Role of the Qualified or Competent Person Mark Howson, PERC Representative, Ankara, 26 January 2016 Competent or Qualified? PERC (Europe), JORC (Australasia), SME (USA) etc. – ‘Competent Person’ Canada – ‘Qualified Person’ Chile – ‘Qualified Competent Person’ Brazil – ‘Qualified Professional’

Why are Competent Persons needed for reporting? Mineral commodities and occurrences are diverse Stages of development need different skills Different reports have different audiences Copper (disseminated, massive veins, porphyry, sediment-hosted, skarns) Gold (disseminated, veins) Iron Ore (sediment-hosted, skarns) Diamonds (pipes, alluvial, marine) Nickel (sulphides, laterites) Potash (bedded salts solution mining versus conventional mining) Uranium (hard-rock, sandstone-hosted in situ leach versus conventional mining) Lead-Zinc-Silver (Volcanogenic massive sulphides, carbonate-hosted) Specialties (Lithium, vanadium, rare earths) Coal (structurally disturbed, flat-bedded) Industrial minerals Construction materials (cement raw materials, aggregates, brick clays) Dimension Stones Exploration Delineation Conceptual study Scoping study Pre-feasibility study Feasibility study Commissioning Production Closure Requiring: Geological knowledge Mining expertise Processing and metallurgical expertise Legal understanding Environmental management Commercial and economic knowledge Social/cultural awareness Geological reports Internal project reports Management planning reports Investment and strategy reports State inventory reports External statements and reports for investors Is anyone a specialist in all of deposits? Is anyone responsible for all of these activities? Is anyone writing all of these reports?

What is a Competent Person? Requirements for a Competent Person A minerals industry professional Often a geologist or mining engineer Employed to work with mineral deposit occurrences in geological environments Exchanges & sharing of information with other countries & companies A member of a Recognised Professional Organization (RPO) Appropriate membership level Subject to ethics and disciplinary codes Minimum 5 years relevant experience "Competent Persons should be clearly satisfied in their own minds that they could face their peers and demonstrate competence in the commodity, type of deposit and situation under consideration. If doubt exists, the person should either seek opinions from appropriately experienced colleagues or should decline to act as a Competent Person." Requires academic qualifications, professional experience & peer scrutiny Style of mineralization Type of deposit Activity or area of technical input which that person is undertaking Those that think experience in a similar but still different deposit type makes them competent, should do so with caution. Note: These requirements are also subject to any additional restrictions or conditions which may be required by relevant stock exchanges or regulatory authorities.

What are the responsibilities of a Competent Person? Preparing Competent Persons Reports Issued by owners of mineral assets Provide information on Exploration Results, Mineral Resources & Mineral Reserves Reports are any public announcement that includes or relies on this information Reports are prepared at different stages of project development and operation Exercising judgement in providing external information Ensuring that information available is properly considered and reasonable conclusions are drawn, supported by objective views Upholding the principles of transparency, materiality, competence and impartiality The core principles inherent in the CRIRSCO aligned standards Enabling balanced and reasoned investment decisions Information is provided to enable investors and/or professional advisors to make informed decisions

Competent Person Activities Reporting Primary responsibility May be annual, or for specific purpose Include 'first time' reporting, bond issues, results updates, divestments, privatization, press releases, etc. Exploration geologists report exploration results Mining (or estimation) geologists estimate and report mineral resources Mining engineers estimate and report mineral/ore reserves Leading a team Co-ordinating other specialists Can include other Competent Persons Oversees and directs work on those not Competent Persons in their own right Could include metallurgists, environmental engineers, economists, marketing experts, etc. Responsibility for the work included in reports done by others Organizing audits and reviews Considering all matters in reports Legacy information Geological confidence Modifying factors Experience from similar or analogue deposits can be important in making assumptions about poorly drilled deposits or unknown aspects in initial stages, but can also be misleading.

Consent for release of reports The Competent Person Consent Necessary for all reports released Confirms the name of the Competent Person, professional qualifications, and experience relevant to the report Can be a stand-alone statement Can be included as a compliance statement in the report

( ≡ Ore Reserves in JORC) CP Judgement - Classification An important part of the CP’s Role is to assess confidence in estimates. Mineral Resources and Reserves are classified in accordance with Figure 1. Briefly explain this diagram in preparation for the next 6 slides. Especially emphasise the Modifying Factors ( ≡ Ore Reserves in JORC) Inferred Indicated Probable Measured Proved

Plans of Example Bench: Blue ≥ 0.25, Pink ≥ 2.5% CP Judgement - Classification Plans of Example Bench: Blue ≥ 0.25, Pink ≥ 2.5% Zinc Open Pit Mine Example (supplied by Dr H Parker) The CP must judge what sample spacing is appropriate to classify confidence in Mineral Resources as Inferred, Indicated & Measured This must be based on geological & mathematical (geostatistical) reasoning. Before the deposit is mined: CP may also refer to other comparable operations with same style of mineralization. After mining has started: CP must reconcile what was estimated with ground truth, and develop estimation procedure so that future estimates are unbiased. Ground-truth Based on Blast Holes (7 X 7 m Spacing) 75 X 75 m Spacing; High-grade is under- represented Inferred 50 X 50 m Spacing; High-grade is still under-represented Indicated 25 x 25 m Spacing High-grade is fairly well represented Measured

Stages of Development Reporting through a mine’s life (1) This illustration is of a hypothetical generalised open pit life cycle, not necessarily typical nor average, but based on the author’s experience. Graph preceded by exploration target identification Closure ‘Discovery Hole’ identifies potentially economic mineralization Ramp-up Scoping Study This is the first of a sequence of slides intended to illustrate the evolution of Mineral Resources and Mineral Reserves through a mine’s life. The mine is a generalized hypothetical open pit. It is not necessarily typical or average, but it is based on the author’s experience. The slides are intended to show how the classification seen in the previous slide, and other definitions correspond with the development of a mine. Graph preceded by regional exploration to identify a target – especially using geophysics & geochemistry The graph starts where a ‘Discovery Hole’ identifies potentially economic mineralization Drilling & trenching continue to define the shape of the deposit, especially that part that may be economic A Conceptual Study determines if it is worth continuing to invest in exploration of the deposit Some companies may report Exploration Results – I have used brown to highlight terms defined by PERC as drill intersection lengths and grades to raise interest & investment Mineralization quantity has been identified but they are not reported because “reasonable prospects for eventual economic extraction” have not been established Feasibility Study Commissioning Full production Tonnage, up to 500 Mt engineering & construction Drilling & trenching continue to define deposit Conceptual Study determines if exploration worth continued investment Exploration Results reported as drill intersection lengths and grades to raise interest & investment Report prepared by a Competent Person (Exploration Geologist) Conceptual Study Mineralization quantity identified but not reported since “Reasonable prospects for eventual economic extraction” have not been established Time periods of, typically, 1-2 years Italics indicates defined or quoted in PERC and other CRIRSCO Standards

Stages of Development Reporting through a mine’s life (2) This illustration is of a hypothetical generalised open pit life cycle, not necessarily typical nor average, but based on the author’s experience. Scoping Study determines potential viability with a range of mining & processing options if “progress to a Pre-Feasibility Study can be reasonably justified” PFS Inferred Mineral Resources reported if there are “reasonable prospects for eventual economic extraction” Closure Report prepared by a Competent Person (Mining Geologist) Ramp-up Scoping Study Order-of-Magnitude (OoM) or Scoping* Study, also known as an Order-of-Magnitude (OoM) determines technical and economic study of the potential viability Consider range of mining & processing options if “progress to a Pre-Feasibility Study can be reasonably justified” Inferred Mineral Resources may be reported if the company needs to encourage investment if “reasonable prospects for eventual economic extraction” Pre-Feasibility* Study (PFS) determines if “financial analysis based on reasonable assumptions” satisfactory if mining likely to proceed subject to social, legal, governmental etc. Based on preferred of a range of mining & processing options Drilling & geological investigation Sufficient to establish economic case to proceed Receives little further investment Mineral Resources typically reported Inferred Mineral Resources Indicated Mineral Resources Feasibility Study Commissioning Full production Conceptual Study Tonnage, up to 500 Mt engineering & construction Pre-Feasibility Study (PFS) determines: If satisfactory “financial analysis based on reasonable assumptions” If mining likely to proceed subject to “Modifying Factors” Geological investigation for more mineralization Reduces, since sufficient found to establish economic case to proceed Mineral Resources reported Inferred Mineral Resources Indicated Mineral Resources Report prepared by a Competent Person (Mining Geologist) Time periods of, typically, 1-2 years

Stages of Development Reporting through a mine’s life (3) This illustration is of a hypothetical generalised open pit life cycle, not necessarily typical nor average, but based on the author’s experience. Feasibility Study (FS) determines if project should proceed comprehensive studies of “Modifying Factors” final economic case & production rate PFS FS engineering & construction Closure Scoping Study Feasibility Study* (FS) determines if project should be implemented final economic case & production rate comprehensive technical, socio-economic & environmental studies On approval, engineering & construction starts Probable Mineral Reserves reported Some may have been reported earlier If break-even case established Converted from Indicated Mineral Resources that lie within the economic mining shell with any dilution & recovery calculations (not shown here) Measured Mineral Resources developed after infill drilling where mining will start Proved Mineral Reserves reported Transferred from most Measured Mineral Resources (e.g. lower-grade may be omitted) Full production Conceptual Study If approved, engineering & construction begins Tonnage, up to 500 Mt Probable Mineral Reserves reported within the economic mining shell with any mining dilution & recovery calculations Report prepared by Competent Persons (Mining geologist & Mining Engineer) Measured Mineral Resources developed after infill drilling where mining will start Report prepared by Competent Persons (Mining geologist & Mining Engineer) Proved Mineral Reserves reported Transferred from Measured Mineral Resources Some left as Mineral Resources Time periods of, typically, 1-2 years

Stages of Development Reporting through a mine’s life (4) This illustration is of a hypothetical generalised open pit life cycle, not necessarily typical nor average, but based on the author’s experience. Commissioning & Ramp-up Reduced production rate while equipment is tested and adjusted and construction is completed FS PFS Closure OoM Study engineering & construction Commissioning & Ramp-up Production starts at reduced rate while equipment is tested and adjusted and construction is completed Overburden stripping may have started during engineering & construction phase, but may continue to delay Full Production starts Proved Mineral Reserves depleted through each year Proved Mineral Reserves updated annually From part of Measured Resources Upgraded by infill drilling of Indicated Resources Full production Conceptual Study Tonnage, up to 500 Mt Commissioning & Ramp-up Full production starts Proved Mineral Reserves reviewed and/or reported Depleted and updated annually from part of Measured Resources Upgraded by infill drilling of Indicated Resources Annual CP Report prepared by Competent Persons (Mining geologist & Mining Engineer) Time periods of, typically, 1-2 years Periods of 1 year

Mineralization of ore grade but not confirmed as economic Stages of Development Reporting through a mine’s life (5) This illustration is of a hypothetical generalised open pit life cycle, not necessarily typical nor average, but based on the author’s experience. CP Report Mining Strategy Revision Decision to reduce cut-off substantially increases Mineral Resources & Reserves, including from marginal stockpiles (Dumps) Proved Mineral Reserves are no longer reported, because infill drilling to this confidence is no longer necessary Mine planning revised to include all Indicated & Measured Mineral Resources as Probable & Proved Reserves, also may include economic stockpiles e.g. low-grade Measured Resources mined but not processed FS PFS OoM Study Mine planning revision Mine plan now includes all Indicated & Measured Mineral Resources any economic stockpiles (from low-grade Measured Resources mined but not processed) New exploration drilling campaign Targets lower-grade than previously, and is successful Updates to Mineral Resources Indicated & Measured transfer to Mineral Reserves Another drilling campaign finds more mineralized material but less with “reasonable prospects of economic extraction” Conceptual Study C. & Ramp-up Full production Tonnage, up to 500 Mt engineering & construction New exploration drilling campaigns Find more mineralization, some of which is infill-drilled and may be upgraded on an annual basis to categories of Mineral Resources for mine planning and transfer to Mineral Reserves Closure / Sale / Underground / Technology improvement Mineralization of ore grade but not confirmed as economic Annual CP Report Mineral Reserves & Resources Updated to remove Mineral Reserves depleted by production, also to add and report material upgraded and transferred to Mineral Reserves Periods of 1 year Periods of 1 year

Mineralization of ore grade but not confirmed as economic Stages of Development Reporting through a mine’s life (6) This illustration is of a hypothetical generalised open pit life cycle, not necessarily typical nor average, but based on the author’s experience. Little further increase due to cut-off reduction Value with additional exploration Project Value Curve + Value with FS Mineral Reserve Break even Value with starter Mineral Reserve Break even - PFS FS OoM Study engineering & construction C. & Ramp-up Full production Conceptual Study Tonnage, up to 500 Mt Closure / Sale / Underground / Technology improvement Mineralization of ore grade but not confirmed as economic Time periods of, typically, 1-2 years Periods of 1 year

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