Ann: Tampia Feasibility Study, page-2

AMPIA FEASIBILITY CONFIRMS ROBUST HIGH-MARGIN GOLD PROJECT Highlights • The Tampia Gold Project is confirmed as technically sound and financially robust with an initial Project life of six years with operating costs in the lowest quartile of gold projects globally1. • Mining plan based on staged development of a single open pit and conventional SAG milling, Gravity, Flotation with ultra-fine grind (UFG) and enhanced leaching of concentrate, and carbon-in-leach (CIL) circuit based on 1.5 Mtpa throughput. • Updated Mineral Resource of 675,000oz gold from 11.7 Mt grading 1.79 g/t Au2. • Initial Ore Reserve of 485,000 oz gold from 7.2 Mt grading 2.09 g/t Au3. • Initial mine plan4 of 534,000 oz gold from 8.0 Mt grading 2.07 g/t Au with excellent potential for resource growth. • Estimated all-in sustaining cost (AISC) is A$8965 oz for the first two years of operations and A$998 oz over LOM, with 104,000 oz Au produced for each of the first two years of operations. • Pre-production Capital Cost estimate is A$119 million (including a $10.8 million contingency) and payback in 18 months from commissioning. • Net Present Value (NPV) at 8% discount rate is A$125 million (pre-tax) and Internal Rate of Return (IRR) is 47% (pre-tax) at A$1650 oz gold price. • Timeline for Project development is completion of Bankable Feasibility Study (BFS) in October 2018, with subsequent construction subject to development finance, regulatory and Board approvals (expected December 2018). • Major exploration program over new gold targets to continue through 2018 and 2019; any growth in resource inventory expected to augment current planned mine life. 1 SourceGFMS,ThomsonReuters 2 See Appendix 3 Table 1 Section 3 and below for Mineral Resource details 3 See Appendix 3 Table 1 Section 4 and below for Ore Reserve details 4 91% of the material in the mine plan is classified as an Ore Reserve, the remaining 9% is classified as Inferred Mineral Resource 5 AISC includes C1 costs (mining and processing costs, site administration, refining costs) + sustaining capital, royalties, site rehabilitation and Head Office corporate costs Registered Office: Level 16, Waterfront Place, 1 Eagle Street, Brisbane QLD 4000 Postal Address: GPO Box 3249, Brisbane QLD 4001 Contact Details: Telephone +61 7 3333 2722 Email: [email protected] www.explaurum.com
Explaurum Limited (Explaurum, EXU or Company) is pleased to announce an initial Ore Reserve of 7.2 Mt grading 2.09 g/t Au (485,000 oz contained) and completion of the Feasibility Study (the ‘Study’) for the development of the Tampia Gold Project (the ‘Project’) located in the wheatbelt of Western Australia, 240 km east of Perth near the township of Narembeen. Table 1. Key Project Statistics Mineral Resources Ounces Gold Indicated Resources 9.8 Mt at 1.83 g/t Au 580,000 oz Inferred Resources 2.0 Mt at 1.60 g/t Au 90,000 oz Total Resources 11.7 Mt at 1.79 g/t Au 675,000 oz Ore Reserves Probable Reserves 7.2 Mt at 2.09 g/t Au 485,000 oz Total Reserves 7.2 Mt at 2.09 g/t Au 485,000 oz Mine Plan Probable Reserves 7.2 Mt at 2.09 g/t Au 485,000 oz Inferred Resources 0.8 Mt at 1.89 g/t Au 48,000 oz Total Production Target 8.0 Mt at 2.07 g/t Au 534,000 oz Capital Costs Process plant 1.5 Mtpa 84.1 Infrastructure 11.8 Other costs 11.8 Contingency 10.8 Pre-production Capital Costs 119 Deferred and Sustaining Capital Costs 12.3 Total Capital Costs 130.8 Production Summary Life of Mine (LOM) (years) 5.3 Processing Rate (Mtpa) 1.5 Strip Ratio (Waste:Ore) 7.6 Gold Production (oz) 490,000 Average Metallurgical Recovery (LOM) (%) 92 Project Economics Gold Price (Base Case) (A$/oz) 1,650 Exchange Rate (USD:AUD) 0.75 Revenue (A$M) 808 C1 Cash Costs (A$/oz) 886 AISC (A$/oz) 998 EBITDA LOM (A$M) 327 NPV8% pre-tax 125 IRR pre-tax (%) 47 Payback (Months) 18 Note: All figures are rounded to reflect appropriate levels of confidence 2
The Project covers an aggregate area of 327 km2, comprising two granted mining leases and nine exploration licences. EXU has a 90% interest in the two mining leases and one exploration licence, and 100% interest in the remaining exploration licences. The Tampia Mineral Resource estimate has been updated by independent resource consultants RSC as part of this Study and classified and reported in accordance with the JORC Code (2012). The Tampia Gold Project Mineral Resource is inclusive of Mineral Reserves (Table 2). Table 2. Tampia Gold Project Mineral Resource classification Tonnes Average Grade Ounces Inferred Weathered 500,000 1.4 20,000 Fresh 1,500,000 1.7 70,000 Sub-total 2,000,000 1.6 90,000 Indicated Weathered 400,000 1.38 20,000 Notes: Fresh 9,400,000 1.85 560,000 Sub-total 9,800,000 1.83 580,000 Total 11,700,000 1.79 675,000 The Mineral Resource is classified in accordance with JORC, 2012 edition. The effective date of the Mineral Resource is 5 April 2018. The Mineral Resource is contained within M70/816. Estimates are rounded to reflect the level of confidence in these resources at the present time. The Mineral Resource is reported as a recoverable resource at 5 × 5 × 2.5 SMU size, and at 0.45 g/t Au cut-off grade for fresh material and 0.30 g/t Au for weathered material. 1. 2. 3. 4. 5. The Tampia Gold Project ore reserves have been estimated as part of this Study to a Probable Ore Reserve of 7.23 Mt at 2.09 g/t Au for 485,000 ounces of gold (Table 3). Table 3. Tampia Ore Reserve statement at 28 April 2018 Reserve Category Tonnes Au Au Metal (t) (g/t) (oz) Probable 7,230,000 2.09 485,000 For further information, contact: John Lawton Managing Director Explaurum Limited +61 7 3333 2722 Cautionary Statement: The Feasibility Study is based on Probable Ore Reserves (91%) and partly based on Inferred Mineral Resources (9%) which combined constitute the Mine Plan. There is a lower level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Inferred Mineral Resources will add to the economics of the project. That portion of the Inferred Mineral Resource that has been included in the Mine Plan (or Production Target) lies within the pit design and near surface, and has been classified by the Competent Person due to drill sample quality. 3
EXECUTIVE SUMMARY The Project comprises a single open pit, within close proximity to the proposed plant site. The proposed process plant is based on a conventional SAG milling, gravity, flotation with concentrate ultra-fine grinding (UFG) and enhanced leach, and carbon in leach (CIL) processing with a nominal throughput capacity of 1.5 Mtpa. The Project has an initial mine life of 5.3 years. The mine plan is based on an optimised mining schedule, mining weathered (surface) and shallow fresh material first. Inferred Mineral Resources occurring at surface and within the pit design have been excluded from the Mineral Reserve estimate but included in the Production Target and financial assessment. The Production Target is 8.0 Mt at 2.07 g/t Au for 534,000 ounces of gold mined. The optimised operating costs for the Project highlight a conventional, low cost and high margin operation with LOM All In Sustaining Costs (AISC) of A$998/oz gold, and AISC of A$896/oz for the first two years. This is a result of the shallow nature of the deposit, average LOM metallurgical of recovery 92%, low reagent consumption and a high component of gravity recoverable gold. Mintrex has estimated the initial capital cost to be A$119 million (±15%), including a contingency estimate of $10.8 million. At a base case gold price of A$1,650 oz and using an 8% discount rate, the project generates a pre- tax NPV of A$125M, an IRR of 47% with a payback of 18 months following commissioning. The Company is well-funded to carry out additional work aimed at increasing the Mineral Resource for early stage processing with further exploration of shallow gold mineralisation in the Mace prospect area, within one kilometre of the proposed open pit, as well as through the conversion of existing Inferred Resources. The work program for 2018 to enable completion of a Bankable Feasibility Study (BFS) includes: • Obtaining all necessary regulatory approvals and licences; • Infill drilling (10m x 10m) in the southern portion of the proposed pit area where mining operations are planned to commence, so that the current Indicated Resource can potentially be upgraded to Measured Resource and the current Probable Reserve can be upgraded to Proven Reserve in this small area of the deposit. This work will test the Resource estimate model to increase confidence and precede but be part of normal grade control drilling included as part of mining operations. This drilling has commenced; • Grid drill the recently reported supergene mineralisation which has been remobilised from erosion of the outcropping Tampia deposit and deposited downslope within a zone extending over 4.5km from the proposed pit boundary, with the aim of bringing this recent discovery into resource category for early stage mining (if warranted). The first phase of this drilling program has been completed; and • Testwork currently in progress on improved processing options for fresh ore indicates overall recovery may be increased by up to 5%. 4
FEASIBILITY STUDY PARAMETERS The Feasibility Study is based on the following key parameters: • Mineral Resource of 11.7 million tonnes at 1.79 g/t Au, which at cut-off grades of 0.3 g/t Au (weathered) and 0.45 g/t Au (fresh), results in a total Resource of 675,000 oz gold, classified and reported in accordance with the JORC Code (2012). • Open pit mining operations to be conducted by EXU using a dry hire equipment contract and a drill and blast contractor. • Process plant and infrastructure designed and built on an engineering, procurement and construction management (EPCM) basis. • Power supply provided by an independent Power Producer contract with an 8 MW LNG power station. • Process water to be sourced from underground aquifers to provide supply beyond the current planned Project life of six years. STUDY TEAM The Feasibility Study commenced in July 2017 and has involved a number of consultant groups, including: ALS Metallurgy Pty Ltd AMC Consultants Pty Ltd CMW Geosciences Pty Ltd Ecoscape Australia Pty Ltd E Precision Laboratory Pty Ltd Gekko Systems Pty Ltd Groundwater Resource Management Pty Ltd Jenike & Johanson Pty Ltd JT Metallurgical Services Pty Ltd Kenex Pty Limited MBS Environmental Pty Ltd Metallurgy Pty Ltd MinEcotech Pty Ltd Mintrex Pty Ltd NPV Consulting Pty Ltd Orway Mineral Consultants (WA) Pty Ltd R & E O’Connor Pty Ltd Rockwater Pty Ltd RSC Global Pty Ltd KEY FEASIBILITY STUDY OUTCOMES Assaying, Mineralogy and Metallurgical Test Work Ore Reserve, Mine Planning and Geotechnical Tailings Storage Facility (TSF) Design Flora and Fauna Surveys Rock Strength Testing Metallurgical Test Work Groundwater Hydrology Processing oreflow properties Metallurgical program management Geology Environmental, Surface Hydrology, Soil Survey Metallurgical Testing Project Management and Mining Process Plant and associated infrastructure Design and Costing, Power Options Financial Modelling Comminution Modelling Aboriginal and European Heritage Hydrology Resource Estimation The key outcomes of this study as compared with the Scoping Study completed in November 2017 are presented below (Table 4). The Ore Reserve, classified and reported in accordance with the JORC Code (2012), constitutes 91% of the Production Target, with the 9% difference (48,000oz Au) coming 5
from near surface material mined within the pit design and classified as Inferred because of drill sample quality. The tonnage throughput will range between 1.5 and 1.9 Mtpa reflecting the variation in feed grade and the proportion of weathered ore in process plant feed material from the open pit. Softer oxide and transitional material mined in the early stages of LOM will be processed at a rate 1.6Mtpa. Fresh material, which represents more than 90% of total material processed, will be treated at 1.5 Mtpa. Low grade material which has a lower flotation mass pull and lower CIL feed grade can be processed at the higher 1.9Mtpa rate. Table 4. Summary of Feasibility Study Outcomes (compared with Scoping Study 3 Nov 2017) Parameter Scoping Study Feasibility Study November 2017 May 2018 Mine life (years) 5.4 5.3 LOM ore mined (Mt) 8.1 8.0 LOM waste mined (Mt) 51.8 60.8 LOM strip ratio (Waste:Ore) 6.4 7.6 Indicated Resources (%) 94 91 Inferred Resources (%) 6 9 Annual ore throughput (Mtpa) 1.5 1.5 Average grade (g/t Au) 2.1 2.1 Metallurgical recovery (LOM Average %) 92 92 LOM Gold production (koz) 502 490 Average annual Gold production (kozpa) 93 92 Average annual Gold production – first 2 years (kozpa) 104 104 Initial capital cost A$M (+/- 15%) 105 (+/-30%) 119 Deferred capital cost A$M - 4 LOM Sustaining capex (A$M) 9 8 WA Govt royalty (%) 2.5 2.5 Other royalty (%) 0 2.0 Average C1 cash cost (A$/oz)*1 799 886 Average AISC cash cost (A$/oz)*2 888 998 LOM gold price (A$/oz) 1,650 1,650 Gross revenue (A$M) 829 808 LOM EBITDA (A$M) 392 327 Average Annual EBITDA (A$M) 73 62 Base case pre-tax NPV8% (A$M) 181 125 Project IRR (%) pre-tax 45 47 Initial Payback period pre-tax (years) 1.5 1.5 *Notes: *1 C1 operating costs include all mining and processing costs, site administration and refining costs *2 AISC includes C1 costs + sustaining capital, royalties, site rehabilitation and head office corporate costs 6
PROJECT APPROVALS AND EXECUTION Baseline environmental surveys have been completed in the following areas: • Flora and Fauna • Soil and Landform • Surface Hydrology • Waste rock, mineralised rock and tailings characterisation • Subterranean Fauna Based on the environmental baseline studies and proposed project impacts, Explaurum expects the environmental approval will be via a Mining Proposal submitted to the Department of Mines, Industry Regulation and Safety (DMIRS), who assess and assign environmental conditions on the Project. The Tampia project is unlikely to trigger criteria requiring referral to the EPA or need any formal approval under Part IV of the Environmental Protection Act 1986. A work program has been prepared to complete all environmental baseline studies and compile approvals documentation for submission to regulators in the September 2018 quarter. Native Title for the Project is deemed to be extinguished because all tenure is owned freehold. An aboriginal heritage survey was conducted as part of the Feasibility Study, which confirmed there were no areas of significance. GEOLOGY AND MINERALISATION The Tampia Gold Project is situated in the Lake Grace Terrane, which is located at the boundary between the Western Gneiss Terrane and the Southern Cross greenstone belt, together constituting part of the larger Yilgarn Craton of Western Australia. The Lake Grace terrane contains many greenstone belt remnants that have been metamorphosed to granulite facies and predominantly comprise banded felsic granulite gneiss that has been intruded by granite. Belts of mafic granulite gneiss less commonly occur with the felsic granulite gneiss as well as subordinate granulite facies metamorphosed BIF and paragneiss. Dating of zircons from hypersthene-bearing granites that are interpreted to have intruded during granulite facies metamorphism within the Lake Grace terrane give a U-Pb age of 2,627 ± 12 Ma. The youngest granitoids also come from this region, with an average age of 2,587 ± 25 Ma. These younger coarse-grained granodiorites postdate granulite facies metamorphism in the Lake Grace terrane and intrude migmatites and charnockitic granites that postdate metamorphic fabrics in the gneiss. The main gold deposits in the Lake Grace Terrane include the Tampia Gold Project, Katanning and Griffins Find. These deposits have characteristics in common with the greenschist and amphibolite facies orogenic gold deposits described in the Eastern Goldfields, Murchison and Southern Cross provinces, but are hosted by granulite facies gneiss lithologies. 7
Figure 1: Regional Geology of south-western Western Australia Previous mapping of the region by GSWA is hampered by recent quaternary sediments and regolith, which combined with farming activities make accurate geological mapping difficult. Recent exploration undertaken by the Company using airborne gravity and magnetics has considerably changed the interpreted geology of the region. From this work, considerably more mafic gneiss, which appears to be the main host to gold mineralisation in the region, has been discovered than previously understood. There are two mafic sequences within the Project area, both of which similar gravity target signatures to the Tampia resource. The Tampia Project area comprises a sequence of mafic and felsic granulite facies paragneiss and orthogneiss similar to the regional area, with the gold deposit hosted by an ovoid shaped mafic gneiss sequence that has been mapped in detail by ground gravity data and drilling. The gneiss sequence dips between 350 to 400 to the south east and strikes 040o. The base of the gneiss sequence that host the Tampia gold deposit, as interpreted from the structural position of the host rocks, is a well banded foliated and banded felsic feldspar-biotite-quartz augen gneiss that also can contain graphite and pyrrhotite. The original sequence for this unit is believed to be clastic sediment, wacke, arenite and graphitic shale. The next unit is a felsic feldspar-biotite-amphibole-pyroxene gneiss that appears to contain a mixture of sedimentary and mafic precursor lithologies. Gold mineralisation at Tampia is spatially associated with tabular zones of intense silicification accompanied by microcline, hornblende and massive, green clinopyroxene. These zones also tend to be associated with a well-developed crenulation cleavage. Gold mineralisation occurs predominantly in the chemically reactive iron rich mafic gneiss but does rarely occur in the late undeformed granites along their contacts and also as narrow lower grade intersections with the undeformed granite. This confirms that gold mineralisation post-dates the intrusion of the granite sheets. From this it is inferred that the metamorphic and structural architecture was established pre-gold mineralisation. No gold has been found to date in the lower felsic gneiss units. 8
The Tampia resource covers an area of approximately 900m x 500m with mineralisation open down plunge to the south-east. Gold mineralisation occurs in elongate to ellipsoidal stacked lenses that vary in size from 1-10m thick, 50-150m wide and 50-200m long and are by hosted by mafic gneiss. The mineral association is arsenopyrite, pyrrhotite, minor chalcopyrite and löllingite, and rare pyrite. Coarse free gold (with nuggets up to 10mm) constitute approximately 30% of the gold in the resource. Total sulphide content of mineralised intercepts is typically between 1% and 3% (predominantly arsenopyrite). Refer to announcement on 13 September 2017 for more detail as none of this information has changed. MINERAL RESOURCE The Feasibility Study is based on an updated Mineral Resource estimate. Compared to the previous estimate, reported to the ASX on 13 September 2017, the updated Mineral Resource estimate includes a more accurate DTM, constraining wireframes and minor changes to the estimation technique, block size and cut-off grades, as summarised in Table 5. The changes include new information and provides a more accurate resource estimate as input for the Feasibility Study. The Resource classification is summarised in Table 2. Table 5. Comparison of April 2018 and September 2017 Resource estimates Sep 2017 Apr 2018 Block Size 20m x 20m x 2.5m 20m x 20m x 5m Change of Support technique Indirect Lognormal Conditioned LIK Additional Data metallurgical drilling Hyperbolic Tail setting 1.36 1.75 Cut-off grade for reporting 0.5 g/t Au 0.3 g/t Au weathered; 0.45 g/t Au fresh Geological interpretation minor adjustments to wireframe Total contained ounces 695 koz 675 koz Notes: Table 2. Tampia Gold Project Mineral Resource classification Tonnes Average Ounces Grade Inferred Weathered 500,000 1.4 20,000 Fresh 1,500,000 1.7 70,000 Sub-total 2,000,000 1.6 90,000 Indicated Weathered 400,000 1.38 20,000 Fresh 9,400,000 1.85 560,000 Sub-total 9,800,000 1.83 580,000 Total 11,700,000 1.79 675,000 1. The Mineral Resource is classified in accordance with JORC, 2012 edition. 2. The effective date of the Mineral Resource is 5 April 2018. 3. The Mineral Resource is contained within M70/816. 4. Estimates are rounded to reflect the level of confidence in these resources at the present time. 5. The Mineral Resource is reported as a recoverable resource at 5 × 5 × 2.5 SMU size, and at 0.45 g/t Au cut-off grade for fresh material and 0.30 g/t Au for weathered material. 9
Drilling Techniques The choice of RC drilling for the resource drill-out was carefully considered by the Competent Person. In the selection of the contractor, significant emphasis was put on the quality of the drilling and the resulting sample, and these constraints were included in the drilling agreement. The drilling techniques are considered fit for purpose across the entire campaign by the Competent Person. Refer to announcement on 13 September 2017 for more detail as none of this information has changed. Sampling & Sub-Sampling Techniques Samples collected by the drill hammer were delivered to a Metzke Splitter for sub-splitting. The performance of splitting was monitored on a per-sample basis by collecting a duplicate split sample for each metre. Subsequent sample preparation was carried out under a customised program that combined results from the sample nomogram and agreed laboratory work flows. Samples were split in a Rocklabs Boyd RSD Combo, that allows a percentage linear split to be specified for each sample. The split weights were optimised for pulverising in Essa LM-2's and their percentage passing size monitored consistently. Samples were then milled in the LM-2's before a manual split of around 200g was put in brown paper bags. The final 50g charge weight was weighed from this. The sampling and sub-sampling techniques are considered fit for purpose across the entire campaign by the Competent Person. Refer to announcement on 13 September 2017 for more detail as none of this information has changed. Sample Analysis Method All samples that were used in the Mineral Resource estimation were analysed at ALS Laboratories in Perth and were assayed via fire assay with AAS finish. Charge weights of 50g were used, with careful management of the flux ratios and fusion process. Standard fluxes were used on normal samples, and the fluxes adjusted before potting based on the oxidation, base metal, and sulphur levels (based on pXRF values). The laboratory results are considered accurate across the entire campaign by the Competent Person. Refer to announcement on 13 September 2017 for more detail as none of this information has changed. Estimation Methodology The Mineral Resource was estimated using multiple indicator kriging (MIK). This method was selected because the distribution of the data has an excessive positive skew (CV of 8.7), which could not be reduced by sub-domaining. The estimation was carried out within domains, aiming to constrain the interpolation to only relevant samples that are characterised by the same geological features. Significant effort was expended, including spatial statistical analysis, to map geological signatures that would identify and isolate different mineralised zones, or that would for instance define drivers for high vs low grade zones. Sample data points were extracted within the domains only for the recent 2017 drilling campaign, and all exploration drilling before this campaign were excluded from the resource estimation process. A significant amount of drilling was carried out by Explaurum in the two years before this campaign (2015-2016). However, the inclusion of these assays would significantly cluster the data and its quality wasn't as stringently controlled as the 2017 drilling campaign drilling. Indicators were then estimated using ordinary kriging into panels with 20m x 20m x 5.0m dimensions. The block size was increased compared to the September 2017 model to allow for better change of support statistics. The April 2018 estimation used a more conservative 10
hyperbolic tail setting of 1.75, compared to the value of 1.36 used in the September 2017 model. All other settings remained the same. Sub-celling was applied at a SMU scale of 5m x 5m x 2.5m. The estimation process automatically corrects for order relationship problems, and no issues were observed. Three passes were applied with increasing search ellipses and decreasing minimum amounts of samples, with first-phase search neighbourhood criteria set to 15/45 min/max samples and 60m/60m/6m search windows. Following the estimation, the probability model was adjusted for volume-variance to an anticipated SMU size of 5 × 5 × 2.5 m to reflect more realistic grade and tonnage scenarios for eventual mining. Due to time constraints, for the September 2017 resource estimation this was carried out using a simple COS method. At that time, an indirect lognormal approach using a global variance reduction was applied to local panels, with a variance reduction factor of 0.33. The variance reduction factor was calculated with the GSLIB program GAMMABAR, using the variograms and a trial-and-error process to get the variance close to the expected variance reduction. For the updated April 2018 model reported here, a more flexible model was required for mining studies. Often, post-processing of a COS estimate into smaller SMU-sized blocks is needed by mining engineers to prevent accumulation of small tonnages into recoverable tonnages over benches that are not mineable in practice. Therefore, for this estimation update, the localisation modelling process was reviewed and an alternative method adopted. Given the high sensitivity to the extreme skew of the distribution, two options to achieve the localisation processes were investigated. Both localised uniform conditioning (localised UC) and localised indicator kriging (LIK) were applied to the probability estimate. The process of localised UC does not preserve the local MIK distribution, which in regularly spaced drilling grids should provide reasonable approximations of local variability. Therefore, the LIK process was chosen for the change of support to achieve the most realistic local SMU grade distributions. Resource Classification Most of the mineralisation within the Mineral Resource has been classified in the Indicated category. Material on the edges, in the deeper less well-drilled parts, as well as some areas in the near surface where ground conditions led to poor sample quality, were classified as Inferred (Table 2). There is no material classified as Measured. The Resource classification has been carried out in accordance with the JORC Code (2012). The grade and densities are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence has been derived from adequately detailed and reliable exploration and sampling gathered through appropriate techniques and is sufficient to assume geological and grade continuity between data points. In the Competent Person's view, it is a realistic inventory of the mineralisation, which after preliminary evaluation of technical, economic and development conditions, might, in whole or in part, become economically extractable. In the Competent Persons' opinion, it is more likely than not that there are reasonable prospects for eventual economic extraction of the Tampia deposit. Portions of the deposit that do not have reasonable prospects for eventual economic extraction are not included in the Mineral Resource. 11
In classifying the Resource, the Competent Person has regarded several aspects that affect resource confidence: • Informing sample quality. Each sample was given a DQR based on a combination of several factors (sample recovery, sample splitting quality, water issues, dust loss). These numbers were then modelled into the blocks, allowing the identification of blocks or areas that are estimated by lower-quality sampling. There is only a small area of clay-rich regolith, that on average, has poor sample quality. • Variography. The 40m drill spacing is generally adequate to determine the larger grade continuity in all directions. Although it is clear from the indicator variography that grade continuity of very high-grade material is not always captured, with first-structure ranges between 10 and 30 m. However, even well above the average Resource grade, there are several areas where high grade zones (above 2.5 g/t Au) can be linked across four to five drill sections (about 180 m). • Kriging efficiency (KE), as a product of the OK check-estimate process, was also used as a proxy for the quality of the estimation and to support the classification. This established that most of the blocks had KEs above 20 %, with blocks in between sections and on the fringes with lower and sub-zero KEs. Expectedly, low KEs were mainly driven by relatively high gamma values in semi-variograms, combined with large point-to-block distances, resulting in high kriging variances. Given the near- perfect grid distribution of the data, lack of clustering contributed to a lower kriging variance and better KE. • Comparison of the MIK model with a conservatively top-cut OK model, within a small area for which historic close-spaced drilling not used in the estimate is available confirmed acceptable correlation of results (tonnes and grade) and is a key argument for the support of the MIK settings applied and the general validity of the model. Considering the classification and the generally accepted confidence limits around the various classification categories, the Competent Person considers that such error margins are well within those of the Indicated classification. GEOTECHNICAL ASSESSMENT A geotechnical study was undertaken by AMC based on structural analysis of drill hole optical and audio downhole data, logging of diamond drill core and laboratory testing to estimate rock strength and shear strength, and potential for failure of pit walls due to the physical properties of all lithologies within the proposed pit area. On the basis of this work, the slope parameters have been incorporated in the pit design that reflect the generally shallow weathering profile and high wall stability (Table 6): 12
Table 6. Open Pit Slope Design Parameters Pit Sector Depth Batter Face Berm Width Max. Inter Ramp (m) Angle (O) (m) Angle (O) Northwest West 0 – 10 45 5.0 - Southwest 10 – 20 60 5.0 - Southeast > 20 75 7.5 57 East 0 - 10 45 5.0 - Northeast 10 – 20 60 5.0 - > 20 75 7.5 61 OPEN PIT MINING Mining activities will be undertaken by Explaurum utilising equipment on a Dry Hire contract basis, whereby all equipment necessary to meet the planned mining schedule is provided on an hourly rate and guaranteed availability basis, with management and staffing being the responsibility of the principal. The mining method planned and costed has the following features, summarised in Table 7: • Mining and stockpiling of unmineralised soil from the final pit design footprint and waste dump areas to be used in rehabilitation of the site at mine closure. • RC grade control of mineralised zones will be undertaken under contract on a campaign basis. • Drilling and blasting of ore and waste material on 5m and 10m benches respectively will be undertaken on contract. • Mining will be undertaken on 5m benches; a 100t excavator will mine ore and waste, while bulk waste will be mined using a larger 200t excavator, with both excavators loading 90t capacity haul trucks. Mining of ore will be undertaken on day shift only, with waste mining on day and night shift (Figure 5 and Figure 6). • Ore will be direct fed to the crusher or stockpiled for later rehandling as required. • Pit dewatering will be managed by dewatering bores outside the pit perimeter and pumping from pit sumps as necessary. Table 7. Open Pit Optimisation Input Variables Whittle Optimisation Parameter Units Value Source Gold price AUD/oz 1,650 EXU Royalty % 4.5 EXU Discount rate % 8 EXU Processing cost – oxide ore (ROM) $/t ore 13.58 MinEcotech Processing cost – oxide ore (low grade) $/t ore 13.47 MinEcotech Processing cost – fresh ore (ROM) $/t ore 22.36 MinEcotech Processing cost – fresh ore (low grade) $/t ore 20.11 MinEcotech Process recovery - oxide % 96 JT Process recovery - fresh % 91 - 96 JT Grade control $/t ore 0.88 MinEcotech Drill & Blast - oxide $/BCM ore 1.25 MinEcotech 13
Drill & Blast – fresh (waste-ore) $/BCM ore 3.18-4.88 MinEcotech Mining cost – L&H waste $/BCM 5.04-9.90 MinEcotech Mining – L&H ore $/BCM 5.62-10.07 MinEcotech G & A – oxide ore (ROM) $/t ore 2.41 MinEcotech G & A – oxide ore (low grade) $/t ore 1.63 MinEcotech G & A – fresh ore (ROM) $/t ore 2.57 MinEcotech G & A – fresh (low grade) $/t ore 1.79 MinEcotech Dore refining costs $/oz 3.61 MinEcotech Overall pit slope angles Batter angles vary with AMC depth: oxide 450-600 fresh 750-800 Optimisation results demonstrate the Tampia pit design to be relatively insensitive to gold price fluctuations and minor changes in input parameters. The design of staged pits was guided by maximising cash flow. MINING SCHEDULE The mining schedule has been based on: • Variable plant throughput rates based on ore type ranging from 1.5Mtpa for fresh ROM ore, 1.6Mtpa for oxide ROM ore and 1.9Mtpa for low grade ore. • Total material movement of approximately 16Mtpa utilising two excavators (100t for ore zone mining, 200t for bulk waste mining) throughout the mine life. • Mining in 3 stages, with maximum vertical advance of 12 benches (60m) per year. • Mining of the southern end of the pit to final design was prioritised to enable in pit dumping of waste material. • Drill and blast ore in 5m benches and bulk waste in 10m benches. • Mining in 5m benches. • Oxide ore to be mined and treated first followed by fresh ore. • Low grade ore to be stockpiled for treatment at the end of mine life. The staged pits for the planned mining schedule are shown in Figures 2, 3 and 4: