2. Old Tailing Dump JSC Zyryanovsk Lead-Mining Complex

3. 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)

4. -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

5. -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 2012. -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

6. 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

7. 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

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

10. A standard set of equipment and machines for the first stage of processing 1 excavator Hitachi ZX400LCH-3 1 loader Brenner 936 3 dump trucks HOWO 6x4ZZ3257M364W Hangar2 concentrators ITOMAK (KGM-10 и KGM-40 DK) 1 scrubber-washing drum SB5

11. Approximate cost of the standard set of equipment and machines for the first stage of processing EquipmentNumberPrice (USD) Amount (USD) Excavator Hitachi ZX400LCH-31180 000 Loader BRENNER 936135 500 Dump truck HOWO 6x4ZZ3257M364W368 000204 000 Hangar150 000 Scrubber-washing drum SB-151167 000 Concentrator ITOMAK KGM-10128 500 Concentrator ITOMAK KGM-40 DK1112 820 Pumps, electrical equipment and other auxiliary equipment -------60 000 TOTAL:837 820

12. 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 = 3 310 000 U.S. dollars -Net annual income = 1 210 000 U.S. dollars -Taxes and payments to the budget per annum = 291 500 U.S. dollars -Number of jobs created = 49 - Average salary = 600 U.S. dollars

13. A standard set of equipment and machines for the second stage of processing 2 excavators Hitachi ZX400LCH-3 2 loaders Brenner 936 6 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

14. Approximate cost of the standard set of equipment and machines for the second stage of processing EquipmentNumberPrice (USD) Amount (USD) Excavator Hitachi ZX400LCH-32180 000360 000 Loader BRENNER 936235 50071 000 Dump truck HOWO 6x4ZZ3257M364W668 000408 000 Hangar250 000100 000 Scrubber-washing drum SB-222297 000594 000 Concentrator ITOMAK MKG-1201263 050 Concentrator ITOMAK KGM-403112 820338 461 Dredger Hydromec 200Eh1300 000 Jig unit MOD-248 83035 320 Hydraulic cyclone GRTS-500411 97347 892 Hydraulic cyclone set CAVEX671 010426 060 Pumps12+-----726 400 TOTAL:3 670 183

15. Expected financial indicators on the second stage of the production (gravity concentration): -Annual volume of extraction = 1 050 thous. tonnes -Gross annual income = 9 900 000 U.S. dollars - Net annual income = 3 700 000 U.S. dollars - Taxes and payments to the budget per annum = 875 000 U.S. dollars - Number of jobs created = 147 - Average salary = 600 U.S. dollars

16. 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) = 81 500 000 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