MEMORANDUM

To: Patricia Tirschmann

From: Gerry Katchen

cc: Chris Airo, Godfrey Mallya, Stanslaus William, Gerry Katchen

Date: October 26, 2011

Regarding: October 2011 Month End Report – Nachingwea Project

SUMMARY

– As of Oct 26th, 1,654m in 8 new drill holes (including in progress) plus one one drill
hole extension (NAD11-221ext).
– 1,683 ddh samples sent to lab totaling 3,553.95kg.
– 109 Soil samples sent to chemex (targeting up plunge surficial extent of Sleepy G).
– Third drill arrived and started drilling day shift only Monday Oct 24th.

NTAKA

NTAKA DRILLING (Highlights)

NAD11-250: (8883200N) Hole positioned 100m up dip from NAD11-242. Hole was second
attempt (twinning hole 249). Hole was abandoned at 85.85m due to ground conditions. HQ
Core barrel stuck in hole, Ngwena’s charge. Hole has been completely redesigned and will
be drilled from across the river bank.

NAD11-251: (8883093N): Hole positioned as a 100m down dip intercept from NAD11-243,
targeting potentially large low grade mineralization (150m down plunge of 024). The hole
intercepted apparent sleeping giant tenor sulphides at depth from 482.35 – 499.75m
(17.4m): 4-6% sulphides

NAD11-252: (8883100N) Hole positioned to test two BHEM plates derived from NAD08-171
EXT. The preliminary plates, with a conductance fo 164 siemens (upper) and 1000 siemens
(lower) were possibly mineralization extending down from I Zone to Sleepy Giant area. The
upper plate was explained by a massive sulphide vein (Po rich). The drillhole failed to
intercept anything conductive at the lower plates target depth. However, the hole did
intercept Po rich + strong Cpy and moderate Pn 50m lower. The intercept was from 397.8 –
412.75 (14.95m): averaging 4-8% sulphides.

NAD11-253: (8883300N) Hole positioned 50m up dip from high grade hole 234. The hole
was targeting a questionable area between a zone of high grade and a dead zone 100m up
dip. The hole did encounter several zones of sulphidic mineralization albeit not as high grade
as NAD11-234.
207.8 – 221 (13.2m): 4-6% sulphides of apparent good tenor
232 – 239 (7.0m): 4-6% sulphides of apparent good tenor
308.05 – 333.6 (25.55m): 4-6% averaged sulphides of apparent good tenor.

NAD10-221EXT: (8883494N): Hole was extended to test conceptual target of sleeping giant
mineralization possibly flattening because the current wireframed zone appears to be an
abrupt change of dip. The extension of the hole was from 298.8-424.6m, the hole primarily in
metasediments the entire way down, appearing to drill down a limb of a fold. The hole
intercepted and ended in ultramafics without delivering any significant sulphide intercepts.
NAD11-254 was then decided upon to prove change of dip is true.

NAD11-254: (8883491N) Hole was 50m up dip from 220 and was designed to test abrupt
change of mineralization dip between NAD10-220 and 221. The hole intersected several
zones of mineralization including the sleeping giant mineralization at the previously
wireframed depth-confirming of the abrupt change.
150 -167.35 (17.35m): 5-8% apparent high tenor sulphides, coorelating to kakabeka zone.
269 – 279.25 (10.25m): 4-6% sulphides of sleepy g tenor, coorelating to previous wireframe
zone.

NAD11-255: (8883300N): Hole positioned 50m down dip of NAD07-023 and updip of
NAD11-231 to solve issue between very large low grade mineralization in 023 and almost
dead mineralization in 231. Hole is in progress at current state.

NAD11-256: (8883900N): Hole designed as a 10-115m down dip intercept from hole
NAD11-240. Hole is intended to test down dip potential of Kakabeka zone and the newly
discovered ‘Flipper’ zone. Hole is in progress at current state.

NAD11-257 (8883700N): Hole designed as a 100m up dip intercept from previous hole
successful hole extension NAD08-127. Hole is intended to test up dip potential of Sleeping
Giant zone that has folded back down and now may possibly link to Ntaka 12C. Hole is in
progress at current state.

GEOPHYSICS

SURFACE SAMPLING/ PROSPECTING

GEOPHYSICS

FIELD LOGISTICS

Water is currently being hauled from Ruponda as a new contract has been completed. The
cost is 12,000Tsh per 7,000L of water. In general, when the truck is hauling, we are allowed
two trips per day, one for Ngwena camp and one to TanDrill camp. Water is hauled until all
storage capacity is full and then the truck is sent back to Nachingwea. All measures to
conserve water are being stressed upon all people.
LOCAL ISSUES

Illegal Malachite Mining in the Chilalo PL6073/2009.

Illegal malachite mining continued through out the month in Chilalo licence PL6073/2009.
The number of illegal miners has been decreasing with time. The government hasn’t been
able to stop the mining activity as yet.

BASELINE STUDIES
MTL Consulting Engineers carried out baseline studies on the Ntaka Hill Nickel Project in the
October month. Surveys conducted by MTL included cost model, water survey, fish survey,
hydrological and hydrogeological survey, fauna and flora, soil and air quality survey. A total
of 30 MTL personnel were involved with the survey.

PERSONNEL & PERSONNEL DEVELOPMENT

Wallace Bailale was employed by Ngwena to help with the third drill. Wallace employment
with Ngwena started on the 7thOctober 2011. Wallace is being trained for the job.
.

ENVIRONMENTAL, HEALTH AND SAFETY

Potable water for camp use is still a problem in the area. The major source of water is
located ~31km southeast of the Ntaka Hill Nickel Project. Conservation of water is being
stressed and monitored to avoid water loss.