Resource Estimation of Tsumeb Tailings Dump, Namibia, August 2011

Transcription

1 Resource Estimation of Tsumeb Tailings Dump, Namibia, August 211 Prepared by Coffey Mining (SA) (Pty) Ltd on behalf of: Weatherly International Plc JTSU1 Coffey Mining (SA) Pty Ltd (26/3152/79) VAT Number ( ) Block D, Somerset Office Estate, 64 Kudu Street, Allen s Nek 1737 Roodepoort, South Africa

2 Coffey Mining Pty Ltd Author(s): Rachel McKinney Consultant-Geology (MSC (Geology)) Brendan Botha Exploration Manager (BSc (Hons) Geology, MSc (ESPM), MSc (MRM), Pri.Sci.Nat, MGSSA) Janine Fleming Kathleen Body Date: August 211 Senior Consultant- Resources Principal Consultant- Resources (BSc Hons Geology, Pr.Sci.Nat, MGSSA) (BS Arts and Sciences (Geology), GDE (Mining), Pr.Sci.Nat) Project Number: Version / Status: JTSU1 v.1 / Final Path & File Name: F:\Projects\Projects\Weatherly International\ JTSU1-Estimation of Tsumeb dump\roport\jtsu1-estimation of Tsumeb dump_final.docx Print Date: Friday, 26 August 211 Copies: Weatherly International Plc (2) Coffey Mining Johannesburg (1) Document Change Control Version Description (section(s) amended) Author(s) Date Document Review and Sign Off Author Janine Fleming Author Rachel McKinney Author Brendan Botha Supervising Principal Kathleen Body This document has been prepared for the exclusive use of Weatherly International Plc ( Client ) on the basis of instructions, information and data supplied by them. No warranty or guarantee, whether express or implied, is made by Coffey Mining with respect to the completeness or accuracy of any aspect of this document and no party, other than the Client, is authorized to or should place any reliance whatsoever on the whole or any part or parts of the document. Coffey Mining does not undertake or accept any responsibility or liability in any way whatsoever to any person or entity in respect of the whole or any part or parts of this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever. Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: i

3 Coffey Mining Pty Ltd Table of Contents EXECUTIVE SUMMARY...v 1 Introduction Scope of Work Participants Technical Report Disclaimer Site and Technical Visits Data Acquired Property Description Location and Access Physiography and Climate Local Infrastructure and Services History Geological Setting Regional Geology Local Geology Mineralization Data and verification Drilling Sample Logging Sample Logging Bulk Density Measurements Data Location Sample Analysis Analytical Quality Assurance and Quality Control Data Geological Modelling Introduction Statistical Analysis Introduction Block Model Development Introduction Block Construction Parameters Grade Estimation Introduction Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: ii

4 Coffey Mining Pty Ltd 1.2 Nearest Neighbour Estimate Resource Reporting Introduction Criteria for Mineral Resource Classification Application of Cut-off Grade and other Modifying Factors Mineral Resource Estimate Tabulation Conclusion References Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: iii

5 Coffey Mining Pty Ltd List of Tables Table 1.1 Mineral Resources of the Tsumeb Dump vi Table 6.7_1 Summary of the Number of Control Samples 21 Table 6.7_2 Summary of Certified Reference Standards Used 22 Table 8.1_1 Descriptive Statistics 26 Table 9.2_1 Block Model Construction Parameters 28 Table 1.2_1 Nearest Neighbour estimation and search parameters 29 Table 1.2_2 Block and drillhole grade comparison 3 Table 11.2_1 Confidence Levels of Key Criteria 31 Table 11.4_1 Measured Mineral Resource Estimate (August 211) 32 List of Figures Figure 2.1_1 Location of the Tsumeb Dump Project 1 Figure 2.1_2 Locality of Tsumeb Dump in relation to the town of Tsumeb 11 Figure 2.1_3 Orthographic Photo of the Tsumeb Dump 12 Figure 6,1_1 Tailings Dump Showing Boreholehole Locations 16 Figure 6.2_1 - Sampling Procedure 18 Figure 8.1_1 Histograms of distributions 27 List of Appendices Appendix A Level Plans and Cross Sections of Copper Distribution in the Tsumeb Dump Appendix B Level Plans Of Copper Leached Distribution in the Tsumeb Dump Appendix C QAQC Plots Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: iv

6 Coffey Mining Pty Ltd EXECUTIVE SUMMARY Coffey Mining (SA) (Pty) Ltd was requested by Weatherly International Plc to complete a Mineral Resource estimation of the Tailing Dump of the closed Tsumeb Copper Mine in Namibia. Reporting was requested to conform to Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves of December 24 (the JORC Code) as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Mineral Council of Australia (JORC). The Tsumeb Tailing Dump is on the northern boundary of the town of Tsumeb in Namibia, a town well serviced with infrastructure, i.e. sealed roads, power and municipal water and waste services. There is also a railway line connecting Tsumeb with Walvis Bay via Windhoek. The Tsumeb Copper Mine is a world renowned polymetalic mine that was in production for just under 1 years. During its operation it produced 3 million tonnes of ore at 4.3% copper, 1% lead, 3.5% zinc and 95g/t silver. The Tsumeb Dump contains the waste product from the processed ore. It was constructed with a single inflow pipe which was moved around the perimeter of the dump as required. The dump is essentially a compound, pod-like deposit with grades varying from one pod to another due to variations in the beneficiation process and recovery improvements over time. The dump s dimensions are approximately 1m x 1m x15m and consist mainly of finely crushed felspathic sandstone, which was the host rock of the mineralization within the Tsumeb Mine. The mineralization of the dump is directly linked to the original mineralogy of the mine and the recoveries of the copper-bearing minerals during beneficiation. The dump also contains copper oxides that were not recovered prior 1986 as well as lead, zinc and minor amounts of silver. The mineralization in the dump and its distribution is directly linked to the operational day-to-day variations and recoveries. A total of 112 auger boreholes were drilled by Dump & Dune who are specialists in drilling tailings and other waste dumps. Samples were taken every meter and a half and sent to Bureau Veritas Laboratory in Swakopmund for analysis and copper solubility. For the drilling and analysis a full quality control program was establish to ensure the accuracy of the data collected. The referee samples sent to ALS Chemex in Johannesburg did reveal some issues regarding the original analysis. The queries regarding the referee results have not been resolved however these only involve the copper leach assays which have not been used in the mineral resource estimation. Statistical analysis of the borehole data that sufficient data was collected to have confidence in the distribution of the various elements within the dump A 3D model was created with survey data received from Namibian Custom Smelters for upper surface and the base as interpreted from borehole logs. Due to the podlike nature of the mineralization, the nearest neighbour estimation method was deemed most appropriate. The block model was constructed such that not more than one sample was represented in a block. The tonnes calculated from the block Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: v

7 Coffey Mining Pty Ltd model are based on densities obtained using on sand replacement tests. The density determined from the samples taken is 1.4g/m 2. Data collected for the Tsumeb dump is sufficient and generally good quality. Therefore the Dump is classified as a Measured Mineral Resource (Table 1). { TC Table 1.1 Mineral Resources of the Tsumeb Dump \fi } Table 1 Tsumeb Dump Mineral Resources of the Tsumeb Dump Tonnage (Mt) Density *Cu (%) Pb (%) Ag ppm Zn (%) Measured *PPM/1 = % The samples were also submitted for sulphuric acid leach assay. The result of these analyses indicates the copper by acid leaching is.3 % (average), which is 72% of the total estimated copper. Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: vi

8 1 INTRODUCTION 1.1 Scope of Work Coffey Mining (SA) (Pty) Ltd (Coffey Mining) was requested by Weatherly International Plc (Weatherly) to complete an estimation of the mineral resources on the Tsumeb Mine Tailings Dump (Tsumeb Dump) at Tsumeb in Namibia. Collectively Coffey Mining was commissioned to carry out the following activities for the resource estimation study of the Tsumeb Dump: Three dimensional modelling of the dump volume. Quality Assurance and Quality Control (QA/QC) of assay laboratory. Database generation, review and validation. Statistical analysis. Block model construction. Completion and validation of the mineral resource estimate based on data obtained during this phase of drilling. The elements to be estimated are Copper (Cu), Lead (Pb), Zinc (Zn) and Silver (Ag), as well as contaminant elements Arsenic (As), Bismuth (Bi), Cadmium (Cd), Mercury (Hg) and Sulphur (S). Compilation of a JORC compliant report. The report describes the methods used to define the mineral resource as well as the result of the mineral resource estimation. The report also states the criteria used to classify the mineral resources. It is understood that this report will be used for stock exchange reporting purposes. Tsumeb dump JTSU1 Page: 7 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

9 1.2 Participants The participants consist of a number of technical experts brought together by Coffey Mining to complete the mineral resource estimate. The participants in the review and their individual areas of responsibility are listed as follows:- Rachel McKinney, Coffey Mining - : Consultant MSc Geology Site visits, QA/QC, data collection, report preparation Janine Fleming, Coffey Mining - : Senior Consultant Resources (BSc (Hons) Geology, MGSSA, Pr.Sci.Nat) Geological interpretations, mineral resource estimation, report preparation. Brendan Botha, Coffey Mining - : Senior Consultant - Exploration (BSc (Hons) Geology, MSc (Earth Science and Project Management), MSc (Mineral Resource Management), Pr.Sci.Nat., MGSSA) Project Management, report preparation Kathleen Body, Coffey Mining - : Principal Consultant - Resources (BS Arts and Sciences (Geology), GDE (Mining), Pr.Sci.Nat) Peer Review, and Competent Person Neither Coffey Mining, nor the key personnel nominated for the work, has any material interest in Weatherly. The work, and any other work done by Coffey Mining for Weatherly, is strictly in return for professional fees. Payment for the work is not in any way dependent on the outcome of the work or on the success or otherwise of Weatherly s own business dealings. As such there is no conflict of interest in Coffey Mining undertaking the independent mineral resource estimate as contained in this document. 1.3 Technical Report The report has been compiled under the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves of December 24 (the JORC Code) as prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Mineral Council of Australia (JORC). This report is also compliant with the South African Code for Reporting of Mineral Resources and Mineral Reserves (SAMREC Code) of 27, prepared by The South African Mineral Resource Committee (SAMREC) under the auspices of The South African Institute of Mining And Metallurgy (SAIMM). The Competent person for the purposes of this report is Kathleen Body who has supervized all aspects of the work reported. She is a registered Professional Natural Scientist (Pr.Sci.Nat.) in terms of the Natural Scientific Professions Act (Act 27 of 23) and is a Competent Person as defined in the JORC and SAMREC Codes. Kathleen Body is a full-time employee of Coffey Mining and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the Tsumeb dump JTSU1 Page: 8 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

10 activity which she is undertaking to qualify as a Competent Person as defined in the 24 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and the South African Code for Reporting of Mineral Resources and Mineral Reserves (SAMREC Code) of 27. Kathleen Body consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. 1.4 Disclaimer Coffey Mining has based its mineral resource estimate for the Tsumeb Dump on information largely provided by Weatherly. This data includes third party technical reports along with other relevant published and unpublished third party information. Coffey Mining has endeavoured by making all reasonable enquiries to confirm the authenticity and completeness of the third party technical data upon which this report is based. A final draft of this report was provided to Weatherly, along with a written request to identify any material errors or omissions, prior to finalisation. Neither Coffey Mining, nor the authors of this report, are qualified to provide extensive comment on legal facets associated with ownership and other rights pertaining to the Tsumeb Dump. No warranty or guarantee, be it express or implied, is made by Coffey Mining with respect to the completeness or accuracy of the legal, environmental, metallurgical, mineral processing or mineral resource estimate information contained in third party reports. While Coffey Mining has reviewed such third party reports and relied on certain aspects of such reports in reaching its conclusions herein, neither Coffey Mining nor the authors of this report accept any responsibility or liability in any way whatsoever to any person or entity in respect of information contained in such third party reports and documents and included in this document, or any errors in or omissions from it, whether arising from negligence or any other basis in law whatsoever. 1.5 Site and Technical Visits A site visit was conducted by Mrs Rachel McKinney on 18 March 211. The intention of the site visit was to identify the property, understand its location and local infrastructure, establish the nature of the exploration undertaken and confirm the positions of a selected number of boreholes. In addition it was possible to verify the logging and sampling procedures and confirm the quality of the exploration. A site visit to the laboratory, Bureau Veritas, in Swakopmund Namibia, where the initial assays were to take place, was done concurrently (17 March 211). This visit was intended to assess laboratory operating procedures, formal QA/QC procedures and capabilities. 1.6 Data Acquired The data and information made available to Coffey Mining by Weatherly consisted of electronic and hardcopies of geological data (collar coordinates, geological logs, assay data) generated from the current drilling phase and surveyed topography files of the dump surface. This data formed the basis from which the mineral resource estimation could be completed. Tsumeb dump JTSU1 Page: 9 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

11 2 PROPERTY DESCRIPTION 2.1 Location and Access The Tsumeb Copper Mine, and its associated tailings dump, is located on the northern boundary of the town of Tsumeb in northern Namibia (Figure 2.1._1). Figure 2.1_2 indicates the location of the Tsumeb Dump in relation to the town of Tsumeb. Access to the project area is a tarred road and the railway line passes the project area in the south. The project is centred on coordinates South and East, at an approximate elevation of 1,3m above mean sea level (amsl). Figure 2.1_2 and 2.1_3 are a orthographic map of the Tsumeb Dump. { TC Figure 2.1_1 Location of the Tsumeb Dump Project \fj } Figure 2.1_1 Location of the Tsumeb Dump Project Tsumeb Project Tsumeb dump JTSU1 Page: 1

12 Figure 2.1_2 Locality of Tsumeb Dump in relation to the town of Tsumeb { TC Figure 2.1_2 Locality of Tsumeb Dump in relation to the town of Tsumeb \fj } Tsumeb dump JTSU1 Page: 11 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

13 Figure 2.1_3 Orthographic Photo of the Tsumeb Dump { TC Figure 2.1_3 Orthographic Photo of the Tsumeb Dump \fj } 2.2 Physiography and Climate The Tsumeb area is semi arid, with an average annual rainfall of 572mm, falling mainly from December to April. However, rainfall is highly variable, and multiyear droughts are common. The climate is sub-tropical, with mean summer temperatures averaging 35 C, and mean winter temperatures average around 1 C. Field conditions are such that it is possible to work all year round; poor weather conditions rarely disrupt exploration or mining operations. Tsumeb is situated on the northern fringe of the Otavi Mountain land, a highland region that extends approximately 1km east-west and 75km north-south. At the mine the landscape is dominated by low hills. The Tsumeb Project area lies on a flat plain sandwiched between low lying dolomitic hills both to the southern and northern sides. The soil type is closely related to the bedrock lithology. Over the sandstone plain is a thin red-brown sandy soil, overlying one to 1m of white calcrete. Below this calcrete are the arenaceous sandstones of the Mulden Group. The dolomite hills are covered by a thin layer of dark brown sandy soil, with abundant chert boulder rubble. The vegetation in the plain is dominantly low bushland, comprised of Acacia and Dichrostachys species, interspersed with open grassland. On the hills there is a more diverse range of tree cover. The water table is at approximately 7 8m below surface. The main land use activity in the area is cattle farming with minor game farming. Tsumeb dump JTSU1 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 Page: 12

14 2.3 Local Infrastructure and Services The Tsumeb Dump lies almost adjacent to the major tarred road that links Tsumeb to Etosha and Angola to the north. There is an electrical power line located on the project site. The railway linking Tsumeb to Walvis Bay and Windhoek passes directly south of the Tsumeb Dump. Skilled labour and most services are available in Tsumeb, and Namibia has a well established mining industry. Tsumeb serves as a base for providing a full range of urban amenities, including medical and educational facilities, financial, retail and commercial services. Tsumeb is a major tourist destination, thanks to the proximity of Etosha National Park. Modern hotels, lodges, shops and restaurants are able to provide most services. Telephone and mobile phone services are reliable, as are the high-speed internet facilities. 3 HISTORY The Tsumeb Copper Mine is a world renowned copper deposit that was operational for just under 1 years. In this period the mine changed ownership various times, up to its closure in Tsumeb Mine produced approximately 1 t of copper and 2 t of lead per annum and during the period from 1954 to 1963 a germanium-enriched zinc concentrate was produced (.2 to.5% germanium). The Tsumeb Dump, which was built-up from tailings fed from the flotation plant, comprises finely crushed host rock with copper bearing minerals that were not recovered during the beneficiation process. Not all of the tailings from the flotation plant were deposited on the Tsumeb Dump. A large percentage was also used to produce cemented backfill for the mine. The beneficiation process was primarily by differential flotation up to 1987; thereafter a gravity plant was installed to recover some oxides that did not react to flotation. This would have caused a decrease in the copper bearing minerals in the Tsumeb Dump. The total recorded production when the mine closed in 1998 was approximately 3Mt with an average grade of 1% lead, 4.3% copper, 3.5% zinc and 95g/t silver (Maiden and Hughes, 2). Tsumeb dump JTSU1 Page: 13 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

15 4 GEOLOGICAL SETTING 4.1 Regional Geology The Tsumeb Copper deposit is located within the Otavi Group, which is the northern boundary of the Damara Belt. The Otavi Group represents the miogeosyncline sediments on the boundary of the orthogeosyncline where stable tectonic processes existed and is dominated by dolomite and limestone. The neighbouring, central Damara depositional environment represents eugeosyncilal facies. This eugeosyncline facies was subjected to more intense tectonic activities than the Otavi Group and formed a central tectonic mountain range. The Otavi Group sediments are followed by the Mulden Group sediments. These sediments are syntectonic and were deposited around and within the central Damara geosynclines tectonic mountain ranges. The Mulden Group consists predominantly of arkose, conglomerate, felspathic sandstone, phyllite and limestone. 4.2 Local Geology The Tsumeb Dump is a man-made structure and not formed by geological processes. The dump was built up by means of a single inlet pipe that was moved at regular intervals around the perimeter of the dump. The dump is essentially a compound, pod-like deposit with grades varying from one pod to another due to variations in the beneficiation process and recovery improvements over time. The structure of the deposit is directly related to the type of material (host rock) that was mined and the fluctuations in the beneficiation process. There were also intermittent deposits of smelter dust deposited on the dump. This direct dependency on the efficiency of the plant and the smelter dust quality contributes to the vertical variation of the deposit, with regards to grades and mineralization. The main copper mineral mined at the Tsumeb Copper Mine was tennantite; therefore the majority of minerals in the dump should be tennantite and the secondary oxides that did not react to flotation up to The dump s dimensions are approximately 1m x 1m x 15m high, consisting of mostly finely crushed felspathic sandstone. Tsumeb dump JTSU1 Page: 14 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

16 5 MINERALIZATION The Tumeb Mine is one of the most spectacular and complex base metal deposits in the world however; the mineralization of the Tsumeb Dump is not well understood as it was primarily a waste dump for the flotation circuit. The mineralization should correspond with the mineralization of the original Tsumeb orebody less the economic portion. Cu solubility results indicate that a large portion of the Dump s copper mineralization occurs in oxide form (72% solubility). There is also associated lead, silver and zinc. Tsumeb dump JTSU1 Page: 15 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

17 6 DATA AND VERIFICATION 6.1 Drilling A nominal 75m by 75m drill pattern was employed over the Tsumeb Dumps, oriented east - west. Four boreholes could not be drilled and sampled due to standing water. These were borehole 3135, 315 and A total of 112 boreholes were drilled. The borehole locations were laid out and surveyed by a local surveyor, Eliert Schwarting of Schwarting Land Surveyors. Drilling was conducted and managed by Dump and Dune (Pty) Ltd who specialise in the auger drilling of tailings using a handheld auger powered by a 14kW hydraulic motor, which was mounted separately on the ground. Core barrels and extension rod lengths used were 1.5m, 3m or 4.5m. The core barrel comprises a rotating spiral encased in a counter rotating stainless steel core barrel 5mm in diameter. All drilling, sampling and bagging was done by the drill supervisor and a site visit was done at the start of the drilling program by the project geologist to ensure the correct logging and sampling protocols were followed. The rig is lightweight and man portable allowing access to all portions of the dumps. { TC Figure 6,1_1 Tailings Dump Showing Boreholehole Locations \fj } Figure 6.1_1 Tsumeb Dump Showing Borehole Locations The typical drilling procedure is as follows: At each site a platform box is dug into the surface down to approximately 2cm to stabilize the rods during drilling and remove topsoil. Tsumeb dump JTSU1 Page: 16 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

18 Drilling to 1.5m depth using the 1.5m core barrel. The sample is collected by extracting the barrel and using the hydraulic motor to reverse the auger and redirect the material into a plastic sample bag. This will typically happen in two to three stages as the entire 1.5m sample cannot fit into the core barrel due to volume taken up by the spiral within. The 3m core barrel is then used mostly in two stages for the same reason stated above. The second 1.5m sample increment is collected from the 3m core barrel. There after the 4.5m core barrel is inserted. This will produce the third 1.5m sample. On top of the 4.5m core barrel, the 1.5m extension rod is attached, then the 3m extension, thereafter the 4.5m extension and so on to continue advancement at 1.5m increments. Depth to end of tailings could not be determined accurately as the exact point of bottom intersection is not known unless bedrock was encountered. If soil was penetrated the exact depth of soil could not be calculated due to material expansion in the auger and unknown loss from the base of the auger on withdrawal. Depth estimations were made according to the amount of material in the bags after separating tailings and sub soil. Accuracy is estimated at better than.5m. All holes were drilled to underlying soil or bedrock. 6.2 Sample Logging The first two 1.5m samples, i.e. down to 3m depth, were collected by laying the rods horizontally on trestles and reversing the motor to discharge the samples directly into plastic bags. The auger was then removed from the outer sleeve over a length of 15mm PVC pipe that had been cut in half lengthwise, and cleaned and the material added to the sample. Material from the longer 4.5m rods was sampled manually by rotating the inner spiral in the opposite direction with a hand crank. The first part of the sample is collected from the nose of the core barrel, the remainder from the PVC pipe on extraction of the inner auger as above. Sleeve, auger and pipe were cleaned with a cloth after each sample. If the sample was wet then water was used to clean. All reasonable measures were taken to ensure full sample recovery (Figure 6.2_1). Each sample was given a unique sample number. The soil in the final run was given an estimated depth in the log and bagged separately to the dump material. The soil sample was then placed inside the bag containing the last dump sample and both samples were assigned the same ticket number. The laboratory was instructed to give a suffix A to the sample number for the dump material and a suffix B to the soil to differentiate between the two. Where an impenetrable bottom was encountered it was noted in the log. A sample ticket printed with the sample number was placed in the sample bag and a second ticket with the same number was stapled into the fold at the top of the bag. Bags were sealed within a half hour of sample extraction. Samples were stored until transported in a closed vehicle to Bureau Veritas Laboratory in Swakopmund, for moisture analysis, screening, drying and splitting off of representative portions for chemical analysis. Tsumeb dump JTSU1 Page: 17 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

19 { TC Figure 6.2_1 - Sampling Procedure \fj } Figure 6.2_1: Sampling Procedure From top, left to right Reversing auger to discharge sample into bag Removing auger from sleeve over PVC pipe Collecting remaining sample from PVC pipe Cleaning auger and sleeve between samples Tagged and sealed sample bags Tsumeb dump JTSU1 Page: 18 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

20 6.3 Sample Logging Tailings samples were logged by Dump and Dune in a very simple manner. Only the From depth, To depth, and colour of the sample was noted on the logging sheet. Also if the sample was particularly wet it was noted in the comments Where subsoil was penetrated this was merely logged as soil and the colour mentioned. The logs were entered into a Excel spreadsheet and a database compiled for geological modelling purposes. 6.4 Bulk Density Measurements A total of six surface bulk density samples were taken from the dumps. The sampling methodology used to determine the density of the tailings material was to clear an area of topsoil/organic matter and dig a square pit.5 m by.5m and.5 m deep. The sides are finished off vertical and as smooth as possible. Material excavated was carefully bagged into multiple bags and sent to the laboratory and weighed to produce a wet weight. The material was then oven dried at 75 C for 12 hours and re-weighed to provide moisture estimation and from this an in situ dry bulk density was calculated. 6.5 Data Location All borehole collars were laid out and accurately surveyed by a local surveyor Eliert Schwarting of Schwarting Land Surveyors, and the holes drilled right next to the surveyed pegs. Namibian Custom Smelters which is located adjacent to the Tsumeb Dump had conducted a DTM survey over the area which they released for use in order to model the top surface of the dump. 6.6 Sample Analysis All drill samples were collected from site and transported to Bureau Veritas Mineral Laboratories in Swakopmund for analysis. Bureau Veritas Namibia is still awaiting final accreditation but analysis is conducted following procedures based on ISO 91 Quality Management Systems and ISO 1725 accreditation. The samples were first dried, de-lumped and riffle split to yield approximately 2.5kg before being pulverized to 95% <75µ. The remaining sample was then stored to be composited at a later date by the client. Once pulverized a 1g split was sent for wet chemistry and ICP. A.25g sample was taken for each of a 4-acid digest and sulphuric acid leach (5% H 2 SO 4 and.1% Supafloc) with ICP-OES and ICP-MS finish. The main elements of interest were copper, lead, zinc and silver. 6.7 Analytical Quality Assurance and Quality Control Data A comprehensive quality assurance and quality control (QA/QC) programme was undertaken. The QA/QC programme identifies various aspects of the results that could have negatively influenced the subsequent resource estimate. It was possible to identify Tsumeb dump JTSU1 Page: 19 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

21 samples that had been swapped, missing samples, and incorrect labelling amongst other aspects. The QA/QC aims to confirm both the precision and accuracy of the laboratory and thereby confirm that the data used is of a sufficient quality for the mineral resource estimate. The control samples used comprised of two different standards, a blank and a duplicate within every 2 samples submitted. The intended aim was 5% coverage for each of the control sample types. Further control on data integrity was achieved through submittal of pulps to a referee laboratory (ALS Chemex, Johannesburg). The quality control data was analysed on an on-going basis and generated some queries with the laboratory. The results are presented in Appendix C. Definition of terms related to the QA/QC protocols applied and subsequent evaluations are provided below: A standard is a reference sample with a known (statistically) element abundance and standard deviation (certified independently). Reference standards are used to gauge the accuracy of analytical reporting by comparing the pre-determined values to those reported by the analytical laboratory used during an exploration project. A blank is a standard with abundance of the element of interest below the level of detection of the analytical technique (certified independently). A duplicate is the split of a sample taken at a particular stage of the sampling process; e.g. Field Duplicate. The precision and accuracy will be discussed in terms of the following statistical measures routinely applied by Coffey Mining. Thompson and Howarth Plot showing the mean relative percentage error of grouped assay pairs across the entire grade range, used to visualize precision levels by comparing against given control lines. Rank HARD Plot, which ranks all assay pairs in terms of precision levels measured as half of the absolute relative difference from the mean of the assay pairs (HARD), used to visualize relative precision levels and to determine the percentage of the assay pairs population occurring at a certain precision level. Mean vs HARD Plot, used as another way of illustrating relative precision levels by showing the range of HARD over the grade range. Mean vs HRD Plot is similar to the above, but the sign is retained, thus allowing negative or positive differences to be computed. This plot gives an overall impression of precision and also shows whether or not there is significant bias between the assay pairs by illustrating the mean percent half relative difference between the assay pairs (mean HRD). Tsumeb dump JTSU1 Page: 2 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

22 Correlation Plot is a simple plot of the value of assay 1 against assay 2. This plot allows an overall visualisation of precision and bias over selected grade ranges. Correlation coefficients are also used. Quantile-Quantile (Q-Q) Plot is a means where the marginal distributions of two datasets can be compared. Similar distributions should be noted if the data is unbiased. Quality control monitoring protocols involved submission of blanks, duplicates and certified reference standards with the core sample batches. Originally after every 8th sample an alternating blank or duplicate was allocated to the sampling sequence followed by a standard as the 1th sample. The actual numbers of control samples submitted are shown in Table 1.6_1. For field duplicates an empty sample bag was submitted for the laboratory to split the previous sample after crushing during sample preparation. Two different standards were used, one low and one high. Their expected values are in Table 1.6_2. Both standards were supplied by African Mineral Standards (Pty) Ltd. Sand sourced from the dunes near Swakopmund was used as the blank material, as the laboratory was using the material and has tested it in the past. { TC Table 6.7_1 Summary of the Number of Control Samples \fi } Table 6.7_1 Tsumeb Dump Project Summary of the Number of Control Samples Control Type Submitted Rate of Control Total Number of Samples Proportion of Total Standards 132 AMIS % AMIS % Duplicates % Blanks % Referee samples 65 5.% Tsumeb dump JTSU1 Page: 21 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

23 { TC Table 6.7_2 Summary of Certified Reference Standards Used \fi } Table 6.7_2 Tsumeb Dump Project Summary of Certified Reference Standards Used Expected Value and Two Between Laboratory Standard Deviations Standard AMIS149 AMIS158 Element EV 2 Std EV 2 Std (ppm) Dev (ppm) Dev Ag 3.1 ± * ±.9* As 25 ±23 NC NC Cu 3769 ±26 37 ±16 Pb 171 ± ±192 Zn 1537 ± ±6 All standards supplied by African Mineral Standards (Pty) Ltd * Provisional Concentration NC - Not Certified Blanks Most blanks reported higher than three times detection limit for each element though much lower than the actual tailings samples. It is suspected that the dune sand used for the blanks carries minor grade causing the higher than expected results and should not be used in future, a washed silica sand should rather be used. It can also be seen that the results return higher in the last two batches which could be due to slight contamination from previous samples during the preparation stage. AMIS149 Most results for Ag, As and Zn returned within two standards deviations of the expected values with a bias of 2% or less. A single sample, C1168 returned blank results in all elements except Cu, it is suspected that this is an error caused in the laboratory. It was asked to re-assay but there was insufficient sample to re-analyse. Most of the Cu results returned higher than expected with a bias of 4.8%, though all except six were within two standard deviations of the EV. Samples of this standard that were sent to the referee laboratory also produced higher results than the EV. During the round robin analysis for standard certification some laboratories also reported similar results for Cu. It is most likely a slight calibration issue causing the higher results and this is not a concern for the mineral resource estimation. Three Pb results returned results far lower than expected. These have all been followed up with the laboratory and have been corrected. The EV for Pb is outside of the calibration range for ICP and it was confirmed by the laboratory that the correct assays were not taken from the fusion results. Tsumeb dump JTSU1 Page: 22 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

24 AMIS158 Most results have returned within two standard deviations of the EV except sample C1155. This sample does not correspond to any other QA/QC sample nor is it an obvious sample transposition. The laboratory was asked to re-assay, including five samples above and below. but similar results were returned. When this sample is removed from the dataset all elements have an acceptable bias of less than 4%. Field Duplicates Of all data pairs grading better than ten times detection limit 9% or more are within 1% HARD precision limits for all elements. In all cases bar one where the duplicate sample was preceded by a soil sample (suffix B), it was the dump sample above that which was duplicated (suffix A) not the soil sample. The laboratory did not follow requested procedures exactly. With two of the duplicate pairs it could not be ascertained which sample had been duplicated. These two samples were C1139 and C Referee Analysis Pulps were sent to ALS Chemex laboratory in Johannesburg. The analytical techniques employed were the same as those utilised by Bureau Veritas in the primary analysis to ensure compatibility of data. All standards returned acceptable values. All elements show acceptable precision and accuracy with <11% difference bias between laboratories. There was a problem with samples from batch S348 for Cu leach assays. The original results from Bureau Veritas are approximately 45% less than the results obtained from ALS. This has been queried with Bureau Veritas and the initial response is that they confirmed a dilution error and corrected the results by applying a mathematical factor to the all the Cu leach results from this batch. Coffey Mining is of the opinion that this is not correct as the solubility is related to the copper minerals present and is unlikely to be linear but rather related to the type and habit of copper minerals throughout the grade range. Tsumeb dump JTSU1 Page: 23 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

25 7 GEOLOGICAL MODELLING 7.1 Introduction The Tsumeb Dump was modelled using the 3D software package Datamine. A model was generated for the surface of the dump and the base of the dump. The surface of the dump is based on the survey supplied to Coffey Mining from Namibian Custom Smelters. The interpretation of the base of the dump is based on the coding in the borehole data where soil first appears in the log, as mentioned in Section 6.1, this method of defining the base has an approximate error of.5m. Tsumeb dump JTSU1 Page: 24 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

26 8 STATISTICAL ANALYSIS 8.1 Introduction Statistical analyses were completed on the Tsumeb Dump for the raw data in the de-surveyed borehole file which is based on the analysis received from the laboratory. Statistical analysis and distribution histograms were calculated for Cu, Pb, Ag and Zn as well as for minor elements; arsenic (As), sulphur (S), cadmium (Cd) as well as Cu leached. These are shown in Table 8.1_1 and Figure 8.1_1. The statistical analysis indicates that the major elements and Cu leached approximate normal distributions except for Ag, which is positively skewed. This can be due to the low concentrations of Ag found in the dump. The minor elements Cd and As have normal distributions. Sulphur (S) is positively skewed. All the elements the statistical analysis was based on have a moderate to large co-efficient of variation, especially the minor elements. This is due to the way the dump was built, the operational fluctuations, and recovery improvement with time of the beneficiation process. The statistical analysis indicates that there is adequate understanding of the variation in the Tsumeb Dump to do a high level resource classification. Level plans and cross sections of the Cu distribution on a 5m and 1m elevation from surface is appended in Appendix A and for Cu solubility in Appendix B Tsumeb dump JTSU1 Page: 25 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

27 Table 8.1_1 Tsumeb Dump Descriptive Statistics (based on Borehole Data) Values presented in PPM Cu Pb Ag Zn As S Cd Cu leached Number Minimum Maximum Mean Median Std Dev Std Error Coeff Var { TC Table 8.1_1 Descriptive Statistics \fi } Tsumeb dump JTSU1 Page: 26 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

28 Figure 8.1_1 Tsumeb Dump Showing Borehole Locations Cu ppm As ppm Pb ppm Ag ppm { TC Figure 8.1_1 Histograms of distributions \fj } Tsumeb dump JTSU1 Page: 27 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211 S ppm Cu leached Cd ppm Zn ppm

29 9 BLOCK MODEL DEVELOPMENT 9.1 Introduction A three dimensional block model was constructed for the area of interest, covering all the data and interpreted dump volume. 9.2 Block Construction Parameters A sub-block model was used to construct the Tsumeb Dump. The parent block size (75mE x 75mN x 1.5mRL) was selected on the basis of the borehole spacing and the estimation method. For the nearest neighbour estimation method it is advisable to have not more than one sample per block. Sub-blocking to a 9.375mE x 9.375mN x.75mrl cell size was undertaken to allow the effective volume representation of the interpretation based on the wireframes (Table 9.2_1). Table 9.2_1 Tsumeb Dump Block Model Construction Parameters Minimum (m) Maximum (m) Extent (m) No of Blocks Parent/Sub Block Size(m) X /9.375 Y /9.375 Z /.75 { TC Table 9.2_1 Block Model Construction Parameters \fi } A block model for the grade estimation was generated using the modelled surfaces for the topography of the dump and the base of the dump, and filling the volume between the two surfaces. Tsumeb dump JTSU1 Page: 28 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

30 1 GRADE ESTIMATION 1.1 Introduction The resource estimation for the Tsumeb Dump was completed using a nearest neighbour estimation method. Based on the fact that the dump had been constructed using a single inlet which had been re-positioned over time, nearest neighbour estimation was deemed to provide the most accurate representation of the grade distribution within the dump. This method also has a proven track record in the estimation of old gold mine dumps in South Africa. Grade estimation was carried out using the Datamine software. 1.2 Nearest Neighbour Estimate A Nearest Neighbour (NN) estimate was completed for the entire dump area. A two pass estimation strategy was applied using progressively expanded and less restrictive searches to successive estimation passes. The search parameters were determined from the borehole spacing and block sizes and are shown in Table 1.2_1. Estimation Pass Table 1.2_1 Tsumeb Dump Nearest Neighbour estimation and search parameters Rotation Search Distance X Y Z X Y Z { TC Table 1.2_1 Nearest Neighbour estimation and search parameters \fi } As the estimation method was nearest neighbour- it was not necessary to limit the number of samples used as the estimation method simply uses the nearest sample value for each block. All relevant statistical information was recorded in order to validate and review the estimate. The recorded information included average distance to sample per block estimate. The model was checked visually and statistically to ensure the results could be confidently reported. The statistical analysis compared the block average for each estimated element to that of the raw borehole data (Table 1.2_2). In most cases the model grade compares very well to the original borehole average grade, except in the case of Bi, where there is a considerable discrepancy between the two averages. This is due to the amount of data available and the very low values reported for Bi Tsumeb dump JTSU1 Page: 29 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

31 { TC Table 1.2_2 Block and drillhole grade comparison \fi } Table 1.2_2 Tsumeb Dump Block and Borehole grade comparison Values presented in PPM Block Grade Borehole grade Difference % Ag 12., Cu Pb Zn As Bi Cd Hg S Cu leached Tsumeb dump JTSU1 Page: 3 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

32 11 RESOURCE REPORTING 11.1 Introduction Based on the assessment of borehole spacing, geological understanding and grade estimation, and the confidence in the analyses the mineral resource is classified as an Indicated Mineral Resource Criteria for Mineral Resource Classification The mineral resource classification has been based on the robustness of the various data sources available, confidence of the geological interpretation, variography and various estimation service variables (e.g.: distance to data, etc). The higher the confidence levels shown in the key criteria, the better the confidence in the resource and thus, the better the resource classification i.e. highest confidence would enable a resource classification of Measured, lowest confidence would enable a resource classification of Inferred. Confidence levels do vary slightly between man-made deposits such as dumps, and in situ mineral resources, however the classification mechanism remains the same; highest confidence Measured Resource. The resource estimate has been classified as an Measured Mineral Resource based on the criteria set out in Table 11.2_1. { TC Table 11.2_1 Confidence Levels of Key Criteria \fi } Table 11.2_1 Tsumeb Dump Confidence Levels of Key Criteria Items Discussion Confidence Drilling Techniques Auger drilling *high Logging Standard nomenclature logged in Excel spreadsheet moderate Borehole Sample Recovery Recovery +8% high Sub-sampling Techniques and Sample Sub-sampling techniques were not used Preparation N/A Quality of Assay Data Verification of Assaying Location of Sampling Points Most of the available data is of industry standard quality but there are still unresolved assay issues. Referee analysis completed with good correlation but there are still unresolved assay issues with Cu solubility, but does not effect the resource status of the Dump Survey of all collars. Vertical boreholes with typically small deviation. moderate Moderate - high Data Density and Distribution Boreholes spaced across the dump on a 75 m grid high Database Integrity Geological Interpretation Minor errors identified and rectified. Data scrutinized prior to inclusion in resource model database. Top of dump has been surveyed and bottom contacts for the dump were well defined based on drilling intersections high high moderate Compositing Composites were not used. N/A Statistics Low coefficient of variation for the variables modeled and relatively well defined statistical distributions. moderate Block size Block size selected based on drilling spacing and estimation method moderate Estimation and Modeling Techniques Nearest Neighbour *high Cut off Grades No cut-off applied N/A Mining Factors or Assumptions Total extraction is assumed moderate Metallurgical Factors or Assumptions None N/A * Only applicable to tailing dumps Tsumeb dump JTSU1 Page: 31 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211

33 11.3 Application of Cut-off Grade and other Modifying Factors The Tsumeb Dump will be reclaimed by hydraulic mining from the top of the dump to the bottom. This type of mining/dump reclamation makes the mining of selective areas difficult. Therefore, no cut-off grade was applied in the resource estimation as it is assumed that the total dump will be reclaimed and processed. No geological losses were incorporated in the Mineral Resource estimation as there should not be any structures present in the dump that will cause losses and a 1% reclamation of the dump is assumed Mineral Resource Estimate Tabulation The Mineral Resource is tabulated in Table 11.4_1 { TC Table 11.4_1 Measured Mineral Resource Estimate (August 211) \fi } Table 11.4_1 Tsumeb Dump Indicated Mineral Resource (August 211) Tonnage (Mt) Density *Cu (%) Pb (%) Ag ppm Zn (%) Measured *PPM/1 = % Tsumeb dump JTSU1 Page: 32 Resource Estimation of Tsumeb Tailings Dump, Namibia August 211