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ULAULO - MELEKA EXPLORATION LICENSE

1. Introduction

The Ministry of Mines of the Federal Democratic Republic of Ethiopia Issued the Ulaulo – Meleka
Exploration License (UMEL) to MIDROC Gold Mine PLC on 04 March, 2005. With subsequent renewal
and extension of the license till the latest exploration license granted for 04 March, 2013 to 03 March,
2014.

This report discusses the exploration work conducted two months of January and February, 2014, the
practiced physical activities, laboratory analytical results, derived conclusions and forwarded
recommendations.

1.1 Objective

The main objective of the 2013/14 exploration program was to outline and generate specific potential
target area/s within the Werseti – Mormora exploration target area, Ulaulo – Meleka Exploration License
(UMEL).

1.2. Location and Access

The location of the project area is found at about 530km from Addis Ababa. The exploration area is
located between Werseti (south limit) and Mormora River (north limit), east of Suki small town (located at
about 10km east of Megado town), Oddo Shakiso Woreda, Guji Zone of Oromia National Regional
State.

The exploration target area is bounded by the geographic longitude and latitude coordinates tabulated in
Table-1 (Ref. Location map and. table – 1 below). The main road from Addis to Kibremengist, about
472km, is Asphalt road, and the remaining road from Kibremengist to shakiso (20km) is currently being
up graded to asphalt road.
.

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Fig – 1: Location map of the area

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2. Exploration Methodology

The following exploration methodologies were adopted for Werset – Mormora Exploration Project:

1. Geological traverse were set at approximately one km interval normal to the general structural
trend of the area, and whenever necessary traverse half way between the traverse lines on either
sides.
2. Random rock chip, hand specimen and grid soil samples were collected for laboratory
examination (chemical analysis) and display.
3. Profile lines of 1000mt long each were arranged in 200mt line and ten meters picket intervals
respectively for integrated follow up geological, geophysical and geochemical exploration works.
4. Gridded IP/Res geophysical survey at 200m line interval and at 10m reading interval
5. Previous geological maps and related reports were reviewed when setting the methodologies.
For field data recording GPS, geological hammer, hand lenses, surveying and geophysical
equipments were used.
6. Samples were analyzed for gold and base metal mineralization in Legedenbi laboratory,
7. Field and laboratory data were processed compiled and interpreted.

3. Previous Works
The following companies have conducted ground prospecting exploration, geophysical survey and air
born electromagnetic survey in Adola Area in the past: AGEP and TMEP (1982–1993), Canyon
Resource (1997-1980), MIDROC Gold Mine PLC. (2004–20100), Training for Minerals Exploration
Project (TMEP), and Geoterrex–Deghem of Canada (1993-94).

During the previous exploration work, extensive access road construction, geological mapping, HMC,
rock chip and soil sampling and trenching works were carried out. The trenches have exposed intensely
sheared, silicified, sericitized and kaolinized quartz mica schist, graphitic quartzite, graphitic schist,
gabbro, talc tremolite schist, amphibolites/amphibole schist and altered meta–granodiorite.

The previous ground prospecting work identified several geochemical anomalies within and in the
surroundings of Ulaulo – Mormora Area. In 2005 and 2006 intensive rock chip samples, channel
sampling was conducted at Werset where 28 g/t gold content was obtained from trench sample
associated with quartz vein. Since then to present date, the quartz veins in the area are quarried,
crushed, milled and panned for gold using manual labor and hand tools by local people.

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MIDROC Gold Mine PLC has conducted integrated geological, geochemical and geophysical exploration
works accompanied by drilling exploratory boreholes between 2004 - 2010 in the Legedembi Exploration
License (LEL) and Ulaulo – Meleka Exploration License (UMEL). The present Werseti–Mormora
exploration Target area is part of Ulaulo–Meleka Exploration License (UMEL).

In 2008, about 18 bore holes with a total length of 2826m were drilled at Werseti quartz veins. Except a
few chip samples from quartz vein and vein let, most chip samples have shown gold results below
detection limit. Samples collected from two test boreholes in Ulaulo–Mormora Area have shown
presence of gold. In general, occurrences of gold mineralization in the Walena–Ulaulo Area were
reported by previous workers and believed to be a continuation of the East Sakaro gold deposit and
genetically a vein–type mineralization.

Table-1: Gold results from previous Trenches indicating occurrences of gold mineralization in
the target area, north of the Werseti Quartz vein.

S. No Trench Gold Width Remark


1 AWTR-3 0.77g/t ----- Quartz vein related
2 AWTR – 24 0.5 ” 7m Quartz vein hosted
3 AWTR – 25 0.5 ” 9m Quartz vein hosted
1.3 “ 1” “ “ “
1.7 “ 1” “ “ “
1.4 “ 1” “ “ “
4 AWTR – 27 2.0g/t 2m Related to quartz vein
5 AWTR – 29 5.2 ” 1” Quartz vein hosted

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Fig – 2: Geological map showing previous works and findings

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4. Conduced Exploration Works

4.1 Access road clearing

Bulldozer and backhoe were not available for the construction of the access road. A total of 9km road
from southern part through Worseti to the northern part of the project area was cleared and rehabilitated
using labor force.

4.2. Geological mapping and data collection

Geological mapping at 1:10,000scale was carried out. About 12km2 area was covered by geological
mapping. Different lithologic rock units, structural elements (such as joints, fracture systems of different
scale, metamorphic fabrics, etc), induced hydrothermal alterations were identified during the mapping
process.

4.3. Geochemical Soil and rock Chip sampling

Rock chip, loam/soil, as well as various representative samples were collected during the mapping.
During the geological mapping, about 62 chip/grab rock samples (112.7% of the plan) were collected
from different rock types. 41 Loam/soil samples were collected at 40mts interval along four consecutive
profile lines set at 200mt grid interval in the south central part of the project. HMC samples were
collected from head waters and first order streams.

4.4. Line cutting

Profile line cutting was conducted in two selected sites, in the north central vein zone and in the
southern part of the project area where the previous trenches and chip samples have shown
occurrences of gold mineralization.

4.5. IP/Res geophysical exploration survey conducted

IP/Res geophysical survey was conducted in the south central part of the present project area. This was
under taken along 4 consecutive gridlines laid down at 200mt interval at 10mt observation points.
Geophysical survey was not conducted in the north central part due to access road limitation.

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5. Geology
5.1. Regional geology

The lithological and structural set up of the Adola Metamorphic Belt is built up of three Proterozoic Age
N–S running nearly parallel gneissic terrains separated by two low grade volcano–sedimentary rocks
with associated basic–ultra basics, late to post tectonic granitoide intrusives and related pegmatite veins.
The two low grade volcano–sedimentary domains are the Megado and Kenticha Greenstone Belts from
west to east respectively.

The gneissic terrains occupy anticlinal structures, while the greenstone belts lie within narrow,
superimposed graben–synclinal structures flanking the gneisses. The contact between the gneissic
domain and low grade volcano–sedimentary greenstone belts are tectonic contacts marked by trust
faults and sheared zones (brittle-ductile deformation shear zones).

The graben structures are controlled by deep-seated faults and accompanied by basic, sub marine
volcanism coupled with deposition of marine sediments. In turn, this was followed by emplacement of
basic-ultra basic intrusions along suture zones (Kozyrev et al, 1985).

Recent investigation works have shown that the sedimentary rocks of Adola Group (Upper Complex)
have continental affinities near the western thrust contact, while those rocks at the central part of the
Megado Greenstone Belt and near the eastern thrust contact have deep–seated marine affinities.
According to different workers, the Adola Area has under gone three major deformation events. The
deformation cycles are described below.

 D1 is marked by thrusting and folding that has resulted in the development of south east
verging thrusts and associated recumbent F1 – folds, together with a related penetrative
regional scale schistocity (S1) axial planar to F1 – folds.
 D2 – Deformation that has refolded the D1 structures and produced major up-right F 2 folds and
related reverse and Transgressional shears and associated drag folds that generally developed
on the limbs of F2 –folds.

 Sinstral strike-slip shear zones, which were accompanied by emplacement of quartz veins and
associated gold mineralization.

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5.2. Local Geology of the Project Area

The geological association of the target area comprises meta-volcano–sedimentary, acidic to


basic intrusive rocks and late stage hydrothermal quartz veins and vein let.

The meta-volcanic units consist of meta-basalt / amphibole schist, tremolie-actinolite-chilorite


schist; and the meta-sediment includes quartzite, graphitic quartzite, graphitic–quartz–mica
schist, and the intrusive rocks are gabbro amphibolites; meta-granodiorite, granodiorite, and
quartz vein and vein lets, from the oldest to youngest respectively.

5.2.1. Amphibolite/Amphibole Schist

The amphibole schist is green to dark green, uniform, fine to very fine in grain size; hard or compact,
exhibits well developed schistocity. It is very difficult to identify the individual mineral constituents, but
secondary minerals such as chlorite and epidote can be seen in hand specimen.

Concordantly occurring hydrothermal quartz veins and vein lets of varying texture were encountered in
this rock unit. The amphibole schist has outcropped in the western and south eastern part of the target
area. The western out crop trends in N – S direction and extends throughout the length of the area, while
the southeastern outcrop is limited to a relatively of smaller area.

5.2.2. Tremolite-Actinolite-Chlorite Schist

The tremolite-actinolite-chlorite schist is yellowish green (may be due to weathering of basic minerals
such as amphiboles, chlorite, etc), fine grained in texture. It exhibits micro-folds or drag or crenulation
cleavage in some places, may be indicating shear zone.

It is exposed in west central part of the project area and extending from north to south being in contact
with the amphibole schist on the west and graphitic-quartz-mica schist on the east. It is highly weathered
to the extent that it is impossible to identify and differentiate individual mineral constituents using hand
lens.

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Significant number of lenses of quartzite and/or graphitic quartzite and graphite schist with variable
outcrop size were observed confined to this and adjacent rock units. Hydrothermal quartz veins and vein
lets of varying nature particularly, in texture were also common in this rock unit and the associated
types.

5.2.3. Quartz Mica Schist

It varies in color from gray to dark gray or black gray and is very fine grained in texture. Mineralogical
composition of this rock is graphite, quartz and mica (mainly sericite) as major constituent. Micro folds,
crenulation cleavage, drag folds and shearing fabrics are well preserved in this unit.

In most parts, sericite is the dominant secondary mineral constituent. Silicification which is represented
by abundant hydrothermal quartz veins-vein lets/stringers (form different quartz vein zones) of varying
nature (in texture and color) is the second alteration products encountered in the area. In addition,
lenses of various quartzite and/or graphitic quartzite/graphitic schist of variable size are also associated
or confined to this unit and those found adjacent to it. It occupies the central part of the area throughout
its length in N – S direction.

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Fig. 3: Geological map of the area

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5.2.4. Graphitic Quartzite

It is dark in color, fine grained in texture and exhibit perfectly developed schistosity in comparison to the
quartzite part. This unit occurs as lenses of variable size within the central to western part of the target
area. This can be sub divided in to two units, pure quartzite and graphitic quartzite, in most cases grade
into one another. Thin talcose, tremolite–chloritic schist layers are found associated.

It was observed in the field that one type grades into the other and there is no clear demarcation
between these two units, even some times grades from quartzite via graphitic quartzite to graphitic
schist. The pure quartzite part is compact; equigranular and medium grained in texture, predominantly
composed of quartz, graphite, micas, garnet and opaque minerals as major constituents and to less
extent contains sericite and iron oxides (limonitized).

The graphitic quartzite part is characterized by progressive increase in graphite and takes dominancy
over quartz and then grade into graphitic schist. Mineralogical composition of this subunit consists of
graphite, quartz, sericite, iron oxide as major constituents. Silicification, which is represented by densely
populated occurrence of concordant quartz vein lets and stringers and sericitization are alteration types
observed in these sub units. Chip samples were taken for laboratory examination.

5.2.5. Talc-Chlorite schist

It occurs as thin layer, dark green to grease green in color and very fine texturally. It is strongly
crenulated and exhibits well developed schistocity. It occurs as very thin layer, may be evolved from
secondary alteration process and usually confined to shear zone. This unit is encountered in the south
central part and other places.

5.2.6. Graphitic Schist

This unit occurs as thin layer alternating with other meta-sediments, usually, as mentioned before,
graphitic quartzite grades gradually to graphite schist. As observed in the field, its thickness varies from
some tens of cm to about 10 - 15 meters thick, greasy in color, very fine, and highly schistose.
Sericitiztion, silicification, chloritization and tourmalinization are the major alteration process encountered
in the graphite schist. Micro folds, crenulation cleavage and/or drag folds are the common feature of this
unit.

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5.2.7. Gabbro Amphibolites

It is dark green in color, medium to course grained, surfacially weathered to yellowish red powder
(limonite). This is exposed in the western part. It stretches from north to south of the area and in contact
with the graphitic quartz mica schist on the west and metagranodiorite on the east. On ground out crop
lenses occur as small blocks.

The major mineral constituents include amphibole (hornblende), plagioclase, k-feldspars, and biotite,
less amount of quartz. In some parts subjected to shearing effect, which is represented by strongly
developed schistocity (few meters thick) within massive and compact rock body.

Plate 1: Gently dipping discordant quartz vein let cross cutting amphibolite unit.

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It was observed that this is invaded significantly by concordant (predominantly) and discordant thin
quartz veins (usually less than 0.5mt to few cm) and vein lets with different characteristics in nature;
especially this was clearly observed where road cut sections expose them.

5.2.8. Metagranodiorite

It is pale gray to pinkish in color, uniform and coarse granitic texture, major mineral constituents include
different amphiboles, plagioclase, k-feldspars, and quartz. This is the oldest lithologic unit of the
surrounding rocks. It is exposed in the north eastern part of the target area.

It is subjected to brittle–ductile deformation. It exhibit well developed foliation, in some parts subjected to
intense shearing and alteration. Sericitization, silicification and kaolinization are the main alteration types
observed in this unit. The major mineral consitituents includes plagioclase, k-feldspars, amphiboles, and
quartz, while sericite, quartz veins/vein lets and kaolin are alteration products encountered during field
work.

5.2.9. Granodirite

Granodiorite rock unit is exposed in the south eastern part of the target area. In most cases, exposed
out crops are without vegetation cover. The granodiorite exposure forms steep morphology, massive
and compact indicating that it is not subjected to tectonic activities and/or regional metamorphism and
deformation (plate 3).

It is dark gray in color, uniform to medium grained in texture. Dark and light minerals are proportional in
quantity. Visible mineral constituents include amphibole group minerals, plagioclase, k-feldspar and
quartz can be mentioned.

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Plate 2: Massif fresh granodiorite exposed in the south eastern part of proper Werset.

5.2.10. Quartz Veins and Vein lets

Quartz veins and vein lets of varying nature and stages of generation occur almost in all lithologic rock
units, except in the younger post tectonic granodiorite. Their thickness varies from few cm to hill forming
quartz reefs (north central, on the left side of Worka River).

Usually they form distinct quartz vein zones in the southern and north central part of the present target
area. Texturally, these quartz veins and vein lets vary from glassy to sugary. Color wise, vary from

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glassy, smoky, to white milky types. These fracture filling rock bodies occur as concordant (dominant)
and discordant in relation to the attitude of their host rocks.

Most quartz veins dip steeply and sub parallel to the shear zone and main foliation trend. In most
cases, the observed zone/s of quartz vein/vein let (zone of silicification) have about 5 to 30m width,
while in some cases, they bear sulfides minerals (mainly pyrite and pyrrohotite), tourmaline, sericite
and kaolin.

In general, these fracture filling hydrothermal quartz veins/vein lets are controlled by different shear
zone and fracture systems, among which, the N-S, NNE–SSW, NE–SW and E–W fracture systems
are the prominent controlling structures.

According to the infield observations, the encountered quartz veins of the area can be sub grouped
on the basis of mineralogical composition into tourmaline bearing, (may be older ones), K-feldspar
(coarse grained) bearing, graphite bearing and sugary quartz veins (well developed quartz crystals
with uniform grain size).

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Plate 3: Werseti auriferous quartz vein dipping 75 0 towards east. It has been actively mined since its
discovery in 2004 to present day by local miners manually using hand tools.

In some glassy quartz veins box-like structure and well define cavities/vogue with certain crystal
shapes (pseudomorphus) show that removal of some metallic minerals mechanically and/or by
dissolution, and these could be base metal sulfides or oxide minerals. In some case, the quartz veins
are oxidized and converted to limonite and other chemical weathering products.

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At proper Werseti, local miners extract gold from galena rich glassy quartz veins while the associate
milky, sugary, etc vein types are waste or barren types but found in the vicinity of the auriferous quartz
vein under mining operation by cooperative local miners.

5.3. Structure

The surrounding of the project area is characterized by the occurrences of varying scale lineaments
belonged to different fracture system and these were recognized both from the topographic map and
on the ground observations made during the course of mapping.

According to the field observation: N – S, NNE – SSW, NE – SW, E – W, NNW – SSE, NW – SE


fracture systems are the prominent structures observed in the surveyed area and in the surrounding.
In addition, different joint systems (conjugate joint, orthogonal joints, etc, and cooling fractures) are
common in massive rocks such as gabbro amphibolites and granodiorite.

The dip and strike measurements made on the ground show occurrences of antiform and/or synform
open folds. Minor or micro folds, crenulation cleavage, and/or drag folds are observed in the central
part of the area in the sheared metavolcano–sedimentary rock units, especially in graphitic quartz mica
schist, tremolite- actinolite-chlorite schist and in parts of gabbro amphibolite.

5.4. Alteration

The types of alteration observed in the Werseti–Mormora target area includes sericitization
(dominantly in the central part through the length), silicification, chloritization, graphitization,
tourmalinization, and kaolinization is prominent types of alteration. Usually alteration is seen well
developed around the contact between graphitic quartz mica schist and gabbro amphibolites.

Strong silicification is represented by abundant occurrences of quartz vein and vein lets especially
within graphitic quartzite and graphitic quartz mica schist, while sericitization is encountered in sheared
zones, usually in metasediments and associated quartz veins. Some quartz veins contains significant
amount of tourmaline crystals and abundant sericite on joint plans of commonly glassy quartz veins of
the Werseti type. Talc is the other alteration product seen in graphitic quartz mica schist.

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5.5. Mineralization

Mineralization was observed in some hydrothermal quartz veins. Gold and base metal sulfide,
especially galena, pyrite, pyrrohotite, were well observed in some auriferous quartz veins and vein lets
among the other encountered sulfides.

Plate 4: About 10m wide intensely altered zone represented by silsification and sericitization, to
which the Werseti auriferous quartz vein-vein lets and other are confined.

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6. Geophysical survey works

6.1. Survey Grid, Summery Statistics and Volume of Geophysical Work done

A total of 4 exploration lines with 10 meters observation interval were set in the northern part of the area
surveyed in 2007. A 600m base line was laid from north to south parallel to the general strike of the
formation; this base line is a continuation of the year 2007. This can facilitate the utilization of the previous
and the present data together. All exploration lines have a maximum length of one kilometer. All lines are
fully covered by Spectral IP/Resistivity Surveys. The details of the geophysical survey conducted in the
Werseti–Mormora target in a month time are given in the table below.

Table 2: Statistical summary of geophysical work done in the Werseti–Mormora target, 2014

No. Geophysical Total No Line/Station Total No of Remark


Method of Lines Interval Observations
1 IP/Resistivity 4 200m/10m 233

6.2. Instrumentation

6.2.1. Spectral IP/Resistivity Survey

transmitter, a receiver, a motor generator, non-polarizing porous-pots as potential electrodes, stainless


steel stakes as current electrodes, steel wires for connecting current electrodes and copper wire for
connecting potential electrodes were used for the IP/Resistivity Survey.

The IPR-12 Time Domain Induced Polarization /Resistivity receiver accepts signals from up to eight
potential dipoles simultaneously and record in a solid state memory along with automatically calculated
parameters for later data retrieval and processing. It averages the primary voltage (Vp), Self–Potential
(SP) and individual transients (MI) continuously.

For this survey, a two second transmit and receive time is selected. The calculated cole–cole
parameters namely: chargeability amplitude (M´´) and time constant (tau) for average and fixed value of
c = 0.25 were generated.

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In spectral IP, the IPR-12 receiver samples the decay curve at a number of points. Each of the
measured decay is then characterized using simple models. The model used in IPR-12 for spectral IP is
the Cole-Cole model. This model is defined by four parameters, they are:

1. R - the resistivity in Ohm-meters


2. M/I - the chargeability amplitude in mV/V
3. Tau - the time constant in seconds, and
4. C - the exponent dimensionless which is constant in IPR-12 and is set to 2.5

The measured decays are compared against a full set of model curves in the IPR-12 receiver. The best
agreement yields the spectral parameters MIP, and tau in our case. These two parameters are
presented in the form of pseudo sections to assist interpretation of the conventional IP. The GGT-3 Zong
transmitter and a Honda motor generator were used for the IP/Resistivity survey.

6.3. Field procedure

6.3.1. Spectral IP/Resistivity survey

A modified dipole cable was prepared and used as a potential cable to take measurements of six dipoles
at a time. A Dipole–Dipole electrode configuration with a dipole length of 40m was used to produce
section data along 4 exploration lines in the surveyed target. In order to increase the depth detection,
measurements were made with increasing values of n (n = 1 to 6). At each electrode position; the
apparent resistivity, the chargeability of individual transients (Mi) and Spectral IP (SIP) parameters for c
= 0.25 were measured.

6.4. Results and presentation

6.4.1. Spectral IP/Resistivity Survey

The dipole–dipole field data was directly dumped to a lap–top computer in the field. Apparent Resistivity,
the conventional chargeability (Mx), the time-constituent () and the cole–cole chargeability (M”) were
selected for processing and presentation from the IPR - 12 data. The data was presented in the form of
spectral IP/Resistivity pseudo–section plots for each surveyed lines and IP/Resistivity plan maps at three
contrasting depth levels (n = 1, n = 4 and n = 6) are prepared, presented and discussed here under. The
Oasis-Montaj, Geosoft mapping system software was used in the preparation of pseudo–sections and
the plan maps.

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6.5. Spectral IP/Resistivity Pseudo section Plots

EL - 900N

The spectral IP/Resistivity pseudo section plots along EL-900N are given on Fig. 4. This exploration line
was surveyed in the year 2007 with the method but shorter dipole length (20m). The purpose was to
confirm the previous IP/Resistivity anomaly and its depth continuation with wider dipole length. Fig. 4a
shows the conventional chargeability pseudo section plot. This section has depicted one major high
chargeability anomaly zone at the center of the surveyed line. It is located between stations 110W and
50W. The center of the anomaly is located at 80W. The anomaly is open both to surface and to depth.

The chargeability value of this zone ranges from 40mV/V to over 70 mV/V. West of this zone an irregular
mostly semi-circular high and low chargeability zone is indicated. This zone could be attributed to some
graphitic or both combination of graphite and sulfide minerals hosted in the shear zone.

The spectral chargeability (M”) pseudo section plot (Fig: 4c,) shows a high chargeability values
corresponding to the above described high IP zone. This suggests that the source of the IP anomaly
could be due to a concentration of metallic sulfides related to some mineralized quartz –veins/vein let
hosted in the shear zone. The spectral chargeability value of this zone exceeds 550mV/V, which is
comparable with the chargeability value recorded over the Legadembi ore zone. The calculated
resistivity pseudosection plot along this line (Figure:4b,) shows two contrasting resistivity zones (High
and Low).

The area west of station 30E and above the n = 4 depth level is characterized by a very low resistivity
value. This zone is attributed to the sheared graphite bearing lithologic units and a deep weathering
front. It is underlain by a wide medium to high resistivity values that is open at depth.

It is evident from the pseudosection contour pattern that the source of this wide medium to high
resistivity zone represents a set of quartz veins all are having the same shape and different width extent.
The medium resistivity value recorded between two high resistive zones could be subject to a
mineralized quartz vein. All bodies are sub-vertically dipping due east.

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The correlation between the chargeability and the calculated resistivity shows a high chargeability value
over a medium resistivity. This is a typical IP/Resistivity signature over a mineralized quartz vein in the
Adola area, particularly, in the contact target of Sakaro–Ulaulo splay to which this zone belongs.

From the present exploration objectives, this zone is a prime target for gold mineralization. Furthermore,
this zone could be the northern extension of the werseti mineralized quartz vein, which currently under
extraction by the local miners. The time constant (TAU) pseudosection plot (Figure: 4d,) shows an
elevated graphitic material concentration between stations 50E and 200W. This is in agreement with the
surface geological data.

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Figure 4: Spectral IP/Resistivity Pseudosection Plots along EL - 900N

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EL-1100N

Figure 5: presents the spectral IP/Resistivity pseudosection plots along EL-1100N. Both the
conventional and spectral chargeability pseudosections (Figure: 5a & c) has depicted one high
chargeability anomaly zone located between stations 30W and 125W with an average width of 90
meters. This zone is the north extension of the chargeability anomaly outlined on EL-900N.

This zone probably caused by a deep seated mineralized quartz vein. The calculated resistivity
pseudosection plot along this exploration line shows a low resistivity zone to a depth of n = 4 under this
very thick low resistivity zone a wide medium to high resistivity anomaly zone are depicted. This high
resistivity zone is believed to be a zone both mineralized and unmineralized quartz vein/vein let.

As it can be seen from the chargeability pseudosections, the medium resistivity over a high chargeability
is attributed to the mineralized quartz vein/vein let. This zone is very deep to be reached by trench and
any surface exploration techniques but only drilling can verify their economic significance with respect to
gold mineralization.

From the calculated resistivity pseudosection plot (Figure: 5b) the area west of station 140E is
characterized by a very low resistivity value to a depth of n = 4 beneath this low resistivity zone and the
whole the area east of station 140E is characterized by a medium to high resistivity value. The medium
to high resistive bodies have a uniform shape, they are sub–vertically dipping due east.

The western medium to high resistivity anomalies probably caused by a number of quartz–veins/vein let,
which are believed to be the source of the IP anomaly. The variation in the resistivity value is attributed
to the degree of alteration and the amount of conductive minerals hosted in and around the quartz vein.
This medium resistivity over a high chargeability zone deserves a test drill for possible gold
mineralization.

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EL-1300N

The spectral IP/Resistivity pseudosection plot along EL-1300N is given on Fig 6. The conventional
chargeability pseudosection plot (Fig: 6a,) shows a noisy semi–circular high and low chargeability

anomalies from surface to a depth of n = 4 throughout the profile. This could be due to one or both of the
following; the exploration line by chance set along a fracture line or in a zone of intensive shearing.

This is further evidenced by the calculated resistivity (Fig: 6b) by outlining a uniformly very low resistivity
over a high resistivity zone. The weathering front along this exploration could be as deep as to the n = 3
depth level. The underling high resistivity zone is caused by four or more parallel high resistive bodies,
all are uniformly dipping due east.

It is interesting to note that a strong spectral chargeability (M”) value (Fig: 6c,) has depicted at depth
between stations 0 and 100E. This corresponds to the central two high resistive bodies located between
the base–line and station 100E. These are believed to be the cause of the IP anomaly and hence a
mineralized quartz vein.

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Fig 5: Spectral IP/Resistivity Pseudo section Plots along EL_1100N

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Fig 6: Spectral IP/Resistivity Pseudo section Plots along EL_1300N

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EL - 1500N

The spectral IP/Resistivity pseudosection plots along EL-1500N are given in Fig 7. The chargeability
pseudosection plot (Figure: 7a,) has depicted about 60 meters wide high chargeability anomaly zone
between stations 20W and 60W. The anomaly is clearly dipping due east. The area west of this zone
(west of station 80W) is characterized by a wide zone of low chargeability is outlined. East of the high
chargeability zone (east of station 20W) a zone of both high and low chargeability values are recorded.

This zone could be attributed to sheared quartz–graphitic schist. The spectral chargeability (M”) (Fig. 7c)
shows two contrasting chargeability zones, high and low. The area west of station 80W is characterized
by a very low chargeability values. This suggests that there are insignificant or no metallic minerals in
that zone. The area east of station 80W is characterized by a wide zone of medium to high chargeability
values.

The shapes of the IP anomalies are semi–circular to circular in places; especially at the eastern end of
this line. This could be an indication of uneven distribution of metallic minerals in a highly sheared
geologic unit/s. It is evident from the time constant (tau) pseudosection plot (Fig. 7d) that a significant
graphitic mineral concentration occurred east of the base–line.

The corresponding calculated resistivity pseudosection plot (Fig. 7, b, 8) shows a very low resistivity
zone over several uniformly easterly dipping high resistive zones. The upper low resistivity zone could
be attributed to a zone of intensively sheared lithologic unit/s with a very deep weathering front.

The depth of weathering increases from west to east. The underlying easterly dipping high resistive
bodies could be attributed to a system of quartz–veins/vein lets. The correlation between the calculated
resistivity and chargeability shows a probable occurrence of a deep seated mineralized quartz vein
between stations 100W and 100E. This zone could be one prime target for vein type gold mineralization.

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Fig 7: Spectral IP/Resistivity Pseudo section Plots along EL_1500N

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6.6. Spectral IP/Resistivity plan map

To help visualize the IP/Resistivity anomaly distribution at different depth level, spectral chargeability
and the calculated resistivity plan maps at three contrasting depth levels (n = 1, 4 & 6) are prepared as
color maps and presented here.

Figures: 8,9 & 10 presents the spectral chargeability (M”) plan maps of the above mentioned depth
levels. Regardless of the depth levels the maps has outlined one strong north-south trending IP anomaly
zone over medium to high narrow resistivity anomaly in the central part of the surveyed grid (see the
calculated resistivity plan maps; Figures: 11,12&13). This zone could be due to a mineralized quartz-
vein. However, it needs further verification by drilling.

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Fig 8: Spectral IP Plan Map (N = 1)

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Fig 9: Spectral IP Plan Map (N=4)

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Fig 10: Spectral IP Plan Map (N = 6)

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Fig 11: Calculated Resistivity Plan Map (N = 1)

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Fig 12: Calculated Resistivity Plan Map (N = 4)

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Fig 13: Calculated Resistivity Plan Map (N = 6)

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7. DISCUSSION

The extensive alteration in the area, such as sericitization, silicification, chiloritization and sulfidation are
typical characteristic alteration assemblage types, usually accompanied by metallic concentration to the
extent of ore formation is one of the most favorable condition for the formation of gold and related
mineralization. In addition, the occurrence of gold being associated with base metal sulfides
mineralization, particularly galena in the area is the other condition supporting the importance of the area
for further follow up gold exploration.

The occurrence of quartz veins, vein lets, stringers predominantly around the contact between graphitic-
quartz-mica schist/amphibolite and amphibolites/metagranodiorite from west to east respectively, and
along sheared and altered parts of metagranodiorite clearly indicates that there is a favorable structural
control for mineralization. The auriferous Werseti quartz vein (mined by local people) and other
mineralized quartz vein-vein let exposed by trenching at north of Werseti (see table 2 and fig.2) support
the idea.

Though the analytical results of chip and soil samples of the past as well as the present seem to be
discouraging, the channel samples from previous trenches excavated at north of the Proper Werseti
auriferous quartz vein, such as AWTR-3, AWTR-24, AWTR-25, AWTR-27 and AWTR-29, (table 2 and
fig. 2) show the existence of un exposed mineralized bodies starting from very shallow to farther deeper
part.

Moreover, the geophysical chargeability pseudo sections produced on 4 consecutive exploration lines
showed a progressively increasing chargeability value with increasing depth, usually exhibiting well
defined tabular–shaped anomalies dipping moderately to steeply eastward is interpreted as occurrences
of mineralized quartz veins and vein lets in the area.

Despite the fact that the results of rock chip and soil samples are below detection limit (< 0.1ppm), the
geophysical chargeability/resistivity pseudosections, indicating higher chargeability with increasing depth
strongly support the existence of unexposed or covered mineralized bodies especially in the area found
north of Proper Wesetri signifies the importance of the present target area for further follow up
systematic exploration works.

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7.1. Conclusion and Recommendation

All the planned survey works were not carried out during the present physical activity due to
various reasons. Nevertheless, based on the previous exploration works and the present
physical activities of geological and geophysical survey works, consequent findings and
reached upon conclusions, the next follow-up exploration tasks are recommended for the next
phase implementation.

1. Thorough evaluation of the previous works: methodological, procedural and technical


approaches, findings, encountered problems/draw backs, reached upon conclusions
and forwarded recommendations are needed to be re-evaluated,

2. Intensive trenching/pitting in already defined quartz vein zones, particularly, given


priority to the southern zone (north of proper Werseti) and second priority to the north
central zone (around Worka River) for channel sampling and mapping purpose,

3. Based on the previous trench results (table 1 and fig. 2), three test bore hole drilling
are recommended:

 AWTR-50 with geographic coordinate of 484400N and 617200E, at 60 0 dip


angle, with 2800 azimuth (200 - 250m depth),
 AWTR-29 with geographic coordinate of 484190N and 617020E, at 60 0 dip
angle, 2800 azimuth (200 – 250m depth),
 AWTR-27 with geographic coordinates of 483990N and 617150E, at 600 dip
angle, with 2800 azimuth (200 – 250m depth),

4. Based on the present IP/Res geophysical survey anomalies, two test drill holes are
recommended:
 EL – 900N: station 40E; dip 600 due west, depth 250m (min = 200 and max =
250m)

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 EL – 1100N: station 40E; dip 600 due west, depth 250m (min = 200 and max
= 250) and

5. IP/Res geophysical survey work starting from the present EL – 1500N farther to the
north up to Warka River at 200mts and 20m picket intervals is recommended.

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8. Bibliography

- Anthony M. Evan, 1993, Ore geology and industrial minerals, an introduction, 3rd edition

- Billay A., Y., Kisters A. F. M., Meyer F. M. and Schneider J., 1997: Geology of the

- Legedembi gold deposit, Southern Ethiopia, implication for Pan African gold exploration

- Final report on the Ulaulo-Meleka Prospecting License, 2004: Volume 1, MIDROC Gold Mine P.L.C.

- Annual report on the Ulaulo-Meleka Exploration License, 2005: volume 1, MIDROC Gold Mine P.L.C.

- Annual report on the Ulaulo-Meleka Exploration License, 2006: volume 1, MIDROC Gold Mine P.L.C.

- Annual report on the Ulaulo-Meleka Exploration License, 2007: volume 1, MIDROC Gold Mine P.L.C.

- Annual report on the Ulaulo-Meleka Exploration License, 2008: volume 1: MIDROC Gold Mine P.L.C.

- Annual report on the Ulaulo-Meleka Exploration License, 2009: volume 1, MIDROC Gold Mine P.L.C.

- Annual report on the Ulaulo-Meleka Exploration License, 2010: volume 1, MIDROC Gold Mine P.L.C.

- Kozyrev V. and others, 1985: Regional geology and exploration work for gold and other minerals in the

Adola gold field, 1979 – 1981. Vol. II Ethiopian Mineral Resource development Corporation, Ministry of

Mines and Energy, Addis Ababa.

- Shiferaw Demissie, Yu, Marchuk, v. Evadokimov, 1987: Summary of the geology and mineral potential

of the Adola area, Addis Ababa, Ethiopia.

- Woldi Gebreab, 1989: geological evolution of the Adola Precambrian green stone belts, southern

Ethiopia.

- Worku H., 1986: Structural control and metamorphic setting of the mineralization of the Adola Belt,

journal of African earth Science Vol. 23, No 3, pp383 – 409.

- Yibas B., W.U., Reimond, Armstrong , C. Koeberl, C. R. Anhaesser, D. Phillip, 2002: The tectono–

stratigraphic, Granitoides, Geochrnology and Geological Evolution of the Precambrian of Southern

Ethiopia, journal of African Earth Science, Vol. 34, pp57 – 8.

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The exploration crew members


1. Wollie Sheka, Senior Geologist and project team leader
2. Jember Shiferaw, Senior Geophysicist, Manager geophysicist and Surveyors
3. Tekle Argaw, Geologist
4. Ayele Negussie, Geologist
5. Niway Demissie, Geologist
6. Mengesha Sisay, Geophysicist
7. Zerihun Girma, Geophysicist
8. Belete Tegenu, Senior surveyor
9. Semredin Keder, Field assistant
10. Grum Zerihun, Driver
11. Habtewold Kebede, Driver, and
12. Alemnesh Galge, Main Cook

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9. Annexes

Annex 1: Laboratory rock chip sample results

Sample Coordinate PPM


S/N Description
code Easting Northing Au Ag Cu Pb Zn
1 UMC 001 Graphitic quartzite < 0.1 < 0.1 30.35 9.66 12.46
483278 620756
2 UMC 002 Sugary quartz vein < 0.1 < 0.1 2.87 7.92 19.00
483365 620492
3 UMC 003 Graphitic quartzite < 0.1 < 0.1 107.40 6.61 13.41
483584 620410
4 UMC 004 Quartz vein < 0.1 < 0.1 9.00 7.87 < 0.1
483822 620972
5 UMC 005 Quartz vein < 0.1 < 0.1 168.75 1.04 < 0.1
483910 620785
6 UMC 006 Quartz vein < 0.1 < 0.1 49.60 5.25 < 0.1
483823 620550
7 UMC 007 Quartz vein < 0.1 < 0.1 3.55 3.88 10.19
484079 620064
8 UMC 051 Quartz vein < 0.1 < 0.1 13.00 6.61 11.38
483495 621580
9 UMC 052 Quartz breccias < 0.1 < 0.1 29.65 8.11 74.71
483843 621459
10 UMC 053 Disturbed quartz vein < 0.1 < 0.1 1.70 2.54 8.64
484734 619037
11 UMC 054 Quartz vein < 0.1 < 0.1 3.30 4.21 14.44
483070 620641
12 UMC 055 graphitic quartzite < 0.1 < 0.1 28.50 3.89 10.64
483142 620641
13 UMC 056 Sugary quartz vein < 0.1 < 0.1 23.35 4.08 24.46
483275 620569
14 UMC 057 Glassy to sugary Q. vein < 0.1 < 0.1 1.11 < 0.1 3.235
483300 620506
15 UMC 058 Glassy to sugary Q. vein < 0.1 < 0.1 11.69 4.53 6.84
483855 612056
16 UMC 059 Glassy to sugary Q. vein < 0.1 < 0.1 3.82 4.39 14.80
483855 620958
17 UMC 060 Quartz vein < 0.1 < 0.1 33.38 < 0.1 15.97
483922 621483
18 UMC 061 Quartz vein < 0.1 < 0.1 18.76 1.30 12.35
483922 621483
19 UMC 062 Quartz vein < 0.1 < 0.1 11.94 4.38 < 0.1
483520 621476

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S/ Sample Coordinate PPM


description
N code Northing Easting Au Ag Cu Pb Zn
20 UMC 063 Graphitic quartzite < 0.1 < 0.1 9.54 6.06 19.21
483520 621476
21 UMC-063b Quartz vein < 0.1 < 0.1 26.97 5.30 20.17
483520 621476
21 UMC-064 Quartz float < 0.1 < 0.1 26.97 5.30 20.17
483761 621139
22 UMC-065 Glassy-sugary Q. vein < 0.1 < 0.1 2.74 2.56 13.23
483745 622305
23 UMC 066 Glassy quartz vein < 0.1 < 0.1 2.87 2.55 12.06
483201 623134
24 UMC 067 Quartz vein < 0.1 < 0.1 11.47 1.43 10.45
483841 619669
25 UMC 068 Quartz vein < 0.1 < 0.1 2.51 6.25 4.90
484034 619716
26 UMC 069 Quartz vein < 0.1 < 0.1 3.05 7.02 6.30
484698 619726
27 UMC 070 Quartz vein < 0.1 < 0.1 2.29 4.55 5.15
484419 618377
28 UMC 071 Quartz vein < 0.1 < 0.1 0.56 1.77 3.46
484429 618241
29 UMC 072 Quartz vein < 0.1 < 0.1 5.67 5.77 3.92
484517 617983
30 UMC 073 Quartz vein < 0.1 < 0.1 1.17 9.19 3.47
484518 617941
31 UMC 074 Quartz vein < 0.1 < 0.1 3.52 3.76 6.52
484518 617941
32 UMC 075 Quartz vein < 0.1 < 0.1 15.57 4.06 13.29
484061 616655
33 UMC 076 Glassy to sugary Q. vein < 0.1 < 0.1 3.40 9.66 2.02
484156 616771
34 UMC 077 Quartz vein < 0.1 < 0.1 2.28 10.99 5.50
484249 616993
35 UMC 078 Quartz vein < 0.1 < 0.1 4.89 7.24 5.98
484251 617069
36 UMC 079 Quartz vein < 0.1 < 0.1 2.41 5.33 3.30
484023 610271
37 UMC 080 Glassy quartz vein* < 0.1 < 0.1 9.28 9.28 < 0.1
484197 619769
38 UMC 081 Quartz vein < 0.1 < 0.1 1.42 1.76 0.66
484412 619675
39 UMC 082 Quartz vein < 0.1 < 0.1 15.00 8.81 6.31
484480 618830
40 MUC 083 Quartz vein < 0.1 < 0.1 0.48 0.29 3.59
484480 618830

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S/N Sample Coordinate PPM


code Northin Easting Description Au Ag Cu Pb Zn
g
41 MUC 084 Quartz vein < 0.1 < 0.1 0.92 0.36 2.54
484550 619011
42 MUC 085 Sulfide-bearing Q. vein < 0.1 < 0.1 1.28 12.59 2.53
482950 622493
43 MUC 086 graphitic quartzite < 0.1 < 0.1 5.90 9.42 2.72
482950 622493
44 MUC 087 Quartz floats < 0.1 < 0.1 55.24 6.12 13.63
483402 622507
45 MUC 088 Glassy to sugary Q. vein < 0.1 < 0.1 < 0.1 5.75 < 0.1
484157 617124
46 MUC 089 Quartz vein < 0.1 < 0.1 0.28 9.79 6.74
483996 617159
47 MUC 090 Silicified quartzite < 0.1 < 0.1 < 0.1 5.78 3.33
484186 617817
48 MUC 091a Glassy/sugary Q. vein < 0.1 < 0.1 13.38 3.18 9.55
484378 617835
49 MUC 091b Glassy/sugary Q. vein < 0.1 < 0.1 4.56 0.47 6.93
484378 617835
50 MUC 092 Glassy//sugary Q. vein < 0.1 < 0.1 3.77 5.09 3.29
484093 617451
51 MUC 093 Sericite–bearing Q. vein < 0.1 < 0.1 1.66 4.39 8.37
414189 617449
52 MUC 094 483995 Quartz vein < 0.1 < 0.1 4.38 9.005 4.97
617094
53 MUC 095 484015 617005 Oxidized quartzite < 0.1 < 0.1 7.46 5.06 4.70
54 MUC 096 484080 617023 Glassy/sugary Q. vein < 0.1 < 0.1 60.47 0.50 10.83
55 MUC 097 484120 617041 Glassy/sugary Q. vein < 0.1 < 0.1 1.425 3.51 6.36
56 MUC 098 484120 617041 Quartz vein < 0.1 < 0.1 3.28 6.78 6.59
57 MUC 099 483952 617963 Graphitic quartzite < 0.1 < 0.1 0.84 2.14 4.88
58 MUC 100 484383 618272 Quartz vein < 0.1 < 0.1 168.63 64.91 18.04
59 MUC 101 484360 617052 Quartz blocks with cavities < 0.1 < 0.1 2.99 3.71 4.04
60 MUC 102 616133 483891 Werseti quartz vein < 0.1 < 0.1 5.825 12.13 7.77
62 MUC 103 616133 483891 Werseti quartz vein 0.94 < 0.1 4.11 7.83 22.03

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Annex 2: Loam/soil samples lab result

S/N Sample Coordinate PPB PPM


code Northing Easting Au Ag Cu Pb Zn
1 UML 01 484435 618367 4.64 <0.1 121.84 18.55 63.89
2 UML 02 484472 618354 11.15 <0.1 120.26 8.33 53.36
3 UML 03 484516 618361 19.89 <0.1 124.61 7.7 58.75
4 UML 04 484540 618361 7.89 <0.1 119.53 <0.1 51.94
5 UML 05 484595 618361 66.90 <0.1 127.94 8.17 68.16
6 UML 06 484632 618362 21.31 <0.1 126.06 8.57 56.56
7 UML 07 484679 618359 <0.1 <0.1 126.56 <0.1 57.96
8 UML 08 484414 618376 17.81 <0.1 66.15 8.91 64.81
9 UML 09 484358 618367 26.02 <0.1 12.33 12.33 47.79
10 UML 10 484318 618367 22.02 <0.1 81,80 17.29 53.39
11 UML 11 484290 618371 14.66 <0.1 55.21 15.87 51.70
12 UML 12 484283 618375 12.02 <0.1 68.59 8.51 68.95
13 UML 13 484209 618376 18.00 <0.1 95.66 3.33 50.36
14 UML 14 484167 618380 5.47 <0.1 201.79 4.00 61.23
15 UML 15 484436 618568 22.55 <0.1 142.41 2.41 70.64
16 UML 16 484477 618566 6.77 <0.1 146.24 <0.1 70.61
17 UML 17 484513 618567 4.96 <0.1 157.48 7.69 11.52
18 UML 18 484554 618565 5.31 <0.1 160.63 <0.1 123.66
19 UML 19 484592 618566 <0.1 <0.1 158.53 2.93 83.13
20 UML 20 484628 618565 13.03 <0.1 173.65 <0.1 78.62
2`1 UML 21 484666 618564 13.66 <0.1 238.39 <0.1 63.20
22 UML 22 484396 618566 <0.1 <0.1 133.44 13,17 62.25

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S/N Sample Coordinate PPB PPM


code Northing Easting Au Ag Cu Pb Zn
23 UML 23 484350 618562 4.64 < 0.1 121.84 10.01 63.89
24 UML 24 484318 618572 9.96 < 0.1 115.24 16.55 53.92
25 UML 25 484279 618568 13.40 < 0.1 100.75 14.25 54.59
26 UML 26 484241 618567 3.86 < 0.1 104.59 2.84 72.74
27 UML 27 484205 618568 9.66 < 0.1 107.79 10.6 72.52
28 UML 28 484438 618761 < 0.1 < 0.1 165.41 11.34 80.82
29 UML 29 484481 618759 23.40 < 0.1 108.77 14.7 82.44
30 UML 30 484509 618759 17.79 < 0.1 116.71 9.13 64.84
31 UML 31 484560 618760 9.93 < 0.1 130.98 9.10 72.72
32 UML 32 484593 618766 6.66 < 0.1 127.50 3.64 73.76
33 UML 33 484627 618764 9.28 < 0.1 128.76 5.47 74.03
34 UML 34 484661 618763 4.88 < 0.1 147.91 6.25 85.75
35 UML 35 484396 618759 2.58 < 0.1 92.81 17.11 64.90
36 UML 36 484361 618763 15..04 < 0.1 81.28 10.64 53.61
37 UML 37 484312 618760 4.79 < 0.1 70.60 11.92 5.3.57
38 UML 38 484284 618771 8.36 < 0.1 76.65 12.29 77.25
39 UML 39 484240 618763 11.67 < 0.1 101.77 < 0.1 82.26
40 UML 40 484196 618760 20.93 < 0.1 178.75 < 0.1 76.04
41 UML 41 484167 618766 < 0.1 < 0.1 226.6 < 0.1 88.94

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MIDROC GOLD Mine PLC.
ULAULO - MELEKA EXPLORATION LICENSE

Annex 3: Summary of Financial expenditure, Dec 26, 2014 to march 05, 2014.

S/N Description Expense

A Operating cost

1 Fuel and Lubricant 27,000

2 Construction materials 2666.00

3 Tires and other rubber materials 173,384.56

4 Electrical spares and materials 8,895.25

5 Goods materials and consumable generals 22,192.52

6 Salaries wages to Ethiopian personnel 326,133.00

7 Travel expenses and hotel accommodation 117,359.50

8 Consumable equipments and supplies 29,725..37

Total operating cost 707,355.64

B Capital Expenditure 92,000.00

Total cost 799,355.6

2013-14 Report on Werseti–Mormora Exploration Project physical activity, UMEL. Page 47


MIDROC GOLD Mine PLC.

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