Old Tailing Dump JSC Zyryanovsk Lead-Mining Complex

Area of the geologic removal = 1.31 sq. km. Tonnage of the reject materials = 36 million tonnes The report on evaluation of mineral resources was compiled in accordance with the JORC Code by JORC Consulting company, the project leader – Andrey Krasnykh, member of the Australian Institute of Geoscientists (AIG)report on evaluation of mineral resources (Membership 4035)

-Magma West LLP has fully completed the exploration of the deposit -On February 8, 2012 there was a memorandum on investment of 100 million euros in the project signed with German company DEB Deutsche Erze Beteiligungs AGmemorandum on investment -On April 24, 2012 Magma West LLP (Astana), Di- As Company Ltd (Zyryanovsk) and DEB AG (Bad Homburg) signed the trilateral contract on joint- activities (consortium).contract on joint- activities

-In compliance with the subsoil contract and the agreements reached, there were over 5 million U.S. dollars invested in the project in the period from 2005 to In 2013 – 2014 – planned transition to the pilot production (gravity concentration) in 2 stages -In case of positive results - > Construction of the processing plant with the combined scheme of concentration

As of today: -Process regulations, technical project and preliminary environmental impact assessment (EIA) have been already developed, agreed on and approved by the relevant authoritiesProcess regulationstechnical project (EIA -Project of the evaluation works, with the section devoted to the pilot production has been already developed and is in the process of being approved

As of today: -The is a state license obtained for design works (technological) and (or) operating of mining, petrochemical, chemical productions and other activitiesstate license -Power line and integrated transformer substation were built

As of today: The equipment for gravity concentration was installed and debugged.

A standard set of equipment and machines for the first stage of processing 1 excavator Hitachi ZX400LCH-3 1 loader Brenner dump trucks HOWO 6x4ZZ3257M364W Hangar2 concentrators ITOMAK (KGM-10 и KGM-40 DK) 1 scrubber-washing drum SB5

Approximate cost of the standard set of equipment and machines for the first stage of processing EquipmentNumberPrice (USD) Amount (USD) Excavator Hitachi ZX400LCH Loader BRENNER Dump truck HOWO 6x4ZZ3257M364W Hangar Scrubber-washing drum SB Concentrator ITOMAK KGM Concentrator ITOMAK KGM-40 DK Pumps, electrical equipment and other auxiliary equipment TOTAL:

Expected financial indicators Expected financial indicators on the first stage of the production (gravity concentration): -Annual volume of extraction = 350 thousand tonnes -Gross annual income = U.S. dollars -Net annual income = U.S. dollars -Taxes and payments to the budget per annum = U.S. dollars -Number of jobs created = 49 - Average salary = 600 U.S. dollars

A standard set of equipment and machines for the second stage of processing 2 excavators Hitachi ZX400LCH-3 2 loaders Brenner dump trucks HOWO 6x4ZZ3257M364W 2 hangars 4 concentrators ITOMAK ( KGM-40 DK and MKG- 120) 1 dredger Hydromec 2000Eh 2 scrubber- washing drum SB-22 4 jig units MOD-2 4 Hydraulic cyclones GTSR-500

Approximate cost of the standard set of equipment and machines for the second stage of processing EquipmentNumberPrice (USD) Amount (USD) Excavator Hitachi ZX400LCH Loader BRENNER Dump truck HOWO 6x4ZZ3257M364W Hangar Scrubber-washing drum SB Concentrator ITOMAK MKG Concentrator ITOMAK KGM Dredger Hydromec 200Eh Jig unit MOD Hydraulic cyclone GRTS Hydraulic cyclone set CAVEX Pumps TOTAL:

Expected financial indicators on the second stage of the production (gravity concentration): -Annual volume of extraction = thous. tonnes -Gross annual income = U.S. dollars - Net annual income = U.S. dollars - Taxes and payments to the budget per annum = U.S. dollars - Number of jobs created = Average salary = 600 U.S. dollars

Third stage – construction of the plant with the combined scheme of processing (the pre-feasibility studypre-feasibility study has been already developed) - Net present value (NPV) = U.S. dollars -Internal Rate of Return (IRR) = 38.8 % -Discounted Payback Period = 4.3 years The calculations were made with a very conservative price for gold.price for gold