DECCAN GOLD MINES LIMITED

ONLY LISTED GOLD EXPLORATION COMPANY IN INDIA.

PROJECTS STRATEGICALLY LOCATED WITHIN WORLD CLASS ARCHAEN GOLD PROVINCECLASS ARCHAEN GOLD PROVINCE.

ANNUAL GENERAL MEETING

30TH DECEMBER 2015

No 5, 19th Main Road4th Sector, HSR Lay OutB l 560 102Bangalore – 560 102Karnataka, Indiawww.deccangoldmines.com

DeccanDeccan GoldGold MinesMines LimitedLimited (DGML)(DGML)establishedestablished inin 20032003,, isis aa companycompany listedlistedonon thethe MumbaiMumbai StockStock ExchangeExchange totocarrycarry outout explorationexploration andand exploitationexploitation

ff ldld ii I diI diofof goldgold resourcesresources inin IndiaIndia..

ExploredExplored 70007000 sqsq..kmkm areaarea inin thethe statesstatesofof Karnataka,Karnataka, AP,AP, KeralaKerala andandid tifi did tifi d 4040 ldld tt ff f thf thidentifiedidentified 4040 goldgold prospectsprospects forfor furtherfurtherdetaileddetailed explorationexploration..

AA totaltotal ofof 2222 ProspectingProspecting LicenceLicenceli tili ti (PL)(PL) dd 33 Mi iMi i LLapplicationsapplications (PL)(PL) andand 33 MiningMining LeaseLease

applicationsapplications (ML)(ML) havehave beenbeensubmittedsubmitted.. TheseThese applicationsapplications attractattractpreferentialpreferential rightsrights andand areare protectedprotected asasperper sectionsection 1010AA ofof thethe NewNewperper sectionsection 1010AA ofof thethe NewNewM&M(D&R)M&M(D&R) actact..

KeyKey projectsprojects ofof thethe companycompany include,include,11)) GanajurGanajur--KarjagiKarjagi clustercluster 22))11)) GanajurGanajur KarjagiKarjagi clustercluster 22))MagalgattiMagalgatti--BhavihalBhavihal clustercluster 33))HirenagnurHirenagnur P,P, HuttiHutti NorthNorth P(HuttiP(HuttiBelt)Belt) andand 44)) RamagiriRamagiri

DrillDrill indicatedindicated resourcesresources identifiedidentified ininGanajurGanajur Main,Main, GanajurGanajur SE,SE, KarajgiKarajgiMain,Main, Mangalgatti,Mangalgatti, BhavihalBhavihal andandHirenagnurHirenagnur projectsprojects

• DGML through its 100% subsidiaryD E l ti S i P i t

DHARWAR SHIMOGA BELT PROJECT

Deccan Exploration Services PrivateLimited (DESPL explored a large areaof 5000 sq km of the Dharwar-Shimoga Greenstone belt coveredShimoga Greenstone belt coveredunder 2 RP blocks.

• Gold mineralization in all the prospectsis hosted within sulphidic bandedferruginous chertferruginous chert.

• Succeeded in identifying 22 goldprospects.p p

• Prospects around Dharwar towardsnorth (Dharwar Cluster) and Haveri inthe south (Ganajur-Karajgi Cluster) arethe south (Ganajur-Karajgi Cluster) areconsidered as significant discoveries.

• Seven (7) Prospecting Licence (PL) and(((((((((

Panaji((((((((( (((((((((

Dharwad

Dharwad

Kalghatgi

North Hutti

Mangalur

Hutti South

two (2) Mining Lease (ML) applicationscovering all the important prospectswere filed.

(((((((((

BANGALORE

(((((((((

0 50

kilometers

Hanagal

100

Ramagiri

GANAJUR MAIN GOLD DEPOSIT & ITS SATELLITE PROSPECTS:GANAJUR MAIN GOLD DEPOSIT & ITS SATELLITE PROSPECTS:

• Ganajur-Karajgi PL (2.2j jg (sq.kms) Block comprises of thehighly rated Ganajur Main golddeposit, Karajgi Main and otheradjoining gold prospects all ofadjoining gold prospects all ofwhich were new discoveries bythe DGML.

• Gold mineralization in the areais hosted within BIF.

• The PL block has excellent• The PL block has excellentInfrastructure faciilities.

• The PL Block has been explored by using multi disciplinary Exploration techniques asi t ti l t d dper international standards.

• Exploration carried out so far has demonstrated that the Ganajur-Karajgi PL block isan important mineralised corridor with possibility of finding sizeable resources ofan important mineralised corridor with possibility of finding sizeable resources of>500 ozs of gold.

• Ganajur Main, Ganajur SE and Karajgi Main are the Key Prospects with drilledresource.

•

• Ganajur Main P is one of the advanced projects discovered by the company. DESPL carriedout closed spaced drilling under PL stage as per International norms to discover a open

i bl

Ganajur Main Gold Project- In a Nutshell

pittable resource.• The Project was independently reviewed by Internationally aclaimed SRK Mining Services

(SRK). SRK completed an updated mineral resource estimate and Preliminary EconomicAssessment of the Ganajur Main Gold Deposit.

• JORC compliant Indicated resource of 308 000 Oz of gold to a depth of 120 metres wasJORC compliant Indicated resource of 308,000 Oz of gold to a depth of 120 metres wasestimated. The resource is equivalent of 121 category as per UNFC Classification. The UNFCclasssification has been validated by the Indian Bureau of Mines.

• The Study by SRK has revealed that project economics is technically and economicallyi Th P j b d l d i i bl i i i iattractive. The Project can be developed into a viable open pit mining operation.

• DGML entered into MOU with Govt of Karnataka to establish a gold mining industry in thisproject area. DGML has proposed for a 2000 tpd Processing Unit. The Project has been clearedby State High Level Clearance Committee (SHLCC)by State High Level Clearance Committee (SHLCC).

• Mining Lease application for 72 Acres has been approved by the Ministry Of Mines,Government of India vide letter No 4/113/2010-MIV dated 24th July 2015. The approval isaper Section 10(A) (2) (B) of the New MMDR Act 2015 and Section 5(1).

• Application for land acquisition was submitted with the KIADB in 2013 for 200 acres.

• Mine development and gold production is expected by the end of year 2017 subject totti ll th lgetting all the approvals.

GANAJUR MAIN GOLD PROSPECT

TABLE-1, SUMMARY OF EXPLORATION WORK CARRIED OUT IN GANAJUR-KARAJGI PL BLOCKKARAJGI PL BLOCK

SL NO TYPE OF EXPLORATION UNIT QUANTUM

1 TOPOGRAPHIC SURVEY SQ.KMS 2.22 GEOLOGICAL MAPPING (1: 2000 AND 1:5000 SCALE) SQ.KMS 2.2

3 GROUND GEOPHYSICAL MAGNETIC SURVEY LINE KMS 288

4 GROUND GEOPHYSICAL SP-RESISTIVITY SURVEY LINE KMS 20

5 GROUND GEOPHYSICAL IP SURVEY LINE KMS 17.4

6 GROUND GEOPHYSICAL EM SURVEY LINE KMS 9

7 TRENCHINGLENGTH(M) 1929.43

8 SAMPLING AND ANALYSIS Nos 28639 DRILLING

A. RC DRILLING (51 DRILL HOLES) METRES 2328B. DIAMOND CORE DRILLING (76 DRILL HOLES) METRES 6147.29TOTAL DRILLING 8475.29COMPREHENSIVE METALLURGICAL STUDIES (AMMTEC)-

10( )

SULPHIDE - COMPLETED KGS 200COMPREHENSIVE METALLURGICAL STUDIES (AMMTEC)-OXIDE - UNDER PROGRRESS KGS 102.8

11ENVIRONMENTAL BASE LINE DATA COLLECTION (AIR, DUSTFALL, NOISE, WATER, SOIL) SAMPLES 207

12 MINERAL RESOURCE ESTIMATION BY SRK (AS PER JORC) COMPLETED

13SCOPING/PRE-FEASIBILITY STUDIES (for Ganajur Main GoldProject) COMPLETED

14 LAND ACQUISITION IN PROCESS

PROGRESS OF WORK RELATED DURING LAST YEAR• The much awaited New Mines & Minerals (Development & Regulations) Act –(MMD&R)

act was promulgated by the Government of India in March 2015.• 22 PL applications and 3 ML applications have become valid as per the provisions of Section

10 A of the new MM&DR Act. This includes 7 PLs and 2 ML applications covering all theimportant prospects of Dharwar-Shimoga basin.

• Mining Lease application for 72 Acres has been approved by the Ministry Of Mines,Government of India vide letter No 4/113/2010-MIV dated 24th July 2015. The approval isaper Section 10(A) (2) (B) of the New MMDR Act 2015 and Section 5(1).

• Prior to this The Indian Bureau of Mines (IBM) submitted a detailed and positive report withregard to mineralization and UNFC classification in response to the clarification sought by theMinistry of Mines.

• Ganajur Gold Project is being monitored by the Project Monitoring Group of the CabinetSecretariat. The Grant Notification from the Karnataka State Government is awaited.

• As per the revised guidelines from the MOEF dated 24th October 2014, the validity of theplant TOR has been increased to 3 years with a provision for extending the vailidity by onemore year.

• With this new guidelines the extended validity for the plant TOR will be 29th April 2017.Regarding the Mine TOR, DESPL applied for an extension till January 2017 as per the newguidelines.

• However DGML after considering various options and also taking into consideration thelatest information with regard to mining and metallurgy has opted to go for fresh TORapplication for the mine and the processing plant. The new TOR application will be for 1000tpd production. The capacity may be increased at a later stage after completion of theexploration in the entire block. This decision is not likely to affect the project scheduleplanned.

Metallurgical Test Work and Process Design:

Ganajur Gold Project is an interlinked project with the proposed ore processing unit tobe located at a distance of 1.5 kms south of the proposed gold mine. DGML has takenseveral steps in understanding the chemistry and process mineralogy of the gold ore sothat it helps in designing a suitable flow sheet. Shareholders are aware that athat it helps in designing a suitable flow sheet. Shareholders are aware that arepresentative sample (200 KGS) of the Ganajur sulphide gold ore drawn from the drillcores and was sent to AMMTEC Laboratory, Perth in Australia for carrying out acomprehensive metallurgical testing and gold recovery studies.

Based on the bench scale studies carried out at ALS-AMMTEC laboratory in Australia,two flow sheets for recovery of gold were considered and the recovery routes can beeither of the following:Crushing – grinding – gravity – CIL (Gold Recovery-77%)Crushing grinding gravity CIL (Gold Recovery 77%)Crushing – grinding – flotation – roasting – CIL (Gold Recovery- 89%)

DGML has recently dispatched another batch of samples weighing 101 kgs from theOxide ore to the same Laboratory in Perth toOxide ore to the same Laboratory in Perth to

Oxide gold ore comminution test work including Bond abrasion Index, Bond Rod MillIndex, Bond Ball Mill Index, SAG Mill testGravity separationG a ty sepa at oCIL cyanidation, Intensive leach test workMulti Stage diagnostic test work etc.

The results are quite encouraging andindicate that the overall recovery throughindicate that the overall recovery throughgravity and cyanide leaching is 87.72%including 31 % through gravityseparation. The leach profile indicates thatthe gold leach kinetics is very fast with allthe gold leach kinetics is very fast with allthe cyanidable gold being recovered afteronly 2 hours. The overall cyanide and limeconsumption is low compared to thesulphide ore. This encouraging result issulphide ore. This encouraging result islikely to enhance the overall economics ofthe project.

The latest results from the oxide ore hasopened new opportunities in theprocessing of the Ganajur Ore. DGML hasnow plans to mine out the near surfaceoxide ore with very simple process route.The Initial capex is likely to be low.

PIT

FEASIBILITY STUDIES:

DGML has shortlisted after several rounds of discussions, two internationallyreputed Consuting Groups for undertaking a definitive Feasibility Study forthe Ganajur Gold Project.

The study shall include estimation of ore reserves, mine planning,optimization and scheduling, geotechnical investigations, study of groundwater and surface water resources description of proposed processingwater and surface water resources, description of proposed processing(Including plant construction and infrastructure) tailing/waste disposal andmanagement, economic evaluation including an estimate of the capitalexpenditure requirements and operating costs and a comparative analysis ofthe effect of various assumptions, taxation, legal and infrastructure, and adetailed sensitivity analysis for various thorough puts etc.

DGML will also be appointing a senior Mining Advisor and process engineerDGML will also be appointing a senior Mining Advisor and process engineerwith international experience in gold to guide the company in developing theproject and also interact with the independent consulting group forcompleting the feasibility study in a time bound manner.

Land acquisition Process:

DESPL h i d G t O d (G O ) ft th St t Hi h L l ClDESPL has received a Government Order (G.O.) after the State High Level ClearanceCommittee (SHLCC) cleared our request for allotment of 200 acres of land for the GanajurMain Gold Mining and Ore Processing Plant.

Th G O h l f ilit t d l d i iti th h K t k I d t i l AThe G.O. has also facilitated land acquisition process through Karnataka Industrial AreasDevelopment Board (KIADB), for which DESPL has submitted application to the KIADB inMarch, 2013. DESPL has obtained this consent from about 90% of the land owners.

DESPL ill h t it 40% f th t t ti t f l d l ith B d i hDESPL will have to remit 40% of the tentative cost of land along with Board service chargesbefore submission of preliminary notifications U/s - 3(1), 1(3) and 28(1) of the KIAD Act,1966.

Details of Documents collected from Revenue Department for Submission to KIADB for Land A i i iAcquisition

Sl No. Details

Total No

Amount Paid (Rs) Date of Purchase

1Land Record Details (RTC) for M L and process plant area for 200 Acres . Rs. 10 each paid for RTC 84 930.00 28.10.2013

2 Survey original Tippan Maps, area. Rs.15 each 30 450.00 27.04.2015

3Akarbandh {Ganajur Land Record details Sheets} for ML and Process plant area 200 Acres 3 675.00 24.4.2015

4 Ganajur Village Map showing the survey boundaries 2 92.00 29.10.2015

5Survey and Subsurvey Atlas Map of ML and Gold Processing plant area 42 888.00

24.4.2015 to 14.5.2015

161 3035.00

Geologists:

Geologists are the back bone of the ongoing exploration programme in Ganajur Project.DGML has also appointed 3 new geologists to strengthen the geological team at Ganajur.Two of them have experience in gold exploration.

DGML would be appointing more geologists progressively for Ganajur and MangalagattiProjects.

G d G h i l SGround Geophysical Survey:

DGML has signed an agreement with Internatioanlly aclaimed DMT Consulting (P) Ltd forundertaking detailed IP geophysical survey in Ganajur-Karajgi Block and Mangalagatti PLBl kBlock.

As reported earlier, DGML completed a detailed ground magnetic survey and alsocarried out multi-parametric geophysical exploration campaign employing Resistivityand Induced Polari ation and TEM Sur e s The IP Sur e has re ealed three IPand Induced Polarization and TEM Surveys. The IP Survey has revealed three IPanomalies which are interpreted as potential mineralized zones.

DMT Consulting will initially study the acquired magnetic data and then Synergisticalytie up with the ground geology and the IP anomalies mapped Based on this the surveytie up with the ground geology and the IP anomalies, mapped. Based on this the surveylay out would be planned.

Drilling

DGML has entered into a drilling contract with South West Pinnacle Exploration PvtLtd to undertake Diamond Core and RC drilling at Ganajur-Karajgi Block and also atMangalagatti PL Block.

As per this contract Drilling was commenced on 23rd December 2015 at Ganajur MainProspect. DGML plans to undertake drilling at Ganajur Main and its satellite prospectsin Phased manner. Phase-1 drilling would involve around 5000-6000 metres.

• DGML’s first priority is to carry outstep-out and infill drilling in GanajurMain Prospect in order to upgrade theMain Prospect in order to upgrade theexisting category of resources and alsoincrease to whatever extent possiblethe overall resources.

• DGML would also undertake deepDGML would also undertake deepdrilling at Ganajur Main to explorethe possible depth extension of theore body as depicted by the IP survey.

• DGML has lodged 2.8 sq.kms MLGM as odged 2.8 sq. s Mapplication covering the satelliteprospects. Exploration by drilling isproposed in these prospects as well.

DRILLING PLAN FOR GANAJUR MAIN PROSPECT

3D view of the IP geophysical data of Ganajur PL area

Drill Holes

IP anomaly coinciding with Ganajur Main ore body

DGML undertook IP survey and completed 24.2 line km of Survey in the PL block.

DEEP SEATED GEOPHYSICAL ANOMALY

G jGanajur Main Ore

BodyIP Anomaly upto

150m depth

PDH

IP Anomaly traced below 300m

The 2D Inversion model also indicates that the Ganajur Main ore body and j yits extension may continue beyond 150metre depth. With this new information there is a possibility of finding deep seated mineralisation.

Typical drill Hole Cross Section and the Ore body Block Model-Ganajur Main

GMC‐16 GMC‐18

Ganajur Main Block Model with high gradeshigh grades

GANAJUR GOLD MINE PROJECT IMPLEMENTATION PLANNO OF YEARS

2015 2016 2017 2018 2019PROJECT STAGES 2015 2016 2017 2018 2019HY-1 HY-2 HY-1 HY-2 HY-1 HY-2 HY-1 HY-2 HY-1 HY-2

MINING LEASE1 • APPROVAL OF ML FROM THE CENTRE

• LETTER OF INTENT (LOI) FROM THE STATE 2 GOVERNMENT

3 • APPOINTMENT OF MINING AND PROCESS ENGINEER

4 • PREPERATION AND SUBMISSION OF MINING PLAN5 APPROVAL OF MINING PLAN BY THE IBM5 • APPROVAL OF MINING PLAN BY THE IBM6 • DEFINITIVE FEASIBILITY STUDIES7 • DGPS SURVEY, LAND SURVEY8 • LAND ACQUISITION PROCESS

• SUBMISSION OF TERMS OF REFERRENCE (TOR) FOR 9

( )PLANT AND THE MINE

10 • EIA/EMP studies in and around the Project, Public Hearing11 • OBTAINING MOEF CLEARANCE12 • GRANT AND EXECUTION OF ML

13 • OBTAINING CONSENT FOR ESTABLISHMENT (CFE)

14

• OBTAINING ALL STATUTORY CLEARANCES (BLASTING, REVENUE, DGMS, STATE GROUND WATER, IRRIGATION DEPT ETC,

15• INFRASTRUCTURE, MINE CONSTRUCTION AND

DEVELOPMENT, CFO16 • PROCESSING PLANT CONSTRUCTION

• GOLD PRODUCTION

Karajgi Main Prospect:

• Karajgi Main is located at 1km South East of GanajurMain Prospect. It is rated byDGML as one of the mostDGML as one of the mostimportant among theprospects in the PL block.

• Exploration in Karajgi Mainprospect during the RP stagehad defined two sulphidicgold bearing zones- A and Bgold bearing zones- A and Bwith significant gold gradesand width.

• The zone B has a drilled resource of 90,000 tonnes averaging 2.23 g/t. Ancient open pits are noticed all along this prospect.

• High Grade gold Intersection in many of the drilled bore holes. Significant IP geophysical singatures indicating potentiality of the Prospect.

DESPL compiled all the data generated under RPand PL stages in Karajgi Main prospect using allthe available data and a 3D resource model was

KARAJGI MAIN PROSPECT

generated.The ore body section was constructed using 0.5 g/tAu as cut off and a minimum width of 1m.A total of 3 auriferous zones were definedtrending northwest and dipping towardsnortheast. Zone-1 and 2 with cumulative strikelength of 360 metres with steep dips towards NEare the two branches that constitute the Karajgijgmain mineralised zone. Zone-3 is on the northernslope of the Karajgi Main hill that is correlated toBand-A. Zone-3 has a strike length of 140 metresdipping at 30 to 35o towards NE.pp g

Based on these data DESPL revised the resource estimate for Karajgi Main Prospect. Theresource was estimated up to a vertical depth of 80 metres. The true thickness of the ore bodyvaries between 1.45 to 9.0 metres.

Category Category Quantity Gold Contained Au ZONE Category

(JORC)Category (UNFC)

Quantity (tonnes)

Gold Grade g/t metal Gold

(ounce)

ZONE-1 Indicated 211 123942 3.81 15229.7

ZONE-2 Inferred 221 100994 1.39 4512.3

ZONE-3 Indicated 211 43040 4.86 6750.7

GRAND TOTAL 267977 3.065 26493

(data would be subject to validation by an Independent Competent person)

• Ganajur southeast prospect(GSEP) i l t d d 1 2

GANAJUR SE PROSPECT

(GSEP) is located around 1.2km SE of Ganajur Mainprospect.

Th b d i• The ore body is a gossanousbanded sulphidic cherthosted by greywacke,traversed by fine stringers ofq a t ca bonate einsquartz-carbonate veins.

• The general trend of the BIFis N 40° to 60° W trend anddips 45° to 70° NEdips 45° to 70° NE.

• Channel sampling and the follow up DTH, drilling carried out during the R.P. tenurehelped DESPL to delineate a mineralized zone for a length of 455 metres.helped DESPL to delineate a mineralized zone for a length of 455 metres.

• 576 metres of RC drilling was carried out during the initial phase of the PL involving12 drill holes. The results indicate that the North West part of the prospect is morepromising.promising.

• Following the promising results DESPL completed 1276.95 metres of diamond coredrilling at Ganajur SE Prospect with excellent results.

BHIDFROM

TO (M)WIDT GRADE

HIGHESTGOLD

DETAILS OF MINERALISED ZONES INTERSECTEDIN THE DRILL HOLES, GANAJUR SE PROSPECT

BHID(M)

TO (M)H (M) AU G/T

GOLDVALUE

GSEP-C763.4 67.9 4.5 3.81 12.570.6 71.6 1 2.75 4.274.6 76.2 1.6 4.1 10.39

GSEP-C8 38 5 42 5 4 4 3 17 38GSEP-C8 38.5 42.5 4 4.3 17.38

GSEP-C1068.65 74.9 6.25 8.31 20.2180.4 83.2 2.8 3.73 4.9

GSEP-C254 57.15 3.15 3.58 11.0162 62.5 0.5 5.95 5.9546.2 49.1 2.9 2.24 5.59

GSEP-C346.2 49.1 2.9 2.24 5.5953.1 56.6 3.5 1.82 3.87

GSEP-C4 80.6 81.1 0.5 7.58 7.58GSEP-C5 41.2 44.2 3 1.32 2.28GSEP-C6 64.7 66.3 1.6 2.25 3.15GSEP-C12 71.2 74.1 2.4 1.96 4.1GS C . . . .96 .GSEP-C13 91.6 96.45 4.85 3.58 17.81

GSEP-C1470.35 76.55 2.7 5.41 10.4478.75 81.4 2.65 4.36 8.56

Mineral Resource Statement for Ganajur SE Prospect- Based on the compilation all the data generated so far in this prospect

Au CATEGORY

G/T SP.GR VOLUMETONNAG

EGRAD

EGOLD (KGS)

GOLD (OZ)

0 0 5 2 95 1915 5650 0 36 2 04 65 690-0.5 2.95 1915 5650 0.36 2.04 65.69

0.5-1 2.95 12909 38081 0.82 31.07 999.15

1.0-2.0 2.95 39840 117527 1.49 174.90 5623.82

2.0-4.0 2.95 36880 108797 2.86 311.32 10010.21

4.0-6.0 2.95 15476 45654 4.91 223.94 7200.69

>6.0 2.95 14219 41947 8.18 343.06 11030.87

2.95 121240 357657 3.04 1086.34 34930.42

Category (JORC)

Quantity (tonnes)

Gold Grade g/t

Contained metal Gold

(ounce)

Indicated 357657 3.04 34930.42

(data would be subject to validation by an Independent Competent person.)

Karajgi Hut prospect:

Th K j i H t t i l t d dThe Karajgi Hut prospect is located around600m NE of Karajgi Main prospect. Twoparallel BIF bands were defined with acumulative strike length of 530 metres as a

lt f l ti i d t d RPresult of exploration carried out under RPand PL stage. The band towards south isFW limb and the northern band is HWlimb. One of the trench on the FW limb has

d l hidi h t f 4 0 idthexposed a sulphidic chert of 4.0m widthaveraging 6.9 g/t Au. Preliminary RCdrilling has also indicated anomalous goldvalues significant enough to undertake

d illi i thi t G d IPmore drilling in this prospect. Ground IPgeophysical survey has also indicated amoderate IP anomaly in this block.

DGML’ i ti it l d tDGML’s resistivity survey revealed twoNW-SE trending moderately resistiveanomalies that could be interpreted as twolimbs of a folded structure . These

li i t t d th N th tanomalies are interpreted as the North westextension of the mineralised chert band ofHut Prospect.

Manglagatti and Bhavihal prospects are located12 to 20 kms north of Dharwar city.

MANGALAGATTI AND BHAVIHAL PROSPECTS

y

They form part of the ‘Dharwar Cluster’ of goldbearing Chert bands. The Dharwar clustercomprises of Mangalagatti SE, Mangalagattip g g g gMain, East and Bhavihal prospects .

All these are considered as highly potential likethe Ganajur-Karajagi cluster near Haveri.j j g

Prospecting License over an area of 4 sq.kms andcovering the Mangalagatti Prospects wasapproved by Ministry of Mines and Governmenty yof Karnataka issued grant order in the month ofOctober, 2012 and the PL is expected to beexecuted shortly.

Gold mineralization is hosted by south-easterlyplunging folded banded iron formation.

An ancient working and adjacent poundingmarks indicates ancient mining activity in thearea.

• Mangalagatti SE Prospect:

MANGALAGATTI AND BHAVIHAL PROSPECTS

Initial Exploration has revealed Twoauriferous zones extending fornearly 500 metres over a width of30 metres were defined.30 metres were defined.

• An inferred resource of 1.5 milliontonnes@ 1.63 g/t Au is estimatedb d lt f h llbased upon results of shallowdrilling programme.

• Bhavihal Prospect is located at apdistance of 8 kms NW ofMangalagatti prospect.

• Preliminary investigation delineated a 400 metres long mineralisation at Bhavihal was delineated and an inferred resource of 74,000 oz of Au was estimated averaging 1.76 g/t.

• Ground Geophysical IP survey has indicated the possible extension of Mangalagatti SE and Bhavihal Prospects;SE and Bhavihal Prospects;

• Both the Prospects are well connected by Road and Railways, infrastructure facilities are excellent.

• Hutti Maski Greenstone belt is one of the mostimportant Archaean gold bearing belts in India.

HUTTI-MASKI GREENSTONE BELT PROSPECTS

p g g• Remarkably similar to the classic Archaean

Superior Craton in Canada, the Yilgarn Craton inWestern Australia and the Kolar greenstone beltin India.

• DGML carried out exploration over an area 851sq km in the Hutti Belt under its twoReconnaissance exploration Permits (RPs).

• The systematic exploration efforts of DGMLy pgeologists resulted in defining 21 gold bearingblocks.

• A total of 12 prospecting licenses (PLs)applications and 1 Mining lease (ML) applicationpp g ( ) ppin Hirenagnur have been filed with the KarnatakaState Government. 9 PL applications are valid asper New MM&DR Act 2015.

• DGML is contesting the Order passed by theg p yHon'ble High Court of Karnataka in the monthof April, 2012 favouring Hutti Gold MinesLimited (HGML) regarding the Hutti Beltprojects. A Special Leave Petition (SLP) wasp j p ( )lodged in the Hon'ble Supreme Court of India,which was admitted in the month of July, 2012.

• The next hearing is scheduled on 12th January2015.

• Hutti Mine North Prospect:• This block is located immediately north of the currently operating Hutti Gold Mine

in Raichur District in Karnataka.in Raichur District in Karnataka.

• A total of eight parallel gold bearing quartz-sulphide veins are known to exist inthe Hutti Mines.

• DESPL carried out detailed exploration within the prospect during its RP tenure.The exploration efforts resulted in tracing the extensions of 5 of the gold lodesthat are being mined in the Hutti Gold Mines.g

• The best finding was extension of the New East Reef which has analysed upto10.0 g/t gold and the extension of the Main Reef that has analysed upto 16.0 g/tGold Strike Reef was explored by limited drilling with positive resultsGold. Strike Reef was explored by limited drilling with positive results

• Other Important prospects in the Hutti Belt include, Uti SE, Chinchergi-WandalliTract, Buddini, Ashoka, Maski etc.

• The Prospecting Licence applications cover all the Prospects.

Hirenagnur Prospect:

• DGML considers Hirenagnurprospect as one of its bestdiscoveries which is located 5 kmssoutheast of Hutti Gold Minessoutheast of Hutti Gold Mines.

• Systematic exploration by means ofgeochemistry, ground geophysics,RC drilling and structural mappingg pp ghas established a large mineralizedsystem of 2 kms length over awidth of nearly 50 metres.

• Preliminary drilling indicatedpresence of 4 parallel mineralisedzones of which the eastern mostzone, i.e., zone III has a strikelength of 600 metres.

• The data generated also suggests• The data generated also suggeststhe possibility of open pit mining ofthe Hirenagnur ore body

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