PULA GROUP LLC

ESTIMATION RESULTS - APRIL 2018

Prepared for:

Pula Group Tanzania

rd
3 Floor, International House Unit 11
Shaaban Robert St/Garden Avenue
Dar es Salaam
Tanzania

22 April 2018
DMT Kai Batla (Pty) Ltd
(2013/204015/07)

Physical Address

26 Republic Road
Bordeaux
Randburg
2194

Postal Address

P. O. Box 41955
Craighall
2024
South Africa

Telephone No.: +27 11 781 4548

Fax No.: + 27 86 545 2720

Website: www.dmt-group.com

Mr. Sodhie Naicker

Pr. Nat. Sci., BSc. Hons. Geology
Sodhie.Naicker@dmt-group.com
Contact Person

DMT Kai Batla (Pty) Ltd

P.O Box 41955, Craighall, 2024, South Africa
Tel +27 11 781 4548 / Fax + 27 86 545 2720

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 1

 1. OBJECTIVE

The Pula Group, LLC, a Pan African Resource Company born out of the US with offices in Boston
(USA), Dar es Salaam (Tanzania), and Johannesburg (South Africa), (the Company or Client)
requested DMT-Kai Batla to compliantly estimate the percentage of Total Graphitic Carbon
(“TGC”) mineral resources for their Pula Graphite deposit located in southern Tanzania.

The objective of this memorandum is to present the results of the mineral estimation as well as to
provide some basic understanding on the methodology employed in the creation of the April 2018
mineral resource model for the Pula deposit.

2. Data Collection

Data was received from the Client as Excel™ spreadsheets and PDF files. The data comprises
reverse circulation drillhole data (9 drillholes were completed) and trench data (30 trenches were
completed). The trenches were individually mapped, to scale, and presented as PDF files.
These were subsequently digitized and manipulated into three dimensional space using
AutoCAD™ and finally imported into Datamine Studio 3.0™.

3. Geological Modeling

Wireframes were constructed using the lithologies tagged within the drillhole data and trench data
files. Strings were drawn separating host rock from mineralized zones on a trench/drillhole basis;
see Figure 1. This was done by displaying the drillhole/trench data and reviewing the entire
model on a cross-sectional basis. Three separate lithologies were modeled:

• GSC: graphitic schist unit;

• DGSC: the disseminated graphitic schist unit;
• PEG: barren pegmatite.

The sections were extended 1000m down-dip at a static angle of -45° in order to ensure that
there would be sufficient volume for block-filling during the estimation phase. The dip angle was
taken from the mapped trench data. Given that data was received for the complete Zone A and
partial Zone B, only these 2 areas were modeled and estimated.

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 2

Figure 1: 3D View of Wireframe Construction Strings

Once the strings were finalized, the string set was then wireframed into solids; see Figure 2.

Figure 2: 3D View of Modeled Wireframes

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 3

The wireframes were then discretized with blocks 10m x 10m x 2m (XYZ) in size using the TRIFIL
routine in Datamine Studio 3.0™.

4. Data Preparation and Methodology

Naïve statistics were completed on drillhole and trench data including trimming (i.e. outlier)
statistics. The entire dataset was then composited into regular 1m composites.

Directional variography was completed on the composited data in order to assess the existence
of anisotropism; none was found. Omni directional variograms were then molded with the nugget
contribution derived from the down-hole variograms.

The data was imported into GSLIB 1 for estimation purposes. Inverse distance squared was
selected as the final estimation method of interpolating TGC values into a three-dimensional
blockmodel. The block size chosen was identical to that discretizing the geological model for both
models, 10 x 10 x 2 meters (Northing x Easting x Elevation). Within the project area there were
210 rows of blocks in the X direction, 300 columns of blocks in the Y direction and 576 stacks of
blocks in the Z direction, for a total of 36,288,000 blocks. The project area consists of an area
from: 8912200N and 8915200N, 489300E to 491400E, and -850El to 300El. Only the complete
Zone A and a partial Zone B was estimated in this exercise.

A minimum of 2 and a maximum of 5 composites were utilized for an estimate. Inverse distance
2
squared (“ID ”) was performed with a discretization of 2 x 2 x 1 (XYZ). The search radii used
approximately equaled the variogram ranges in the plane of the deposit. A second estimation run
was completed using a minimum of 1 and a maximum of 3 composites with search radii
approximately 2.5x the initial series of runs. The search strategy utilized in the ID2 runs is shown
in Table 1.

Table 1: Estimation Search Strategy

Principal Direction Minor Direction Vertical Direction
Variable Radius Azimuth/Dip Radius Azimuth/Dip Radius Azimuth/Dip
Meters Degrees Meters Degrees Meters Degrees
TGC 250.0 90°/0° 250.0 180°/-45° 10.0 180°/+45°

The search ellipsoid was oriented at an azimuth of 90° NE with its’ primary axis having a radius of
250m whilst down-dipping at 45° SE with a radius of 250m and having a vertical radius of 10m
(vertically through the deposit). The final blockmodel is shown in Figure 3; the estimated blocks
are colored according to their estimated TGC values and a legend is shown.

1
GSLIB: Geostatistical library from Stanford University, USA.

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 4

Figure 3: 3D View of Final Estimated Blockmodel

5. Specific Gravity

Due to data paucity, the specific gravities were not estimated for this exercise. The mean SG
value of 2.70 was used to convert volumes into tonnages. This mean value was derived from 51
separate SG measurements completed at Bureau Veritas laboratory in Johannesburg, South
Africa.

6. Results

Results were tabulated at various TGC thresholds and are presented below for Indicated Mineral
Resources and for Inferred Mineral Resources. The Indicated Mineral Resources are shown in
Table 2 and the Inferred Mineral Resources are shown in Table 3.

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 5

Table 2: Indicated Mineral Resources
TGC
%
Cut-off Tonnes
TGC
(%)
0.00 50,950,080 4.62
1.00 44,405,280 5.24
2.00 40,138,200 5.64
3.00 34,663,680 6.13
4.00 25,576,560 7.06
5.00 17,646,120 8.23
6.00 11,696,400 9.64
7.00 8,225,820 11.00
8.00 5,570,640 12.67
9.00 4,393,440 13.79
10.00 4,393,440 13.79

Table 3: Inferred Mineral Resources

TGC
%
Cut-off Tonnes
TGC
(%)
0.00 107,958,420 3.91
1.00 88,906,140 4.67
2.00 75,982,860 5.19
3.00 61,993,080 5.81
4.00 43,843,140 6.75
5.00 21,881,880 8.90
6.00 14,810,040 10.61
7.00 10,290,780 12.39
8.00 6,969,780 14.77
9.00 6,072,840 15.71
10.00 4,571,640 17.70

7. Conclusion

The mineral resource blockmodel for the Pula deposit is now complete. Statistics demonstrate the
final estimated inverse distance model is fairly robust and adequately mimics the trends observed
in the original dataset for the deposit.

A more complete report detailing the methodology and the parameters and statistics estimated
will be made available in the final Competent Persons Report for the said project.

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 6

Yours Sincerely,

Competent Person Director

Dexter S. Ferreira DMT Kai Batla
BSc. (Geology), BEng. (Mining), Pri.Sci.Nat. Sodhie Naicker
BSc. (Geology), Pri.Sci.Nat.

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 7

 8. Qualifications, Experience and Independence

The author of this field report, Mr. Dexter Ferreira, is a senior geostatistician with over 25 years’
experience in project evaluation internationally, including extensive involvement with mineral
projects throughout South America and Africa. He is a member of the South African Council for
Natural Scientific Professions, and qualifies as an ‘Expert’, ‘Competent Person’ and ‘Qualified
Person’ as defined in National Instrument 43-101 and the JORC Code.

The author of this report has not or has not previously had any material interest in the Clients’
Company or the mineral properties in which the Client has an interest. The relationship with the
Client is solely one of professional association between client and independent consultant. This
report is prepared in return for professional fees based upon agreed commercial rates and the
payment of these fees is in no way contingent on the results of this report.

DMT Kai Batla (Pty Ltd - Pula Estimation – Memorandum 8