Coffey Mining Pty Ltd - SHALI Group Mining Pty Ltd 3 Coffey Mining Pty Ltd Review of the Geology and Exploration of the Ongombo Copper Project in Namibia – 2 November 2011 Table

Coffey Mining Pty Ltd

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Review of the Geology and Exploration of the Ongombo Copper Project in Namibia – 2 November 2011


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Table of Contents

1 SUMMARY ......................................................................................................................................................... 6

2 INTRODUCTION ............................................................................................................................................. 14

2.1 Participants ............................................................................................................................................... 14

2.2 Data Acquired ....................................................................................................................................... 15

2.3 Site and Technical Visits ..................................................................................................................... 16

3 RELIANCE ON OTHER EXPERTS .............................................................................................................. 17

4 PROPERTY DESCRIPTION AND LOCATION........................................................................................... 18

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY 20

6 HISTORY .......................................................................................................................................................... 23

6.1 B&O Minerals ........................................................................................................................................... 23

6.2 JCI Limited ................................................................................................................................................ 24

6.3 Tsumeb Corporation Limited ................................................................................................................. 25

6.4 Gold Fields Namibia Limited .................................................................................................................. 27

6.5 Comments ................................................................................................................................................ 29

7 GEOLOGICAL SETTING AND MINERALIZATION ................................................................................... 31

7.1 Regional Geology .................................................................................................................................... 31

7.2 Local Geology .......................................................................................................................................... 32

7.2.1 Local Geology ................................................................................................................................. 32

8 DEPOSIT TYPES ............................................................................................................................................ 36

9 EXPLORATION BY NCO ............................................................................................................................... 37

10 DRILLING ...................................................................................................................................................... 39

11 SAMPLE PREPARATION, ANALYSIS AND SECURITY ...................................................................... 40

12 DATA VERIFICATION ................................................................................................................................ 41

13 MINERAL PROCESSING AND METALLURGICAL TESTING ............................................................. 41

14 MINERAL RESOURCE ESTIMATES ....................................................................................................... 41

14.1 Introduction ....................................................................................................................................... 41

14.2 Geological Modelling .......................................................................................................................... 41

14.2.1 Structure ...................................................................................................................................... 42

14.2.2 Domains ....................................................................................................................................... 42

14.3 Borehole Data ...................................................................................................................................... 42

14.3.1 Sample Flagging ......................................................................................................................... 43

14.3.2 Compositing ................................................................................................................................ 43

14.3.3 Bulk Densities ............................................................................................................................. 43

14.4 Volume Modelling/Block Model Development ................................................................................ 43

14.4.1 Assumptions ............................................................................................................................. 43


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14.4.2 Block Size Test work .............................................................................................................. 43

14.4.3 Model Construction and Parameters .................................................................................... 43

14.5 Grade Estimation ................................................................................................................................ 44

14.5.1 Estimation Methods ................................................................................................................ 44

14.5.2 Estimation Parameters ........................................................................................................... 44

14.6 Resource Classification and Criteria ................................................................................................ 44

15 ADJACENT PROPERTIES ........................................................................................................................ 48

16 INTERPRETATION AND CONCLUSIONS .............................................................................................. 50

16.1 Data review and mineral resources .................................................................................................. 50

16.2 Exploration Potential ........................................................................................................................ 50

17 RECOMMENDATIONS ............................................................................................................................... 53

18 REFERENCES ............................................................................................................................................. 55


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List of Tables

Table 1_1 – Inferred Mineral Resources of the Ongombo Project……………………………………………11

Table 1_2 – Target size for Targets 1 and 2…………………………………………………………………….12

Table 10_1 – Borehole Results…………………………………………………………………………..……….39

Table 15_1 – Historical Production from the Otjihase Mine……………………………………………………48

Table 15_2 – Mineral Resources of the Otjihase Mine…………………………………………………………49

Table 16.2_1 – Target size for Targets 1 and 2…………………………………………………………………51

List of Figures

Figure 1_1 Matchless Belt with Major Sulphide Deposits……………………………………………………….8

Figure 1_2 Mineralization in borehole 158A on the East/Ost Shoot……………………………………………9

Figure 1_3 Plan of mineralization the Otjihase Mine……………………………………………………………10

Figure 1_5 Estimated distribution of copper grades Ongombo and exploration Targets…………………..13

Figure 4_1 – Location of NCO’s EPL 3238………………………………………………………………………19

Figure 5_1 – Ongombo Prospect Photos………………………………………………………………………..21

Figure 5_2 –Satellite image of EPL 3238………………………………………………………………………..22

Figure 6.1_1 – Boreholes drilled by B&O 1971-1973…………………………………………………………..24

Figure 6.3_1 Conductors identified by EMP survey…………………………………………………………….26

Figure 7.1_ Matchless Belt with Major Sulphide Deposits……………………………………………………..31

Figure 7.2.1_1_ Schematic Stratigraphy of the mineralized zone at Ongombo……………………………..34

Figure 7.2.1_1_ Mineralization in borehole 158A on the East/Ost Shoot…………………………………….35

Figure 9-1 NSAMT Conductivity Depth Section…………………………………………………………………38

Figure 16.2_1 Estimated distribution of copper grades Ongombo……………………………………………47

Figure 15_1 Plan of mineralization the Otjihase Mine………………………………………………………….49

Figure 16.2_1 Estimated distribution of copper grades Ongombo and exploration Targets……………….52

List of Appendices

Appendix A – Validation of Historical Data


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1 SUMMARY

Namibian Copper NL (NCO) requested Coffey Mining (Pty) Ltd to compile an Independent

Technical Report on the company’s Ongombo project near Windhoek, Namibia. The request was

to review the geology, historical data, recent exploration work by NCO, evaluate the mineral

resource potential of the property and estimate contained mineral resources with the current data.

NCO has had access to a large amount of data from exploration projects on the property

undertaken over the last 40 years. Data has been sourced from reports filed with the Namibian

Geological Survey in Windhoek. In addition there are numerous public domain documents

describing the geology and mineralization of the Ongombo property and neighboring mines.

In spite of nearly 170 boreholes having been drilled on the property, most of which intersected

copper mineralization no rigorous evaluation of the mineralization has taken place. Previous

owners undertook basic “reserve” calculations but no records exist of the methodologies and

assumptions used in the estimations and prospects on the Matchless belt.

Property Description

The NCO tenements are situated in the Khomas region of the Windhoek District of Namibia.

Figure 4_1 indicates the geographic locality of NCO’S Exclusive Prospecting License (EPL). The

area under license measures 15.781km from north to south and 12.552km from east to west and

covers an area of 14,524Ha.

The Gazania Investments Thirty Two (Pty) Ltd Joint Venture is the sole legal and beneficial

owner of EPL 3238 issued by the Ministry of Mines and Energy in Windhoek, Namibia. The EPL

is a full title right in the name of the Gazania Investments Thirty Two (Pty) Ltd JV. Partners to the

JV include the local BEE partner Starlight Investments (Pty) Ltd (15%), Avanti Resources Pty Ltd

(5%) and NCO (80%).

The Ongombo Project is located in an area of relatively well developed infrastructure on the

farms Ongombo and Ongombo West. The Ongombo Project is located 15km northeast from

Otjihase Mine and 45km from Windhoek, the capital of Namibia. The property is easily accessed

by tar road, from Windhoek which is the nearest large population centre and hosts all modern

amenities and public services.


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History

The property has been extensively explored in the past by the following companies:

B&O Minerals (1971-73) - The work consists of regional geological mapping and photo-

interpretation; blanket geochemical soil sampling (200 x 10/20 sample spacing); ground

magnetic; electromagnetic and airborne magnetic surveys; colour air photography; airborne

infra-red line scanner surveys; detailed geochemical soil sampling and rock sampling of

selected areas; percussion and diamond drilling of 68 boreholes.

JCI Limited (1975) - soil geochemistry, wagon drilling, diamond drilling (4 boreholes) and

geophysics (ground magnetometer survey and Turam survey).

Tsumeb Corporation Limited – (1980-1986) EMP surveys, regional lithogeochemical surveys

and diamond drilling.

Gold Fields Namibia Limited (1986-1994) - geological mapping, electro-magnetic (EM)

surveys, diamond drilling and a “reserve” estimation.

NCO (2007-2009) – geophysical surveys, 2 diamond drillholes.

Geology and Mineralization

The Ongombo project lies within the Matchless Member of the Kuiseb Formation, a conspicuous

assemblage of lenses of foliated amphibolites, chlorite-amphibolite schist, talc schist and

metagabbro. This belt, up to 5km wide in the Otjihase area, stretches 350km east-northeastwards

in the Southern Zone of the Damara Orogen from the Gorob – Hope (Figure 1_1) area towards

Steinhausen, north of Omitara.

The deposit is generally described as a Besshi-type massive sulphide. These are described as

thin sheet like bodies of massive to well-laminated pyrite, pyrrhotite, and chalcopyrite within thinly

laminated clastic sediments and mafic tuffs.

According to Cox and Singer (1986) the average size of Besshi-type deposits is 220,000t.

According to the calculations of Gold Field the Ongombo Project is within the top quarter of the

deposits classified as Besshi-type deposits. The average grade (50 percentile) is 1.5% copper.

The Ongombo Project, according to calculations by Gold Fields is in line with these grades.


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Three mineralized shoots are identified in the area, namely the West Shoot, the Central Shoot

and the East/Ost Shoot. The shoots plunge at about 7 degrees in a north easterly direction. The

mineralized zone is enveloped in staurolite-rich biotite schist, which contains fine to coarse

disseminated sulphide grains. The mineralized zone consists of streaky, banded and locally semi

massive granular sulphide aggregates within a quartzitic groundmass which is in places

magnetite bearing (Pentzel, 1994).

Typical mineralization at Ongombo is shown in Figure 1_2.

Figure 1_1

Matchless Belt with Major Sulphide Deposits (Breitkopf and Maiden 1988)


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Figure 1_2

Mineralization in borehole 158A on the East/Ost Shoot

The Otjihase Mine, managed by Weatherly International PLC, is an operating Copper Mine which

is immediately southwest of the current Ongombo Project.

Gossan outcrop is the surface expression of the massive sulphide mineralization. Otjihase

consists of four identified mineralized shoots, one large shoot more than 8km in length, broken by

faults, which forms the basis for the mine and three smaller ones.


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Figure 1_3

Plan of mineralization at the Otjihase Mine ( Weatherly 2011)

The average Au grade of 0.22g/t for the Inferred Mineral Resources at Otjihase compares with an

average grade of 0.29g/t Au for NCO’s 6.78m intercept in ONG08-1 on the Ost Shoot, and an

average grade of 0.38 g/t Au for NCO’s 3.3m intercept in ONG08-2 on the Central Shoot.

Mineral Resources

A geological model and mineral resource estimate for the TCL/Goldfields drilling data was

undertaken to determine the potential of the property and help plan future exploration. Two types

of estimation methods were attempted. The inverse distance weighted method was used for both

Shoots. An ordinary Kriging estimate was attempted for the Central Shoot.

The object of the estimation exercise was to evaluate the quality of the historical data and the

potential of the project and a base for future exploration. To this extent the geology was modelled

using the top and bottom contacts of the mineralized zone for volume modelling. No attempt to

calculate a “best cut” from the boreholes was made. In addition no minimum or maximum stoping

width was used to limit the volume. All mineralization is considered to be contained within the

mineralized zone with only sulphur (from pyrite) of potential interest in the waste zones. No waste


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models were constructed.

The only successful estimation so far is from the inverse distance weighting method. Only these

parameters are reported. Elements estimated are copper, sulphur, silver, zinc and bulk density.

Only copper and bulk density are available for all samples. Assays for silver are available for

most samples. There are a large number of missing assays for sulphur and zinc. These are

estimated where data exist.

Mineral Resources are classified as Inferred. There is a low confidence in the data due primarily

to the fact that the borehole data is incomplete with regards to survey data and geological detail.

Inferred resources are for copper and silver only. Zn and Au grades are very low and there are

many gaps in the data due to either lack of assay or non-reporting. However, even though these

metal values are low they are likely to represent significant credits especially gold. Sulphur is

underestimated for the East/Ost shoot also due to lack of assays in some of the drilling

campaigns.

Mineral resources for Ongombo are given in Table 16.2_1 and grade tonnage distributions in

Table 16.2_2. Distribution of copper grades is shown in Figure 16.2_1

Conclusions and Recommendations

In spite of the incompleteness of the reports and drilling data, there is sufficient data to evaluate

the potential of the property.

The Ongombo property hosts a similar style of mineralization to the neighbouring Otjihase Mine

and is a small moderate grade copper deposit with accessory silver, probable gold but with very

low zinc grades. The mineral resource estimation shows grades similar to what Otjihase is

Table 1_1

Ongombo Project

Inferred Mineral Resources of the Ongombo Project

Resource Category In situ tonnes and grade at 1% Cu cutoff

Tonnes (Millions) Cu (%) Ag (g/t) Density (t/m3)

Central Shoot 2.47 1.8 8 3.04

East/Ost Shoot 4.78 1.6 8 3.37

Total 7.25 1.7 8 3.26


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currently mining.

There appears to be reasonable potential to extend both the Central and East/Ost Shoot down

plunge to the north-east as far as the Swakop Graben on the EPL boundary. Conductivity results

show potential for another two parallel shoots but these appear as much weaker signal and the

geometry may be similar to Otjihase with a combination of well mineralized shoots and poorer

ones. Drilling has not delineated the full extent of the deposit. Addition potential lies in four areas

(Figure1_5)

The potential size of target 1 and target two may be in the order of 6Mt (Table 1_2). Parameters

in Table 1_2 are taken form the results of the Mineral Resource estimation.

Table 1_2

Ongombo Project

Target size for Targets 1 and 2

Area Length Width Thickness Density

Total tonnes Extraction ratio Est Tonnes

(Mt) Grade

(m) (m) (m) (t/m3)

Central 5,800.00 200 1.5 2.9 5,046,000.00 0.7 3.5 1.8

East/Ost 2,600.00 250 2.7 3.3 5,791,500.00 0.4 2.3 1.6

Total 5.8 1.7


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Figure 1_5 Estimated distribution of copper grades at Ongombo and exploration Targets


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2 INTRODUCTION

Namibian Copper NL (NCO) requested Coffey Mining (Pty) Ltd to compile an Independent

Technical Report on the company’s Ongombo project near Windhoek, Namibia. The request was

to review the geology, historical data, recent exploration work by NCO, evaluate the mineral

resource potential of the property and estimate contained mineral resources with the current data.

NCO has had access to a large amount of data from exploration projects on the property

undertaken over the last 40 years. Data has been sourced from reports filed with the Namibian

Geological Survey in Windhoek. In addition there are numerous public domain documents

describing the geology and mineralization of the Ongombo property and neighbouring mines.

In spite of nearly 170 boreholes having been drilled on the property, most of which intersected

copper mineralization no rigorous evaluation of the mineralization has taken place. Previous

owners undertook basic “reserve” calculations but no records exist of the methodologies and

assumptions used in the estimations and prospects on the Matchless belt. .

2.1 Participants

The Coffey Mining personnel involved in the technical review of the Ongombo Project, including

their principal areas of responsibility, are listed below:-

Kathleen Body, Coffey Mining Principal Consultant- Resources:

(Pr.Sci.Nat, BSc (Geology)

Review of exploration and drilling data, Mineral resource estimation, and Report

preparation.

Brendan Botha, Coffey Mining Exploration Manager:

BSc Earth Sciences, BSc Hons (Geology). MSc (Earth Science and Project

Management),

MSc (Mineral Resource Management), (Pr.Sci.Nat) (MGSSA)

Review of geology and exploration data, report preparation

Navin Reddy, Coffey Mining Exploration Manager:

BSc (Geology), BSc Hons (Geology). MBA, (MGSSA)

Site visit, compilation of data

Chris Fredericks, Coffey Mining Manager Africa:

BSc (Geology), FSAIMM Pr.Sci.Nat


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Peer review

Kathleen Body and Brendan Botha are registered professional natural scientists (Pr.Sci.Nat.) with

SACNASP and are “Competent Persons” as defined in the 2007 edition of the SAMREC Code

and the 2004 JORC code.

Neither Coffey Mining, nor the key personnel nominated for the work, has any material interest in

Namibian Copper NL, its subsidiaries or their mineral properties. The work, and any other work

done by Coffey Mining for Namibian Copper NL, is strictly in return for professional fees. Payment

for the work is not in any way dependent on the outcome of the work or on the success or

otherwise of Namibian Copper NL's own business dealings. As such, there is no conflict of

interest in Coffey Mining undertaking the independent CPR as contained in this document.

In compliance with the SAMREC Code, the following should be noted:

The Competent Person with the overall responsibility for this CPR is Mrs Kathleen Body, Pr. Sci.

Nat. Mrs Body is competent based on the guidelines provided in Section 4.3 of the SAMREC

code. Mrs Body is a geologist with 16 years experience in the mining industry in a variety of

commodities including stratabound copper deposits.

In compliance with the JORC Code, the following should be noted:

The Competent Person for the Mineral Resource estimate in Kathleen Body who has supervised

all aspects of the work. Mrs Body, who is registered with the South African Council for Natural

Scientific Professionals (‘SACNASP’), has sufficient experience which is relevant to the style of

mineralization and type of deposit under consideration and to the activity which she is

undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian

Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mrs Body

consents to the inclusion in the report of the matters based on her information in the form and

context in which it appears.

2.2 Data Acquired

Data used in the review of the project and the preparation of this report was given to Coffey

Mining by NCO. NCO obtained this data from the Namibian Geological Survey. The information

consisted of reports filed by previous operators on the property and borehole core stored at the

geological survey storage facilities. In addition, relevant reports and academic work in the public

domain were used where appropriate. Reports and other sources are listed in the References

(Section 20)


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2.3 Site and Technical Visits

A site visit of three days was undertaken by Mr Navin Reddy, Exploration Manager for Coffey

Mining 7 to 10 June 2011. The purpose of the site visit was to undertake a general site inspection

and verify data from the drilling programs.

In addition to this visit, Mr Reddy has worked on a neighbouring property. Mrs Body has visited

both of the neighbouring, Otjihase and Matchless, Mines


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3 RELIANCE ON OTHER EXPERTS

Coffey Mining has based the review of the Ongombo Deposit on information largely provided by

Namibian Copper NL (NCO). This data includes third party technical reports along with other

relevant published and unpublished third party information. Coffey Mining has endeavoured by

making all reasonable enquiries to confirm the authenticity and completeness of the third party

technical data upon which this report is based. A final draft of this report was provided to NCO,

along with a written request to identify any material errors or omissions, prior to finalization.

Neither Coffey Mining, nor the authors of this report, is qualified to provide extensive comment on

legal facets associated with ownership and other rights pertaining to the Ongombo Project. Coffey

Mining did not carry out any legal due diligence confirming the legal title of Gazania Investments

Thirty Two (Pty) Ltd to the property. Coffey Mining was provided with details of the Gazania

Investments Thirty Two (Pty) Ltd JV and various MME receipts and renewal certificates. Coffey

Mining was also provided with the latest Quarterly Report and Licence Renewals which

demonstrate legal title ownership and EPL good standing.

Similarly, neither Coffey Mining nor the authors of the report are qualified to provide extensive

comment on environmental issues associated with Namibian Copper’s mineral properties.

No warranty or guarantee, be it express or implied, is made by Coffey Mining with respect to the

completeness or accuracy of the legal, environmental, metallurgical or mineral processing

information contained in third party reports. While Coffey Mining has reviewed such third party

reports and relied on certain aspects of such reports in reaching its conclusions herein, neither

Coffey Mining nor the authors of this report accept any responsibility or liability in any way

whatsoever to any person or entity in respect of information contained in such third party reports

and documents and included in this document, or any errors in or omissions from it, whether

arising from negligence or any other basis in law whatsoever.


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4 PROPERTY DESCRIPTION AND LOCATION

The NCO tenements are situated in the Khomas region of the Windhoek District of Namibia.

Figure 4_1 indicates the geographic locality of NCO’s Exclusive Prospecting License (EPL). The

area under license measures 15.781km from north to south and 12.552km from east to west and

covers an area of 14,524Ha.

The Gazania Investments Thirty Two (Pty) Ltd Joint Venture is the sole legal and beneficial owner

of EPL 3238 issued by the Ministry of Mines and Energy in Windhoek, Namibia. The EPL is a full

title right in the name of the Gazania Investments Thirty Two (Pty) Ltd JV. Partners to the JV

include the local BEE partner Starlight Investments (Pty) Ltd (15%), Avanti Resources Pty Ltd

(5%) and NCO (80%). The yearly cost for the EPL is N$2,000. All annual license fees, as

required by the Ministry of Mines, are paid up, and all quarterly statuary reporting to the Ministry

is up to date.

Under Namibian Mineral law an EPL is granted for an initial period for 3 years. At the end of the 3

year period applications may be made to the Ministry of Mines for 2 renewal periods of 2 years

each. Applications for each subsequent renewal are subject to a reduction of 25% and 50% of the

covered area, respectively. Application for renewal shall not be withheld without reason.

The EPL was extended on 16 July 2009 for its first 2-year period. The area was reduced in area

to represent the area presented in Figure 4_1. On the 3rd

June 2011 the EPL was again renewed

for a period of 2 years to 7th

November 2012, without any reduction in area. The reason is that

the mineralization at Ongombo can be expected to occur along strike and down dip along the full

length of the tenement.

There are no other encumbrances, restrictions or objections on the property known to the author.


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Figure 4_1 Location of NCO’s EPL


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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,

INFRASTRUCTURE AND PHYSIOGRAPHY

The Ongombo Project is located in an area of relatively well developed infrastructure on the farms

Ongombo and Ongombo West. The Ongombo Project is located 15km northeast from Otjihase

Mine and 45km from Windhoek, the capital of Namibia. The property is easily accessed by tar

road, from Windhoek to Gobabis, and then on a gravel road from the tar road up to the project

area. There is also a railway line from Gobabis to Walvis Bay, via Windhoek running parallel to

the tarred road.

The city of Windhoek is the nearest large population centre and hosts all modern amenities and

public services. In Namibia, towns and villages have municipal water and electricity. Telephone

communication is by fixed line in major centres. Mobile telephone services are available near

settlements. The Ongombo prospect is outside of the settlement areas and has no municipal

services other than the fixed line telephone service which parallels the gravel road to Midgard

(Figure 5_2) which passes through the licence area. .

The area has a hot and dry climate with maximum mean temperatures of 31°C and 15°C for

summer and winter respectively. Summer rainfall varies between 350-450mm per annum.

Prospecting can normally be conducted throughout the year although potential extreme wet

seasons between December and February can limit access.

The terrain in the Project area is gently undulating with elevations in the range of 1,600m –

2,000m amsl. The landscape is dominated by rolling hills and covered by scrub and grassland.

The Swakop River divides the EPL into two parts (Figure 5_1 and 5_2).

The main economic activity in the area is stock farming, game hunting and eco-tourism.


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Figure 5_1

Ongombo Prospect


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Figure 5_2

Satellite Image of EPL 3238


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6 HISTORY

The property has been extensively explored in the past by the following companies:

B&O Minerals

JCI Limited

Tsumeb Corporation Limited

Gold Fields Namibia Limited Not all of the information from work done by these various

companies is available and the work presented here is from various reports available

from the Ministry of Mines in Namibia.

6.1 B&O Minerals

There are no reports or information available on the exploration activities and results for the work

done by B&O Minerals. The information referred to herein is sourced from JCI Limited, Tsumeb

Corporation Limited and Gold Fields Namibia reports.

In a TCL progress report for the period June 1981 to March 1983 (Kruger, 1983) the exploration

activities conducted by B&O Minerals are listed. The work consists of regional geological

mapping and photo-interpretation; blanket geochemical soil sampling (200 x 10/20 sample

spacing); ground magnetic; electromagnetic and airborne magnetic surveys; colour air

photography; airborne infra-red line scanner surveys; detailed geochemical soil sampling and

rock sampling of selected areas; percussion and diamond drilling of 68 boreholes (Figure 6.1_1).

According to JCI Limited (Hoffmann, 1976) B&O Minerals investigated the area from 1971 to

1973. Copper mineralization was outlined in a stratabound pyrite/pyrrhotite, magnetite quartzite

association. However, the incidence of copper, together with minor to trace amounts of zinc and

silver, was found to be only of moderate grade and the tonnage reserves outlined were sub-

economic. Furthermore, drilling results suggested mineralization of ore-grade potential within the

sulphide-bearing horizons was limited and unlikely to continue with depth or along strike.

Hoffman also states that B&O Minerals calculated an ore reserve for the eastern main shoot of

mineralization. The reserves calculated (based on 0.9m% cut off) amount to 3.29 m tonnes at

1.9% Cu with an average thickness of 1.62 metres.


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Figure 6.1_1

Boreholes drilled by B&O 1971-1973

6.2 JCI Limited

JCI commenced exploration activities in the area in November 1975. The aim of the study was to

establish, more confidently, limits on the copper mineralization of economic potential delineated

by drilling and to predict any possible extensions.

Exploration activities conducted by JCI included soil geochemistry, wagon drilling, diamond

drilling (4 boreholes) and geophysics (ground magnetometer survey and Turam survey). The

results of these activities are summarized by Hoffmann (1976) as follows:

Mineralization below the Eastern Main Shoot terminates in boreholes OGB 63, 50 and

55, with no intersection made in borehole OGB 56, located in line with and down plunge


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from the axis of best sulphide mineralization, no potential at depth is expected.

For the remainder of the ore zone all the evidence compiled suggests that no significant

extensions to the main quartzite would be found

However, further drilling should be undertaken to provide a better idea of the nature of

the quartzite and the associated sulphides in the western and central portions and to

substantiate whether or not it pinches out at depth. It is also stated in the report that the

conclusions are largely based on information available from widely spaced diamond drill

boreholes (200 metre grid-spacing over the Eastern Main Shoot) and with few boreholes

located outside the main quartzite development.

6.3 Tsumeb Corporation Limited

TCL obtained the rights to the Ongombo in 1980. The work was done in two parts; the first from

1980 to 1982 and the second part from 1983 to 1986.

Apart from regional orientation soil geochemistry, exploration work carried out by TCL during the

first two year term of the grant concentrated on the Ongombo Project. Whereas the regional

geochemical work showed that little improvement of the existing B&O Mineral work was possible,

a new shoot was discovered on Ongombo Ost 140 by means of the Newmont EMP unit.

Altogether 5 EMP surveys were read covering an area of 487 hectares and a distance of 4.3km

along strike. The EMP surveys outlined conductors extending down-plunge from the gossan

(Figure 6.3_1). Surveys 1 to 3 showed anomalies which are consistent with the known

mineralization as proven by previous drilling. Survey 5 carried out on the south western extension

of the gossan outcrop revealed weak and broad anomalies which are not indicative of economic

mineralization. Survey 4 which is joined to survey 3 in the northwest, picked-up the best anomaly.


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Figure 6.3_1

Conductors identified by EMP survey (after Kruger 1009 Figure 2)

Five diamond drill boreholes were drilled on the survey 4 conductor. Drilling was initially confined

to the north-eastern part of the area. Sulphide mineralization associated with magnetite quartzite

was intersected over widths of between 1 and 2 metres with a Cu content of just below 4% in the

best parts.

The south-western boundary of the shoot was determined by drilling. In the centre of the shoot an

intersection of 0.72m at 5.86% Cu was made on the high grade/EMP trend of the new “Ongombo

East Shoot”.

Infill drilling was also done on the Ongombo Central Shoot to delineate the mineralization in the

high conductivity part of the horizon. The best intersection showed sulphide mineralization over a

3.23m width at 1.60% Cu.

During the second period of the grant period TCL revisited the regional geological mapping

(1:25,000) with a newly developed genetic model for mineralization within the Matchless


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Amphibolite Belt.

TCL also embarked on a regional chip sampling programme of Kuiseb schists to improve their

knowledge in lithogeochemical prospecting for blind mineral deposits.

Nine diamond drill boreholes were drilled (537m) at Ongombo Central Shoot. From these 9 holes

17 intersections were recovered. Based on all the available drilling data a new geological ore

reserve was calculated by means of geostatistical methods. Using a 3m% Cu cut off a reserve of

1,378,700 tonnes of 2.11% Cu with an average width of 1.8m was estimated (Schneeweiss,

1986).

A grid of 100m x 200m was drilled over the Ongombo East Shoot anomaly. Fourteen

intersections were obtained from 8 sites over the area. From the 8 sites the shape of the body

could not be delineated and additional drilling was recommended.

A preliminary ore reserve calculation was made using the contour method. About 200,000 ore

tonnes at an average grade of slightly over 2% Cu and 17ppm Ag over 1.5m was estimated.

The result from further drilling and information on any additional work done on the Ongombo

Project by TCL was not obtained.

6.4 Gold Fields Namibia Limited

Gold Fields Namibia obtained the Hoffnung Grant, which includes the Ongombo project, in June

1988 and activities continued on the property up to 1994.

Work done by Gold Fields during this period was geological mapping, electro-magnetic (EM)

surveys as well as diamond drilling.

The geological mapping did not reveal any additional information of the area. EM loop 13-14

indicated a conductor with a trend of 037°TN, which still had to be investigated by diamond

drilling.

A total of 48 diamond drill boreholes were drilled by Gold Fields between 1988 and 1991. Of

these 33 boreholes, 11 were drilled on the Central Shoot and the balance on the East Shoot and

Ost Shoot (Figure 6.4_1).


28



Figure 6.4_1

Boreholes drilled by Goldfields on the East/Ost Shoot 1988-1991


29



The mineral content of the boreholes were composited into a “geological grade” and “mining

grade”. The geological grade refers to the grade of the mineralized zone between the hanging

wall and footwall. The mining grade is the defined ore zone composited to a 2m thick mining

thickness.

The result of the drilling is reflected in the resource/reserve estimations for the different ore

shoots.

Central Shoot – reserves reported to be 990,000 tonnes. The figure is based on the assumption

that all the ore has a thickness of 2m with a grade of 1.5% Cu and an SG of 3.00. The average

m% Cu value of all intersections inside the ore-body is 3.30m% Cu, which translates to a grade of

1.65% Cu for the Central Shoot.

East Shoot – reserves for the East Shoot was calculated in the same manner as for the Central

Shoot. The estimated reserves are 165,000 tonnes at 3.48m%Cu or 1.74% Cu over an thickness

of 2m.

Drilling results also indicated that the East Shoot is probably the up plunge extension of the Ost

Shoot since definite similarities in lithologies exist.

Ost Shoot – The reserves estimated by Gold Fields are tentative as the tonnes are based on an

estimated length, breadth and width of the defined orebody. The eastern section of the Ost Shoot

still has to be drilled to prove or disprove tons to the east. A tonnage of 1,794,880 tonnes at

1.29% Cu was calculated for the Ost Shoot.

In 1991 Maneschijn (Petzel, 1994) gave a total ore reserve from all available data for the West

Shoot, Central Shoot and East/Ost Shoot to be 4,143,913 tonnes at 1.60% Cu, 8.92g/t Ag and

0.21g/t Au.

No further information is available on additional work done by Gold Fields.

6.5 Comments

The property was investigated by numerous parties. The basic geological exploration has been

done in great detail and as stated little improvement was made with regards to the geological

understanding by means of geological mapping and geochemistry.

CP statement regarding historical estimations:

A qualified person has not done sufficient work to classify the historical estimate as


30



current mineral resources or mineral reserves”

The issuer is not treating the historical estimate as current mineral resources or mineral

reserves as defined in the 2007 edition of the SAMREC Code and the 2004 JORC code.

The historical estimates should not be relied upon as indicative of current potential

The biggest potential for exploration is the Central and Ost Shoots. Drilling is required to properly

define the extents of the two ore-bodies as well as to determine the actual resources of the two

ore bodies.


31



7 GEOLOGICAL SETTING AND MINERALIZATION

7.1 Regional Geology

The Ongombo project lies within the Matchless Member of the Kuiseb Formation, a conspicuous

assemblage of lenses of foliated amphibolites, chlorite-amphibolite schist, talc schist and

metagabbro. This belt, up to 5km wide in the Otjihase area, stretches 350km east-north-

eastwards in the Southern Zone of the Damara Orogen from the Gorob – Hope (figure 7.1_1 area

towards Steinhausen, north of Omitara.

Figure 7.1_1

Matchless Belt with Major Sulphide Deposits (Breitkopf and Maiden 1988)

A genetic relationship between the pyritic deposits and the amphibolite suite was recognized by

Voit and Stollreither (1905) who suspected the rocks to be the metamorphic diabases but could

not find conclusive evidence to verify their hypothesis. Kroner (1977) interpreted the amphibolites

and lenses of serpentinite as units of geosynclinal mafic and ultramafic volcanics. Finnemore

(1978) suggested a geochemical relationship of the Matchless suite to oceanic tholeites and

pillow lavas were recognised in the field. The amphibolite layers/lenses are generally

conformable, though locally crosscutting with respect to the compositional layering in the


32



enclosing Kuiseb Formation schist. No melange has been found along the belt and there is no

change in tectonic style across it, so that the feature does not appear to be a slice of upthrust

oceanic crust. The enclosing quartz-mica schists are interpreted as deep water quartzose

greywacke.

Goldberg (1976) noted that in many places the cupriferous pyrite deposits are closely associated

with layers of magnetite quartzite. Their frequent position directly below the massive sulphide

bodies between Otjihase and Gorob, together with other evidence of stratigraphic inversion, have

been interpreted to indicate that the stratabound ores are of the Besshi-type, formed initially on

the sea floor and afterwards emplaced in overturned attitude in continental margin sediments.

Killick (1983) concurred that the sequence is inverted over a distance of at least 250km, but

considers ore deposition to have occurred in situ relative to four volcanic centres spread out

along the length of the Matchless Belt. The most north-easterly of the four volcanic centres or

clusters is the Otjihase cluster which includes the Otjihase, Ongeama and Ongombo deposits.

7.2 Local Geology

A gossanous magnetite quartzite bed on the farms Ongombo West 56 and Ongombo Ost 140,

traceable for some 5km in a north-easterly direction, dips consistently 15o

to 20o

northwest, and

is conformable with the enclosing Kuiseb Formation schist. The best outcrops are on banks of the

White Nossib River which forms the common boundary between the two farms. West of the river

a zone of slumped rusty magnetite and massive limonitic gossan continues along strike for some

1,800m. The thickness of the bed varies between 1 and 2m, thinning gradually westward. Except

for two isolated outcrops, only float indicates the sub-outcrop trend of the gossan east of the

White Nossib River. Two lenticular units of more basic schist and amphibolite are present in the

sequence above and below the gossan: in this area the amphibolites of the Matchless Member

are developed over a limited width of only 1.5km.

7.2.1 Local Geology

Three mineralized shoots are identified in the area, namely the West Shoot, the Central Shoot

and the East/Ost Shoot. The shoots plunge at about 7 degrees in a north easterly direction. The

shoots are hosted within the Kuiseb Formation schists which show signs of hydrothermal

alteration in the hangingwall of the mineralized horizon. The hangingwall schist consists of a

sequence of alternating metapelitic staurolite bearing schists, garnetiferous quartz-biotite-

muscovite-chlorite schist and massive metapsammitic, locally garnetiferous quartz-biotite schist

(Pentzel, 1994). Amphibolites comprising sheared feldspathic metagabbros and chlorite

amphibole schist were also noted in the hangingwall. Their positioning and distinct character is


33



used for stratigraphical correlation.

A schematic stratigraphy of the mineralized zone is given in Figure 7.2.1_1. The mineralized zone

is enveloped in staurolite-rich biotite schist, which contains fine to coarse disseminated sulphide

grains. The mineralized zone consists of streaky, banded and locally semi massive granular

sulphide aggregates within a quartzitic groundmass which is in places magnetite bearing

(Pentzel, 1994).

The semi massive mineralized quartzite bands are intercalated with weakly mineralized biotite-

and staurolite-rich schist. The sulphides occur within the schist in association with quartz lenses

or as streaks and disseminations. The bottom part of the mineralized zone generally consists of a

poorly mineralised magnetite quartzite unit which is separated from the barren footwall schist by

staurolite-rich biotite schist.


34



Figure 7.2.1_1

Schematic Stratigraphy of the mineralized zone at Ongombo (Maroni 1990 in Marlow 2007)

Typical mineralization at Ongombo is shown in Figure 7.2.1_2. This shows sections of borehole

158A on the East/Ost Shoot. Additional photographs of the mineralization can be seen in

Appendix A. A typical distribution of grades is shown in Table 10_1 for boreholes ONG08_01 and

ONG08_02


35



Figure 7.2.1_1

Mineralization in borehole 158A on the East/Ost Shoot


36



8 DEPOSIT TYPES

TCL introduced the Besshi-model for massive sulphides as an exploration tool on the Matchless

Amphibolite Belt and this was later adopted by Gold Fields.

The following text is a short summary of the model for the Besshi-type massive sulphide

mineralization from Cox and Singer (1986).

Description: Thin sheet-like bodies of massive to well-laminated pyrite, pyrrhotite, and

chalcopyrite within thinly laminated clastic sediments and mafic tuffs.

Geological EnvironmentRock Types: Clastic terrigenous sedimentary rocks and tholeiitic to

andesitic tuff and breccia.

Locally, black shale, oxide-facies iron formation, and red chert.

Textures: Thinly laminated clastic rocks. All known examples are in strongly deformed

metamorphic terranes. Rocks are quartzose and mafic schist.

Deposit Description

Mineralogy: Pyrite + pyrrhotite + chalcopyrite + magnetite + sphalerite

Texture/Structure: Fine-grained, massive to thinly laminated ore with colloform and framboidal

pyrite. Breccia or stringer ore. Cross-cutting veins contain chalcopyrite, pyrite, calcite or galena,

sphalerite.

Alteration: Difficult to recognize because of metamorphism.Ore controls: Deposits are thin, but

laterally extensive and tend to cluster in an echelon pattern Weathering: GossanGrade and

Tonnage

According to Cox and Singer (1986) the average size of Besshi-type deposits is 220,000t.

According to Gold Fields estimates, the Ongombo Project is within the top quarter of the deposits

classified as Besshi-type.

The average grade (50 percentile) is 1.5% Cu. The Ongombo Project, according to calculations

by Gold Fields is in line with these grades.


37



9 EXPLORATION BY NCO

Previous owners of the EPL area successfully employed both magnetic and electro-magnetic

surveys to identify magnetic anomalies and conductors at the Ongombo deposit, and ground

electro-magnetic surveys penetrated effectively to around 500m. Although the Ost Shoot has

historically been tested to a depth of 500m, the Central Shoot has only previously been tested to

a depth of around 300m. Consequently a ground electro-magnetic survey was considered to be

the most appropriate initial exploration tool to test the down plunge extension of the Central

shoot.

The ground electromagnetic survey over the Central Shoot was undertaken by consultants

Gregory Symons Geophysics and completed in September 2008. The initial base line clearing

and surveying was completed in late August 2008, and the 200m spaced cut lines, loops and

pegging was completed in early September 2008. The actual electromagnetic survey was

undertaken in mid-September 2008. The Time Domain EM (TDEM) survey utilized a Geonics

Protem EM receiver with Zonge GGT10 Transmitter and Zonge GDP 32 II receiver. Four large

loops measuring 600m by 800m were surveyed on 200m spaced lines and 50m spaced stations.

The loops were aligned in a north-easterly direction down plunge of the deepest historical

intercepts of copper mineralisation on the Central Shoot. The south-western boundary of the first

loop was aligned with the northeast boundary of the last historical ground EM loop surveyed by

GFN. Initial interpretation of the EM data indicates the presence of a conductor which extends

down plunge of the deepest historical intercepts of copper mineralisation on the Central shoot,

and which is aligned parallel to the north-easterly trend of the Central Shoot. However, the

strongest signal from the conductor lies up dip of the Central shoot trend, and indicates the

Central Shoot may possibly coalesce with a down dip extension of the Ost Shoot.

The result of the TDEM (time domain electro-magnetics) and NASMT (natural source audio

magneto-tellurics) indicated a previously unknown shoot, termed the Far West Shoot. The shoot

correlates with a surface gossan.


38



Figure 9_1 NSAMT Conductivity Depth Section, showing the Ongombo Shoot System


39



10 DRILLING

Based on the EM data work done by NCO, NCO decided to drill 2 diamond boreholes to verify

mineralization down-plunge of the historical Ost and East Shoots.

The drilling confirmed the presence of mineralization down-plunge of the Ost and Central Shoot.

The drilling also confirmed the presence of mineralization within the “inter-shoot zone” of the

Central and Ost Shoots.

The result from the drilling is tabulated in Table 10_1.

Table 10_1

Ongombo: Review of Geology

Borehole Results

BH Id East North Depth From Depth To Thickness Cu(%) Zn(%) Au(g/t) Ag(g/t)

ONG08-1 741626 7535593 402.05 402.93 0.88 0.23 0.02 0.07 <10

402.93 403.04 0.11 0.78 0.08 0.23 <10

403.04 403.1 0.06 0.27 0.06 0.06 <10

403.1 403.14 0.04 1.42 0.09 0.61 10

403.14 403.4 0.26 0.2 0.03 0.06 <10

403.4 403.46 0.06 4.24 0.17 2.47 30

403.46 403.63 0.17 0.06 0.02 0.01 <10

403.63 403.79 0.16 8.05 0.23 1.85 51

403.79 404.58 0.79 1.49 0.06 0.39 <10

404.58 405.36 0.78 1.14 0.07 0.36 <10

405.36 406 0.64 1.03 0.04 0.28 <10

406 406.38 0.38 0.16 0.02 0.06 <10

406.38 406.66 0.28 1.42 0.02 0.38 <10

406.66 407.33 0.67 0.26 0.02 0.08 <10

407.33 407.45 0.12 1.39 0.04 0.46 10

407.45 407.74 0.29 0.13 0.02 0.05 <10

407.74 408.42 0.68 0.84 0.02 0.52 <10

408.42 408.83 0.41 0.3 0.02 0.1 <10

ONG08-2 738604 7531834 197.97 198.67 0.7 0.15 0.03 0.04 <10

198.67 199.14 0.47 0.02 0.03 <0.01 <10

199.14 199.53 0.39 0.26 0.05 0.07 <10

199.53 199.9 0.37 0.38 0.03 0.15 <10

199.9 200.15 0.25 0.96 0.06 0.28 <10

200.15 200.34 0.19 0.07 0.04 0.02 <10

200.34 200.37 0.03 1.21 0.08 0.42 <10

200.37 200.68 0.31 2.73 0.15 2.94 21

200.68 201 0.32 0.55 0.05 0.16 <10

Half core samples were taken at geological and or mineralogical boundaries. The down-hole

survey results indicate that the intercepted mineralization is a very good approximation of true

width.


40



11 SAMPLE PREPARATION, ANALYSIS AND SECURITY

Bagged samples of split drill core were dispatched by the drilling management consultants

Geomine Consulting Namibia to the Genalysis labs in Joburg by courier for preparation and the

pulps air freighted to Genalysis’ laboratory in Perth, Australia. Preparation in Johannesburg

consisted of jaw crushing the whole sample followed by pulverizing to a 120 gram pulp.

Copper, zinc and silver was determined by ore grade four acid digestion followed by optical

emission spectrometry (Genalysis Method code AX/OES). Gold was determined by 25gm fire

assay (Genalysis Method code FA25/AAS). The detection limits for Cu, Zn and Au is 10ppm and

for Ag it is 0.01ppm.

No quality control programme was instituted by NCO, and only the laboratory quality control

procedures were followed.


41



12 DATA VERIFICATION

Coffey Mining has reviewed all the historical exploration reports as well as literature available on

the Ongombo EPL’s and neighbouring areas. The historical reports are a summary of results

obtained and do not cover methods and processes followed. Coffey Mining has reviewed

documentation prepared by NCO, of which some of the information is used in this report.

Mr Navin Reddy of Coffey Mining undertook a three day site visit to verify the processes and

methodologies applied in the field as well as to verify the drilling programme and view the

borehole core at the geological survey of Namibia. Discussions were held with NCO staff to

discuss issues pertinent to this report.

It is the opinion of the Coffey Mining that the data reviewed is adequate to report on a

reconnaissance/early stage exploration programme and an Inferred Mineral Resource.

A summary of the historical data is given In Appendix A.

13 MINERAL PROCESSING AND METALLURGICAL TESTING

No metallurgical or processing test work has been carried out by NCO.

14 MINERAL RESOURCE ESTIMATES

14.1 Introduction

A geological model and mineral resource estimate for the TCL/Goldfields drilling data was

undertaken to determine the potential of the property and help plan future exploration. Two types

of estimation methods were attempted. The inverse distance weighted method was used for both

Shoots. An ordinary Kriging estimate was attempted for the Central Shoot. However, when model

validation was undertaken errors in the borehole data were found. When these errors were

corrected, the variogram models originally used could not be replicated and this method was

abandoned. Only the inverse distance estimation results are presented.

14.2 Geological Modelling

A geological model of the entire mineralized zone was constructed from the borehole data. The

data set is incomplete and some of the information used was estimated from information in

neighbouring boreholes. Collars –where records were available actual collar coordinates were

used. Where records were not available, collar coordinates were estimated from map positions.


42



Surveys - where records were available actual survey data were used. Boreholes have a very

regular and predictable deviation caused by strong and monotonous structural fabrics. Where

survey data was not available for a specific borehole, the survey data from the nearest hole was

used to predict the position of the mineralization. Deflections which were not surveyed had the

inclination increased by one degree in the direction of the borehole deviation which was typical off

a non-direction wedge at the time. Assays – assays were extracted from drilling logs and

reports. Lithology - at this stage the only lithological distinction made was between the

mineralized zone and the non-mineralized hangingwall and footwall. Because detailed geology

was missing for many of the holes and in any case has not been verified, lithological variation

within zones was not modelled. For boreholes where geology logs existed, mineralized zone as

defined was kept. For boreholes without geological logs the limits were chosen based on grades

of copper, sulphur and silver. In most cases the boundary is obvious with large

increases/decreases in grade between neighboring samples.

14.2.1 Structure

The deposit is structurally simple consisting of two or more linear pencil shaped shoots which lie

within stratabound copper and iron sulphides. The Ost Shoot represents the down-plunge

extension of the East shoot. The shoots lie within a planar zone, which parallels the dip of the F2

penetrative fabric (main schistocity or foliation). The L2 lineation also lies within this plane and it

is this L2 extension direction, which controls the mineralisation. This lineation is well exposed at

the surface at Ongombo. Shoots and the L2 lineation plunge about 7 degrees to the northeast,

whilst the F2 fabric and stratabound sulphides dip about 15-20 degrees to the northwest.

Modelled features are the Central Shoot and East/Ost Shoot. It is possible that a small portion of

a third shoot was intersected in one borehole to the northwestt of the Central Shoot. The East

and Ost shoots have been combined as a single unit. Geologically they appear similar. The strike

change may be the result of a general change in attitude of the strata or minor faulting. A similar

feature is seen at the neighbouring Otjihase Mine (Section 15). There may be a loss in continuity

due to small-displacement sub-vertical faulting. However, with the wide borehole spacing and

lack of detailed borehole logging, the presence and extent of these faults is not known.

14.2.2 Domains

Domains are only the two shoots. Smaller domains have not yet been established.

14.3 Borehole Data

Borehole data is from the records of Tsumeb Corporation Limited and its owner in the late 1980’s-

mid1990, Goldfields Namibia Limited. A discussion of the data is given in Appendix A. Borehole


43



data is used as is. The only corrections are in the survey data where obviously erroneous

readings were either removed or corrected.

14.3.1 Sample Flagging

Sample flagging for compositing and estimation is simple. All samples are flagged as

hangingwall, mineralized zone or footwall. No attempt has been made to subdivide the

mineralized zone. Better and more complete logging is needed for this step.

14.3.2 Compositing

Boreholes were not composited for inverse distance estimation but were weighted by sample

length to account for the different sample sizes. For the kriged estimate of the Central Zone

samples in the mineralized zone were composited to 40cm as used in the variograms modelling.

14.3.3 Bulk Densities

Bulk densities were estimated directly. All assays for copper also had associated bulk density

measurements. No cutting or capping was applied. Only two measurements were removed from

the database because of obvious errors (probably due to typing errors). There is a weak

correlation of density with copper grade.

14.4 Volume Modelling/Block Model Development

14.4.1 Assumptions

The object of the estimation exercise is to evaluate the quality of the historical data and the

potential of the project and a base for future exploration. To this extent the geology was modelled

using the top and bottom contacts of the mineralized zone for volume modelling. No attempt to

calculate a “best cut” from the boreholes was made. In addition no minimum or maximum stoping

width was used to limit the volume.

14.4.2 Block Size Test work

Borehole spacing varied from 50m x 100m to greater than 400m. Declustering exercise was

undertaken to look at the effect of block size on the estimation. In the unrotated coordinate

system there was very little difference between block sizes of 50 and 100m or block thickness of

2-5m. A block size of 50m x 50m x 8m was chosen in order to show the variability in the deposit

where borehole spacing was closest.

14.4.3 Model Construction and Parameters

Each shoot was modelled as a separate entity for separate estimations. Block models built on a


44



common prototype are only combined for display purposes. The model was constructed using the

UTM WGS84 grid coordinates and built in Datamine software. All mineralization is considered to

be contained within the mineralized zone with only sulphur (from pyrite) of potential interest in the

waste zones. No waste models were constructed.

14.5 Grade Estimation

14.5.1 Estimation Methods

The only successful estimation so far is from the inverse distance weighting method. Only these

parameters are reported. Elements estimated are copper, sulphur, silver, zinc and bulk density.

Only copper and bulk density are available for all samples. Assays for silver are available for

most samples. There are a large number of missing assays for sulphur and zinc. These are

estimated where data exist. All samples are weighted by sample length as well as distance from

the estimation point.

14.5.2 Estimation Parameters

Search volumes were determined by borehole spacing. Three search volumes were used 100,

200 and 400m in the plane of mineralization and 10, 20 and 40m thick. The search ellipse was

rotated to the plunge of the mineralization N30Em 7 °.

The two smaller volumes were to estimate the closely spaced boreholes. Blocks were estimated

on successive passes so that estimates used the minimum volumes. The estimation allowed for

up to 50 samples per block. In practice this did not exceed 20 and half of the blocks were

estimated with less than 5 samples, effectively placing the resource classification in the Inferred

category.

All elements were estimated separately.

14.6 Resource Classification and Criteria

Mineral Resources are classified as Inferred. There is a low confidence in the data mostly

because the borehole data is incomplete with regards to survey data and geological detail.

Inferred resources are for copper and silver only. Zn and Au grades are very low and there are

many gaps in the data due to either lack of assay or non-reporting. However, even though these

metal values are low they are likely to represent significant credits especially gold. Sulphur is

underestimated for the East/Ost shoot also due to lack of assays in some of the drilling


45



campaigns.

Mineral resources for Ongombo are given in Table 16.2_1 and grade tonnage distributions in

Table 16.2_2. Distribution of copper grades is shown in Figure 16.2_1

East/Ost Shoot has higher grades than the Central Shoot and the mineralized zone is thicker with

blocks estimated with a larger number of samples. Maximum block thickness for the Central

Shoot is 5m and for the East/Ost shoot 7.8m.

Table 16.2_1

Ongombo Project

Inferred Mineral Resources of the Ongombo Project

Resource Category In situ tonnes and grade at 1% Cu cutoff

Tonnes (Millions) Cu (%) Ag (g/t) Density (t/m3)

Central Shoot 2.47 1.8 8 3.04

Est/Ost Shoot 4.78 1.6 8 3.37

Total 7.25 1.7 8 3.26


46



Table 16.2_2

Ongombo Project

Grade tonnage distribution of Inferred Mineral Resources of the Ongombo Project

Resource Category

In situ tonnes and grade

Cut-off grade Cumulative Tonnes Cu (%) Ag (g/t) Density (t/m3)

Central Shoot 0 3370000 1.51 9 2.9

0.5 3157000 1.59 9 3.04

1 2475000 1.79 8 3.04

1.5 1143000 2.35 11 3.08

2 601000 3.02 13 3.19

2.5 360000 3.53 16 3.25

3 209000 4.08 19 3.26

3.5 197000 4.14 19 3.27

4 155000 4.23 18 3.28

4.5 5381 4.59 23 3.24

5 275 5.14 23 3.29

Est/Ost Shoot 0 10245000 1.17 7 3.19

0.5 9807000 1.2 7 3.29

1 4780000 1.59 8 3.37

1.5 1783000 2.23 12 3.48

2 779000 2.79 15 3.8

2.5 474000 3.16 17 4.04

3 317000 3.38 21 4.39

3.5 54000 4.19 12 3.3

4 23000 5 12 3.33

5 12000 5.68 10 3.29

6 4204 6.41 7* 3.25

6.5 1821 6.93 7* 3.26

7 16 7.39 40 3.31

* Estimate may be low due to missing assays


47



Figure 16.2_1

Estimated distribution of copper grades Ongombo


48



15 ADJACENT PROPERTIES

The Otjihase Mine, managed by Weatherly International PLC, is an operating Copper Mine which

is immediately southwest of the current Ongombo Project.

The historical production from Otjihase is tabled in Table 15_1. For comparative purposes the

mineral resources of the Otjihase Mine are tabled in Table 15_2 (www.weatherlyplc.com,

Weatherly 2011). An improvement in the average grade of the Cu, Ag and Au is consistent with

improved resource category. The average Au grade of 0.22g/t for the inferred resources at

Otjihase compares with an average grade of 0.29g/t Au for NCO’s 6.78m intercept in ONG08-1

on the Ost Shoot, and an average grade of 0.38 g/t Au for NCO’s 3.3m intercept in ONG08-2 on

the Central Shoot.

Table 15_1

Ongombo Project

Historical Production from the Otjihase Mine (Schneider G.I.C and Seeger K.G., 1992).

Year Ore (t) Cu Concentrate (t) Pyrite Concentrate (t)

1980 5037

1981 205634 14242 26772

1982 774060 61192 108818

1983 756996 53322 118239

1984 844049 49890 172315

1985 832741 55006 174363

1986 867723 61331 189451

1987 546868 38328 120260

1988 831570 55789 226682

1989 763542 49448 196532

1990 630497 34138 138924

1991 651797 34498 127119


49



Table 15_2

Ongombo Project

Mineral Resources of the Otjihase Mine

Resource Category In situ tonnes and grade

Tonnes Cu (%) Ag (g/t) Au (g/t)

MEASURED 3543518 2.41 9.05 0.43

INDICATED 2816936 1.99 6.73 0.35

INFERRED 4729622 1.49 6.34 0.22

TOTAL 11090076 1.91 7.3 0.32

The local geology of the Otjihase Mine is presented in Figure 15_1. Gossan outcrop is the

surface expression on the massive sulphide mineralization. Otjihase consists of four identified

mineralized shoots, one large shoot more than 8km in length, broken by faults, which forms the

basis for the mine and three smaller ones.

Figure 15_1

Plan of mineralization at the Otjihase Mine ( Weatherly 2011)


50



16 INTERPRETATION AND CONCLUSIONS

16.1 Data review and mineral resources

In spite of the incompleteness of the reports and drilling data, there is sufficient data to evaluate

the potential of the property. The Matchless Amphibolite belt is a well know geological feature and

has been extensively studied. Along with the academic work, substantial exploration has been

carried out in the past and the neighbouring property has an operating mine which has a similar

style of mineralization. The Ongombo property hosts a similar style of mineralization to the

neighbouring Otjihase Mine. The geometry of the Ongombo deposit should be fairly predictable

and can be extrapolated beyond the current drilling for several hundred metres. Both the logged

lithologies and the assay results appear reasonable for the deposit type. At this stage the drilling

data can be used to estimate an Inferred Mineral Resource however, the lack of downhole survey

data for the boreholes leaves too large an uncertainty in the positions of the mineralized

intersections for a higher classification. There appears to be reasonable potential to extend both

the Central and East/Ost Shoot down plunge to the north-east as far as the Swakop Graben on

the EPL boundary. The NSAMT Conductivity results show potential for another two parallel

shoots but these appear as much weaker signal and the geometry may be similar to Otjihase with

a combination of well mineralized shoots and poorer ones. The Ongombo deposit is a small

moderate grade copper deposit with accessory silver, probable gold but with very low zinc

grades. The mineral resource estimation shows grades similar to those that Otjihase is currently

mining. East/Ost Shoot has a lower overall grade than the Central Shoot at a 1% copper cut off

and the East/Ost Shoot has large low-grade tonnages which the evaluated portion of the Central

Shoot does not have.

16.2 Exploration Potential

One of the main characteristics of the deposits in the northern Matchless Belt is that they have

mineralization developed in shoots of substantial length. The neighbouring Otjihase mine has

mineral resources defined over a 9 km length and the deposit may extend further. The Matchless

deposit to the southwest has shoots of several kilometres in length, also not fully evaluated.

Evaluation of the geology and mineral resources of Ongombo suggest that this same

characteristic is present at Ongombo. Drilling has not delineated the full extent of the deposit.

Addition potential lies in four areas (Figure16.2_1)


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Target 1 - The highest grades from the mineral resource estimation at the northern most end of the OST

shoot

The down plunge extension of the Ost Shoot – beyond 14,300E is essentially untested. Only 4 drill holes

exist northeast of Section 14,300E. These include ONG171 on section 14,500E, which reported 9.53m%

Cu; ONG155 and NCO borehole ONG08-1 on section 14,700E, which reported 1.62% Cu and 4.01m%

Cu, respectively; and ONG154 on section 14,900E which reported 1.33m% Cu. Modelled grades for the

East/Ost Shoot are highest in this area. The strike length of the zone between sections 14,300E and

16,900E is 2,600m.

Target 2 - the down plunge extension of the Central Shoot parallel to the East/Ost Shoot the strike length

of the zone between sections 11,100E and 16,900E is 5,800m.

Target 3 - the up-dip extension of historical mineralisation defined between sections 13,500E and

14,500E on the East/Ost Shoot – this zone represents a significant portion of the mineralisation on the

Ost shoot and all sections are open up-dip

Target 4 - the zone between the Central Shoot and the East/Ost Shoot between sections11,100E and

11,900E. The strike length of the zone linking the Central shoot to the Ost shoot between sections

11,100E and 11,900E is 800m. NCO EM data and NCO hole ONG08-2 and the mineral resource

estimation all show that the Central Shoot and the Ost Shoot locally coalesce. The continuity of

mineralisation between the historical ore shoots (the coalescing of ore shoots) could substantially

increase the tonnage target potential at Ongombo.

The potential size of Target 1 and Target two may be in the order of 6Mt (Table 16.2_1. Parameters in

Table 16.2_1 are taken form the results of the mineral resource estimation.

Table 16.2_1

Ongombo Project

Target Size for Targets 1 and 2

Area Length(m) Width (m) Thickness (m) Density (t/m3) Total tonnes Extraction ratio Est Tonnes (Mt) Grade

Central 5800 200 1.5 2.9 5046000 0.7 3.5 1.8

East/Ost 2600 250 2.7 3.3 5791500 0.4 2.3 1.6

Total 5.8 1.7


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Figure 16.2_1

Estimated distribution of copper grades at Ongombo and exploration targets


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17 RECOMMENDATIONS

There is sufficient potential on the Ongombo property to recommend additional work to evaluate

the mineral potential.

The following tasks need to be done as soon as possible;

Re-logging of all boreholes for which core is available

Find and resurvey all borehole collars to check locations

Create a detailed stratigraphic profile for the property

Remodel the geology with the revised stratigraphic interpretation

Re-evaluate the NSAMT survey to see if additional work needs to be done

A detailed exploration plan has not been supplied to Coffey by NCO. The following is

recommended;

Where boreholes are accessible it is recommended that NCO tries to resurvey boreholes

where this information is missing.

Downhole resistivity survey may be useful for verifying the position of the mineralization in

holes which do not have preserved core.

Depending on the outcome of the above and the core logging it may be necessary to twin

some of the boreholes to verify the geology if there are large areas where borehole data is

uncertain.

The Goldfields exploration program left many planned boreholes undrilled. These boreholes

are on the established grid and were meant to target down plunge extensions of the Central

Shoot. It is recommended that NCO continue with the same plan.

FillingapsinthecurrentdrillinggridonboththeCentralandEast/OstShoot.

The recommend grid as per the Goldfields programme is to test new areas at 400m section

spacings but with 100m spacings along a section to define the shoots lateral edges.

Once the shoot boundaries are defined infill drilling is proposed at 100m sections by 50m

spacing along section or at 50m x 50m if necessary in the shallower parts of the deposit.

The shallower parts of the deposit have been drilled. Chasing the extensions to the

mineralization will require boreholes in excess of 500m. While this is a good longer term goal


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it is recommended that NCO put the majority of their work programme in the first year

towards the evaluation of the currently defined mineral resource.


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18 REFERENCES

Ferneyhough, A.B. 1989. Surface EMP results for loops 13 to 28 over the Hoffnung and Otjituezu

Prospecting Grants, Gold Fields Namibia Limited internal Report.

Breitkopf, J.H. and Maiden K.J. (1988) Tectonic Setting of the Matchless Belt Pyritic Copper Deposits,

Namibia: Econ.Geol.,v.83, p. 710-723

Cox and Singer (1986) Mineral Deposit Models version 1 USGS Bull. 1693

(http://pubs.usgs.gov/bul/b1693/ )

Goldberg I., 1976. A preliminary account of the Otjihase copper deposit, South West Africa:

Econ.Geol.,v.71, p. 384-390.

Killick, A.M., 1983. Sulphide mineralization at Gorob and its genetic relationship to the Matchless

Member, Damara sequence, SWA/Namibia: Geol. Soc. South Africa Spec. Pub., v. 11, p. 381- 384.

Kotze, W,H, 2008. Independent Geologist’s Report On the Ongombo Base Metal Project (Epl3238) For

Ongombo Copper Limited, Geomine Consulting Namibia CC, 13 February 2008.

Maneschijn, G.D, 1991. The Ongombo semi-massive sulphide deposit, with special reference to diamond

drilling results. Internal Goldfields Namibia Limited report.

Marlow A. G., 2007. Technical Review of the Ongombo Copper Deposit in Namibia. Prepared for Avanti

Resources Pty Ltd. 54pp.

Moroni M., 1990. The Geology, Petrology and Geochemistry of the Mineralisation and Hydrothermal

Alteration at Ongeama, Ongombo and Matchless West Extension, Namibia. M.Sc. thesis Rhodes

University, 133pp.

Petzel. V.F.W, 1994. Drilling Proposal for the Ongombo Prospect for 1994. Goldfields Namibia Limited

Internal report pp3

Petzel, V.F.W. 1994b. Progress report for the Hoffnung Grant M46/3/1623 for the period June 1992 to

May 1994. Gold Fields Namibia internal report. 18pp.

Schneeweis, R. 1986. Progress Report for the Period March 1983 to May 1986, Hoffnung Prospecting

Grant M46/3/1623. Tsumeb Corporation Limited, Internal Report

Schneider G.I.C and Seeger K.G., (1992). Copper: Mineral Resources Series. Open File report MRS 49

Geological Survey of Namibia


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Weatherly 2011, Investor Presentation July 2011.

http://www.weatherlyplc.com/downloads/pdf/Weatherly_Presentation_July_2011.pdf

Used for geological modelling and data but not directly quoted ion the report

Corbett, D.H., 1990. Progress Report to the Mining Commissioner in Support of the Renewal of the

Hoffnung Prospecting Grant M46/3/1623 for a Further Period of Two Years from 10 September 1990.

Gold Fields Namibia Limited Report dated June 1990.

Kruger, T.L. 1993. Ongombo Prospect: Ost and Central Shoot Exploration Proposal. Gold Fields Namibia

Limited internal report for EC SYSMIN Report dated 20/40/1993. 9pp

Lubbe, B.L. 1994. Surface EM results for loops 29 to 34 over the Hoffnung Prospecting Grant

M46/3/1623. Gold Fields Namibia internal report, 3pp.


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58



APPENDIX A - DATA REVIEW HISTORICAL DRILLING

1 DRILLING METHODS

A combination of percussion (Schramm hammer drill) and diamond core drilling was used. Percussion

drilling of non-mineralized overburden with diamond tail was a common method used by Goldfields. Most

boreholes have one non-directional deflection. Core recovered was either “B” or “N” sized. Recoveries

were not recorded but drilling the recent site visit by Coffey mining, some of the historical holes

2 SURVEYING

2.1 Grid Control

Boreholes were laid out on a grid of sections 200m apart and 50-200m spacing along sections

(Figure 12.2_1). Drillling does not appear to have been systematic but dependant on yearly

budgets and targets. Some boreholes laid out and numbered were never drilled.

2.2 Borehole Collars

Electronic (scanned) copies of the original hand written datasheets and/or original prints from an

electronic database were provided to Coffey Mining. Borehole collars were surveyed by a

qualified surveyor and reported relative to an established baseline and in the local Namibian

coordinate system. This was then based on the LO (Gauss Conformal) Bessel 1841 (Schwarzeck

Datum) projection with the German legal metre (http://www.mme.gov.na/gsn/nam-map-

system.htm). Survey records are available for most boreholes and these coordinates are used in

the evaluation. Where records are not available, coordinates are estimated from old maps and

elevations estimated from a Google EarthTM

image. During the Site visit by Coffey Mining, no

borehole collars could be located due to thick grass. However, during 2007 and site visit by

Geomine (Kotze, 2008) found the old boreholes could be located but only boreholes from

OGB070 onwards were marked with a cement capping and metal plate with the borehole number.

Older boreholes had no identifying numbers.

2.3 Downhole Surveying

Electronic (scanned) copies of the original hand written datasheets and/or original prints from an

electronic database were provided to Coffey Mining. Downhole surveying was carried out by the


59



drilling contractor. The actual instruments used at the time are not recorded however both single

shot and multishot cameras were available at the time.

It appears that both instruments were used as some boreholes have few widely spaced readings

typical for a single shot instrument and some have more regularly spaced and more frequent

readings typical of the multishot tools at the time.

It is believed that all for the boreholes were originally surveyed however not all of this data is now

available. In most cases the mother hole was surveyed but not the deflections. In some cases it

appears that the deflection was surveyed but not the mother hole. Some boreholes have both the

mother hole and deflection surveyed.

Boreholes have a very regular and predictable deviation caused by strong structural fabrics.

Where survey data was not available for a specific borehole, the survey data from the nearest

hole was used to predict the position of the mineralization. Deflections which were not surveyed

had the inclination increased by one degree in the direction of the borehole deviation which is

typical of a non-direction wedge at the time.

2.4 Surface Topography

The entire mineralized body is below surface and underground mining is the norm in this area. A

detailed topographic survey has not been carried out. Topography, where needed, can be

modelled from borehole collars and existing topographic data.

3 LOGGING, SAMPLING, ASSAYING AND DATA MANAGEMENT PROCEDURES

3.1 Geological Logging Electronic (scanned) copies of the original hand written datasheets

and/or original prints from an electronic database were provided to Coffey Mining. Detailed

logging by rocktype and mineralization was undertaken for all boreholes within the mineralized

zones. Logging and sampling information collected by Goldfields appears to have been stored in

an electronic database. Details of which are not known.

3.2 Sampling Diamond Core Samples Mineralized zones were sampled by taking half core.

Samples were taken as to honour geological boundaries. Samples were cut with a diamond saw.

3.3 Sample Preparation No details of the sample preparation are available. However,

Ongombo was a part of a larger copper mining operation and standard procedures of TCL and


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Goldfields, appropriate for the deposit at the time, would have been used.

3.4 Assaying No details on the assay methods are available. Normal procedures would have

been an acid digest followed by AAS finish for Copper and Zinc, Fire Assay for silver and gold.

3.5 Bulk Densities Bulk densities were routinely taken. One density measurement per assayed

sample was the norm. Details on the measurement procedures are not available.

3.6 Analytical Quality Control (QA/QC) Procedures and Data Analytical quality control was

not routinely the responsibility of the exploration staff and assays were done in-house at

TCL/Goldfields laboratories. No record of the laboratory quality control procedures is available to

Coffey Mining.

3.7 Data Verification Full data verification has not been completed by NCO or Coffey Mining.

Access to the drill core is needed to check the accuracy of the logging and to resample the

mineralized zones.

3.8 Core Storage. Borehole core that is available is stored at the Geological Survey of Namibia

storage facilities. When inspected the core boxes and core were found to be in good condition

with few signs of oxidation of the sulphides. Boxes were well marked and stored in a well

maintained facility. All depth and sample markings were still visible. Core is in a condition to make

re-logging and re- sampling possible.

4 SUMMARY

Data records for the Ongombo project are incomplete but sufficient information exists to evaluate the

potential of the project area.

Documents

Coffey Mining Pty Ltd - SHALI Group Mining Pty Ltd 3 Coffey Mining Pty Ltd Review of the Geology and Exploration of the Ongombo Copper Project in Namibia – 2 November 2011 Table