, 165, 40} 0.28 0.49 30 10 8 0.13 75 50 50 0.10 160 100 100
151 -ĺ ĺ -ĺ {-80, 170, 0} 0.09 0.45 50 70 10 0.32 230 195 12.5 0.14 415 195 12.5
152 -ĺ ĺ -ĺ {-75, 150, 0} 0.08 0.64 130 75 9 0.28 175 150 17 - - - -
153 -ĺ -ĺ -ĺ {-65, 170, 25} 0.06 0.62 60 60 5 0.32 135 100 10 - - - -
201 -ĺ ĺ -ĺ {-45, 160, 0} 0.10 0.50 30 95 7 0.40 220 155 32 - - - -
202 -ĺ ĺ -ĺ {-40, 135, 0} 0.07 0.34 65 55 35 0.59 115 175 35 - - - -
— V-114 —
211 -ĺ ĺ -ĺ {-65, 160, 0} 0.12 0.24 70 60 5 0.23 70 115 15 0.41 150 280 50
212 -ĺ ĺ -ĺ {-65, 160, 0} 0.12 0.24 70 60 5 0.23 70 115 15 0.41 150 280 50
100 -ĺ -ĺ ĺ {-30, 55, 75} 0.05 0.64 50 35 25 0.31 125 55 25 - - - -
Note: a direction of -11° to 141° means a plunge of 11 degrees towards an azimuth of 141 degrees, Mina Justa Prospect local grid system; backtransformed nugget and sill values shown.

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APPENDIX V
Table 4.6
Search Volume Parameters
Datamine First Search Pass (SVOL1) Second Search Pass (SVOL2) Third Search Pass (SVOL3)
Domain ZXZ Angles
D1, D2, D3 Samples Factor Samples Factor** Samples
(Y=D1)
Total copper (Cu)*
10 {-90, 165, 40} 160, 100, 50 min. 12, max. 30, mpd. 5 1.5 x SVOL1 min. 10, max. 30, mpd. 5 5 x SVOL1 min. 6, max. 15, mpd. 5
— V-115 —
Notes:
*Search volume parameters for total copper used for sequential copper components Cu_SS, Cu_CN and Cu_R for the relevant domains; mpd=maximum number of samples per drill hole;
**SVOL3 set large to ensure all blocks in 0.2% Cu grade shells informed with grade; orientation data reference Mina Justa Prospect local coordinate system.

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Grade Estimation
Total copper, sequential copper, silver and gold grades were estimated into the relevant domain-coded
blocks in the input block model using ordinary kriging. The domain-coded, composited and top-cut drill
hole file was used as the input drill hole data file for grade estimation. Mineralogical data were
estimated into the input model using the nearest neighbour technique.
Block model grade estimates were reviewed in detail by Snowden to ensure that the estimation process
had worked. Sequential copper data were estimated into blocks using the variogram and search
volume parameters defined for total copper, to honour ratios between the variables and the relationship
CuT=CuSS+CuCN+CuR as far as possible. Following block grade estimation, the sequential copper
data were normalised to the total copper data on a block-by-block basis, given that there is confidence
in the quality of the total copper data. This normalisation process was conducted to ensure that the
ratios between the three sequential copper components were retained. Detailed validation checks were
conducted on the normalised sequential copper data by Snowden to check that this process worked
correctly. In general, the pre-normalisation sum of the sequential copper data matched the total copper
grade fairly closely and only minor adjustments were made to the individual sequential copper
components during the normalisation process.
Model Confidence Classification

Resource model classification took account of data quality, geological continuity, confidence in the
geological model and current level of domaining, grade continuity (from the variography), kriging
efficiency and drill hole spacing. Based on review of all of these factors, Snowden is of the opinion that
the total copper, sequential copper, silver and gold models are of sufficient quality to support Indicated
and Inferred classifications as per CIM (2005) definitions for the Mina Justa and Magnetite Manto
deposits.
Example views of the October 2008 mineral resource model colour-coded according to resource
category are presented in Figure 4.8. The relatively low proportion of Indicated material in the deep
sulphide domains and in the Magnetite Manto domain are due to excessive extrapolations of the grade
shell interpretation into areas that are not well supported by the current drilling.
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Figure 4.8
W-E Section through Mina Justa Prospect, Coded by Resource Category
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$OWKRXJKLQ6QRZGHQ¶VRSLQLRQWKHGDWDLVRIVXIILFLHQWTXDOLW\DQGDWDSSURSULDWHGULOOKROHVSDFLQJWR
support a Measured classification in parts of the deposit (eg, the Cu40 area, the Northern Oxides and
part of the Cpy Sulphide domain), there are insufficient geologically and spatially representative density
data to raise confidence in the applied density model to the required level at this stage. This is
particularly important in a prospect such as Mina Justa in which density varies significantly in plan and
with depth as a function of lithology, weathering, alteration, and mineralisation.
The mineralogical data is subjective and cannot be classified according to the CIM (2005) resource
classification definitions.
Model Validation
Block model validation was conducted by Snowden on the Indicated material as follows:
x Detailed review of the compilation of the input block model to ensure that all blocks were correctly
coded.
x Visual inspection of drill hole and block model grade data for each of the variables of interest,
colour coded according to grade, to ensure that input data trends are honoured in the resource
model.
x Global comparison of model and input drill hole grades for total copper, acid-soluble copper, silver
and gold (in relevant domains) to assess global unbiasedness (Table 4.7).
x Comparison of grade trends between the declustered, domain-coded, composited and top-cut input
drill hole data and the block model on easting, northing and elevation slices to assess areal bias.
Snowden conducted this validation step on the total copper, acid-soluble copper, silver and gold
variables on a by-domain basis, and noted that the block model data honoured trends in the input
drill hole data for each variable of interest. A selection of these plots is presented in Figure 4.9.
x Grade-tonnage reporting checks. Grade-tonnage reports were generated in independent software
packages to ensure no errors were made during reporting.
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Table 4.7
Model Validation: Global Mean Grade Comparisons by Domain
Variable Domain Mean Grade
Input data* Block Model
Cu 10 0.45% 0.46%
151 0.70% 0.73%
152 0.87% 0.83%
153 0.33% 0.32%
201 0.69% 0.73%
202 0.70% 0.68%
211 1.90% 1.93%
212 0.52% 0.53%
100 0.58% 0.58%
Cu_SS 10 0.36% 0.37%
*Note: Input drill hole data are declustered, domain-coded, composited and top-cut. All data from that part of the
resource classified as Indicated. Declustering conducted using nearest neighbour interpolation into block model for
relevant variables and domains.
Based on the results of block model validation, Snowden considers the resource model to be valid, with
the block estimates honouring the input drill hole data. Example local grid west-east cross-sections
through the validated block model, filtered such that CODE>0.1, colour coded according to total copper
are presented in Figure 4.10, Figure 4.11 and Figure 4.12.
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Figure 4.9
Comparison of Grade Trends between Block Model and Input Drill Hole Data
APPENDIX V
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Figure 4.10
Local Grid West-East Cross-Sections through the Mina Justa Prospect Resource Model, Colour Coded According to Total Cu
APPENDIX V
a b
— V-121 —
c d
e f
Notes: Cross-sections are filtered such that CODE>0.1. Sections along a) 9100 mN, b) 9200 mN, C) 9300 nN, d) 9400 mN, e) 9500 mN; topography (brown), base of oxides (ochre), and top-of-sulphide (red) surfaces are shown for reference. Yellow: Oxide, Mina Justa Deposit
(CODE=10); Dark blue: Oxide, Magnetite Manto Deposit (CODE=100); Light blue: Transition, Mina Justa (CODE=151); Dark green: Transition, Mina Justa (CODE=152); Light green: Transition, Mina Justa (CODE=153); Orange: CPY sulphide, Mina Justa (CODE=201); Light
orange: CPY sulphide, Mina Justa (CODE=202); Pink: Bn-Cc sulphide, Mina Justa (CODE=211); Magenta: Bn-Cc sulphide, Mina Justa (CODE=212).

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Figure 4.11
APPENDIX V
a b
— V-122 —
c d
e f
Notes: Cross-sections are filtered such that CODE>0.1; sections along a) 9700 mN, b) 9800 mN, c) 9850 mN, d) 9900 mN, e) 9950 mN, and f) 10000 mN; topography (brown), base-of-oxide (ochre) and top-of-sulphide (red) surfaces are shown for reference. Yellow: Oxide,
Mina Justa Deposit (CODE=10); Dark blue: Oxide, Magnetite Manto Deposit (CODE=100); Light blue: Transition, Mina Justa (CODE=151); Dark green: Transition, Mina Justa (CODE=152); Light green: Transition, Mina Justa (CODE=153); Orange: CPY sulphide, Mina Justa
(CODE=201); Light orange: CPY sulphide, Mina Justa (CODE=202); Pink: Bn-Cc sulphide, Mina Justa (CODE=211); Magenta: Bn-Cc sulphide, Mina Justa (CODE=212).

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Figure 4.12
APPENDIX V
a b
— V-123 —
c d
e f
Notes: Sections are filtered such that CODE>0.1. Sections along a) 10 050 mN, b) 10 100 mN, c) 10 150 mN, d) 10 200 mN, e) 10 300 mN, and f) 10 400 mN; topography (brown), base-of-oxide (ochre) and top-of-sulphide (red) surfaces are shown for reference. Yellow: Oxide,
Mina Justa Deposit (CODE=10); Dark blue: Oxide, Magnetite Manto Deposit (CODE=100); Light blue: Transition, Mina Justa (CODE=151); Dark green: Transition, Mina Justa (CODE=152); Light green: Transition, Mina Justa (CODE=153); Orange: CPY sulphide, Mina Justa
(CODE=201); Light orange: CPY sulphide, Mina Justa (CODE=202); Pink: Bn-Cc sulphide, Mina Justa (CODE=211); Magenta: Bn-Cc sulphide, Mina Justa (CODE=212).

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4.5.2.7 Mineral Resource Reporting
CIM Definitions
x Mineral resources that are not mineral reserves do not have demonstrated economic viability. The
mineral resources presented in this section are inclusive of any ore reserves that are defined in
other parts of this report.
x A Measured mineral resource (CIM, 2005) is that part of a mineral resource for which quantity,
grade or quality, densities, shape, and physical characteristics are so well established that they can
be estimated with confidence sufficient to allow the appropriate application of technical and
economic parameters, to support production planning and evaluation of the economic viability of
the deposit. The estimate is based on detailed and reliable exploration, sampling and testing
information gathered through appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes that are spaced closely enough to confirm both geological and grade
continuity. This classification requires a high level of confidence in, and understanding of, the
geology and controls of the mineral deposit.
x An Indicated mineral resource (CIM, 2005) is that part of a mineral resource for which quantity,
grade or quality, densities, shape, and physical characteristics can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and economic parameters, to
support mine planning and evaluation of the economic viability of the deposit. The estimate is
based on detailed and reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough for geological and grade continuity to be reasonably assumed. An Indicated
mineral resource estimate is of sufficient quality to support a preliminary feasibility study.
x An Inferred mineral resource (CIM, 2005) is that part of a mineral resource for which quantity and
grade or quality can be estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The estimate is based on
limited information and sampling gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes. Confidence in an Inferred mineral resource
estimate is insufficient to allow the meaningful application of technical and economic parameters or
to enable an evaluation of economic viability worthy of public disclosure. Inferred mineral resources
must be excluded from estimates forming the basis of feasibility or other economic studies.
Resource Reporting
The Mineral Resources are as reported by Snowden in October 2008, and reviewed by AMEC Minproc
as part of this technical report. No mining has occurred to deplete the resource.
The October 2008 global classified resource for the Mina Justa Prospect is presented for total Cu in
Table 4.8 and for Ag and Au in Table 4.9.
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Table 4.8
Mina Justa Prospect Global Classified Resource for Total Cu
Cut-off grade Million CuT Contained Cu
(CuT %) Tonnes (%) (Million lb)
Indicated
0.2 411.3 0.67 6 070
0.3 336.8 0.76 5 650
0.4 246.9 0.91 4 960
Inferred
0.2 77.5 0.72 1 240
0.3 64.6 0.82 1 170
0.4 50.9 0.94 1 060
Data may not tally exactly due to rounding. CuT=total Cu%.
Table 4.9
Global Classified Resource for Ag and Au
Cut-off grade Million Ag Au Contained Ag Contained Au
(CuT %) Tonnes (g/t) (ppb) (kOz) (Oz)
Indicated
0.2 189.3 7.77 51.48 47 290 313 300
0.3 161.8 8.75 55.95 45 530 291 000
0.4 135.4 9.93 61.61 43 230 268 200
Inferred
0.2 68.8 4.50 71.13 9960 157 400
0.3 58.3 5.03 79.22 9430 148 500
0.4 48.1 5.63 89.89 8700 138 900
Silver and gold data reported only for the transition and sulphide domains. CuT=total Cu%. Data may not tally exactly
due to rounding.
The global classified resource detailing total and sequential copper data as of October 2008 is
presented in Table 4.10.
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Table 4.10
Mina Justa Prospect Global Classified Resource: Sequential Copper Data
Cut-off grade Million CuT Cu_SS Cu_CN Cu_R Contained Cu
(CuT %) Tonnes (%) (%) (%) (%) (million lb)
Indicated
0.2 411.3 0.67 0.26 0.19 0.22 6070
0.3 336.8 0.76 0.29 0.23 0.25 5650
0.4 246.9 0.91 0.31 0.29 0.30 4960
Inferred
0.2 77.5 0.72 0.08 0.12 0.53 1240
0.3 64.6 0.82 0.08 0.14 0.60 1170
0.4 50.9 0.94 0.08 0.15 0.72 1060
Data may not tally exactly due to rounding
4.6 GEOTECHNICAL STUDIES
4.6.1 Introduction
Knight Piésold, an independent consulting group specialising in geotechnical studies, and waste
characterisation and waste storage matters, carried out geotechnical investigations at the DFS level for
pit slope design, tailings storage, waste rock dumps, ripios dumps, stockpiles and process plant
structures. The field work was conducted between October 2006 and November 2007, during which
time representative samples were collected for laboratory tests and in-situ tests were completed.
Sources of potential borrow materials were also identified and classified.
The geotechnical program and geological and structural mapping results are presented in Figure 4.13
and Figure 4.14.
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Figure 4.13
Geotechnical Plan: West Sector Plant
APPENDIX V
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Figure 4.14
Geotechnical Plan: East Sector Plant
APPENDIX V
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The geotechnical investigation program consisted of the following:

x Ten oriented core drill holes in the main (Mina Justa) pit area, with depths ranging between 260
and 750 m.
x Five oriented core drill holes in the Magnetite Manto pit area, with depths ranging between 101 and
173 m.
x Eight drill holes distributed over the areas where the main project facilities are located, with depths
ranging between 30 and 120 m.
x Geomechanical mapping and lithological description of material from 40 drill holes.
x Geological-geomechanical surface outcrop mapping and detailed line mapping (7 traverses).
x Field testing: Standard Penetration Testing, permeability tests in soil and rock, Point Load Testing
and in-situ density of soils.
x Rock laboratory testing: Index properties, triaxial tests, Unconfined Compressive Strength (UCS)
and direct shear.
x Tests of representative rock samples to characterise the foundation materials and locate borrow
materials.
x Installation of two open pipe piezometers and a vibrating wire piezometer.
4.6.2 Open Pit Geotechnical Design Parameters
The final Main or Mina Justa pit area will measure 2.2 km by 1.3 km with a maximum depth of 430 m,
while the final Magnetite Manto pit will be 0.55 km by 0.31 km by 155 m deep.
From the geotechnical database, a simplified geotechnical model has been defined for pit slope design,
comprising three major geotechnical domains:
x Domain I: Overburden, 1.0 to 6.1 m thick, including Quaternary aeolian and alluvial deposits, that
have no effective influence on pit slope design.
x Domain II: Tunga andesite (ocoite) ranging from fresh to slightly weathered, but locally highly
weathered in fault zones. UCS value is high on average (77 MPa).
x Domain III: Volcanic-sedimentary rocks of the Rio Grande formation, weathering as in Domain II
and with similar UCS values.
The rock mass quality characterisation, using the Rock Mass Rating (RMR) classification system,
VKRZV WKDW FRUUHVSRQG WR ³SRRU´ URFN WR ³IDLU´ DQG WR ³JRRG´ /LWWOH GLIIHUHQFH ZDs
observed between ocoite and volcano-sedimentary host rocks in this regard.
The most important structural characteristics observed in the project area are block faulting and
fracturing related to major structures. These structures are of critical importance as they directly
influence the quality of the rock mass and, thus, affect the development and operation of the open pits.
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In the main pit area, the result of the analysis of major structures indicates that the structural
arrangement is represented by four main fault systems:
x System 1: The dominant system has a NW-SE direction and dips varying between 35º and 70º
NE. This system is related to regional faults such as the Tunga and Treinta Libras faults.
x System 2: Has an ENE-WSW direction with dips varying between 44º (Zorrito fault) and 66º to the
southeast.
x System 3: Has a NE-SW direction with dips varying between 45º and 75º to the northwest.
x System 4: Has a NW-SE direction, with dips varying between 60º and 80º to the southwest.
Analysis of small scale structures shows the presence of 3 main systems and 2 random systems, as
follows:
x Main systems:
N22°W trending, dipping 56°NE
N23°E trending, dipping 54°SE
N83°W trending, dipping 54°SW.
x Random systems:
N18°W trending, dipping 40°SW
N49°E trending, dipping 58°NW.
Based on the geotechnical model and the proposed pit shell, a total of 13 pit design sectors were
defined for the Main pit and three for the Magnetite Manto pit. However, a review of the data shows
that quality of the rock mass and the structural features show little variation among the design sectors.
Two types of stability analysis of pit slopes were carried out for each design sector, namely kinematic
stability analysis controlled by rock mass structures, and overall slope stability analysis controlled by
rock mass strength. The pit slope geometries for each design sector have been determined based on
minimum acceptable criteria for each of these design methods.
The minimum factor of safety (FoS) criteria adopted for stability analyses are in accordance with the
Peruvian regulations and are 1.3 under static conditions and >1.0 (post-earthquake) taking account of
peak ground acceleration for 100 year return events. Based on a seismic study, a peak ground
acceleration of 0.20 g is predicted for a return period of 100 years; a value of 0.12 has been assumed
as the horizontal seismic coefficient, based on standard practice.
Stability analysis results indicate that a bench face angle of 65° to 70° is expected to be achievable for
the pits. A 20 m high double-benching configuration is recommended for pit development.
Recommended inter-ramp slope angles range from 45° to 50°, as shown in Table 4.11.
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Table 4.11
Pit Slope Design Criteria
Pit Design Sector Bench Slope Bench Height Bench Width Inter-ramp
Angle (m) (m) Slope Angle
I 65 20 11 45
II 70 20 10 49
Northern Oxide
III 70 20 10 49
IV 65 20 11 45
V 65 20 11 45
VI 65 20 9 48
Main VII 70 20 10 49
VIII 70 20 10 49
XII 65 20 11 45
XVI 65 20 11 45
XVII 65 20 9.5 47
Cu40
XVIII 65 20 9.5 47
XIX 65 20 11 45
XIII 70 20 9.5 50
Magnetite Manto XIV 65 20 9 48
XV 65 20 9 48
Slope stability is sensitive to blasting disturbance. Consequently, low damage controlled blasting is
recommended for the development of final pit walls.
The recommended slope configurations do not eliminate all potentially unstable blocks in the pit wall. A
certain percentage (less than 35%) of bench scale planar/wedge daylighting is acceptable and can be
managed during pit mining operations. Regular bench scaling and ravelling clean-up should be
implemented to control the potential rockfall hazard and a geotechnical instrumentation system is
recommended to monitor pit wall performance during operations.
4.6.3 Site Geotechnical Investigations: Tailings Storage and Process Facility Areas
Bedrock consists primarily of crystal tuff, epiclastic sandstone and lithic volcanoclastic rocks of andesitic
composition, together with fine-grained andesite. This sequence is intruded by sub-volcanic porphyritic
andesite.
The basement is covered by Quaternary aeolian deposits over the majority of the site, with alluvial
materials in valley bottoms, such as in the TSF area. Site investigations indicate that the cover material
is loose to medium dense aeolian sand, between 0.5 m and 4 m thick.
Beneath the aeolian sand there is a thin layer of poor quality and heavily weathered rock with a lower
RMR value of approximately 29. Below this layer there is fair to good quality rock (RMR value between
45 and 55) extending to depths greater than 700 m below surface.
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In the TSF area, the aeolian sands are underlain by dense alluvial sand and gravel deposits with
thicknesses of as much as 65 m observed in the investigation drill holes. Underlying this is a
conglomeratic sandstone in the order of 15 m thick, overlying basement rocks.
The plant site area is founded on fair to good quality bedrock (average RMR of 51). The thin overlying
aeolian sands and any poor quality rock will be removed to reach the foundation level.
4.6.4 Borrow Materials
Source areas for suitable borrow materials to be used during the construction have been located. An
approximate volume of 1 295 000 m3 of common fill material is estimated to be contained in two
quarries adjacent to the plant site.
Approximately 933 000 m3 of fine grained construction materials have been identified in the two
quarries and the Chauchilla fine material quarry. While more distant from the construction area, the
Chaucilla quarry is expected to provide a source of suitable clay-fraction material for blending to
achieve required plasticity, permeability and particle size.
Non-PAG waste rock from the Magnetite Manto Pit has been confirmed to be suitable for construction
of the tailings dam. However, Marcobre intends to conduct studies to confirm that waste rock available
early from the Main Pit will also be suitable for construction of the tailings dam, since production from
Magnetite Manto pit is not scheduled to start in time for construction of the starter dam.
4.6.5 Groundwater
Results obtained from a vibrating wire piezometer in the Main pit area indicate that the phreatic level
(depth to ground water) is 470 m deep (312 masl). The water level is approximately 90 m below the
base of the final pit, consequently, the pit will be developed under dry conditions.
4.6.6 Site Stability
The slopes, hills and low mountains in the area display stable conditions, and there is no risk of flash
floods, landslides or other mass displacement phenomena.
4.6.7 Seismic Risk Analysis
The site is prone to seismic activity that is largely associated with the subduction of the Nazca plate
beneath the Continental plate just off the west coast of Peru. Based on a seismic hazard study, the
area is subject to high intensity seismic events capable of causing serious damage.
Both deterministic and probabilistic analyses were carried out. The deterministic analysis defined the
potential source zones, types and properties of earthquakes that could be experienced at the site,
based on its seismic setting, and included defining the potential Maximum Credible Earthquakes
(MCEs) that the site could experience. The probabilistic analysis produced a statistical relationship
between peak ground acceleration (PGA) and return period for earthquakes that the site could be
expected to experience based on the recorded seismic history.
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The deterministic analysis identified the maximum event as a magnitude Mw 8.0 upper intraplate
subduction earthquake, producing a mean plus one standard deviation PGA at the site of 0.48 g.
The probabilistic analysis gave PGAs at the site, in the free field, for selected return period events, as
shown in Table 4.12.
Table 4.12
Probabilistic Analysis: Peak Ground Acceleration in Rock
1
Average Return Period PGA
Site Comments
(Years) (g)
50 0.15
100 0.20
475 0.36 10% prob. of exceedance in 50 years.
Mina Justa 1000 0.44
2475 0.58 2% prob. of exceedance in 50 years.
5000 0.70
10000 0.84
(1)
PGAs associated with 63% probability of exceedance minus the representative of the case where the design life in
years equals the return period.
Appropriate seismic coefficient values were determined for each mine facility according to the risk,
flexibility, and life of the corresponding structure.
4.7 MINING
4.7.1 Introduction
The Mina Justa and Magnetite Manto deposits are located at low altitude in an arid area of moderate
topography. Rock strengths are low to moderate. There is no groundwater and insignificant rainfall.
These factors suggest that open pit mining should be routine and low cost. Negative aspects include
the relatively low grade of the Oxide mineralisation and the presence of barren dykes that are pervasive
throughout the mineralisation. In order to minimise dilution and mining losses, selective mining on 10 m
benches (5 m mining flitches) is specified using excavators configured as backhoes.
The bulk of mining is focussed in the Mina Justa deposit which includes Oxide (vat leach feed) and
deeper Sulphide (concentrator feed) mineralisation. Oxide ore is also mined from the Magnetite Manto
pit. Oxide ore is hauled to the vat feed crusher and the long term Oxide stockpiles. Sulphide ore is
hauled to a separate concentrator crusher. The majority of waste is hauled to the main waste dump,
with other destinations including the Magnetite Manto waste dump, the concentrator tailings dam
embankment, the ROM stockpile area and the ripios disposal containment structure.
Figure 4.15 displays the general mining site plan including final pits, waste dumps, stockpiles, ripios
dump and tailings dam.
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Figure 4.15
Final Pit and Dump Layout Plan
APPENDIX V
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Mine planning activities performed during the course of the study included:
x Pit optimisation
x Pit and dump designs
x Mineral reserve estimation
x Mine and process scheduling
x Mine fleet assessment
x Mine operating and capital cost estimation.
4.7.2 Pit Optimisation
The resource model prepared by Snowden was based on 25 m x 25 m x 5 m parent block size with
smaller sub-cells. Several regularised mining models were prepared to investigate the impact of block
size on dilution and mining losses relative to the in-situ resource model, and a block size of 10 m x
10 m x 5 m was selected as the basis for mine planning.
Pit optimisation of the mining model (Indicated mineralisation only) was carried out using Whittle Four-X
software. Optimisation input parameters were based on information available at the start of the study,
including overall slope input (41° to 44°) from Knight Piésold and a copper price of $1.65/lb. Revenue
was received from both Vat and Concentrator ore streams. The optimisation was constrained to prevent
mining on the adjacent Shougang property. A number of different analysis scenarios and sensitivities
were produced and shells were selected to form the basis for the ultimate and staged pit designs.
4.7.3 Pit and Dump Design
Ultimate and staged pit designs were created from the selected optimisation shells incorporating access
ramps. Access was generally by a single ramp of 30 m width at a maximum design grade of 10%.
Ramps were narrowed to one-way at depth in the pits to minimise associated waste. There are 4
discrete pits, of which 2 are developed in stages to defer waste stripping and improve ore presentation.
Pit slope geotechnical investigations were carried out by Knight Piésold. Pit design sectors were
established to group areas of the proposed pits with similar geometric, geological and rock mass quality
characteristics. Stability analysis results indicate that a bench face angle of 65° to 70° is expected to be
achievable. A 20 m high double benching configuration is recommended for pit development.
Recommended inter-ramp slope angles range from 45° to 50° depending on the design sector.
Pit inventories are summarised in Table 4.13, and ultimate pit designs are illustrated in Figure 4.16.
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Table 4.13
Pit Inventory
Unit Main Pit Northern Copper 40 Magnetite Total
Oxide Manto
Vat Ore Mt 90.4 17.0 2.6 4.6 114.6
Concentrator Ore Mt 48.0 - 0.8 - 48.8
Waste Tonnes Mt 329.5 43.5 10.9 18.5 402.4
Total Material Mt 467.9 60.5 14.3 23.1 565.8
Strip Ratio t:t 2.38 2.56 3.23 3.96 2.46
Figure 4.16
Ultimate Pit Designs
It is estimated that the Project will generate approximately 402.5 Mt of waste rock, of which 383 Mt will
be placed in the Main waste dump, 14 Mt in the Magnetite Manto waste dump and the remaining 5.5 Mt
(non-PAG material) will be used for construction of the tailings dam.
The main waste dump is located northeast of the main pit and also serves as the containment structure
for ripios storage. The ripios will be surrounded by mine waste rock to maintain adequate physical
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stability of the material. The ripios dump has a capacity of approximately 114 Mt and will contain the
waste product from the vat leaching process.
A separate dump is provided for Magnetite Manto pit waste, some of which may be used for tailing dam
embankment construction. Some mine waste will be directed to enlarge the ROM pad to provide a
suitable configuration for dumping, storage and rehandle of crusher feed. Some opportunistic backfill of
waste into the Northern oxide pit may be feasible near the end of the mine life.
Current estimates are that 15 Mt of mine waste will be classified as PAG. This material will be placed
within designated areas within the main waste dump, but in areas well removed from the ripios and final
outer faces. It will be surrounded by non-PAG waste and at closure it will be covered by non-PAG
waste.
A large long term stockpile is also allowed for excess, lower grade vat feed that accumulates during the
early years of mining.
Waste storage areas and stockpiles are illustrated in Figure 4.17.
Figure 4.17
Waste Storage Areas and Stockpiles
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4.7.4 Mineral (Ore) Reserve
The Mina Justa Mineral Reserve is that portion of the Indicated Resource that is contained within the
ultimate pits and has recoverable metal values that allow economic treatment (Table 4.14). The
Mineral Reserve is classified as Probable Mineral Reserve.
The Mineral Reserve was determined by AMEC Minproc as of June 2009, as part of the DFS. The
Mineral Reserve is based on the most recent resource model, which was developed by Snowden in
October 2008, and reviewed by AMEC Minproc as part of this technical report. No mining has occurred
subsequently to deplete the Mineral Reserve.
Table 4.14
Mina Justa Probable Mineral Reserve (1), (2), (3)
Tonnes CuT CuSS Ag
Classification
(Mt) (%) (%) (ppm)
Vat Feed 114.6 0.56 0.46 -
Concentrator Feed 48.8 1.37 - 14.1
Total 163.4 0.80 - -
(1) Reported according to NI 43-101 reporting guidelines, QP is Ross Oliver, an employee of AMEC Minproc.
(2) No Measured resource so no Proved Mineral Reserve.
(3) Mineral Reserve cut-off is based on an NSR (Net Smelter Return) calculation and a copper price of $1.65/lb.
4.7.5 Mine and Process Schedules
Bench reporting of reserve information was performed for the pit stages and imported into a purpose-
built mine scheduling spreadsheet. A range of mining rates and vat leach cathode production profiles
was investigated. A final mining rate of 60 Mt/a was adopted as a sustainable rate that could bring
forward the mining and treatment of higher grade concentrator feed and also sustain a cathode
production rate of 52 000 t/a of copper.
Mine and process scheduling was carried out on a monthly basis for the pre-strip (Yr-1) and first year of
production, quarterly for Year 2 through Year 5 and annually thereafter. The quarterly resolution was
necessary to ensure ore availability for the deferred concentrator start.
Figure 4.18 illustrates the mining production rate by pit stage over the mine life. The majority of mining
is associated with developing and sustaining the presentation of the deeper sulphides from the
Mina Justa Main Pit stages. Figure 4.19 shows the material types mined.
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Figure 4.18
Total Mining Tonnage by Pit Stage (Mt)
Figure 4.19
Ore Mining Tonnage by Material Type (Mt)
Table 4.15 shows the annual mining and processing production schedule.
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Table 4.15
Annual Production Schedule: Mining and Processing
Mining Total Yr-1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12
Vat Ore (kts) 114 602 4 640 14 791 20 568 8 977 8 866 14 836 12 811 8 158 10 059 8 762 2 134
APPENDIX V
Cu (%) 0.56% 0.44% 0.47% 0.54% 0.57% 0.57% 0.58% 0.54% 0.71% 0.60% 0.69% 0.47% 0.00%
CuSS (%) 0.46% 0.37% 0.40% 0.42% 0.44% 0.46% 0.47% 0.39% 0.58% 0.51% 0.62% 0.36% 0.00%
Float Ore (kts) 48 794 2 380 5 055 5 059 4 670 5 301 5 043 5 005 5 014 5 081 6 183
Cu (%) 1.37% 1.17% 1.43% 1.33% 2.79% 1.19% 1.04% 1.01% 1.07% 1.09% 1.53%
Au (g/t) 0.029 0.016 0.016 0.020 0.037 0.026 0.022 0.021 0.033 0.044 0.048
Ag (g/t) 14.1 8.8 12.2 11.8 32.0 12.9 10.7 11.7 10.8 9.6 18.2
Total Ore (kts) 163 396 4 640 14 791 22 948 14 032 13 925 19 506 18 112 13 201 15 064 13 776 7 216 6 183
Waste (kts) 402 363 27 942 44 972 37 251 46 446 46 550 40 724 42 330 47 157 45 038 14 442 7 544 1 968
Total Mining (kts) 565 759 32 582 59 763 60 199 60 478 60 475 60 231 60 442 60 358 60 102 28 219 14 760 8 151
Strip Ratio 2.46 6.02 3.04 1.62 3.31 3.34 2.09 2.34 3.57 2.99 1.05 1.05 0.32
Closing Stockpiles
HG Vat Feed (kts) 1 180 147 1 651 1 406 825 795 2 223
MG Vat Feed (kts) 1 940 4 101 4 950 2 383
LG Vat Feed (kts) 1 520 5 934 12 150 13 344 12 593 14 024 16 241 11 574 9 663 4 998
Float Ore (kts) 461 515 574 243 544 587 592 606 687 1 871
Total (kts) 4 640 10 183 19 212 16 241 13 167 15 673 16 785 12 986 11 050 7 827 687 1 871
Processing
Vat Ore (kts) 114 602 9 248 12 000 12 001 12 000 12 000 12 000 12 000 12 000 12 000 9 355
Cu (%) 0.56% 0.56% 0.61% 0.59% 0.53% 0.56% 0.61% 0.58% 0.56% 0.54% 0.48%
CuSS (%) 0.46% 0.47% 0.47% 0.47% 0.43% 0.47% 0.45% 0.46% 0.47% 0.47% 0.39%
— V-140 —
CuRec (%) 0.42% 0.43% 0.43% 0.43% 0.39% 0.43% 0.42% 0.43% 0.43% 0.43% 0.36%
Acid (kg/t) 40.66 40.15 40.32 40.39 41.10 40.49 40.67 40.91 40.39 40.48 41.89
Cu Recovery (%) 74.5% 78.1% 71.5% 72.2% 73.4% 76.2% 68.8% 75.2% 77.4% 79.7% 74.0%
Cu in Cathode (t) 481 596 40 100 51 999 51 513 46 867 51 601 50 157 52 010 51 997 52 056 33 295
Float Ore Feed (kts) 48 794 1 919 5 001 5 000 5 000 5 000 5 000 5 000 5 000 5 000 5 000 1 871
Cu (%) 1.37% 1.23% 1.43% 1.33% 2.57% 1.31% 1.04% 1.01% 1.07% 1.10% 1.73% 0.73%
Au (g/t) 0.029 0.016 0.016 0.020 0.035 0.028 0.022 0.021 0.033 0.044 0.055 0.018
Ag (g/t) 14.1 9.3 12.3 11.9 28.9 14.1 10.7 11.7 10.8 9.7 20.8 8.9
Cu rec to Con (%) 93.0% 90.1% 91.9% 92.5% 95.3% 92.9% 91.8% 91.5% 92.6% 92.3% 95.0% 87.8%
Au Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Ag Rec to Con (%) 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Concentrate (dry t) 1 643 741 56 279 164 301 144 397 291 496 176 948 126 276 125 066 150 083 151 018 224 479 33 399
Cu Con Grade (%) 37.8% 37.7% 40.1% 42.7% 42.1% 34.5% 38.0% 37.1% 33.0% 33.7% 36.7% 35.9%
Au Con Grade (g/t) 0.70 0.44 0.39 0.56 0.48 0.63 0.70 0.67 0.88 1.17 0.98 0.81
Ag Con Grade (g/t) 335 255 299 329 397 319 340 375 288 256 370 399
Cu in Con (t) 621 373 21 192 65 867 61 618 122 596 61 053 47 945 46 431 49 528 50 834 82 319 11 989
Au in Con (ozs) 36 978 792 2 082 2 608 4 516 3 565 2 850 2 679 4 261 5 700 7 057 867
Ag in Con (kozs) 17 725 461 1 579 1 528 3 718 1 817 1 381 1 508 1 391 1 244 2 669 429
Total Copper (t) 1 102 969 40 100 73 191 117 379 108 485 174 198 111 210 99 955 98 428 101 584 84 129 82 319 11 989

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Annual Vat and Concentrator ore processing feed rates are shown in Figure 4.20 and long term ore
stockpile inventories are illustrated in Figure 4.21.
Figure 4.20
Vat and Float Ore Processing (Mt)
Figure 4.21
Long Term Stockpile Inventories (Mt)
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4.7.6 Mine Fleet Assessment
In order to minimise dilution and mining losses, and maximise the mined ore grade, a selective
approach to mining is required, mandating the use of the most selective, large scale, digging unit, the
backhoe excavator. Relative to a FEL or face shovel, the backhoe configuration allows tight control of
digging boundaries both in plan and elevation.
The selected bench height is 10 m to allow 2 nominal 5 m flitches to be mined by the backhoe. After
considering blast heave, the actual flitch height dug by the backhoe will average about 6 m. Backhoes
in the 20 m3 class can operate productively with this bench height. The selected excavator has a
production rate that is a good match for the peak throughput rates of the Vat circuit primary crusher.
A large FEL has been specified to serve the following functions:

x Provide production loading back-up in the pit when a primary excavator is unavailable
x Provide truck loading for rehandle of long term vat feed stockpiles
x Rehandle (by tramming) from short term operational stockpiles located on the ROM pad.
In order to keep operating costs low, 228 t class haul trucks and support equipment have been
selected. Crawler-mounted diesel drills capable of single pass drilling have been selected for
productivity and operational flexibility.
Fleet sizing for loading, hauling and drilling was based on unit productivity estimates from vendor and
benchmark data, plus detailed analysis of haulage profiles to estimate haul truck productivity.
A computerised dispatch system is required in order to monitor equipment, provide production statistics
and provide the information to measure and improve fleet productivity.
4.7.7 Mine Operating Cost
The mine equipment will be owned and operated by the Owner team with support in some key areas by
specialist contractors. Peru has many long term mines and trained operational and maintenance
personnel with experience in the class of mining equipment specified for the project.
Specialist support will include:

x Down-the-hole explosive supply
x Vendor preventative maintenance services for major equipment, inclusive of labour, site support
and consignment stock
x Diesel supply, storage and dispensing services.
Explosive supply will be by a local vendor providing a down-the-hole service. Since the conditions are
dry, ANFO has been specified as the sole explosive. After assessment of rock properties, powder
factors of 0.20 kg/t in waste and 0.24 kg/t in ore have been adopted.
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Key operating cost drivers are summarised in Table 4.16.
Table 4.16
Key Operating Cost Assumptions
Item Value Unit Comment
1
Diesel 0.636 $/litre includes storage & dispensing
1
AN explosive 540 $/t Dry, 100% ANFO used
3
Powder factor - ore 0.24 kg/m
3
Powder factor - waste 0.20 kg/m
Truck tyre life 5 000 hrs
1
costs supplied 1Q, 2009
The proposed major equipment fleet make-up is summarised in Table 4.17, together with key
equipment assumptions used to build up the operating cost estimate. While specific equipment models
have been used to build up the estimate, actual fleet configuration would be subject to a further
tendering and evaluation process to establish the most cost-effective mining solution. Costs were
supplied by vendors between February and July 2009.
Table 4.17
Equipment Fleet and Hourly Costs
Type Equipment Fleet Operating Operating Purchase Expected
Class Units Hours Costs Price Life
h/yr US$/h (US$ M) (h)
3
Excavator 20 m 3 6 701 $435 $5.55 60 000
Dump Truck 228 t 23 6 701 $219 $3.65 65 000
3
FEL 20 m 1 5 585 $280 $4.67 50 000
Track Dozer 433 kW 4 5 046 $105 $1.22 30 000
Wheel Dozer 372 kW 1 4 840 $89 $1.01 50 000
Grader 221 kW 3 5 606 $64 $0.82 40 000
Water Truck 45 kl 2 3 723 $91 $1.11 60 000
Production Drill 229 mm 4 4 906 $44 $1.61 50 000
Figure 4.22 illustrates the mining operating unit cost with time, showing the major operating cost
components. Mining costs are inclusive of all material handling from stockpiles, and the transport and
placement of ripios on the dump.
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Figure 4.22
Operating Costs per Tonne by Time (US$/t)
The average mine operating cost for life of the mine is $1.14/t mined as of IQ09. Costs in the earlier
years are lower, but increase in later years as haul distances increase and the total tonnage mined
decreases.
4.7.8 Mine Capital Cost
The total mine capital cost (including replacement, rebuilds and sustaining capital) has been estimated
at $138 M as detailed in Table 4.18. This cost does not include capitalisation of mining costs in the
construction period. Costs were supplied in the period February-July 2009; no escalation has been
applied.
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APPENDIX V
Table 4.18
Mine Initial and Sustaining Capital Costs: Bare Costs ($M)
Mining Capital
Mine Area Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Total
-1 1 2 3 4 5 6 7 8 9 10 11
Loading 21.78 21.78
Hauling 65.68 10.95 76.63
Drill and Blast 6.45 6.45
Support 8.53 2.04 10.57
Other 7.20 0.52 7.72
Total Mine Capital 109.64 13.51 - - - - - - - - - - 123.15
Mining Sustaining Capital
Mine Area Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Yr Total
— V-145 —
-1 1 2 3 4 5 6 7 8 9 10 11
Loading -
Hauling 3.64 0.45 0.45 3.64 0.45 8.63
Drill and Blast -
Support 3.65 1.23 4.88
Other 0.09 0.03 0.45 0.09 0.62 0.20 0.15 0.04 1.66
Total Sustaining 0.00 3.73 0.48 0.45 0.45 7.38 1.07 1.43 - 0.15 - 0.04 15.17
Capital
Total Mine Capital 109.64 17.24 0.48 0.45 0.45 7.38 1.07 1.43 - 0.15 - 0.04 138.32
Note: costs received between February and July 2009, and have not been escalated

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4.8 METALLURGY
Metallurgical testwork has been completed on representative subsamples of the Mina Justa and
Magnetite Manto ore to determine the processing requirements.
4.8.1 Oxide Ore
Testwork was initially conducted by Metso Minerals on four samples of Mina Justa Oxide ore. These
test results generated a Macon crushability result of 28%, indicating that the oxide ore is competent and
difficult to crush.
A comprehensive testwork program was completed on 21 samples representing the main Oxide ore
types at varing depths and locations within the deposits. The crushing testwork program was
conducted at Phillips Enterprises LLC (Phillips) in Colorado, USA, and at the Ammtec Limited (Ammtec)
facility in Perth, Western Australia. The Ammtec testwork and results were selected for detailed
analysis and generation of the Bond crushing work index (CWi) design values, while the Phillips
testwork results were used to further investigate trends generated from the Ammtec results.
No significant differences were noted in the CWi results for different depths or geographic locations.
The Ammtec results tended to show similar results between the andesite and sedimentary lithologies,
although amygdaloidal andesite material appeared to be marginally more competent. By contrast, the
Phillips testwork indicated that the sedimentary material may be slightly more difficult to crush.
The CWi results obtained show a large range of results between specimens within each sample tested.
Greater competency occurred for these samples with minimal inherent fractures. As the material is
crushed finer (and the rock fractures are removed), the competency of the ore is expected to increase.
This trend has been used in the selection of CWi values for the design criteria; a Bond CWi of 10 kWh/t
has been selected for the primary, secondary and tertiary crushing stages, increasing to 16 kWh/t for
the quaternary stage.
UCS testwork was undertaken by Advanced Terra Testing Inc (under the direction of Phillips). The
overall dataset showed an average UCS value of 48.2 MPa, and a maximum UCS value of 130.2 MPa.
The results of Bond abrasion index tests conducted by Phillips showed that the sedimentary material is
less abrasive, with an average abrasion index of 0.13. Andesite has an abrasion index of 0.22,
increasing to 0.24 for amygdaloidal andesite. Limited crushing data was obtained for the Magnetite
Manto deposit, which showed a large variation in results (0.08 to 0.32) for the different lithology types
tested. On average, the Mina Justa deposits are expected to be moderately abrasive with an abrasion
index value of 0.19.
Based on the parameters generated during the comminution testwork program, modelling of potential
crushing circuits was undertaken. Several flow sheet options were modelled including 3 and 4 stages
of crushing, open and closed circuit secondary crushing, crushed ore stockpile options and various
equipment configurations. The optimal circuit design from the modelling was determined to be a
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quaternary crushing circuit, with the secondary stage in open circuit, and the tertiary and quaternary
stages in closed circuit.
4.8.1.2 Leach Testwork
Testwork on the Oxide material commenced with bottle roll leaching, moved to individual column tests,
and finally evolved into an integrated pilot program run continuously in locked cycle. Pilot testing was
followed by an on-going program of variability testing on material from various areas of the proposed
Mina Justa and Magnetite Manto open pits.
%RWWOHUROOWHVWLQJFRPPHQFHGSULRUWR0DUFREUH¶VDFTXLVLWLRQRIWKHSURMHFW,QWKH0DUFREUHWHVWVWKH
principal variables were crush size (1 mm to 25 mm), acid level (pH 1.2 to 2.5) and lithology (andesite
or sedimentary). Both the Rio Tinto and Marcobre results demonstrated that the Mina Justa Oxide ore
is inherently leachable, although recovery generally decline as the crush size or pH increase. Both
andesite and sedimentary material achieved 100% extraction of the acid soluble copper (CuSS) at fine
crush sizes (1 mm and 3 mm top size) and high acid levels (pH <1.5). Recovery from the andesite was
found to be more sensitive to both crush size and pH than the sedimentary rock. Acid consumption by
the andesite was also more sensitive to these variables than it was for the sedimentary material.
Ancillary bottle roll tests suggested that a high chloride level would minimise acid consumption, but
retard copper extraction.
A column testing program followed, based on the results of the bottle roll tests. Initially, the main focus
was on identifying the design parameters for some type of heap leach operation. Testing started with
12 trials on the same andesite composite used in bottle roll tests. Variables included crush size, acid
cure dosage, irrigation rate, acid concentration in the leach solution, and test duration. However, the
results were somewhat discouraging; high recoveries could be achieved (>90%), but long leach cycles
(3 to 5 months) and high acid levels were needed. The resulting gangue acid consumption (GAC)
approached 100 kg/t, with specific consumptions of 11 kg to 20 kg acid/kg Cu. The runs with the lowest
specific acid consumption (7 kg acid/kg Cu) only achieved recoveries of about 70%, with GAC levels
just below 50 kg/t.
Results were no better for columns charged with sedimentary material. In general, recoveries were
lower, while the GAC levels were higher. The problem proved to be one of relative kinetics. The initial
copper leach rate was fast, with about half the total recovery occurring in the first 10 days. After that the
leach rate slowed dramatically, typically taking another 3 or 4 months for the recovery to double. The
rate of acid consumption behaved quite differently, rising linearly with time over the entire leach cycle.
Thus after 10 days, recovery was reasonably good and acid consumption was still very low. However,
after another 3 to 4 months of leaching, Cu extraction doubled, but GAC increased by a factor of 14 or
15 times.
One set of tests showed that increasing the irrigation rate improved copper recovery but did not
increase acid consumption. This observation and the kinetic factors led to a key series of experiments,
in which flows were increased in stages from 10 to 40 L/h.m2. At the same time, the acid concentration
in the leach solution was decreased proportionately so that after 55 days of leaching, each test received
the same total quantity of acid. The results were quite dramatic. Recovery increased as the flow rate
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increased. At the same time the total acid consumption, GAC and specific acid consumption all
declined progressively as the flow increased and the acid concentration decreased.
These results led to the conclusion that vat leaching with its high flow rate, short cycle time and good
wash efficiency might be the most effective process route for the Mina Justa Oxide material. Therefore,
a vat testwork program was developed, starting with a series of batch trials, which generally confirmed:
x That the pH needed to be below 1.5 to get effective leaching.
x Recovery generally increased as the crush size decreased. Although most head samples showed
significant upgrading in the finer fractions, the residue assays showed no such effect. Thus, the
fines leached better than the coarser material.
x The GAC values in kg/t tended to increase with finer crushing, but the specific acid consumption
(kg acid/kg Cu) actually declined in many cases.
These results suggested that operating on a 6 day leach cycle with material crushed to between
6.0 mm and 9.5 mm would provide an optimum vat process.
In order to determine the range of leach behaviour that might occur in operations, 40 composites were
tested under identical (but non-optimised) conditions. Recovery based on total copper (CuT) analyses
averaged 58%, with a range of 13% to 84%. When samples containing less than 0.3% Cu (the
expected cut-off grade) were deleted from the database, the average recovery increased to 62.5% of
CuT (equivalent to 75% of the acid soluble copper). The average GAC level was 44 kg/t, but ranged
from 19 kg/t to 139 kg/t.
Positive results in the batch vat tests led to testing in an integrated vat pilot plant operating continuously
in locked cycle. Phase 1 tests utilised four composites; low-grade and mid-grade samples from the
Mina Justa deposit and mid-grade and high-grade samples from Magnetite Manto. During this phase,
some problems with acid control and copper stripping from the pregnant leach solution were
experienced. In spite of these, the Phase 1 results showed that crushing to 6 mm or 8 mm gave the
same recovery and the same residue assays. However, 9.5 mm crush size was shown to be too
coarse, leading to a drop in recovery. The results also showed that acid cure dosages of 10 kg/t to
20 kg/t had minimal effects on the leach performance. Over this range both extraction and GAC values
were actually highest at the lowest cure dosage.
At the end of Phase 1 testing, samples of the final leach solutions from each ore type were sent to the
solvent extraction reagent vendors for compatibility studies. The results were positive, with no copper
transfer or phase disengagement problems noted.
After resolving operational problems (acid control and copper stripping), a second pilot plant campaign
(Phase 2) was conducted. All Phase 2 testing was done using the optimal process conditions
established in the Phase 1 tests. The 37 Phase 2 samples were selected to provide a variability
program that was intended to demonstrate the effects of changes in head grade, mineralogy, lithology,
geographic location, depth in the deposit and blends based on the then-current mine plan.
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The results indicated that while copper extraction is undoubtedly influenced by the various deposit
parameters, the key relationship is between recovery and head grade. Regression analysis showed
that the grade-recovery relationship has the following form:
Recovery of CuT (%) = (86.5 + 9.3 x CuSS) x (CuSS/CuT)
Maximum copper recovery is capped at 95% of CuT, to prevent the projection of 100% extraction from
high grade ore.
The other important numerical expression required for such activities as mine planning and financial
analysis is the relationship between head grade and acid consumption. Here, regression analysis
showed that total acid consumption was independent of the head grade, indicating that total acid
consumption is primarily dependent on gangue characteristics. Regression analysis demonstrated that
GAC was related to head grade, but that the relationship was negative (GAC declined as the grade
increased). This was caused by the increased acid credit from higher grade material. Initially, a simple
linear correlation was established for the relationship. However, further evaluation showed that an
exponential expression fits the data better and has a higher correlation coefficient. Both are strictly
empirical fits of the data. Numerically, the exponential relationship is expressed as follows:
GAC (kg/t) = 50.07e(-0.47 x CuSS)
Other design parameters determined in conjunction with the Phase 2 tests included:
x Total suspended solids (TSS) in the vat overflow
x Clarification tests on the PLS to provide the design basis for the PLS clarifier
x Viscosity of the leach solution averaged 1.5 cP, but increased gradually during the tests and ended
at 1.8 cP
x Final moisture in the leach residues ranged from 9.0% to 16.4%, with an average of 11%
x Void space in the ore bed, which decreased from 42% to 37.5% during the 6 day leach cycle.
Once pilot testing was complete and the results evaluated, a follow-up variability testwork program was
initiated. This involved testing of more than 200 samples from various locations in both Mina Justa and
Magnetite Manto. One of the objectives was to characterise material so that the results could be used
in the block modelling work. Another was to develop a procedure that would provide a fast, simple test
that could be used on blast hole material to estimate its leach behavior. A large-scale bottle roll
procedure was adopted for the tests. Unfortunately, when applied to the 200 samples, the results did
not replicate those obtained in the pilot tests. Both the recoveries and acid consumption in the
variability tests were higher than expected. In fact, recoveries for the transition ore (<80% acid soluble)
actually exceeded the acid soluble content of the samples. Additional testwork has been undertaken to
resolve the differences and improve the variability test procedure. However, it appears that further work
may be necessary to develop a viable procedure to support grade control and ore material type
classification.
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4.8.1.3 Solvent Extraction Testwork
SX testwork and modelling was conducted by Cognis Corporation in Chile, with additional modelling by
Cytec Limited in Peru based on analysis of the PLS solutions. Data was derived primarily from
operation of the Phase 2 vat leaching pilot plant. A number of circuit configurations were considered
during the testwork and modelling phases to determine the optimum SX circuit for the project.
Samples were sent to the Cognis laboratory in Chile for batch scale solvent extraction testing. These
samples were used to generate McCabe Thiele isotherms for reagents LIX973N and LIX612N-LV at
concentrations of between 20% v/v and 28% v/v.
Modelling of the solvent extraction process by Cognis demonstrated that the required mass transfer of
copper could be achieved from a number of circuit configurations, including series parallel, optimum
series parallel, series and dual SX trains in a series configuration. From a review of the possible
configurations and assessment of the capital and operating cost implications, the 2E+1S+1W (ie,
2 extraction stages, 1 stripping stage, and 1 washing stage) was selected as the preferred circuit
configuration.
Cognis conducted further modelling using the selected 2E+1S+1W circuit at a copper tenor of 8 g/L and
revised pH of 1.9. These simulations were run using both LIX973N and LIX84-l as each offers
performance benefits at the increased pH of 1.9. The modelling was conducted at several extractant
concentrations and organic to aqueous ratios. The modelling showed that the LIX84-l reagent was
superior to the LIX973N.
Samples were also sent to Cytec in Peru where they were analysed at independent laboratories. The
analyses showed high chloride levels of up to 6 g/L which have been taken into account in subsequent
design work. Cytec conducted a comparison of two potential circuit configurations, namely 2E+2S and
2E+1S. The simulations also included the impact of varying pH levels and extractant concentrations.
The results obtained confirmed that acceptable copper recoveries can be achieved by both circuits.
The 2E+2S circuit would require a lower extractant concentration to achieve the same recovery as the
2E+1S circuit, however, an additional stage of mixer/settlers would be required. Ultimately, once
relative capital and operating cost were taken into account, a 2E+1S+1W circuit configuration was
selected.
An extraction of 94% of the soluble copper in the PLS stream is expected to be recovered through the
2E+1S+1W circuit, based on a PLS stream containing 8 g/L copper at a pH of 1.9. An extractant
concentration of 25% v/v is required for effective extraction of the soluble copper. Stripping of the
copper from the extractant is carried out using an electrolyte solution containing 35 g/L copper and
180 g/L sulphuric acid. These electrolyte parameters are relatively standard for copper SX systems in
plants world-wide.
Full ICP scans of the PLS solution from the Phase 2 vat leaching testwork program show several
impurities which need to be considered in the design of the SX circuit. These impurities include iron,
manganese, silicon (colloidal silica) and chlorides. Mitigation measures include a wash mixer/settler
and coalescer tank to remove aqueous entrainment carrying iron, manganese and chloride. Equipment
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for treating the organic stream with activated clay to mitigate the effects of colloidal silica has been
included in the crud treatment area of the SX plant.
4.8.2 Sulphide Ore
Several testwork campaigns were completed during the PFS evaluation of the Mina Justa Sulphide
deposit. The sample collection and testwork was directed by Transmin Metallurgical Consultants in
Lima (Transmin).
Comminution testwork was conducted on selected sample intervals to represent Transitional (Mixed),
Primary (Cpy), and Secondary (Bn-Cc) ore types. The initial testwork campaign was conducted at SGS
Lakefield Research in Chile during 2006, and was limited to Bond abrasion, rod mill, and ball mill work
index tests. The testwork results obtained indicated that all three samples tested were of moderate
grindability and abrasiveness.
The second comminution testwork campaign was conducted in 2008 at SGS Lakefield Research in
Chile, and by JKTech in Australia. With the exception of a more elevated primary sulphide abrasion
index, the results for the Transitional, Secondary and Primary Sulphide ores tested were similar to
those tested in Campaign 1, except that a Mixed sulphide ore sample returned relatively low rod mill
and ball mill indices.
The SMC test results showed a similar trend to that found with the Rod and Ball work indices. The
highest competency ore type was Transitional ore, which was classified as very hard, while the
Secondary sulphide sample displayed moderate to hard competency. The Primary and Mixed samples
tested have an average to soft classification.
A third testwork campaign was conducted in late 2008. The testwork, performed by Laboratorio Plenge
in Peru, included ball mill work index and SMC tests, with the results of the SMC tests evaluated by
JKTech in Australia. The Primary and Secondary sulphide ore samples were designated as very hard
to hard, except for Primary ore from the Cu40 zone which was classified as having average
competency. A weighted average Axb competency value of 32.0 was chosen for design. This
corresponds to an ore of high competency. The Axb results from the SMC tests ranged from a low
competency of 63.1 to a very high competency of 27.0. The BWi results returned by the Primary and
Secondary ores were higher than reported in Campaign 1, while results obtained for the Cu40 zone
samples indicated significant variability, ranging from moderate to low grindability. The design BWI
value was calculated as 22.1 kWh/t. This corresponds to an ore of hard grindability. Individual sample
BWI results ranged from 11.3 kWh/t to 26.7 kWh/t which is a very broad spectrum.
A targeted sample selection and comminution testing program is required to better define the sulphide
comminution properties for DFS purposes. This requires updated geometallurgical analysis of ore
types and mine concepts to ensure the samples selected are relevant to the early years of sulphide ore
treatment in particular.
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4.8.2.2 Flotation Testwork
Phase 1 Testwork
A diamond drill program in 2005 provided drill core for flotation testwork. Samples were identified as
Transitional, Secondary and Primary sulphide ore types.
During this testwork campaign, the impact of primary grind on recovery, flotation kinetics and
concentrate grades was assessed for the three main ore types. The trends showed that copper
recovery increased with the extent of grind. For the Transitional material, the highest bulk flotation
recovery of 92% was achieved at a grind size of P80 75 µm. The Secondary sulphide ore produced a
bulk flotation recovery of 98% at a grind of P80 75 µm, with recovery decreasing for the coarser grinds.
The P80 106 µm grind grade-recovery relationship was the most favourable, but was not significantly
better than 150 µm. For the Primary sulphide material the highest bulk flotation recovery of 98% was
achieved at a grind size of P80 75 µm, with recovery decreasing for grinds coarser than P80 106 µm. The
copper distribution by particle size in the flotation tailings indicated that some copper remained locked
with gangue in the coarser size fractions, with improved liberation observed at the finer grinds.
Bulk flotation tests showed that the copper minerals are readily recovered by flotation, but generally low
concentrate grades and high mass pulls were evident (Table 4.19).
Table 4.19
First Phase Bulk Flotation Testwork: Grade and Mass Pull
Ore Type Concentrate Grade Mass Pull
(Cu%) (%)
Transition 4.5 18
Secondary 11.5 30
Primary 3.8 26
A series of regrind tests were conducted on the Primary and Secondary rougher flotation concentrates
to determine the optimum regrind size. These tests showed an increase in copper concentrate grade
with increased degree of regrind. For the Secondary ore, regrinding rougher concentrate to P80 52 µm
resulted in the fastest recovery rates and highest terminal recovery rates, but with the lowest copper
grades. The P80 43 µm regrind and P80 37 µm regrind tests performed at pH11 produced similar
results. For the Primary ore, the most favourable concentrate grade, mass pull and recovery resulted
from a P80 43 µm concentrate regrind combined with a slurry pH of 12. A concentrate regrind of P 80
16 µm for the Transitional, P80 18 µm for the Secondary and P80 16 µm for the Primary sulphide
material was selected by Transmin for the locked cycle tests.
Cleaner flotation response to sodium cyanide addition was evaluated during this phase. The tests
showed a positive response to sodium cyanide, with improved concentrate grades and recoveries
noted. However, the tests were completed at high additions of sodium cyanide, and tests at lower
levels were not evaluated. Other depressants were also evaluated during this testwork, but no
significant benefits were noted from these alternatives.
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Locked cycle tests were performed on the Transitional, Primary, and Secondary ore composites to
determine the expected flotation performance and concentrate parameters. These tests were
conducted at a significantly finer regrind size (P80 16 µm to 18 µm) than the initial regrind tests. The
Transitional and Primary composites required two stages of cleaning to produce marketable
concentrate, a single stage was sufficient for the Secondary ore composite. Concentrates containing
25% copper or more were produced in all the locked cycle tests after two stages of cleaning. From
these tests, a circuit consisting of two cleaning stages, followed by a cleaner scavenger stage was
recommended to produce marketable flotation concentrate.
Phase 2 Testwork
Additional composite samples were assembled for a second phase of flotation testwork using drill cores
not previously used for testwork, in order to test the variability of the different ore types. Testwork
conducted during this second campaign was aimed at further exploring flash flotation, rougher flotation,
and cleaner flotation performance.
x Flash Flotation
Flash flotation tests were conducted with 67% solids slurry after grinding to a particle size P80 of
300 µm, with results as shown in Table 4.20. These indicate that flash flotation could be feasible,
but regrinding and cleaner flotation would be required at least for Primary ore, which forms the bulk
of the sulphide deposit.
Table 4.20
Flash Flotation Concentrate Performance
Ore Type Copper Recovery Copper Grade
(%) (%)
Secondary 79 30
Primary 88 11
x Bulk Flotation
Bulk flotation tests were performed to optimise the reagent scheme. A reagent scheme consisting
of promoter A-3477 (isobutyl dithiophosphate) with collector Z-11 (sodium isopropyl xanthate) was
evaluated at different dosage rates and also combined with sodium sulphide addition. A standard
primary grind of P80 150 µm was selected for all tests, with stage dosing of Aerofloat 3477
promoter prior to milling and 10 g/t xanthate collector before flotation. The addition of sulphidiser
did not result in significant grade improvement, but final recovery was negatively affected.
Promoter at an addition rate of 25 g/t produced a lower mass pull, higher copper grade and faster
recovery rates than the other levels tested.
Bulk flotation tests were conducted on the Secondary sulphide ore to optimise the slurry pH and to
review the impact of sodium sulphide addition. The tests showed an increase in recovery as the
pH was increased from 8.6 to 11. A slurry pH of 10 produced an acceptable recovery with the
lowest mass pull and highest copper grade. Sulphidiser addition resulted in some grade and
recovery improvements.
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Cleaner tests were conducted using rougher concentrates generated with promoter (A3477) and
collector (Z-11), with regrinding to P80 37 µm. The Primary ore type generated a 15% copper
concentrate after 4 minutes of flotation, whereas the Secondary ore type produced a 44% copper
concentrate.
Phase 3 Testwork
A third testwork campaign aimed at optimising regrind and cleaner flotation performance was
completed in early 2009. A series of tests were conducted on the Primary and Secondary sulphide
rougher flotation concentrates to determine the optimum circuit parameters. The composite samples
evaluated in this phase of testwork were similar to the second phase samples, although Primary ore
samples from the Cu40 zone were also included.
Regrind and cleaner tests excluding sodium cyanide dosing were conducted on Primary and Secondary
sulphide rougher flotation concentrates. The Primary ore results indicate that 25% copper concentrate
can be produced at particle size distribution P80 of 37 µm and 43 µm, without cyanide addition. Higher
copper concentrate grades were produced from Secondary ore samples at P80 of 49 µm and 57 µm,
again without cyanide addition. For both ore types, recoveries and concentrate grades improved
compared to earlier testwork.
Transmin selected P80 37 µm and P80 49 µm for the Primary and Secondary ore, respectively, as the
basis for the additional variability and locked cycle tests.
Variability batch flotation tests with three cleaning stages and locked cycle tests were performed on
similar composites. In general, lower bulk flotation mass pulls were observed in this campaign, when
compared to the first two testwork campaigns. A revised reagent scheme was utilised, with reduced
collector (Z11) and promoter (A3477) dosages. Concentrates containing 25% copper or more were
produced from the Transitional and Secondary ore samples in the locked cycle tests, after two stages of
cleaning. Both recovery and concentrate grade improved for the Secondary ore. The Primary ore tests
did not consistently produce 25% copper concentrate after two stages of cleaning, but sodium cyanide
was not added during the cleaning stages as had been the case during the first two campaigns. The
Primary ore concentrate grade was therefore lower than previously reported.
Higher overall recoveries were evident for the Primary samples, while the Transitional ore tests
returned lower recoveries.
Copper recovery and concentrate grade versus copper grade were plotted for locked cycle tests from
the second and third campaign to estimate basic correlations for a metallurgical model. However,
insufficient data was available to establish relationships, so the majority of the correlations were
constant values.
Precious metals recoveries of 80% are based on the average metal recovery observed from the trials.
The flotation parameters adopted for the PFS are shown in Table 4.21.
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Table 4.21
Predictive Metallurgy Summary
Recovery Concentrate Grade
Mineralisation Type Metal
(%) (% Cu)
Transitional (Oxide plus sulphide) Copper 85 32
Copper min of (5.3892Ln(CuT)+90.956)
Secondary (Bornite-Chalcocite) or 96 45
Primary (Chalcopyrite) Copper 94 23.5
Precious metals Gold 80 -
Silver 80 -
The metallurgical testwork was completed to PFS level and some fundamental assumptions of
metallurgical response of some ore types have been made for plant design, optimisation and metal
production.
The copper concentrate specifications summarised in Table 4.22 were prepared as follows:
x The concentrate grades are obtained from the projections detailed in Table 4.21
x The precious metals head grades and recoveries shown in Table 4.21 were used to calculate the
metals grades in each concentrate type
x The remaining elements were estimated based on locked cycle test concentrate analyses.
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Table 4.22
Copper Concentrate Specifications by Ore Type
Secondary
Primary (Chalcopyrite) Transition
(Bornite/Chalcocite)
Element Units
Operating Operating Operating
Range Range Range
Range Range Range
Cu % 19.1 - 33.2 23.5 39.6 - 50.0 45 30 - 50.9 32
Bi g/t 5 - 731 21 - 1 260 25 - 55
Fe % 31.1 - 38 12.1 - 20 11.4 - 14.5
Mo % 0.002 - 0.01 0.002 - 0.01 0.001 - 0.01
Pb % 0.02 - 0.84 0.01 - 0.03 0.01 - 0.03
S % 32.8 - 43.9 13.5 - 18.3 14.4 - 16.2
Si %
Insoluble % 1.2 - 4 9 - 17.1 10.9 - 16.2
Zn % 0.01 - 2.88 0.01 - 0.05 0.03 - 0.04
Ag g/t 62.7 - 199.5 151.8 333 - 705.3 422.0 320 - 592 326.2
Al % <0.01 - 0.15 0.19 - 0.65 0.36 - 0.55
As g/t 38.5 - 466 <5 - 145 31 - 148
Au g/t 0.3 - 3 1.00 0.5 - 0.6 0.54 0.4 - 2.2 0.49
Ba g/t 1 - 128 3 - 64 22 - 36
Be g/t <1 - 79 <1 - 56 <3 - 41
Ca % 0.05 - 0.28 0.36 - 0.98 0.49 - 1.2
Cd g/t <2 - 163 <2 <2
Cl g/t 100 - 190 100 - 190 100 - 190
Co g/t <1 000 - 3 009 <1 - 261 145
Cr g/t 4 - 353 22 - 120 31 - 195
F % <0.001 <0.001 <0.001
Hg g/t 5.4 0.8 6.7
K % <0.01 - 0.04 <0.01 - 0.05 0.04
La
Mg % 0.05 - 0.17 0.3 - 0.89 0.54 - 0.69
Mn % <0.01 - 0.05 0.03 - 0.11 0.04 - 0.14
Na % 0.01 - 0.04 0.01 - 0.06 0.01 - 0.05
Ni g/t <2 - 2 430 <2 - 193 19 - 169
P g/t 125 - 2 327 474 - 4 248 230 - 537
Sb % <0.0005 <0.0005 - 0.023 <0.0005 - 0.003
Se
Sn g/t <5 <5 <5
Te
U g/t <50 <50 <50
Y g/t <1 - 19 <1 - 7 3-8
The results indicate good concentrate quality with no analysed elements at penalty levels.
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4.8.2.3 Magnetite Testwork
The Mina Justa rougher/scavenger flotation tailings contain recoverable quantities of magnetite.
Magnetic separation laboratory test campaigns were performed to evaluate the feasibility of producing a
saleable magnetite concentrate.
The first testwork campaign was conducted at Laboratorio Plenge in Peru using the flotation tailings
from the initial flotation testwork campaign. Single pass and triple pass cleaner separation tests were
performed after bulk magnetic recovery. The iron grades in the magnetite concentrates were generally
below market specification for all three ore types. The levels of copper, sulphur, silica and alumina
obtained in the concentrates suggested that intermediate processing of the first-pass magnetic
concentrate is required to liberate locked magnetite and separate gangue.
The second round of magnetite testwork was performed at CIMM Chile using flotation tailings from the
second flotation testwork campaign. The testwork included both dry and wet magnetic separation on
five samples. Wet magnetic separation tests produced higher magnetite grades in the final
concentrates than the dry tests, but were still below typical market specifications. Rougher and first-
pass cleaning steps produced substantial grade improvements, but minimal grade improvements were
obtained from further cleaning stages. Metal recovery to the rougher concentrate improved with
increasing degree of regrind.
The third testwork campaign was aimed at confirming the conceptual magnetite recovery circuit derived
from preliminary testwork. The testwork, which was conducted by Transmin on five samples at the
Pontificia Universidad Catolica del Peru, further investigated the effect of regrinding, with the results
showing an increase in magnetite concentrate iron grade as the extent of regrinding increased.
The magnetite testwork completed during the campaigns confirmed that a high grade (63% iron)
magnetite concentrate can be generated from the Mina Justa flotation tailings with high magnetite
grades, provided intermediate processing (regrinding, slimes removal and finishing magnetic
separation) is undertaken.
4.8.2.4 Geochemical Characterisation of the Tailings
Knight Piésold performed geochemical characterisation testing to assess the acid generation and
neutralisation potential as well as the leachability and supernatant quality associated with samples of
flotation tailings from metallurgical pilot plant studies conducted by Transmin. The results, which were
used to formulate the tailings disposal strategy, were found to be dependant on the dominant sulphide
mineralisation of the ore, ie, bornite-chalcocite and chalcopyrite ores.
The test results showed that the cleaner scavenger tailings (CST), rougher scavenger tailings (RST)
and thus combined CST and RST tailings produced from bornite-chalcocite ore are likely to be non-acid
generating. However, the results also showed that CST and combined tailings from the chalcopyrite
ore are likely to be acid generating while the RST is likely to be non-acid generating.
Leachability and supernatant quality tests on the same samples indicated that many of trace elements
were below detection limits, or were not defined as potential COC by the relevant water quality
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guidelines. Manganese, molybdenum and nickel were found to be higher than the regulatory limits in at
least one of the RST supernatant samples from the chalcopyrite and bornite-chalcocite samples. The
CST supernatant from the chalcopyrite ore was found to have slightly elevated nickel, while supernatant
from bornite-chalcocite sample was found to have slightly elevated antimony.
The scenario for managing tailings in the TSF is to separately dispose of the CST and RST in dedicated
areas in a manner that the CST will be kept saturated to reduce its potential for oxidation and thus acid
generation. The CST will also be contained in a fully-lined portion of the TSF for seepage control,
which will also assist in keeping it saturated. The RST will be deposited in an adjacent but unlined area
of the TSF, for which air drying will be promoted to consolidate the deposits.
Leachate generation and seepage is expected to be low or negligible due to the strong evaporation
potential at the site, which will desiccate the RST and produce a regime of low and possibly negative
pore pressures in the deposit with little to no propensity for causing seepage. However, if any small
amounts of seepage do emerge from the base of the RST they are likely to be intermittent and will
either be retained in the geological units well above the groundwater (at a depth of over 400 m), or have
the trace elements attenuated to levels that will be highly unlikely to negatively impact the groundwater.
A preliminary seepage model showed that the potential seepage will reach a depth of 140 m after a
period of 15 years assuming an unlined facility and a constant supernatant pond.
In the next stage of design, detailed seepage analysis will be undertaken taking account of the mine
schedule and TSF configuration during different periods of the mine life.
4.9 PROCESS PLANT DESIGN
The processing plant for the Mina Justa Project is conceived as being built in two stages. The first
stage consists of the plant to treat Oxide ore to produce copper cathodes, and the second stage
consists of a plant to treat Sulphide ore to produce copper concentrates. Much of the infrastructure for
the two processing plants is common, which will reduce overall costs compared to comparable separate
facilities.
4.9.1 Oxide Ore Plant
The Mina Justa Project utilises sulphuric acid leaching of the Oxide ore to extract copper. The leached
copper is purified and upgraded by SX to provide a rich electrolyte to the EW plant, producing copper
cathodes. The feed to the leaching process is prepared by crushing and screening to achieve an 8 mm
product size.
The overall processing flow sheet for the Oxide ore is depicted in Figure 4.23 and the plant layout in
Figure 4.24.
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4.9.1.1 Crushing and Screening
The crushing circuit is designed to reduce 12 Mt/a (1712 t/h at an overall 80% availability) of oxide ore
to minus 8 mm prior to leaching. This is accomplished using a four stage crushing circuit consisting of:
x Primary Crushing and Stockpiling: ROM ore is delivered by 220 t mine haul trucks tipping directly
into the ROM bin. Ore that cannot be fed directly to the primary crusher (eg, due to maintenance
downtime) will be dumped on the adjacent ROM oxide ore stockpile, and later fed to the crusher by
FEL.
The primary crusher is a 54" x 75" gyratory crusher, treating an average of 2283 t/h, sufficient to
crush 12 Mt/a at 60% availability. A coarse ore stockpile with a live capcity of 12 hours provides
surge capacity between the primary and secondary crushing stages to account for mine trucking
cycles and maintenance requirements.
x Secondary, Tertiary, and Quaternary Crushing: The coarse ore reports to a 12' x 27' scalping
screen prior to secondary crushing by means of a 750 kW cone crusher operating in open circuit.
Tertiary screening is conducted by two 12' x 27' double deck screens. To reduce the height of the
tertiary screening facility, the tertiary screens have been lowered and 9 m long transfer conveyors
have been installed under the screens to allow removal of the undersize material. Two 750 kW
cone crushers operating in closed circuit are utilised for the tertiary crushing stage.
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Figure 4.23
APPENDIX V
Mina Justa Oxide Circuit Flow Sheet
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Quaternary screening is conducted by four 14' x 27' double deck screens. The quaternary screens
have been lowered and 11 m long transfer conveyors have been installed to allow removal of the
undersize material.
The quaternary crushing stage utilises three 750 kW cone crushers operating in closed circuit.
Metal detectors and/or electro-magnets are included ahead of the secondary, tertiary, and
quaternary crushers to detect and/or remove tramp metal. The detectors are tuned to allow for the
high magnetite content of some of the ore.
To minimise capital cost, most of the facilities are fully exposed to the weather. An open type of
building is selected with easy access provided for mobile cranes for maintenance of equipment.
x Dust Control: Dust will be controlled by a combination of dust suppression and dust collection
systems. The primary crusher will be a major source of dust, particularly the ROM bin during truck
dumping. The truck tip point is enclosed on three sides. Wetting sprays have been included to wet
the ore while on the truck and a set of sprays has been included in the ROM bin to wet the ore
stream as it is dumped, to suppress dust.
Ducted dust collection systems and high-efficiency wet scrubbers are included with extraction
hoods at all major dust generating locations throughout the crushing circuit, including transfer
points, crusher discharges, vibrating screens and feeders.
4.9.1.2 Vat Leaching
x Acid Curing: Ore crushed to 100% passing 8 mm is delivered to the fine ore bin, which has a
surge capacity of 1 hour. Due to the dry and windy site conditions, a bin has been provided as
opposed to an open stockpile to minimise generation of dust.
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Figure 4.24
Plant Layout
APPENDIX V
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The crushed ore requires a short period of curing with acid to optimise leaching recovery.
Therefore, after the crushed ore is drawn from the fine ore bin, it is sprayed with dilute sulphuric
acid as it passes from one discharge conveyor to another.
x Vat Leaching (Figure 4.25): The acidified ore is transported by conveyor to the vat leaching area,
where it is loaded into vats for leaching.
The vats are essentially reinforced concrete shells, each measuring 30 m wide, 40.5 m in length
and 7.6 m high, and capable of holding 12 800 t of ore for a 6 day leaching cycle. At any one time,
16 vats participate in the leaching process. However, 18 vats have been designed to allow for
loading, unloading, filling, draining and maintenance. The vats are designed to be acid resistant
and are constructed to ensure that the leach solution is not lost due to leaks or seismic events.
Acidified ore is loaded into a vat by means of a tripping conveyor until the vat is full, leaving
300 mm of freeboard in the vat. The vat is then flooded with a dilute sulphuric acid solution which
is introduced through the base of the vat, under a filtration bed, and which overflows from the top of
the vat into a launder from which the solution is piped to the next vat or to a storage pond.
Leaching occurs over a 6 day period, at the end of which most of the acid-soluble copper has been
leached into solution. Over the life of the mine the average recovery of total copper is projected to
be 74.5%. At the end of the leaching cycle, the remaining solution is drained from the vat and the
moist waste solids are removed by a clamshell grab, placed into a hopper and discharged onto a
conveyor system for transfer to the ripios dump.
Solution management is designed as a counter-current system. Solution advances progressively
to fresher ore in order to maximise the copper content of the leach solution before treatment in the
solvent extraction and electrowinning plant. The highest tenor copper solution (PLS), which
overflows from the vat containing the freshest ore, is clarified then stored in a covered holding pond
before being pumped to the SX circuit.
The dilute acid solution (raffinate) returning from the SX plant, contains only 0.48 g/L Cu
(compared to 8 g/L for the PLS) and is used for final leaching of ore before it is removed from a vat
and sent to the ripios dump. The residual moisture in the ripios (approximately 11% by weight) is
essentially raffinate and provides a bleed for impurities, so that another bleed stream is not
required.
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Figure 4.25
Vat Leaching Layout
APPENDIX V
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x Clarification: Pinned bed clarifiers have been specified because of their proven performance in
removal of fines from copper leach solutions. Due to the acidic nature of the PLS solution,
materials of construction include SAF2205 stainless steel for the clarifier feed tank and fibre
reinforced plastic (FRP) and SAF2205 internals for the clarifiers.
The clarified PLS solution gravitates to the PLS Pond with the clarifier underflow solids being
pumped to the vats.
x Solution Ponds: The PLS pond is 6 m deep and has been sized to contain 24 500 m3 of solution.
This pond is covered to reduce evaporation and prevent pick-up of wind-blown solids. The
raffinate pond is also 6 m deep and has been sized to contain 16 400 m3 of solution. The raffinate
pond is not covered and it will also serve as an emergency reservoir in case one of the vats is
drained by accident or intentionally in an emergency.
Both ponds are lined with a double layer of HDPE membrane in order to avoid loss of solution and
prevent contamination of the environment. The dimensions also include an allowance to contain
precipitation from a 100 year, 24 hour rainfall event.
x Ripios: The ripios remaining after the leaching stage are removed from each vat by an unloading
crane with a 22 m3 clamshell grab. The clamshell discharges the material into a hopper that feeds
the ripios receiving conveyor. This material is transported to the ripios area via three discharge
conveyors. The last ripios conveyor loads a truck loading bin, which in turn loads haul trucks for
final ripios removal and disposal in the adjacent ripios dump, the design of which is described in
more detail in Section 4.13.1.
4.9.1.3 Solvent Extraction
The SX process involves the selective extraction of copper from the relatively dilute PLS to produce a
high purity, high tenor copper sulphate solution suitable for the EW process:
x Configuration: The SX mixer/settler units are configured for 2 stages of extraction, 1 stage of wash
and 1 stage of stripping. Solution is pumped from the PLS pond to the extraction circuit where it is
contacted with the organic phase to extract copper from the aqueous phase. Loaded organic exits
the extraction circuit and reports to the wash stage to remove any entrained impurities, such as
iron, manganese and chloride.
Spent electrolyte from the EW process enters the strip circuit at the primary mix tank and is mixed
with the loaded organic stream prior to passing through the strip settler for disengagement of the
aqueous and organic phases. Copper-rich electrolyte flows by gravity to the strong electrolyte
tank. Strong electrolyte contains minor amounts of particulate solids and entrained organic, which
are removed prior to electrowinning using CoMatrix dual media filters.
A reverse flow design is selected for the mixer/settler layout to minimise plant footprint and pipe run
length. Primary and secondary single mix tanks are utilised for each stage. The settlers are
constructed with concrete walls lined with fibre-reinforced plastic (FRP). The settler roofs are
constructed from a steel cladding with access ports for maintenance.
The solvent extraction area includes a series of floor drains which drain to a set of sumps/firetraps.
This arrangement will eliminate pooling of corrosive or combustible fluids in the bund.
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x Crud Handling: Crud from various areas within the SX plant is pumped through the crud centrifuge
that splits the crud into its three constituent phases, aqueous, organic and solids. The aqueous
phase is returned to the SX circuit whilst cleaned organic phase is either returned to the SX circuit
or treated further with activated clay. Contaminated solids are collected for separate disposal.
x Fire Protection: Fire protection philosophy is one of automatic detection and initiation of
suppression measures. SX fires in recent years have demonstrated that any fire must be
suppressed in the very early stages to prevent destruction of the plant and surrounding
infrastructure. For this reason, the fire protection system for Mina Justa comprises the following:
Foam suppression to the SX bunds, SX settlers and tanks containing organic
A fire detection system for the bund and inside of each of the vessels described above.
4.9.1.4 Electrowinning
The EW circuit utilises permanent cathode technology to produce LME Grade A cathode copper.
Electrowinning is conducted using a total of 122 cells at a nominal current density of 320 A/m2. Copper
plating is continuous over a period of 6 days before the cathodes are removed and processed for
dispatch:
x EW Cells: The copper-rich electrolyte (strong electroliyte), passes to the EW circuit where copper
is recovered by electrowinning in the form of copper cathodes. Electrolyte that has been depleted
of copper during electrowinning is recycled to the strip stage in solvent extraction.
Polishing cells receive strong electrolyte and act as organic entrainment protection for the
commercial cells. Electrolyte overflowing the polishing cells flows to the electrolyte circulation tank
and mixes with the spent electrolyte from the commercial cells to result in a stream of circulating
electrolyte.
The electrowinning cells are of monolithic polymer concrete construction comprising vinyl ester
resin mixed with aggregate. Electrolyte is circulated throughout the cell via a PVC manifold
mounted at the bottom of each cell. Holes drilled into the PVC manifold allow electrolyte to pass
between the electrodes in the cell. A total of 122 EW cells are installed, comprising 26 polishing
cells and 96 commercial cells. Each cell contains 69 cathodes (stainless steel blanks) and 70
anodes. Cathode quality is expected to be the same between the polishing and commercial cells.
The polishing cells are generally viewed as insurance against contaminating the entire tankhouse if
organic breakthrough occurs in the filters.
x Cathode Stripping: Copper plating onto the stainless steel blanks is continuous over a period of
approximately 6 days before the cathodes are removed for harvesting of the copper. Copper is
removed from the cathodes by an automated cathode stripping machine.
Approximately 3 t of copper sheets are accumulated before the bundles are sampled, strapped,
and transferred by forklift to a dedicated storage area prior to dispatch.
x Ventilation System: The EW cells are housed in a fully enclosed building to provide protection from
dust and climatic conditions, and provide an acceptable working environment for the crane and
stripping machine operators.
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Primary acid mist suppression is by a layer of polyolefin prills, which float on the cell surface and
disperse the bubbles of acid mist as they reach the solution line of the cell. A forced cross-flow
ventilation system provides secondary mist suppression by removing acid mist from the building.
4.9.1.5 Reagents
x Sulphuric Acid: Sulphuric acid (98%) is delivered by road tankers to the sulphuric acid unloading
area. Four unloading stations have been provided to transfer the sulphuric acid into the two
storage tanks. Each tank contains a live volume of 3187 m3, sufficient to store a 7 day supply on
site.
The tanks are sited within a HDPE-lined earth bund capable of containing 110% of the entire
contents of sulphuric acid stored on site.
x Flocculant: A non-ionic flocculant is dosed to the clarifier feed well. Flocculant is delivered to site
by road on pallets containing 25 kg bags and prepared with fresh water in a batching plant near the
clarifier.
x Extractant: Extractant (LIX984 or Acorga M5640) at a concentration of 25% by volume, is used in
the SX process to extract copper from the pregnant leach solution.
Extractant is delivered to site in 1 m3 intermediate bulk containers (IBCs), off-loaded by forklift, and
stored in a covered shed. The containers are moved to the SX area as required. Extractant is
added (by gravity) to the SX circuit on a demand basis.
x Diluent: High flash-point diluent (Shelsol 2046 or equivalent) is delivered to site by road tanker and
off-loaded into the diluent storage tank, which has a storage capacity equivalent to 45 days.
Diluent is transferred to the SX circuit and the crud treatment area on a demand basis, using a
single positive displacement pump.
x Guar: Guar is a high molecular weight organic polymer that acts as a smoothing agent for the
deposition of copper during the EW process, therefore enhancing the appearance of the final
copper product.
Guar for this system is received as powder in 25 kg bags, with storage on-site equivalent to
28 days of usage. The Guar is mixed in an automated system and the solution is pumped to the
EW circuit.
x Cobalt Sulphate: Cobalt sulphate is added to the EW circuit to maintain a cobalt concentration of
180 ppm and enhance the stability of the lead anode coating.
The cobalt sulphate reagent is received in 25 kg bags, with storage on-site equivalent to 28 days of
usage. The reagent is mixed in a small mixing tank and dosed to the EW circuit as required.
4.9.1.6 Services
x Raw Water: This is supplied from a borefield in the Jahuay aquifer, 31 km to the southeast. A
network of bores fitted with screens and submersible pumps will feed into a holding tank at the
aquifer. From there the water is pumped to site, an intermediate pumping station being required to
overcome the difference in elevation.
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A 6 m deep raw water pond with 16 000 m3 capacity is sited in the plant area to receive water from
the borefield for redistribution around the site for process water, fire water, dust control, camp,
mine water trucks and other purposes.
x Fire Water: The raw water pond also serves as the source of fire water, with the pond and pumps
configured to ensure a minimum amount of fire water is always available in the pond. The raw
water pump suctions are located above the fire water pump suctions, so the required four hours of
water is available.
The fire water pump set comprises an electrically powered main centrifugal pump, a diesel
powered pump, and an electrically powered jockey pump. The fire water system pressure is
maintained using the jockey pump, thereby preventing premature starting of the main fire water
pump.
x Potable Water: Raw water is treated through the water treatment plant to produce potable quality
water to be used for safety shower, drinking water and ablution facilities. The water treatment plant
uses chlorination to destroy any harmful bacteria present. The resultant potable quality water is
transferred to the 80 m3 potable water storage tank.
x Plant and Instrument Air: Plant air at 750 kPag is provided from the two main plant air
compressors and stored in the plant air receiver where it is reticulated to the plant air utility stations
(excluding the crusher buildings). A separate portable air compressor is provided for use in the
crusher plant areas.
A stream of plant air is diverted through a pair of air filters and fed to a duty/standby desiccant air
drier to remove moisture from the plant air to generate instrument quality air. Instrument air is
reticulated to points of demand.
4.9.2 Sulphide Ore Plant
The overall processing flow sheet for the Mina Justa sulphide ore is depicted in Figure 4.26 and the
concentrator facilities layout is depicted in Figure 4.27. Design is to a PFS level, with further
metallurgical testwork required to support DFS-level engineering.
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Figure 4.26
APPENDIX V
Mina Justa Sulphide Circuit Flow Sheet
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4.9.2.1 Comminution
The separate comminution circuit is designed to treat 5 Mt/a of sulphide ore to produce a product size
of 80% passing 150 µm. It comprises:
x Primary Crushing: ROM sulphide ore is delivered to the crushing area by 220 t mine haul truck,
and tipped directly into the ROM bin. Ore that cannot be fed directly to the primary crusher, for
example due to crusher maintenance, will be unloaded to the adjacent ROM sulphide ore stockpile,
and later fed to the crusher by a wheel loader.
A 54" x 75" primary gyratory crusher treats an average of 951 t/h, producing 5 Mt/a (availability
60%). A coarse ore stockpile provides 12 hours of surge capacity between the crushing and
milling stages.
x Dust Control: Wetting sprays have been included to wet the ore while on the truck, and a set of
sprays has been included in the ROM bin to wet the ore stream as it is dumped, to suppress dust.
Ducted dust collection systems with high-efficiency wet scrubbers are included with extraction
hoods at all major dust generating locations throughout the crushing circuit.
x Primary Grinding and Pebble Crushing: The primary grinding circuit consists of an open circuit
SAG mill with a pebble crushing circuit. The SAG mill feed conveyor transports crushed material
reclaimed from the crushed ore stockpile to a SAG mill.
The SAG mill has a diameter of 9.15 m, with an effective grinding length of 5.3 m. The SAG mill
has been designed on the basis of a nominal 12% ball load. The motors are sized to take a
maximum ball load of 15% at a 30% charge level and approximately 72% of critical speed. It is
powered by twin 4000 kW hyper-synchronous wound rotor motors. The drive motors are variable
speed with the adjustment achieved using slip energy recovery (SER) drives. The SAG mill is
equipped with a dedicated lubrication system for mill motors, gearboxes, pinion bearings and mill
bearings.
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Figure 4.27
Concentrator Layout
APPENDIX V
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Oversize pebbles from the SAG mill are transferred to the pebble crushing circuit which includes a
600 kW cone crusher. The crushed pebbles are returned to the SAG mill via the SAG mill feed
conveyor.
x Secondary Grinding and Classification: This consists of a ball mill in closed circuit with a cyclone
cluster, and targets a product size of 80% passing 150 µm.
The ball mill has a 6.57 m diameter and effective grinding length of 10.75 m. It is powered by twin
4200 kW motors. The ball mill has a jacking cradle system and inching drive for maintenance
purposes. The ball mill is equipped with a dedicated lubrication system for mill motors, gearboxes,
pinion bearings and mill bearings.
4.9.2.2 Flotation
The flotation circuit comprises bulk flotation, concentrate regrind, cleaner flotation and on-stream
analysis. The bulk flotation circuit produces a concentrate. Selective recovery of the copper minerals
occurs in the cleaner circuit, where a concentrate of final product quality is produced.
x Bulk Flotation: Cyclone overflow from the secondary grinding circuit, at a pulp density of 35%
solids and pH of 9 reports to the rougher/scavenger circuit. The rougher flotation stage consists of
two 70 m3 tank cells, and the scavenger flotation stage consists of four 70 m3 tank cells. The total
installed residence time for the rougher-scavenger flotation circuit is 20 minutes.
Rougher/scavenger flotation concentrates are pumped to the regrind circuit for further grinding.
Provision exists to transfer the rougher concentrate to alternative locations, such as cleaner feed.
The scavenger flotation tailings are transferred to the tailings disposal circuit.
x Concentrate Regrind: Rougher and scavenger concentrates report to the regrind circuit for fine
grinding. A single 3.8 m diameter ball mill operates in closed circuit with hydrocyclones. The
regrind mill is powered by a 1300 kW motor and uses 40 mm balls as grinding media to achieve a
P80 in the regrind cyclone overflow of approximately 49 µm.
x Cleaner Flotation: Selective flotation is achieved through the addition of collector and frother and
by increasing the pulp pH to 11. Cleaner flotation is carried out in four 38m3 cells with a total
nominal residence time of 10 minutes.
Cleaner concentrate is transferred to the recleaner circuit, consisting of three 16 m3 u-shaped
flotation cells with a total nominal residence time of 10 minutes. The recleaner concentrate is
pumped to the concentrate handling area.
The cleaner flotation tailings flow to cleaner scavenger flotation which consists of three 38 m3
u-shaped flotation cells with a total nominal residence time of 10 minutes. The cleaner scavenger
flotation tailings are transferred to the tailings disposal circuit.
x Sampling and Analysis: Eight sample streams are collected for on-line control of the flotation
circuit. Various in-stream samplers collect samples and direct the streams to a multiple stream
XRF analyser. The analysis is undertaken using an XRF analyser. The rejects from the sampling
system are pumped to their respective return point in the process.
Rougher feed and regrind overflow samples pass through a particle size analyser for particle size
determination.
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4.9.2.3 Concentrate Handling
The recleaner concentrate is screened to remove debris from the slurry. Thickening of the
concentrates is carried out using a 15 m diameter high-rate thickener to produce a product at 65%
solids.
The thickened stream is transferred to the filter feed tank which has 12 hours of storage capacity. The
concentrate solids are dewatered by a pressure filter. The filter discharges moist concentrate directly
onto a storage slab below the filter, while the filtrate is returned to the concentrate thickener.
Concentrate is transferred from the stockpile into a storage shed with an FEL, which is also used to
load road trucks for shipment.
4.9.2.4 Tailings Thickening and Disposal
Two tailings streams are produced by the concentrator, namely the cleaner scavenger tailings (CST)
stream which has potential for acid generation, and the rougher scavenger (RST) tailings stream which
has low acid generation potential. The two streams are disposed of separately.
x The RST are pumped to the tailings thickener which is a 28 m diameter high-rate unit. Thickener
overflow discharges to the process water pond, while thickener underflow, at 60% solids, is
pumped to the RST section of the TSF.
x The CST are pumped to a 11 m diameter thickener. Overflow discharges to the process water
pond and underflow, at 60% solids, is pumped to the CST section of the TSF.
4.9.2.5 Reagents
x Collector (Sodium Isopropyl Xanthate - SIPX): Used in the flotation process to promote recovery of
mineral particles by creating hydrophobic surfaces for air bubble attachment. SIPX is delivered to
site in 1 t bulka bags, with storage being provided for 20 bags. A 2 t monorail hoist lifts the bags
into a bag splitter chute above a 6 m3 agitated collector mixing tank. A 20% solution is prepared
with raw water and pumped to the collector header tank for distribution.
x Promoter (Aerofloat 3477): Contains dithiophosphates, which are selective for copper recovery
and are generally used in conjunction with xanthate collectors. A3477 is delivered as a liquid to
site in 210 L drums, with storage being provided for 75 drums. The promoter is transferred from
the drums by a drum pump to a 1 m3 promoter storage tank, from where it is dosed into the
flotation circuit.
x Frother (Dow 250): Frother stabilises air bubbles that reach the surface of the agitated slurry in the
flotation process. Dow 250 is received as liquid in 210 L drums and storage is provided for
75 drums. The frother is transferred from the drums using a drum pump to a 1 m3 frother storage
tank, from where it is dosed in the flotation circuit with dedicated metering pumps.
x pH Modifier (Lime): Lime is used is to regulate the pulp pH, suppressing the flotation of iron
sulphides and improving copper sulphide mineral flotation. Hydrated lime (85% Ca(OH)2) is
delivered to site as a bulk solid and stored in a 60 t hopper. Lime solution is prepared with raw
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water and transferred to a 20 m3 agitated lime storage tank prior to distribution to the plant through
a ring main.
x Flocculant: This is added to the concentrate and tailings thickeners to aid settling of solids by
agglomerating fine particles in the slurry. Flocculant is transported to site as a solid in 25 kg bags.
Storage is provided on-site for 400 bags. Dry flocculant powder is transferred to the storage
vessel when required, mixed in an automated system and made up to a concentration of 0.3% w/w.
Flocculant solution is delivered to the respective thickeners using dedicated variable-speed
metering pumps. Flocculant solution is diluted to 0.03% w/w prior to dosage.
x Sodium Sulphide: Sodium sulphide (Na2S) is used in the flotation circuit as a sulphidising agent to
improve the flotation of partially oxidised minerals. It is delivered to site in 1 t bulka bags, with
storage allowance in a secured area on-site for 15 t. A 2 t monorail hoist lifts the bulka bags into a
bag splitter chute above a 6 m3 agitated mixing tank. Sodium sulphide is made up to a 15%
solution concentration with raw water. The solution is transferred to a 10 m3 storage tank which is
sited in a concrete containment area capable of storing the entire contents of the tank in case of an
emergency. The solution is metered to the rougher flotation feed box.
4.9.2.6 Services
x Raw Water: Raw water requirements are provided from the Oxide plant raw water pond. A set of
raw water pumps will be installed at the pond to supply the Sulphide plant.
x Fire Water: This is supplied from the Oxide fire water system.
x Potable Water: potable water is provided from the Oxide Plant potable water system.
x Process Water: The process water pond has a capacity of 4500 m3. Provision exists to transfer
raw water into the process water pond to maintain the level at a predetermined value. Process
water is distributed to the process plant areas as required.
x Plant and Instrument Air: The concentrator has a dedicated plant and instrument air system similar
to that at the Oxide plant. Two independent flotation air blower systems are utilised for bulk
flotation and cleaner flotation air supply.
4.10 GENERAL INFRASTRUCTURE
In addition to the mine and process plant, the Mina Justa Project includes significant infrastructure,
principally in the areas of power, transport and water supply. Key components of these are situated
off-site, with links to the Project area as depicted in Figure 4.28.
Additional site infrastructure includes buildings for accommodation and offices, workshops, stores and
explosive magazines. Facilities for waste disposal, security and fire protection have also been
considered.
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4.10.1 Access Roads
A 14.8 km access road8 has been surveyed and designed, linking National Route PE-30 (connecting
the Municipality of San Juan de Marcona to the Panamericana Highway) to the plant site and
accommodation camp. The access road has been designed with two lanes and a total width of 8.40 m.
The road surface is unsealed gravel. Signage will be provided to control traffic movements, particularly
where heavy vehicles are operating.
4.10.2 Internal Roads
A network of internal roads provides access from the main gate to the offices, various stores, process
plant buildings, the mine, waste and ripios dumps, stockpiles and the TSF. Some of the roads will carry
heavy traffic delivering fuel and acid, and exporting product. The roads in and around the processing
plant are sealed with bitumen.
4.10.3 Buildings
The following buildings are additional to the main processing plant structures:
x Common Facilities: administration building, main security building, first aid and fire station, gate
and sentry box, workshop and offices, warehouse and offices, laboratory, change rooms, plant
dining room, site toilets, sewage treatment plants, Mina Justa main substation, camp, water
borefield pump stations, water transfer pump station No. 1, water transfer pump station No. 2.
x Oxide Processing Plant: Oxide reagents store, Oxide control room, Oxide primary crushing
substation, secondary screening substation, Crushing and screening substation, tertiary screening
substation, quaternary screening substation, Oxide process substation, SX substation, EW
substation, Rectiformer A substation, Rectiformer B substation, Oxide services substation.
x Sulphide Processing Plant: Sulphide administration building, Sulphide control room, Sulphide
reagents store, concentrate store, grinding substation, flotation substation, HV substation
substation, thickening and concentrate substation, Sulphide primary crushing substation, pebble
crushing substation, administration and services substation.
x Mine Facilities: mine offices, heavy vehicle workshop and lube store, mine warehouse, mine
change rooms, mine dining room, vehicle washdown, vehicle refuelling, diesel storage facility, tyre
bay and battery store, explosives and detonator store, ammonium nitrate storage, core shed, mine
office substation, mine workshop substation.
x Diesel Facilities: A heavy vehicle diesel refuelling area is included in the mining area and will be
supplied under contract. The area is expected to comprise a fuel supply truck unloading package,
three 1500 m3 storage tanks, a loading pump and heavy vehicle refuelling diesel loading arm. The
storage tanks are to be located in a concrete bunded compound with an apron for tanker
unloading. The heavy vehicle refuelling bay is to be on a separate concrete slab.
A light vehicle diesel refuelling area is expected to comprise a fuel supply truck unloading package,
a storage tank and two light vehicle refuelling bowsers.
8
Following completion of the DFS, alternative access routes have been identified to avoid conflict with Shougang ±
Section 4.23.3
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4.10.4 Communications
A radio link to the town of Marcona will provide telephone and broadband data communications to site.
The site communications network backbone comprises a single mode fibre optic cable connecting the
operations centre to all offices, substations, laboratory and gatehouse. This backbone supports the
plant information network for computer networking, redundant Process Control System network (PCS),
communication system, fire alarm system and the CCTV signals.
A radio system incorporating multiple channels provides coverage for the entire process plant and
tailings dam areas. The radio system is suitable for maintenance and security/emergency
communications.
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Figure 4.28
Mina Justa Project Plan
APPENDIX V
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4.10.5 Construction and Accommodation Camp
Project facilities include an accommodation camp, located approximately 4.4 km away from the plant
site, which will serve both the construction and operations phases of the project. The maximum
capacity of the camp will be 990 people during the construction phase and 270 people during the
operation phase.
The camp will be equipped with accommodation, kitchen and eating areas, medical, security,
communications and recreation facilities. A gate-house is provided where the access road enters the
property.
Temporary buildings will be modular or prefabricated, which will allow easy disassembly, reuse or
resale at the end of the construction phase. Permanent buildings will be constructed with metal
structures, covered with thermoacoustic, metallic panels and/or simple metallic panels over concrete
slab for the laundry, storage and warehouse buildings; and/or buildings based on reinforced masonry
(concrete blocks) walls with metallic roofs and covering for the rest of the buildings.
4.10.6 Waste Treatment
4.10.6.1 Solid Waste Treatment
The solid waste facilities are designed to process and store organic waste and industrial non-dangerous
waste. Dangerous industrial wastes will be stored in a temporary area and transported off-site for
subsequent final disposal using accredited groups.
4.10.6.2 Hazardous Waste Treatment
Hazardous wastes on the project will include waste with dangerous metallic elements, reactant
residues, explosives and flammable materials.
For each case, specific procedures will be established for waste collection, temporary disposal on site,
safe transportation to storage areas and final transportation to registered locations for treatment and
final disposal. Marcobre will construct a facility next to the solid waste landfill site, in an area of
approximately 12 000 m2, completely enclosed by its own perimeter fence.
4.10.6.3 Sewage
A number of sewage treatment plants will be sited at several locations, including:

x At the camp, offices and storage areas, which are near each other, sewage will be directed to a
biological-type treatment plant with the capacity to serve 500 to 600 people (approximately
58 m3/day).
This system comprises primary treatment, which consists of local phosphates precipitation, oil
traps, re-collection and extraction of coarse residual material, etc.; and secondary treatment, which
consists of a first stage of anaerobic reactions and a second stage of an activated sludge process.
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x For the process plant areas, a similar but smaller system will be provided, with a capacity of
13 m3/day. Oil traps and phosphate precipitation are replaced by a metallic cation precipitation
reactor.
x Two collection tanks will be provided at the mine. The sewage will be collected and transported by
truck for treatment at the camp sewage treatment system.
4.11 WATER SUPPLY SYSTEM
The project water balance was studied, and site water supply and water management requirements
were determined by Knight Piésold.
4.11.1 Project Water Balance
A site-wide water balance has been developed to quantify the amount of make-up water that is required
to sustain operations, taking account of water that will be lost in the tailings from the Sulphide
concentrator operation and to the ripios in the vat leaching operation.
The water balance used a computer model that estimated for each month of the life of the mine and into
the post-closure period the amounts of water in the various components of the system. The
calculations were made from or calculated inflows and outflows. Two major inputs are monthly
precipitation and evaporation, which were obtained from a climate study for the project also by Knight
Piésold. Another principal input is the flowchart and logic for water management in the system, which
included the planned operation of the TSF for separate CST and RST management. Additional
information was supplied by GRD Minproc and Marcobre with regards to the loading, leaching and
unloading of the vat leach cells, and mine waste production for placement in the dumps.
Due to the very dry climatological conditions at the site, the water balance is significantly in deficit,
requiring the addition of make-up water from an outside source to sustain operations.
The amounts of make-up water for the vat leaching and sulphide process plant operations are
described in the following sections.
4.11.1.1 Leaching Operations
For the vat leach system, input information to the water balance included ore moisture contents at feed,
during leach and after draindown to a residual level in the ripios. In general, 710 m3/hr of water will be
required for processing, and the overall average outside source make-up water requirement to sustain
the vat leaching operation is predicted to be approximately 140 m3/hr.
4.11.1.2 Sulphide Plant Operations
The majority of the water loss for the concentrator is as discharge of tailings to the TSF. The results of
the water balance indicate that make-up requirements are approximately 175 m3/hr.
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The design and operation of the TSF is such that there is limited potential to reclaim water from the
TSF, since CST are required to be submerged as far as possible to avoid oxidation. Moreover, the
normal operating depth of water in the pond is 300 mm and it would be difficult to recover clean water.
4.11.1.3 Other Areas
Apart from the process operations, approximately 45 m3KURI³RWKHU´PDNH-up will be required for the
operation of the camp and for dust suppression on the roads.
4.11.1.4 Total Operational Requirements
The total outside source make up requirement is predicted to be approximately 186 m3/hr from Year 1
through Q7 in Year 2 for the vat leaching operation. From Years 2 through 10 the requirement is
predicted to increase to 589 m3/hr (Oxides + Sulphides), but then decrease during Years 10 through 12
to 420 m3/hr (Sulphides).
4.11.1.5 Start-up Water Requirements
The start-up water requirement for the vat leach facility is predicted to be 77 500 m3 with an additional
45 m3/hfor mining and other uses.
The volume of start-up water required for the sulphide mill is predicted to be 10 000 m3, with the
additional 45 m3KIRUWKH³RWKHU´VRXUFHVFor the start-up of TSF, it is estimated that a continuous flow
of 319 m3/h for the roughers and 56 m3/h for the cleaners will be required for start-up operation.
4.11.1.6 Closure and Reclamation Water Management
Climatological data shows that there is significant net evaporation at the site, which indicates that with
the exception of short duration storm events there will be no net accumulation of precipitation. The TSF
will have the capacity to temporarily store the run-off produced from a PMP event on the undiverted
catchment, and this water will then be evaporated, so that no release is required. Consequently, there
will be no need to provide and maintain a spillway or diversion channels with the TSF.
4.11.2 Hydrological Testwork and Studies
Field investigations and studies were undertaken by MWH Peru S.A. (MWH, formerly GWI) and Vector
into the potential of the Jahuay and Lomas aquifers (Figure 4.29) to supply project make-up water
requirements. Work included:
x Climatic water balance
x Test well drilling and installation in the Upper Jahuay aquifer, about 31 km northeast of the project
site, and in the Lomas aquifer, about 50 km southeast of the project site
x Numerical modelling and other analysis.
This work determined that the Jahuay aquifer is capable of meeting the project demand over the life of
the project, with a safe long-term yield of 34 L/s estimated from pump-testing. The average hydraulic
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conductivity values for the aquifer are high, estimated in the range of 1 to 2 x 104 m/s and the storativity
value estimated for the pumping test was 0.00115 (0.12%).
The water is fresh, pH-neutral with slightly elevated levels of iron (0.3 to 0.6 mg/L) and potentially
corrosive to mild steel over the long term, largely due to the low total dissolved solids (TDS) content.
However, corrosion potential is anticipated to be minimal over the proposed life of the project.
The aquifer is fed almost exclusively by water surplus generated within the Jahuay/Carbonara basin at
elevations between approximately 3300 and 4200 masl. Average annual water surplus for the basin is
estimated in the range of 40 to 140 L/s with a best estimate of about 73 L/s. Most of this water surplus
LVEHOLHYHGWREHFRPSRVHGRI³WUDQVPLVVLRQORVVHV´ie, infiltration through the sandy bed of the stream)
in the valley above the proposed well field location, with additional water as ground water flow from the
upper basin and, during peak storm events, some run-off within the valley south of the proposed well
field. Additional water is expected to recharge the aquifer from bedrock in the valley walls.
Numerical modelling indicates that withdrawals in the order of those required for the operation are
sustainable, due in part to the high storage capacity of the sand and gravel aquifer. It is possible that
total annual withdrawals from the aquifer by the Project, Marcona town and SKRXJDQJ¶VRSHUDWLRQVPD\
exceed the average annual water surplus for the basin, but, following closure of the Mina Justa
operation, water levels will gradually recover to pre-operation levels. Based on simulations, pumping of
the Mina Justa well field should not adversely affect the Shougang/Marcona field, located 9.6 km south
of the southernmost Marcobre well, even if Shougang/Marcona were to double its current well usage in
the near future.
The Upper Jahuay aquifer is preferred to that at Lomas in view of the following factors:
x Shorter pipeline length (estimated 31 km versus 48 km for Lomas)
x Higher permeability and potentially higher well yields and fewer wells required as a result
x Lower potential for well interference with other users
x Better water quality.
The Lomas aquifer represents a viable back-up water supply source, should this be required, although
pump tests indicated a long-term safe yield of only 5 L/s. Water quality was found to be suitable for the
use intended, although other wells in the area have encountered slightly brackish water. There is some
potential to affect neighbouring wells in the area, should significant water withdrawal occur.
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Figure 4.29
Locations MPA-1 Lomas, MPA-2 Jahuay and Proposed Test-Production Wells
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4.11.2.1 Well Field Design
Two stages of the well installation are proposed: Stage 1 (Year -1) ± 3 wells; Stage 2 (Year 2) ±
5 wells. The design basis considers an average well yield of 25 L/s, and provides for 1 back-up well in
Stage 1 and 2 back-up wells in Stage 2.
Although well sites have been proposed, execution of additional surficial resistivity surveys on the east
bank of the Jahuay valley is recommended prior to drilling to investigate the potential water resources
on this side of the valley, thereby reducing the need for pipeline crossings of the valley, and to provide
additional information for characterising the aquifer.
MWH recommends a test production drilling approach to the well field installation program, where
drilling from the outset is at a diameter that permits installation of a final production well. Wells drilled
using this approach should be installed with an air-rotary rig which can advance well casing, or with a
cable-tool rig. All wells are developed to a sand-free condition and test pumping undertaken to
evaluate optimum well yield, pump setting, potential for well interference and water quality.
4.11.3 Water Supply System
The pipeline is designed with two pumping sections. An intermediate pump station is required, because
of the 300 m difference in elevation between the starting pumping station and the reception pond at the
mine site, the 31 km long pipeline9, flow requirements, and the resultant dynamic heads.
The water supply system includes the following elements:

x Borefield/water collection system, water wells and pumps located in the Jahuay aquifer
x Water transfer system, two pump stations and transfer pipelines, from the reception tank in the
Jahuay aquifer to the storage pond at the mine site
x Electrical distribution system, 22.9 kV power distribution line to the borefield and distribution to
each pump station
x Controls and instrumentation at each pump station and borefield location tied back via optical fibre.
4.11.3.1 Borefield/Water Collection and Transfer System
Wells
A total of 8 wells will be installed to supplement the 1 existing well. The wells will be activated
progressively as the water requirement for the mine increases. For the first 2 years, 3 wells will be in
use and 1 on stand-by to satisfy the demand of 186 m3/h. This will be increased to 7 operating wells
with 2 wells on stand-by to meet the maximum requirement of 561 m3/h, while, for the last 2 years,
5 wells will be operating, with 2 wells on stand-by.
9
Subsequent to the DFS, alternative access routes are being considered (Section 4.23.3)
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Well Pumps
The dynamic levels of the water wells are estimated to lie between approximately 100 m to 150 m
below ground surface, and pump intakes are located at 20 m below the dynamic level.
Pumps shall be of turbine type with submersible motors/drives. Due to their location, environmental
characteristics and operating conditions, the following pumps have been selected:
x One pump with estimated 90 m3/h, 224 m Total Dynamic Head (TDH), 150 HP
x Four pumps with estimated 90 m3/h, 191 m TDH, 125 HP
x One pump with estimated 90 m3/h, 143 m TDH, 100 HP
x Three pumps with estimated 90 m3/h, 121 m TDH, 75 HP.
Well Field Piping and Collection Tank

Carbon steel will be used for the pipelines from the wells to the collection tank and for the transfer
pipelines from the pump stations to the storage pond on-site.
Water will be transferred from the wells via a single pipeline to a collection tank of 300 m3 capacity.
Pump Station No. 1

Pump Station No. 1 includes the collection tank and pumps. The pumps are located in a masonry room
with a Precor type roof supported by light metal trusses. Axial wall fan type air extractors have been
considered to help ventilation, especially in summer season. The roof metal structure includes the
maintenance openings with covers above each pump's axis to allow installation and removal of the
pumps using a mobile crane from outside of the building.
Pumps shall be of vertical turbine, can type, where the pump bowls are in a vessel, with 295 m3/h
capacity and 326 m TDH. Motor power is estimated in 300 HP per pump.
During the initial phase of operation 2 pumps will be installed in the station, 1 operating and other
stand-by. As project requirements increase, a third pump will be installed resulting in 1 pump used as a
stand-by and 2 others as operating pumps. Associated infrastructure for the pump station second
phase expansion, as such as blanked pipeline spurs, pump plinths, adequate space allowed in
substation and control system, etc., will be included as part of the Phase 1 works.
Transfer Pump Station No. 2

Transfer Pump Station No. 2 includes a transfer tank with a capacity of 300 m3, and utilises identical
pumps, housed in a building of similar construction.
Two pumps will be installed during the first phase of operation, 1 operating and 1 stand-by, while, for
the second phase, a third pump will be installed to provide 1 stand-by and 2 operating pumps.
Associated infrastructure for the pump station second phase expansion, such as blanked pipeline
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spurs, pump plinths, adequate space allowed in substation and control system, etc., will be included as
part of the Phase 1 works.
Transfer Pipeline
As pumping is in 2 stages, there are 2 pipeline sections, one of 18.1 km and the other 13 km.
Steel will be used close to the pumping stations, but, as pressure decreases along the pipeline,
sections further away from the pumping station will be of HDPE construction to minimise the costs.
Steel pipes shall have concrete sleepers installed every 6 m and anchor blocks whenever its direction
changes. HDPE pipes will be restrained with earth anchors. Pipes shall be protected with
venting/vacuum breaker valves.
For the first section between pump stations, the pipeline will be steel, 14" diameter for 16 km, reducing
WR´+'3(IRUWKHILQDO km. The second section from the Pump Station No. WRVLWHZLOOEHRI´
UHGXFLQJWR´VWHHOIRU km, followed by 2 NPRI´+'3(
During the detailed design phase, a transient analysis of various operational scenarios including the
instantaneous loss of all pumping systems will be undertaken. From the results of this transient
analysis, a full scope of required valves and pressure relief systems can be determined.
Fire Protection System

BC type carbon dioxide fire extinguishers will be installed in each pump station. The detection system
signals will be transferred to local detection and alarm control panels communicating with the central
control room.
Fresh Water Storage and Distribution System at Mina Justa

The water will be discharged in the pond located at the plant site, from where it will be distributed to
internal facilities.
4.11.3.2 Water Supply - Electrical System
Power Supply and Distribution ± Borefield/Water Collection System

Electrical power supply to the well pumps will be by means of a 22.9 kV overhead line from the Project
site. From this transmission line, a secondary line will be installed to each well using a 315 kVA
transformer of 22.9/0.48 kV. Each motor control centre that feeds each borefield pump motor control is
supplied from the overhead line on load isolator that supplies a pad-mounted transformer.
Power Supply and Distribution ± Water Transfer System

The overhead 22.9 kV transmission line will supply each pump station via a 1500 kVA transformer
which will feed the 4.16 kV motor control centre that supplies the pumps. The substations that feed
each pumping station will be conventional unitary substations, the same as those feeding the MV MCC,
which will be located in the electrical room. The considered starters are DOL.
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Auxiliary supplies such as the control system, lighting and small power, etc., will be supplied via an
auxiliary transformer.
Control and Instrumentation System

Instrumentation is provided at each borefield/water collection and transfer station to control the pumping
system and provide adequate information for remote control/operation of the water collection and
transfer system. This includes typical instrumentation such as:
x Flowmeters, pressure transmitter on pipeline
x Low flow switches on pump headers
x Alarms to warn remote operators when pumps have tripped out
x Optic fibre communication system relaying information from each borefield/water collection pump
substation and transfer station to the central control room.
4.12 POWER SUPPLY SYSTEM
4.12.1 Power Supply and Distribution
The plant site is located approximately 15 km from the existing Marcona 220 kV substation, which is
connected into the regional 220 kV network. Marcobre will enter into a long-term power supply
agreement with a generator that will deliver power to the distribution grid operated by Red de Energía
del Peru (REP).
To satisfy the power demand requirements for Mina Justa it is necessary to upgrade the National
Network System to Marcona. This is currently in progress by ProInversion (a Government entity).
A dedicated 14.7 km 220 kV overhead power line10 supported by steel towers will connect to the grid at
5(3¶V 0DUFRQDVXEVWDWLRQ kV bus. The 220 kV RYHUKHDG SRZHUOLQH WHUPLQDWHVDW WKH3URMHFW¶V
HV switchyard on the 220 kV bus.
A 22.9 kV power line will run between site and the Jahuay borefield, 31 km to the southeast, via an
intermediate pump station. The line is supported by wooden poles.
4.12.1.1 HV Switchyard
An outdoor switchyard is proposed to accommodate the incoming 220 kV overhead lines and a
220/22.9 kV transformer to supply the plant and associated HV switchgear feeding a 22.9 kV
switchboard located indoors at the main plant substation.
10
Subsequent to the DFS, alternative access routes are being considered (Section 4.23.3)
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4.12.1.2 22.9 kV Main Switchboard
The 22.9 kV main switchboard is provided with a single incomer bay. The 22.9 kV main switchboard is
provided with gas-insulated switchgear bays for distribution of 22.9 kV to plant load centres, power
factor correction and HV motors.
4.12.1.3 Distribution
Power is distributed from the 22.9 kV main substation switchboard to major plant loads via an overhead
line to the boundary of the process plants. Within the process plants, power cables are used. Plant
load centres have varying secondary voltages supplied by step-down power transformers adjacent to
the each of the load centres.
4.12.2 Site Power Supply
4.12.2.1 Oxide Plant Electrical Load
The total connected load for the Oxide plant and mine infrastructure is 36 394 kW. The application of
relevant utilisation factors results in a total running load of 30 124 kW for the oxide process plant and
mine infrastructure only. The inclusion of power factor correction and harmonic filtering equipment (with
a total reactive power of 6 MVAr) allows for the correction of the power load to approximately 0.9
lagging and a predicted maximum demand of 33 441 kVA.
4.12.2.2 Sulphide Plant Electrical Load
The Sulphide plant total connected load is 29 061 kW. The application of relevant utilisation factors
results in a total running load of 22 861 kW for the sulphide process plant, tailings and associated
process plant infrastructure only. The inclusion of power factor correction and harmonic filtering
equipment (with a total reactive power of 6 MVAr) allows for the correction of the power load to
approximately 0.94 lagging and a predicted maximum demand of 24 211 kVA.
4.12.2.3 Other Electrical Loads
In addition to process plant loads, other loads are the camp (824 kVA), lighting for internal access road
(190 kVA), wells substation (695 kVA) and transfer pumping station (842 kVA). These loads are fed
from the plant site via 22.9 kV overhead power line.
4.12.2.4 Power Reticulation
There are 12 substations servicing the Oxide crushing, screening and process plant facilities, and an
additional seven substations for the Sulphide plant.
4.12.2.5 HV Switchboards
The Oxide plant HV switchboards are located within the Oxide crushing and screening area HV
substation and the Oxide process area HV substation.
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For the Sulphide plant, power is distributed from the 22.9 kV main substation switchboard to major plant
loads via an overhead line to the boundary of the Sulphide plant. The Sulphide plant HV switchboard is
located within the Sulphide plant HV substation. It handles the Sulphide primary crusher as well.
4.12.2.6 Emergency Generation
Emergency power is required to maintain the plant process in a safe state, allowing safety systems to
function seamlessly and prevent long delays in restarting the plant after the restoration of power to the
site. Catastrophic failure of the power system is not considered.
The emergency power is provided to a number of drives that typically require back-up emergency
power for short-term power outages (4 hours or less). Individual small generators for this purpose are
located at or near the required substation.
The following emergency power requirement has been identified:

x Oxide plant: Total 2321 kW consisting of 2027 kW fixed loads (building loads, plant lighting and
x Sulphide plant: Total 922 kW consisting of 690 kW fixed loads (building loads, plant lighting and
4.12.3 Control Systems
The plant is provided with a process control system (PCS) with a moderate level of control complexity.
The plant is designed to be operated primarily from the central control room (CCR) located adjacent to
the EW building. The CCR contains four operating stations and an engineering workstation. Local field
operator stations provide complete control room type information to the operators, but allow interaction
from the field operators on a secured basis.
A CCR is provided for the Sulphide plant and is located near the grinding building.
4.13 WASTE DISPOSAL
4.13.1 Mine and Ripios Waste Dumps
A design has been prepared for the two mine waste rock dumps (the Main and Magnetite Manto waste
dumps), the ripios dump and the low grade stockpile, taking account of the physical and geochemical
stability of the structures and the appropriate land use following closure.
The estimated amount of waste rock to be generated by the Project is approximately 402.5 Mt, of which
383 Mt will be placed in the Main mine waste dump, 14 Mt in the Magnetite Manto waste dump and the
remaining 5.5 Mt (non-PAG material) will be used for construction of the tailings dam.
The ripios dump has been designed with a capacity of approximately 114 Mt, and the low grade
stockpile has a capacity of 20 Mt.
The location of the structures is shown in Figure 4.30.
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Figure 4.30
Ripios and Mine Waste Dumps
APPENDIX V
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In order to generate information for the design of these structures, a site investigation program was
conducted by Knight Piésold between June 2006 and December 2007. The investigation included
characterisation of the foundations, waste rock material and ripios material.
The foundation of the waste rock dumps and low grade stockpile comprises three main geological units:
Quaternary material (aeolian sands), overlying highly weathered and fractured bedrock (Tunga
Andesites and volcano-sedimentary material of the Rio Grande Formation), which, in turn, overlies
fresh, fractured bedrock with medium to high strength. All three geological units are adequate for
foundations. However, the aeolian material located at the final outer toe of the Main mine waste rock
dump will be removed to improve stability.
The water level encountered during the site investigation is at approximate elevation 312 masl, or some
400 m below the base of the Main waste rock dump and 500 m below the Magnetite Manto waste rock
dump and low grade stockpile.
The strength parameters for the waste rock were estimated using correlations based on the expected
particles sizes, angularity, and the stress conditions in the dumps. The strength parameters for the
ripios material were determined from standard laboratory testing; ripios material comprises silty sands
and fine gravels with a maximum size of 8 mm.
4.13.1.1 Ripios and Main Mine Waste Dump Design
Ripios will be placed at the north end of the Main waste rock dump and will be confined behind a large
buttressing embankment of mine waste rock. The buttressing embankment will have a crest elevation
of 820 masl. The ripios material will be placed slightly above this to a final elevation of 832 masl.
The intermediate slopes (bench slopes) on the mine waste dump have been designed to 1.4H:1V. The
overall outer slope in the North sector, which forms the downstream slope of the buttressing
embankment, will be 1.7H:1V. It will have an intermediate bench 40 m wide at elevation 750 masl. The
intermediate bench width has been established considering a minimum width for haul truck operation.
The upstream slope of the mine waste buttressing embankment in the North sector in contact with the
ripios material will be 1.4H:1V with no intermediate berms. The overall outer slope in the South sector
of the waste dump will be 2.15H:1V and will reach a maximum elevation of 780 masl. The Southern
sector will be buttressed by a stabilisation ramp and berm along the toe in order to improve the long
term stability.
The ripios and waste rock will be placed by trucks into their designated areas. The ripios will be
drained to a moisture content in the order of 11%, and will be transported from the vats by conveyors to
a transfer point and then onto the trucks. The ripios will be placed in relatively thin lifts to promote air
drying before the next lift is applied. This will reduce the moisture content below 11% and thus reduce
the propensity for the ripios to generate seepage.
The results of stability analyses for the Main waste rock dump gave static FoS values during
development and in the long term (after full build-out) in excess of 1.3 and 1.5, respectively. Dynamic
or earthquake stability analyses were carried out using a psuedo-static approach since the waste rock
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forming the slopes and confining the ripios will be non-liquefiable. The pseudo-static analyses gave
FoS values over 1.0 during both the operation and post-closure periods considering a 475 year event
(0.36 g). These results are compliant with industry accepted values. Stability analyses for the ripios
GXPSGXULQJSODFHPHQWLQGLFDWHGWKDWDVHFXULW\RU³QRJR´]RQHRIDSSUR[LPDWHO\ m to 25 m in front
of the advancing ripios lift will be necessary since some minor (superficial) sloughing of this advancing
slope can be expected.
Seepage analyses of the Main waste dump were undertaken and the results indicate that very little
infiltration can be expected during rainfall events. In particular, the saturation degree of the mine waste
was shown to increase only 5% in the top 5 m to 10 m from a PMP storm event. No variation on the
degree of saturation in the upper mine waste was calculated for lesser precipitation events.
Consequently, the potential to generate seepage through the dumps is limited, and the potential for
seepage to impact the groundwater table at a depth of 400 m to 500 m is very low.
In order to monitor slope movements on the Mine waste dump, marker points will be installed during
and after operations. Underdrain systems will be installed at the base of the ripios dump to monitor any
potential seepage from the ripios area. Potential flow will be conducted to a water monitoring station.
The amount of PAG mine waste rock is estimated at approximately 15 Mt. This material will be placed
in a designated area within the southern portion of the main waste dump and will be encapsulated by
non-PAG material. The PAG waste will be separated from the ripios to the north and will be kept
removed from the final outer slopes of the waste dump. At closure, the upper surface of the PAG waste
rock in the dump will be covered with a 1 m layer of non-PAG material to remove the potential for acid
dust generation and dermal contact.
4.13.1.2 Magnetite Manto Waste Rock Dump and Low Grade Stockpile Design
The Magnetite Manto waste rock dump covers 34 ha, and will be constructed in 3 layers. Disposition
will be by downstream discharge in 3 layers, 11.5 m, 10 m and 14 m thick. The final elevation will be
834 masl. Berms width will be 20 m.
The low grade stockpile will extend over 41 ha, and will also be constructed in 3 layers. Material
disposal will be by downstream discharge in 3 layers, 30 m, 20 m and 10 m thick, and the final elevation
will be 871.5 masl. Berm width will be 30 m at elevation 841.5 masl, and 40 m at elevation 861.5 masl.
For both structures the bench slopes and the overall outer slopes will be 1.4H:1V and 2.5H:1V,
respectively. Stability analyses were carried out on these slopes and gave FoS values at the end of full
build-out greater than 1.5. Psuedo-static analyses gave FoS values greater than 1 during both the
operation and post-closure periods considering a 475 year event (0.36 g). These results are compliant
with industry accepted values.
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4.13.2 Tailings Storage Facility (TSF)
4.13.2.1 Location and General Information
The TSF has been designed to a DFS level with a capacity for 49 Mt (dry) of tailings - consisting of
7.5 Mt (dry) of CST and 41.5 Mt (dry) of RST - that will be deposited seperately and managed in
adjacent portions of the facility over a period of 10 years. The two tailings delivery systems have been
designed to a PFS level.
The TSF will be located in a north-south trending depression just to the southwest of the planned mill
site and west of the Main and Magnetite Manto open pits. It will cover a surface area of approximately
372 ha at full build-out (Figure 4.31).
The location of the TSF was selected based on an alternatives analysis study of seven options for
which environmental, economic and technical aspects were considered together with the property
boundaries.
The design of the TSF was developed by Knight Piésold based on:
x Site geotechnical, hydrogeological, hydrological and climate data
x Geotechnical and geochemical data for the tailings
x Geotechnical and geochemical data for the mine waste that will be used in dam construction
x The mining and mill processing schedule.
As part of TSF design, a preliminary study was conducted to evaluate the costs and benefits of
including a tailings dewatering system in the design. The results indicated that thickened tailings
should be incorporated in the design to increase the amount of water recovered. The current DFS
design contemplates thickening both the CST and RST streams to 60 % solids content by weight prior
to delivery to the TSF.
4.13.2.2 Tailings Dam Design
The tailings dam will be constructed out of non-PAG mine waste rock from the Magnetite Manto open
pit and possibly the Main open pit (pending further characterisation studies on the Main pit materials).
Mine haul trucks will be used to transport the construction materials which will be placed into the dam in
thin, horizontal lifts and compaced by routing the mine trucks evenly over the lifts. Final surface
compaction will be by vibratory smooth drum rollers.
At full build-out, the dam will have a length of 1.8 km and a height of 27 m. It will be constructed in
three stages using the downstream construction method and has been designed to maintain its physical
stability during construction, operation and post-closure. A geosynthetic liner will be included on the
upstream face of the dam, and will be extended to underly the southern portion of the TSF basin where
the CST tailings will be stored. Figure 4.32 gives details of the dam.
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Figure 4.31
APPENDIX V
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Figure 4.32
Tailings Dam
APPENDIX V
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The dam was assessed for its consequence classification according to the Canadian Dam Association
&'$'DP6DIHW\*XLGHOLQHVDQGZDVIRXQGWRKDYHD³/RZ´FODVVLILFDWLRQ7KLVUDQNLQJLVGXHWRthe
absence of a population at risk and the remote nature of any surface or groundwater resources that
could be affected.
4.13.2.3 Tailings Deposition
The CST tailings will be deposited into the southern portion of the TSF through frequently rotated
spigots located along the upstream crest of the dam, while the RST will be discharged into the northern
side of the TSF from a few off-take points above the northeast side. The CST will be stored above a
liner while the RST will not. A separation dike will be constructed between the CST and the RST
areas. The overall tailings management plan will involve keeping a shallow supernatant water pond
over as much of the CST deposit as possible in order to keep it saturated and reduce its potential for
oxidation and acid generation. However, it is expected that the pond will not cover the whole CST
deposit at all times and thus the management plan will also involve frequently blanketing the surface of
the CST with a fresh layer of CST. This will keep the areas that are not submerged also in a saturated
condition to the greatest extent possible. The CST deposition spigots will be closely spaced along the
entire crest length of the dam to facilitate this. The liner under the CST will assist in keeping the deposit
saturated by keeping any seepage losses to a very low level.
The RST deposited on the northeast side of the TSF will form a drained and consolidated mass that will
confine the CST into the southern side of the TSF. The surface of the RST deposit will slope to the
south and west and will confine the small supernatant pond in this area to cover a significant portion of
the CST. The RST will be non-acid generating and will be largely above the pond and exposed to air to
increase its drying, consolidation and densification. The liner under the CST will not be extended under
the RST, so that bottom drainage from the RST can occur thus further increasing its consolidation.
Under normal operating conditions the volume of the supernatant pond in the TSF will vary between
about 79 800 and 116 200 m3 in the RST portion of the TSF and 20 300 to 243 100 m3 for the CST
side. The results also indicate that under an extreme precipitation event condition (Probable Maximum
Precipitation or PMP), the maximum pond size is predicted to increase to between 166 200 and
220 200 m3 in the RST side and 34 529 to 278 885 m3 in the CST side over the life of the operation.
These pond sizes are very small and translate into maximum depths of water over the tailings of less
than 1 m and normal depths of less than approximately 300 mm. Water is not planned to be reclaimed
from the TSF owing to the very shallow depths of the supernatant pond, from which the recovery of
clean water would be difficult.
In addition to providing capacity to store the operation and storm water volume, 1 m of freeboard has
been provided at each stage of development of the TSF.
Leachate generation and seepage from the TSF is expected to be low. The liner under the CST portion
will act as a barrier to seepage, while the strong evaporation potential at the site will desiccate the RST
and produce a deposit that will have low and possibly negative pore pressures with little to no
propensity for causing seepage. Any small amounts of seepage that do emerge from the base of the
TSF are likely to be retained in the geological units well above the groundwater, which is at a depth of
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over 400 m, or have their trace elements attenuated to levels that will be unlikely to negatively impact
the groundwater. A preliminary seepage model showed that the potential seepage will reach a depth of
140 m during a period of 15 years considering an unlined facility and a constant supernatant pond.
4.13.2.4 Tailings Delivery System
The tailings delivery systems have been designed to a PFS level and include a separate tailings
delivery pipeline for the RST and CST tailings. The current design, which is based on preliminary
rheology and hydraulics assessments, contemplates that the CST will be pumped and the RST will be
transported by gravity to the TSF. These plans will require confirmation or revision in more detailed
engineering studies.
The CST tailings will correspond to approximately 15% of the total total production or 0.75 Mt (dry) per
year while the RST will correspond to the remaining approximately 85% of the tailings production or
4.2 Mt (dry) per year. Both streams will be thickened at the plant to 60% solids content (by weight).
The CST will be delivered to the TSF via a 125 mm diameter steel pipe to the crest of the tailings dam,
from where the slurry will be discharged from frequently rotated and closely spaced spigots on the
upstream crest of the dam. The normal design flow rate for the CST system is 81 m³/h.
The RST will be delivered to the TSF via a 350 mm diameter HDPE pipe installed beside an access
and service road running parallel to the east side of the TSF. The RST tailings will be deposited from a
few single discharge points above the northeast side of the TSF. The deposition strategy for the RST
will be to establish and maintain a sloping beach to the south and west to keep the CST confined
against the dam and to keep the small supernatant pond largely over the CST. The normal design flow
rates for the RST system is 540 m³/h.
4.13.2.5 TSF Construction
To reduce initial capital costs, the TSF is planned to be built in three stages, involving raising the tailing
dam and progressively installing the CST liner system. The construction stages are:
x Stage 1: Construction of the tailings dam to elevation 765 masl. Placement of the geosynthetic
liner on the upstream slope of the dam and in the basin under the portion corresponding to CST
deposition for this stage. Installation of the CST and RST delivery systems.
x Stage 2: Raise the tailings dam to elevation 772 masl. Placement of the geosynthetic liner on the
upstream slope of the dam, and in the border of the basin under the portion corresponding to CST
deposition for this stage.
x Stage 3: Raise the tailings dam to its ultimate crest elevation of 781 masl. Placement of the
geosynthetic liner on the upstream slope of the dam and in the border of the basin under the area
of CST deposition for this stage. Install the second stage of the RST transport system in the north
side of the facility.
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4.13.2.6 TSF Closure Plan
The closure plan for the TSF has been developed to a concept level only at this time. The plan calls for
covering the final CST surface with an appropriate non-PAG layer in order to limit the potential for
oxidation and acid generation over the long term.
The TSF will have the capacity to temporarily store the run-off produced from a PMP event on the
undiverted catchment, and this water will then be evaporated so that no release is required.
Consequently, there will be no need to provide and maintain a spillway or diversion channels with the
TSF.
4.14 DIESEL FUEL SUPPLY
Fuel supply will be contracted with a vendor that will deliver to a fuel supply facility at site. The service
will cover:
x Transport to site
x Storage and facilities management
x Two in-pit fuel supply trucks for refuelling heavy vehicles
x Personnel to provide 24 hour 7 day per week dispensing service
The price used in the DFS is based on official refinery gate price for diesel, plus transportation to site,
storage and dispensing on a long-term contract basis, for which Marcobre obtained two quotes.
4.15 PORT AND TRANSPORT
4.15.1 Port Facilities
4.15.1.1 Overview
A multi-port strategy is proposed for the Project, as recommended in the report from Sandwell (2009),
as follows:
x San Martin, 250 km by road to the north of Mina Justa, is selected for cathode and acid shipments
for the first 5 years.
x Matarani, 550 km by road to the south is used for shipment of concentrate for 1 year.
x San Juan de Marcona, 30 km to the south, is selected for cathode, acid and concentrate supply
and shipments for the reminder of the Project.
4.15.1.2 San Martin (Terminal Portuario General San Martin)
This port is located approximately 250 km by road to the north of Mina Justa, road access being along
the single lane carriageway Panamerican Highway. Terminal Portuario General San Martin (TPGSM)
suffered damage from an earthquake in August 2007 as the port was being prepared for privatisation.
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TPGSM handled 997 740 t of cargo in 2007, down from the peak of 1 142 707 t it handled in 2006, due
to damage suffered in an earthquake. The predominant cargo is bulk solids which accounted for 78%
of the cargo in 2006.
The port has a 700 m long wharf divided into 4 berths. Overall berth utilisation in 2006 was
approximately 20%, corresponding to 292 berth-days per year total.
If the privatisation scheme goes ahead as envisaged, the 2 northernmost berths will be combined into a
large 350 m long berth for container ships. This will decrease the number of berths available for other
cargo to 2 or 3 (if the container berth is shared with other cargo) and increase pro-rata the berth
utilsation.
2YHUDOOWKHVSDFHDYDLODEOHDW73*60ZRXOGPHHW0DUFREUH¶VUHTXLUHPHQWVIRUFDUJRKDQGOLQJHYHQ
during the peak production years, the exception being the tank farm for liquid bulk storage that would
have to be expanded.
According to the Tender Basis document for TPGSM, the winning tenderer had to make an investment
in the order of US$80.4 M. This estimate is no longer valid considering the extensive damage to the
port caused by the earthquake of August 2007. It is not definite yet, but it seems that the government
plans are to transfer the insurance money collected and the responsibility for executing the necessary
repairs to the selected tenderer.
4.15.1.3 Matarani
The port of Matarani will be used for the shipment of concentrates for 1 year, in order to accommodate
a delay in the start-up of the port of San Juan de Marcona. The port is located approximately 450 km
by road to the south of Mina Justa, road access being along the single lane carriageway Panamerican
Highway.
Matarani port is operated by Terminal Internacional del Sur (TISUR), and handles bulk copper
concentrate and copper cathodes from various mines. Other cargo handled at the terminal includes
soya and soya meal, liquid bulks and containers.
Copper concentrate is received by rail or truck. Trucks are end-dumped into a hopper at an unloading
rate of 240 t/h.
Two storage buildings are available at the terminal. Stacking in both buildings is made by a travelling
stacker mounted against one side of the building. Reclaiming of the product is done by FEL and a fixed
hopper system. A pipe conveyor connects the storage buildings to the ship loading system.
The pipe conveyor feeds a travelling ship loader equipped with a tripper and a boom with a telescopic
chute. All the conveyors are enclosed to reduce dust emissions. The conveyor and ship loader
capacity is 1500 t/h. Pier length is 582 m and the port is capable of handling ships with a LOA up to
210 m and beam up to 35 m.
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TISUR has 160 ha of land area available for new developments; expansion plans include the option of
two new berths inside the existing harbor and, in a later phase, the construction of additional berths
outside the harbor through additional landfill.
The existing port infrastructure and shipping facilities is adequate to handle concentrates from
Mina Justa and it is likely that no additional investment is required. The project could share the existing
truck receiving hopper and 50 000 t capacity shed with other customers and negotiate storage and
handling charge with TISUR.
4.15.1.4 San Juan de Marcona
A Supreme Decree was issued by the government of Peru in December 2008, stating that the port will
be privatised. Tenders for the port concession are expected imminently.
The national port authority of Peru (APN) has completed preliminary studies for the development of a
SRUW DW 6DQ -XDQ GH 0DUFRQD 7KH $31¶V SODQ LV WR GHYHORS WKH 3RUW LQ XS WR VL[ SKDVHV WKH LQLWLDO
phase will focussed on the handling and shipment of iron ore, copper and possibly other bulk minerals.
Subsequent phases would see the development of facilities to handle containers, liquid bulks and other
materials.
The port was expected to handle up to 10 Mt/a of minerals starting in 2013 (and rising to 22 Mt/a by
2032), the majority of these shipments being iron ore.
The government proposed schedule for the start-up of San Juan de Marcona port has been delayed by
1 year, following which San Juan de Marcona port is selected for cathode, acid and concentrates
supply and shipments.
A contingency plan has been developed in case these assumptions do not materialise. If San Juan de
Marcona is not ready by 2015, then concentrates can continue to be shipped from the port of Matarani
until there is a facility in San Juan de Marcona. If there are no cathode handling and/or acid handling
facilities ready in San Juan de Marcona by 2017, then these can continue to be handled from San
Martin until facilities are available at San Juan de Marcona.
4.15.1.5 Port Selection for Mina Justa Project
Marcobre has assumed that the start of operation of the bulk mineral handling facilities at the new port
of San Juan de Marcona will be delayed for 1 year and will start in 2015, at which time concentrates
from Mina Justa will be shipped out of this port. Marcobre has further assumed that, starting in 2016,
cathodes and acid will also be handled by the new port of San Juan de Marcona in accordance with the
proposed phased development of this facility.
A contingency plan has been developed in case these assumptions do not materialise. If San Juan de
Marcona is not ready by 2015, then concentrates can continue to be shipped from the port of Matarani
until there is a facility in San Juan de Marcona. If there are no cathode handling and/or acid handling
facilities ready in San Juan de Marcona in 2016, then these can continue to be handled from San
Martin until facilities become available.
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4.15.2 Transport
4.15.2.1 Land
The Mina Justa Project is located approximately 400 km south of Lima, and is easily accessible by a
good network of highways. The highway south of Lima, the Panamerican Highway, is initially 4 or 6
lanes wide, reducing to two-way, single lane traffic after 115 km.
At highway marker 488, a spur road leads to the town of San Juan de Marcona. A distance of 10 km
along this highway there is an exit to the Mina Justa exploration camp, which lies another 3 km from the
exit. Thus, total travel distance to the project site from Lima is 501 km, a journey taking approximately
6 to 7 hours.
Road distances to other urban centres from the project site are:
x Nazca: 50 km
x San Juan de Marcona: 30 km.
4.15.2.2 Air
It is expected that some project employees will be transported between Lima and site by aircraft. Two
airports exist close to the project, as follows:
x The city of Nazca has a small airport that is used by light aircraft. The runway is approximately
1 km in length. Flying distance from Lima to Nazca is approximately 350 km.
x On the edge of San Juan de Marcona there is a small airport owned and operated by the Peruvian
Navy for training purposes. It has a runway of approximately 2 km, but only half is in good
condition. Flying distance from Lima is approximately 400 km.
Neither airfield has lighting for night flights and flying is restricted to between approximately 7 am and
4 pm. Neither airport is serviced by commercial carriers at this time.
4.16 PROJECT IMPLEMENTATION PLAN
The Mina Justa Project will be implemented in two stages. The first stage involves construction of the
facilities required to mine and process Oxide ore, and the second stage, which will commence while the
Oxide plant is still under construction, involves construction of a concentrator and related facilities to
process Sulphide ore.
4.16.1 Implementation Schedule
Summaries of the DFS Oxide and Sulphide plant implementation schedule are provided in Figure 4.33
and Figure 4.34. It should be noted that a delay of 4 months has occured since that time (Section
4.16.3).
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A 29 month timeframe is projected for completion of the Oxide plant, with an additional 3 months to
complete the commissioning and commence cathode production. It is assumed that all necessary
permitting and environmental approvals are obtained within the timeframe indicated.
Similarly, a 29 month timeframe is projected for the Sulphide plant implementation, plus 3 months for
commissioning.
The key drivers of the schedules are the very long delivery lead times for some critical equipment (eg,
crushers and mills), the large quantity of concrete works required for the vat leaching area, and the time
required to construct camp accommodation.
The strategies employed in the schedule to achieve the project completion dates include the following
essential elements.
x Early award of EPCM contract: An EPCM (Engineering, Procurement and Construction
Management) approach has been assumed for the implementation of the facilities and supporting
infrastructure. Early award of the EPCM contract is necessary to progress the engineering and
tender the critical long lead time equipment packages and contracts.
x Early award of critical items: the supply of cone crushers and construction of the camp are on the
critical path. The schedule relies upon award of these critical items at the Project Release and
Financial Approval milestones. For the Sulphide plant, the mills are critical long lead equipment
and it is assumed that these will be ordered three months before the Sulphide Project Release
milestone.
x Maximum Pre-assembly: To minimise construction time, where possible, tanks, platforms, MCCs
and other equipment will be pre-assembled as much as practicable before being delivered to site.
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Figure 4.33
Mina Justa Project: Oxide Project Implementation Schedule (DFS Version)
APPENDIX V
— V-202 —
Delay of 4 months projected (Section 4.16.3)

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Figure 4.34
Mina Justa Project: Sulphide Project Implementation Schedule (DFS Version)
APPENDIX V
— V-203 —
Delay of 4 months projected (Section 4.16.3)

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4.16.2 Schedule Risks
The following risks to the schedule have been identified:

x Preparation of the documents and tendering for the critical long lead equipment and camp
construction, and turn-around time for the review and approval of critical project drawings and
documents, may take longer than planned.
x Delivery times and estimates supplied by vendors for the DFS are not firm. There is a risk that
these could change when orders are placed.
x Delay in obtaining permits that affect the milestones for finance approval, project release, or
construction start will adversely affect the schedule11.
x The camp is essential for the project because there is insufficient existing accommodation near the
site. It is planned to commence the other construction works while in the process of building the
camp. It is recommended to plan and closely manage the camp construction and contractor
mobilisation schedules to ensure that accommodation and facilities are made available ahead of
demand in order to avoid constraining the build-up of the main construction workforce.
x An allowance has not been made specifically for inclement weather, industrial strife, civil unrest,
earthquakes, unidentified community festivals, and the like. There are more than 3000 community
festivals celebrated in Peru each year, and those that apply locally have not yet been identified.
More importantly, there will be presidential elections iQ $SULO DV FXUUHQW SUHVLGHQW¶V 5 year
term expires on July 27, 2011. Presidential election years have often been marked by elevated
levels of civil unrest, most often manifested by blocking highways. It is recommended that these
risks are reviewed when more specific information is available regarding contracting strategy, local
industrial conditions, etc., and a contingency allowance be made if necessary.
4.16.3 Post-DFS Developments
The ESIA hearing took place on 8 January, 2010. The latest estimate by MDUFREUH¶VOHJDOFRXQVHOLV
that the timing will be as follows:
x ESIA approval end of July 2010
x Oxide plant construction start 1 February 2011
x Oxide plant construction complete 6 February 2013
x Oxide plant commissioning complete 29 April 2013
The updated timetable is based on the assumption that administrative proceedings will take the
maximum length of time allowed by regulations. On that basis, the schedule is anticipated to have a
delayed start of 10 months from the DFS schedule.
11
Start of construction has been delayed for ten months from the DFS schedule, due in part to a delay in approval of the
ESIA (Section 4.16.3)
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4.16.4 Contracting Strategy
The Project will be implemented with a general strategy of multiple, horizontal, discipline-oriented
contract packages (for earthworks, concrete, structural erection/mechanical/piping, tank erection, field
piping, electrical/instrumentation works, HV electrical works, process control, etc.), with the inter-
discipline construction interfaces managed by an EPCM Contractor.
This approach is aimed at minimising construction interface issues and risks. Key elements are as
follows:
x Match contractor skills with the work scope and minimise the impact of using too many lower tier
contractors.
x Optimise interfaces by using small packages for specialised or interruptive work that, if
incorporated into the larger packages, would cause disruption or loss of focus with the main
contractors.
x Focus on an orderly and timely implementation of the project philosophy, ie, schedule to allow for
progressive release of engineering, prioritised procurement and delivery of material and
equipment.
x ³)UHH-LVVXH´ VSHFLILF ORQJ OHDG HTXLSPHnt and materials to allow contract scopes to be defined
without requiring contractors to procure specialised long-lead material or equipment.
In general, competitive tendering on a lump sum basis is preferred for the Project using well-defined
detail drawings, equipment lists, standards and scope of works specification. This philosophy will apply
in particular to bulk equipment supply and fabrication.
In circumstances where engineering and vendor information is limited, and there are time schedule
constraints due to long delivery times, it may not be appropriate to enter into lump sum contracts. In
such instances, fabrication or construction contracts will be based on unit rates with provisional bills of
quantities extracted from the Project control estimate. Such an approach could be adopted for the
earthworks packages, concrete construction packages and structural steel fabrication packages.
4.16.5 Implementation Scope of Work
The Project scope of work includes the provision of facilities for mining, process plant, utilities and
services, waste disposal and the associated infrastructure to support the construction work and
on-going operations.
Marcobre will manage the EPCM Contractor, and manage or execute all other activities needed to
complete the Project, including:
x Finance, insurance, governmental approvals, environmental approvals and licences
x Land purchases, permits, security, medical, taxes and duties
x Mine planning, mine equipment supply and assembly, and mine development
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x Engagement of specialist consultants and contractors for mining, waste disposal and other
specialist scopes
x Contracts for power supply, port usage, transport of cathodes, copper concentrate, acid, other
reagents and consumables, etc.
The EPCM Contractor will be appointed to design and manage the construction of the processing plant
and associated infrastructure, including:
x Engineering and procurement of the:
Oxide process plant
Mine facilities
Infrastructure and services
Sulphide plant
x Contracting and management of construction contractors
x Management of commissioning.
The success of the implementation of the project will be dependent on the combined performance of
the EPCM Contractor and the Marcobre team. The alignment of the team members to common
objectives and the ability to work together as an efficient, cohesive group is considered critical for the
success of the Project.
4.16.6 Organisation
The implementation strategy is based on an organisation with a Marcobre project team and an EPCM
Contractor both reporting to a Marcobre Project Director.
The EPCM Project Manager will be responsible for managing the EPCM works and other specialist
consultants and subcontractors. Key personnel will be nominated to ensure that assigned areas of
responsibility are delivered safely, on time, on budget and in accordance with specifications and project
criteria.
The EPCM Construction Manager and management team will be based on-site to manage and oversee
WKHFRQVWUXFWLRQFRQWUDFWRUVZKRZLOOFDUU\RXWWKHFRQVWUXFWLRQ$3URMHFW6SRQVRU¶V&RPPLttee, made
up of senior management from Marcobre and the EPCM Contractor, will be appointed to provide
resolutions to problems or issues that cannot be resolved by the project team.
4.16.7 Health, Safety, Environment and Community
The Project HSEC Management Plan will be developed prior to project execution, and will identify the
HSEC requirements, allocate duties and responsibilities, and detail the processes and procedures that
are used to manage HSEC during the implementation of the project. The Project HSEC Management
Plan will be consistent with the Owner's Social-Environmental Management Plan, and the ESIA, as well
as Marcobre HSEC policy which requires compliance with applicable Equator Principles.
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Public meetings, consultations, systems, procedures and management plans will be used to align the
key stakeholders, namely the Marcobre Project Team, the Marcobre Operating Team, the EPCM
Contractor, contractors, vendors, the workforce and the community in order to achieve the HSEC
objectives.
4.16.8 Project Management
x Risk Management: The risk review/assessment process is a fundamental tool, and it will be used
to maximise the probability of achieving the project objectives.
x Planning and Scheduling: Progress and performance will be monitored and measured against a
base-lined Master Project Schedule. Suppliers and contractors will develop their own more
detailed schedules to manage and control their work scopes, and provide input at a summary level
into the Master Project Schedule that will be managed by the EPCM Contractor.
x Work Breakdown Structure: A defined work breakdown structure is a fundamental part of the
development of the project numbering system and the cost accounting system, and will be adopted
to define the overall project and break it down into smaller areas and sub-areas in a hierarchical
numbering system.
x Project Cost Controls: Rigorous procedures will be developed and implemented to ensure
effective control of expenditure by management, including preparation and approval of change
orders, identification of trends, and release of contingency.
The quantities and project costs will be controlled and managed against the control budget through
the EPCM Contractor¶V FRVW FRQWURO V\VWHP IRU WKDW SDUW RI WKH 3URMHFW XQGHU WKH EPCM
Contractor¶VFRQWURO0DUFREUHZLOOGLUHFWO\PDQDJHRWKHUFRVWVVXFKDV2ZQHU¶V&RVWV
7KH (3&0 &RQWUDFWRU¶V FRVW FRQWURO V\VWHP ZLOO LQYROYH WUDFNLQJ RI FRQWUDFWV SURFXUHPHQW DQG
expediting for direct costs and site services, temporary works, sub-consultants, timesheet and
manhour control, and associated expenses for indirect costs.
x Quality Assurance: Project management plans and project criteria will be developed early in the
SURMHFWLPSOHPHQWDWLRQWRHQVXUHDOLJQPHQWRIWKH(3&0&RQWUDFWRUZLWK0DUFREUH¶VUHTXLUHPHQWV
The EPCM Contractor will have an audit system in place to identify non-compliances.
6XSSOLHU¶VDQGFRQWUDFWRU¶VTXDOLW\V\VWHPVZLOOEHDVVHVVHGDWWLPHRIWHQGHUDQGFRPSOLDQFHZLWK
their systems will be monitored by the EPCM Contractor during implementation.
4.16.9 Project Phases
4.16.9.1 Permitting
The efforts to obtain all the applicable permits for the project will be grouped into two major phases. The
first phase will include obtaining the environmental approval for the project and all the construction and
operating permits required to commence mining activities and construction of the Oxide ore processing
facilities, including all supporting site infrastructure and off-site infrastructure to the extent legally
possible.
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The second phase (concentrator) will begin during the execution of the first phase. The construction of
the concentrator is scheduled to commence immediately after commissioning of the Oxide plant, and by
that time all relevant construction and operating permits required for construction of the Sulphide plant
should be obtained, to the extent legally possible.
Certain key permits required for operations, such as the water license and the beneficiation concession
(which is, in effect, the key operating permit), can only be obtained after the corresponding facilities
have first been constructed, inspected, and found to be in accordance with the associated construction
authorisation. Under the existing Peruvian legal and regulatory regime, it is therefore impossible to
obtain all necessary operating permits and approvals prior to the commencement of construction.
In accordance with applicable law, the Mine Closure Plan will be submitted within 1 year following the
approval of the ESIA and will be updated as required. Pre-production stripping cannot commence prior
to approval of the Mine Closure Plan.
4.16.9.2 Required Permits and Approvals
The competent environmental authorities for the mining sector are MINEM and the Bureau for the
Supervision of the Investments in Energy and Mines (OSINERGMIN). The former approves the
environmental management instruments, in this specific case, the ESIA and the Mine Closure Plan for
the Mina Justa Project, whereas the latter is in charge of supervising compliance with the legal
obligations in environmental matters.
Marcobre will have to obtain other governmental consents in order to develop activities that are
regulated by Peruvian legislation, ie, mining and mineral processing, construction of hydraulic
infrastructure and water use, electrical transmission, archeological evaluation projects, storage of fuel
and the use of restricted chemicals, explosives, telecommunication equipment, radioactive substances,
etc. These consents are issued by authorities within MINEM, as well as within other ministries.
A Gantt diagram and spreadsheet have been prepared, identifying each administrative procedure, the
timeframe in which it will have to be started, and the costs associated with obtaining the consents.
The following describe the main consents to be obtained in order to construct and operate the facilities
in each phase:
First Phase: Construction and Start-Up

Before the start of the first phase it is necessary to obtain general Project permits and approvals,
including approval of the ESIA, and obtaining the Certificate of Nonexistence of Archeological Remains
for the area that will be involved during Project implementation. As noted, Marcobre has to apply for
the approval of the Mine Closure Plan within 1 year after the approval of the ESIA.
During this phase the principal permits and approvals to be obtained are the:
x Beneficiation concession construction authorisation, and following construction and inspection, the
beneficiation concession itself, which constitutes the principal approval for the operation.
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x Authorisation to start mining exploitation activities in the Mina Justa Pit, the Magnetite Manto Pit
and the construction material quarries.
x Authorisation to construct well field facilities and the water pipeline to the mine site.
x Licence to use groundwater for domestic and mining purposes, which can only be issued after the
construction and inspection of the hydraulic infrastructure.
x Definitive Electrical Transmission Concessions for the 220 kV and the 22.9 kV electrical lines.
x Effluent Treatment and Reuse (in case Marcobre decides to discharge effluents into the
environment).
Second Phase: Concentrator Construction and Ongoing Operations

The ESIA submission and approval activities for the Sulphide Project occur as part of the same
application as the Oxide Project in the project implementation schedules.
This phase should be developed once the consents required for its construction are obtained. During
this phase modification of the beneficiation concession (includes construction authorisation) will be
obtained.
4.16.9.3 Engineering
Engineering will be conducted from a well-equipped and well-resourced Project office, by a competent
group of engineers with the appropriate level of skills and experience, utilising standard documents and
procedures.
The Marcobre project team will play an important role in reviewing engineering documents and
drawings provided by the EPCM Contractor. To ensure Marcobre has input to process and plant
control issues, meetings will be conducted progressively with Marcobre representatives during the
development of process flow sheets, process control philosophy, P&IDs and design criteria.
4.16.9.4 Procurement and Contracting
Procurement and contracting for that portion of the Project scope under the control of the EPCM
Contractor ZLOO EH XQGHUWDNHQ E\ WKH(3&0 WHDP VXSHUYLVHG E\ WKH 2ZQHU¶V3URMHFW7HDP 9HQGRU
and contractor lists will be prepared for Marcobre approval, with consideration given to capability,
product quality, and performance and delivery record. Priority will be placed on sourcing materials and
services in Peru.
All packages will be tendered, awarded, and administered through to close-out in the name of
0DUFREUHZLWKWKH(3&0&RQWUDFWRUDFWLQJDVWKH0DUFREUH¶VUHSUHVHQWDWLYHIRUH[HFXWLRQRIWKHZRUN
Invoices and progress claims will be forwarded to the EPCM Project Manager for
quantity/delivery/condition verification and approval where applicable. Marcobre will control final
authorisation and payment.
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Peru-based transport companies familiar with local law, customs requirements and the transportation of
processing equipment will be used to manage and coordinate logistics.
Procurement and contracting for that portion of the scope that is under the control of Marcobre will be
undertaken by the Marcobre Project Team working together with the Marcobre Operating Team. Which
organisation would take the lead on a particular contract or procurement process would depend on
whether it is largely an operating concern (eg, acid suppy) or a construction concern (eg, construction
period security and catering).
4.16.9.5 Construction
The EPCM Contractor will manage the construction contractors on behalf of Marcobre. The EPCM
Contractor and the Marcobre Project Director will be responsible for ensuring that no activity within their
respective scopes commences or continues without all applicable permits and approvals required for
the commencement or continuation of that activity being in hand.
The first construction activity involves clearing of any vegetation and the recovery and placement of any
topsoil into stockpiles for future rehabilitation.
The principal construction materials are cement, sand, and aggregate for concrete works. Sand of
suitable quality is in plentiful supply in the project area, and will be accessed from a borrow pit in the
mine area. A small quarry will be established within a waste area of one of the initial open pits to
provide feed to a mobile crusher to produce aggregate. Material for the base of the access road and
mine area roads will be locally derived, using crushed rock from waste areas of the proposed open pits
as required to supplement broken material at surface.
Early activities comprise the construction of the access road and internal roads, and establishment of
temporary accommodation for the workforce, temporary power and temporary water supplies.
Permanent power and water supplies will be developed during the construction period, but are not
required until production machinery and equipment has been installed and is ready for testing.
Depending on local conditions, which have been determined by geotechnical surveys, ground
preparation will be required to form firm foundations, particularly for larger machinery such as crushers,
mills and vats. A batch plant for concrete will be established on site for use during the construction
period, but will not be a permanent facility.
Once the process equipment has been installed, and power and water brought to and reticulated
around the site, the equipment will be commissioned. Prior to this, the mining fleet and support facilities
will be established on site, pre-stripping of waste will commence (about 9 months prior to start-up of the
Oxide processing facilities), and initial ore stockpiles will be established to allow commissioning and
subsequent ramp-up of the plant to full production.
Manning numbers will vary greatly over time during construction, depending on the activities being
undertaken, but it is estimated that the peak construction labour force will number approximately 1400
workers, not including Marcobre employees or support services contractor employees such as catering,
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security, explosives, heavy vehicle maintenance, and laboratory. Of these, it is estimated that up to
70% will be brought in from outside the area and will require accommodation on site during specific
construction phases. The camp has been designed to accommodate up to 980 people during
construction, which is estimated to be sufficient to accommodate all those on site at any one time.
Towards the end of the construction phase, a portion of the camp will be renovated and upgraded to
provide offices and a permanent camp for Marcobre employees not living in San Juan de Marcona or
Nazca.
Most of the construction camp will consist of portable modules which will be decommissioned and
transported off site following construction of the Sulphide plant.
4.16.9.6 Commissioning
7KH &RPPLVVLRQLQJ 0DQDJHU ZLOO OHDG WKH (3&0 &RQWUDFWRU¶V FRPPLVVLRQLQJ WHDP ZLWK GLVFLSOLQH
engineers reporting directly to the Commissioning Manager. It will be necessary to overlap
construction, pre-commissioning and commissioning activities, particularly considering that two
processing plants are being built in sequence. Responsibilities will be clearly defined, together with
authorised signatories for documentation such as check lists, test documentation, punch lists and
handover certificates.
As sections of plant become available, wet commissioning will be undertaken, followed by ore
commissioning, which would be under the management of the Marcobre Project Team, with assistance
from the Marcobre Operations Team.
4.17 PROJECT OPERATIONAL PLAN
4.17.1 Operational Labour Levels and Sourcing
The workforce required to operate the Project is shown in Table 4.23. The expectation is that 60% of
the workforce will be drawn from the towns of San Juan de Marcona and Nazca, and will be transported
to site by bus each day. The remainder will be based outside the region and will require
accommodation in the camp. The operations camp is designed to hold 300 people in single person
quarters.
Initially, it is expected that local skills will be limited to security, clerks, general labouring, drivers,
technical assistants and plant operators. However, Marcobre will employ full-time personnel officers to
conduct training courses to build up the skills base of local labour so that over time the proportion of
local labour will rise to 90% of the total work force and will be strongly represented in management and
technical areas.
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Table 4.23
Summary Operations Manning Levels
Phase 1 Phase 2 Phase 3
Oxide Oxide + Sulphide Sulphide
Mine
All manning excl. maintenance 227 236 97
Maintenance manning 65 65 65
Mine - Total: 292 301 162
Process Plants
Oxide 124 124 0
Sulphide 0 104 104
Subtotal (excl. Maintenance): 124 228 104
Cleaners 8 8 8
Maintenance manning 71 107 70
Plants - Total: 203 343 182
Site Organisation (excl. Maintenance) 75 84 75
Total Site Manning 570 728 419
4.17.2 Closure/Post-closure Plan
A preliminary closure and post-closure plan has been prepared as part of the DFS. The focus is on
addressing potential impacts from waste rock, ripios and tailings disposal, and the closure plan ensures
that any harmful components of these three waste streams are shielded permanently from the
environment. The intention is that the Project will have no material, long term, negative impacts on the
environment of the project area. Following mine closure, all surface buildings and equipment will be
removed from site unless otherwise agreed with the Peruvian authorities in accordance with applicable
regulations (eg, power lines and water supply lines may be retained).
Closure of the operations will take place in stages. Vat leaching, SX/EW facilities and the ripios dump
would be decommissioned and the sites reclaimed while the Sulphide ore continues to be mined and
processed.
Monitoring of the effectiveness of the closure plan will continue for a period of time to be determined in
the corresponding Mine Closure Plan as approved by the regulatory authorities.
4.18 CAPITAL COST
4.18.1 Preamble ± Cost Escalation from 1Q09
Capital and operating costs estimates within this report have a base date of 15 February 2009 (1Q09).
This means that costs in the estimate were obtained during the few months prior to the 15 February
2009 and therefore reflect market conditions that prevailed at that time. This also means that costs
presented for inclusion in the estimate in currencies other than the base currency have been converted
to US$ at exchange rates that prevailed at that time.
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China Sci-tech has required an update of both capital and operating costs to 31 January 2010, as part
of this Technical Report. An accurate update would require very time-consuming revalidation of every
quotation received from vendors and contractors, and well as an update of the foreign currency rates of
exchange. Due to time constraints in compiling this report, AMEC Minproc has used information from
the US Bureau of Economic Analysis website: National Income and product Accounts Table, Table
1.1.9 Implicit Price Deflators for Gross Domestic Product (Index Numbers, 2005=100) Seasonally
Adjusted. From this table, the Gross Domestic Implicit Price Index, which is the broadest measure of
U.S. inflation, shows an increase from 109.691 to 109.946 for the period 1Q09 to 4Q09. This equates
to a percentage increase of 0.23% which AMEC Minproc has used to adjust both capital and operating
cost estimates. No adjustments have been made to foreign currency exchange rates.
Amounts shown in key tables in this report have not been changed from the original report, but
additional tables have been included below each of these key tables showing the original cost at 1Q09,
the adjustment percentage, adjustment amount and the final updated cost to 1Q10.
4.18.2 Project Capital
AMEC Minproc developed or supervised the capital cost estimates for the mining equipment, mine
development, process plant, and associated in-plant and ex-plant infrastructure. Additional information
and costs were supplied by Knight Piésold IRU WKH 76) 0DUFREUH GHYHORSHG WKH 2ZQHU¶V &RVW
estimates. These are presented as an Oxide Plant DFS estimate (which includes the Mine DFS
estimate) and as a Sulphide Plant PFS estimate.
The capital cost estimates are structured to encompass the following major categories:
x Direct Capital Costs: Includes expenditures incurred for the construction of the process plant and
infrastructure, mining and associated capital costs as defined in the Oxide Plant (DFS) and
Sulphide Plant (PFS) scope of work. The costs include permanent materials and equipment,
freigKW WR VLWH FRQVWUXFWLRQ ODERXU DQG HTXLSPHQW LQFOXGLQJ FRQWUDFWRUV¶ VXSHUYLVLRQ RYHUKHDGV
and profit), temporary construction facilities, construction mobile equipment, and commissioning
assistance. (Note: GMI has considered the vendor representatives, first fill consumables and
start-up spares within its Indirect costs for the infrastructure components.)
x Indirect Capital Costs: The expenditures related to the engineering design, procurement, project
management, site construction management and commissioning supervision by the EPCM
Contractor. Indirect costs also provide for consultants required to supplement design engineering
and construction activities.
x Accuracy Provisions: These reflect the level of definition available relating to the scope of work,
process design, conceptual engineering design and cost data at the time of the capital estimate
development. These make appropriate allowances for uncertain elements of cost, for estimating
anomalies and omission in quantification, thereby reducing the risk of cost variation within the
required accuracy level.
x 2ZQHU¶VCosts: IQFOXGHFXVWRPVGXWLHVLQVXUDQFH2ZQHU¶VSURMHFWWHDP2ZQHU¶VRSHUDWLQJWHDP
SULRUWRSURGXFWLRQSURSHUW\FRVWVVXUIDFHULJKWVDQGPLQHUDOULJKWVDQGRWKHU2ZQHU¶VLQWDQJLbles,
excluding sunk costs.
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The estimated total costs are summarised in Table 4.24 (Oxide plant and mine ± Base Date 1Q09),
Table 4.25 (Oxide plant and mine ± escalated to 1Q10), Table 4.26 (Sulphide plant ± base date 1Q09)
and Table 4.27 (Sulphide plant ± escalated to 1Q10). Details of mine capital costs are included in
Section 4.7.8.
The unescalated capital cost estimate for the oxide plant as shown in Table 4.24 has a level of
accuracy of ±10%, while the unescalated estimate for the sulphide plant in Table 4.26 has a level of
accuracy of ±20%. Costs originally in currencies other than US$ have been converted to US$ at the
exchange rates shown in Table 4.28.
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Table 4.24
Oxide Plant DFS Capital Cost Estimate (1Q09), Summarised by Area
No. ($) (%) ($) ($)
001 General Plant 11 055 834 11.4% 1 261 807 12 317 641
010 Crushing and Screening 1 097 296 10.0% 109 731 1 207 027
011 Primary Crushing 12 011 627 8.9% 1 063 609 13 075 236
012 Primary Stockpile and Reclaim 5 399 360 9.3% 501 547 5 900 907
013 Secondary Screening/Crushing and Tertiary Crushing 20 287 527 6.1% 1 228 564 21 516 091
014 Tertiary Screening and Quaternary Crushing 22 968 439 6.0% 1 387 639 24 356 078
015 Quaternary Screening 10 418 274 7.3% 758 199 11 176 473
020 Vat Leaching 67 288 240 9.3% 6 248 419 73 536 659
030 Solvent Extraction 18 772 003 11.2% 2 094 912 20 866 915
040 Electrowinning 29 898 230 7.6% 2 262 348 32 160 578
050 Reagents ± Oxide 2 391 151 10.3% 246 951 2 638 102
060 Services ± Oxide 3 469 873 11.4% 395 997 3 865 870
070 Infrastructure ± Oxide 21 533 336 9.7% 2 097 806 23 631 142
081 Commissioning ± Oxide 2 020 961 10.0% 202 096 2 223 057
082 Vendor Representatives 1 058 439 10.0% 105 844 1 164 283
083 First Fills and Spares 11 512 650 10.0% 1 151 265 12 663 915
084 Loose Tools and Equipment 1 221 938 10.0% 122 193 1 344 131
095 Power Supply 11 545 443 10.0% 1 154 545 12 699 988
096 Plant Access Road 7 134 713 13.6% 968 895 8 103 608
097 Construction Camp and Village 17 008 679 10.0% 1 700 868 18 709 547
098 Water Supply 16 576 532 13.7% 2 270 740 18 847 272
200 Mining 123 150 502 0.2% 224 776 123 375 278
EPCM 51 080 140 10.0% 5 108 014 56 188 154
2ZQHU¶V&RVWV 37 242 013 0.0% 0 37 242 013
Totals 513 447 511 6.5% 33 418 038 546 865 549
Table 4.25
Oxide Plant DFS Capital Cost Estimate, Escalated to 1Q10
1Q09($) (%) ($) 1Q10
($)
Total escalated Oxide plant capital cost estimate 546 865 549 0.23% 1 257 791 548 123 340
The PFS capital cost estimate for the Sulphide plant (Table 4.26) has a level of accuracy of ±20%, and
is expressed in 1Q09 US$. Escalated costs to 1Q10 are shown Table 4.27.
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Table 4.26
Sulphide Concentrator PFS Capital Cost Estimate (1Q09), Summarised by Area
No. ($) (%) ($) ($)
001 General Plant 4 651 645 18.5% 860 088 5 511 733
098 Water Supply 3 598 297 12.8% 460 312 4 058 609
110 Sulphide Primary Crushing 15 066 043 14.3% 2 157 212 17 223 255
120 Sulphide Grinding 36 804 910 9.6% 3 545 430 40 350 340
130 Sulphide Flotation 17 230 211 15.2% 2 615 714 19 845 925
140 Sulphide Concentrate Thickening and Filtration 7 579 799 13.8% 1 045 210 8 625 009
160 Sulphide Tailings Thickening and Disposal 15 102 265 18.2% 2 753 420 17 855 685
170 Sulphide Reagents 2 444 480 16.9% 414 113 2 858 593
180 Sulphide Services 7 592 634 16.7% 1 265 847 8 858 481
191 Commissioning 485 763 14.3% 69 596 555 359
192 Vendor Representatives 535 528 15.0% 80 329 615 857
193 First Fills and Spares 3 681 004 19.9% 732 099 4 413 103
EPCM 22 129 233 0.0% 0 22 129 233
2ZQHU¶V&RVWV 10 529 709 0.0% 0 10 529 709
Totals 151 693 661 11.0% 16 613 409 168 307 070
Table 4.27
Sulphide Concentrator PFS Capital Cost Estimate, Escalated to 1Q10
IQ09($) (%) ($) IQ10 ($)
Total escalated sulphide concentrator capital cost estimate 168 307 070 0.23% 387 106 168 694 176
Costs originally in currencies other than US$ have been converted to US$ at the exchange rates shown
in Table 4.28.
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Table 4.28
Exchange Rates (1Q09)
Currency Unit Units per US$
AUD Australia Dollars 1.54
CLP Chile Pesos 595
EUR Euro 0.785
JPY Japan Yen 91.7
PEN Peru Nuevos Soles 3.26
USD United States Dollars 1
ZAR South Africa Rand 10.1
CAD Canadian Dollar 1.24
Note: Base date 16 February 2009
4.18.3 Estimation Methodology
The estimate methodology applies to the AMEC Minproc scope of work only, unless otherwise stated.
Generally, for earthworks, concrete, structural steelwork and platework fabrication and installation
supply rates and unit man-hours are based on information provided by GMI, a major local contractor,
for the off-site infrastructure. AMEC Minproc has independently checked GMI-provided rates against
other Peruvian contractors. Quantities were determined from material take-offs based on preliminary
designs and layout drawings.
Equipment specifications were prepared and issued with tender packages for all major equipment
items, and budget equipment prices were obtained. The balance of costing was derived from
AMEC Minproc¶VGDWDEDVHDQGIURPDOORZDQFHVEDVHGRQWKHGDWDEDVH
In-plant piping is derived from the actual costs of similar plants completed by, or currently in the process
of being completed by AMEC Minproc and adjusted to Peruvian costs and productivity. The basis of
the piping estimate is installed piping to number of pumps per area, for equivalent type areas.
Electrical equipment prices were obtained from multiple Peruvian suppliers for all major items of
electrical equipment; the balance of pricing was based on quotes from suppliers for recent
AMEC Minproc projects. Some minor items were based on the AMEC Minproc electrical estimating
database. The majority of unit rate items were built up from unit rates supplied by GMI. Site installation
hours have been calculated from the AMEC Minproc in-house database, using Peruvian norms as the
basis.
For the buildings a budget quotation was received from a local contractor and used within the estimate.
Building area costs were compared and verified against similar buildings on current projects.
Transport of concrete-related bulk materials is included in the all-in concrete rate (reinforcing, cast-in
steelwork, culverts, etc.). Transport rates for steelwork and platework bulk materials were derived from
rates received from installation contractors.
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Transport for all equipment items is based on information received for steelwork and platework
transport. Where this method of calculating freight costs was inappropriate, an allowance varying from
5% to 12% was applied, based on historical information, depending on the original source of
equipment, volume, weight, etc.
No equipment suppliers provided freight costs with their quotes other than to their closest port of
departure in some instances.
Subsequent to original pricing requests some transport information has been received from suppliers
and incorporated into the estimate.
4.18.4 Sunk Costs
In addition to the costs presented in Table 4.24 and Table 4.26, the project carries sunk costs of
US$99.6 M to 31 December 2008, and was projected to incur additional costs through 30 September
2009 of $6.4 M.
GRD Minproc did not prepare estimates for the following:

x Project Contingency: Marcobre has elected to determine the Project Contingency allowance as nil
for the purpose of economic assessment. AMEC Minproc has strongly recommended to Marcobre
that a contingency allowance be included as part of the project costs.
x Escalation: AW0DUFREUH¶VUHTXHVWHVFDODWLRQwas excluded from the original project estimates.
4.18.5 Sustaining Capital
Sustaining capital represents the amount of capital investment, at current day costs (1Q09), required to
support the process plant operation over the life of the operation. This includes deferred capital such
as a tailings dam lift, and sustaining capital such as the replacement of mining equipment, other heavy
mobile equipment, computer hardware, light vehicles, etc.
The summary of the sustaining capital requirements is presented in Table 4.29.
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Table 4.29
Sustaining/Deferred Capital Summary (1Q09)
Total Cost
Plant Description
($)
Deferred Capital
Sulphide Recleaner concentrate pump 2 28 600
Sulphide Pressure Filter Upgrade 510 000
Sub-Total Deferred Capital 8 398 600
Sustaining Capital
Oxide/Sulphide Replacement of computers 1 411 000
Oxide/Sulphide Mining Sustaining Capital 15 185 638
Oxide/Sulphide Vehicles Sustaining Capital 7 859 997
Sub-Total Sustaining Capital 24 456 635
Total 32 855 235
Table 4.30
Total Sustaining/Deferred Capital, Escalated to 1Q10
IQ09($) (%) ($) IQ10
($)
Total escalated sustaining/deferred capital cost estimate 32 855 235 0.23% 75 567 32 930 802
4.19 OPERATING COSTS
The operating costs for the project have been determined for the following categories:
x Mining
x Oxide plant
x Sulphide plant
x General and administration (site and Lima office)
x Land transport, port, ocean freight, marketing, treatment and refining charges.
The operating cost estimate has an accuracy of ±10% (except the Sulphide plant which was developed
to a PFS level of ±20%). Operating costs are in US$ and reflect an estimate base date of 1Q09 unless
otherwise stated. Foreign currency conversion rates are as shown in Table 4.28.
IGV tax is not included in the operating cost estimates. It is expected to be fully recovered by Marcobre
with a 3 month lag.
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Except where specifically noted, no allowance has been made in the operating cost estimate for
financing charges, contingency, escalation or exchange rate variations, depreciation and accounting
effects, sustaining capital (which is included in capital expenditures), and exploration on other
prospects.
Key unit operating costs provided by Marcobre are summarised in Table 4.31. These costs have a
base date of 1Q09.
Table 4.31
Key Unit Costs Provided by Marcobre (1Q09)
Item Unit Cost
Diesel (delivered to site, including site storage and dispensing) US$/litre 0.636
Electricity (including transmission) US$/MWh 55.00
Sulphuric acid (delivered to site)
Via San Martin US$/tonne 90.40
Via San Juan US$/tonne 62.50
A summary of Project unit operating costs per ROM tonne is provided in Table 4.32, while Project
closure costs are shown by year in Table 4.34.
4.19.1 Mining Cost
Mine operating costs have been determined largely as Owner mining costs, based on equipment and
labour requirements to achieve the mine schedule. Unit costs include appropriate allowances for
technical labour and materials to control the mining operation, including grade control.
Mining equipment maintenance and repair costs are assumed to be carried out under a maintenance
and repair contract with the mining equipment vendor, while blasting is assumed to be carried out by
the explosives supplier under contract to Marcobre.
The average mine operating cost for life of the mine is $1.14/t mined (base date 1Q09). Costs in the
earlier years are lower, but increase in later years as haul distances increase and the total tonnage
mined decreases. Further details are supplied in Section 4.7.7.
4.19.2 Oxide Plant
Plant operating costs have been developed for the Oxide Plant under the following categories:
x Labour
x Power
x Maintenance materials
x Reagents
x Consumables
x Miscellaneous items.
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The accuracy of the Oxide plant operating cost estimate is ±10% and reflects the plant operating at
design capacity.
4.19.3 Sulphide Plant
The Mina Justa Sulphide plant is designed to process 5 Mt/a of sulphide ore to produce copper
concentrates (also containing silver and lesser gold) for sale on world markets.
Operating costs have been developed for the Sulphide plant under same categories as for the Oxide
plant.
The accuracy of the Sulphide plant operating cost estimate is ±20% and reflects the plant operating at
design capacity.
4.19.4 Transport
San Martin port is selected for cathode and acid shipments initially, and Matarani port for copper
concentrates, switching to the Port of San Juan de Marcona once available.
Reagents and consumables have been priced by suppliers on the basis of delivery to site where
possible, or shipped via the port of Callao. Additional road transport costs from Callao to Mina Justa
site have been estimated on the basis of the transportation cost assessment undertaken by Marcobre
and Sandwell.
4.19.5 General and Administration
The G&A costs cover labour and miscellaneous items required to support site operations.
The Labour cost in this category includes administration, community relations, environmental, safety,
security, accounting, logistics, laboratory and centralised maintenance personnel.
Miscellaneous items include administration costs, insurance, personnel transport and accommodation,
site services, administration vehicles, road maintenance, consultants and health, safety and
environmental management related costs.
G&A costs encompass both site administration and Lima corporate office costs, but exclude costs
DWWULEXWDEOHWRH[SORUDWLRQRQ0DUFREUH¶VRWKHUSURVSHFWVRQWKH0DUFRQD&RSSHU3URSHUW\
4.19.6 Environmental
The environmental costs considered are related to the construction, operation, closure and post-closure
phases of the project.
7KHFRVWRIHQYLURQPHQWDOPRQLWRULQJLVEDVHGRQ9HFWRU¶VZRUNZKLFKLQFOXGHVFRVWVDVVRFLDWHGZLWK
x Atmospheric condition monitoring
x Air quality and noise
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x Biological monitoring
x Water quality (TSF and ripios dump seepage)
x Inspection and audit costs by governmental authorities, related to health, safety and environment
x Other costs including dust control program, management of effluents and management of domestic
and industrial solid wastes.
Closure costs were estimated by Vector, following review of Knight Piésold¶VGHVLJQV
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Table 4.32
APPENDIX V
Summary of Project Operating Costs (US$/t ROM Processed) Model 090821

Area Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Mining 0 9.88 5.47 3.72 3.60 3.68 3.84 3.74 3.74 2.98 1.85 2.24 2.07
Oxide Plant 0 5.76 5.68 5.68 5.69 5.69 4.50 4.49 4.52 4.52 4.46 4.57 -
Sulphide Plant 0 - - 4.90 4.82 5.20 5.12 5.06 4.81 5.24 4.80 5.16 4.92
General and Administration 0 2.14 1.30 1.08 1.04 1.05 1.05 1.05 1.05 1.04 1.03 1.88 2.95
Corporate Office (Lima) 0 0.25 0.15 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.22 0.38
Transport/ Marketing 0 0.23 0.23 3.42 3.08 4.74 4.88 2.65 2.60 2.66 2.61 7.18 11.92
Total 0 18.27 12.84 18.91 18.34 20.46 19.49 17.10 16.83 16.54 14.85 21.24 22.25
Table 4.33
— V-223 —
Summary of Operating Costs (US$/t ROM Process Model 090821, Escalated to IQ10)
Description Period
Yr -1 2012 2013 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total Cost IQ09 0 18.27 12.84 18.91 18.34 20.46 19.49 17.1 16.83 16.54 14.85 21.24 22.25
Total Escalated Cost IQ10 0 18.30 12.86 18.95 18.38 20.52 19.54 17.14 16.87 16.59 14.89 21.30 22.29

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APPENDIX V
Table 4.34
Summary of Project Closure Costs
Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Progressive 688 468 323 212 155 209 1 656 698 851 302 - - -
1)
Closure
2)
Final Closure - - - - 3 008 260 5 556 186 3 217 554 144 125
Total 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
1)
Progressive closure costs include costs related to pits mined out before cessation of production and closure of the oxide treatment facilities (including the ripios dump) which cease
operation prior to the concentrator.
2)
Final closure costs include sulphide processing facilities, waste dumps, tailings pond, concentrator facilities, camp and infrastructure.
Table 4.35
Summary of Project Closure Costs: Escalated to IQ10
— V-224 —
Description Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Total Cost IQ09 688 468 323 212 155 209 1 656 698 3 859 563 5 556 186 3 217 554 144 125
Total escalated 690 051 323 955 155 566 1 660 508 3 868 440 5 568 965 3 224 954 144 456
cost 1Q10

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4.20 MARKETING AND PRODUCT PRICING
4.20.1 Copper Cathode Sales Contract
0DUFREUH¶V PDUNHWLQJ DSSURDFK IRU LWV FRSSHU FDWKRGH SURGXFWLRQ FRQVLGHUV UHTXLUHPHQWV XQGHU WKH
Shareholders Agreement as well as financing requirements. Current plans would commit 100% of the
first 10 \HDUV¶SURGXFWLRQRIFRSSHUFDWKRGHVWR/6-Nikko and Norddeutsche Affinerie AG (NA).
LS-Nikko
Subject to finalisation of the formal sales contract, Marcobre has agreed to sell 70% of its copper
cathode production to LS-Nikko. The Shareholders Agreement specifies that the contract will contain
the following principal terms:
x Quantity: 70% of annual production reducing to 35% of annual production if the joint interest of
LS-Nikko and Korea Resources in Marcobre is less than 20% but at least 15%, reducing to nil if
their joint interest is below 15%.
x Term: 120 months from commencement of cathode production.
x Marketing Fee and Cathode Premium: Annual negotiation, with dispute settlement by arbitration.
x Other terms and conditions will be on standard industry terms and conditions for the sale of copper
cathodes on a long-term basis.
NA
Marcobre has entered into a letter of intent with NA covering the remaining 30% of annual production
for 10 years from the commencement of copper cathode production. The key terms of the letter of
intent are as follows:
x Term: 120 months from commencement of cathode production.
x Shipment: Equal monthly shipments.
x %DVLV&,)ODQGHGLQWRFXVWRPHU¶VEDUJHDORQJ-side vessel.
x Marketing fee: To be agreed.
x Cathode premium: Related to the benchmark premium/discount of major producers.
x Quotational Period: Either the month prior to the month of shipment or the month following the
month of arrival at the port of discharge.
x Other terms and conditions: On a basis that is standard and normal in the industry for the long-
term sale of copper cathodes.
4.20.2 Copper Concentrates
4.20.2.1 LS-Nikko
Pursuant to the Shareholders Agreement, it was agreed that Marcobre would sell 90% of its copper
concentrate production to LS-Nikko for 10 years from the commencement of copper concentrate
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production. The sales contract has not been finalised, but the Shareholders Agreement specifies that
the contract will contain the following principal terms:
x Quantity: 90% of annual production, reducing to 45% of annual production if the joint interest of
LS-Nikko and Korea Resources in Marcobre is less than 20% but at least 15%, further reducing to
nil if their joint interest is less than 15%.
x Term: 120 months from commencement of concentrate production.
x Delivery: &,))22QVDQ.RUHD+LEL3RUW-DSDQRU6DJDQRVHNL-DSDQDW%X\HU¶VRSWLRQ.
x Payable Cu: For copper concentrates grading 35% Cu or less, pay 96.5%; for copper concentrates
grading more than 35%, pay 96.75%; subject to a minimum deduction of 1 unit.
x Payable Ag: Less than 30 g Ag/dmt, 0; 30 g Ag/dmt or more, 90%.
x Payable Au: Less than 1 g Au/dmt, 0; between 1 g Au/dmt and 3 g, 90%; 3 g Au/dmt or more, to
be agreed in the long term sales contract.
x Pricing Basis:
Copper: AYHUDJH RI WKH GDLO\ /0( *UDGH ³$´ VHWWOHPHQW TXRWDWLRQV GXULQJ WKH 4XRWDWLRQDO
Period
Silver: Average of the daily London Bullion Market fine silver spot quotations during the
Quotational Period
Gold: Average of the London Bullion Market a.m. and p.m. quotations during the Quotational
Period.
x Quotational Period: Third month after month of arrival.
x Allocation to Market Terms and Price Sharing Terms: 60% Market-Related Terms, 40% Price
Sharing Terms.
x Copper Treatment and Refining Charges, Market-Related Terms:
Copper treatment charge and refining charge: negotiated annually on a 2 year block basis,
based on then current international transactions and agreements for similar quantities
between major mines and major custom smelters in Korea and Japan for quantities of not less
than 30 000 t/a
Copper price participation, ±10% on the basis of ¢90/lb for first 2 years, and thereafter subject
to biannual negotiation based on market terms.
x Copper Treatment and Refining Charges, Price Sharing Terms:
&RPELQHG WUHDWPHQW DQG UHILQLQJ FKDUJH DV D SHUFHQWDJH RI /0( &RSSHU *UDGH ³$´
settlement price for the Quotational Period, 24% for first 60 months, and 25% for second
60 months, subject to a minimum of US$0.19 per pound of payable copper, no maximum.
x Refining charge for gold and silver: annual negotiation based on market terms.
x Payment Terms: 90% of provisional invoice on second business day after arrival of vessel at port
of discharge; 10% of provisional invoice 60 days after arrival; final payment on 3rd GD\DIWHU%X\HU¶V
FRQILUPDWLRQRI6HOOHU¶VILQDOLQYRLFHDOOSD\PHQWVPDGHXQGHULUUHYRFDEOHOHWWHURIFUHGLW.
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x Insurance: Seller pays for insurance at 110% of value stated in the provisional invoice, subject to
adjustment to 110% of final value.
x Other terms: On terms standard and normal in the industry for the sale of copper concentrates on
a long-term basis.
4.20.2.2 Other Copper Concentrate Contracts
The 10% balance of the copper concentrates not committed to LS-Nikko would constitute 1 or 2
shipments a year in most years, insufficient to support a long term sales contract. Marcobre intends to
sell the uncommitted production on a spot basis, most likely to smelters in the Far East to take
advantage of freight savings from combining shipments with the volume going to LS-Nikko. For the
purposes of the DFS, it has been assumed that the 10% balance of production is sold to LS-Nikko on
the same terms as the market portion of the long-term contract.
4.20.3 Market Review (Copper and Sulphuric Acid)
Marcobre contracted Brook Hunt and Associates Limited (Brook Hunt) to provide a market review of the
following:
x Supply and demand for copper cathodes and copper concentrates.
x Copper price forecast.
x Copper concentrate treatment and refining charge forecast.
x Copper cathode premium forecast.
x Penalty elements and standard penalty rates.
x Freight rate forecast for copper concentrates to South Korea and copper cathodes to South Korea
and Northern Europe.
x Sulphuric acid supply, demand and price forecast in the Chile-Peru market.
x Elemental sulphur price forecast FOB Vancouver.
x Sulphur freight rate forecast from Vancouver to major Peruvian ports.
The initial report was completed in August 2008 and subsequently updated to February 12, 2009. The
Brook Hunt projections are in 1Q08 US$ terms. US CPI inflation from 1Q08 to 1Q09 was -0.04%;
accordingly, Marcobre determined that no inflation adjustment was required to convert the Brook Hunt
forecasts to a 1Q09 basis.
Table 4.36 summarises the key forecasts as of 1Q09 from the updated Brook Hunt report, and
compares the forecasts with the assumptions used in the DFS financial analysis.
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Table 4.36
Summary of Forecast Prices and Terms
1Q09 US$ terms, 2012 to 2023 Average
1)
Brook Hunt Cases DFS
Low Base High Case
Price
LME *UDGH³$´&RSSHUOE 1.82 1.93 2.12 2.00
Cathode premium, $/t
South Korea 63.82 69.17 77.50 69.55
Germany 82.08 89.17 100.42 89.55
Reagents
Sulphuric Acid, $/t, CIF Main Peruvian Ports 33.33 44.17 57.50 45.00
Ocean Freight Rates
Cathodes: South Korea, $/t 53.83 57.08 61.50 56.91
Cathodes: Germany, $/t 59.58 64.00 67.58 63.64
Concentrates: South Korea, $/t 41.83 45.17 61.00 45.50
Market Treatment and Refining Charges, Copper Concentrates
Treatment Charge US$/t 79.17 86.25 87.50 87.00
Refining Charge c/lb 0.07917 0.08625 0.0875 0.087
Price Participation Base commencing 2015 1.50 1.60 1.75 1.60
Precious Metal Refining Charges
Au (US$/payable oz) 5.00 5.00 5.00 5.00
Ag (US$/payable oz) 0.35 0.35 0.35 0.35
1)
Brook Hunt cases copyright Brook Hunt and Associates Limited
The Brook Hunt forecasts are cyclical. For the DFS base case cash flow projections, Marcobre has
elected to use the simple average of the Brook Hunt base case projections over the relevant period,
being 2012 to 2022 for costs affecting cathode production, and 2014 to 2023 for costs affecting copper
concentrates. The assumptions derived in this matter are shown in the DFS Case column in Table
4.36.
4.20.4 Transport, Marketing and Realisation Costs
The operating costs covered under this category include the following:
x Product trucking
x Port storage and handling
x Ship loading
x Ocean freight
x Marketing fee in the case of copper cathodes
x Copper concentrate treatment and refining charges
x Marine Cargo Insurance for copper cathodes and copper concentrates.
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Mina Justa copper cathodes and copper concentrates will be trucked to port and shipped to overseas
customers, while sulphuric acid will be transported by ship to port and trucked to site. For the first
5 years of operations, (2012 to 2016), transport of cathodes and acid are assumed to be via Port of San
Martin, switching to the Port of San Juan de Marcona in 2017. Concentrates are assumed to be
shipped via the Port of Matarani in the first year of production (2014), switching to San Juan de
Marcona in 2015.
Cost estimates are shown in Table 4.37. The costs expressed in this table have a base date of 1Q09.
Table 4.37
Transportation, Marketing and Realisation Costs (1Q09)
Category Units $
Copper Cathodes
Truck to port, San Martin/San Juan US$/t 19.59/5.48
Port handling and storage charges, Martin/San Juan US$/t 18.20/14.50
Ocean freight: South Korea US$/t 56.91
Ocean freight: Northern Europe US$/t 63.64
Marketing fee US$/t 13.00
Copper Concentrates
Truck to port, Matarani/San Juan US$/wmt 35.72/5.48
Port handling and storage charges, Matarani/ San Juan US$/wmt 10.50/22.00
Ocean freight US$/wmt 45.50
Market Portion (60% of LS-Nikko and 100% of other)
Copper concentrate treatment charge US$/dmt 87.00
Copper refining charge US¢/payable lb Cu 8.7
Price-Sharing Portion (40% of LS-Nikko)
Note 1
Combined treatment and refining charge % of Copper Price 24.5%
Gold refining charge US$/payable oz Au 5.00
Silver refining charge US$/payable oz Ag 0.35
Note 1: 24% for first 5 years, 25% for second five years, floor of 19 cents per payable pound.
4.21 DFS RISK ASSESSMENT
4.21.1 Hazard Identification
A formal hazard identification and risk assessment study was conducted by AMEC Minproc to identify
issues affecting the safety and health of people working in the Oxide plant (note that the Sulphide
facility was not considered in this study).
The focus of the study was the identification of process hazards applicable during the operational phase
of the Project and a review of the engineered safeguards included in the design that mitigate or reduce
the risks of those hazards causing harm to personnel, members of the public or the environment.
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The vat leaching system has been designed by Indec S.A, which conducted its own review and
produced a separate Hazard Identification report.
Seven extreme risk topics were identified and recorded during the workshop. These risks and
mitigating factors are:
x Vehicle collisions: Vehicle collisions are a significant hazard both with equipment within the plant
and with other vehicles on and off-site, resulting in potential equipment damage and uncontrolled
release of leach solution/acid to the environment. The key risk is the potential for human fatalities.
This risk will be mitigated by adopting a transport logistics plan and site traffic management plan as
the project moves into implementation phase. The plan layout and mine, haul and access roads
are designed to minimise the risks for collision.
x Seismic events: The region has a high occurrence of seismic events. If the earthquake protection
features in the design and construction of pits, dumps, plant buildings and other infrastructure fail,
catastrophic consequences in terms of production, environmental and safety impacts could occur.
To mitigate this risk, the design criteria are established to comply with all relevant standards for
type of facilities and location with input provided from Peruvian consultants that have relevant
experience with such events. Mine and plant are designed for 500 year occurance for
earthquakes. The plant and building heights are minimised to mitigate potential impacts of
earthquakes.
x Ripios disposal system hazards: The original ripios disposal system involved a series of fixed and
movable conveyors, introducing electrocution hazards. Potential for personnel fatigue, resulting
from working continuous 12 hour production shifts and moving gear on ripios dumps during night
shift and under poor lighting, creates the potential for serious safety incidents. The ripios disposal
system has been modified to include mine trucks in place of the movable conveyor system. For
remaining (fixed) conveyors the risks will be mitigated by implementing relevant operation and
maintenance procedures, having a specialist HV electrician, and incorporating international
standard HV protection systems into the conveying system design.
x Acid delivery traffic volume: Acid transport and delivery will result in high traffic volumes within the
Oxide facility. This risk will be mitigated by adopting the transport logistics plan, site traffic
management plan and relevant procedures by Marcobre and its contractors.
x Unsafe equipment operation: Inadequate or poorly enforced site-wide project standards and
equipment naming conventions increase the likelihood of incorrect, unsafe operation of equipment
with potential significant production and safety impacts resulting from poor isolation. In addition, it
may also create the need for holding excessive operating spares. This risk will be addressed
during the engineering and procurement phases of the project, and training of personnel.
x Emergency communication system: Lack of site-wide communications in an emergency has the
potential to increase injuries and/or death in an event such as an earthquake or fire. This risk will
be addressed during the implementation phase of the project and training of personnel.
x SX area fire: There is a high risk of serious fire in the SX plant and fuel storage area. Adequate
allowances for the fire detection and suppression systems have been made in the DFS, and
correct equiment and materials of construction are selected. Details of the system require further
development during the engineering phase and during the training of personnel.
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4.21.2 Technical Risks
BatteryLimits Pty Ltd (BatteryLimits) conducted a technical risk assessment for the Project. Thirty-four
risks were identified from discussions with the various participants, although the technical risk profile
contains a relatively low number of top priority risks.
The key issue identified is that the study is at DFS level for the Oxide project and at PFS level for the
Sulphide project. The Sulphide project is expected to be a major contributor to project economics, but
more work is required to support a DFS level study. This risk is expected to be mitigated by further
studies.
The second priority group of risks incorporated issues that need on-going attention from Marcobre,
including transport logistics, lease restrictions, port availability and project execution.
4.21.3 Commercial Risks
The Mina Justa Project faces the normal commercial risks faced by a base metal mining project. These
can be considered in three main categories: market risks, legal risks, and political risks, although the
latter, in particular is unrelated to this technical review and is not considered further.
Operating Cost Inputs

Key operating cost components are the prices for acid, diesel and electricity, which represent 21%,
13% and 12% of site costs respectively. Analysis by Marcobre shows that a 1% change in acid price
results in a 0.4% change in NPV, while a 1% change in diesel prices results in a 0.2% change in NPV.
The result for electricity is similar to diesel. Unexpected increases in price of these consumables
constitute a significant risk to the economics of the project.
Sulphuric Acid
Sulphuric acid is a vital input to the Oxide process with no practical substitute. While Marcobre intends
to enter into long term supply contracts with reliable, proven suppliers, prices would not be fixed, but set
by reference to the prevailing market.
0DUFREUH¶VORQJWHUPDFLGVXSSO\FRQWUDFWVwill require some flexibility in quantity, since there is some

uncertainty about unit gangue acid consumption rates, and consumption varies with ore grade
Acid prices (and availability) have varied over a large range in the past few years, and there is an
unknown degree of risk relating to the Brook Hunt costs used in the operating costs.
Power Supply
The Mina Justa Project will be a relatively large regional power consumer. Generating capacity and
transmission capacity have been strained in recent years. The power supply situation has been
improved with the construction of gas-fired generating capacity on the central Peruvian coast following
the completion of the Camisea natural gas pipeline, but electricity transmission constraints remain.
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Marcobre intends to negotiate long-term power supply agreements with a reliable generator, but there
is no certainty that the cost used for the operating cost estimate will be realised.
Diesel Supply
Security of supply should not be a concern, since several commercial competitors exist. Fuel supply
risks are largely logistical, since the fuel will have to be transported over fairly long distances by tanker
truck, either from Lima or from Pisco depending on the supplier and the type of diesel.
The operating and capital cost estimates contemplate that fuel supply will be provided under long term
contract with a reliable and reputable supplier that is capable of providing the required amount of fuel
and safely transporting it to site, as well as constructing and operating the site fuel storage and
dispensing facilities. The price anticipated in DFS for diesel delivered and dispensed on site was
$0.636/L, but re-pricing in February 2010 gave a cost estimate of $0.819/L. The volatility of diesel on
the world market, creates a moderate degree of risk for the project.
Land Transport and Port

Land transportation and port costs for cathodes, concentrates and acid stand to have a significant
impact on operating costs. It is anticipated that Marcobre will negotiate port service contracts with
existing ports (and the planned new port of San Juan de Marcona when it becomes available), and also
road transportation contracts. The cost of these contracts could vary from those assumed in the DFS.
More importantly, should the nearby proposed port of San Juan de Marcona be delayed for several
years, or not be completed, the cost to the project of trucking acid and concentrates over far greater
distances would run to several million dollars per annum, with a modest impact on total operating costs
and Project NPV.
4.21.4 Legal Risks to Infrastructure Development
Water Supply
Marcobre¶V intension is to PHHWWKH3URMHFW¶VZDWHr requirements by obtaining a water license over the
Upper Jahuay aquifer. Options exist in the event that this is not possible, but there would be significant
additional capital and operating cost implications.
Infrastructure Easements
The current plans call for easements to be obtained for the 220 kV power line, access road, water
pipeline and associated 22.9 kV power line involve surface lands owned by the Peruvian State, and,
possibly part of a mining concession belonging to Shougang. Post-DFS, GMI has identified alternative
URXWHV IRU WKHVH LQIUDVWUXFWXUH LWHPV DYRLGLQJ 6KRXJDQJ¶V SURSHUW\ :KLOH WKHUH PD\ EH PLQRU
additional capital cost associated with longer access routes, the alternatives are deemed to be
technically and socially acceptable, with little risk attached.
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4.22 OPPORTUNITIES
4.22.1 Additional Ore Reserves
Two Whittle runs were performed to test the potential to expand the reserve, based on the current DFS
parameters. These parameters include the selling prices of copper, process recoveries and concentrate
grades, and costs associated with the transportation, smelting and refinery of copper, etc.
If DFS recoveries and costs are used at the $1.65 copper price, then the potential ore reserves could
result in a 19% increase in recovered metal. However, the benefit associated with additional oxide may
be reduced due to its lower average grade. The mining (total rock handling) increases by 29%.
For the $2.00/lb copper case (with the DFS parameters), further marginal grade material could be
added with a potential of 30% more recoverable copper for a 40% increase in total mining.
As outlined in Section 4.23.2, further development scenarios have been simulated using Whittle
analysis that have the potential to increase the reserve and pit size, and extend the project life.
Additional reserves have not been determined, but the potential to increase the life of the operation
constitutes an obvious opportunity to improve project economics.
4.22.2 Sulphide Ore Processing Only Option
This option was first conceived when sulphuric acid prices increased sharply in 2007 and 2008, and
concerns were expressed about the long-run cost and availability of acid. Since that time, acid prices
have returned to more normal levels and long term supply shortages are no longer a concern.
Nevertheless, this option has been examined in some detail.
A Sulphide-Only option would have relatively high pre-production stripping costs to develop the
sulphide ore at depth. However, this would be offset by the capital cost reduction arising from not
having to build the oxide processing facilities. Furthermore, in this case, the oxide material mined to
access the sulphide ore would not necessarily be wasted; for a modest additional cost it could be
stockpiled for possible future treatment.
A Sulphide-Only mine plan was developed based on the DFS base case pit shells, but excluding those
parts of the deposit such as Magnetite Manto and the Northern Oxides. Mining capital and operating
costs were then developed for this mine plan. Capital costs for process and infrastructure were
factored from the DFS capital costs, eliminating those portions of the Project which relate solely to
Oxide processing. Process and G&A operating costs for the Sulphide-Only case were already available
because Phase 3 of the combined Oxide/Sulphide project is Sulphide-Only.
The preliminary analysis of the Sulphide-Only case indicates that this alternative is feasible, and could
be optimised further.
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4.22.3 Vat Leach Operation
Assay Accountability
Check analyses by a third party laboratory (SGS-Peru) at the end of the Phase 2 pilot tests indicated
that, while the head assays were in good agreement, residue assays for CuT and CuSS from SGS-
Peru were consistently lower and the divergence appeared to increase as the grade of the residue
increased. This leads to the possiblility that estimated metallurgical recoveries could be biased low by
about 0.5% for average grade ore and as much as 1% for high grade ore (>1% Cu). However, a major
re-assaying program would be required to determine which laboratory was in error.
pH Control
Testwork has shown that the pH must be less than about 1.5 (free acid higher than 1.5 g/L) to get
effective extraction. However, there is evidence to suggest that acid was not well controlled toward the
end of the 6 day leach cycles in the Phase 2 pilot plant tests. In 27 of the 37 tests, the final pH was
above 1.5 and in 22 of the tests, the final free acid content was less than 1.0 g/L. In 5 of these runs the
final free acid was actually 0.0 g/L. These results suggest that the acid level was too low toward the
end of the tests and this may have retarded extraction to some degree. Supporting this hypothesis is
the observation that in virtually every test, extraction was continuing when the 6 day leach cycle was
terminated. Also supporting this was the rapid initial extraction of additional copper when the vat
residues were re-leached in 20 g/L acid.
At this point there is no way of assessing whether or not the low acid levels (high pH values) actually
retarded extraction. Also, there is no way of knowing whether the additional acid consumption would be
justified by the higher recovery. However, once the commercial plant is in operation, there may be an
opportunity to increase recovery through better control of the acid level in the final stage of leaching.
This will have to be balanced so that the cost of the additional acid does not exceed the value of the
addition copper output.
4.22.4 Sulphide Circuit
Magnetite Recovery Circuit Option

AMEC Minproc completed a process option study to evaluate magnetite recovery from scavenger
flotation tailings. This stream, comprising approximately 80% of the total solid mass flow in the circuit,
contains recoverable quantities of magnetite. A circuit was configured for the production of magnetite
concentrate containing more than 63% iron.
Based on the preliminary process design, the conclusions are:

x The production of market grade magnetite concentrate (>63% Fe) is technically feasible. Typically,
the quantity of concentrate produced will range between 388 000 t and 788 000 t, depending on
the ore processed.
x There is no information regarding the marketability of the product.
x The estimated annual operating cost for a magnetite recovery circuit is expected to be $3.8 M.
x Capital expenditure for the magnetite recovery facility is estimated at $29.3 M.
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x Additional tailings characterisation testwork will be required to define the expected tailings if a
magnetite recovery circuit is considered.
AMEC Minproc has recommended that additional testwork be performed to optimise the circuit design.
Capital and operating cost savings may be realised if the regrind circuit capacity can be reduced. In
addition, the magnetite reserve needs to be defined in order to determine if magnetite recovery from
this resource is viable. However, the current mine model does not indicate the magnetite distribution
and would need to be revised to include this.
Crusher Circuit Design

Potential exists to optimise the crushers, as CWi testwork data was not available for the DFS design.
The crusher specifications were based on correlations of CWi from Drop Weight Index (DWi) data,
which indicated the ore as competent. The primary crusher selected is on the upper limit in terms of
power, and the design can be revisited when test data is available. In order to reduce the stresses on
WKH PDFKLQH WKH PLQH¶V EODVWLQJ VL]H OLPLWV VKRXOG EH UHYLHZHG WR RSWLPLVH WKH PD[LPXP 520 VL]H
presented to the crusher.
Grinding Circuit Design

Variable test data on ore competency and grindability was available for the PFS. The current Bond
work index distribution tends to the higher end of range. AMEC Minproc recommends that the existing
database be expanded using core samples taken from the full spatial range of the proposed mining
areas. Increasing ore competency within the domains is considered a key project risk and will impact
on the comminution circuit design and operating throughput.
Conversely, if further testwork shows the highly competent result for the Primary and Secondary
sulphide ore is anomalous, a reduction in the proposed comminution circuit size will result. Alternative
circuit designs such as three stage crushing with ball milling or two stage crushing with HPGR-ball
milling may be advantageous if the average ore competency is high to extreme. Specific energy input
reductions may result, with associated savings in capital and operating costs. Three stage crushing
followed by ball milling may be a viable option, but crushing test results were not available and
therefore this circuit was not considered.
Flash Flotation Circuit

A flash flotation stage has not been included into the circuit, as testwork was not available to form a
design basis. Based on the rapid flotation behaviour exhibited during tests, flash flotation may be a
beneficial process option, but testwork is required to confirm this approach.
Bulk Flotation Optimisation

Sodium sulphide was used in the rougher flotation circuit to promote the flotation of partially oxidised
copper minerals. Further testwork is required to evaluate the benefits of adding this reagent to rougher
flotation, as a baseline test (without the use of the chemical) was not available for comparison. If
negligible effects are observed in future, the sodium sulphide mixing and dosage system can be
removed from the flow sheet.
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Variable collector schemes were evaluated in the PFS. Incorporating a collector and dosage rate
selection campaign into the next stage of testwork could result in improved bulk flotation performance
or operating cost savings. Additionally, mineralogical characterisation of the bulk flotation products will
also assist to verify if the circuit configuration is optimal.
Defining and characterising the copper minerals lost in the final flotation tailings may provide an
indication of whether the selected circuit configuration is the optimum arrangement for extracting the
recoverable copper fraction.
Cleaner Flotation Circuit Optimisation

Limited reagent optimisation tests were performed during the testwork campaigns. Opportunity exists
to improve the cleaner flotation performance.
Regrind Circuit Optimisation

Limited particle size analysis was performed on flotation concentrates during the PFS testwork
campaign. Determining the mass fractions to be processed in the regrind milling of concentrates may
provide circuit optimisation possibilities.

The preliminary TSF design incorporates separate disposal of RST and CST, based on the acid
generation potential of the CST. Additional tailings characterisation studies are required to investigate if
combined tailings deposition will result in non-acid generating tailings. If it is the case, a simplified
tailings deposition system could result, with capital, operating and closure cost savings.
4.22.5 Plant Design
Ripios Disposal System

The cost estimate was based on the use of mining equipment, including trucks and dozers, for ripios
disposal. Late in the study, an alternative disposal system was identified, namely a modular conveying
system. The system comprises a fully enclosed conveyor, which can be lengthened almost indefinitely
and with slewing capability. This system could provide an operating and capital cost saving. A cost
comparison and detailed technical evaluation is required to confirm this opportunity.
Dual Media Electrolyte Filters

Dual media electrolyte filters have been selected for the electrolyte filtration duty. CoMatrix filters are a
new technology and can offer a significant cost saving due to higher specific flowrates and hence
smaller vessels.
Dual media filters have been selected as CoMatrix filters were considered too aggressive an approach
at the DFS stage as they are new technology and suppliers indicated the pricing for fabrication of
stainless steel pressure vessels is rather volatile. However, the opportunity to save on capital cost by
the use of CoMatrix filters should be investigated.
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EW Building Ventilation System

A proprietary ventilation system has been selected as it included a performance guarantee. The
guarantee states that the acid mist concentration in the EW building will not exceed the exposure levels
stipulated by the American Conference of Governmental Industrial Hygienists.
The ventilation system selected has a high capital cost, high power requirement and is complicated,
(includes 30 separate fans, each with discharge ductwork). This system is, however, considered the
most economical means of achieving guaranteed mist exposure levels.
There is an opportunity to reduce capital cost and complexity of the system using a non-proprietary
system that would greatly reduce capital cost. However careful checking is required to ensure that the
system is sufficient to ensure exposure levels are not exceeded. A significant effort will be required to
find a suitable ventilation system designer/fabricator, as preliminary efforts during the DFS were
unsuccessful.
4.22.6 Cost and Implementation
Changed Market Conditions

Price reductions to the cost estimate resulting from the change to the estimate base date from 2Q08 to
1Q09 reflected the impact of the slow down in the global economy at the time the estimate costs were
updated. The market conditions going forward are highly uncertain and could impact negatively or
positively on costs.
The methodology applied to update Capex costs from1Q09 to 1Q10 is a gross simplification and is not
considered accurate. Further inaccuracy arises from changes in foreign currency rates of exchange
that have not been altered as part of this update. Actual current market conditions could impact
negatively or positively on costs.
Explore Secondhand Plant and Cancelled Orders

In the current environment, there may be an opportunity to take advantage of the expected increase in
secondhand plant and cancelled orders. This may reduce capital costs, however this approach was not
incorporated into the DFS estimate.
Oxide and Sulphide Plant Overlap

Increased overlap between the Oxide and Sulphide construction programs could result in greater
synergies between the two projects and therefore cost savings such as more efficient utilisation of the
accommodation camp.
4.23 POST DFS ACTIVITIES
4.23.1 Exploration Drilling
A press release by Chariot Resources dated 6 January 2010 summarises results of exploration drilling
in and around the Mina Justa deposit following the cut-off date for the October 2008 resource model.
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Results from a total of 136 holes have been added to the database, including extensions to 28 pre-
existing holes. Collar locations are shown in Figure 4.35.
Significant mineralisation was recorded in three key areas, namely:

x Northern Oxide and Western Extension areas: Copper oxides have been intersected outside DFS
pit boundaries to the northeast and northwest.
x MA67 area to the west of the Main pit, where oxide mineralisation has been intersected in four
adjacent holes, possibly indicating a new satellite pit area.
x Copper 40 area: Continuing intersection of copper sulphide mineralistion over significant intervals,
peripheral to the Cu40 pit. Three holes intersected over 100 m at 1% copper, above 300 m depth,
and all three confirmed narrower high grade zones at moderate depths as follows:
MJV-07-083: 10 m at 2.88% Cu
MJV-08-038: 6 m at 3.85% Cu
MJV-08-065: 22 m at 2.83% Cu.
This recently intersected mineralisation indicates that there is potential WR H[SDQG WKH SURMHFW¶V
resources and reserves.
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Figure 4.35
Drill Hold Location Plan ± Recent Exploration Drilling
APPENDIX V
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4.23.2 Additional Mine Planning
Subsequent to the DFS, AMEC Minproc performed additional mine planning tasks as summarised in
the following:
Run 6 Pit Design and Scheduling

The Run 6 optimisation indicated the potential to increase the pit size by 29% and realise a 19%
increase in recovered copper. Affected pit stages were re-designed resulting in a 30% increase in the
pit size and an 18% increase in recoverable copper.
The DFS and Run 6 pit inventories are shown in Table 4.38.
Table 4.38
DFS and Updated Pit Inventories
Total Vat Ore Total Float Ore Total Strip

Case Ore Cu CuSS Ore Cu CuSS Au Ag Waste Ratio
(Mt) (%) (%) (Mt) (%) (%) (g/t) (g/t) (Mt)
DFS 114.6 0.56%0.46% 48.8 1.37% 0.17% 0.029 14.1 402.4 2.46
Update 138.1 0.53%0.43% 70.5 1.16% 0.20% 0.030 12.4 528.7 2.53
Both the vat and float ore overall quality drops as a result of the marginal grade material added in the
expanded pits. Overall strip ratio increases.
A mine and process schedule using similar annual rates and a similar development sequence to the
DFS schedule was generated. Both mine and process schedules are very similar to the DFS in the
initial years. However, there is a deferral in copper production in the early years as a result of lower ore
cut-offs and the earlier inclusion of more marginal ore. Potential project life increases from 12 to
16 years.
Run 6a and 6b Optimisations

These pit optimisations assess potential pit expansions that could be justified if mining was allowed on
Shougang ground and current Inferred mineralisation was confirmed by further investigations.
Table 4.39 summarises these results compared with Run 5 (the basis for the DFS) and Run 6 above.
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Table 4.39
Pit Optimisation Shell Comparisons
Total
Total Vat Inventory Float Total
Optimisation Strip
Inventory Waste
Version Ratio
Ore Cu CuSS Ore Cu Ag (kts)
(kts) (%) (%) (kts) (%) (g/t)
Run 5 120 0.57% 0.46% 48 1.39% 14.0 376 2.23
Run 6 142 0.53% 0.43% 71 1.16% 12.0 491 2.30
Run 6a 143 0.53% 0.43% 89 1.07% 10.0 574 2.47
Run 6b 144 0.53% 0.43% 92 1.05% 10.0 574 2.43
Run 5 Basis for DFS

Run 6 Re-run using final DFS parameters
Run 6a Post DFS simulating mining on Shougang ground
Run 6b Post DFS simulating mining on Shougang ground and Inferred conversion
Run 6a indicates that allowing mining to proceed onto Shougang ground would increase the potential
float plant feed and extend the mining and processing life as a result of mining the deeper sulfides in
the Cu40 orebody that occur (at depth) adjacent to the Shougang boundary. While sulfide inventory
increases, average ore quality decreases. Vat inventories are not impacted.
As detailed elsewhere in this section, Shougang is applying to expand its mining operations and may
have alternative, conflicting uses for this potential pit expansion area.
Run 6b shows that conversion of current Inferred mineralisation will have a minor impact on potential pit
inventories.
4.23.3 Identification of Alternative Access Routes
Subsequent to completion of the DFS, but prior to submission of the Mina Justa ESIA, Shougang
submitted its own EIA to allow for a major expansion of the mine over the next 13 years. Additional
open pits and waste dumps close to the western and southern bRXQGDULHV RI 0DUFREUH¶V 7$1
concession overlap with the proposed access routes for the 220 kV powerline, the fresh water pipeline,
the 22.9 kV powerline and the site access road.
GMI has completed preliminary studies for Marcobre to identify 2 or 3 alternative routes for these
infrastructure items. In all cases the alternatives are considered to be viable and with low impact on
environmental and socio-cultural grounds, with the exception of a northern option for the access road
which crosses some plant habitats, archeological sites, and lies closer to the San Fernando Reserve.
The other two access road alternatives lie close to parts of the mine infrastructure (pits and waste
dumps) and careful traffic management would be required if these are adopted.
Detailed route survey and design work has not been undertaken, and thus capital costs for the
alternatives are not available. However, in general there is little change in overall length of the affected
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infrastructure (Table 4.40), and it is not anticipated that there will be any material change to the overall
capital cost estimate.
The original routes and all alternatives have been included in the ESIA.
Table 4.40
Comparison of Distances of Affected Infrastructure Items (km)
Item DFS Alternative 1 Alternative 2 Alternative 3
220 kV powerline 14.7 16.6 18.3
22.9 kV powerline 35.7 28.9 34.5
Water pipeline 31 22 23
Access road 7.5 7.8 12.7 23.5*
* northern access route ± not recommended
4.23.4 Project Schedule
The DFS assumed that the ESIA application would be filed for approval by July 1, 2009. Given that the
actual date of filing was November 6, 2009, there is an impact on the overall project schedule and
timing to obtain the main consents to construct and operate the facilities of the Mina Justa Project.
(VWXGLR 2VWHUOLQJ 0DFREUH¶V OHJDO FRXnsel, has reassessed the project permitting schedule and
advised on the following changes to key project dates:
x ESIA approval End of July 2010 (end of March 2010 in the DFS)
x Oxide plant construction start 1 February 2011 (1 April 2010 in the DFS)
x Oxide plant construction complete 6 February 2013 (6 April 2012 in the DFS)
x Oxide plant commissioning complete 29 April 2013 (29 June 2012 in the DFS).
The sulphide plant schedule will consequently be delayed in accordance with this new oxide plant
schedule.
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5. REFERENCES
AMEC, 2004. Updated technical report on the Marcona Cu Project, Department of Ica, Peru. AMEC
Report No. 146769, Effective Date November 1st, 2004. 291p.
Chen, H., 2008. The Marcona-Mina Justa District, South-central Peru: Implications for the Genesis and
Definition of the Iron-Oxide-Copper (-Gold) Ore Deposit Clan. Unpublished Ph.D. thesis, Queens
University, Kingston, Ontario, Canada. 266p.
CIM Definition Standards, 2005 CIM Definition Standards on Mineral Resources and Mineral Reserves.
Prepared by the CIM Standing Committee on Reserve Definitions, Adopted by the CIM Council,
December 11th 2005. 10p.
GRD Minproc, 2006. Mina Justa Prospect Preliminary Assessment Report. NI 43-101 Technical
Report on the Marcona Copper Property, Peru. 194p.
GRD Minproc, 2009. Marcona Copper Property, Mina Justa Prospect Definitive Feasibility Study
NI 43-101 Technical Report on the Marcona Copper Property, Peru. 299p.
GRD Minproc, 2009. Mina Justa Copper Project Definitive Feasibility Study (11 volumes +
appendices).
Snowden, 2007. Mina Justa Prospect Resource Update. NI 43-101 Technical Report on the Marcona
Cu Project, Peru, prepared for Chariot Resources Ltd. By Snowden Mining Industry Consultants Inc.,
Report No. V492, Effective Date 13 February 2007, Vancouver, Canada. 143p.
60254-00000-00-002-001
Page 232
— V-243 —

6. STATEMENT OF CAPABILITY
This report has been prepared by Dan Greig, Branislav Grbovic, Ross Oliver, Dean David and George
Kalivitis, all employees of AMEC Minproc, based in Perth, Western Australia. AMEC Minproc
specialises in feasibility studies, engineering design and construction of mineral projects, including
resource, mining and process engineering.
AMEC Minproc is a subsidiary of AMEC Limited, an international supplier of consultancy, engineering

and projeFW PDQDJHPHQW VHUYLFHV WR WKH ZRUOG¶V QDWXUDO UHVRXUFHV QXFOHDU FOHDQ HQHUJ\ ZDWHU DQG
environmental sectors, with its head office in London, UK.
The qualifications of the technical experts are provided as follows:
Mr Branislav Grbovic, B.Sc. (Mech Eng), M.Sc. (Processing Tech), Member of Australasian Institute
of Mining and Metallurgy (AusIMM), Australian Institute of Project Managers (AIPM) and Engineers
Australia (EA), have worked as an Engineer, Design, Study and Project Manager on studies and
projects in the minerals processing, power and environmental industries world-wide for a total of 27
years since graduation from university. Work covering a range of commodities including copper and
other base metals, gold, coal and industrial minerals.
Mr Dan Greig, B.Sc. Hons (Geology), Member Australian Institute of Geoscientists, is a geologist with
over 40 years experience world-wide in exploration and resource geology, project evaluation and
feasibility studies, project reviews and due diligence audits covering a range of commodities including
copper and other base metals, gold/silver, mineral sands and industrial minerals.
Mr Ross Oliver, B.Eng (Mining), MAusIMM, is a mining engineer with more than 30 years of industry
and consulting experience including management and execution of feasibility studies (scoping,
preliminary and definitive) and technical reviews. He has Australian and international experience in an
extensive range of commodities with a particular focus on the evaluation of all mining aspects of large
scale open pit deposits.
Mr Dean David, B App Sc (Metallurgy), SAIT, is a metallurgist with over 27 years experience in all
aspects of physical processing of ores from mining through to generation of concentrates or prepared
feeds for downstream processing. Dean has conducted work on projects worldwide partaking in study,
implementation, commissioning and optimisation phases and covering all major commodities and many
minor ones.
Mr George Kalivitis, B.Sc. Quantity Surveying, has 30 years international experience in the process
engineering field including estimating, cost engineering, cost controls and contracts. As Estimating
Manager for AMEC Minproc in Perth, George is responsible for overall delivery of capital cost
estimates.
60254-00000-00-002-001
Page 233
— V-244 —

7. STATEMENT OF INDEPENDENCE
Neither the authors nor AMEC Minproc have any interest or entitlement to securities or assets of
Marcobre, Chariot Resources or China Sci-tech. AMEC Minproc will be paid a fee for this report based
on its normal professional rates and reimbursable expenses. The fee is not contingent on the
conclusions of this report.
60254-00000-00-002-001
Page 234
— V-245 —

8. LIMITATIONS AND CONSENT
This report has been based on data, reports and other information provided by Chariot and Marcobre
as recorded in this report. AMEC Minproc has been advised that this information is complete as to
material detail, and is not misleading.
AMEC Minproc has reviewed the data, reports and information provided and has employed professional
personnel with experience appropriate to the technical aspects of the Mina Justa Project. The opinions
stated here are given in good faith. AMEC Minproc believes that the assumptions are factual and
correct, and the interpretations reasonable.
AMEC Minproc does not accept any liability other than its statutory liability to any individual,
organisation or company, and takes no responsibility for any damages arising from the use of this
report, or information, data or assumptions contained therein.
The report is provided to the directors of China Sci-tech for the purpose of assisting them in assessing
the technical issues and associated risks of the proposed project, and for use in a listing document on
the Hong Kong Stock Exchange; it should not be used or relied upon for any other purpose. The report
does not constitute a technical or legal audit. Neither the whole nor any part of this report may be
included in, with, or attached to any document or used for any purpose without AMEC Minproc¶VZULWWHQ
consent to the form and context in which it appears.
Yours Faithfully,
AMEC Minproc Limited
Branislav Grbovic
Signed
Branislav Grbovic
Project Manager, AMEC Minproc Limited
Dan Greig
Signed
Dan Greig
Principal Geologist, AMEC Minproc Limited
60254-00000-00-002-001
Page 235
— V-246 —

Ross Oliver
Signed
Ross Oliver
Manager Mining, AMEC Minproc Limited
Dean David
Signed
Dean David
Process Consultant, AMEC Minproc Limited
George Kalivitis
Signed
George Kalivitis
Estimating Manager, AMEC Minproc Limited
60254-00000-00-002-001
Page 236
— V-247 —
APPENDIX VI VALUATION REPORT ON THE MINA JUSTA PROJECT
Greater China Appraisal Limited

漢華評值有限公司
香港灣仔港灣道6-8號瑞安中心2703室
2703 Shui On Centre, 6-8 Harbour Road,
Wanchai, Hong Kong
Tel: 852 25116868 Fax: 852 25116161
www.gca.com.hk
30 April 2010
Board of Directors
Room 4510 China Resources Building
26 Harbour Road
Wanchai
Hong Kong
Re: Business Enterprise Valuation of Chariot Resources Limited
Dear Sirs/Madams,
At your request, we were engaged to assist you in the valuation analysis pertaining to the fair
value of the business enterprise of Chariot Resources Limited (“Chariot”), which indirectly holds,
through its subsidiaries, 70% interest in Marcobre S.A.C. (“Marcobre”) in Peru as of 28 February 2010
(the “Valuation Date”). Marcobre is the sole owner of the Marcona Copper Property with 46
concessions granted to Marcobre (“Marcobre Concessions”), which consists of a number of copper
deposits and prospects with a total landholding of 32,889 hectares located in the province of Nazca,
Peru. It is our understanding that our analysis will be used by management of China Sci-Tech Holdings
Limited (the “Company”) in their determination of the value of Chariot solely as a reference for
investment purpose. Our work was performed subject to the assumption and limiting conditions
described in Appendices of this report.
We understand that this valuation will be used as a reference for investment purpose, details of
which are set out in the circular dated 30 April 2010 issued by the Company to the Shareholders (the
“Circular”), of which this valuation report forms part. Unless otherwise stated, terms used in this
valuation report have the same meanings as those defined in the Circular. Our analysis was conducted
for the above mentioned purpose only and this report should be used for no other purposes. The
standard of value is fair value; whilst the premise of value is value in use, as part of going concern.
The approaches and methodologies used in our work did not comprise an examination in
accordance with generally accepted accounting principles, the objective of which is an expression of
an opinion regarding the fair presentation of financial statements or other financial information,
whether historical or prospective, presented in accordance with generally accepted accounting
principles.
We express no opinion and accept no responsibility for the accuracy and completeness of the
financial information or other data provided to us by others. We assume that the financial and other
information provided to us is accurate and complete, and we have relied upon this information in
performing our valuation.
— VI-1 —
PURPOSE OF ENGAGEMENT
As aforementioned, the purpose of this particular engagement is to assist the management of the
Company in determining the business enterprise value of Chariot as of the Valuation Date for
investment purpose.
The premise of value is Going Concern, defined as: “an ongoing and operating business
enterprise”.
Going Concern value is defined as: “the value of a business enterprise that is expected to operate
into the future. The intangible elements of Going Concern Value result from factors such as having a
trained workforce, an operational plant, and the necessary licenses, systems, and procedures in
place”.
BASIS OF VALUATION
We have performed the business enterprise valuation of Chariot on the basis of fair value.
Fair Value
According to Hong Kong Financial Reporting Standard, fair value is the amount for which an
asset could be exchanged, or a fair value liability settled, between knowledgeable and willing parties
in an arm’s length transaction.
For the purpose of this valuation, the term fair value is similar and/or interchangeable with the
valuation standards or definitions below and will be used throughout this valuation report.
Market Value
According to The Hong Kong Business Valuation Forum - Business Valuation Standards, market
value is defined as the estimated amount for which an asset (a property) should exchange on the date
of valuation between a willing buyer and willing seller in an arm’s length transaction after proper
marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.
Fair Market Value
The International Valuation Glossary defines fair market value as the amount at which property
would change hands between a willing buyer and a willing seller, when the former is not under any
compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable
knowledge of relevant facts.
— VI-2 —
Our valuation has been prepared in accordance with the HKIS Valuation Standards on
Trade-related Business Assets and Business Enterprise (First Edition 2004) published by the Hong
Kong Institute of Surveyors and the Business Valuation Standards (First Printed 2005) published by
the Hong Kong Business Valuation Forum. Both are generally accepted valuation standards followed
by relevant professional practitioners in Hong Kong. These standards contain detailed guidelines on
the basis and valuation approaches in valuing assets used in the operation of a trade or business and
business enterprises.
PREMISE OF VALUE
Premise of value relates to the concept of valuing a subject in the manner in which it would
generate the greatest return to the owner of the property, taking into account what is physically
possible, financially feasible, and legal. Premises of value include the following:
• Going concern: appropriate when the business is expected to continue operating without
the intention or threat of liquidation in the foreseeable future;
• Orderly liquidation: appropriate for a business that is clearly going to cease operations in
the near future and is allowed sufficient time to sell its assets in the open market;
• Forced liquidation: appropriate when time or other constraints do not allow an orderly
liquidation;
• Assembled group of assets: appropriate when all assets of a business are sold in the market
piecemeal instead of the entire business itself.
This business enterprise valuation of Chariot is prepared on a going concern basis.
SCOPE OF SERVICES
We were engaged by the management of the Company to assist in their estimate of the fair value
of the business enterprise of Chariot as of Valuation Date.
• We understand that the Company will use our analysis solely as a reference for investment
purpose, details of which are set out in the Circular.
• Our analysis and conclusion of opinion of value on Chariot was based on our discussions
with the managements of the Company and Chariot, as well as a review of key transaction
documents and records, including:
• Marcona Project — Mina Justa Definitive Feasibility Study, Technical Report to Hong
Kong Stock Exchange prepared by AMEC Minproc (“AMEC”), dated 19 April 2010
(the “Technical Report”);
— VI-3 —
• Audited financial statements of Chariot for the fiscal years ended 30 April 2007, 2008,
and 2009; and
• Consolidated financial statements of Chariot for the fiscal years ended 30 April 2007,
2008, 2009 and the six months ended 31 October 2008 (unaudited) and 2009.
We also relied upon publicly available information from sources on capital markets, including
industry reports, and various databases of publicly traded companies and news.
COMPANY OVERVIEWS
Chariot Resources Limited (“Chariot”) and its subsidiaries (together referred to as the
“Chariot Group”)
The Chariot Group is engaged in the acquisition, exploration and development of mineral
properties located in South America. Its principal asset is its interest in Marcona Copper Property.
GROUP STRUCTURE
The following diagram illustrates the current organizational structure of Chariot immediately
prior to the Acquisition Completion:
Chariot Resources
Limited
(British Columbia)
100% 100%
Andes Resources
Chariot Holding Inc.
Compania Minera S.A.C.
(Cayman Islands)
(Peru)
100% 100%
Chariot Operating
Chariot Partners Limited
Limited
(Cayman Islands)
(Cayman Islands)
50% 20%
Marcobre S.A.C.
(Peru)
— VI-4 —
Chariot Resources Limited (“Chariot”)
Chariot Resources Limited (CHD.CN) is a development stage company engaged in mineral

exploration and development, and listed on the Toronto Stock Exchange (“TSX”) and indirectly holds
70% interest in Marcobre, which in turn owns one of South America’s premier advanced-stage copper
projects - Mina Justa Project located on the Marcona Copper Property. Chariot was incorporated under
the laws of the Yukon on 12 November 1996 under the name of Hyperion Resources Corporation. On
21 February 2002, the shares of Chariot were consolidated on the basis of one new for five old shares
and the name of Chariot was changed to Chariot Resources Limited. The Mina Justa Project (the
“Project”) located on the Marcona Copper Property in Peru is rapidly advancing toward production,
and is also the most advance-staged and production-ready amongst all other deposits and prospects
which the Marcobre Concessions cover.
Chariot is headquartered in Toronto, Canada with a registered address of Suite 702, 55 University
Avenue, Toronto, Ontario, Canada, and with 25 employees as of 30 April 2009.
Marcobre S.A.C. (“Marcobre”)
Marcobre was incorporated as a closed corporation by means of public deed dated 20 May 2004.
It is indirectly owned as to 70% by Chariot and as to 30% by Korean Resources Company and
LS-Nikko Copper Incorporated (the “Korean Partners”). Marcobre is principally engaged in the
holding of the interest in the Marcona Copper Property.
Andes Resources Compania Minera S.A.C. (“Andes”)
Andes was incorporated as a closed corporation by means of public deed dated 22 August 2001.
It is directly wholly-owned by Chariot. Andes entered into service agreements with Marcobre to
provide management services to Marcobre with respect to the Project.
Marcona Copper Property and the Mina Justa Project
The Marcona Copper Property covers an area of approximately 32,889 hectares, of which the
Project is the principal exploration and development prospect. The Project is located approximately
400 kilometres southeast of Lima in the Nazca Province, Peru.
The mineralization to be extracted by the Project is contained in two separate deposits, the Mina
Justa deposit and the much smaller Magnetite Manto deposit, which are separated by 1 kilometre of
barren ground. The Project is designed to process 12 Mt/a of oxide ore by crushing, vat leaching,
solvent extraction, and electrowinning to produce up to 52,000 t/a of cathode copper. The Project will
be expanded during the second year of operation to include a 5 Mt/a concentrator to treat copper
sulphide ore underlying the oxide ore in certain portions of the Mina Justa deposit.
— VI-5 —
Marcobre Concessions
Under Peruvian mining law, the right to explore for and exploit minerals is granted by way of
concessions. Marcobre has acquired and is the sole and registered holder of all material mining
concessions in relation to the Marcona Copper Property. The deposits of the Project are located on the
Target Area 1 concession, which covers an area of approximately 3,969 hectares. The remaining part
of the Marcona Copper Property comprises 45 mining concessions covering an area of approximately
28,920 hectares. The Target Area 1 concession was granted on 15 June 1956 and the other Marcobre
Concessions were granted between 31 August 1994 and 29 November 2006.
China Sci-Tech Holdings Limited (the “Company”)
The Company (00985.HK) is an investment holding company and is organized into two operating
divisions: investment and financial instruments, which includes trading of securities, convertible notes
and derivatives financial instruments and properties letting. Other activities include providing
secretarial services and investment holding. Operations of the Company are carried out in China and
Hong Kong. Its subsidiaries include China Sci-Tech Secretaries Limited, Cyber Range Limited,
Harbour Fair Overseas Limited, Perfect Touch Technology Incorporated, Smart Ease Limited and Sky
Falcon Investment Limited.
The Company is headquartered in Hong Kong and has a registered address of Room 4510, 45/F
China Resources Building, 26 Harbour Road, Wan Chai, Hong Kong. The Company has 15 employees
as of 31 March 2009.
ECONOMIC OVERVIEW
The economy of Peru is the 47th largest in the world 1 , and as a emerging market-oriented
economy, its economy is characterized by a high level of foreign trade, which depends heavily on
exports. Peru’s main exports are copper, gold, zinc, textiles and fish, with major trading partners of
United States, China, Brazil and Chile. Service sector accounts for more than half of the Peruvian
GDP, following by manufacturing (22.3%), extractive industries (15%), and taxes (9.7%) 2 . Forecasts
of the Peru economy for the medium and long-term remain positive. Peru experienced the highest GDP
growth rate in 2007 in Latin America, and in 2008 it was the highest in Latin America and the entire
world at 9.94%. The recent economic growth has been fueled by macroeconomic stability, improved
terms of trade, and rising investment and domestic consumption. However, poverty remains a serious
problem with an unemployment rate of 8.35% in year 2009 3 .
1
“Rank Order — GDP (purchasing power parity)”, CIA. Retrieved 28 March 2010.
2
Banco Central de Reserva, Memoria 2006, p. 204. Retrieved on 28 March 2010.
3
Bloomberg. Retrieved on 28 March 2010.
— VI-6 —
Peru is likely to attract future domestic and foreign investment in tourism, agriculture, mining,
petroleum and natural gas, power industries and financial institutions. As its GDP continues to grow
at a healthy rate, unemployment rate should decrease as the economy grows and the inflation being
kept in check at around 2%. With the implementation of bilateral free-trade agreements (“FTAs”) with
its two main trading partners, United States and China, as well as the EU, Canada and Singapore,
negotiations will continue towards an FTA with Mexico. Talks have begun with India and are also
planned with Russia, Australia and South Africa. In addition, construction of new road links with
Brazil, and investment in large hydroelectricity projects in the border Amazon region should
strengthen commercial ties with Peru’s trading neighbors and further boost its economic growth.
Economic Indicators
2006A 2007A 2008A 2009A 2010F 2011F
Real GDP (yoy%) 7.76 8.85 9.94 1.00 4.60 —

CPI (yoy%) 2.00 1.78 5.78 2.98 2.20 —
Unemployment (%) 8.51 8.45 8.32 8.35 — —
Current Account (% of GDP) 3.04 1.11 (3.31) — — —
Central Bank Rate (%) 4.50 5.00 6.50 1.25 3.50 —
USD-PEN 3.20 3.00 3.13 2.89 2.85 2.84
Source: Bloomberg
INDUSTRY OVERVIEW
Copper Mining Industry
The global market for copper is approximately 19 million tonnes per annum, of which
approximately 40% is supplied by South American countries including Peru. The demand for copper
by final market is very well spread due to its versatility in industrial applications.
As the global economy recovers, copper demand will bounce back following China’s lead, and
copper producers will likely have a difficult time in keeping up with growth and hit supply constraints.
Copper remains primarily a supply side commodity, which explains the extent of the price recovery
in 2009, despite weak real demand and a large underlying surplus. London Metal Exchange- (“LME”)
monitored inventories of copper dropped to almost 540,000 tonnes, the lowest amount since early
February 2010. The metal’s outstanding performance in 2009 was, in view of many analysts, due to
the huge amount of copper imported by China, one of the largest copper consumers in the world,
causing copper price to double in 2009. However, it turned out that China has imported more than it
really requires beginning in year 2010, together with the fact that copper consumption failed to pick
up in China after Chinese New Year holidays, has prompted many to believe the current price level
is difficult to be sustained.
— VI-7 —
The International Copper Study Group (“ICSG”) forecasts for year 2010, a surplus of around
540,000 tonnes is expected to develop as lower copper demand will encounter an increase in copper
supply. ICSG expects a recovery in copper usage in most copper consuming countries for 2010, but
lower industrial demand and partial drawdown of inventories accumulated in 2009 is expected to
reverse the growth in apparent usage in China and lead to an overall global decrease in usage of around
0.7%, which will add to the underlying surplus in the short-run.
Source: Bloomberg
All in all, market consensus is generally of the view that the medium-term of copper will be
bullish, reaching record highs by year 2013 before testing the USD10,000/t mark. Despite the
underlying surplus, it is widely believed that the copper market will be back in deficit by year 2011
as even comparatively modest demand growth starts to run up again still only slowly increasing
production capacity, which will dry up the underlying surplus quickly and put upward pressure on
price. In the short-term, however, copper is expected to remain in surplus in 2010, ahead of deficits
in years 2011-13 of perhaps 600,000 tonnes. The ratio of stocks to consumption will continue to climb
in 2010, not excessively however, and just enough of a temporary downward pressure on price to delay
its rally to record levels by year 2013.
— VI-8 —
VALUATION METHODOLOGIES CONSIDERED
The valuation of any asset or business can be broadly classified into one of three approaches,
namely the asset approach, market approach and income approaches. In any valuation analysis, all
three approaches must be considered, and the approach or approaches deemed most relevant will then
be selected for use in the fair value analysis of that asset.
The Asset Approach
This is a general way of determining a fair value indication of a business, business ownership
interest, security, or intangible asset by using one or more methods based on the value of the assets
net of liabilities.
Value is established based on the cost of reproducing or replacing the property, less depreciation
from physical deterioration and functional and economic obsolescence, if present and measurable.
We have considered but rejected the asset approach for the business enterprise valuation of
Chariot due to the following reason:
• The value of Chariot is determined by the amount of reserves/resources in the mine deposits
from which economic benefits can be derived, rather than the cost of replacement of
mineral reserves/resources.
The Market Approach
interest, security, or intangible asset by using one or more methods that compare the subject to similar
businesses, business ownership interests, securities, or intangible assets that have been sold.
Value is established based on the principle of substitution. This simply means that if one thing
is similar to another and could be used for the other, then they must be equal. Furthermore, the price
of two alike and similar items should approximate one another.
We have considered but rejected the market approach for the business enterprise valuation of
Chariot due to the following reasons:
• The market approach is the approximate transaction price of a company/business in the

market place. There is no comparable transaction in the public market.
• Available public information in relation to acquisitions frequently involves specific buyers

who pay a premium/discount under their unique circumstances. This makes it difficult to
know if the price paid truly represents the approximate price of the transaction.
— VI-9 —
The Income Approach
interest, security, or intangible asset by using one or more methods that convert anticipated benefits
into a present value amount.
In the income approach, an economic benefit stream of the asset under analysis is selected,
usually based on historical and/or forecasted cash flow. The focus is to determine a benefit stream that
is reasonably reflective of the asset’s most likely future benefit stream. This selected benefit stream
is then discounted to present value with an appropriate risk-adjusted discount rate. Discount rate
factors often include general market rates of return at the Valuation Date, business risks associated
with the industry in which the company operates, and other risks specific to the asset being valued.
We have considered and accepted the income approach for the business enterprise valuation of
Chariot due to the following reasons:
• The business enterprise value of Chariot is determined by the ability to generate a stream
of benefits in future; and
• Economic benefit streams of Chariot can be identified based on the Technical Report
prepared by AMEC.
MAJOR ASSUMPTIONS OF BUSINESS ENTERPRISE VALUATION
Business enterprise value is an economic measure reflecting the market value of the whole
business. Our development of the business enterprise value under the Income Approach will be
performed by using a discounted cash flow (“DCF”) methodology, which requires a number of
parameters, including revenue and expense forecasts, working capital requirement and capital
expenditure requirement.
The basic DCF formula is set out as follows:
E1 E2 E3 En
PV = + + + ѧ +
2 3 n
(1+k) (1+k) (1+k) (1+k)
• E1, 2, 3, etc. = Expected economic income in the 1st, 2nd, 3rd periods, and etc.
• En = Expected economic income in the nth or last period in which an element

of income is expected.
• k = Discount rate.
— VI-10 —
In the valuation of Chariot, the management of the Company has provided us with the Technical
Report which comprises of the amount of mineral reserves and resources, a detailed mining schedule,
production schedule, and other relevant costs data. Provided below is a brief description of the major
assumptions applied in the valuation of Chariot.
Mineral Resources and Reserves
Resources and reserves have been developed and are in accordance with the regulations and
guidelines of Canadian National Instrument 43-101 (“NI43-101”). AMEC considers that the resources
and reserves are also in accordance with the JORC Code. The following are details extracted from the
Technical Report.
Total
Copper CuT Ag Au Resources
Indicated Resources (%) (g/t) (g/t) (t)
Copper (Cut-off grade 0.30) 0.76% — — 336,800,000

Silver and Gold — 8.75 0.06 161,800,000
Total
Copper CuT Ag Au Reserves
Probable Reserves (%) (g/t) (g/t) (t)
Copper 0.80% — — 163,400,000
Commodity Prices
Copper, Gold and Silver prices applied in the valuation of Chariot are as follows:
Current 2010 2011 2012 2013 2014+
Copper (USD/lb) 3.2765 3.008 3.340 3.500 3.000 2.850

Gold (USD/oz) 1,117.60 1,147.00 1,187.00 1,035.00 988.75 988.75
Silver (USD/oz) 16.48 18.00 19.00 16.45 15.40 15.40
The forecasts of the above commodity prices are extracted from the commodity price forecast of
the Bloomberg, which were contributed by analysts from different financial and research institutions
as at the Valuation Date.
Basis of Revenue
The mining, processing and sale schedules, as well as the related assumptions contained in our
valuation are extracted from the Technical Report. Revenue is derived by multiplying the copper price
(USD/lb) to the amount of copper cathodes (lb) and concentrates (lb) produced. In addition, revenue
is also derived by multiplying the gold and silver price (USD/lb) to the respective amounts of gold
and silver produced from the concentrates.
— VI-11 —
Basis of Cost of Production
The cost of production mainly includes mining costs, royalty charges, oxide plant and sulphide
plant operating costs, general and administrative costs, land transport, port and ocean freight,
marketing costs, treatment and refining charges. All relevant costs data are extracted from the
Technical Report.
Determination of Corporate Tax Rate
The statutory corporate tax rate in Peru is 30% for the year 2009. Accordingly, we have adopted
the same in our valuation during the projection period.
Basis of Capital Expenditure
According to the Technical Report, Chariot is expected to incur significant capital expenditure
in years between 2010 and 2014 to construct the oxide and sulphide plants, for the production of
copper cathodes and copper concentrates, respectively. In addition, other deferred and sustaining
capital expenditures will also be incurred to maintain the normal course of business throughout the
projection period as specified in the Technical Report.
Capital Expenditures (USD)
Oxide Plant 548,123,340

Sulphide Plant 168,694,176
Sustaining/Deferred Capex 32,930,802
Working Capital Movement
Since Chariot is currently in the development stage and production is yet to be commenced, we
have estimated its working capital movement throughout the projection period by making reference to
the working capital requirements of other copper mining and processing businesses which are already
in the production stage.
DETERMINATION OF DISCOUNT RATE
We developed the cost of equity (the “Re”) and the cost of debt (the “Rd”) of Chariot based on
data and factors relevant to the economy, the industry, and Chariot as at the Valuation Date. These
costs were then weighted in terms of a typical or market participant industry capital structure to arrive
at the estimated weighted average cost of capital (the “WACC”).
Development of Weighted Average Cost of Capital (the “WACC”)
We considered market and industry data to develop the WACC for Chariot.
— VI-12 —
The traditional formula for calculating the WACC is:
WACC = [(%D) * (Rd) * (1 - tax rate)] + [(%E) * (Re)]
Development of Cost of Equity (the “Re”)
We considered the Capital Asset Pricing Model (the “CAPM”) to calculate the cost of equity of
Chariot. Such method is considered a common method.
Capital Asset Pricing Model
CAPM, as applied to Chariot, can be summarized as follows:
Re = Rf + Beta * (Rm - Rf) + RPs + RPu
Risk-Free Rate (“Rf”)
We have applied the 20-year U.S. Treasury Bond yield of 4.40%, plus the spread between the
5-year average inflation rate in Peru and the 5-year average inflation rate in the U.S. of 0.21% (2.80%
- 2.59%) to arrive at a risk-free rate of 4.61%.
Expected Market Return (“Rm”)
Expected market return represents the risk premium for a particular equity market. The expected
equity risk premium in Peru applied is 15.78%, as quoted from Bloomberg.
Beta
In the CAPM formula, beta is a measure of the systematic risk of a particular investment relative
to the market for all investment assets. We obtained betas for thirteen identified publicly traded
guideline companies (“Public Guideline Companies”), details of which are listed in the table below.
The identified betas were unlevered to remove the effects of financial leverage on the indication of
relative risk provided by the beta, and re-levered at the optimal industry capital structure.
Selection of Guideline Public Companies
Due care was exercised in the selection of Guideline Public Companies by using reasonable
criteria in deciding whether or not a particular company is relevant to compute beta in our
determination of Re.
— VI-13 —
In selecting the Guideline Public Companies, we started with the description of the company
being valued, in terms of lines of business, location of principal business and other criteria. For this
particular engagement, we have selected the Guideline Public Companies based on the following
criteria:
(1) Status of operation
The Guideline Public Companies are engaged in the exploring and mining of copper. Since
there is no identical company in the market, regardless of which industry it is, it is always not
the case that the Guideline Public Companies are engaged in the identical line of business as
Chariot, but rather we have looked into companies with similar or complementary businesses.
(2) Regional status geographically
The mineral properties of the Guideline Public Companies are located in countries of North
and South America, which are close to Peru (i.e. the location where the mineral properties of
Chariot are situated).
(3) Market risk and investment status
The Guideline Public Companies are Canadian-listed companies such that their risks and
return profiles are comparable to Chariot, a company with its shares listed on the Stock Exchange
of Toronto, Canada.
(4) Sufficient market knowledge and reflection in enterprise value
The amounts of mineral reserves/resources for the projects undertaken by the Guideline
Public Companies are publicly disclosed.
The following is the list of Guideline Public Companies that we have reviewed in connection
with the valuation of Chariot:
Company Ticker Mine Location Description
Ivanhoe Mines Limited IVN.CN Australia, Explores for and develops copper,
Mongolia gold, silver, molybdenum, rhenium,
and uranium.
Northern Dynasty NDM.CN United States Explores for copper, gold and
Minerals Limited molybdenum.
Corriente Resources CTQ.CN Ecuador Explores and develops copper-gold

Inc. mineral properties.
Terrane Metals TRX.CN Canada Explores and develops copper and

Corporation gold mineral properties.
— VI-14 —
Company Ticker Mine Location Description
Augusta Resources AZC.CN United States Explores and develops copper and
Corporation other base metal assets.
Far West Mining FWM.CN Canada Evaluates, acquires, explores for

Limited and develops copper, uranium, lead,
zinc and silver mineral properties.
Norsemont Mining Inc. NOM.CN South America Explores and develops

copper-molybdenum-silver mineral
properties.
Baja Mining BAJ.CN Mexico Explores and develops copper,

Corporation cobalt, zinc, and manganese mineral
properties.
Candente Copper DNT.CN Peru Explores copper mineral properties.

Corporation
Katanga Mining KAT.CN Congo Explores for and produces copper

Limited and cobalt.
Iberian Mineral IZN.CN Spain, Peru Develops and produces copper and
Corporation zinc mineral products.
Quadra Mining Limited QUA.CN United States Explores and develops copper
mineral properties.
Anvil Mining Limited AVM.CN Congo Explores and mines copper/ silver.
Source: Bloomberg
Median Un-levered Beta Re-levered Beta
1.014 1.191
Small company premium (“RPs”)
RPs, over the risk premium for the market, can be calculated by subtracting the estimated return
in excess of the riskless rate from the realized return in excess of the riskless rate of companies. In
the case of Chariot, we applied the small company premium of 3.74% in excess of CAPM for
companies in the micro cap category of NYSE/AMEX/NASDAQ in the United States. We relied on the
studies performed by Ibbotson Associates as reflected in their Stocks, Bonds, Bills, and Inflation:
2009 Yearbook.
— VI-15 —
Specific company adjustment (“RPu”)
RPu for unsystematic risk attributable to the specific company is designed to account for
additional risk factors specific to Chariot.
Firm specific risk factors may include the following:
• Competition
• Customer Concentration
• Size
• Poor Access to Capital
• Thin Management
• Lack of Diversification
• Environmental
• Litigation
• Distribution Channels
• Old Technology
• Company Outlook
In the case of Chariot, we believe all of the above risk factors have been properly accounted for
in the cost of equity and therefore it is not necessary to apply an additional RPu.
Cost of Equity (“Re”) Calculation
CAPM
Risk Free Rate (“Rf”) 4.61%
Beta 1.191
Expected Market Return (“Rm”) 15.78%
Small Company Premium (“RPs”) 3.74%
Specific Company Adjustment (“RPu”) 0.00%
Cost of Equity (“Re”) 21.65%
— VI-16 —
Weighted Average Cost of Capital (“WACC”)
WACC (being the discount rate for this valuation) is determined by the weighted average, at
market value, of the cost of all financing sources in the business enterprise’s capital structure. We have
“levered” Chariot as if it mirrored the median percentage of debt as the Guideline Public Companies
which are in the emerging stage of their mining operation, on the assumption that over time, Chariot
will approach an optimal capital structure with 20% of debt, which is the less expensive form of
capital than equity, to remain competitive. Subsequent to the calculations of cost of equity and the cost
of debt, the following equation is used to develop the WACC:
WACC = [(%D) ⴒ (Rd) ⴒ (1-T)] + [(%E) ⴒ (Re)]
The calculation of WACC, or the discount rate, therefore becomes:
WACC
Percentage of Interest Bearing Debt (%D) 20.00%
⳯ Market Cost of Debt (Borrowing Rate in Peru) (Rd) 8.34%
⳯ 1 - Tax 70.00%
Weighted Cost of Debt 1.17%
+ Percentage of Equity (%E) 80.00%
⳯ Cost of Equity (“Re”) 21.65%
Weighted Cost of Equity 17.32%
WACC (Nominal) 18.49%
Peru 5-Year Average Inflation Rate 2.80%
∴ WACC (Real)* (rounded) 15.30%
* Calculated based on the Fisher Equation
As the projected cash flows derived from revenue and costs as set out in the Technical Report
were expressed in constant purchasing power (i.e. in real terms), a real discount rate that has been
adjusted to estimate the effect of expected inflation was adopted in the valuation for consistency.
According to the cash flows presented in real terms being discounted at the real rate of WACC,
the business enterprise value of Chariot which holds 70% interest in Marcobre as at the Valuation Date
would be CAD 254,000,000.
— VI-17 —
Sensitivity Analysis
WACC (Real) & Long-Term Copper Price (from year 2014 onwards)
Both the WACC (real) and the long-term copper price adopted play a pivotal role in the valuation
as they are very sensitive to the business enterprise value of Chariot. The business enterprise value
under different combinations of WACC (real) and long-term copper price is presented below:
Business Enterprise Value (CAD’ million)

Long-Term Copper Price (USD/lb)
WACC 2.65 2.75 2.85 2.95 3.05

16.30% 149 184 218 252 287
15.80% 164 200 235 271 306
15.30% 180 217 254 290 327
14.80% 197 235 273 311 349
14.30% 214 254 293 332 372
SYNTHESIS AND RECONCILIATION
The following comparative data summarizes the various methods that we have accepted or
considered and rejected, along with their respective final values. Each method is rated relative to the
applicability of the method relative to the facts and circumstances of Chariot, and strengths/
weaknesses are discussed.
Asset Approach
Replacement, Liquidation or Book Value Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rejected
Income Approach
Discounted Cash Flow Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CAD 254,000,000
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accepted
Market Approach
Guideline Public Company Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rejected
To test the reasonableness of our opinion as to the business enterprise value of Chariot, we have
compared the above value with the market capitalization of around CAD226,000,000 of Chariot as at
the Valuation Date. Our valuation under the Income Approach has approximately 12% premium over
the market capitalization which falls within a reasonable range of control premium when a controlling
interest of a business is acquired.
— VI-18 —
CONCLUSION OF VALUE
In conclusion, based on the analysis stated above and on the valuation method employed, it is
our opinion that the business enterprise value of Chariot which holds 70% interest in Marcobre as of
the Valuation Date is reasonably stated below:
CANADIAN DOLLARS TWO HUNDRED AND FIFTY FOUR MILLION ONLY (CAD
254,000,000)
We hereby certify that we have neither present nor prospective interests in the Company and have
neither personal interest nor bias with respect to the parties involved.
Yours faithfully,
For and on behalf of
GREATER CHINA APPRAISAL LIMITED
K.K. Ip Samuel Y.C. Chan

Registered Business Valuer of HKBVF MBA, CVA, CM&AA
MRICS, MHKIS and RPS (GP) Associate Member of AIMA
Managing Director Director
Head of Business Valuation
Analyzed and Reported by:

Patricia Ma
Victor C.W. Siu
Mr. K.K. Ip, a Chartered Valuation Surveyor of The Royal Institution of Chartered Surveyors (RICS), Member of Surveyors
Registration Board of Hong Kong, Member (General Practice Division) of The Hong Kong Institute of Surveyors (HKIS) and
Registered Business Valuer of The Hong Kong Business Valuation Forum (HKBVF), has substantial experience in property,
plant and machinery, business enterprise and intellectual property valuations for various purposes in Greater China Region since
1992.
Mr. Samuel Y.C. Chan, MBA, Certified Valuation Analyst of The International Association of Consultants, Valuators and
Analysts (IACVA), Associate Member of the American Institute of Minerals Appraisers (AIMA) and Certified Merger &
Acquisition Advisor, has been conducting business enterprise and intellectual property valuations for various purposes since
2004. He also spends a significant portion of his time in valuation of financial instruments including convertible bonds,
preference shares, swaps, corporate guarantees and employee share options for private and public companies in China, Hong
Kong, Taiwan, Japan, Singapore and the United States.
— VI-19 —
APPENDICES — STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS
The primary assumptions and limiting conditions pertaining to the value estimate conclusion(s)
stated in this report are summarized below. Other assumptions are cited elsewhere in this report.
The valuation may not be used in conjunction with any other valuation or study. The value
conclusion(s) stated in this valuation are based on the program of utilization described in the report
and may not be separated into parts. The valuation was prepared solely for the purpose, function, and
party so identified in the report. The valuation report may not be reproduced, in whole or in part, and
the findings of the report may not be utilized by a third party for any purpose, without the express
written consent of Greater China Appraisal Limited.
No change to any item in any of the valuation report shall be made by anyone other than Greater
China Appraisal Limited, and we shall have no responsibility for any such unauthorized change.
Unless otherwise stated in the valuation, the valuation of the business has not considered or
incorporated the potential economic gain or loss result from contingent assets, liabilities, or events
existing as at the Valuation Date.
The working papers for this engagement are being retained in our files and are available for your
references; we would be available to support our valuation conclusion(s) should this be required.
Those services would be performed for an additional fee.
Neither all nor any part of the contents of the report shall be disseminated or referred to the
public through advertising, public relations, news or sales media, or any other public means of
communication, or referenced in any publication, including any private or public offerings, including
but not limited to those filed with the Hong Kong Exchanges and Clearing Limited or other
governmental agency, without the prior written consent and approval of Greater China Appraisal
Limited.
Management is assumed to be competent, and the ownership to be in responsible hands, unless

noted otherwise in this report. The quality of business management can have a direct effect on the
viability and value of the business. Any variance from this assumption could have a significant impact
on the final value estimate.
Unless otherwise stated, no effort has been made to determine the possible effect, if any, on the
subject business due to future legislation, including any environment or ecological matters or
interpretations thereof.
Events and circumstances frequently do not occur as expected, and there will usually be
differences between prospective financial information and actual results, and those differences may be
material. Accordingly, to the extent that any of the information used in this analysis and report
requires adjustment, the resulting fair value would be different.
— VI-20 —
Any decision to purchase, sell, or transfer any interest or asset in the acquirer or acquiree
company, or any portion thereof, shall be solely your responsibility, as well as the structure to be
utilized and the price to be accepted.
The selection of the price to be accepted requires consideration of factors beyond the information
we will provide or have provided. An actual transaction involving the subject business or assets might
be concluded at a higher value or at a lower value, depending on the circumstances of the transaction
and the business, and the knowledge and motivations of the buyers and sellers at that time.
All facts and data set forth in our letter report are true and accurate to the best of our knowledge
and belief.
No investigation of legal fees or title to the property has been made, and the owner’s claim to
the property has been assumed valid. No consideration has been given to liens or encumbrances that
may be against the property except as specifically stated in the valuation executive summary report.
During the course of the valuation, we have considered information provided by the management
and other third parties. We believe these sources to be reliable, but no further responsibility is assumed
for their accuracy.
We have conducted interviews with the current management of the acquiring company
concerning the past, present, and prospective operating result of the acquiring company.
Any projections of future events described in this report represent the general expectancy
concerning such events as at the Valuation Date. These future events may or may not occur as
anticipated, and actual operating results may vary from those described in our report.
This valuation study is intended solely for use by the management of the acquiring company as
a reference for investment purpose and should not be used for any other purpose or distributed to third
parties, in whole or in part, without the express written consent of Greater China Appraisal Limited.
We have no responsibility or obligation to update this report for events or circumstances

occurring subsequent to the date of this report.
Our report is based on historical and/or prospective financial information provided to us by

management and other third parties. This information has not been audited, reviewed, or compiled by
us, nor has it been subjected to any type of audit, review, or compilation procedures by us, nor have
we audited, reviewed, or compiled the books and records of the subject company. Had we audited,
reviewed, or compiled the underlying data, matters may have come to our attention that would have
resulted in our using amounts that differ from those provided; accordingly, we take no responsibility
for the underlying data presented or relied upon in this report.
We have relied upon the representations of the owners, management, and other third parties
concerning the value and useful conditions of all equipment, real estate, investments used in the
business and any other assets of the business, and that such assets are free and clear of liens and
encumbrances, or that the Company has good title to all assets.
— VI-21 —
Our valuation judgment, shown herein, pertains only to the subject assets, the stated value
standard (fair value), as at the Valuation Date, and only for the stated valuation purpose.
The various estimates of value presented in this report apply to the valuation report only, and
may not be used out of the context presented herein.
In all matters that may be potentially challenged by the Hong Kong Exchanges and Clearing
Limited, a Court, the Inland Revenue Department, or other governmental and/or regulatory body, we
do not take responsibility for the degree of reasonableness of contrary positions that others may
choose to take, nor for the costs or fees that may be incurred in the defence of our recommendations
against challenge(s). We will, however, retain our supporting work papers for your matter(s), and will
be available to assist in active defence of our professional positions taken, at our then current rates,
plus direct expenses at actual, and according to our then current Standard Professional Agreement.
— VI-22 —
APPENDIX VII MANAGEMENT DISCUSSION AND ANALYSIS
MANAGEMENT DISCUSSION AND ANALYSIS OF THE GROUP
Review of the year ended 31 March 2007 of the Group
The Group recorded a turnover of approximately HK$6.66 million for the year ended 31 March LR14.69(7)
App 16-32(1)
2007. Compared with last year, there was an increase by an amount of approximately HK$0.54 App 16-32(4)
App 16-32(5)
million. The increase is mainly attributable to the increase of dividend income from investments in App 16-32(6)
App 16-32(10)
listed securities and rental income from PRC properties. Compared to previous year, the revenue from
the investments in financial instruments segment and the property investments segment have increased
approximately 141% and 11% respectively. With a stable occupancy rate, the rental income will
continue to provide a steady cashflow to the Group in the coming year. Although volatility of the
market gave pressure on the performance of the Group’s securities investments, the overall
improvement of the market sentiment during the year improved the performance of the securities
investments. For the year ended 31 March 2007, the Group recorded approximately HK6.24 million
gain arising from fair value changes of investments held for trading. In preceding year, loss arising
from fair value changes of investments held for trading was approximately HK$3.99 million. It is
expected that certain issues will lead to the fluctuation of the market such as the performance of the
PRC stock markets, macro economic control policy in PRC and movement of the exchange rate of
RMB, all of which can affect the market sentiment. The Group also recorded an impairment loss of
available-for-sale investment in an amount of approximately HK$0.98 million. Since the last financial
year, the Group adopted new Hong Kong Accounting Standare (“HKAS”) 39 and HKAS 32 in relation
to recording convertible loan notes at fair value. Under the new accounting treatment, the Group had
a loss on redemption of convertible notes of approximately HK$6.71 million and a loss arising from
fair value changes of derivative financial instruments in the amount of approximately HK$11.02
million. During the year, the Group no longer held its interest in its associate company, Shijiazhuang
Shuanghuan Automobile Co. Limited. 石家莊雙環汽車有限公司 (“Shuanghuan”) as a result of
enforcement of security by a lender in relation to a HK$60 million loan. Details of which were
disclosed in the Company’s announcements dated 11 January 2007, 24 January 2007 and 2 April 2007
respectively. Thus, the Group recorded a loss on transfer of subsidiaries in the amount of
approximately HK$38.92 million for the year ended 31 March 2007. During the year, the Group did
not share any result of Shuanghuan. Overall, the net loss for the year was approximately HK$63.05
million as compared to the net gain of approximately HK$25.50 million in the preceding year.
As at 31 March 2007, the Group had bank balance and cash of HK$42.42 million. Fair value of
investments held for trading was in an amount of approximately HK$318.31 million. During the year,
the Company obtained a HK$60,000,000 loan from an independent third party. The loan was secured
by the equity shares of a subsidiary of the Company and bore an annual interest rate at 5%. The loan
was settled during the year as a result of enforcing the securities by the lender. Details of which were
disclosed in the Company’s announcements dated 11 January 2007, 24 January 2007 and 2 April 2007
respectively. As at 31 March 2007, the Group had three unsecured convertible notes originally issued
on 31 January 2005, 31 March 2005 and 22 September 2006 with outstanding principal amount of
HK$16.2 million, HK$4.80 million and 49.8 million respectively. The first two convertible notes bear
3% interest rate per annum and the last convertible notes bear 5% interest rate per annum. All such
convertible notes are in Hong Kong dollars and mature on the third anniversary of date of issue. All
the outstanding convertible notes were converted at HK$0.37 per Share, HK$0.40 per Share and
HK$0.145 per Share respectively during the period from May 2007 to July 2007. A total of
— VII-1 —
399,232,056 Shares was issued subsequent to those conversions. As at 31 March 2007, the liability
component of the convertible notes was approximately HK$60.98 million. Save for the
abovementioned convertible notes, the Group had no borrowing and loan from banks or financial
institutions as at 31 March 2007. The gearing ratio as at 31 March 2007 was approximately 20.39%
based on the liability component of the convertible notes in the amount of approximately HK$60.98
million and the equity attributable to equity holders in the amount of approximately HK$299.13
million.
The Group had 4 staff as at 31 March 2007. The staff costs (excluding directors’ emoluments)
was around HK$1.77 million for the year. Staff remuneration package are normally reviewed annually.
The Group has participated in Mandatory Provident Fund Scheme. In addition, the Group provides
other staff benefits which include double pay and medical benefits. The Group has no share option
scheme during the year.
On 20 April 2006, the Company entered into a placing agreement with Taifook Securities
Company Limited (“Taifook”), pursuant to which, Taifook agreed to place, on a best effort basis, the
convertible notes in an aggregate principle amount of HK$49.80 million with interest at a rate of 5%
per annum. The convertible notes would carry a right to convert into new share of HK$0.10 each in
the capital of the Company (the “Share(s)”) at the conversion price of, subject to adjustment,
HK$0.145 per Share from the date of issue of the convertible notes to the date immediately before the
first anniversary of the date of issue of the convertible notes, HK$0.160 per Share from the first
anniversary of the date of issue of the convertible notes to the date immediately before the second
anniversary of the date of issue of the convertible notes, HK$0.176 per Share from the second
anniversary of the date of issue of the convertible notes to the date immediately before the third
anniversary of the date of issue of convertible notes which is the maturity date of the convertible
notes. The placing was completed on 22 September 2006. Details of the placing of the convertible
notes were disclosed in the Company’s announcements dated 21 April 2006 and dated 20 September
2006. The net proceeds of approximately HK$48.7 million of placing such convertible notes was
utilized for partial redemption of the convertible notes of the Company issued on 31 March 2005
whereas the net proceeds was originally intended to be used as general working capital of the
Company.
In October 2006, the Company redeemed HK$55,200,000 of the HK$60,000,000 convertible

notes (the “HK$60 million CN”) which were issued on 31 March 2005 for the three years with an
interest at of 3% per annum. The outstanding balance of the HK$60 million CN is HK$4,800,000.
On 16 March 2007, the Company entered into a placing agreement with Taifook, pursuant to
which, Taifook agreed to place, on a fully written basis, 343,496,000 new Share at HK$0.10 per Share.
The net proceeds from the placing was approximately 33.34 million. The placing of Shares was
completed on 4 April 2007. Details of the placing were disclosed in the Company’s announcement
dated 23 March 2007. As at 31 March 2007, approximately HK$23 million was utilized for investment
in securities issued by listed companies and approximately HK$3.61 million was used as the Group’s
general working capital. The remaining net proceeds of approximately HK6.73 million is not utilized
yet.
— VII-2 —
On 16 March 2007, the Company also entered into a placing agreement with Taifook, pursuant
to which, Taifook agreed to place, on a best effort basis, the convertible notes in an aggregate principle
amount of HK$165 million with interest at a rate of 4% per annum. The convertible notes would carry
a right to convert into new Shares at the conversion price of, subject to adjustment, HK$0.11 per Share
from the date of issue of the convertible notes to 29 February 2008, HK$0.12 per Share from 1 March
2008 to 28 February 2009, and HK$0.13 per Share from 1 March 2009 to 28 February 2010 which is
the maturity date of the convertible notes. The placing of the convertible notes was completed on 3
July 2007. The net proceeds of approximately HK$161.45 million from the placing of convertible
notes has not been utilized. The 165 million convertible notes were fully converted in July 2007 and
1,499,999,996 Shares were issued. Details of the placing of the convertible notes were disclosed in
the Company’s announcements dated 23 March 2007 and 3 July 2007 and the Company’s circular
dated 24 April 2007.
With stable occupancy rate of the Group’s investment properties, it will be expected to bring
steady rental income to the Group and thus will continue to contribute cashflow to the Group. It is
expected that the market will still fluctuate as many issues such as performance of the PRC stock
markets, macro economic control policy in PRC and movement of the exchange rate of RMB can affect
the market sentiment. The lost of interest in Shuanghuan does not have material impact on the
operation of the Group as Shuanghuan is just an associate company of Group. In view of the increase
in demand for natural resources and energy in the world and the increase in the prices of metals over
the past years, the Group are optimistic about the future prospect of the demand for natural resources
and the energy industry taking into account that the sustainable economic growth of the PRC and the
national consumption of the metal. Entering into the S&P Agreement 1 (as defined below) allows the
Group to diversify its business into the mining industry. The Group will continue to explore potential
business opportunities in order to improve its earning capacity and diversify the market risk that the
Group will confront in long run.
The Group recorded a total income of approximately HK$29.14 million for the year ended 31
March 2008. Compared with last year, there was an increase by an amount of approximately HK$20.73
million. The increase is mainly attributable to the increase of interest income from financial
institutions. Compared with previous year, the revenue from the investments in financial instruments
segment decreased approximately 5.58% but from the property investments segment increased
approximately 17.98%. Rental income will continue to provide a steady cashflow to the Group in the
future. The administration expenses for the year was approximately HK$48.46 million representing
approximately 287.37% increase when compared with last year. During the year, the Company issued
HK$165 million convertible notes and successfully completed two placements of securities. Further,
the Group has been preparing to expand its operation and business. It rented more office space, hired
more employees and appointed more officers during the year. Thus, the expenses relating to legal and
professional fees, rent and management fee, salaries and emoluments, and issuance of convertible
notes and Shares had a big jump. All these expenses accounted for over 69.23% of the total
administration expenses for the year. The market was volatile during the year as many uncertainties
such as the performance of the PRC’s financial and property market, financial crisis arisen from
sub-prime mortgage crisis in USA, possibility of downturn of the USA’s as well as the global
economy, and oil price issue had affected the market sentiment. For the year, the Group recorded a loss
— VII-3 —
arising from fair value changes of investments held for trading and a loss arising from fair value
changes of commodity future contract were approximately HK$190.88 million and HK$9.22 million
respectively. In last year, it had a gain arising from fair value changes of investments held for trading
and a loss arising from fair value changes of commodity future contract of approximately HK$6.24
million and HK$0.45 million respectively. Under the requirements of HKAS 39 and HKAS 32, a
theoretical gain or loss in relation to the convertible notes would be calculated but in fact such
theoretical gain or loss has no co-relation with the actual operation of the Company and would not
have any material actual impact on the operation or cashflow of the Company. However, it will affect
the result of the income statement of the Company. Under these accounting treatments, the Group
recorded a loss arising from change of fair value of conversion option derivative derived from
convertible notes issued of approximately HK$83 million during the year. Overall, the net loss for the
year was approximately HK$305.57 million as compared to the net loss of approximately HK$63.05
million in the preceding year.
As at 31 March 2008, the Group had bank balance and cash approximately of HK$2 billion. Fair
value of investments held for trading was in an amount of approximately HK$415.12 million. As at
31 March 2008, the Group had no outstanding convertible notes. The Group had no outstanding loan
or borrowing from banks or financial institutions as at 31 March 2008 as well.
were around HK$4.99 million for the year. Staff remuneration package are normally reviewed
annually. The Group has participated in Mandatory Provident Fund Scheme. In addition, the Group
provides other staff benefits which include double pay and medical benefits. The Group has adopted
a share option scheme in the year but no share option was granted during the year.
On 16 March 2007, the Company entered into a placing agreement with Taifook, pursuant to
which, Taifook agreed to place on a best effort basis, the convertible notes in an aggregate principle
amount of HK$165 million with interest at a rate of 4% per annum. The convertible notes would carry
a right to convert into new Shares in the Company at the conversion price of, subject to adjustment,
HK$0.11 per Share from the date of issue of the convertible notes to 29 February 2008, HK$0.12 per
Share from 1 March 2008 to 28 February 2009, and HK$0.13 per Share from 1 March 2009 to 28
February 2010 which was the maturity date of the convertible notes. The placing of the convertible
notes was completed on 3 July 2007. The net proceeds of approximately HK$161.45 million from the
placing of convertible notes had been utilized as one-third of it was used as the Group’s general
working capital (approximately HK$53.82 million) and the remaining was used to finance investment
of securities (approximately HK$107.63 million). The 165 million convertible notes were fully
converted in July 2007 and 1,499,999,996 Shares were issued. Details of the said placing of the
convertible notes were disclosed in the Company’s announcements dated 23 March 2007 and 3 July
2007 and the Company’s circular dated 24 April 2007.
On 4 June 2007, the Company entered into a placing agreement with Kingston Securities Limited
(“Kingston”), pursuant to which, Kingston agreed to place, on a fully written basis, 436,000,000 new
Shares at HK$0.45 per Share (the “June Placing”). The net proceeds from the placing was
approximately HK$191 million which was intended to be used for investment opportunities in metal
ore. The placing of Shares was completed on 21 June 2007. Details of the said placing were disclosed
in the Company’s announcement dated 5 June 2007.
— VII-4 —
On 20 June 2007, Power East Investments Inc., an indirect wholly owned subsidiary of the
Company, entered into a conditional sale and purchase agreement with Qian Mingjin (錢銘今) as
vendor and Wang Liang (王亮) as guarantor (the “S&P Agreement 1”) to acquire all the issued shares
in and a shareholder loan of Front Wave Group Limited (“Front Wave”) at the total consideration of
RMB199,500,000 to be satisfied partially by the allotment and issue of 113,183,532 fully paid Shares
at HK$0.46 per Share and by cash. The consideration would be financed by internal resources. Upon
completion of the S&P Agreement 1, Front Wave would have 95% equity interest in Xing City Hong
Ji Mining Industry Company Limited (興城市宏基礦業有限公司) which had the exploration right to
and would have the mining licence for the Liaoning Province Xing City Guojiazhen Renhe
Molybdenum Mine (遼寧省興城市郭家鎮任合鉬礦). Details of the said acquisition were disclosed in
the Company’s announcement dated 4 July 2007.
On 9 August 2007, Polymate Investments Limited, an indirect wholly-owned subsidiary of the

Company, entered into an agreement with Kingstate Holdings Limited to establish a joint venture to
submit tender in an open tender for investment and development of a hotel and commercial real estate
project in Shanghai. Pursuant to the agreement, the joint venture would establish a Hong Kong
company and in turn would set up a project company in the PRC. The registered capital of the project
company would be HK$100 million. Due to the delay in timetable for the relevant tender, two
supplemental agreements were signed to extend the date for injection of capital from 17 September
2007 to 30 September 2008. Details of the said joint venture was disclosed in the Company’s
announcement dated 13 August 2007 and circular dated 31 August 2007. Details of the said two
supplemental agreements were disclosed in the Company’s announcements dated 17 September 2007
and 31 December 2007 respectively.
On 28 August 2007, the Company entered into a placing agreement with Kingston, pursuant to
which, Kingston agreed to place, on a fully written basis, 870,000,000 new Shares at HK$0.22 per
Share. The net proceeds from the placing was approximately HK$186 million. The placing of Shares
was completed on 27 September 2007. The net proceeds was fully used for working capital and
Group’s business-related investments. Details of the said placing were disclosed in the Company’s
announcement dated 3 September 2007.
On 28 August 2007, the Company also entered into a placing agreement (the “August Placing”)
with Kingston, pursuant to which, Kingston agreed to place, on a best effort basis, 8,000,000,000 new
Shares at HK$0.22 per Share (the “August Placing Shares”). The net proceeds from the placing was
approximately HK$1.72 billion. The August Placing could be completed partially by a maximum of
14 lots provided that the aggregate number of the August Placing Shares for each partial completion
shall not be less than 600,000,000 (save for the last lot of the August Placing where the number of
the August Placing Shares to be issued may be less than 600,000,000, as the case maybe). The whole
August Placing was completed on 27 December 2007. 6,000,000,000 new Shares and 2,000,000,000
new Shares were issued on 15 November 2007 and 27 December 2007 respectively. The net proceeds
was intended to used for funding future acquisition of mineral resources business. Details of the said
placing were disclosed in the Company’s announcement dated 3 September 2007.
— VII-5 —
On 2 November 2007, Think Smart International Corp, a wholly owned subsidiary of the
Company, entered into a conditional sale and purchase agreement with Mr. Mi Dengfeng (米登峰) (the
“S&P Agreement 2”) to acquired all the shares in Global Winner International Holdings Limited
(金灃國際控股有限公司) (the “Global Winner”) from Mr. Mi Dengfeng (米登峰) at a consideration
of approximately HK$197.4 million to be satisfied partially by allotment and issue of 220,000,000
fully paid Shares at HK$0.80 per Share and by cash. Global Winner and its subsidiaries (the “Global
Winner Group”) had entered into 13 acquisition agreements with various molybdenum mine owners
in PRC (the “Acquisition Agreements”) to acquire the controlling stake of these mines. Pursuant to
the S&P Agreement 2, a supplemental acquisition agreement would be entered into between Global
Winner Group and those mine owners and Global Winner Group should have the discretion to settle
certain amounts of the maximum consideration payable under the Acquisition Agreements and the
supplemental agreement of approximately RMB2.84 billion payable by the Global Winner Group to
the mine owners by way of allotment and issue of fully paid Shares at HK$0.80 per Share. Thus, the
total consideration payable under the S&P Agreement 2 and the supplemental acquisition agreement
amounts to approximately RMB3.03 billion. Details of the said acquisition were disclosed in the
Company’s announcement dated 20 November 2007.
However, as a result of the Catalogue of Foreign Investment Business Guidance (revised 2007)
(外商投資產業指導目錄(2007年修訂)) (the “Catalogue”) effective from 1 December 2007, foreign
investment in molybdenum exploration and mining in the PRC has been prohibited. Having taking
consideration of the legal opinions issued by the PRC lawyer in connection with the S&P Agreement
1 and the S&P Agreement 2 and the possibility of fulfillment of all the conditions precedent under the
S&P Agreement 1 and the S&P Agreement 2, the Company decided to terminate the S&P Agreement
1 and the S&P Agreement 2 on 17 March 2008. Details of the termination of the S&P Agreement 1
and the S&P Agreement 2 were disclosed in Company’s announcement dated 17 March 2008.
With stable occupancy rate of the Group’s investment properties, it will be expected to bring
steady rental income to the Group and thus will continue to contribute cashflow to the Group. It is
expected that the market will still volatile and its sentiment will fluctuate as many issues such as
performance of the PRC stock markets and property markets, financial crisis arisen from sub-prime
mortgage crisis in USA, possibility of the downturn of the USA’s and the global economy, high oil
price and inflation, can have a profound effect on the market sentiment globally. The two very
substantial acquisitions of the Group in relation of molybdenum mines during the year were
terminated as a result of the Catalogue, which has been effective from 1 December 2007, prohibits
foreign investment in molybdenum exploration and mining in PRC. The Group is still optimistic about
the natural mineral industry. The Group will continue to explore potential business opportunities in
order to improve its earning capacity and diversify the market risk that the Group will confront in long
run. If such opportunities arise in the future, the funding requirement may be satisfied by way of
internal resources and/or other effective sources of funding, depending on the then market sentiment.
The Group recorded a total income of approximately HK$44.91 million for the year ended 31
March 2009. Compared with last year, there was an increase by an amount of approximately HK$15.77
million. The increase is mainly attributable to the increase of dividend income from the Group’s
securities investment. Compared with previous year, the revenue from the investments in financial
— VII-6 —
instruments segment and the property investments segment increased approximately 285.62% and
23.41% respectively. Rental income will continue to provide a steady cashflow to the Group in the
future. The administrative expenses for the year was approximately HK$71.89 million representing
approximately 48.34% increase when compared with last year. During the year, the Company issued
HK$100 million convertible notes. Further, the Group has been preparing to expand its operation and
business. It appointed senior officers, including directors, during the year. Thus, the expenses relating
to legal and professional fees, salaries and directors’ emolument, and securities transactions had a big
jump. All these expenses accounted for over 78.53% of the total administration expenses for the year.
As the global economy plunged during the year, the performance of the market was terrible. For the
year, the Group recorded a total sum of loss arising from fair value changes of investments held for
trading and a loss arising from fair value changes of derivative financial instruments in the amount
of approximately HK$332.17 million. In last year, there was a total loss of approximately HK$200.11
million.
In previous year, the Company recorded a loss arising from fair value change of conversion
option derivative in the amount of approximately HK$83.00 million. As there was a change in the
accounting industry views of the accounting treatment in respect of the convertible notes that was
previously applied by the Group, there was no such loss recorded under the current accounting
treatment during the year. Overall, the net loss for the year was approximately HK$366.52 million as
compared to the net loss of approximately HK$305.57 million in the preceding year.
As at 31 March 2009, the Group had bank balance and cash approximately of HK$1,535.27
million. Fair value of investments held for trading was in an amount of approximately HK$571.69
million. During the year, the Company issued HK$100 million redeemable zero coupon convertible
notes (details of which are disclosed below). The convertible notes are compound financial
instruments containing liability and equity components. As at 31 March 2009, the outstanding liability
component of the convertible notes amounted to approximately HK$68.18 million. Other than the
outstanding convertible notes, the Group had no outstanding loan or borrowing from banks or financial
institutions as at 31 March 2009. The gearing ratio as at 31 March 2009 was approximately 3.21%
based on the net book value of liability component of the convertible notes and the total equity. As
at 31 March 2009, the Group had commitments authorized but not contracted for in relation to an
agreement with a third party to establish a joint venture in which the Group will invest approximately
HK$51 million for investment in property market in the PRC and such investment amounted to HK$51
million is expected to be satisfied by internal resources in the Group if necessary.
was around HK$8.59 million for the year. Staff remuneration package are normally reviewed annually.
The Group has participated in Mandatory Provident Fund Scheme. In addition, the Group provides
other staff benefits which include double pay and medical benefits. The Group has a share option
scheme but no share option was granted during the year.
On 8 April 2008, due to the termination of the very substantial acquisitions in relation to the
Front Wave Group Limited and Global Winner International Holdings Limited, the Company
announced the change of the use of proceeds obtained from the placing of new Shares in June Placing,
which was disclosed in the Company’s announcement dated 5 June 2007, and from the tranche II of
August Placing, which was disclosed in the Company’s announcement and circular dated 3 September
— VII-7 —
2007 and 18 September 2007 respectively. The net proceeds of approximately HK$191 million from
the June Placing was to be used as general working capital of the Group. About HK$800 million out
of the net proceeds of approximately HK$1,715 million from the August Placing was to be used for
investments in the Group’s principal activities. Details of the change of use of proceeds were disclosed
in the Company’s announcement dated 8 April 2008.
On 30 June 2008, the Company entered into a convertible notes placing agreement with
Kingston, pursuant to which, Kingston conditionally agreed to place, on a fully underwritten basis, the
convertible notes in an aggregate principle amount of HK$100 million (the “2008 Convertible
Notes”). The 2008 Convertible Notes would carry a right to convert into new Shares in the Company
at the conversion price of, subject to adjustment, HK$0.10 per Share from the date of issue of the 2008
Convertible Notes to the date immediately before the first anniversary of the date of issue of the 2008
Convertible Notes, HK$0.11 per Share from the first anniversary of the date of issue of the 2008
Convertible Notes to the date immediately before the second anniversary of the date of issue of the
2008 Convertible Notes, and HK$0.12 per Share from the second anniversary of the date of issue of
the 2008 Convertible Notes to the date immediately before the third anniversary of the date of issue
of the 2008 Convertible Notes which is the maturity date of the 2008 Convertible Notes. The net
proceeds from the placing of 2008 Convertible Notes would be about HK$97 million which will be
used for existing business operations and/or activities. Details of the said placing of the 2008
Convertible Notes were disclosed in the Company’s announcements dated 2 July 2008. The convertible
notes placing was completed on 21 July 2008. Due to the Capital Reorganisation and Rights Issue of
the Company (details of which are disclosed below), the conversion price of the 2008 Convertible
Notes had been adjusted as follows:
Conversion price (HK$)

After
adjustments After
Before any due to Capital adjustments due
adjustments Reorganisation to Rights Issue
Form 21 July 2008 to 20 July 2009 0.10 2.50 0.635

Form 21 July 2009 to 20 July 2010 0.11 2.75 0.699
Form 21 July 2010 to 20 July 2011 0.12 3.00 0.762
Details of the above adjustments to the conversation price were disclosed in the circular of the
Company dated 22 October 2008 and the announcement of the Company dated 2 June 2009.
On 30 September 2008, Polymate Investments Limited (an indirect wholly owned subsidiary of
the Company), Kingstate Holdings Limited and the joint venture company entered into a third
supplemental agreement (the “Third Supplemental Agreement”) in relation to the establishment of
the joint venture company, pursuant to which, parties to the Third Supplemental Agreement agreed to
further extend the latest date for their contribution of the initial capital of the joint venture company
from 30 September 2008 to 31 December 2008. Details of the Third Supplemental Agreement were
disclosed in the Company’s announcement dated 30 September 2008. On 31 December 2008, the same
— VII-8 —
parties entered into a fourth supplemental agreement (the “Fourth Supplemental Agreement”) to
further extend the latest date for their contribution of the initial capital of the joint venture company
from 31 December 2008 to 30 June 2009. Details of the Fourth Supplemental Agreement were
disclosed in the Company’s announcement dated 31 December 2008.
On 10 October 2008, the Company proposed a proposal of capital reorganisation (the “Capital
Reorganisation”) to the Shareholders that: (1) the nominal value of all the issued Shares be reduced
from HK$0.10 each to HK$0.004 each (the “Reduced Share(s)”) by cancelling HK$0.096 paid up on
each issued Share by way of reduction of capital (the “Capital Reduction”); (2) every 25 issued
Reduced Shares be consolidated into one consolidated Share of HK$0.10 (the “Consolidated
Share(s)”); and (3) the credit arising from the Capital Reduction will be applied to offset against the
accumulated losses of the Company and the remaining balance of the credit being credited to the
capital reduction reserve account of the Company. The Capital Reorganisation is conditional upon: (1)
Shareholders’ approval by a special resolution at a extraordinary general meeting of the Company; (2)
the confirmation by the Grand Court of Cayman Islands (the “Court”) and the registration by the
Registrar of Companies in the Cayman Islands of an official copy of the Court order and the minutes
containing the particulars required under the Cayman Islands’ Companies Law; (3) compliance with
the conditions imposed by the Court; and (4) the Listing Committee of the Stock Exchange granting
the listing of, and permission to deal in, the Consolidated Shares in issue upon the Capital
Reorganisation becoming effective. The Shareholders had passed a special resolution to approve the
Capital Reorganisation at the Company’s extraordinary general meeting held on 20 November 2008.
The Capital Reorganisation was completed and be effective from 1 April 2009. Details of the Capital
Reorganisation were disclosed in the Company’s announcement dated 10 October 2008, 30 January
2009, 6 March 2009 and 30 March 2009, and the Company’s circular dated 22 October 2008.
On 11 February 2009, Core Business Investments Inc. (“Core Business”), a wholly-owned

subsidiary of the Company, entered into a sale and purchase agreement with East Dynamic Holdings
Limited (“East Dynamic”) to purchase all the shares in Ocean Capital Investments Limited (“Ocean
Capital”), a wholly-owned subsidiary of East Dynamic and a shareholder’s loan in the amount of
HK$35,703,297.26 owed by Ocean Capital to the East Dynamic for a consideration of
HK$25,196,702.74 and HK$35,703,297.26 respectively. Ocean Capital through two of its subsidiaries
owns 24 residential units in Hong Kong. The transaction was completed on 11 February 2009. Details
of the transaction were disclosed in the Company’s announcement dated 11 February 2009.
On 13 February 2009, Leadton Corp. (“Leadton”), a wholly-owned subsidiary of the Company,

entered into a memorandum of understanding (the “MOU”) with 世紀大酒店有限公司 (New Century
Hotel Shanghai Company Limited) (the “Shanghai Company”). Pursuant to the MOU, the Shanghai
Company agreed to negotiate with the Leadton the terms of a definitive sale and purchase agreement
in respect of acquisition of 上海虹口世紀大酒店 (New Century Hotel Shanghai) (the “Shanghai
Hotel”). According to the MOU, Leadton paid an earnest money in the amount of HK$10 million to
the Shanghai Company. If no sale and purchase agreement can be concluded and entered within the
period of the MOU from the date of the MOU until four months thereafter, the earnest money will be
refunded to the Leadton. Details of the MOU were disclosed in the Company’s announcement dated
13 February 2009.
— VII-9 —
On 23 February 2009, the Company proposed, subject to the Capital Reorganisation become
effective, to have a rights issue exercise on the basis that five rights shares for every Consolidated
Share held on the record date (with Warrants to be issued in proportion of one Warrant for every five
rights shares subscribed for) (the “Rights Issue”). The subscription price was HK$0.15 per rights
share. Kingston entered into an underwriting agreement with the Company as an underwriter to the
Rights Issue on the even date. The Rights Issue would raise not more than approximately HK$398
million before expenses by issuing not less than 2,653,242,530 rights shares. The proceeds from the
Rights Issue will be used for the investments in the Group’s principal activities. The Rights Issue was
approved by independent shareholders of the Company at the extraordinary general meeting held on
9 April 2009 and became unconditional on 27 May 2009. It is expected to be completed on 3 June
2009. Details of the Rights Issue were disclosed in the Company’s announcements dated 23 February
2009, 6 March 2009, 11 March 2009, 23 March 2009, 24 March 2009, 24 April 2009, 27 April 2009,
11 May 2009 and 12 May 2009, circular dated 23 March 2009, prospectus dated 16 April 2009 and
supplemental prospectus dated 15 May 2009.
On 23 February 2009, the Company announced further change of the use of proceeds obtained
from the August Placing. Part of the net proceeds of approximately HK$915 million from the August
Placing was changed to fund the acquisition of Shanghai Hotel and/or the investments in the Group’s
principal activities. Details of the change of use of proceeds were disclosed in the Company’s
announcement dated 23 February 2009.
On 24 April 2009, Maxter Investments Limited (“Maxter”) and the Company (as Maxter’s
guarantor) entered into a sale and purchase agreement (the “2009 SPA”) with OZ Minerals Agincourt
Pty Ltd and OZ Minerals Limited to purchase the entire issued share in OZ Minerals Martabe Pty Ltd
(“OMM”), a wholly owned subsidiary of the OZ Minerals Agincourt Pty Ltd, at a consideration being
the aggregate of US$211 million and a reimbursement amount in a sum of not exceeding US$11.4
million (the “OMM Acquisition”). OMM indirectly controlled the entire interest in the Martabe
Project at the Western side of the island of Sumatera in the Province of North Sumatera, in the
Batangtoru sub-district, Indonesia. Details of the OMM Acquisition were disclosed in the Company’s
announcement dated 12 May 2009.
On 24 April 2009, Polytex Investments Inc. (“Polytex”), a wholly-owned subsidiary of the

Company and the immediately holding company of the Maxter, and the Company entered into an
option agreement (the “2009 Option Agreement”) with Acewick Holdings Limited (“Acewick”), a
wholly-owned subsidiary of G-Resources and G-Resources pursuant to which Polytex agreed to grant
a call option to Acewick to acquire the entire issued shares in Maxter. The option price shall be the
aggregate of the total consideration or sum paid or contributed by the Group in the OMM Acquisition
and US$10 million, which shall be satisfied by the allotment and issue of ordinary shares of
G-Resources. On 9 May 2009, the Grantee exercised such call option. Details of the possible disposal
of the entire issued shares of Maxter (the “Maxter Disposal”) were disclosed in the Company’s
announcement dated 12 May 2009.
On 27 May 2009, the parties to the 2009 Option Agreement entered into a supplemental option
agreement, pursuant to which the Polytex agreed to sell and assign to Acewick and Acewick agreed
to purchase and take an assignment from Polytex the title, benefits of and interest in the shareholder’s
— VII-10 —
loans due and owing to Polytex by Maxter in an aggregate sum of (i) HK$16,320.20 and (ii) the
maximum amount up to the total consideration or sum paid or contributed by Polytex and/or its
subsidiaries on behalf of Maxter for payment to OZ Minerals Agincourt Pty Ltd and/or its related
bodies corporate under the 2009 SPA and ancillary documents upon completion of the 2009 SPA.
Through the OMM Acquisition or receipt of the ordinary shares of G-Resources as disclosed
above, the Group can start its involvement into the mining industry. The OMM Acquisition and Maxter
Disposal enable the Group to diversify its investment indirectly through the equity interest in
G-Resources in the further development of the Martabe Project. As the Group purchased more
properties during the year, more rental income is expected in the coming future. Thus rental income
will continue to contribute cashflow to the Group. The financial tsunami hit global economy seriously.
The global economy is still sluggish. Unfortunately, the appearance of swine human flu and its rapid
worldwide spreading rate will further weaken the global economy. The global economy is not expected
to recover soon, and the market will continue to fluctuate in the coming year. Hence, the Group is
cautious on the performance of financial instruments investments. The Group will continue to explore
potential business opportunities in order to improve its business portfolio and diversify the market risk
that the Group will confront in the long run. If such opportunities arise in the future, the funding
requirement may be satisfied by way of internal resources and/or other effective sources of funding,
depending on the then market sentiment.
MANAGEMENT DISCUSSION AND ANALYSIS OF THE CHARIOT GROUP
Set out below are the management discussions and analyses of the Chariot Group for the six
months ended 31 October 2009 and for the years ended 30 April 2009, 2008 and 2007. They should
be read in conjunction with the consolidated financial statements and the related notes of the Chariot
Group included in Appendix III to this circular. Chariot Group principally conducts its operation
through its 70%-owned indirect subsidiary, Marcobre. Marcobre is accounted for using proportionate
consolidation and 70% of the relevant figures are incorporated in the consolidated financial statements
of Chariot Group.
PERIOD TO PERIOD COMPARISON OF CHARIOT GROUP
Six months ended 31 October 2009 and 2008
Business review
The activities of Chariot were principally directed to the exploration of the Mina Justa Project.
With the completion of DFS in mid 2009, Chariot focused on maintaining the Mina Justa Project on
its critical path to enable the commencement of construction in 2010 and on its related identified
project optimization opportunities. Following a strategic review of value maximization alternatives,
Chariot retained RBC Capital Markets as its financial advisor to begin a formal public sale process
to solicit interest in an acquisition of the Chariot Sale Shares.
— VII-11 —
Results of operations
Expenses
Dissident shareholder proxy costs of C$644,809 (equivalent to approximately HK$5,010,101) for

the six months ended 31 October 2009 resulted from an one-off cost incurred by Chariot in a defense
against an abortive attempt by a group of dissident shareholders to gain control of Chariot at its
Annual General and Special Meeting of the Shareholders in September 2009.
Staff and directors’ costs for the six months ended 31 October 2009 amounted to C$469,479
(equivalent to approximately HK$3,647,805) compared to C$414,034 (equivalent to approximately
HK$3,217,003) for the same period in 2008. The increase resulted, in part, from the relocation of the
chief financial officer of Chariot from Peru to Canada in early 2009.
Office and other expenses, filing fees and investor relation expenses increased to C$311,262
(equivalent to approximately HK$2,418,475) for the six months ended 31 October 2009 from
C$246,972 (equivalent of approximately HK$1,918,948) for the same period in 2008. This increase
was due to additional indirect costs associated with the dissident shareholder proxy action mentioned
above.
Legal and audit expenses decreased to C$259,183 (equivalent to approximately HK$2,013,826)

for the six months ended 31 October 2009 from C$306,266 (equivalent to approximately
HK$2,379,656) for the comparative period in 2008. The decrease was due to the reduced requirement
for legal consultations.
Transaction costs of C$166,972 (equivalent to approximately HK$1,297,356) incurred in the

current period were directly attributable to the formal public sale process embarked upon by Chariot.
Commencing in 2007, Chariot entered into agreements with financial institutions for advice and
assistance in all aspects for senior financing. All related direct costs were capitalized as deferred
financing costs. During the six months ended 31 October 2009, the management of Chariot decided
to discontinue the services with these financial institutions and therefore the deferred financing costs
totaling C$2,902,611 (equivalent to approximately HK$22,552,997) were written off.
Chariot recorded a foreign exchange gain of C$397,088 (equivalent to approximately

HK$3,085,334) in the six months ended 31 October 2009 compared to a loss of C$157,803 (equivalent
to approximately HK$1,226,114) in the same period in 2008, resulting primarily from the fluctuation
in United States-Canadian exchange rates.
Interest income for the six months ended 31 October 2009 was C$114,591 (equivalent to
approximately HK$890,361) compared to C$405,464 (equivalent to approximately HK$3,150,415) in
the same period in 2008. The surplus cash invested as guaranteed bank certificates matured in June
2009 and the resultant funds were placed in cash accounts with an assortment of Canadian financial
institutions with lower interest returns.
— VII-12 —
As a result of the foregoing, the losses attributable to equity owners of Chariot for the six months
ended 31 October 2009 increased to C$4,254,113 (equivalent to approximately HK$33,054,033) from
C$730,861 (equivalent to approximately HK$5,678,717) in the same period in 2008.
Cashflows
Operating Activities
Net cash used in operating activities for the 6 months ended 31 October 2009 amounted to
C$579,324 (equivalent to approximately HK$4,501,290), as compared to net cash from operating
activities of C$514,266 (equivalent to approximately HK$3,995,795) for the same period in 2008. The
increase in use of cash was primarily attributable to costs incurred relating to the defense against the
dissident shareholder group’s actions during the period leading up to the holding of the Annual
General & Special Meeting of the Shareholders of Chariot in September 2009.
Investing Activities
Net cash from investing activities for the 6 months ended 31 October 2009 amounted to
C$12,408,988 (equivalent to approximately HK$96,416,596), as compared to net cash used in
investing activities of C$22,137,289 (equivalent to approximately HK$172,004,522) in 2008. The
decrease was due to the large reduction in exploration activities in the current period coupled with the
conversion of short-term investments into cash equivalents.
With the completion of the DFS, development expenditures decreased considerably to

C$2,894,187 (equivalent to approximately HK$22,487,544) in the six months ended 31 October 2009
(2008: C$7,705,167 (equivalent to approximately HK$59,868,377)). In view of low budgeted
exploration plans for the year 2009, the costs associated with applying for the Peruvian Government’s
early recovery plan in 2009 did not warrant a renewed application for 2009, hence, the increase in the
Peruvian sales tax receivable of C$632,371 (equivalent to approximately HK$4,913,459) (2008:
C$401,851 (equivalent to approximately HK$3,122,342)).
As the short term investments matured in June 2009, these funds were placed with alternate
banking and financial institutions providing higher interest returns.
Financing Activities
Net cash from financing activities for the six months ended 31 October 2009 amounted to
C$10,653,262 (equivalent to approximately HK$82,774,780), as compared to net cash from financing
activities of C$260,356 (equivalent to approximately HK$2,022,940) in 2008. The change was due to
a subscription by Solway Finance Ltd who completed a US$10,000,000 (equivalent to approximately
HK$77,629,000) private placement with the Company for 35,740,000 common shares on 30 October
2009. Stock options exercised in the six months ended 31 October 2009 realized C$96,570 (equivalent
to approximately HK$750,339) (2008: C$260,356 (equivalent to approximately HK$2,022,940)).
— VII-13 —
Years ended 30 April 2009 and 2008
Business review
The activities of Chariot were principally directed to the exploration of the Mina Justa Project.
During the year ended 30 April 2009, Chariot completed the DFS for its 70%-owned Mina Justa
Project, one of at least five prospects located on Marcona Copper Property.
Expenses
Legal and audit expenses increased to C$545,768 (equivalent to approximately HK$4,240,563)

for the year ended 30 April 2009 from the C$191,020 (equivalent to approximately HK$1,484,206) for
the year 2008. This increase reflected the additional legal work associated with responses to a number
of third party groups’ interest in the acquisition of Chariot.
Office and other expenses, filing fees and investor relation expenses decreased from C$472,232
(equivalent to approximately HK$3,669,195) for the year ended 30 April 2008 to C$280,409
(equivalent to approximately HK$2,178,750) for the year 2009. This reduction resulted from the
continued stringent cost cutting measures and the absence of the stock exchange fees incurred with
respect to Chariot’s share financing in prior year.
Staff and directors’ costs for the year ended 30 April 2009 amounted to C$936,127 (equivalent
to approximately HK$7,273,613) compared to C$1,128,688 (equivalent to approximately
HK$8,769,793) for the year 2008. The decrease was primarily due to the decrease in stock based
compensation of C$277,000 (equivalent to approximately HK$2,152,262) and the increase in staff
costs of C$84,000 (equivalent to approximately HK$652,672). Stock based compensation varied from
period to period depending upon the grant issue price, the fair value and the amortization of current
and previous stock option grants. Staff costs in respect of the Marcona Copper Project were capitalized
during the exploration and development phase. The increase in staff costs in 2009 was mainly as a
result of the relocation of the chief financial officer to Canada from Peru.
Chariot recorded a foreign exchange gain of C$345,776 (equivalent to approximately

HK$2,686,645) in 2009 compared to the gain of C$36,641 (equivalent to approximately HK$284,697)
in 2008. The strength of the US$ vis a vis the C$ towards the latter part of the 2009 fiscal year and
the continued volatility between the two currencies both played a part in these results.
Interest income amounted to C$729,034 (equivalent to approximately HK$5,664,521) in 2009

compared to C$809,807 (equivalent to approximately HK$6,292,119) in 2008, reflecting the draw
down in cash reserves in the year.
As a result of the foregoing, the losses attributable to equity owners of Chariot for the year ended
30 April 2009 decreased to C$694,603 (equivalent to approximately HK$5,396,996) from
C$1,248,640 (equivalent to approximately HK$9,701,808) in 2008.
— VII-14 —
Cashflows
Net cash from operating activities for the year ended 30 April 2009 amounted to C$334,341
(equivalent to approximately HK$2,597,796), as compared to net cash used in operating activities of
C$1,238,412 (equivalent to approximately HK$9,622,337) in 2008. The increase in cash inflow was
primarily due to the reduction in operating cash flow before working capital changes of C$248,468
(equivalent to approximately HK$1,930,572) resulting from continued cost cutting measures and the
decrease in other receivables of C$662,901 (equivalent to approximately HK$5,150,674) as a result
of advances paid for drilling services being applied to the cost of services performed.
Net cash used in investing activities amounted to C$22,209,801 (equivalent to approximately

HK$172,567,933) for the year ended 30 April 2009, as compared to net cash used in investing
activities of C$23,839,137 (equivalent to approximately HK$185,227,711) in 2008, a year of
heightened exploration activity. The decrease in cash used in investing activities was primarily due to
the decrease in exploration and development expenditures, together with the decrease in recoverable
Peruvian sales taxes and a draw-down on short-term investments. Chariot participated in the
exploration early recovery agreement with the Peruvian tax authorities in the fiscal year ended 30
April 2009 during which recoveries of C$368,551 (equivalent to approximately HK$2,863,604) (2008:
C$437,565 (equivalent to approximately HK$3,399,836)) were received.
Net cash used in financing activities for the year ended 30 April 2009 amounted to C$637,247
(equivalent to approximately HK$4,951,345), as compared to net cash from financing activities of
C$20,664,084 (equivalent to approximately HK$160,557,866 in 2008. The change was primarily due
to the public offering in 2008, while the only cash inflow from financing activities in 2009 was the
realization from stock options exercised which amounted to C$260,356 (equivalent to approximately
HK$2,022,940) (2008: C$647,377 (equivalent to approximately HK$5,030,055)) and the outflow of
C$897,603 (equivalent to approximately HK$6,974,286) incurred in connection with project debt
financing costs.
Years ended 30 April 2008 and 2007
Business review
For the year ended 30 April 2008, Chariot continued to focus on the Mina Justa Project. Principal
activities were centered on defining mineral resource, feasibility study, environmental and social
impact assessment study and on securing senior debt financing.
— VII-15 —
Expenses
Staff and directors’ costs for the year ended 30 April 2008 amounted to C$1,128,688 (equivalent
to approximately HK$8,769,793) compared to C$1,729,522 (equivalent to approximately
HK$13,438,213) for the year 2007. The decrease was primarily due to the reduction in stock based
compensation of C$551,000 (equivalent to approximately HK$4,281,215) and staff costs of C$50,000
(equivalent to approximately HK$388,495). Stock based compensation varied from period to period
depending upon the grant issue price, the fair value and the amortization of current and previous stock
option grants. Staff costs in respect of the Marcona project were capitalized during the exploration and
development phase.
Legal and audit expenses decreased to C$191,020 (equivalent to approximately HK$1,484,206)

for the year ended 30 April 2008 from C$339,479 (equivalent to approximately HK$2,637,718) for the
year 2007 due to the reduced requirement for legal consultations in 2008.
Office and other expenses, filing fees and investor relation expenses decreased to C$739,255
(equivalent to approximately HK$5,743,937) for the year ended 30 April 2008 from C$858,430
(equivalent to approximately HK$6,669,915) for the year 2007 due to the reduction in office and other
expenses of C$133,000 (equivalent to approximately HK$1,033,397) and investor relation expenses of
C$38,000 (equivalent to approximately HK$295,256) resulting from cost control measures, and partly
offsetting the increase in filing fees of C$52,000 (equivalent to approximately HK$404,035) in
connection with its public offering in 2008.
The turbulence experienced by world financial markets during the year ended 30 April 2008
impacted interest and foreign exchange rates; foreign exchange rate gains for the year ended 30 April
2008 amounted to C$36,641 (equivalent to approximately HK$284,697) (2007: C$476,059 (equivalent
to approximately HK$3,698,931)) while interest income decreased to C$809,807 (equivalent to
approximately HK$6,292,119) in 2008 from C$1,059,481 (equivalent to approximately
HK$8,232,061) in 2007.
As a result of the foregoing, the losses attributable to equity owners of Chariot for the year ended
30 April 2008 decreased to C$1,248,640 (equivalent to approximately HK$9,701,808) from
C$1,435,050 (equivalent to approximately HK$11,150,195) for the year 2007.
Cashflows
Net cash used in operating activities for the year ended 30 April 2008 amounted to C$1,238,412
(equivalent to approximately HK$9,622,337), as compared to net cash used in operating activities of
C$604,028 (equivalent to approximately HK$4,693,237) for the year 2007. The increase in use of cash
was primarily due to an increase in other receivables of C$765,040 (equivalent to approximately
HK$5,944,284) primarily as a result of advances paid to drilling service providers.
— VII-16 —
Net cash used in investing activities for the year ended 30 April 2008 amounted to C$23,839,137
(equivalent to approximately HK$185,227,711), as compared to net cash used in investing activities
in 2007 of C$19,001,453 (equivalent to approximately HK$147,639,390). The increase in the cash
outflow was primarily due to the short term investment of C$6.1 million (equivalent to approximately
HK$47.4 million), partly offsetting the slight decrease in the total expenditures on mineral properties
of C$2.6 million (equivalent to approximately HK$20.2 million) and the increase in the exploration
activities resulting in an increase in associated Peruvian sales tax receivable of C$1.4 million
(equivalent to approximately HK$10.9 million).
Net cash from financing activities for the year ended 30 April 2008 amounted to C$20,664,084
(equivalent to approximately HK$160,557,866), as compared to net cash from financing activities of
C$25,683,851 (equivalent to approximately HK$199,560,954) in 2007. The decrease in the net cash
inflow was primarily due to the different proceeds raised from the equity financing in each of the
respective years and the incurrence of project debt financing costs of C$1,643,719 (equivalent to
approximately HK$12,771,532) associated with proposed lenders and related advisors. The public
offering of the Chariot’s common shares in 2008 raised net proceeds of approximately C$21.7 million
(equivalent to approximately HK$168.6 million) whilst the proceeds raised from the issuance of
warrants in 2007 were approximately C$25.3 million (equivalent to approximately HK$196.6 million).
Stock options exercised in 2008 realized C$647,377 (equivalent to approximately HK$5,030,055) as
compared to C$577,471 (equivalent to approximately HK$4,486,892) in 2007.
SEGMENT INFORMATION
The directors of Chariot reviewed the geographical segments of the Chariot Group for making
strategic decisions.
31 October 2009 (expressed in C$) Corporate Peru Total
Cash and cash equivalents 22,461,884 610,425 23,072,309

Short-term investments 65,983 — 65,983
Other assets 833,911 9,696,431 10,530,342
Assets 23,361,778 83,820,987 107,182,765

Liabilities 864,006 996,571 1,860,577
Net Assets 22,497,772 82,824,416 105,322,188
— VII-17 —
30 April 2009 (expressed in C$) Corporate Peru Total
Cash and cash equivalents 12,832 576,551 589,383

Other assets 484,566 12,333,969 12,818,535
Assets 16,498,927 84,143,858 100,642,785

Liabilities 251,113 1,748,336 1,999,449
Net Assets 16,247,814 82,395,522 98,643,336

Other assets 574,311 10,848,604 11,422,915
Assets 28,722,826 72,640,092 101,362,918

Liabilities 484,572 2,387,104 2,871,676
Net Assets 28,238,254 70,252,988 98,491,242

Other assets 316,798 5,627,945 5,944,743
Assets 26,808,970 51,171,857 77,980,827

Liabilities 337,293 1,581,015 1,918,308
Net Assets 26,471,677 49,590,842 76,062,519
LIQUIDITY, CAPITAL STRUCTURE AND FINANCIAL RESOURCES
The Chariot Group has funded its operations and growth principally from equity financing.
As at 31 October 2009, Chariot had approximately C$23.1 million (equivalent to approximately

HK$179.5 million) in cash and cash equivalents, C$66,000 (equivalent to approximately HK$512,813)
— VII-18 —
in short term investments and no debt. The net assets amounted to C$105.3 million (equivalent to
approximately HK$818.2 million). The gearing ratio (a ratio of total borrowings to total assets) was
nil. As at 31 October 2009, 364,917,101 Chariot shares were issued and outstanding. At the same time,
16,207,454 options were issued and outstanding with an average exercise price of C$0.47 and an
average of 86 months to expiry.
As at 30 April 2009, Chariot had approximately C$589,000 (equivalent to approximately

HK$4,576,471) in cash and cash equivalents, C$16,000,000 (equivalent to approximately
HK$124,318,400) in short term investments and no debt. The net assets amounted to C$98.6 million
(equivalent to approximately HK$766.1 million). The gearing ratio (a ratio of total borrowings to total
assets) was nil. As at 30 April 2009, 328,695,501 Chariot shares were issued and outstanding. At the
same time, 17,159,055 options were issued and outstanding with an average exercise price of C$0.47
and an average of 93 months to expiry.
As at 30 April 2008, Chariot had approximately C$23.1 million (equivalent to approximately

HK$179.5 million) in cash and cash equivalents, C$6.1 million (equivalent to approximately HK$47.4
million) in short term investments and no debt. The net assets amounted to C$98.5 million (equivalent
to approximately HK$765.3 million). The gearing ratio (a ratio of total borrowings to total assets) was
nil. As at 30 April 2008, 328,302,203 Chariot shares were issued and outstanding. At the same time,
15,510,368 options were issued and outstanding with an average exercise price of C$0.56 and an
average of 95 months to expiry.
As at 30 April 2007, Chariot had approximately C$27.5 million (equivalent to approximately

HK$213.7 million) in cash and cash equivalents and no debt. The net assets amounted to C$76.1
million (equivalent to approximately HK$591.3 million). The gearing ratio (a ratio of total borrowings
to total assets) was nil. As at 30 April, 2007, 303,464,238 Chariot shares were issued and outstanding.
At the same time, 12,938,833 options were issued and outstanding with an average exercise price of
C$0.43 and an average of 96 months to expiry.
EMPLOYMENT AND SHARE OPTION SCHEME
As at 31 October 2009, the employee roster of Chariot comprised of three personnel in Canada
and a further twenty-two in its operations in Peru. The cost of the labour force in Peru was capitalized
to mineral property interests. Remuneration packages generally consisted of base salary, performance
bonus and stock options, and were reviewed on a periodic basis.
FOREIGN EXCHANGE MANAGEMENT
Chariot operates internationally with offices and operations in Canada and Peru, which gives rise
to the risk that its financial instruments may be adversely impacted by exchange rate fluctuations. A
significant portion of Chariot’s expenses are also incurred in US$ and to a lesser extent in other
foreign currencies. A significant change in the currency exchange rates between the C$ relative to the
Peruvian currency or US$ could have an effect on the results of operations, financial position or cash
— VII-19 —
flows of Chariot. Chariot has not entered into foreign currency contracts to hedge its risk against
foreign currency fluctuations. However, as many of Chariot’s obligations are denominated in US$, the
impact of foreign exchange differences on US$ denominated financial assets would be naturally
hedged to an extent.
Chariot has elected not to actively manage this exposure at this time. Notwithstanding, Chariot
will continuously monitor this exposure to determine if any mitigation strategies become necessary.
There would be no effect on other comprehensive income.
OUTLOOK
Chariot planned to continue the essential activities related to Mina Justa Project while at the
same time supporting the sale process being conducted by RBC Capital Markets. In order to
accomplish these objectives the following critical activities were being undertaken:
• Continuing with various studies and other activities to optimize DFS and add value to the
Mina Justa Project
• Seeking to acquire various surface rights and continuing work on obtaining important
permits
• Completing the public participation phase of the ESIA approval process
• Obtaining approval to start construction of the water wells
COMMITMENT, CONTINGENCIES AND PLEDGED ASSETS
In the event that Chariot and the Korean Partners approve the start of construction of a mine and
plant to process mineralized material from Marcona, additional contingent payments to Rio Tinto and
SHP would be required to complete the acquisition of an undivided 100% interest in Marcona. These
contingent payments to Rio Tinto and SHP would not exceed US $10.0 million (equivalent to
approximately HK$77.6 million) and the amounts of such payments would be determined by whether
Marcobre approves the commencement of the construction of mine and processing facilities on the
Target Area 1 concession (or any event analogous to the foregoing by any successor to Marcobre) and
the amount of copper equivalent contained in the mineral resource on the Target Area 1 concession.
Chariot has agreed to guarantee the payment obligations of Marcobre to Rio Tinto and SHP under
the terms of the Target Area 1 Transfer Agreement, entered into by SHP, Marcobre and Chariot and
dated 6 August 2004 (as amended on 30 December 2004), the Option Assignment Agreement, entered
into by Rio Tinto, Marcobre and Chariot and dated 6 August 2004 (as amended on 30 December 2004),
and the Claims Transfer Agreement, entered into by Rio Tinto, Marcobre and Chariot and dated 6
August 2004 (as amended on 30 December 2004). Chariot has also agreed to pledge the shares that
it holds indirectly in Marcobre as security for the payment obligations. A similar guarantee and share
pledge was provided by the Korean Partners. Each of Chariot’s and the Korean Partners’ guarantees
and pledges are limited to their respective pro-rata share ownership of Marcobre. In addition,
— VII-20 —
Marcobre granted a security interest in form of a mining mortgage over Target Area with respect to
the Marcona property as security in respect of the contingent payments described above.
In addition, Chariot was committed to honour certain contractual work program in connection
with the development of Marcobre as described in the 2009 Work Plan and other lease payments. As
at 31 October 2009, Chariot’s pro-rata portion of the expected expenditures under the 2009 Work Plan
amounted to US$5.6 million (equivalent to approximately HK$43.5 million) for the calendar year
2009 and the lease payments amounted to C$126,000 (equivalent of approximately HK$978,125).
SUBSEQUENT EVENTS
On 20 November 2009, Chariot granted an option to purchase 450,000 at a price of C$0.33 to

a service provider to Chariot.
Chariot’s pro-rata portion of the expected expenditure under the 2010 Work Plan with respect to
the development of Marcobre amounted to US$10.9 million (equivalent to approximately HK$84.6
million) for the calendar year 2010.
On 1 March 2010, Chariot announced that it has entered into the Arrangement Agreement with
the Company pursuant to which the Company has agreed to acquire through the Chariot Purchaser, by
way of the Plan of Arrangement, the Chariot Sale Shares at the Chariot Consideration.
The completion of the Plan of Arrangement is subject to, among other things, the approval by
66 2/3% of the votes cast by Chariot Shareholders at the Chariot Meeting to be held to approve the
Plan of Arrangement, the approval by a majority of the votes cast by the Shareholders at the EGM to
be held to approve the transaction as a “very substantial acquisition” in accordance with the Listing
Rules and receipt of court approvals. The Plan of Arrangement is expected to close in the first half
of 2010.
— VII-21 —
APPENDIX VIII GENERAL INFORMATION
1. RESPONSIBILITY STATEMENT
This circular includes particulars given in compliance with the Listing Rules for the purpose of App 1B-2
giving information with regard to the Group. The Directors collectively and individually accept full
responsibility for the accuracy of the information contained in this circular and confirm, having made
all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the
omission of which would make any statement herein misleading.
2. DISCLOSURE OF INTERESTS
2.1 Directors’ Interests or Short Positions in the Shares
As at the Latest Practicable Date, none of the Directors and chief executive of the Company had LR14.66(8)
App 1B-34
any interests or short positions in the Shares, underlying Shares and debentures of the Company or any App 1B-38(1)
of its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to
be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the
SFO (including interests and short positions which they were taken or deemed to have under such
provisions of the SFO); or (b) pursuant to section 352 of Part XV of the SFO, to be entered in the
register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors
of Listed Company to be notified to the Company and the Stock Exchange.
2.2 Competing Interests
As at the Latest Practicable Date, none of the Directors nor their respective associates had any LR14A.59(1)
interest in any business, which might compete with the business of the Group.
2.3 Directors’ Interests in Assets of the Enlarged Group
As at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any LR14.66(10)
App 1B-40(1)
assets which have been acquired or disposed of by, or leased to, or which are proposed to be acquired App 1B-Note 2
or disposed of by, or leased to, any member of the Enlarged Group since 31 March 2009, the date to
which the latest published audited consolidated financial statements of the Group were made up.
2.4 Directors’ Interests in Contracts of the Enlarged Group
As at the Latest Practicable Date, none of the Directors was materially interested in any contract LR14.66(7)
App 1B-40(2)
or arrangement, which was subsisting as at the Latest Practicable Date and was significant in relation
to the business of the Enlarged Group.
— VIII-1 —
3. SUBSTANTIAL SHAREHOLDERS
As at the Latest Practicable Date, so far as was known to the Directors or chief executive of the
Company, there was no persons or entities (other than a Director and the chief executive of the
Company) who had an interest or a short position in the Shares or the underlying Shares of the
Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and
3 of Part XV of the SFO or who were, directly or indirectly, interested in 10% or more of the nominal
value of any class of share capital carrying rights to vote in all circumstances at general meetings of
any other member of the Enlarged Group.
4. SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into LR14.66(7)
App 1B-39
any service contract with any member of the Enlarged Group (excluding contracts expiring or App 1B-Note 2
determinable by the Enlarged Group within one year without payment of compensation (other than
statutory compensation)).
5. LITIGATION
As at the Latest Practicable Date, so far as the Directors were aware, no member of the Enlarged LR14.66(2)
App 1B-33
Group was engaged in any litigation or arbitration or claim of material importance and there was no App 1B-Note 2
litigation or claim of material importance known to the Directors to be pending or threatened against
any member of the Enlarged Group.
As at the Latest Practicable Date, so far as the Directors were aware, there were no claims in
relation to the exploration rights of the Mina Justa Project made or notified either by third parties
against any member of the Enlarged Group or vice versa.
6. WORKING CAPITAL AND INDEBTEDNESS
6.1 Working capital
In determining the sufficiency of the working capital of the Group, the Directors have made the
assumption that the Chariot Acquisition and the Chariot Placing will be completed.
The Directors are of the opinion that, after taking into account the financial resources available
to and the internal resources of the Enlarged Group and on the assumption that the Chariot Acquisition
and the Chariot Placing will be completed in due course as set out in the preceding paragraph, the
Enlarged Group has sufficient working capital for the next twelve months from the date of this
circular, in the absence of unforeseen circumstances.
— VIII-2 —
6.2 Indebtedness
As at the close of business on 28 February 2010, being the latest practicable date for the purposes
of this statement of indebtedness, the Group had aggregate outstanding borrowings of approximately
HK$2.0 million comprising a shareholder loan in the amount of approximately HK$2.0 million owed
by China Sci-Tech (Far East) Limited (a joint venture owned as to 51% by Golden Wish Investments
Limited, a subsidiary of the Company, and as to 49% by King Wisdom Limited, respectively) to King
Wisdom Limited.
As at the close of business on 28 February 2010, the Chariot Group had a contingent payment
of US$3.0 million payable to Rio Tinto and SHP if the total mineral resource on the Target Area 1
concession (which includes the Mina Justa deposit and the Magnetite Manto deposit) is greater than
the equivalent of 2.58 million tonnes of contained copper metal using a copper equivalent cut-off
grade of 0.3%. The Chariot Group’s share of this payment is US$2.1 million. An additional contingent
payment of US$7.0 million will be payable by the Chariot Group to Rio Tinto and SHP if the total
mineral resource on the Target Area 1 concession is greater than the equivalent of 3.44 million tonnes
of contained copper metal using a copper equivalent cutoff grade of 0.3%. The Chariot Group’s share
of this payment is US$4.9 million. These contingent payments to Rio Tinto and SHP will not exceed
US$10.0 million and the amounts of such payments will be determined by whether Marcobre approves
commencing the construction of mine and processing facilities on the Target Area 1 concession and
the amount of copper equivalent contained in the mineral resource on the Target Area 1 concession.
Each of the Chariot Group and the Korean Partners have guaranteed, to the extent of their respective
pro rata ownership of Marcobre, the contingent payments described above and each has pledged its
shares of Marcobre as security in respect of such payments. In addition, Marcobre has granted a
security interest with respect to the Mina Justa Project as security in respect of the contingent
payments described above.
Save as aforesaid or as otherwise disclosed above, as at the close of business on 28 February

2010, the Enlarged Group did not have any loan capital issued or outstanding or agreed to be issued,
bank overdrafts, loans or other similar indebtedness and liabilities under acceptances (other than
normal trade bills) or acceptance credits, debentures, mortgages, charges, hire purchases
commitments, guarantees or other material contingent liabilities.
The Directors are not aware of any material adverse changes in the Enlarged Group’s
indebtedness position or contingent liabilities since 28 February 2010.
6.3 Funding in relation to the development of the Mina Justa Project
The Company estimates that the total funds required for developing the Mina Justa Project for
at least two years following the issue of this circular is approximately HK$2.6 billion, of which the
Company is expected to contribute approximately HK$1.8 billion as a 70% shareholder in the Mina
Justa Project. Since the Mina Justa Project is in the development phase, the Company does not expect
it to generate any income from mining activities for at least two years following the issue of this
circular.
— VIII-3 —
The Company believes that the estimated mine capital costs (including replacement, rebuilds and
sustaining capital) are approximately US$139 million (equivalent to approximately HK$1,079
million). On the assumption that all necessary permits and environmental approvals are obtained
within the stipulated timeframe, a 29-month period is projected for completion of the oxide plant, with
an additional three months to complete commissioning and to commence cathode production. A
29-month timeframe is projected for the sulphide plant implementation, with an additional three
months for commissioning.
7. MATERIAL ADVERSE CHANGE
As at the Latest Practicable Date, the Directors were not aware of any material adverse change
in the financial or trading position of the Group since 31 March 2009, being the date to which the
latest published audited consolidated financial statements of the Company were made up.
8. CONSENT
Each of AMEC Minproc Limited, Deloitte Touche Tohmatsu, Greater China Appraisal Limited,
Guangdong Securities and PricewaterhouseCoopers LLP has given and has not withdrawn its consent
to the issue of this circular with the inclusion herein of its report and/or opinion and/or references to
its names in the form and context in which they appear.
9. QUALIFICATION OF EXPERTS
The following is the qualification of the professional advisers who have given their opinion or App 1B-5(1)
advice or report which is contained in this circular:
Name Qualification
AMEC Minproc Limited Independent technical adviser
Deloitte Touche Tohmatsu Certified Public Accountants
Greater China Appraisal Limited Independent valuer
Guangdong Securities Limited A licensed corporation to carry out Type 1 (dealing in

securities), Type 2 (dealing in futures contracts), Type 4
(advising on securities), Type 6 (advising on corporate
finance) and Type 9 (asset management) regulated activities
under the SFO
PricewaterhouseCoopers LLP Chartered Accountants, Vancouver, Canada
The letter and report from Deloitte Touche Tohmatsu and PricewaterhouseCoopers LLP are given App 1B-5(3)
as at the date of this circular for incorporation in this circular.
The report from AMEC Minproc Limited was given on 19 April 2010 for incorporation in this
circular.
— VIII-4 —
The report from Greater China Appraisal Limited is given as at the date of this circular for
The letter from Guangdong Securities Limited is given as at the date of this circular for
10. DISCLOSURE OF INTERESTS OF ADVISERS
(a) As at the Latest Practicable Date, none of Deloitte Touche Tohmatsu,

PricewaterhouseCoopers LLP, AMEC Minproc Limited, Greater China Appraisal Limited
and Guangdong Securities Limited had any shareholding in any member of the Group or any
right (whether legally enforceable or not) to subscribe for or to nominate persons to
subscribe for securities in any member of the Group.
(b) As at the Latest Practicable Date, none of Deloitte Touche Tohmatsu, App 1B-40(1)
PricewaterhouseCoopers LLP, AMEC Minproc Limited, Greater China Appraisal Limited

and Guangdong Securities Limited had any direct or indirect interests in any assets which
have been acquired or disposed of by, or leased to, or which are proposed to be acquired
or disposed of by, or leased to, any member of the Enlarged Group since 31 March 2009,
the date to which the latest published audited financial statements of the Group were made
up.
(c) As at the Latest Practicable Date, none of the Directors and AMEC Minproc Limited had
any interest, direct or indirect, in the promotion of, or in any assets which had been within
the two years immediately preceding the issue of this circular acquired or disposed of by
or leased to, any member of the Group.
11. MATERIAL CONTRACTS
The following contracts (not being contracts entered into in the ordinary course of business) were LR14.66(10)
App 1B-42
entered into by members of the Enlarged Group within the two years immediately preceding the Latest App 1B-43
App 1B-Note 2
Practicable Date and are, or may be, material:
(a) the placing agreement dated 30 June 2008 entered into between the Company and Kingston
Securities Limited as placing agent in relation to the placing of the convertible redeemable
notes issued by the Company in the aggregate principal amount of HK$100,000,000 due on
the date immediately before the third anniversary of the date of issue (such date to be
inclusive);
(b) an agreement dated 11 February 2009 entered into between Core Business Investments Inc.,
a wholly-owned subsidiary of the Company, as purchaser and East Dynamic Holdings
Limited as vendor in relation to the sale and purchase of the entire issued share capital of
Ocean Capital Investments Limited and the shareholder’s loan owed by Ocean Capital
Investments Limited to the vendor for considerations of HK$25,196,702.74 and
HK$35,703,297.26, respectively;
— VIII-5 —
(c) a memorandum of understanding dated 13 February 2009 entered into between Leadton
Corp., a wholly-owned subsidiary of the Company, as purchaser and 上海虹口世紀大酒店
有限公司 (New Century Hotel Shanghai Company Limited*) as vendor in relation to the
sale and purchase of the 上海虹口世紀大酒店 (New Century Hotel Shanghai*) for earnest
money in the amount of HK$10,000,000 payable by Leadton Corp. to
上海虹口世紀大酒店有限公司 (New Century Hotel Shanghai Company Limited*);
(d) an underwriting agreement dated 23 February 2009 entered into between the Company and
Kingston Securities Limited in relation to the Rights Issue (as amended by side letters dated
6 March 2009 and 13 May 2009 entered into between the same parties);
(e) the sale and purchase agreement dated 24 April 2009 (“OZ Acquisition”) entered into
between OZ Minerals Agincourt Pty Ltd, OZ Minerals Limited, Maxter Investments
Limited and the Company for the acquisition of the entire share capital of OZ Minerals
Martabe Pty Ltd by Maxter Investments Limited at a total consideration of US$216.9
million;
(f) the option agreement dated 24 April 2009 entered into between Polytex Investments Inc.,
Acewick Holdings Limited, G-Resources and the Company for the acquisition of the entire
share capital of Maxter Investments Limited by Polytex Investments Inc. at a consideration
of the aggregate sum of (i) the total consideration paid for the OZ Acquisition and (ii)
US$10 million which was satisfied by the allotment and issue of the Shares of G-Resources
Group Ltd. (as supplemented by a side letter dated 12 May 2009 and the supplemental
option agreement dated 27 May 2009);
(g) the Arrangement Agreement;
(h) the Chariot Placing Agreement;
(i) the agreement dated 11 March 2010 entered into by CST Minerals Pty Limited, the
Company and Cape Lambert Resources Limited for the acquisition of the fully paid
ordinary shares in Cape Lambert Lady Annie Exploration Pty Ltd. for a consideration of not
more than A$135 million (equivalent to approximately HK$965 million);
(j) the conditional placing agreement dated 25 March 2010 entered into between the Company,
Deutsche Bank AG, Hong Kong Branch and Morgan Stanley International in relation to the
proposed placing of up to 7,800,000,000 new Shares by Deutsche Bank AG, Hong Kong
Branch and Morgan Stanley International at a placing price of not less than HK$0.20 per
Share;
(k) the Chariot Subscription Agreement;
(l) the subscription agreement dated 29 March 2010 and entered into between the Company
and Mr. Chiu relating to the proposed subscription for 780,000,000 new Shares by Mr. Chiu
— VIII-6 —
at a subscription price equivalent to the final placing price per Share under paragraph (j)
above; and
(m) the share option agreements entered into between the Company and Mr. Barber on 19 March
2010, and between the Company and each of (i) Mr. Chiu, (ii) Mr. Hegarty and (iii) Mr. Hui
Richard Rui, respectively, on 24 March 2010, for subscription for the Shares to be allotted
and issued upon exercise of share options granted to Mr. Barber, Mr. Chiu, Mr. Hegarty and
Mr. Hui Richard Rui, respectively, at an exercise price of HK$0.20 per Share.
Save for the aforesaid material contracts, no material contract has been entered into by the
Enlarged Group (not being contracts entered into in the ordinary course of business) within two years
immediately from the Latest Practicable Date which is or may be material.
12. MISCELLANEOUS
(a) The company secretary of the Company is Mr. Chow Kim Hang, a practicing solicitor in App 1B-35
Hong Kong.
(b) The registered office of the Company is located at Ground Floor, Caledonium House, Mary App 1B-36
Street, P.O. Box 1043, George Town, Grand Cayman, Cayman Islands. The head office and
principal place of business is located at Room 4510, 45th Floor, China Resources Building,
26 Harbour Road, Wanchai, Hong Kong.
(c) The Hong Kong branch share registrar of the Company is Tricor Tengis Limited, 26th Floor,
Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(d) The English text of this circular shall prevail over the Chinese text.
13. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during normal business hours
on any weekday (except Saturdays and public holidays) at Room 4510, 45/F, China Resources
Building, 26 Harbour Road, Wanchai, Hong Kong, from the date of this circular up to and including
the date of the EGM:
(a) the memorandum and articles of association of the Company; App 1B-43(1)
(b) the annual reports of the Company for the two years ended 31 March 2008 and 2009; App 1B-43(3)
(c) the letters of consent from each of Deloitte Touche Tohmatsu, PricewaterhouseCoopers
LLP, AMEC Minproc Limited, Greater China Appraisal Limited and Guangdong Securities
Limited;
(d) the accountant’s report on the Chariot Group prepared by PricewaterhouseCoopers LLP, the App 1B-43(5)
text of which is set out in Appendix III to this circular;
— VIII-7 —
(e) the report on the unaudited pro forma financial information of the Enlarged Group prepared App 1B-43(3)
by Deloitte Touche Tohmatsu, the text of which is set out in Appendix IV to this circular;
(f) the technical report prepared by AMEC Minproc Limited on the Mina Justa Project, the text
of which is set out in Appendix V to this circular;
(g) the valuation report prepared by Greater China Appraisal Limited on the Mina Justa Project,
the text of which is set out in Appendix VI to this circular;
(h) copies of the material contracts referred to in section 11 of this appendix to this circular; App 1B-43(2)(b)
(i) a copy of each of the circular issued by the Company pursuant to the requirements set out
in Chapters 14 and/or 14A of the Listing Rules which has been issued since 31 March 2009,
being the date of which the latest published audited accounts of the Group were made up;
and
(j) this circular. App 1B-43(6)
— VIII-8 —
NOTICE OF EXTRAORDINARY GENERAL MEETING

(Stock Code: 985)
NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Sci-Tech Holdings
Limited (the “Company”) will be held at Concord Room II-III, 8th Floor, Renaissance Harbour View
Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Tuesday, 1 June 2010 at 10:00 a.m. or
any adjournment thereof for the purposes of considering and, if thought fit, passing with or without
amendment or modification, the following resolutions:
ORDINARY RESOLUTIONS
1. “THAT:
(a) the arrangement agreement dated 28 February 2010 and entered into among (i) China
Sci-Tech Minerals Limited (formerly known as 0874791 B.C. LTD.), an indirect
wholly-owned subsidiary of the Company (“China Sci-Tech Minerals”), (ii) Chariot
Resources Limited (“Chariot”) and (iii) the Company (the “Arrangement
Agreement”) (a copy of which has been produced to the meeting, marked “A” and
initialled by the chairman of the meeting for the purpose of identification) and more
particularly described in the circular of the Company dated 30 April 2010 (the
“Circular”) in relation to the implementation of the plan of arrangement for the
purchase of all the issued and outstanding common shares in the capital of Chariot
(the “Plan of Arrangement”) subject to the terms and conditions set out therein and
all transactions contemplated thereunder be and are hereby approved, ratified and
confirmed;
(b) any one director of the Company be and is hereby authorised for and on behalf of the
Company to execute from time to time all such documents, instruments, agreements
and deeds and to do all such acts, matters and things as he/she may in his/her absolute
discretion consider necessary or desirable for the purpose of and in connection with
the implementation of the Plan of Arrangement, the Arrangement Agreement and the
transactions contemplated thereunder and to agree to such variations of the terms of
the Arrangement Agreement as he/she may in his/her absolute discretion consider
necessary or desirable; and
(c) any one director of the China Sci-Tech Minerals be and is hereby authorised for and
on behalf of the China Sci-Tech Minerals to execute from time to time all such
documents, instruments, agreements and deeds and to do all such acts, matters and
— N-1 —
things as he/she may in his/her absolute discretion consider necessary or desirable for
the purpose of and in connection with the implementation of the Plan of Arrangement,
the Arrangement Agreement and the transactions contemplated thereunder and to
agree to such variations of the terms of the Arrangement Agreement as he/she may in
his/her absolute discretion consider necessary or desirable.”
2. “THAT:
(a) the directors of the Company (the “Board”) be and are hereby authorised and granted
specific mandate (the “Chariot Specific Mandate”) (information relating to the
Chariot Specific Mandate is more particularly described in the Circular) to allot and
issue up to 31,200,000,000 new shares of the Company (the “Chariot Placing
Shares”) pursuant to the proposed placing of the Chariot Placing Shares to individual,
corporate and/or new institutional investors (the “Chariot Placing”) in accordance
with the placing agreement dated 25 March 2010 and entered into among (i) the
Company, (ii) BOCI Asia Limited and (iii) Morgan Stanley & Co. International plc
(the “Chariot Placing Agreement”) (a copy of which has been produced to the
meeting, marked “B” and initialled by the chairman of the meeting for the purpose of
identification);
(b) contingent on the Board resolving to issue all or any part of the new shares pursuant
to sub-paragraph (a) above, the Board in exercising (from time to time) the Chariot
Specific Mandate in respect of all or any part of the Chariot Placing Shares be and is
hereby authorised to execute all such documents, instruments, agreements and deeds
and to do all such acts, matters and things as he/she may in his/her absolute discretion
consider necessary or desirable for the purpose of and in connection with the
allotment and issue of all or any part of the Chariot Placing Shares including (without
limitation):
(i) determine the number of Chariot Placing Shares to be issued in each such
exercise of the Chariot Specific Mandate in respect of the Chariot Placing Shares
(each an “Exercise”); and
(ii) determine the issue price of the Chariot Placing Shares by reference to the
relevant market consideration, including the prevailing market conditions, the
prevailing market price for the Chariot Placing Shares and investor demand for
the Chariot Placing Shares at the relevant time of each Exercise, provided that
the issue price shall not be less than HK$0.20 per Chariot Placing Share; and
(c) any one director of the Company be and is hereby authorised for and on behalf of the
— N-2 —
the implementation of the Chariot Specific Mandate, the Chariot Placing Agreement
and the transactions contemplated thereunder and to agree to such variations of the
terms of the Chariot Placing Agreement as he/she may in his/her absolute discretion
consider necessary or desirable.”
3. “THAT:
(a) the subscription agreement dated 29 March 2010 (the “Chariot Subscription
Agreement”) and entered into between (i) the Company and (ii) Mr. Chiu Tao (“Mr.
Chiu”) (a copy of which is tabled at this meeting and marked “C” and initialed by the
chairman of this meeting for the purpose of identification) and more particularly
described in the Circular, pursuant to which Mr. Chiu has agreed, among other things,
to subscribe for 3,120,000,000 new shares of the Company (the “Chariot
Subscription Shares”) under the Chariot Placing at the Subscription Price and all
transactions contemplated thereunder be and are hereby approved, ratified and
confirmed;
for the purpose of this resolution:
“Subscription Price” means the final subscription price per Chariot Subscription
Share (exclusive of brokerage, fee and levy, if any) at which the Chariot Subscription
Shares are to be subscribed by Mr. Chiu, which shall be the same as the placing price
for the Chariot Placing and which shall not be less than HK$0.20 per Chariot
Subscription Share (exclusive of brokerage, trading fee and transaction levy, if any);
and
the implementation of the Chariot Subscription Agreement and the transactions
contemplated thereunder and to agree to such variations of the terms of the Chariot
Subscription Agreement as he/she may in his/her absolute discretion consider
necessary or desirable.”
4. “THAT:
(a) subject to the approval of the Registrar of Companies in Cayman Islands, the name of
the Company be changed to “CST Mining Group Limited” and that “中科礦業集團有
限公司” be adopted for identification purpose only as the Chinese name of the
Company; and
— N-3 —
Company to do all such acts and things and to execute all such documents and deeds
as he/she may in his/her absolute discretion consider necessary and desirable in order
to effect such change of name and adoption of Chinese name.”
By order of the Board

Hui Richard Rui
Executive Director and General Manager
Hong Kong, 30 April 2010
Notes:
1. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and vote on behalf of him. A proxy needs not be a member of the Company.
2. A form of proxy for use at the meeting is enclosed.
3. To be valid, a form of proxy, together with the power of attorney or other authority, if any, under
which it is signed or a certified copy of that power or authority must be lodged with the
Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury
Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event no later
than 48 hours before the time appointed for holding the meeting or any adjournment thereof.
— N-4 —

Mina Justa

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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

CHINA SCI-TECH HOLDINGS LIMITED App 1B- 1

(1) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE ACQUISITION OF

Placing Agents of the Company in connection with the Chariot Placing

Certain information contained in this circular constitutes forward-looking information. Investors

Currency and Exchange Rates

Letter from the Board ................................................... 11

Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Letter from Guangdong Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Appendix I — Audited Financial Information of the Group . . . . . . . . . . . . . . . . . I-1

Appendix II — Unaudited Financial Information of the Group . . . . . . . . . . . . . . . II-1

Appendix III — Accountant’s Report on the Chariot Group . . . . . . . . . . . . . . . . . . III-1

Appendix IV — Unaudited pro forma Financial Information

Appendix V — Technical Report on the Mina Justa Project . . . . . . . . . . . . . . . . . V-1

Appendix VI — Valuation Report on the Mina Justa Project . . . . . . . . . . . . . . . . . VI-1

Appendix VII — Management Discussion and Analysis ...................... VII-1

Appendix VIII — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VIII-1

Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N-1

“A$” Australian dollars, the lawful currency of Australia

“Andes” Andes Resources Compañia Minera S.A.C., a corporation

“Appointment Announcement” the announcement of the Company dated 25 March 2010 in

“Arrangement Resolution” the special resolution of Chariot approving the Plan of

“associate(s)” has the meaning ascribed to it under the Listing Rules

“BCBCA” the Business Corporations Act (British Columbia) and the

“Board” the board of Directors

“BOCI” BOCI Asia Limited, a corporation licensed for Type 1

“C$” Canadian dollars, the lawful currency of Canada

“Canadian Court” the Supreme Court of British Columbia

“Canadian GAAP” General Accepted Accounting Principles of Canada

“Chariot” Chariot Resources Limited (formerly known as Hyperion

“Chariot Acquisition Completion the conditions precedent of the Arrangement Agreement

“Chariot Board” the board of directors of Chariot

“Chariot Circular” the notice of the Chariot Meeting and accompanying

“Chariot Consideration” the consideration for the Chariot Acquisition

“Chariot Group” Chariot and its subsidiaries

“Chariot Meeting” the special meeting of the Chariot Shareholders, including

“Chariot Option(s)” as at the date of the Arrangement Agreement, the 16,529,190

“Chariot Placing Agents” BOCI and Morgan Stanley International

“Chariot Placing Completion” completion of the Chariot Placing

“Chariot Purchaser” China Sci-Tech Minerals Limited (formerly known as

“Chariot Shareholder(s)” holder(s) of Chariot Sale Share(s)

“Chariot Subscription Shares” 3,120,000,000 new Shares to be subscribed by Mr. Chiu in

“closed corporation” a special kind of corporation that, in accordance with the

“closed corporation by means of a closed corporation incorporated by means of a public deed,

“CIRA” Certificate of Nonexistence of Archaeological Remains

“Company” China Sci-Tech Holdings Limited, a company incorporated in

“CRU” an independent business analysis and consultancy group

“DFS” the definitive feasibility study on the Mina Justa Project

“Director(s)” the directors of the Company

“Dissenting Chariot registered Chariot Shareholder(s) who dissent in respect of

“Dissent Rights” the rights of dissent in respect of the Plan of Arrangement

“EGM” the extraordinary general meeting of the Company to be

“Enlarged Group” the Group immediately after completion of the Chariot

“ESIA” the Mina Justa Environmental and Social Impact Assessment

“Financial Advisers” BOCI and Morgan Stanley Asia

“G-Resources” G-Resources Group Limited, a company incorporated in

“Group” the Company and its subsidiaries from time to time

“Guangdong Securities” or Guangdong Securities Limited, a licensed corporation to

“HK$” Hong Kong dollars, the lawful currency of Hong Kong

“Independent Board Committee” an independent committee of the Board comprising Mr. Yu

“Independent Shareholders” all Shareholders

“JORC Code” Australasian Code for Reporting of Identified Mineral

“Korean Partners” Korea Resources Company and LS-Nikko Copper Inc.

“Last Trading Date” 26 February 2010