INDEPENDENT REPORT ON THE NICKEL LATERITE …s1.q4cdn.com/531881216/files/doc_downloads/Agata-Nickle-Laterite... · INDEPENDENT REPORT ON THE NICKEL LATERITE RESOURCE - AGATA NORTH,

INDEPENDENT REPORT ON THE NICKEL LATERITE RESOURCE - AGATA NORTH, PHILIPPINES.

Agata North Project, Agusan del Norte Province, Philippines.

For

TVI Resource Development (Phils) Inc. 22/F BDO Equitable Tower, 8751 Paseo de Roxas Ave Salcedo Village 1226, Makati City Philippines

01 April 2013

Mark G Gifford MSc (Hons), FAusIMM

Independent Report on the Nickel Laterite Resource – Agata North, Philippines 2013

i

TABLE OF CONTENTS

Executive Summary ................1

1.0 Introduction ................3

2.0 Location, Description and Tenement Status ................4

2.1 Location

2.2 Property Description

2.3 Tenement Type

3.0 Regional Climate, Resources, Infrastructure, Physiography and Access ..............11

3.1 Climate

3.2 Local Resources and Infrastructure

3.3 Physiography

3.4 Access

4.0 History ..............13

5.0 Geology ..............14

5.1 Regional Geology

5.2 Local Geology

5.3 Laterite Ni Deposit Geology

5.4 Other Deposit Geology

6.0 Mineralization ..............22

7.0 Exploration ..............23

7.1 MRL General Exploration (1997-2000)


7.3 MRL Laterite Ni Exploration

7.4 Drillhole Collars Survey

8.0 Sampling and Assaying ..............29

8.1 ANLP Sampling Procedure

8.2 MRL Sampling Protocols

8.3 Laboratory Sampling Protocols

8.4 Internal Check Assays (McPhar and Intertek)

8.5 External Check Assays (MRL)

8.6 Summary

9.0 Data Verification ..............41

10.0 Bulk Density Determinations ..............42

11.0 Resource Estimate ..............45

11.1 Geometric Interpretation

11.2 Exploratory Data Analysis

11.3 Variography and Estimation

11.4 Resource Classification

12.0 Conclusions .............65

13.0 References .............66

14.0 Date and Signature .............68


ii

LIST OF FIGURES

Figure 1: Map of the Philippines showing MRL Project Areas ................4

Figure 2: MRL Tenements and Projects in the Surigao Mineral District ................5

Figure 3: Map showing broad outline of ANLP and Agata Cu-Au Prospects ................6

Figure 4: Compilation Map showing areas of mapped Ni Laterites within Surigao District ................7

Figure 5: Panoramic view of ANLP showing the main area of laterite development. ..............12

Figure 6: Geological Map of Surigao Mineral District ..............15

Figure 7: Local Geological Map of Agata North Project Area ..............17

Figure 8: ANLP Drillhole Location Map – BHP-Billiton and MRL (2007) Drilling. ..............26

Figure 9: ANLP Drillhole Location Map – All Drilling ..............28

Figure 10: Graphs of Nickel Standards Assays. ..............38

Figure 11: Comparison of Independent Checks and MRL Assays ..............42

Figure 12: Agata North Bulk Density Test Pit Location Map ..............44

Figure 13: ANLP Saprolite BD data graph – Dry Density vs Moisture All Data ..............45

Figure 14: Wireframe surfaces and drilling, Agata North (Ni on left, Fe on right side of drill trace....46

Figure 15: Block model sub-domains. ..............47

Figure 16: Histograms for composited Cr2O3 for saprolite sub-domains ..............49

Figure 17: Histogram for composited CaO in the upper limonite sub-domain ..............50

Figure 18: Contact analysis for the upper and lower limonite for Ni, Co, Al and Mn …………...51

Figure 19: Contact analysis for the upper and lower limonite for Fe, Mg, SiO2 and Cr2O3 ..............51

Figure 20: Contact analysis for the upper and lower limonite for CaO. ..............51

Figure 21: Contact analysis for the upper and lower saprolite for Ni, Co and Fe ..............52

Figure 22: Contact analysis for the upper and lower saprolite for Al, Mg, Cr2O3 and MnO ..............52

Figure 23: Contact analysis for the upper and lower saprolite for SiO2 and CaO ..............52

Figure 24: Comparison of composites against the block model for Ni in limonite. ..............59

Figure 25: Comparison of the sub-dom and dom block models for Cr2O3 in upper saprolite ............59

Figure 26: Resource classification, Agata North Deposit. ..............60

Figure 27: Grade-tonnage curve, Measured + Indicated, Limonite. ..............62

Figure 28: Grade-tonnage curve, Measured + Indicated, Saprolite ..............62

Figure 29: Grade-tonnage curve, Measured + Indicated, Upper Limonite ..............63

Figure 30: Grade-tonnage curve, Measured + Indicated, Lower Limonite ..............63

Figure 31: Grade-tonnage curve, Measured + Indicated, Upper Saprolite ..............64

Figure 32: Grade-tonnage curve, Measured + Indicated, Lower Saprolite ..............64


iii

LIST OF TABLES Table 1: Agata Project Tenements held by Mindoro ..........…...8

Table 2: Climate Averages and Extremes 1961-2000 ……………11

Table 3: NAMRIA Tie Points Technical Description ……………29

Table 4: Ni Standards used at ANLP and frequency ..............33

Table 5: Variance of Original and Internal Laboratory Duplicate Analyses ……………35

Table 6: Variance of Ni Standard and Laboratory Assays ……………36

Table 7: Variance of Field Duplicate and Original Assays .............36

Table 8: Variance of Field Duplicate and Original Assays .............37

Table 9: Variance of Pulp Duplicate and Original Assays .............39

Table 10: Variance of Pulp Duplicate and Interlab Assays .............40

Table 11: Results of Independent Check on Drill Core Assays .............41

Table 12: Summary of Bulk Density Measurements .............43

Table 13: Domain and Sub-Domain codes for Agata North Laterite ……..……45

Table 14: Block Model Properties .............46

Table 15: Comparison of raw sample lengths to composite sample lengths. .............47

Table 16: Composite statistics for sub-domains .............48

Table 17: Limonite Variogram Models .............53

Table 18: Saprolite Variogram Models .............54

Table 19: Domains and sub-domains estimated for each variable .............54

Table 20: Estimation neighbourhood parameters .............55

Table 21: Percent cells in estimation runs and mean number of samples used .............56

Table 22: Composite vs. block estimate comparison .............57

Table 23: Agata North Mineral Resource Estimate as at 18th March 2010. .............60

LIST OF APPENDICIES

Appendix 1: ANLP Cross-Sections

Appendix 2: MRL QA/QC Procedures

Appendix 3: McPhar / Intertek Sample Preparation Procedures

Appendix 4: ANLP Bulk Density Data

Appendix 5: ANLP Resource Estimate – Statistics and Variography

Appendix 6: 2010 and 2013 Resource Comparison


1

EXECUTIVE SUMMARY

This Ni Laterite Resource report was prepared at the request of Yulo Perez, Manager of TVI Resource

Development (Phils) Inc. It is the sixth mineral resource estimate completed over the Agata North

Lateritic Nickel Project (ANLP) project, and was to estimate a resource post the review and

application of further sub domains within the Agata North limonite and saprolite geological domains.

ANLP is located about 47 km north-northwest of Butuan City and 73 km southwest of Surigao City,

Mindanao Island, Philippines. The ANLP is one of the projects located within the overall Agata

Project, which is covered by the Mineral Production Sharing Agreement (MPSA) Contract Area held

by Minimax Mineral Exploration Corp. (Minimax) denominated as MPSA-134-99-XIII and approved

by the Department of Environment and Natural Resources (DENR) on May 26, 1999.

The Agata Project is situated along the southern part of the uplifted and fault-bounded Western

Range on the northern end of the east Mindanao Ridge. green schists, ultramafics, limestones,

andesite and tuff, younger limestones, intrusive, and alluvium are present within the area. The

widespread occurrence of ultramafics and serpentinized ultramafics, especially along the broad

ridges characterized by peneplaned topography provide a favourable environment for the

development of nickel laterites.

The laterite profile in the ANLP consists of the ferruginous laterite, limonite, saprolite grading to the

ultramafic rock, from surface to increasing depth. The limonite zone is iron oxide-rich, where the

predominant minerals are hematite, goethite and clays, and with moderate nickel content (over 1%),

while the saprolite zone has much less iron-oxide, is magnesium-rich, and has a slightly higher nickel

content than the limonite horizon in its upper portion.

This report is based on the exploration data that were produced and compiled by previous owners

Mindoro Resources Limited (MRL). Data verification performed by the author of the MRL database

found no discrepancies. Hence the database is considered adequate to meet industry standards to

estimate mineral resources.

The resource was estimated by Mike Job, Principal Consultant, Quantitative Group Perth, using the

Ordinary Kriging method. The data was domained into 5 ore types, Limonite (upper), Limonite

(lower), Saprolite(upper), saprolite (lower), and Bedrock and within each domain 9 individual

elements were estimated and reported upon. The resource estimate is as below:


2

In comparison to the August 2010 resource there is an increase of 4.1Mt in the Measured and

Indicated. Including a Ni grade increase in comparison to the previous estimate (from 1.03% to

1.10%), thus contained Ni metal for the Measured and Indicated has increases by 21% (from 307kt

Ni to 373kt Ni). This is the feature of a more robust estimation methodology which has reduced

influence of lower saprolite grades upon the upper saprolite grades, and a greater level of

confidence within the topography. Cut-off grades applied to the resource were 0.5% within the

Limonite Zone and 0.8% within the Saprolite Zone, these are the same cut-offs that have been

applied in all six ANLP resource estimations to date.

Classification Sub-Domain kTonnes Ni Co Fe Al Mg SiO2 CaO Cr2O3 MnO

Upper Limonite 211 0.98 0.11 49.7 3.11 0.5 2.8 0.03 3.67 1.01

Lower Limonite 27 1.13 0.15 35.5 2.57 5.1 21.1 0.22 2.86 0.85

Total Limonite 238 1.00 0.11 48.1 3.05 1.0 4.9 0.05 3.58 1.00

Upper Saprolite 478 1.19 0.03 11.3 0.39 17.9 41.6 0.32 0.89 0.23

Lower Saprolite

Total Saprolite 478 1.19 0.03 11.3 0.39 17.9 41.6 0.32 0.89 0.23

Measured Sub-Total 716 1.13 0.06 23.5 1.27 12.3 29.4 0.23 1.78 0.49

Upper Limonite 8,360 0.93 0.11 47.9 3.45 0.6 3.3 0.21 3.13 0.92

Lower Limonite 1,403 1.00 0.12 36.3 3.01 3.6 15.8 0.23 2.58 0.83

Total Limonite 9,764 0.94 0.11 46.3 3.39 1.0 5.1 0.22 3.05 0.90

Upper Saprolite 23,411 1.16 0.03 11.9 0.55 16.5 40.3 0.35 0.91 0.25

Lower Saprolite 48 0.84 0.02 8.9 0.35 19.4 41.1 0.33 0.70 0.18

Total Saprolite 23,459 1.16 0.03 11.9 0.55 16.5 40.3 0.35 0.91 0.25

Indicated Sub-Total 33,222 1.10 0.05 22.0 1.38 11.9 30.0 0.31 1.54 0.44

Measured &

Indicated Grand Total 33,938 1.10 0.05 22.0 1.38 11.9 30.0 0.31 1.55 0.44

Upper Limonite 178 1.05 0.11 47.7 3.38 0.8 5.5 0.03 3.16 0.93

Lower Limonite 79 1.15 0.10 35.7 2.97 3.9 21.7 0.14 2.73 0.82

Total Limonite 258 1.08 0.11 44.0 3.25 1.8 10.5 0.06 3.03 0.90

Upper Saprolite 1,828 1.04 0.03 12.4 0.63 16.2 41.5 0.35 0.99 0.26

Lower Saprolite 0.02 1.11 0.02 7.3 0.21 18.9 42.7 0.28 0.65 0.16

Total Saprolite 1,828 1.04 0.03 12.4 0.63 16.2 41.5 0.35 0.99 0.26

Grand Total 2,086 1.04 0.04 16.3 0.96 14.4 37.7 0.32 1.24 0.34

Measured

Indicated

Inferred


3

1.0 INTRODUCTION

The Agata North Lateritic Nickel Project (ANLP) resource in the Philippines historically formed part of

the resource base of Mindoro Resources Limited (MRL) and had been under active exploration by

this company since 1997, with the first lateritic nickel resource drilling program completed in 2006. A

restructuring of MRL assets has meant that the ANLP has undergone active review by TVI Resources

Development (Phils) Inc. (TVI), with this report re-estimating the resource based on a re-evaluation

of geological domains and the re-estimating of 9 elements into the resource estimate.

This technical report was prepared at the request of Yulo Peres, Manager of TVI Resources

Development (Phils) Inc. This is the sixth mineral resource estimate for the Agata North Laterite

Nickel Project (ANLP) located within the northern areas of Mindanao, the southernmost Island

within the Philippines (Figure 1). The first four technical reports were completed from 2008 – 2009

and were compiled by Dallas M. Cox BE (Min) a qualified person as defined by National Instrument

43-101, with the 5th technical report completed by the author in 2010. All drilling programs

completed in the 2010 Resource were used again in the compilation of this resource – this re-

estimation is to aid TVI in determining the best approach to exploiting the resource in the short to

long term.

The resource estimate presented in this report has been completed by Mike Job, a qualified

geological statistician and Principal Consultant for Quantitative Group (QG) – a geological consulting

firm based in Perth, West Australia. The estimation methodology and geochemical modelling used

on the resource was defined by discussions with TVI, the author and QG so as to provide the most

comprehensive and accurate resource estimate possible considering the data spacing and continuity.

The author has visited site on three occasions, and has seen the exploration drilling in progress and

has been able to review all aspects of the operation. Tony Climie, the managing MRL exploration

geologist based in Manila has visited site on numerous occasions and was in charge of all drill

programs completed upon the ANLP since 1997. He and his technical staff have provided the

database and records and have ensured the accuracy and completeness of the dataset upon which

the author has made few changes or alterations.


4

2.0 LOCATION, DESCRIPTION AND TENEMENT STATUS 2.1 Location

The Agata Projects are located within the northern part of Agusan del Norte province in

Northeastern Mindanao, Republic of the Philippines. It lies within the Western Range approximately

10 kilometers south of Lake Mainit (Figures 1-2). The Agata Project falls within the political

jurisdiction of the municipalities of Tubay, Santiago and Jabonga. The Mineral Production Sharing

Agreement (MPSA) Contract Area, encompassing the Agata Projects, is bounded by geographical

coordinates 9010’30” and 9019’30” north latitudes and 125029’30” to 125033’30” east longitudes.

Figure 1: Map of the Philippines showing MRL Project Areas

The ANLP is located in barangays Lawigan and Tinigbasan, municipality of Tubay, barangays E.

Morgado (formerly Agata) and La Paz, municipality of Santiago, and barangay Colorado, municipality

of Jabonga, all in the province of Agusan del Norte. It lies about 73 km southwest of Surigao City and

47 km north-northwest of Butuan City. The majority of MRL’s exploration activities on the project

area are located in barangays Lawigan and E. Morgado.


5

Figure 2: MRL Tenements and Projects in the Surigao Mineral District


6

The Agata South Laterite Project (ASLP) is located in barangays Binuangan, Tagpangahoy, and

Tinigbasan, municipality of Tubay. It is under a joint venture agreement with Delta Earthmoving, Inc.

(Delta).

The locations of the known mineralized zones on the Agata MPSA relative to the property

boundaries are illustrated in Figure 3 and Figure 4. The ANLP mineralized zone, as defined by drilling

and mapping to date, lies entirely within the Agata MPSA. Other known nickel laterite zones exist

near the southern boundary of the property. Artisanal copper and gold mining is active in the Agata

MPSA area and are shown in Figure 3. These are outside the delineated nickel laterite mineralized

zones.

Figure 3: Map showing broad outline of ANLP and Agata Cu-Au Prospects

There are no existing mineral reserves within or near the property boundaries. The nearest mine

infrastructures, including settling ponds, are those of the SRMI Mine located in between the parcels

of the Agata MPSA at the southern boundaries (Figure 4). The National Highway runs parallel to the

length of the Agata MPSA, just outside the eastern boundary. In addition, a farm-to-market road

transects the northern portion of the MPSA area, near the Tubay River.

2.2 Property Description

The ANLP area is part of the Agata Projects and is covered by the approved MPSA of Minimax

denominated as MPSA 134-99-XIII, which is comprised of 66 blocks covering an area of 4,995

hectares (ha) (Figure 2). To the southeast of the ANLP area, and surrounded by the Minimax MPSA,

is the Estrella Bautista Exploration Permit (EP) Area denominated as EP 00021-XIII, covering 84.39


7

Figure 4: Compilation Map showing areas of mapped Ni Laterites within Surigao District


8

ha. This lone claim block is also part of MRL’s Agata Projects and was acquired through an

Agreement to Explore, Develop and Operate Mineral Property. The MPSA Contract and the EP areas

are located within the Western Range in the northern part of Agusan del Norte province.

The MPSA was approved on May 26, 1999 by the Department of the Environment and Natural

Resources (DENR) and was registered on June 17, 1999 with the Mines and Geosciences Bureau

(MGB) Regional Office No. XIII in Surigao City. A MOA was signed by Mindoro and Minimax on

January 19, 1997. Mindoro assigned all its rights in the MOA to MRL on June 27, 1997. The MOA

granted MRL the exclusive and irrevocable right to earn the Option Interests in the project. At

present, MRL has earned a 75% interests in the Agata Tapian Main, and Tapian San Francisco and the

Extension Projects (tenements acquired after the finalization of the MOA) in the Surigao Mineral

District. It also has a further option to acquire an additional 25% direct and indirect participating

interest. The 2nd and 3rd exploration periods for the MPSA were July 23, 2004 to July 22, 2006 and

February 7, 2007 to February 6, 2009, respectively. The fourth exploration was granted on June 19,

2009. The Agata-Bautista-EP was approved on October 2, 2006 and the first renewal was applied for

on September 29, 2008.

Both tenements are in good standing. Since the first Exploration Period in 1999, submission of all

quarterly and annual accomplishment reports, and quarterly drilling reports; and the payment of the

mandated occupation fees were accomplished by MRL, on behalf of Minimax. The same was done

for the Agata-Bautista EP.

Table 1: Agata Project Tenements held by Mindoro: TENEMENT ID AGATA AGATA-BAUTISTA

PERMIT NUMBER MPSA-134-99-XIII EP-21-XIII

APPLICATION NUMBER APSA-XIII-007 EPA-00080-XIII

DATE FILED (MGB XIII) 4-Jul-97

DATE APPROVED 26-May-99 2-Oct-06

PERMITTEE/ APPLICANT MINIMAX BAUTISTA

LOCATION Jabonga, Santiago, & Tubay, Agusan del Norte Santiago, Agusan del Norte

AREA (ha**) 4,995.00 84.39

STATUS

- 4th Exploration Pd. approved-June 19, 2009 1st renewal of EP filed on 29-Sep-08

-ECC granted May 20, 2008

MPSA - Mineral Production Sharing Agreement EP - Exploration Permit

APSA - Application for Mineral Production Sharing Agreement EPA - Exploration Permit Application

The boundaries of these tenements were located by the claimowners on a topographic map and

submitted to the MGB-DEMR for approval. A tenement boundary survey approved by the MGB will

be required through an “Order to Survey” once a mining project feasibility study has been submitted


9

by the proponent. The coordinates used by Mindoro are those indicated in the MPSA document

issued by the MGB. The surveyed drillhole collars are tied to a local grid, which in turn is tied to

National Mapping and Resource Information Authority (NAMRIA) satellite/GPS points and

benchmarks.

The original area of the MPSA was 7,679 ha comprising 99 blocks, but 32 claim blocks with an

approximate area of 2,700 ha were later relinquished. This leaves 4,995 ha of the approved Contract

area as of May 18, 2000. The details of the original 99 claim blocks may be referenced on Item 6.2,

pages 11-13 of the January 22, 2009 NI 43-101 Report on the Agata North Nickel Laterite Project

available on sedar.com and Mindoro’s website.

With the issuance of an MPSA covering the Agata Projects, the landuse classification of the area is

therefore for mineral production. Those outside the Contract area are essentially classified as

timberland. There are no dwellers within the ANLP and ASLP drilling areas. The author is not aware

of any environmental liabilities to which the property is subject other than those that fall under the

Philippine Mining Act of 1995.

On May 20, 2008, an Environmental Compliance Certificate (ECC) was issued by the DENR to MRL for

nickel laterite mineral production covering 600 ha within the Agata MPSA Contract area, including

both the Agata North and Agata South projects.

The barangay (village) centers where the projects are located, are mostly populated by Christians.

There are some indigenous peoples (IP) that live in the surrounding areas within and outside the

Minimax MPSA Contract area. Sitio Coro, Bgy. Colorado is almost entirely populated by IPs while

other IP groups have merged with the non-IP inhabitants in barangays E. Morgado and La Paz,

municipality of Santiago, and Bgy. Tagmamarkay, Tubay.

MRL, through the assistance of the National Commission on Indigenous Peoples (NCIP) - Regional

Office No. XIII, has signed a Memorandum of Agreement with the IPs living within the MPSA

Contract Area in 2008 albeit the latter have neither Certificate of Ancestral Domains Claim (CADC)

nor Certificate of Ancestral Domains Title (CADT) within the Contract area. The MOA calls for a 1%

royalty on gross sales of mineral products to be given to the IPs as provided for in the Indigenous

Peoples Reform Act (IPRA) of the Republic of the Philippines.

Areas of nickel laterite mineralization have been mapped at a regional scale in the ASLP located in

the southern part of the Agata Projects and are the subject of a Mining Services Agreement between

MRL, Minimax and Delta. No drilling or sampling has been carried out in this area prior to the

negotiations with Delta. Delta, at its sole cost and risk, may carry out exploration of the ASLP and

may select an area of up to 250 ha to advance to production if warranted.

2.3 Tenement Type

An MPSA is a form of Mineral Agreement, for which the government grants the contractor the

exclusive right to conduct mining operations within, but not title over, the contract area during a

defined period. Under this agreement, the Government shares in the production of the Contractor,

whether in kind or in value, as owner of the minerals. The total government share in a mineral

production sharing agreement shall be the excise tax on mineral products. The excise tax is 2% of the


10

actual market value of the gross output at the time of extraction. In return, the Contractor shall

provide the necessary financing, technology, management and personnel for the mining project.

Allowable mining operations include exploration, development and utilization of mineral resources.

The approved MPSA has a term not exceeding 25 years from the date of the execution thereof and

renewable for another term not exceeding 25 years. It gives the right to the Contractor to explore

the MPSA area for a period of 2 years renewable for like periods but not to exceed a total term of 8

years, subject to annual review by the Director to evaluate compliance with the terms and

conditions of the MPSA.

The Contractor is required to strictly comply with the approved Exploration and Environmental Work

Programs together with their corresponding budgets. These work programs are submitted by the

Contractor as requirements in securing the renewal of the Exploration Period within the MPSA term.

The Contractor is likewise required to submit quarterly and annual accomplishment reports under

oath on all activities conducted in the Contract Area. All the reports submitted to the Bureau shall be

subject to confidentiality clause of the MPSA. The Contractor is further required to pay at the same

date every year reckoned from the date of the first payment, to the concerned Municipality an

occupation fee over the Contract Area amounting to PhP 75.00 per hectare. If the fee is not paid on

the date specified, the Contractor shall pay a surcharge of 25% of the amount due in addition to the

occupation fees.

If the results of exploration reveal the presence of mineral deposits economically and technically

feasible for mining operations, the Contractor, during the exploration period, shall submit a

Declaration of Mining Project Feasibility together with a Mining Project Feasibility Study, a Three

Year Development and Construction or Commercial Operation Work Program, a complete geologic

report of the area and an Environmental Compliance Certificate (ECC). Failure of the Contractor to

submit a Declaration of Mining Project Feasibility during the Exploration Period shall be considered a

substantial breach of the MPSA.

Once the ECC is secured, the Contractor shall complete the development of the mine including

construction of production facilities within 36 months from the submission of the Declaration of

Mining Project Feasibility, subject to such extension based on justifiable reasons as the Secretary

may approve, upon the recommendation of the Regional Director, through the MGB Director.

Any portion of the contract area, which shall not be utilized for mining operations, shall be

relinquished to the Government. The Contractor shall also show proof of its financial and technical

competence in mining operations and environmental management.

On February 2005, the Philippine Supreme Court decided with finality allowing for the 100% foreign

ownership of the mineral tenement under the Financial and Technical Assistance Agreement (FTAA).

An Exploration Permit (EP) is an initial mode of entry in mineral exploration allowing a Qualified

Person to undertake exploration activities for mineral resources in certain areas open to mining in

the country. Any corporation may be allowed a maximum area of 32,400 ha in the entire country.

The term of an EP is for a period of two (2) years from date of its issuance, renewable for like periods

but not to exceed a total term of four (4) years for nonmetallic mineral exploration or six (6) years

for metallic mineral exploration. Renewal of the Permit is allowed if the Permittee has complied with


11

all the terms and conditions of the Permit and he/she/it has not been found guilty of violation of any

provision of “The Philippine Mining Act of 1995” and its implementing rules and regulations.

Likewise, the conduct of a feasibility study and filing of the declaration of mining project feasibility

are undertaken during the term of the Permit.

3.0 REGIONAL CLIMATE, RESOURCES, INFRASTRUCTURE, PHYSIOGRAPHY AND ACCESS

3.1 Climate

The climate of Jabonga, Santiago and Tubay municipalities where the project area is situated belongs

to Type II on the Philippines Atmospheric Geophysical & Astronomical Services Administration

(PAGASA) Modified Coronas Classification. It has no dry season with very pronounced rainfall

months. Climate averages from 1981-2000 show that peak rainfall months are from October to

February. The highest mean monthly rainfall is 308 mm during January and the lowest mean

monthly rainfall is 104.8 mm during May while mean annual rainfall is 2027 mm.

Table 2: Climate Averages and Extremes 1961-2000

MONTH

RAINFALL TEMPERATURE

RH

%

WIND CLOUD

AMT

(okta) AMOUNT

(mm)

# OF

RD MAX MIN MEAN

Dry

Bulb

Wet

Bulb

Dew

Pt. DIR SPD

Jan 308.0 21 30.1 22 26.1 25.7 24.2 23.6 88 NW 1 6

Feb 211.8 15 30.8 22 26.4 26.0 24.2 23.5 86 NW 1 6

Mar 149.8 16 31.8 22.4 27.1 25.7 24.5 23.7 83 NW 1 5

Apr 107.2 12 33.1 23.1 28.1 27.7 25.2 24.3 82 ESE 1 5

May 104.8 14 33.8 23.8 28.8 28.3 25.8 25.0 82 ESE 1 6

Jun 135.1 16 33.0 23.6 28.3 27.8 25.5 24.7 83 ESE 1 6

Jul 157.5 16 32.5 23.3 27.9 27.5 25.3 24.5 84 NW 1 6

Aug 105.1 12 32.8 23.5 28.1 27.8 25.4 24.6 82 ESE 2 6

Sep 140.2 14 32.8 23.3 28.1 27.7 25.4 24.6 83 NW 2 6

Oct 195.3 17 32.3 23.2 27.8 27.4 25.3 24.6 84 NW 1 6

Nov 193.7 18 31.6 22.9 27.2 26.9 25.1 24.5 86 NW 1 6

Dec 218.4 19 30.8 22.5 26.7 26.3 24.7 24.1 88 NW 1 6

Annual 2026.9 190 32.1 23.0 27.6 27.1 25.1 24.3 84 NW 1 6

Based on Butuan City Synoptic Station


12

3.2 Local Resources and Infrastructure

A farm-to-market road was constructed by MRL in 2005 and is currently servicing three (3)

barangays in two (2) towns. This road was turned-over to the local government. Road maintenance

is being supported by the company.

The drill site and the whole plateau is a fern-dominated (bracken heath) open grassland sparsely

interspersed with forest tree seedlings and saplings of planted species. A few secondary growth

trees line the streams along the lower slopes. The floodplain of Tubay River is planted with

agricultural crops such as rice, corn, banana, squash, etc.

3.3 Physiography

Most part of the Agata Projects spans the NNW-SSE-trending Western Range, which towers over the

Mindanao Sea to the west and Tubay River to the east, which drains southward from Lake Mainit.

The western part of the area is characterized by a rugged terrain with a maximum elevation of 528

meters above sea level. This part is characterized by steep slopes and deeply-incised valleys. The

eastern portion, on the other hand, is part of the floodplain of Tubay River, which is generally flat

and low-lying, and has an elevation of less than 30m above sea level.

Within the project area, steep to very steep slopes are incised by gullies and ravines while the

central portion is characterized by broad ridges dissected in the west section by a matured valley

formation exhibiting gentle to moderate slopes. Elevations range from 200-320m above sea level

extending similar topographic expressions going to the south. In the northern expanse, it abruptly

changes to rugged terrain having very steep slopes. Nickel enriched laterite is widespread on the

ridges stretching from the central part going to the south.

Based on the initial evaluation of the area, the development of laterite mineralization is extensive,

but not limited to the broad ridges and is present on gently-moderately sloping topography. The

topography over the principal laterite development together with the position of the area of

detailed drilling is shown in Figure 5 below.

Figure 5: Panoramic view of ANLP showing the main area of laterite development.


13

3.4 Access

The ANLP site is accessible by any land vehicle from either Surigao City or Butuan City via the Pan-

Philippine Highway. At the highway junction at Barangay Bangonay, Jabonga, access is through partly

cemented, gravel-paved Jabonga Municipal road for approximately 4 km, then for another 6 km thru

a farm-to-market road to Barangay E. Morgado in the municipality of Santiago. From Manila, daily

flights are available going to Butuan City. Moreover, commercial sea transport is available en-route

to Surigao City and Nasipit (west of Butuan City) ports.

An alternate route is available from the Pan-Philippine Highway via the Municipality of Santiago.

From Santiago town proper, barangay E. Morgado can be accessed through a 1.5 km municipal-

barangay road going to Bgy. La Paz, thence by pump boats. The travel time is about 15 minutes via

the Tubay River.

The northern portion of the ANLP can be reached from Bgy. E. Morgado by hiking for about 1 hour

along existing foot trails (approximately 1.5 km).

4.0 HISTORY The earliest recognized work done within the area is mostly from government-related projects

including:

The Regional Geological Reconnaissance of Northern Agusan reported the presence of gold claims in the region (Teves et al. 1951). Mapped units include sedimentary rocks (limestone, shale and sandstone) of Eocene to mid-Tertiary age.

Geologists from the former Bureau of Mines and Geosciences Regional Office No. X (BMG-X) in Surigao documented the results of regional mapping in the Jagupit Quadrangle within coordinates 125°29´E to 125°45´ east longitude and 9°10´ to 9°20´ north latitudes. The geology of the Western Range was described as a belt of pre-Tertiary metasediments, metavolcanics, marbleized limestone, sporadic schist and phyllite and Neogene ultramafic complex. (Madrona, 1979) This work defined the principal volcano-sedimentary and structural framework of the region and recognized the allochtonous nature of two areas of ultramafic rocks that comprise serpentinized peridotite in the Western Range, one between the Asiga and Puya rivers in the Agata project area and the other west of Jagupit. These were mapped by Madrona (1979) as blocks thrust westward, or injected into the metavolcanics between fault slices.

The United Nations Development Program (UNDP, 1982) conducted regional geological mapping at 1:50,000 scale and collected stream sediment samples over Northern Agusan. The UNDP report of 1984 described the geological evolution of this region and included a detailed stratigraphic column for the Agusan del Norte region. Two anomalous stream sediment sites were defined near the Agata project during this phase of work. The Asiga porphyry system that lies east of the Agata tenements was explored by Sumitomo Metal Mining Company of Japan in the 1970’s and 1980’s (Abrasaldo 1999).

La Playa Mining Corporation, financed by a German company in the late 1970’s, explored within the

Agata Project area for chromiferrous laterite developed over weathered ultramafic rocks. There

were five (5) test pits dug in the area.


14

In 1987, Minimax conducted reconnaissance and detailed mapping and sampling. Geological

mapping at 1:1,000 scale was undertaken in the high-grading localities, and an aerial photographic

survey was conducted and interpreted. MRL established a mining agreement with Minimax in

January 1997, and commenced exploration in the same year.

Several artisanal miners are active within the project site since the 1980’s up to the present. These

miners are conducting underground mining operations at the Assmicor and American Tunnels area

and gold panning of soft, oxidized materials within Assmicor and Lao Prospect areas and of

sediments in major streams including that of Tubay River. The region of small-scale mining activity

was later named “Kauswagan de Oro” (translated: “progress because of gold”). The majority

subsequently left the region for other high-grading areas in Mindanao. In more recent years, a group

of copper “high-graders” emerged in the American Tunnels area mining direct-shipping grade copper

ore. However, this new trend waned due to the softening of metal prices in the latter part of 2008.

5.0 GEOLOGY

5.1 Regional Geology

The principal tectonic element of the Philippine archipelago is the elongate Philippine Mobile Belt

(PMB – Rangin, 1991) which is bounded to the east and west by two major subduction zone systems,

and is bisected along its north-south axis by the Philippine Fault (Figure 6). The Philippine Fault is a

2000 km long sinistral strike-slip wrench fault. In the Surigao district, this fault has played an

important role in the development of the Late Neogene physiography, structure, magmatism and

porphyry copper-gold plus epithermal gold metallogenesis. There has been rapid and large-scale

uplift of the cordillera in the Quaternary, and limestone of Pliocene age is widely exposed at 1000-

2000 meters elevation (Mitchell and Leach 1991). A cluster of deposits on the Surigao Peninsula in

the north consists chiefly of epithermal gold stockwork, vein and manto deposits developed in

second-order splays of the Philippine Fault (Sillitoe 1988). The mineralization-associated igneous

rocks in Surigao consist mostly of small plugs, cinder cones and dikes dated by K-Ar as mid-Pliocene

to mid-Pleistocene (Mitchell and Leach 1991; Sajona et al. 1994; B.D.Rohrlach, 2005).

The basement rocks consist of the Concepcion greenschist and metamorphic rocks of Cretaceous

age overthrusted by the pillowed Pangulanganan Basalts of Cretaceous to Paleogene age, which in

turn, were overthrust by the Humandum Serpentinite. Its emplacement probably occurred during

the late Cretaceous. The Humandum Serpentinite occupies a large part in the tenement area, and

through its subsequent weathering the area has a high potential for nickel laterite mineralization.

(Tagura, et.al., 2007).

The Humandum Serpentinite is overlain by Upper Eocene interbedded limestone and terrigenous

clastic sediments of the Nabanog Formation. These are in turn overlain by a mixed volcano-

sedimentary package of the Oligocene Nagtal-O Formation, which comprises conglomeratic

andesite, wacke with lesser pillow basalt and hornblende andesite, and the Lower Miocene Tigbauan

Formation. The latter is comprised of conglomerates, amygdaloidal basalts, wackes and limestones.

Intrusive events associated with the volcanism during this period resulted in the emplacement of


15

Figure 6: Geological Map of Surigao Mineral District


16

plutons and stocks that are associated with porphyry copper-gold and precious metal epithermal

mineralization in the region. (Tagura, et.al., 2007)

Lower Miocene Kitcharao Limestone and the lower part of the Jagupit Formation overlie the

Tigbauan Formation. The Jagupit Formation consists of conglomeratic sandstone, mudstone and

minor limestone. The youngest stratigraphic unit is the Quaternary Alluvium of the Tubay River

floodplain.

Mineral deposits within the region are dominated by epithermal precious metal deposits and

porphyry copper-gold. There is a rather close spatial and probably genetic association between

epithermal precious metals and porphyry deposits. These deposits exhibit strong structural control.

First order structures are those of the Philippine Fault system, which play a role in the localization of

the ore deposits, while the second order structures that have developed as a result of the

movement along the Philippine Fault system are the most important in terms of spatial control of

ore deposition. (Tagura, et.al., 2007)

Other mineral deposits are related to ultramafic rocks of the ophiolite suite and comprise lenses of

chromite within harzburgite and lateritic nickel deposits that have developed over weathered

ultramafic rocks.

5.2 Local Geology

The Agata Projects area is situated along the southern part of the uplifted and fault-bounded

Western Range on the northern end of the east Mindanao Ridge. The Western Range is bounded by

two major strands of the Philippine Fault that lie on either side of the Tubay River topographic

depression (B. Rohrlach, 2005). The western strand lies offshore on the western side of the Surigao

Peninsula, whereas the eastern strand, a sub-parallel splay of the Lake Mainit Fault, passes through a

portion of the property and separates the Western Range from the Central Lowlands to the east

(Figure 7). These segments have juxtaposed lithologies consisting of at least six rock units including

pre-Tertiary basement cover rocks, ophiolite complex, clastic limestone and late-stage Pliocene calc-

alkaline intrusive rocks. (Tagura, et.al., 2007)

The rock units within the ANLA from oldest to youngest are discussed below:

Concepcion Greenschist (Cretaceous)

The basement sequence on the property comprises greenschists, correlative to the Concepcion

Greenschists (UNDP, 1984), which occur mostly in the central to southern portions of the Agata

Project. This rock outcrops in Guinaringan, Bikangkang and Agata Creek as long, elongated bodies. In

the northern half, this unit is mapped as narrow, scattered erosional windows. The predominant

minerals are quartz, albite, and muscovite with associated chlorite, epidote and sericite. In places,

talc and serpentine are the main components. (Tagura, et.al., 2007) The exposure of the schist by

the late Eocene implies a metamorphic age of Paleocene or older and a depositional age of early

Cretaceous. (UNDP, 1984)


17

Figure 7: Local Geological Map of Agata North Project Area


18

Humandum Ultramafic (Cretaceous?)

Ultramafic rocks unconformably overlie the basement schist and formed as conspicuously

peneplaned raised ground on the property area. These are comprised of serpentinites, serpentinized

peridotites, serpentinized pyroxenites, serpentinized harzburgites, peridotites, pyroxenites and

lesser dunite, which are fractured and cross-cut by fine networks of talc, magnesite and/or calcite

veins. These rocks are usually grayish-green, medium- to coarse-grained, massive, highly-sheared

and traversed by meshwork of serpentine and crisscrossed by talc, magnesite and calcite veinlets.

The serpentinites in the Agata Projects correlate with the Humandum Serpentinite (B. Rohrlach,

2005). The Humandum Serpentinite was interpreted by UNDP (1984) to be emplaced over the

Concepcion greenschists probably before the Oligocene, and before late Eocene deposition of the

Nabanog Formation. MGB (2002) classified the Humandum Serpentinite as a dismembered part of

the Dinagat Ophiolite Complex, which is established to be of Cretaceous age.

These rocks have potential for nickel due to nickel-enrichment in the weathering profile as observed

in its deep weathering into a reddish lateritic soil. (B. Rohrlach, 2005).

Nabanong Limestone (Upper Eocene)

Several bodies of limestone correlative to the Nabanog Formation (UNDP 1984), were mapped in the

project area. The easternmost limestone body lies in the Assmicor-Lao prospect region, in the

central portion of the property, Guinaringan-Bikangkang area and at Payong-Payong area located at

the western side. In the northern half of the property, these limestones occur as narrow scattered

bodies probably as erosional remnants. In places, this unit exhibits well-defined beddings and

schistosity and crisscrossed by calcite ± quartz veinlets. The limestones outcropping near intrusive

bodies are highly-fractured with limonite and fine pyrite, associated with gold mineralization in

fractures and show green hue due to chloritization. In places, the limestone is interbedded with thin

sandstone, siltstone, and shale beds.

Andesite and Tuff (Oligocene)

Sparsely distributed across the property are narrow bodies of andesite and tuff. Towards the vicinity

of Peak 426 at the northwestern part, the andesite occurs as a volcanic edifice. It is generally fine-

grained to locally porphyritic in texture. The tuff grades from crystal tuff to lithic lapilli. Several

exposures of this unit are described by Abrasaldo (1999) as being strongly fractured adjacent to

northeast-trending faults.

Volcanic Intrusives (Upper Oligocene to Lower Miocene)

A series of intrusives of alkalic and calc-alkaline composition occur in close vicinity to Lake Mainit

Fault. These include syenites, monzonites, monzodiorites and diorites that are closely associated

with gold mineralization as most of the workings and mining activities are concentrated within the

vicinity of these intrusive rocks. The syenites are well-observed in the American and Assmicor

tunnels and consist mostly of potash feldspar. The monzonites are noted in the Lao Area, in the


19

American Tunnel and occasionally along Duyangan Creek. Monzodiorite outcrops in the Kinatongan

and Duyangan creeks and sparsely in the American Tunnel. Trachyte to trachyandesite porphyry is

noted in the Kinatongan Creek. Diorites were observed in the American and Assmicor tunnels, which

occur mostly as dikes. The intrusions in the Lao and American Tunnel prospects have been

tentatively correlated with the Mabaho Monzonite (UNDP, 1984).

Kitcharao Limestone (Lower Miocene)

Correlatives of the Kitcharao limestone are scattered through large areas of the Agata Projects area.

Minor outcrops of the Jagupit Formation lie in the eastern claim block adjacent to barangay

Bangonay (Abrasaldo, 1999).

Recent Alluvium

Quaternary Alluvium underlies the Tubay River floodplain, within the valley between the Western

Range and the Eastern Highlands.

5.3 Laterite Ni Deposit Geology

The widespread occurrence of harzburgite, peridotite, pyroxenite, their serpentinized equivalents,

serpentinite, and localized lenses of dunite/serpentinized dunite comprise the lithology in the

project area. These rocks are confined to broad ridges extending down to the footslopes of the

Western Range. The ultramafic bodies are of probable late Cretaceous age, and were emplaced as

part of an ophiolite sequence during the Upper Eocene (Abrasaldo, 1999). Schists are also present in

the extremities of the laterite area. Several of these rock types were likewise identified in

petrographic/mineragraphic analyses of drill core and rock samples as wehrlite (peridotite),

serpentinized wehrlite, serpentinized websterites (pyroxenite), websterites, serpentinites and

cataclasite. The location of these samples is shown in Figure 7. Lineaments trending NE within the

ultramafic (and underlying green schist?) are interpreted as either fault splays or zones of weakness

in the area.

Geological mapping in the project area showed favorable development of laterite along the broad

ridges characterized by peneplane topography. These areas are where the drilling activities are

concentrated. In areas with moderate to semi-rugged topography, erosion proceeds much faster

than soil development, hence the laterite is thinner.

In the Agata Project, there are two distinct geomorphic features that have influenced laterite

formation and consequent nickel enrichment. The Eastern part of the delineated body has a

moderate relief whose bedrocks are exposed in ridge tops and in the nearby creeks. On the other

hand, the Western laterite occurs on a low relief terrain and with no exposures of bedrock on its

hillcrests. In the Western area, the laterite is well developed and contains thick and highly

mineralized limonite/saprolite and transition rocks. The Eastern Laterite Zones contain boulders

across the laterite profile suggesting transport. Its limonite zone is usually thinner. (A. Buenavista,

2008).


20

Test pits that were previously excavated by a previous company showed a maximum depth of 9.40

m and an average depth of 4.96 m. All these test pits have bottomed in limonite. Drilling done by

QNI, Phils. (QNPH) and MRL showed thicker laterite profile than what was revealed by previous test

pitting.

5.4 Other Deposit Type Geology – Agata

The Surigao Mineral District is host to several deposit types. The Philippine Fault has played an

important role in the development of the Late Neogene physiography, structure, magmatism and

porphyry Cu-Au plus epithermal Au metallogenesis. An intense clustering of porphyry Cu-Au and

epithermal Au deposits occurs along the Eastern Mindanao Ridge.

There is a strong structural control on the distribution of Cu-Au deposits in the Surigao district, and a

clear association of deposits and mineral occurrences with high-level intrusives and subvolcanic

bodies. Most of the centers of mineralization are located along NNW-SSE-trending second-order

fault splays of the Philippine Fault, and where these arc-parallel structures are intersected by

northeast-trending cross-faults. The Tapian-San Francisco property lies in a favorable structural

setting at the district-scale, at the intersection between multiple strands of a NE-trending cross-

structure and the Lake Mainit Fault. This same NE-trending structural axis encapsulates both the

Boyongan porphyry deposit and the Placer epithermal gold deposits. (B. Rohrlach, 2005)

Most of the known hydrothermal gold mineralization within the district is of low-sulfidation

epithermal character developed in second-order splays of the Philippine Fault. The mineralization is

predominantly of Pliocene age and is spatially and temporally associated with the Mabuhay

andesitic volcanism. Epithermal mineralization tends to be confined to the Mabuhay Clastics and

associated andesitic stocks, lavas and pyroclastics, and in older rocks immediately beneath the

unconformity at the base of the Mabuhay Clastics. The principal low-sulfidation epithermal-type,

carbonate-replacement-type and porphyry-type deposits and occurrences include: vein-type

(Tabon-Tabon vein, Plancoya vein); bulk-mineable stringer stockworks (Placer, Motherlode, Mapaso,

Nabago); stratabound ore or carbonate-hosted (Siana mine); surface workings in argillized zones

(Mapawa, Hill 664, Manpower, Layab, Gumod); placer gold (Malimono-Masgad region); porphyry

Cu-Au (Boyongan, Bayugo, Asiga and Madja); high-level porphyry-style alteration (Masgad,

Malimono, Tapian-San Francisco) and high sulfidation (Masapelid Island). (B.D. Rohrlach, 2005)

The principal deposit types that are being explored for in the Agata tenement area are:

Porphyry Cu-Au of calc-alkaline or alkaline affinity

Low-sulfidation epithermal Au

Carbonate-hosted Disseminated Au-Ag Ore

Skarn Au-(Cu)

Nickeliferrous Laterite

The first four deposit types collectively belong to the broad family of magmatic-hydrothermal Cu-Au

deposits that form above, within and around the periphery of high-level intrusive stocks of hydrous,

oxidized, calc-alkaline to potassic alkaline magmas that are emplaced at shallow levels in the crust of

active volcanic arcs. These different deposit types form at different structural levels of magmatic

intrusive complexes, and their character is governed by a multiplicity of factors that include depth of


21

magmatic degassing, degassing behavior, host-rock lithology and structural preparation. (B.D.

Rohrlach, 2005)

The Agata Projects area has high potential for the presence of one or more porphyry-type Cu-Au

hydrothermal systems associated with 3 principal targets, and multiple satellite targets, that are

associated with zones of high IP chargeability. Porphyry-style mineralization has been encountered

previously in the Agata region by shallow drill holes in targets that are associated with modest IP

chargeability anomalies. The Agata Projects possess multiple conceptual target styles such as

porphyry, epithermal, Carlin-type and Ni-laterite (Figure 3).

American Tunnels is a small erosional window through ultramafic cap rocks. It is in the center of a six

kilometer trend of chargeability anomalies and at a point where the chargeability is near-surface,

and actually daylights. It is also associated with extensive alteration, geochemical anomalies, and

abundant gold and copper-gold showings. American Tunnels is characterized by a chargeability

anomaly, extending over 800 meters by 300 meters. There are over 100 shallow artisanal mines and

workings within the trend, but mineralization is mostly obscured by ultramafic cap rock of variable

thickness. Where the mineralization is exposed, younger gold mineralization is telescoped into

interpreted porphyry copper-gold related mineralization (Figure 3).

Mineralization is at the top of multi-phase intrusives, on the cusp of the chargeability anomaly, and

is interpreted as a high-grade, late-stage concentration at the upper contact of the intrusive stocks

and dykes, and derived from porphyry copper-gold mineralization below. Petrology indicates

mineralization is principally within late, more-fractionated monzonite phases of a syenite,

monzonite, monzodiorite and diorite intrusive complex of dykes, sills, and small stocks intruding

ultramafic rocks. Mineralization is associated with complex alteration assemblages of chlorite,

epidote, actinolite, biotite ± k-feldspar, sericite, magnetite and albite. Copper minerals are

chalcopyrite and bornite. These features, as well as the high molybdenum values, are consistent with

a porphyry copper-gold setting.

Gold is mined from a honeycombing of shallow (5 to 20 meters) underground workings, estimated to

be several hundred meters in extent, within an area of about 200 meters by 225 meters at American

Tunnels. Free gold is also present in streams draining ultramafic cap rocks several hundred meters

north of American Tunnels. There are also dozens of artisanal gold workings within other erosional

windows to the south on the Agata Project.

Having artisanal workings producing both gold and copper throughout the local region indicates that

there is significant opportunity within the project area and provides Mindoro with significant

opportunity outside of the Ni Laterite resource defined in this report.


22

6.0 MINERALIZATION Nickeliferrous laterite deposits are present over a broad region in the Agata Projects area (Figure 4).

They are divided into two (2) major areas known as the ANLP and the ASLP. Based on mapping, the

former has an area of approximately 286 hectares while the latter comprises about 235 hectares. In

the ANLP, drilling is concentrated in about eighty (80) percent of the interpreted nickel laterite

mineralization to date.

The laterites are developed over ultramafic rocks that lie along the Western Range. The rock types

within the ultramafics are harzburgite, serpentinized harzburgite, peridotite, serpentinized

peridotite, pyroxenite, serpentinized pyroxenite, serpentinite with localized lenses of

dunite/serpentinized dunite. The ultramafic bodies are of probable Cretaceous age, and were

emplaced as part of an ophiolite sequence during the Upper Eocene (Abrasaldo, 1999). Formation of

the laterites is thought to have occurred during the Pliocene or early Pleistocene. The largest of the

laterite bodies overlies the central ultramafic body (Figure 7).

Initially, MRL undertook aerial photograph interpretations and field inspections, to define areas of

potential laterite formation. The soil profile is intensely ferruginous in this region, and relic cobbles

of intensely fractured and serpentinized ultramafic rock lie scattered throughout the region of

observed laterite development. At higher elevations along the topographic divide, ferruginous

pisolites and blocks of lateritic crust were observed developed on an ultramafic protolith.

Nickel laterites are the products of laterization or intense chemical weathering of the ultramafic

rocks, especially the olivine-rich varieties like harzburgite and dunite. The high rainfalls and intense

weathering breaks down the easily weathered harzburgite and dunite and the more mobile

elements of Mg and Si tend to leave the profile at a much faster rate than the less mobile Fe and

Ni/Co. Thus high Fe laterite and limonite zones overlie the weathering saprolite of the ultramafic

rocks and where erosion of the upper Fe laterite is low quite deep depths can be formed (<10m).

The Ni mineralization is predominantly at the base of the Fe laterite and the top of the saprolite, as

this mineral is concentrated in minerals that can hold it within their matrix (limonite and to a lesser

degree hematite, goethite and Fe-rich clays in the Fe Laterite, and more primary Mg rich clays

(saponite and stevensite) in the ultramafic saprolite. When weathering is very deep, in zones of

interpreted crush or fault zones, then more Ni can be located in the Fe laterite, but predominantly

the largest Ni enrichment is within the saprolite of the underlying ultramafic rock near the contact

zone with the Fe laterite.

Within the saprolitic ultramafic there are areas of more weathering resistant “boulders” and these

tend to carry less Ni mineralization than the surrounding more degraded saprolite – this is related to

the lower level presence of the Mg rich clays and their capacity to carry Ni and Co within their

structure.

Patches of garnierite are present within the saprolite. Abundant garnierite was observed in a trench

along the slopes on the western portion of ANLP.


23

7.0 EXPLORATION All exploration work on the Agata Project carried out by Mindoro was under the direct supervision of

James A. Climie, P.Geol., Exploration Manager. Local staff formed the exploration team with

qualified geologists logging all drill core and the site manager also being a qualified geologist.


Initial work by MRL on the Agata Project from 1997 to 2000 comprised a geological evaluation

conducted by Marshall Geoscience Services Pty Ltd. It was part of a due-diligence assessment of the

property prior to entering into a Joint Venture with Minimax. This work suggested that hydrothermal

gold mineralization at Agata is related to andesitic or dioritic intrusives, that vein mineralization is

representative of the upper levels of a porphyry system and that there is prospectivity for skarn

mineralization within limestones on the property (Marshall, 1997; Climie et al., 2000).

The 1st phase of exploration activity commenced in May 1997 in the Assmicor region and consisted

of grid establishment followed by soil geochemical survey (1,617 soil samples analyzed for Au, Ag,

Cu, Pb, Zn, As), geological mapping plus selective rockchip sampling and petrographic studies.

Furthermore, DOZ technologies of Quebec, Canada, interpreted a RadarSat image of the Agata area

and generated a 1:50,000 scale interpretation of the region. In addition, MRL re-sampled by channel

sampling, five test pits (ATP-1 to ATP-5) excavated by La Playa Mining Corporation. These pits

encountered laterite thicknesses of 2.48 to 9.40 meters. The composited assay values for each of the

re-sampled test pits range from 0.43% to 0.94% nickel.

The 2nd phase of exploration activities on the Agata Projects was undertaken between June 1999

and December 1999. This included grid re-establishment, geological mapping within the Assmicor

Prospect and American Tunnels, ground magnetic survey, soil geochemistry (50 samples), rock/core

sampling, petrography and drilling of 11 holes. (Climie et al., 2000).

The soil sampling survey generated widespread Cu and Au soil anomalies. Soil Cu anomalies tend to

be closely restricted to mapped intrusions at American Tunnels and Assmicor-Lao. Soil Au anomalies

are more widespread and extend into the surrounding and overlying carbonate rocks. In contrast,

soil As anomalies appear to be weakly developed over the intrusions but more strongly developed

over carbonates. The Cu and Au soil anomalies associated with the Assmicor-Lao prospect region

(Figures 10-11) are open to the east beneath the alluvial flood plain sediments of the Tubay River.

The potential for an extension of the Assmicor mineralization to the immediate east beneath the

Tubay River floodplain is strengthened by the observation that the dikes and intrusives encountered

in drilling at

Assmicor dip towards the east, that porphyry-like quartz veins were encountered in drillhole DH 99-

11, which lies east of the Assmicor prospect, and the evidence of a resistivity anomaly developing on

the edge of the IP survey east of the Assmicor prospect.


24

Nineteen surface channel samples were collected in the Limestone Prospect area (Figure 13). Sixteen

of these samples yielded grades ranging from 0.02 g/t Au to 0.85 g/t Au. Three of the samples

graded 2.79 g/t Au over 3.7 meters, 3.77 g/t Au over 2 meters and 1.48 g/t Au over 3 meters. The

channel samples indicate a zone of anomalous gold above 0.1 g/t in rock samples that extends over

an area of 100m by 50m in oxidized limestone.

Petrographic analyses by Comsti (1997) and Comsti (1998) reveal that the intrusive rocks at Agata

consist of alkalic, silica-undersaturated plutonic rocks. These comprise of syenites and monzonites

that display varying degrees of sericitic and propylitic alteration. Potassic feldspar is a primary

mineral phase in many of these rocks.

An in-house ground magnetic survey was conducted in 1999. The magnetic data comprised a series

of semi-continuous magnetic highs, with values >40250nT, that broadly coincide with the

distribution of ultramafic rocks along the western margin of the Lao and Assmicor areas. The

magnetic signature decreases gradually westward where the ultramafics are thought to be buried at

deeper levels beneath the limestones.

MRL drilled eleven (11) diamond drill holes into the Assmicor and Limestone prospects in 1999 and

encountered Au intersections associated with limonitic stockworks in biotite monzodiorite intrusive.

These include 18.8m @ 1.13 g/t Au and 24.2m @ 1.38 g/t Au in holes DH 99-05 and DH 99-06,

respectively. The intrusives comprise larger biotite monzodiorite bodies that are cross-cut by

younger diorite dikes, plagioclase diorite dikes, biotite diorites and quartz diorites. These dikes and

intrusive bodies dip predominantly eastward, suggesting that a deeper magmatic source lies to the

east, possibly along the trace of the Lake Mainit splay of the Philippine Fault, beneath the alluvial

floodplain of the Tubay River. Drillhole DH 99-11, collared east of the Assmicor shaft, intersected

porphyry-style quartz-magnetite veins in biotite diorite, quartz diorite and in hornblende-quartz

diorite.


MRL undertook a third phase of exploration activity in 2004 on the Agata Project. This activity

involved gridding, mapping and extensive grid-based pole-dipole induced polarization (IP)

geophysical surveying along 30 east-west-oriented survey lines that extend from 7,800 mN to 13,400

mN. The IP data were acquired by Elliot Geophysics International using a Zonge GGT-10 transmitter,

a Zonge GDP-32 receiver and a 7.5 KVA generator. A total of 77.10 km of grid were surveyed by pole-

dipole IP. The dipole spacing used in the survey was 150 meters. The data were modelled by Dr Peter

Elliot of Elliot Geophysics International using inversion modelling.

Induced polarization (IP) surveying on the Agata Project has identified numerous IP chargeability

anomalies that form finger-like apophyses at shallow levels, and which amalgamate into larger

anomalies at deeper levels. The IP chargeability anomalies tend to strengthen with depth in the core

anomaly regions (Southern Target anomaly and Northern Target anomaly). The IP chargeability

anomalies attain values that locally exceed 40 msecs, and routinely exceed 20 msecs on most of the

IP pseudo-sections from Agata. Weaker modeled IP chargeability anomalies are associated with

known mineralization at Assmicor (10-18 msec) and in other satellite positions adjacent to the two

cores Northern and Southern target anomalies. There is an indication, from the four plan views of


25

the IP chargeability data, that NNW to NW faults may be important in controlling the distribution

and shape of many of the IP anomalies at Agata. Faults that lie along these trends are expected to

lie in a dilational orientation in relation to the regional stress field associated with sinistral

movement on the near north-trending Philippine Fault splay.

Preliminary drilling on the Agata Project was carried out between November 2, 2005 and October

28, 2006. This was conducted under a joint-venture among MRL, Panoro Minerals Ltd. (Panoro), and

Minimax. The prospects were highly recommended priority targets for drill evaluation as these

prospects exhibit classic stacking of geophysical, geological and geochemical features associated

with Philippine porphyry copper-gold systems (Rohrlach, 2005). The preliminary drilling program was

aimed to test the area of highest chargeabilities in the North and South Porphyry Targets.

Great operational difficulties were encountered in extraordinarily bad ground conditions. A total of

five drill holes with a combined length of only 756.45 meters were completed, four of which were

drilled within the North Porphyry Target and one at South Porphyry Target. All five holes were

prematurely terminated, not reaching target depths. The chargeability anomalies were interpreted

to occur at around 375m below surface (N=4) based on IP geophysical inversion models. The deepest

hole bottomed at only 251.20m, a long way from the 500-meter target.

All drill holes have intersected and bottomed in strongly serpentinized ultramafics with very minimal

pyrite mineralization. Dr. Peter Elliot, Consulting Geophysicist, affirmed that the serpentine was not

the cause of the anomalies, and would only cause a weak IP anomaly.

From 2008 to 2009, underground mapping and sampling (continuous rock chip and grab sampling) of

the American Tunnels prospect was undertaken. To date, results of 48 rock samples have been

reported by Mindoro. Significant results include an aggregate of 26m @ 1.94 g/t Au; 21.90m @ 3.67

%Cu; and 17.5m @ 2.01% Cu. Results of the underground sampling are incorporated in the rock

geochemistry map.

7.3 MRL Laterite Ni Exploration

Lateritic Nickel mineralization was known within the ANLP area since the early 1990’s and grades

were confirmed in the development of test pits in 1997 (See Section 7.1). The project since this

initial definition has moved ahead so as to better define the resource and to provide better technical

information with regards to eventual exploitation.

In June 2004, Taganito Mining Corporation was selected from several interested parties and granted

the non-exclusive right to assess the nickel laterite potential of the Agata Project. Taganito carried

out two phases of evaluation and reported encouraging results. Forty-eight surface laterite and rock

samples were collected from an area of about 300 ha within a much more extensive area of nickel

laterite mineralization. Nickel contents range from very low to a high of 2.09%, with most of the

values exceeding 0.5%. Taganito considered these values to be within the range that normally cap

the secondary nickel enriched zone and have recommended a detailed geological survey and drilling.

However, MRL elected to allow Queensland Nickel Phils., Inc. (QNPH) to proceed with a

reconnaissance drill program in 2006.


26

Since Taganito, exploration has been carried out by the use of open core drilling on a drill pattern

that has been successively closed down with each subsequent drill program so as to enhance the

accuracy of the future reported lateritic Ni resource. All drilling to date has been completed by the

use of small mobile open hole NQ coring rigs, which are highly mobile in difficult to access terrain.

Recovery from these drill rigs is high, with losses generally occurring where there are changes in the

hardness of the drilled material, causing material to be disrupted at the bit face. The major ore zone

is generally a softer material and losses within the ore zones have been minimal at all stages of the

drilling programs. A variety of contractors have been used over time, with the drilling rate being the

only variation with regards to their performance and sampling rate.

Each of the individual drill programs will be discussed and summarized.

BHP-Billiton (2006)

QNPH, a subsidiary of BHP-Billiton, conducted reconnaissance drilling over the ANLP from January

23, 2006 to April 26, 2006 at an initial drilling grid of 200m x 200m followed by in-fill drilling at 100-

m grid spacing. A full report of the drilling program entitled “Evaluation of Preliminary Exploration

on Agata Nickel Laterite Prospect of MRL Gold Philippines, Inc, Agusan del Norte, Philippines” was

completed by QNPH in June 2006 and submitted to MRL immediately thereafter. A total of 35 holes

were drilled over an area of approximately 80 ha, which is 21% of the 340-hectare ANLP. The

drillhole locations are incorporated in the MRL’s AGL Drillhole Location Map (Figure 8).

Figure 8: ANLP Drillhole Location Map – BHP-Billiton and MRL (2007) Drilling.


27

This drilling program was subsequent to a Memorandum of Understanding (MOU) signed between

MRL and QNPH on December 5, 2005. The MOU allowed QNPH to conduct exploration in the

property, which also include technical review and geological mapping. It was intended to evaluate

and establish resource potential of the area and as a possible Yabulu Refinery ore source, and to

present a resource model. QNPH were looking for high Ni / high Fe ore and were not intending to

formalise any agreements with MRL until the results of the exploration proved positive.

To evaluate the potential of the ANLP for the Chinese market, MRL commissioned Denny Ambagan

to re-evaluate QNPH’s data with the aim of estimating low-grade resources for the Chinese market.

Ambagan is a geologist, who worked for Crew Minerals in its Lagonoy and Mindoro nickel laterite

exploration areas for three years. An in-house estimate was tabled. QNPH post this estimate did not

take up an option with MRL with regards to the ANLP.

MRL Phase 1 (2007)

The first drilling program in the ANLP managed and developed by MRL was conducted from February

22 to August 3, 2007 with 100 holes completed and a total meterage of 2267.12. Drilling was

confined to the area defined for an initial DSO operation. The drilling area related to areas covered

by initial Exploration Targets A and B. The drilling rate averaged 3.8m / day / drill rig and the

recovery of drill core over the program was 88.2%.

MRL Phase 2 (2007/08)

A follow-up infill drilling program in ANLP was started in December 17, 2007 to May 30, 2008,

completing 773.12 meters in 48 drill holes (37 new drill holes and 11 twin holes). The purpose of this

exercise was to better define the mineralization and extend the initial resource. The drilling rate

averaged 4.6m / day / drill rig and the recovery of drill core over the program was 93.9%.

MRL Phase 3 (2008)

From June 18, 2008 to September 26, 2008, step-out drilling was carried out with hole spacing

widened to 100m by 100m centers. Drilling totaled 3,601 meters in 225 holes. This program was

aimed to drill out the greater part of Agata North resource potential based on areas covered by

Exploration Targets C and D. The drilling rate averaged 11.5m / day / drill rig and the recovery of drill

core over the program was 95.0%.

A total of 408 vertical holes were completed during the first 4 phases of drilling in the ANLP,

including the previous BHP-Billiton drilling. The drilling patterns are all located on a 50m- to 100m-

spaced grid. Total meterage is 7,300.83 with an average depth of 17.89m/per hole, a maximum of

46.6m, and a minimum of 4.35m.

MRL Phase 4 (2010)

During 2010 the program continued to infill the resource so as to gain both a greater level of

accuracy for the resource estimate, but also to be able to study the variography of the resource

within a close spaced pattern combining both high grade limonite and saprolite ores. From April 23,

2010 to July 10, 2010 infill drilling totalled 147 drill holes for 2682 meters of drilling. The drilling rate


28

averaged 13.6m / day / drill rig and the recovery of drill core over the program was 91.5%. Lower

recovery is explained by the variably lithified ultramafic in the close spaced pattern to be used for

variographical purposes, this is not common throughout the deposit but the location weighting in

this program has skewed the recovery data.

For the resource being compiled in this report the total number of drill holes completed is 593 for

10,851.84m meters of drilling with an average drill hole depth being 18.30m. All drill holes

completed within the ANLP area are located on Figure 9. All cross sections are in Appendix 1.

Figure 9: ANLP Drillhole Location Map – All Drilling

Summary

All exploration completed to date has been systematic and appropriate with regards to the

development of a resource estimate. The author considers the drilling methodology used within the

ANLP area and the various sample recovery rates appropriate and accurate with regards to providing

a sampling platform for resource estimation.

7.4 Drillhole Collars Survey

Surveying of drill hole collars’ position and elevation was undertaken by MRL surveyors using a

Nikon Total Station DTM-332. This, together with the topographic survey of the ANLP is tied to five

National Mapping and Resource Information Authority (NAMRIA) satellite/GPS points and

benchmarks with certified technical descriptions (Table 3). The Reference System used is PRS 92 or

WGS 84, used interchangeably by mathematical conversions.


29

Consequently, the baseline for the local gridlines is based on 51 MRL control stations. About 65,535

survey points, including drillhole collars, were established with varying shot distances. These are

downloaded into the computer by seamless data transfer, imported to MAPINFO, which are then

used for the Digital Terrain Modeling to derive the contour map.

Table 3: NAMRIA Tie Points Technical Description

STATION LATITUDE LONGITUDE EASTING NORTHING LOCATION

AGN_45 9°11'07.88738" 125°33'39.04409" 561636.287 1015703.065 SW-end corner of Sta. Ana

Bridge, Tubay

AGN_46 9°11'11.29480" 125°33'39.28491" 561643.476 1015807.756 NW-end corner of Sta. Ana

Bridge, Tubay

AGN_48 562018.601 1019260.784

AGN_153 9°19'23.02761" 125°33'15.95108" 560907.623 1030913.182 NW-end corner of Puyo

Bridge, Jabonga

AGN_154 9°19'14.68259" 125°33'13.72449" 560840.077 1030656.707 NW-end corner of Bangonay

Bridge, Jabonga

8.0 SAMPLING AND ASSAYING

8.1 MRL Sampling Procedure

The ANLP QA/QC Procedures for the whole ANLP drilling program was set up by MRL geologists and

was followed by all personnel involved in all stages of the program (Appendix 2). This was adapted

from the QA/QC Protocols of QNPH for the 2006 drill program carried out on the ANLP. Periodically,

the protocols were evaluated and improvements implemented. The core handling, logging and

sampling procedures applied in the program are briefly described below.

Core checkers, under the supervision of MRL technical personnel, are present on every drill rig

during operation. This is to record drilling activities from core recovery, core run, pull-out and put-

back, casing and reaming at the drill site. Once a core box is filled, it is sealed with a wooden board

then secured with a rubber packing band. This is placed in a sack and manually carried to the core

house some 300m to 1km m from the drill area.

Core logging was carried out in the core shed by MRL geologists. For standardization of logging

procedures, the geologists are guided by different codes for laterite horizon classification,

weathering scale, boulder size, and color.

After logging, the geologist determines the sampling interval. Core sampling interval is generally at

one (1) meter intervals down the hole, except at laterite horizon boundaries, when actual

boundaries are used. The sample length across the boundaries is normally in the range of 1.0 ±

0.30m to avoid excessively short and long samples. In the saprolitic rocks and bedrock layers, some

sample intervals have lengths greater than 1.30 meters to a maximum of 2.00 meters.


30

8.2 MRL Sampling Protocols

As in all stages of the program, the ANLP QA/QC Procedures (Appendix 2) were diligently followed

during the sample preparation and security procedures. The analyses for the first 2,689 core samples

were performed by McPhar Geoservices (Philippines), Inc. (McPhar), which follows internationally-

accepted laboratory standards in sample handling, preparation and analysis.

For the rechecking of the integrity of laboratory assays, independent consultant Dr. Bruce D.

Rohrlach, also a qualified person, provided MRL geologists with sampling procedures in May, 2007

after several site visits. This was incorporated into the QA/QC Procedures.

Following the recommendations of another qualified person, F. Roger Billington in May, 2008, the

sampling protocols were slightly modified. The most important modification was the insertion of

pulp rejects in the same batch as the mainstream samples. This is to ensure that all conditions in

assaying are similar, if not completely the same for both the mainstream and check samples. All of

the analyses are completed by Intertek Testing Services, Phils., Inc. (ITS) for analysis using the XRF

analytical method, and thus all 8,411 core samples since have been analysed by this group.

The ITS Phils. facility is among Intertek’s global network of mineral testing laboratories. It provides

high quality assay analysis of mineral samples for nickel deposit exploration projects. Intertek

mineral testing laboratories implement quality protocols.

MRL Core Sampling

During the first two phases of drilling, whole core sampling was conducted for 132 drill holes, and 17

holes were split-sampled. Whole core considering the relatively small core diameter, and to achieve

better precision by assaying the largest possible sample.

Whole core splitting was manually performed. The core was laid on a canvas sheet, pounded and

crushed by use of a pick, thoroughly mixed, quartered, then the split sample is taken from 2

opposite quarter portions. The other 2 quarters are combined and kept as a duplicate in a properly-

sealed and labelled plastic bag and arranged in core boxes according to depth. The duplicates are

stored in the core house at the Agata Base Camp, some 1.5 km from the drill area.

For the third and latest drilling phase, split-sampling was conducted to ensure the availability of

reference samples in the future (except for 45 drillholes from the third drilling phase). The cores

were cut in half using either a core saw or spatula. The remaining half is stored in properly-labelled

core boxes at the Mindoro Camp site in Agata.

The sampling interval is marked in the core box by means of masking tape/aluminum strip labeled

with the sampling depth. The sample collected is placed in a plastic bag with dimension of 35cm x

25cm secured with a twist tie. The plastic bag is labelled with the hole number and sample interval.


31

After the samples are collected, they are weighed then sun-dried for about 5 hours and weighed

again before final packing for delivery to the laboratory. In cases where there is continuous rain, the

samples are pan-dried for 5-6 hours using the constructed drying facility or wood-fired oven.

MRL prepared its own sample tags for all samples including pulp repeats, pulp standards, and coarse

rejects samples. The samples were placed in a rice sack and then in a crate to ensure the security of

the samples during transport.

For all of the 2007 cores and batch 2008 AGL 10, the prepared samples were sent to the McPhar

laboratory in Makati City, Metro Manila via a local courier (LBC Express). The samples were carefully

packed in craters with proper labels. This was accompanied by an official Submission Form and a

Courier Transmittal Form. The crates were transported to Butuan City where LBC Express branches

are present. The transportation of the crates containing the samples is always accompanied by

designated MRL staff. The courier received the package and provided MRL with receipts indicating

contents. For batches 2008 AGL 1, 3 and 6, the samples were delivered by MRL to McPhar’s sample

preparation facility in General Santos City. The assaying was performed in their laboratory in Makati

City.

Counting and cross-checking of samples vis-à-vis the McPhar Submission Form were performed by

McPhar supervisors. Notice is given to MRL if there are discrepancies, otherwise it is understood that

sample preparation and analysis will be carried out as requested. A sample tracking, quality control,

and reporting system was maintained between MRL and McPhar.

For batches 2008 AGL-13, 16, 18 and onwards, the core samples were delivered to Intertek’s sample

preparation facility in Surigao City. Likewise, checking of samples against the list was done upon

submission. Once prepared, Intertek-Surigao sends the samples to their assay laboratory in

Muntinlupa City, Metro Manila.

The core sampling and logging facility was under the supervision of MRL geologist or mining

engineer at all times. This facility was originally within the drill area and is about 300m to 1km from

the drill pads, however though logging of the core was completed at the drill rig for the phase 4

drilling, core trays were delivered to Bgy. E. Morgado base camp for sample splitting preparation

under the guidance of MRL staff. A civilian guard secures the base camp premises during the night.

The ANLP drilling was directly under the supervision of James A. Climie, P. Geol., Exploration

Manager of Mindoro.

Checking of Laboratory Performance

In addition to stringent sampling protocols, QA/QC procedures were also employed following Dr. B.

Rohrlach’s and F.R. Billington’s (MRL independent consultants) guidelines. Standard reference

materials, field duplicates, coarse rejects and pulp rejects were resubmitted to the analysing

laboratory to check the accuracy of the primary laboratory results. A total of 1269 analyses of check

samples were used in confirming the accuracy and repeatability of all assays to be used within the

resource estimation of the ANLP. Selection of check samples are spread throughout all holes and in

various laterite horizons.


32

The field duplicates totalled 325 or 2.93% of the 11,100 mainstream core samples of MRL. Normally,

1 in every 20 core samples is duplicated. The duplicate sample is selected to ascertain that the full

range of different laterite horizons is systematically covered. The samples were selected to cover the

full range of Ni grades at Agata, and to extensively cover the different stages and spatial distribution

of the drill program, so as to provide a representative check on the reliability of the original sample

splitting process undertaken by MRL at Agata North. Originally, the splitting method is the same as

for obtaining duplicates for storage but 1/4 part of the prepared sample represents the field

duplicate while the 3/4 part is the regular sample. For the half-core sampling, the field duplicates

were taken by cutting the remaining ½ core into 2. These samples were sent to the laboratory in the

same batch and were treated in the same way as the mainstream core samples.

A set of 81 coarse reject samples, comprising 0.73 % of the 11,100 core samples, were submitted to

the laboratory where the original samples were analyzed for resampling and assaying. Resampling

was done by taking a duplicate split from the coarse rejects and then placing it back into the assay

stream for analysis. Again, as in all duplicates, the submitted samples were chosen to cover the

natural range of assays. The reanalysis of the coarse reject samples was undertaken as an internal

check on the crushing and sub-sampling procedures of the laboratory to ensure that the samples

taken for analysis were representative of the bulk sample.

There were two sets of pulp rejects sent for re-assaying. One was sent to the laboratory where it was

originally analyzed. A total of 250 pulp rejects were sent under this category. The other set was sent

to an umpire laboratory wherein a total of 319 pulp rejects were analyzed. This is to establish

reproducibility of analysis and determine the presence or absence of bias between laboratories.

Samples were taken on all of the different laterite horizons. Originally, pulp rejects were collected

and sent in separate batches. Starting on June 2008, pulps were inserted together with the

mainstream samples (1 in each set of 40 samples). The pulp rejects for inter-laboratory checking

were sent at a later date.

The umpire laboratory for the 2007 drilling program was Intertek in Jakarta. Selected pulp samples

were sent by MRL to Intertek’s Manila office, after which they forward the samples to Jakarta in

Intertek Cilandak Commercial Estate 103E, JI Cilandak KKO, Jakarta 12560. Intertek (Jakarta) has

acquired an ISO 17025 2005 accreditation from KAN (National Accreditation Body of Indonesia)

denominated as LP 130_IDN. This is valid until 2010. With the change of primary laboratory to

Intertek Phils., Mcphar becomes the umpire laboratory. In 2008, Mcphar samples/assays were

checked by Intertek Phils. and vice-versa.

Nickel standards or certified reference materials are routinely inserted to the batches of core

samples sent for assaying. This is done as a double check on the precision of the analytical

procedures of Mcphar and Intertek on a batch by batch basis. The standards, which have known

assay values for Ni, were provided by Geostats Pty Ltd of Australia in pulverized (pulp) form weighing

about 5 grams contained in 7.5cm X 10cm heavy duty plastic bags. Originally, one (1) standard

sample is inserted for every batch of 40 to 45 samples. However, there were some standards

inserted in smaller intervals of 25-35 samples. Starting with Batch 2008 AGL-18, one standard

sample was included in every set of approximately 40 samples. In all, 294 standards equivalent to

2.65 % of the core samples were used.


33

Eighteen types of Ni standards were used with grade ranging from 0.01% to 2 % Ni. Each one comes

with a certificate that shows the accepted mean Ni value and standard deviation, which are available

in the website of Geostats (www.geostats.com.au). The specific nickel standards and the frequency

of using each one are listed in Table 4.

Table 4: Ni Standards used at ANLP and frequency

Ni Standard # Assays %Ni Ni Standard

# Assays %Ni

GBM305-9 32 0.25 GBM906-7

6

0.56

GBM307-13

16

2 GBM996-1

5

1.27

GBM901-1

55

0.8 GBM302-8

6

1.08

GBM903-2

27

0.11 GBM397-6

5

0.03

GBM905-13

41

1.51 GBM901-4

6

0.02

GBM906-8

44

0.55 GBM903-5

10

0.18

GBM398-4

5

0.41 GBM995-4

10

0.03

GBM900-9

5

1.16 GBM997-4

5

0.01

GBM901-2 8 0.88 GBM998-3 8 0.03

9 Standards 233 9 Standards 61

8.3 Laboratory Protocols

McPhar Geoservices (Phil.), Inc.

McPhar carries out high quality sample preparation and analytical procedures. It is an ISO 9001-

2000-accredited laboratory and has been providing assay laboratory services to both local and

foreign exploration and mining companies for more than 35 years. It served as the primary

laboratory for the ANLP drilling. Its address is 1869 P. Domingo St., Makati City, Metro Manila.

Mcphar’s sample preparation procedures and analytical processing are illustrated in the flowcharts

below. Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum

(Al), silica (SiO2) and some samples for phosphorous (P). The Ni, Co, Fe, Mg and Al are assayed by

dissolving a 25g charge with a two acid digest using hot hydrochloric (HCl) and nitric acid (HNO3) and

reading the results by Atomic Absorption Spectroscopy (AAS). The SiO2 and P are analyzed by a

gravimetric process.

McPhar has its own Quality Assurance / Quality Control (QA/QC) program incorporated in their

sample preparation and analyses procedures. Every tenth sample and samples with "anomalous"

results, i.e., samples having abnormally high or low results within a sample batch, are routinely

checked. This is done by preparing a solution different from the solution on the regular sample taken

on the same pulp of a particular sample.

Intertek Testing Services Phils., Inc.

Intertek Testing Services Phils., Inc. is among Intertek’s global network of mineral testing

laboratories. It provides quality assay analysis of mineral samples for nickel deposit exploration


34

projects. Measures are taken by Intertek mineral testing laboratories to ensure that correct method

development and quality protocols are in place to produce good quality results.

Each sample is analyzed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminum (Al), silica

(SiO2), CaO, Cr2O3, K2O, MnO, Na2O, P2O5, and TiO2. Whole rock analyses are done using X-ray

Fluorescence. The samples are fused using lithium metaborate. XRF analysis determines total

element concentrations that are reported as oxides.

For its internal QAQC, Intertek performs repeat analyses plus split sample analyses in every 15-20

samples. Furthermore, on the average, one standard reference material is inserted in every 40

samples, and one blank in every 60 samples.

Flowcharts of McPhar and intertek sample preparation and analysis procedure flowsheets are

presented in Appendix 3.

8.4 Internal Check Assays (McPhar and Intertek)

The laboratories of Mcphar and Intertek in Manila have a Quality Assurance/Quality Control

programs incorporated in their sample preparation and analyses procedures. The two laboratories

regularly conduct duplicate analysis of Ni and other elements as a check on analytical reproducibility

within their own laboratories. Repeats are routinely conducted on all elements being analyzed and

are typically on every 10th sample for McPhar and on every 20th sample for Intertek. All in all there

are 770 (6.94%) repeat analyses that are spread evenly throughout the entire database.

In analyzing the correlation between the original and duplicate sample, the Variance between the primary assay and the duplicate was computed as follows: (a – b)

Var = ________ x 100

a

Where: a - is the original sample analyzed

b - is the duplicate sample analyzed and

Var - is the percentage relative difference.

To interpret the Variance value, a value of zero means the two values are identical and the

duplication is perfect, a negative value means the duplicate is higher, while a positive value means

the original is higher. Values less than 10% variance (either negative or positive), are considered

excellent when reviewing comparative samples within lateritic Ni deposit assays. [NB This

methodology is used in all sections of Chapter 8.0 Sampling and Assaying within this report.]

There is an excellent correlation for all of the elements within an internal repeat with all below

Variances <1% (0.03 – 0.28%) as shown in Table 5, which is consistent with high precision

repeatability. There is generally a very even spread of the check assay being both higher and lower

than the primary assay which indicates that there is no systematic bias occurring in the check

analyses routine.


35

Table 5: Variance of Original and Internal Laboratory Duplicate Analyses

Internal Laboratory Comparitive Statistics

McPhar

Ni Co Fe Al Mg Si

Variance from 1st Assay

0.05%

-0.26%

-0.15%

-0.08%

0.28%

0.03%

Duplicates = 1st Assay

98

204

4

98

23

16

Duplicates < 1st Assay

84

38

146

94

137

120

Duplicates > 1st Assay

90

30

122

80

112

136

Intertek

Ni Co Fe Al Mg Si

Variance from 1st Assay

-0.06%

0.36%

0.09%

-0.04%

0.33%

0.01%

Duplicates = 1st Assay

15

74

0

5

0

2

Duplicates < 1st Assay

100

73

98

107

105

115

Duplicates > 1st Assay

117

85

134

120

127

115

8.5 External Check Assays (MRL)

MRL has also set up its own QA/QC protocols vis-à-vis the laboratories’ sample preparation and

analytical procedures, which the author has observed in the field and analysed the results for this

report. The external laboratory checks determine the assaying laboratories to replicate a known

standard, the repeatability of the assay from the field splitting and the pulp repeats (i.e external and

internal repeats of the primary assays), the consistency of grade between laboratories, and the

determination of any bias within the sample preparation process through the analyses of the coarse

rejects. It is a comprehensive series of analyses compiled to ensure grade estimates are of the

highest calibre.

Nickel Standards

As a double check on the precision of the analytical procedures of both Mcphar and Intertek

laboratories, nickel standards were inserted by MRL into the sample runs at approximately 1 to 45

samples on the average. A total of 303 nickel standards, representing 2.73 % of the 11,100 core

samples were sent. These standards were purchased from Geostats Pty. Ltd of Australia. Twelve

types of standards were used for the whole drilling course to date, with grade ranging from 0.11 to

2.00 % nickel.

Table 6 presents the data standards for nickel for two of the Ni standards used by MRL which were

lateritic nickel standards and most closely related to the ANLP samples submitted. From the

statistical analyses it is confirmed that the external standards submitted by MRL fell within a small

range from the accepted mean, and that comparative statistics were well within acceptable


36

standards. A point to note is that both McPhar and Intertek consistently underestimated Fe for both

standards, and though the variation is <3.2% of the Ni standards Fe grade, it was the only example of

a systematic variation encountered within the dataset.

Table 6: Variance of Ni Standard and Laboratory Assays

Ni Standard GBM901-1 Ni Standard GBM905-13

Ni Co Fe Ni Co Fe

Variance from Std

-1.66%

-8.68% 3.15%

Variance from Std -0.33% -4.25% 1.92%

# Assays = Std 0 0 0 # Assays = Std 0 2 0

# Assays > Std

46

45

0 # Assays > Std

25

20

0

# Assays < Std 9 10 55 # Assays < Std 16 19 41

The graphical representation of the standards data shows that the Ni grade is extremely consistent

within the standard and within both standards the check assays vary above and below the

standard’s value (Figure 10). However, when a new batch of the same standard was put into the

sample runs the minor elements within the standard varied (especially Co), and this indicates the

difficulty of ensuring an even spread of the minor elements within a product like a Ni standard. The

variation for the minor elements can therefore be explained by batch variation rather than a

systematic error within the assaying process.

Field Duplicates

The analytical reproducibility of field duplicate samples is a measure of the representativity of the

original split of the sample, a check on the reliability of the sample reduction procedure (splitting)

undertaken by MRL at the field area.

The field duplicates were sent together with the regular core samples for assaying. A total of 325

core field duplicates (2.93% of the 11,100 core samples) were analyzed. Of these, 134 were analyzed

by Mcphar (1 in 20 cores) while 191 duplicates were by Intertek (1 in every 40 samples).

Table 7: Variance of Field Duplicate and Original Assays

Field Duplicates Comparitive Statistics

Ni Co Fe Al Mg Si

Variance from Assay

-0.16%

-2.1%

0.1%

0.3%

-0.6%

-0.9% (Abs Variance from Assay)

3.30%

7.2%

3.1%

6.1%

9.5%

6.2%

Field Duplicates = Assay

22

81

0

28

9

1

Field Duplicates < Assay

164

133

157

163

154

171

Field Duplicates > Assay

139

111

168

130

158

149


37

The results presented in Table 7 range from 0.1% to -2.1% for all elements, which indicates that

there is an extremely high repeatability for all field samples. When reviewing the Absolute Variance,

i.e the maximum variance from the sample average, all values for all elements are still under 10% of

the average grade which supports the consistency of the splitting method and the reliability of the

assays. Reviewing the split of duplicate samples being higher or lower in grade on average, the total

count indicates that there is an equal chance of any duplicate being higher or lower than the original

assay.

The author confirms that the field splitting and sampling protocol was excellent and supports the

validity of the samples to be assayed for use in estimation purposes for all elements.

Coarse Rejects

The reanalysis of the coarse reject samples was undertaken as an internal check on the crushing and

sub-sampling procedures of McPhar and Intertek to ensure that the samples taken for analysis were

representative of the bulk sample. The Variance results for the Coarse fraction post crushing in

comparison to the primary assay is shown in Table 8.

Table 8: Variance of Field Duplicate and Original Assays

Coarse Reject Comparitive Statistics

Ni Co Fe Al Mg Si

Variance from Assay

-0.04%

4.0%

-0.4%

-0.6%

1.9%

-0.9% (Abs Variance from Assay)

3.38%

10.0%

2.9%

11.3%

13.5%

4.8%

Coarse Rejects = Assay

5

19

0

3

1

0

Coarse Rejects < Assay

42

38

45

46

45

39

Coarse Rejects > Assay

34

24

36

32

35

42

The results presented in Table 8 range from -0.04% to -4.0% for all elements, which indicates that

there is an extremely good correlation of the coarse rejects with the passing material that formed

the pulp for assaying. When reviewing the Absolute Variance, i.e the maximum variance from the

sample average, there are 3 elements (Co, Fe, and Mg), that are more variable and this may be due

to specific minerals that may crush less evenly due to hardness or platiness (Corundum for Al as an

example) – but even with these minor variances for some minor elements the coarse sample rejects

are very similar to the fines material. Reviewing the split of coarse rejects being higher or lower in

grade on average, the total count indicates that there is an equal chance of any duplicate being

higher or lower than the original assay.

The author confirms that the crushing of the primary sample protocol was excellent and supports

the validity of the resultant pulps to be assayed for use in estimation purposes for all elements.


38

Figure 10: Graphs of Nickel Standards Assays.

Ni G

rad

e

Sample Count

Standard 901-1 Ni Repeats

Ni G

rad

e

Sample Count

Standard 905-13 Ni Repeats

Co

Gra

de

Sample Count

Standard 901-1 Co Repeats

Co

Gra

de

Sample Count

Standard 905-13 Co Repeats

Fe G

rad

e

Sample Count

Standard 901-1 Fe Repeats

Fe G

rad

e

Sample Count

Standard 905-13 Fe Repeats


39

Pulp Rejects Analyzed by Primary Laboratory

A total of 30 of the McPhar pulp rejects during the first and second drilling phases were re-sampled

and analyzed representing 1.07% of the 2,793 core samples. These were selected from previously

submitted batches covering a range of sample grades, a range of horizons and a range of holes from

the core drilling programs, so as to be representative of all the samples.

The method of pulp reject sampling for Intertek Laboratory was modified in June 2008. Starting with

batch 2008 AGL-18, pulp rejects were randomly selected one in every set of 40 and were pre-

numbered. These pulps were inserted to its assigned numbers right after sample preparation and

were analyzed in the same batch as its source. A further 220 pulp rejects were submitted to the

completion of the 2010 drill program.

The duplicate pulp analyses were conducted to test for homogeneity of the pulps generated by the

two laboratories. Insufficiently milled samples will lead to multiple assaying of pulps with poor

precision (i.e. poor repeatability). Inversely, agreement between assays of duplicates of the pulp

would indicate that the milling procedure in the laboratory was efficient and generated a suitably

homogeneous pulp.

Table 9: Variance of Pulp Duplicate and Original Assays

Pulp Duplicates Comparative Statistics

Ni Co Fe Al Mg Si

Variance from Assay

0.59%

-2.6%

0.0%

-0.6%

-0.3%

0.4% (Abs Variance from Assay)

1.97%

6.0%

1.3%

3.2%

4.5%

2.2%

Pulp Duplicates = Assay

13

58

0

8

1

1

Pulp Duplicates < Assay

102

108

117

147

119

117

Pulp Duplicates > Assay

135

84

133

95

130

132

The results presented in Table 9 range from 0.0% to -2.6% for all elements, which indicates that

there is an extremely high correlation of the repeat pulp assay with the primary assay. When

reviewing the Absolute Variance, i.e the maximum variance from the sample average, the range is

extremely small at 1.97-6.0% which indicates an extremely good repeatability for the pulps

presented to the laboratories prior to assaying. Reviewing the split of pulp repeats being higher or

lower in grade on average, the total count indicates that there is an equal chance of any pulp

duplicate being higher or lower than the original assay.

The author confirms that the pulp repeatability was excellent and supports the validity of the

primary pulps to be assayed for use in estimation purposes for all elements.


40

Pulp Rejects Analyzed by Umpire Laboratory

Two laboratories have been used since the inception of the laterite Ni exploration at ANLP, and

during the drilling programs check pulps have been forwarded to the alternate laboratory to confirm

assay reliability. There are minor issues for some element analyses due to the varying assay

methodologies (McPhar use AAS process and Intertek use an XRF), but this is predominantly within

the minor elements and not the Ni assay.

Table 10: Variance of Pulp Duplicate and Interlab Assays

Interlab Pulp Duplicates Comparative Statistics

Ni Co Fe Al Mg Si

Variance from Assay

1.97%

-0.9%

1.2%

2.7%

2.4%

0.0% (Abs Variance from Assay)

5.04%

10.4%

6.7%

20.5%

17.8%

1.0%

McPhar = Intertek

9

60

0

7

1

1

McPhar < Intertek

117

127

135

140

129

74

McPhar > Intertek

193

132

184

172

189

81

The results presented in Table 10 range from -0.9% to 2.7% for all elements, which indicates that

there is an extremely high correlation of the interlab repeat pulp assay with the primary assay, and

in fact are very similar to the range of variance encountered within the single lab pulp repeats (Table

9). When reviewing the Absolute Variance, i.e the maximum variance from the sample average, the

range is larger at 1.0-20.5% which indicates that though their is good repeatability for the pulps, the

differing methodologies do provide some contrast in the minor elements (Al and Mg especially).

Reviewing the split of pulp interlab repeats being higher or lower in grade on average, the total

count indicates that there is an equal chance of any pulp duplicate being higher or lower than the

original assay.

The author confirms that the pulp interlab repeatability was excellent and further supports the

validity of the primary pulps to be assayed for use in estimation purposes for all elements.

8.6 Summary

In the authors opinion the sampling protocols, procedures and methods performed by MRL, and

their implementation are of acceptable standards. Assays performed at the McPhar and Intertek in

Metro Manila, are also of acceptable standards. Variations encountered by the McPhar and Intertek

QA/QC program on the Agata samples were all within acceptable limits.


41

9.0 Data Verification

The author has visited site twice in the past 6 months and in each occasion has reviewed protocols

and processes set in place at the Mindoro base camp in Agata. The datasets provided by Mindoro

were checked and verified by comparing a random portion against original field sheets and official

Certificates of Analytical Results. Selected core trays were visually inspected against the logs. In

addition, the core photos were viewed and compared with the cross sections showing laterite

horizons generated by MRL. The lithology was checked in the field and in the drill cores. The digital

file was checked for logical errors or data entry errors. There were a few but very minor errors

found.

Previously Dallas Cox who has compiled the 3 previous resource reports also completed a series of

random checks made in the field, to corroborate the acceptable quality of the data. As a further test,

he collected twelve field duplicate samples and sent them to the same laboratory where they were

originally assayed. Five samples come from the limonite horizon, six are from the saprolite and one

from the saprolitic rock horizon. Table 11 and Figure 11 show the results and the correlation vis-à-vis

original MRL assay values.

Table 11: Results of Independent Check on Drill Core Assays

HOLE ID FROM TO RUN MRL

Ni %

DMC

Ni %

MRL

Co %

DMC

Co %

MRL

Fe %

DMC

Fe %

MRL

Al %

DMC

Al %

MRL

Mg %

DMC

Mg %

AGL 2008-281 1.00 2.00 1.00 1.46 1.43 0.09 0.09 38.94 39.75 2.45 2.64 1.07 1.13

AGL 2008-355 2.00 3.00 1.00 1.02 0.91 0.07 0.07 30.47 31.55 2.57 2.61 2.28 1.44

AGL 2008-175 2.60 3.45 0.85 1.59 1.58 0.05 0.05 23.32 23.60 0.74 0.66 10.51 10.32

AGL 2008-194 6.00 7.25 1.25 0.92 0.95 0.03 0.03 15.22 15.89 0.71 0.69 12.93 12.64

AGL 2008-174 3.40 4.20 0.80 1.31 1.35 0.03 0.03 14.45 15.25 0.46 0.45 15.57 15.63

AGL 2008-297 8.00 9.00 1.00 1.27 1.25 0.14 0.13 52.05 50.62 3.88 3.36 0.36 0.42

AGL 2008-299 1.00 2.00 1.00 1.20 1.32 0.14 0.13 47.57 44.50 1.82 1.69 2.75 3.89

AGL 2008-355 2.00 3.00 1.00 0.87 0.92 0.03 0.03 14.24 14.64 0.52 0.55 15.89 15.65

AGL 2007-17 27.00 28.00 1.00 1.33 1.31 0.02 0.02 6.38 8.14 0.11 0.21 15.02 17.24

AGL 2008-135 5.55 6.45 0.90 1.03 1.12 0.12 0.11 50.10 50.73 2.46 2.12 0.71 0.77

AGL 2008-74A 17.40 18.40 1.00 0.46 0.51 0.01 0.01 5.40 6.07 0.15 0.16 14.66 15.43

AGL 2008-14A 13.55 14.85 1.30 0.80 0.97 0.02 0.02 8.48 10.20 0.16 0.19 14.53 15.15

* DMC - Dallas M. Cox


42

Figure 11: Comparison of Independent Checks and MRL Assays

The graphs show good correlation between the MRL assays and that of Dallas Cox’s samples. This is

attested by the values of the coefficient of determination R2, which range from 0.947 for nickel to

0.996 for iron.

The author has verified all aspects drill hole collar locations, sampling and assay procedures,

examined mineralized material in the field and in drill core, as well as the geological and assay

databases during two site visits in the Agata Project and meetings with MRL staff and Dallas Cox a

previous independent analyst of the Agata north Resource. With these factors, as well as the

evaluation of the results of assay rechecking, the writer is satisfied that all data utilised in the

resource estimate can be relied upon.

10.0 Bulk Density Determinations

MRL have completed a significant number of bulk density tests so as to provide data for estimating

the tonnages of each specific mineralized zone within the ore body. Samples were predominantly

taken from test pits prepared for the taking of density samples. A total of 30 samples from 15 test

pits were used for the ferruginous laterite horizon; 37 samples from 19 pits for limonite; and 17 pit

samples from 6 pits for saprolite. In addition 19 core samples were tested from the saprolite zone.

All primary data used for these determinations are located in Appendix 4.

For BD measurements done on site, large samples ranging in volume from 0.005 m3 to 0.08 m3 were

collected from twenty test pits. The locations of these test pits are distributed around the drilling

area (Figure 12). The bulk samples were measured for volume, wet weight, and dry weight. The

description of the methodology is detailed in the ANLP QA/QC Procedures (Appendix 2)

The BD and moisture content were computed with the following formulas.


43

Weight (kg)

Bulk Density = _______________ ÷ 1000 (kg/ton)

Volume (m3)

Weight wet – Weight dry

% Moisture Content = __________________ x 100

Weight wet

For the drill cores, relatively solid/less compressed portions of 10cm-20cm lengths were selected

from drill holes that are spatially distributed and coated in paraffin wax to preserve the moisture.

These were then dispatched to McPhar Laboratories wherein the samples were measured using the

water displacement method. It is standard practice for McPhar to check the wax coating and

perform re-waxing if needed.

Table 12: Summary of Bulk Density Measurements

HORIZON Wet

Density

Dry

Density

Moisture

Content

%

No. of

Samples

FERRUGINOUS LATERITE 1.72 1.20 30.49 30

LIMONITE 1.81 1.24 31.74 37

SAPROLITE (Pit Samples) 1.98 1.46 26.11 17

SAPROLITE (Core Samples) 1.82 1.45 20.60 19

Table 12 shows the summary results of these measurements, and the dry density values used in the

resultant block model were 1.24 dt/m3 for Limonite and 1.45 dt/m3 for Saprolite. A dry density of 1.6

dt/m3 for bedrock has been applied in the model, but there is no mineralised ore within this defined

region and as such is simply a differential figure to aid in planning and design.

With the separation of the upper and lower limonite and the upper and lower saprolite within the

resource modelling a further refinement of the dry bulk density values was required. In regards to

the limonite values, the bulk density test work as shown in Table 12 successfully allocated the upper

limonite (ferruginous laterite), and lower limonite values (limonite). However for saprolite there was

no distinction and a review of all the saprolite data confirmed that there was a significant difference

between these two layers and a gross average could not be applied.

Figure 13 is a graph of the dry bulk density data versus moisture levels for the two sets of data

obtained during the test work. In Figure 13 the red stars are 2007 data set, and the black dots are

the 2010. What is immediately noticeable is that in both data sets the dry density is in a direct

correlation with moisture (R2 value for 2007 = 0.83 / 2010 = 0.93), with the improved methodologies

used in 2010 showing a greater correlation but in effect exactly the same trend. As Agata North has


44

no mine or pit to obtain larger density samples from, every test completed here is a corrupted test in

the sense that moisture has been added to the sample during collection (either by drilling

methodology or by opening up a small test pit) and as such the averages of these values are not

appropriate unless we consider moisture. The solution to this impasse is to interpret an in situ

moisture and then apply the moisture value to the best correlation (2010 in this case), and define

the dry density in this format.

Based on the spread of the data and the presence of smectite mineralogy it can be assumed that the

moisture content will be approximately 24% in situ. This provides a bulk density of 1.32 t/m3 for the

upper saprolite. One other factor needs to be considered and this is the presence of boulders within

the upper saprolite and used in the estimation, this lithology has a greater density and forms ~19%

of the upper saprolite material. As it is impossible to accurately predict the tonnes of this rock, or

the actual density due to its varying level of hardness and weathered status, thus we can only

predict a small impact on overall density.

Considering all of these factors the following density values for the newly formed upper and lower

saprolite layers in the ANLP 2013 resource have been interpreted as below.

Upper Saprolite Dry Density = 1.34t/m3

Lower Saprolite Dry Density = 1.45t/m3

Figure 12: Agata North Bulk Density Test Pit Location Map


45

Figure 13: ANLP Saprolite BD data graph – Dry Density vs Moisture All Data

11.0 Resource Estimate

The resource Estimate calculations were completed by Mike Job, Principal Consultant for

Quantitative Group based out of Fremantle, West Australia. All data was checked and forwarded by

the author, and all modelling methodologies were discussed prior to commencement of developing

the resource.

11.1 Geometric Interpretation

There is a total of 633 drillholes in the dataset. All of the holes are vertical and relatively shallow,

with the deepest hole ending at 46.6m depth. The UTM coordinates (rather than the local grid) have

been used. Basic validation of the dataset was previously conducted by QG in 2010.

As reported in Gifford (2010) the limonite/saprolite contact point was based on an abrupt change in

the level of Mg in limonite (usually less than 1% Mg) to saprolite (generally well over 10% Mg,

although sometimes down to about 5% Mg). There is also an abrupt drop of Fe in limonite (~40% to

50%) to saprolite (less than 10%). The saprolite/bedrock contact was identified by using the Ni assay

data (bedrock generally less than 0.4%) and the geological logging. The geological logging provided

in the dataset matched these grade-determined boundaries extremely closely (Gifford, 2010).

As discussed in the introduction, the division of the limonite domain into sub-domains was based on

a 44% Fe grade boundary. The higher Fe grade occupies the greatest proportion of the limonite

domain and is positioned above the lower Fe grade sub-domain. Likewise for the saprolite sub-

domains, based on a 0.7% Ni boundary, the higher Ni grade occupies the upper portion of the


46

domain and represents the greatest proportion of the total domain. The sub-domains are shown

graphically in Figure 14.

The topography surface was used to cut the base of limonite and base of saprolite wireframes,

which were in turn subdivided by the respective sub-domain wireframes (Figure 14). These 5

surfaces were used to select and flag the drill samples. The sample selection and flagging processes

were conducted using Datamine software.

Figure 14: Wireframe surfaces and drilling, Agata North (Ni on left, Fe on right side of drill trace).

Sample selection and flagging was checked on screen and demonstrated robust adherence to the

interpretation parameters, with accurate selection and flagging of the samples.

The domain and sub-domain codes (DOMAIN and SUBDOM fields respectively) are shown in Table

13.

Table 13: Domain and Sub-Domain codes for Agata North Laterite.

Domain & Sub-Domain Domain

Code

Sub-Domain

Code

Limonite >44% Fe (Upper

Limonite)

1 11

Limonite <44% Fe (Lower

Limonite)

1 12

Saprolite >0.7% Ni (Upper

Saprolite)

2 21

Saprolite <0.7% Ni (Lower

Saprolite)

2 22

The same wireframe surfaces used for sample selection were also used for the construction of a 3D

block model. The parent cell size used by Gifford (2010) of 20m x 20m x 1m with 10m x 10m x 1m

sub-blocking (see Table 4 and Figure 15) was used here. The model origin was chosen so that the

drillholes would mostly be located in the centre of a parent block (Gifford, 2010).


47

Table 14: Block Model Properties

Easting (m) Northing (m) RL (m)

Origin 775,625 1,025,225 0

Parent block size 50 50 1

Sub-block size 10 10 1

Extent 778,225 1,029,025 400

Figure 15: Block model sub-domains.

11.2 Exploratory Data Analysis (EDA)

The flagged samples were composited to 1m to allow EDA on comparative, additive samples. The

majority of raw samples were at or less than 1m in length.

A number of drillholes had exactly the same collar coordinates; AGL 2008-196 and -196, and holes

AGL 2008-247and 248. Therefore, holes -196 and -248 were removed. Compositing was conducted

in Datamine using ‘Mode = 1’, which divides the down-hole intercept in each (sub) domain equally to

be as close to 1m as possible. A minimum composite length of 0.5m was used.

More sample length is lost compositing in the sub-domains compared to compositing in just the

main domains, but the amounts lost are relatively small. Table 15 shows the raw and composite

lengths for both domains and sub-domains, and the percentage of the length lost.


48

Table 15: Comparison by of raw sample lengths to composite sample lengths.

Domain / Sub-

Domain

Raw Sample

Length

Composite Sample

Length

% Length

Lost

1 3058 3016 1.4

11 2563 2526 1.4

12 496 480 3.2

2 5701 5653 0.8

21 4336 4296 0.9

22 1373 1337 2.6

Preparation of the three additional variables, Cr2O3, CaO and MnO, included dealing with a number

of grade values given as <0.01%. This indicates the variable was below detection limit for that

sample. These values were converted to a grade of 0.01% to allow their consideration in the analysis

and prevent their loss in the case of subsequent estimation, which could allow higher grades to

possibly over inform the estimate in those areas.

Assessment of the validity of the sub-domains for each of the variables was conducted by

comparison of the basic statistics of the composited samples for each domain and sub-domain,

consideration of their distribution in the form of histograms and by contact analysis. The results of

each of these processes are given in Appendix 5.

Note that the variables of interest are not informed to the same levels; Ni, Co and Fe are best

informed and CaO, Cr2O3 and MnO are the least informed (Appendix 5).

Assessment of the main limonite and saprolite domains, including the additional 3 variables, CaO,

Cr2O3 and MnO, supports the use of a hard boundary between these domains as concluded by

Gifford (2010).

Basic summary statistics for each of the sub-domain composites within each domain are given in

Table 16.


49

Table 16: Composite statistics for sub-domains

There is a clear change in the mean and variance for some variables, most obviously the variables

providing the basis of the sub-domaining (Fe in limonite and Ni in saprolite) but also for some of the

other variables e.g. Fe in saprolite and Mg in limonite. These distribution changes are reflected in

the histograms (Appendix 5).

Care does need to be taken in some cases where isolated extreme values can affect the statistics in

one sub-domain or the other without necessarily indicating the validity of a sub-domain boundary.

An example of this is Cr2O3 in the saprolite sub-domains where a single high grade sample in the

upper saprolite has a significant effect on the variance of the distribution. This is shown in Figure 16.

Figure 16: Histograms for composited Cr2O3 for saprolite sub-domains (upper saprolite uncut on left;

upper saprolite top-cut in middle and lower saprolite on right).

CaO in the limonite domain appears to be problematic, particularly in the upper sub-domain, with

what appears to be two populations rather than a single population. This indicates there may be a

separate control on CaO distribution in the upper sub-domain. The histogram for CaO in the upper

limonite sub-domain is given in Figure 17.


50

Figure17. Histogram for composited CaO in the upper limonite sub-domain (histogram for higher

grade population inset).

Contact analysis considers two ‘domains’ at a time (one contact) - samples are ‘binned’ according to

their distance either side of the contact and the average grade of each bin is calculated for each

variable of interest. The mean grades across the contact are plotted, providing a visual guide as to

whether the transition is gradational or sharp.

Contact analysis plots are contained in the figures below and in Appendix 1 (Contact Analysis

worksheet). In the plots the mean grade by distance from the contact is represented by the red line

series; the interpreted contact itself is represented by the vertical black line (at zero distance).

For the limonite domain, the contact analysis plots for the upper and lower sub-domain contact

shows two clear groupings of variables; those that demonstrate a trend of grade through the sub-

domain boundary, and those that show a distinct statistical shift either side of the boundary.

Those that show a gradational trend in grade across the limonite sub-domain boundary are Ni, Co, Al

and (to a lesser degree) Mn. The contact analysis plots for these are shown in Figure18.

Variables demonstrating a distinct statistical shift either side of the boundary are Fe (as would be

expected), Mg and SiO2, and Cr2O3. The contact analysis plots for these are shown in Figure19.


51

Figure18: Contact analysis for the upper and lower limonite sub-domains for Ni, Co, Al and Mn

respectively.

Figure19: Contact analysis for the upper and lower limonite sub-domains for Fe, Mg, SiO2 and Cr2O3

respectively.

The contact analysis for CaO is less clear, possibly affected by some other control on distribution.

The contact analysis for CaO in the limonite sub-domains is shown in Figure 20.

Figure 20: Contact analysis for the upper and lower limonite sub-domains for CaO.

For the saprolite domain, only three variables show evidence of an abrupt statistical change across

the 0.7% Ni sub-domain contact. The most distinct, was Ni, but Co and Fe also displayed a marked

change at the sub-domain boundary, as shown in Figure 21. Less distinct or lower magnitude

statistical shifts are shown by Al, Mg, Cr2O3 and MnO, given in Figure 22. Gradational distributions

across the contact are demonstrated by SiO2 and CaO, shown in Figure 23.


52

Figure21: Contact analysis for the upper and lower saprolite sub-domains for Ni, Co and Fe

respectively.

Figure22: Contact analysis for the upper and lower saprolite sub-domains for Al, Mg, Cr2O3 and MnO

respectively.

Figure23: Contact analysis for the upper and lower saprolite sub-domains for SiO2 and CaO

respectively.


53

From the statistical analysis and assessment of the validity of the Fe based sub-domains in the

limonite domain and the Ni based sub-domains in the saprolite domain, it is seems evident that the

sub-domains are valid for a number of variables. These variables would benefit from separate

estimation using the sub-domain contact as a hard boundary while others would not benefit, and

may in fact be adversely affected, by the imposition of a hard sub-domain boundary. It also needs to

be noted that for some variables in the lower limonite sub-domain there is a significant reduction in

the number of assays available for estimation, for example CaO, Cr2O3 and MnO are reduced to 295

samples.

In the limonite domain, Fe, Mg and SiO2 would benefit from separate estimation into the sub-

domains while Ni, Co and Al would be more robust with estimation into the parent domain.

The cases for CaO, Cr2O3 and MnO are less clear cut, so these variables were estimated into the

domains and sub-domains in parallel for assessment (see the Final Model section).

For the saprolite domain, Ni, Co and Fe are likely to benefit from separate estimation into the sub-

domains, but CaO estimation will likely be more robust into the parent domain.

The cases for SiO2, Al, Mg, Cr2O3 and MnO are less clear cut and these variables were estimated into

the domains and sub-domains in parallel for assessment.

11.3 Variography and Estimation

Experimental variograms were generated for the nine variables in the two main domains and the

four sub-domains. Given the orientation and geometry of the domains and sub-domains variography

was generated in the horizontal plane with an additional downhole direction to help model short

range structure and calculate the nugget. Little anisotropy is evident in the horizontal plane so all

but three of the variogram models are omni-direction in the horizontal plane.

A lag value of 30m to 60m in the horizontal plane was used with 1m in the vertical direction. Using a

slicing height of 2m to 5m in the horizontal plane provided an improvement in variogram structure.

Experimental variograms and their associated models are contained in Appendix 5. The models are

tabulated in Table 17 and Table 18.

For the variables estimated into both the main domains and sub-domains in parallel the domain

variogram models were used for both estimates.

The grade variables showed relatively low nuggets being less than 10% for the limonite domain rising

to about 20% for the saprolite domain. The nuggets rose for the sub-domain up to 40% in the case

of Mg in the lower limonite and Co in the lower saprolite but were generally around or below 20%

otherwise (Table 17, Table 18).

The majority of the variance was taken up in the nugget and first structure with the range of the first

structure rarely exceeding 40m. The second structure ranges were generally below 150m with a

very few exceeding that range (Table 17, Table 18).


54

Table 17: Limonite Variogram Models

Estimation was performed using ordinary kriging (OK) and followed the general methodology and

parameters used in Gifford (2010). OK was run for each of the variables into either the domains or

sub-domains as determined by the Phase 1 assessment. The domains or sub-domains estimated for

each variable is given in Table 19.


55

Table 18: Saprolite Variogram Models

Table 19: Domains and sub-domains estimated for each variable

(Sub)Domains Ni Co Fe Al Mg SiO2 CaO Cr2O3 MnO

Limonite Yes Yes Yes Yes Yes Yes

Upper Limonite Yes Yes Yes Yes Yes Yes

Lower Limonite Yes Yes Yes Yes Yes Yes

Variable (C0) % Major Semi Minor Sill % Structure

SiO2 5 17.4% 22 20 3 18 62.6% 1

175 50 4 5.77 20.1% 2

CaO 0.032 33.7% 13 13 2 0.016 16.8% 1

140 140 9 0.047 49.5% 2

Al 0.025 10.0% 12 12 2 0.072 28.8% 1

125 125 8 0.153 61.2% 2

Mg 3.43 19.8% 20 20 2.5 11.46 66.1% 1

170 170 6 2.456 14.2% 2

Cr2O3 0.052 23.9% 25 25 2 0.111 50.9% 1

130 130 3 0.055 25.2% 2

MnO 0.003 19.2% 16 16 3 0.008 51.3% 1

85 85 5 0.0046 29.5% 2


Ni 0.025 14.5% 8 8 2 0.102 59.0% 1

60 60 3 0.046 26.6% 2

Co 0.0001 22.5% 10 10 2 0.00023 51.7% 1

18 18 3 0.000115 25.8% 2

Fe 6.7 22.2% 12 12 2 15.4 51.0% 1

85 85 4 8.1 26.8% 2


Ni 0.006 16.0% 8 8 1 0.0241 64.1% 1

60 60 1.5 0.0075 19.9% 2

Co 1.7E-05 40.0% 20 20 2 1.36E-05 32.1% 1

330 330 4 1.19E-05 28.0% 2

Fe 0.95 22.2% 15 15 4 1.55 36.3% 1

440 440 5 1.772 41.5% 2

Saprolite

Upper Saprolite

Lower Saprolite

Nugget Range Sill

Nugget Range Sill

Nugget Range Sill


56

Saprolite Yes Yes Yes Yes Yes Yes

Upper Saprolite Yes Yes Yes Yes Yes Yes Yes Yes

Lower Saprolite Yes Yes Yes Yes Yes Yes Yes Yes

The search ellipses were oriented according to the local dip and dip direction using the Datamine

dynamic search feature, which allows the search neighbourhood ellipse dip and dip direction to be

defined separately for each block (in this instance, the variogram was also rotated to align with the

search, but this does not always need to occur). This has the advantage of having a locally-varying

orientation over a domain, where an ‘average’ dip and dip direction would not necessarily honour

the local grade geometry.

The local dips and dip directions were calculated from the orientation of the limonite/saprolite

boundary wireframe triangles, approximating the dip of each of the mineralised domains. Note that

tolerances can be set during this process, so that ‘erroneous’ points will not be generated, such as

vertical dips at the edges of the wireframe.

These points were then used to produce the dip and dip direction for each parent block - essentially

the dip and dip direction are treated as variables and estimated into the block model using special

parameters (to account for dip between 90° and -90°, and dip direction between 0° and 360°).

Then, during estimation of the grade variables, the search ellipse and variogram orientation is

rotated appropriately for each parent block.

To limit the effect of downhole drift evident for many of the variables a restricted search was used

for the vertical direction. Three estimation runs were conducted with less restrictive parameters for

each successive run to inform the maximum number of blocks as possible. The main neighbourhood

search parameters are given in Table 20 and a block discretisation of 5x5x1was used.

Table 20: Estimation neighbourhood parameters.

Estimation

run number

X direction

(m)

Y direction

(m)

Z direction

(m)

Minimum

number of

samples

Maximum

number of

samples

Run 1 150 150 5 10 40

Run 2 300 300 10 4 40

Run 3 600 600 20 4 20

The results of the estimates into each domain or sub-domain are provided in Appendix 5 (Model

Stats worksheet). This includes the number and percentage of uninformed cells and negative kriging

values.


57

The percentage of uninformed cells for each estimate was extremely low, being less than 0.3% for

the poorly informed variables and less than 0.05% for the well informed variables. The exception to

this was for lower limonite, which has the fewest sample numbers, and has up to 3% uninformed

cells.

Five variables reported negative kriging results for all estimates. These negative results are an

artefact of grades receiving a negative weight at the periphery of the search ellipse. These were

very minor in number with a maximum of 0.37% cells for CaO in the upper limonite (Appendix 5).

For the final model these uninformed cells and those with negative kriging results were assigned

positive values. The assigned values were determined by visual inspection of the areas affected in

the model for each domain or sub-domain with a general value of the surrounding grades used.

These minor numbers of affected cells will not have affected the overall quality of the estimation.

As an indication of the level of sample support, Table 21 shows the percentage of cells informed in

each estimation run and the mean number of samples used for Ni in the limonite and upper and

lower saprolite and Fe in the upper and lower limonite.

Table 21: Percent cells informed in estimation runs and mean number of samples used

Dry bulk density was assigned to the model (limonite 1.24, saprolite 1.45).

Validation of the estimates was conducted by comparison of the estimate statistics to the informing

composite sample statistics, swath plots and on-screen visual validation.

Statistical comparison of the model to samples shows a very close match between means, and a

sensible reduction in variance. The comparison of sample to model means is given in Table 22 with a

more comprehensive comparison provided in Appendix I (Model Stats worksheet).

Swath plots were generated for each variable on E-W and N-S slices at 50m spacings and compared

the mean grade of the block model and composites in each slice. The swath plots are contained in

Appendix II. An example is illustrated in Figure 24, which compares Ni in the limonite domain. In all

cases the block model follows the trends of the composites with the expected reduction in

variability.

To assist in assessment of the variables estimated using both the main domains and sub-domains,

the sub-domain swath plots for these variables also had the domain model (restricted to the sub-


58

domain) plotted as well. An example is given in Figure 25, with all sub-domain plots given in

Appendix II.

Table 22: Composite vs. block estimate comparison

Domain Variable Sample Mean Model mean

Ni 0.97 0.95

CO 0.11 0.11

AL 3.34 3.34

CaO 0.22 0.21

Cr2O3 3.12 3.01

MnO 0.91 0.90

FE 47.80 47.93

MG 0.54 0.61

SIO2 3.31 3.51

CaO 0.22 0.19

Cr2O3 3.21 3.14

MnO 0.93 0.92

FE 35.98 36.20

MG 3.75 3.83

SIO2 16.86 16.76

CaO 0.26 0.23

Cr2O3 2.56 2.59

MnO 0.80 0.83

SIO2 40.77 40.49

CaO 0.34 0.35

AL 0.43 0.49

MG 17.45 17.52

Cr2O3 0.83 0.83

MnO 0.22 0.22

NI 1.17 1.12

CO 0.03 0.03

FE 11.57 11.89

AL 0.47 0.56

MG 16.73 16.64

Cr2O3 0.89 0.91

MnO 0.24 0.24

NI 0.52 0.52

CO 0.02 0.02

FE 7.63 7.61

AL 0.31 0.33

MG 19.82 20.06

Cr2O3 0.61 0.59

MnO 0.16 0.16

Limonite

Upper Limonite

Lower Limonite

Saprolite

Upper Saprolite

Lower Saprolite


59

Figure24: Comparison of composites against the block model for Ni in limonite.

Figure25: Comparison of composites against the sub-domain and domain block models for Cr2O3 in

upper saprolite.


60

On the basis of the validation process it was evident that for variables estimated into both domains

and sub-domains both produced valid estimates with little difference between them.

11.4 Resource classification As only 40 holes had been added to the previous estimation data set, and those were in 5 tightly spaces ‘grade control’ grids, the classification applied to the previous estimate (Gifford, 2010) was applied in this study. The resource classification reflects confidence in both geometric interpretation and confidence in

geostatistical grade estimates, and also classifies the resource in a spatially coherent manner,

avoiding small areas of different categories. The vast majority of the deposit is drilled on 50m x 50m

or 100m x 100m grids, which is sufficient to support an Indicated Resource category. The only areas

of Inferred Resource are around the steep-sided creek systems, where the drilling is on a broader

pattern and the laterite horizons thin out. Measured Resource is restricted to that part of the

resource where the drilling has been on 25m x 25m centres (Figure 26).

Figure 26: Resource classification, Agata North Deposit.


61

Decisions on whether the variables were better estimated into domains or further divided into sub-

domains was made on the basis of the EDA, contact analysis and the validation of the estimation

results.

Ni, Co and Al for limonite and CaO for saprolite demonstrated clear continuous trends across the

sub-domain boundaries and were estimated into the main domains only. Fe, Mg and SiO2 in the

limonite and Ni, Co and Fe in the saprolite showed a distinct statistical shift across the sub-domain

boundaries and were estimated into the sub-domains only.

For the other variables, CaO, Cr2O3 and MnO in the limonite and SiO2, Al, Mg, Cr2O3 and MnO in the

saprolite, the statistical shift across the sub-domain boundaries were less distinct or of lower

magnitude but did not exhibit a clear continuous trend. These variables were estimated into both

domains and sub-domains with validation indicating both approaches resulted in acceptable results.

However, the sub-domain validation appeared marginally superior and with no evidence of an

adverse effect from the hard sub-domain boundaries, the sub-domain estimates for these variables

were used in the final model.

The Mineral Resource Estimate figures above a 0.5% Ni cut-off for limonite and above a 0.8% Ni cut-

off for saprolite are presented in Table 23 (variable grades are in %).

Table 23: Agata North Mineral Resource Estimate as at 18th March 2013.

This is an increase of 3.6Mt in the Measured and Indicated compared to the 2010 Mineral Resource

Estimate (Gifford, 2010). The Ni grade also increases slightly compared to the previous estimate

(from 1.05% to 1.08%), so contained Ni metal for the Measured and Indicated increases by 15%

(from 340kt Ni to 391kt Ni).

Nickel grade-tonnage curves for the Measured plus Indicated resource at 0.05% incremental cut-offs

shown for the domains and sub-domains are shown in Figure 27 to Figure 32.


62

Figure 27: Grade-tonnage curve, Measured + Indicated, Limonite.

Figure 28: Grade-tonnage curve, Measured + Indicated, Saprolite.


63

Figure 29: Grade-tonnage curve, Measured + Indicated, Upper Limonite.

Figure 30: Grade-tonnage curve, Measured + Indicated, Lower Limonite.


64

Figure 31: Grade-tonnage curve, Measured + Indicated, Upper Saprolite.

Figure 32: Grade-tonnage curve, Measured + Indicated, Lower Saprolite.


65

12.0 Conclusions

The presence of large areas of an exposed Ultramafic along the Western Range, an upthrust ridge

east of the Philippine Fault, has provided a location for lateritic weathering of the ultramafic. The

area known as Agata North has been enriched within the laterite profile in Ni and Co.

The ANLP has two distinct geomorphic features that have influenced laterite formation and

consequent nickel enrichment. The Eastern part of the delineated body has a moderate relief whose

bedrocks are exposed in ridge tops and in the nearby creeks. The Western laterite occurs on a low

relief terrain and with no exposures of bedrock on its hillcrests. In the Western area, the laterite is

well developed and contains thick and highly mineralized limonite/saprolite. The Eastern Laterite

Zones contain some boulders within the laterite profile. Its limonite zone is usually thinner.

The laterite profile in the ANLP consists of the ferruginous laterite, limonite and saprolite zones or

horizons, and the saprolitic rock, from surface to increasing depth. The limonite zone is

characteristically iron oxide-rich, where the predominant minerals are hematite, goethite and clays,

and with moderate nickel content (over 1%), which overlies the saprolite zone that has much less

oxidised, is magnesium -rich, and has a slightly higher nickel content than the limonite horizon, with

grades in both zones generally at their highest near or adjacent to the contact zone.

This report is based on the data that were produced and compiled by MRL. Data verification

performed by the author found no discrepancies in the sampling and analyses that biased the data

set. Hence the database is considered adequate to meet industry standards to estimate mineral

resources.

The resource was calculated by Quantitative Group using Ordinary Kriging as the estimation method.

Both the limonite zone and the saprolite zones were estimated independently as the form of

mineralisation in both zones were unique and could not be used for comparative statistics. Each of

the limonite and saprolite zones were further subdivided and specific elements re-estimated to

account for both geochemical and mineralogical variation seen within the major lithologies. The

measured and indicated resource estimated from this report is as below:

33,938,000t ore @ 1.10%Ni, 0.05%Co, 22%Fe

The cut-offs applied to the resource were 0.5%Ni for Limonite and 0.8%Ni for Saprolite (as per the

previous estimates completed upon the ANLP, (Cox, 2008 2009a 2009b, Gifford 2010). The last

resource calculated on the ANLP (Gifford, 2010), had the following tonnage and grade:

29,790,000t ore @ 1.03%Ni, 0.05%Co, 23%Fe

Variations in grade can be explained by the application of a grade restrictive delineation between

the upper and lower saprolite and variation in tonnes are explained by the restriction on the

influence of lower grades within the lower saprolite thus giving a greater tonnage >0.8%Ni estimated

(Appendix 6). With the increase in tonnage there is also a tonnage increase in total Ni tonnes (from

307kt to 391kt contained Ni).


66

13.0 References

Abrasaldo, E.M. 1999. Exploration Report Agata Project June 1997-April 1998. MRL Gold Phils., Inc.,

Internal Company Report (unpubl)

Ambagan, D. 2007. Notes on Resource Estimation of Agata Nickel Laterite Project of MRL Gold

Phils., Inc., Internal Report., (unpubl). January 2007.

Aurelio, M.A. and Peña R.E. 2002. Geology and Mineral Resources of the Philippines, Volume 1:

Geology. (eds) Aurelio, M.A. and Peña, R.E., Department of Environment and Natural

Resources, Mines and Geosciences Bureau, Philippines.

Bailey, D.G. 2003. Surigao Property Group, Northeastern Mindanao, Geology and Exploration

Potential. Bailey Geological Consultants (Canada), Technical Report for Panoro Minerals Ltd.

Buenavista, A.G. 2008. Notes on the Geology and Mineralization in the Surigao Western Range. MRL

Gold Phils., Inc. Internal Report, February 2008.

Buenavista, A.G. 2008. Geochemistry of the Agata Nickeliferrous Laterite Deposit. MRL Gold Phils.,

Inc. Internal Report, May 2008.

Cox, D.M. 2008. Independent Geologic Report on the Nickel Laterite Resource at Agata North

Laterite Project Area, Agata Project, Agusan del Norte Province, Northern Mindanao,

Phillipines. MRL Gold Phils., Inc., September 2008, rev. Oct 2008.

Cox, D.M. 2009a. 43-101 Technical Report on the Mineral Resource Estimate for the Agata North

Nickel Laterite Project of Mindoro Resources Ltd., January 22, 2009.

Cox, D.M. 2009b. 43-101 Technical Report on the Mineral Resource Estimate for the Agata North

Nickel Laterite Project of Mindoro Resources Ltd., December 22, 2009.

Climie, J.A., et,al. 2000. Accomplishment Report for the Period: June to December 1999. MRL Gold

Phils., Inc., Internal Company Report (unpubl). January 2000.

Climie, J.A., et,al. 2005. Interim Exploration Program Report, Surigao Joint Venture Projects: March

1 to June 20, 2005. MRL Gold Phils., Inc., Internal Company Report (unpubl). July 2005.

De Luna, R., et.al., 2004. Report on the Reconnaissance Geologic Survey of the Nickeliferrous Laterite

Deposits at Barangay Tapian, Mainit, Surigao del Norte and Barangay E. Morgado, Santiago,

Agusan del Norte. Taganito Mining Corp. Report, July 2004.

Elliott, P.J. 2005. Report on IP and Magnetic Surveys Over the: Agata Prospect, San Francisco

Project, Philippines. MRL Gold Phils., Inc. and Panoro Minerals Ltd,, Company Report, June 2005

Fang, E.F.E and C.A. Matilac. 2006. Evaluation of Preliminary Exploration on Agata Nickel Laterite

Prospect of MRL Gold Phils., Inc., QNPH Report, June 2006


67

Fetiza, I.A. Jr. 1999. Exploration Report: Tapian-San Francisco Project, May 1997 - May 1998. MRL

Gold Philippines Inc. Internal Company Report (unpubl.).

Gifford, M. G. 2010. Independent Geologic Report on the Nickel Laterite Resource at Agata North

Laterite Project Area, Agusan del Norte Province, Northern Mindanao, Phillipines. MRL Gold

Phils., Inc., August 2010.

Marshall, N.J. 1997. Geological Report on the Agata, Mat-I, Nabago and Tapian Gold Prospects,

Northern Mindanao, Republic of the Philippines. Marshall Geoscience Services Pty. Ltd.,

Australia.

Mitchell, A.H.G. and Leach, T.M. 1991. Epithermal gold in the Philippines: Island arc metallogenesis,

geothermal systems and geology. Academic Press Geology Series.

Rangin, C. 1991. The Philippine Mobile Belt: A complex plate boundary. Journal of Southeast Asian

Earth Sciences, 6 (3/4), pp. 209-220.

Rohrlach, B.D. 2005. Independent Geological Report on the Surigao Property Group, Northern

Mindanao, Philippines. MRL Gold Phils., Inc. and Panoro Minerals Ltd., Company Report, April

2005

Sajona, F.G., et.al., 1994. Magmatic response to abrupt changes in geodynamic settings: Pliocene-

Quaternary calc-alkaline and Nb-enriched lavas from Mindanao (Philippines). Tectonophysics,

237(1-2), pp. 47-72.

Sillitoe, R.H. 1988. Geotectonic setting of western Pacific gold deposits. In: M.J. Bartholomew. D.W.

Hyndman, D.W. Mogk, and R. Mason, (eds), 8th International Conference on Basement

Tectonics, 8, pp. 665-678. Kluwer Publishers, Butte, Montana.

Tagura, F. et. al. 2006. Comprehensive Report, MPSA-134-99-XIII, Agata Tenement Blocks. MRL Gold

Phils., Inc. Internal Company Report (unpubl.), 2006

Tagura, F. et. al. 2006. Report on the Preliminary Drill Evaluation on Canaga (MPSA-33-95-X),

Malimono, Surigao del Norte. MRL Gold Phils., Inc. Internal Company Report (unpubl.),

September 2006

Tagura, F. et. al. 2007. Report on Agata Drilling Program, Agusan del Norte, Philippines (Phase 1 Year

2 Expenditure Period 2005-2006), MRL Gold Phils., Inc. Internal Company Report (unpubl.),

January 2007

UNDP. 1984. Geology of Northern Agusan, Mindanao, United Nations Technical Report No. 2,

DP/UN/PHI-79-004/6, New York.

UNDP. 1987. Geology and Gold Mineralization of Surigao del Norte, United Nations Technical Report

No. 4, DP/UN/PHI-85-001/4, New York.

Zurkic, N. 2009. AGL-Vario_Report. Zurkic Mining Consultants Pty. Ltd., Internal Report (unpubl)


68

14.0 Date and Signature

CERTIFICATE OF QUALIFICATION

I, Mark G. Gifford of 636 Bramley River Road, Margaret River, Western Australia hereby certify that:

1. I am a Professional Geologist employed as a private consultant.

2. I am responsible for the preparation of the Technical Report titled “Independent Report on

the Nickel Laterite Resource – Agata North, Philippines.” And dated March 22nd 2013.

3. I am a Fellow in good standing of the Australian Institute of Mining and Metallurgy with

membership number 108672

4. I am a graduate of the University of Waikato, New Zealand with a Masters Degree (1st Class

Honours) in Earth Sciences.

5. I have practiced my profession for 24 years, and have worked specifically on lateritic Nickel

deposits throughout the world for 5 years in a geological managerial position. I have been

operating as an Independent Consulting Geologist since 2005.

6. I certify that by reason of my education, affiliation with a professional association (as

defined by NI 43-101), and past relevant work experience, I fulfil the requirements to be a

“qualified person” for the purposes of NI 43-101. I am an independent qualified person as

defined by NI 43-101 and by the companion policy 43-101CP to National Instrument 43-101.

7. This technical report is based on my review of the available published data, company reports

and data, and personal visits to the property. I have visited the property thrice in 2010/2011

and have completed inspections of all aspects of the exploration process, as well as

consulting with MRL staff at all levels during the development of the report. My visits were

in March - June 2010, and May 2011.

8. I have read NI 43-101 and form 101F1. The technical report has been prepared in

compliance with both of these documents.

9. I, Mark Gifford, do not expect to receive any interest (direct, indirect or contingent), in the

properties described herein, nor in the securities of Mindoro Resources Limited or any of

their affiliates. I am independent of the issuer under all criteria of Section 1.5 of NI 43-101.

10. I am not aware of any material fact or material change with respect to the subject matter of

this Technical Report which is not reflected in this report. I am not aware of any possible

omissions that would deem this report misleading.

11. I consent to the filing of the Technical Report with any stock exchange and other regulatory

authorities, and any further publication by them for regulatory purposes. I consent to the

inclusion of parts of the Technical Report as electronic publication on the companies’

websites that are accessible to the public.


69

Signed in Margaret River, Australia. Dated 01 April 2013.

_________________________________

Signature of Qualified Person

Mark G. Gifford MSc (Hons), MAusIMM

________________________________

Name of Qualified Person

Documents

INDEPENDENT REPORT ON THE NICKEL LATERITE …s1.q4cdn.com/531881216/files/doc_downloads/Agata-Nickle-Laterite... · INDEPENDENT REPORT ON THE NICKEL LATERITE RESOURCE - AGATA NORTH,