Endeavour Mining Corporation

Ity Mine, Côte d’Ivoire

(Latitude 6° 52’16” N, Longitude 8° 06’30” W)

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa

Lead Qualified Person: Kathleen Jane Body, Pr.Sci.Nat., Coffey Mining (South Africa) (Pty) Ltd
Mpfariseni Mudau, Pr.Sci.Nat., Coffey Mining (South Africa) (Pty) Ltd
Gordon Ian Cunningham, Pr Eng., Turnberry Projects (Pty) Ltd.
Rémi Bosc, Eur.Geol., Arethuse Geology Sarl
Patrick Perez, P.Eng., SGS Canada
Jason Baker, P.Eng., SNC-Lavalin Inc.
Daniel Gauthier, Eng., SNC-Lavalin Inc.
Pierre Larochelle, Eng., SNC-Lavalin Inc.
Henri P. Sangam, P.Eng., SNC-Lavalin Inc.

Effective Date: 31 July 2015

Report Date: 30 September 2015

Coffey Mining, a Division of Coffey Geotechnics Inc

20 Meteor Drive, Toronto, Ontario, M9W 1A4
 Coffey Mining South Africa (Pty) Ltd

Author(s):
Kathleen Body Principal Resource Geologist (Coffey) Pr.Sci.Nat, BS Arts&Sci (Geology), GDE
(Mining)
Mpfariseni Mudau Resource Geologist (Coffey) Pr.Sci.Nat , BSc (Hons), MSc Eng. (Mining)
Gordon Cunningham Principal Metallurgical Engineer (Turnberry) BE (Chemical), Pr Eng. FSAIMM
Rémi Bosc Principal Consultant (Arethuse) Ing. Geol, Eur. Geol.
Patrick Perez Senior Mining Engineer (SGS) M.Eng, P.Eng.
Jason Baker Senior Mining Engineer (SNC) BA Sc., P.Eng.
Daniel Gauthier Manager-Technology Group (SNC) BA Sc., MBA, Eng.
Pierre Larochelle Project Engineering Manager (SNC) BA Sc., Eng.
Henri P. Sangam Director Geotechnical Engineering (SNC) BEng, B.A.Sc., M.A.Sc., Ph.D., P.Eng.

Date: 30 September 2015

Project Number: JSMI02

Document Review and Sign Off

This is a scanned signature held on file by Coffey. This is a scanned signature held on file by Coffey.
The person and signatory consents to its use only The person and signatory consents to its use only
for the purpose of this document. for the purpose of this document.

Kathleen Body Ken Lomberg

Lead Qualified Person Senior Principal
Peer Review

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 1

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Date and Signature Page

This report entitled “Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa (Latitude
6° 52”16′ N, Longitude 8° 06”30′ W” with an effective date of 31 July, 2015 was prepared on behalf of
Endeavour Mining Corporation by Kathleen Body, Mpfariseni Mudau, Gordon Cunningham, Remi Bosc,
Patrick Perez, Jason Baker, Daniel Gauthier, Pierre Larochelle and Henri P Sangam signed:

Dated at Johannesburg, this 30th day of September, 2015

This is a scanned signature held on file by Coffey.

The person and signatory consents to its use only for
the purpose of this document.

Kathleen Body, (Pr.Sci.Nat.)

Resource Geology Manager
This is a scanned signature held on file by Coffey. The
person and signatory consents to its use only for the
purpose of this document.

Mpfariseni Mudau (Pr Sci Nat.)

Resource Geologist
This is a scanned signature held on file by Coffey. The
person and signatory consents to its use only for the
purpose of this document.

Gordon Cunningham (Pr Eng, FSAIMM)

Principal Metallurgical Engineer

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 1

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 1

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 th
Dated at Montréal, this 30 day of September, 2015

This is a scanned signature held on file by Coffey. The

person and signatory consents to its use only for the
purpose of this document.

Patrick Perez (M.Eng, P. Eng.)

Senior Mining Engineer (SGS)
 Coffey Mining South Africa (Pty) Ltd

Table of Contents

1 Summary .................................................................................................................................... 1
1.1 Introduction ..................................................................................................................... 1
1.2 History............................................................................................................................. 3
1.3 Geology .......................................................................................................................... 4
1.4 Exploration ...................................................................................................................... 4
1.5 Data ................................................................................................................................ 4
1.6 Metallurgy and Heap Leach Process .............................................................................. 6
1.7 Metallurgy and CIL Process ............................................................................................ 6
1.8 Mineral Resources .......................................................................................................... 7
1.9 Mineral Reserves (Heap Leach)...................................................................................... 9
1.10 Mineral Reserves (Carbon-in-Leach) ............................................................................ 10
1.11 Mining ........................................................................................................................... 11
1.12 Infrastructure ................................................................................................................. 11
1.13 Environmental ............................................................................................................... 12
1.14 Capital Costs................................................................................................................. 13
1.15 Operating Costs ............................................................................................................ 13
1.16 Economic Analysis ........................................................................................................ 14
1.17 Conclusions ..................................................................................................................15
1.18 Recommendations ........................................................................................................ 16
2 Introduction.............................................................................................................................. 18
2.1 Scope of the Report ...................................................................................................... 18
2.2 Principal Sources of Information ................................................................................... 19
2.3 Site Visits ...................................................................................................................... 19
2.4 Qualifications and Experience ....................................................................................... 21
3 Reliance on Other Experts ...................................................................................................... 22
4 Property Description and Location ........................................................................................ 23
4.1 Location ........................................................................................................................ 23
4.2 Mineral Rights ............................................................................................................... 26
4.3 Ownership ..................................................................................................................... 27
4.4 Royalties ....................................................................................................................... 27
4.5 Risk Factors ..................................................................................................................28
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography ....................... 29
5.1 Climate .......................................................................................................................... 29
5.2 Vegetation and Soils ..................................................................................................... 29
5.3 Topography ...................................................................................................................29
5.4 Access and Infrastructure ............................................................................................. 30
5.5 Security ......................................................................................................................... 30

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page i

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

5.6 Surface rights ................................................................................................................ 31

6 History ...................................................................................................................................... 32
6.1 General History of the Property ..................................................................................... 32
6.2 History: Aires de Lixiviation (Heap Leach Pads)............................................................ 34
6.3 History: Teckraie ........................................................................................................... 34
6.4 History: Daapleu ........................................................................................................... 35
6.5 History: ZiaNE ............................................................................................................... 35
6.6 History: Verse Ouest Rock Dump ................................................................................. 35
6.7 History: Mont Ity ............................................................................................................35
6.8 History: Walter ..............................................................................................................36
6.9 History: Gbeitouo .......................................................................................................... 36
6.10 Historic Gold Production ............................................................................................... 38
7 Geological Setting and Mineralization ................................................................................... 39
7.1 Regional Geology ......................................................................................................... 39
7.2 Local Geology ............................................................................................................... 42
7.2.1 Laterites................................................................................................................. 43
7.2.2 Saprolites (Argiles) ................................................................................................ 43
7.2.3 Rock Dumps .......................................................................................................... 44
7.2.4 Daapleu Rhyolite (Daaplite, IFMD)........................................................................ 44
7.2.5 MetavolcanoSediments ......................................................................................... 44
7.2.6 Other Lithologies ................................................................................................... 44
7.3 Deposit Geometry ......................................................................................................... 45
8 Deposit Types .......................................................................................................................... 46
8.1 Introduction ................................................................................................................... 46
8.2 Skarn Deposits.............................................................................................................. 46
8.3 Shear Zone Deposits .................................................................................................... 49
9 Exploration ............................................................................................................................... 50
10 Drilling ...................................................................................................................................... 51
10.1 Drilling Methods ............................................................................................................ 51
10.2 Other Sources of Data Used for Resource Definition .................................................... 54
10.3 Surveying ...................................................................................................................... 54
10.3.1 Borehole Collars .................................................................................................... 54
10.3.2 Downhole Surveying ............................................................................................. 54
10.3.3 Surface Topography .............................................................................................. 55
10.4 Qualified Person’s Comments (Mudau)......................................................................... 55
10.5 Qualified Person’s Comments (Bosc)............................................................................ 55
11 Sample Preparation, Analyses and Security ......................................................................... 56
11.1 Sampling ....................................................................................................................... 56
11.1.1 Diamond Core Samples ........................................................................................ 56

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page ii

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

11.1.2 RC Samples .......................................................................................................... 56

11.1.3 Sample Preparation............................................................................................... 57
11.2 Assaying ....................................................................................................................... 58
11.3 Other Samples - Verification Assays ............................................................................. 58
11.4 Bulk Densities ............................................................................................................... 58
11.4.1 Methodologies ....................................................................................................... 58
11.4.2 Deposit Densities .................................................................................................. 59
11.4.3 Qualified Person’s Comments (Mudau) ................................................................ 59
11.5 Analytical Quality Control (QA/QC) Procedures and Data ............................................. 60
11.5.1 Introduction............................................................................................................ 60
11.5.2 Quality Control Assessment .................................................................................. 61
11.5.3 Qualified Person’s Comments (Mudau) ................................................................ 63
11.5.4 Quality Control for Walter (Bosc)........................................................................... 64
11.5.5 Quality Control for Gbeitouo (Bosc) ...................................................................... 65
11.6 Data Management ........................................................................................................ 65
11.6.1 Database ............................................................................................................... 65
11.6.2 Borehole Logging .................................................................................................. 65
11.6.3 Sampling Records ................................................................................................. 65
11.6.4 Sample Storage..................................................................................................... 66

12 Data Verification ...................................................................................................................... 67

12.1 Site Visit ........................................................................................................................ 67
12.2 Historical Data Validation .............................................................................................. 67
12.3 Off-Site Data Validation................................................................................................. 68
12.3.1 Aires ...................................................................................................................... 68
12.3.2 Verse Ouest .......................................................................................................... 68
12.3.3 Teckraie................................................................................................................. 69
12.3.4 Daapleu ................................................................................................................. 69
12.3.5 ZiaNE .................................................................................................................... 70
12.3.6 Mont Ity.................................................................................................................. 70
12.3.7 Walter .................................................................................................................... 70
12.3.8 Gbeitouo ................................................................................................................ 71
12.4 Qualified Persons Opinion (Mudau) Aires, Teckraie, Verse Ouest, Daapleu,
ZiaNE and Mt Ity ........................................................................................................... 72
12.5 Qualified Persons Opinion (Bosc) Walter and Gbeitouo ................................................ 72
13 Mineral Processing and Metallurgical Testing ...................................................................... 73
13.1 Heap Leach Operations ................................................................................................ 73
13.2 Carbon-in-Leach (CIL) Operations ................................................................................ 73
13.2.1 Test Work Program ............................................................................................... 74
13.2.2 Qualified Person’s Comments ............................................................................... 74
13.2.3 Discussion and Process Development .................................................................. 75
13.2.4 Additional Metallurgical and Geochemical Test Work ........................................... 77
13.2.5 Status of Testwork................................................................................................. 77

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page iii

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14 Mineral Resource Estimates ................................................................................................... 78

14.1 Aires de Lixiviation (Old Heap Leach Pads) .................................................................. 78
14.1.1 Introduction............................................................................................................ 78
14.1.2 Data Validation ...................................................................................................... 79
14.1.3 Geometry and Modelling ....................................................................................... 79
14.1.4 Mineralization Interpretation .................................................................................. 79
14.1.5 Compositing .......................................................................................................... 79
14.1.6 Statistical Analysis................................................................................................. 80
14.1.7 High Grade Capping.............................................................................................. 80
14.1.8 Bulk Densities........................................................................................................ 81
14.1.9 Variography ........................................................................................................... 81
14.1.10 Block Modelling ..................................................................................................... 81
14.1.11 Grade Estimation................................................................................................... 81
14.1.12 Estimation Parameters .......................................................................................... 82
14.1.13 Model Validation .................................................................................................... 82
14.1.14 Depletion ............................................................................................................... 83
14.1.15 Mineral Resource Classification ............................................................................ 83
14.1.16 Classification and Grade Models........................................................................... 84
14.1.17 Summary of Mineral Resources ............................................................................ 86
14.2 Teckraie ........................................................................................................................ 86
14.2.1 Introduction............................................................................................................ 86
14.2.2 Data validation....................................................................................................... 86
14.2.3 Geometry and Modelling ....................................................................................... 86
14.2.4 Mineralization Interpretation .................................................................................. 87
14.2.5 Compositing .......................................................................................................... 87
14.2.6 Statistical Analysis................................................................................................. 87
14.2.7 High Grade Capping.............................................................................................. 87
14.2.8 Bulk Densities........................................................................................................ 87
14.2.9 Variography ........................................................................................................... 88
14.2.10 Block Modelling ..................................................................................................... 88
14.2.11 Grade Estimation................................................................................................... 88
14.2.12 Estimation Parameters .......................................................................................... 89
14.2.13 Model Validation .................................................................................................... 89
14.2.14 Depletion ............................................................................................................... 89
14.2.15 Mineral Resource Classification ............................................................................ 90
14.2.17 Summary of Mineral Resources ............................................................................ 93
14.3 Verse Ouest ..................................................................................................................93
14.3.1 Introduction............................................................................................................ 93
14.3.2 Data validation....................................................................................................... 93
14.3.3 Geometry and Modelling ....................................................................................... 93
14.3.4 Mineralization Interpretation .................................................................................. 94
14.3.5 Compositing .......................................................................................................... 94

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page iv

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.3.6 Statistical Analysis................................................................................................. 94

14.3.7 Outlier Analysis ..................................................................................................... 94
14.3.8 Bulk Densities........................................................................................................ 94
14.3.9 Variography ........................................................................................................... 95
14.3.10 Block Modelling ..................................................................................................... 95
14.3.11 Grade Estimation................................................................................................... 95
14.3.12 Estimation Parameters .......................................................................................... 95
14.3.13 Model Validation .................................................................................................... 96
14.3.14 Depletion and Geological Loss.............................................................................. 97
14.3.15 Mineral Resource Classification ............................................................................ 97
14.3.16 Classification and Grade Models........................................................................... 98
14.3.17 Summary of Mineral Resources ............................................................................ 99
14.3.18 Comparison with Historical estimates ................................................................... 99
14.4 Daapleu ...................................................................................................................... 100
14.4.1 Introduction.......................................................................................................... 100
14.4.2 Data Validation .................................................................................................... 100
14.4.3 Geological Interpretation and Modelling .............................................................. 100
14.4.4 Mineralization Interpretation ................................................................................ 101
14.4.5 Compositing ........................................................................................................ 106
14.4.6 Statistical Analysis............................................................................................... 106
14.4.7 High Grade Capping............................................................................................ 106
14.4.8 Bulk Densities...................................................................................................... 106
14.4.9 Variography ......................................................................................................... 107
14.4.10 Block Modelling ................................................................................................... 108
14.4.11 Grade Estimation................................................................................................. 109
14.4.12 Estimation Parameters ........................................................................................ 109
14.4.13 Model Validation .................................................................................................. 109
14.4.14 Depletion and Geological Losses ........................................................................ 115
14.4.15 Mineral Resource Classification .......................................................................... 115
14.4.16 Classification and Grade Models......................................................................... 116
14.4.17 Summary of Mineral Resources .......................................................................... 120
14.4.18 Comparison with Historical Estimates ................................................................. 121
14.5 ZiaNE .......................................................................................................................... 125
14.5.1 Introduction.......................................................................................................... 125
14.5.2 Data Validation .................................................................................................... 125
14.5.3 Geological Interpretation and Modelling .............................................................. 125
14.5.4 Mineralization Interpretation ................................................................................ 128
14.5.5 Compositing ........................................................................................................ 131
14.5.6 Statistical Analysis............................................................................................... 131
14.5.7 High Grade Capping............................................................................................ 131
14.5.8 Bulk Densities...................................................................................................... 132
14.5.9 Variography ......................................................................................................... 132
14.5.10 Block Modelling ................................................................................................... 132

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page v

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.5.11 Grade Estimation................................................................................................. 133

14.5.12 Estimation Parameters ........................................................................................ 133
14.5.13 Model Validation .................................................................................................. 133
14.5.14 Depletion ............................................................................................................. 134
14.5.15 Mineral Resource Classification .......................................................................... 134
14.5.16 Classification and Grade Models......................................................................... 135
14.5.17 Summary of Mineral Resources .......................................................................... 138
14.6 Mont Ity ....................................................................................................................... 139
14.6.1 Introduction.......................................................................................................... 139
14.6.2 Data Validation .................................................................................................... 139
14.6.3 Geological Interpretation and Modelling .............................................................. 139
14.6.4 Mineralization Interpretation ................................................................................ 139
14.6.5 Compositing ........................................................................................................ 141
14.6.6 Statistical Analysis............................................................................................... 141
14.6.7 Outlier Analysis ................................................................................................... 141
14.6.8 Bulk Densities...................................................................................................... 141
14.6.9 Variography ......................................................................................................... 142
14.6.10 Block Modelling ................................................................................................... 143
14.6.11 Grade Estimation................................................................................................. 143
14.6.12 Estimation Parameters ........................................................................................ 143
14.6.13 Model Validation .................................................................................................. 144
14.6.14 Depletion ............................................................................................................. 144
14.6.15 Mineral Resource Classification .......................................................................... 144
14.6.16 Classification Models........................................................................................... 147
14.6.17 Summary of Mineral Resources .......................................................................... 149
14.6.18 Note Rounding has been applied ........................................................................ 149
14.6.19 Comparison with Historical Estimates ................................................................. 149
14.7 Walter ......................................................................................................................... 150
14.7.1 Introduction.......................................................................................................... 150
14.7.2 Data Validation .................................................................................................... 150
14.7.3 Geological Interpretation and Modelling .............................................................. 150
14.7.4 Mineralization Interpretation ................................................................................ 150
14.7.5 Compositing ........................................................................................................ 153
14.7.6 Statistical Analysis............................................................................................... 153
14.7.7 Outlier Analysis ................................................................................................... 154
14.7.8 Bulk Densities...................................................................................................... 154
14.7.9 Variography ......................................................................................................... 154
14.7.10 Block Modelling ................................................................................................... 154
14.7.11 Grade Estimation................................................................................................. 155
14.7.12 Estimation Parameters ........................................................................................ 155
14.7.13 Model Validation .................................................................................................. 155
14.7.14 Depletion ............................................................................................................. 155
14.7.15 Mineral Resource Classification .......................................................................... 157

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page vi

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.7.16 Classification Models........................................................................................... 158

14.7.17 Summary of Mineral Resources .......................................................................... 162
14.7.18 Comparison with Historical Estimates ................................................................. 162
14.8 Gbeitouo ..................................................................................................................... 162
14.8.1 Introduction.......................................................................................................... 162
14.8.2 Data Validation .................................................................................................... 162
14.8.3 Geological Interpretation and Modelling .............................................................. 163
14.8.4 Mineralization Interpretation ................................................................................ 163
14.8.5 Compositing ........................................................................................................ 164
14.8.6 Statistical Analysis............................................................................................... 164
14.8.7 Outlier Analysis ................................................................................................... 164
14.8.8 Bulk Densities...................................................................................................... 167
14.8.9 Variography ......................................................................................................... 167
14.8.10 Block Modelling ................................................................................................... 167
14.8.11 Grade Estimation................................................................................................. 168
14.8.12 Estimation Parameters ........................................................................................ 168
14.8.13 Model Validation .................................................................................................. 169
14.8.14 Depletion ............................................................................................................. 169
14.8.15 Mineral Resource Classification .......................................................................... 169
14.8.16 Classification Models........................................................................................... 170
14.8.17 Summary of Mineral Resources .......................................................................... 172
14.8.18 Comparison with Historical Estimates ................................................................. 172
14.9 Summary of Mineral Resources .................................................................................. 173
15 Mineral Reserve Estimates ................................................................................................... 174
15.1 Mining of Heap Leach Operations ............................................................................... 174
15.1.1 Mining Recovery and Dilution.............................................................................. 174
15.1.2 Metallurgical Factors and Assumptions .............................................................. 175
15.1.3 Cut-Off Grade Parameters .................................................................................. 176
15.1.4 Pit Optimization Parameters................................................................................ 177
15.1.5 Mineral Reserves ................................................................................................ 178
15.2 CIL Operations ............................................................................................................ 179
15.2.1 Mining Recovery and Dilution.............................................................................. 179
15.2.2 Metallurgical Factors and Assumptions .............................................................. 181
15.2.3 Cut-off grade selection ........................................................................................ 182
15.2.4 Pit Optimization Parameters................................................................................ 183

16 Mining Methods ..................................................................................................................... 184

16.1 Hydrogeological Work ................................................................................................. 184
16.2 Mine Geotechnical Work ............................................................................................. 185
16.3 Heap Leach Operations .............................................................................................. 189
16.3.1 Introduction.......................................................................................................... 189
16.3.2 Geotechnical Engineering Assumptions ............................................................. 189
16.3.3 Pit Designs Parameters....................................................................................... 189

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page vii

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

16.3.4 Pit Designs .......................................................................................................... 190

16.4 CIL operations............................................................................................................. 193
16.4.1 Pit Optimization Parameters................................................................................ 193
16.4.2 Geohydrology and Geotechnical Engineering Assumptions ............................... 194
16.4.3 Pit Designs Parameters....................................................................................... 194
16.4.4 Pit designs ........................................................................................................... 195
16.4.5 CIL Mine Schedule .............................................................................................. 197

17 Recovery Methods ................................................................................................................. 198

17.1 Heap Leach Operations .............................................................................................. 198
17.1.1 Utilities Requirements ......................................................................................... 200
17.1.2 Reagents ............................................................................................................. 200
17.1.3 Maintenance ........................................................................................................ 200
17.1.4 Future Operations ............................................................................................... 200
17.1.5 Qualified Person’s Comments ............................................................................. 201
17.1.6 Analytical Facilities .............................................................................................. 201
17.1.7 Qualified Person’s Comments ............................................................................. 201
17.2 CIL operations............................................................................................................. 202
17.2.1 Primary Crushing................................................................................................. 204
17.2.2 Grinding ............................................................................................................... 204
17.2.3 Pre-Leach Thickening ......................................................................................... 205
17.2.4 Leach and Carbon-In-Leach ............................................................................... 205
17.2.5 Detoxification ....................................................................................................... 205
17.2.6 Carbon Acid Wash and Elution ........................................................................... 206
17.2.7 Electrowinning and Smelting ............................................................................... 206
17.2.8 Carbon Regeneration .......................................................................................... 206
17.2.9 Reagents ............................................................................................................. 207
17.2.10 Plant Services ..................................................................................................... 207

18 Project Infrastructure ............................................................................................................ 208

18.1 Current Infrastructures ................................................................................................ 208
18.1.1 Mining Facilities ................................................................................................... 208
18.1.2 Process Plant ...................................................................................................... 208
18.1.3 Power .................................................................................................................. 208
18.1.4 Site Access.......................................................................................................... 208
18.1.5 Security ............................................................................................................... 208
18.1.6 Accommodation................................................................................................... 209
18.1.7 Transport and Logistics ....................................................................................... 209
18.1.8 Communication ................................................................................................... 209
18.2 Site Access and Infrastructure for the CIL Project ....................................................... 209
18.3 Tailing Storage Facility for the CIL Project .................................................................. 211
18.4 Water Management for the CIL Project ....................................................................... 211
18.4.1 Cavally River ....................................................................................................... 211
18.4.2 Hydrogeology ...................................................................................................... 213

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page viii

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

18.4.3 Sitewide Water Balance ...................................................................................... 214

18.4.4 Geochemistry ...................................................................................................... 214

19 Market Studies and Contracts .............................................................................................. 215

20 Environmental Studies, Permitting and Social or Community Impact .............................. 217
20.1 Overview ..................................................................................................................... 217
20.2 Project Description ...................................................................................................... 218
20.3 Summary of Key Environmental and Social Issues (PFS) ........................................... 218
20.4 Stakeholder’s Identification ......................................................................................... 220
20.5 Environmental and Social Scope of Work for the DFS ................................................ 221
20.6 Environmental Legal Framework................................................................................. 222
20.7 Environmental Reports................................................................................................ 222
20.8 Environmental Compliance ......................................................................................... 224
21 Capital and Operating Costs ................................................................................................ 225
21.1 Heap Leach Operations .............................................................................................. 225
21.1.1 Capital Costs ....................................................................................................... 225
21.1.2 Operating Costs .................................................................................................. 225
21.2 CIL Operations ............................................................................................................ 225
21.2.1 Capital Costs (CAPEX) ....................................................................................... 225
21.2.2 Operating Costs (OPEX) ..................................................................................... 228

22 Economic Analysis ................................................................................................................ 232

22.1 Gold price and Exchange rates ................................................................................... 232
22.2 Royalties and taxes ..................................................................................................... 232
22.3 Inflation ....................................................................................................................... 232
22.4 Operating and Capital Costs ....................................................................................... 232
22.5 Sustaining Capital ....................................................................................................... 233
22.5.1 Heap Leach Operation ........................................................................................ 233
22.5.2 CIL Operation ...................................................................................................... 233
22.6 Working capital ........................................................................................................... 233
22.6.1 Heap Leach Operation ........................................................................................ 233
22.6.2 CIL Operation ...................................................................................................... 233
22.7 Depreciation ................................................................................................................ 233
22.7.1 Heap Leach Operation ........................................................................................ 233
22.7.2 CIL Operation ...................................................................................................... 233
22.8 Closure Costs and Salvage Value ............................................................................... 233
22.9 Production Profile and Cash Flow Analysis ................................................................. 234
22.9.1 Heap Leach Operation ........................................................................................ 234
22.9.2 CIL Operation ...................................................................................................... 235
22.10 Conclusion .................................................................................................................. 238
23 Adjacent Properties ............................................................................................................... 239
24 Other Relevant Data and Information................................................................................... 239

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page ix

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

25 Interpretation and Conclusions ............................................................................................ 240

26 Recommendations ................................................................................................................ 243
27 References ............................................................................................................................. 246

List of Tables

Table 1.5_1 – Drilling Summary 4

Table 1.8_1 – Mineral Resource 31 July 2015 9

Table 1.9_1 – Mineral Reserves for Heap Leach Operation 31 July 2015 10

Table 1.10_1 – Mineral Reserves for Carbon-in-Leach Operation 31 July 2015 11

Table 1.16_1 – Basis and Assumptions of the Economic Model for the HL and CIL Project 15

Table 2.4_1 – List of Qualified Persons and Responsibilities 21

Table 4.2_1 – Coordinates Mining Permit PE26 26

Table 4.2_2 – Coordinates PR61 27

Table 4.4_1 – Royalty Rates Applicable Under The Ivorian Mining Code 28

Table 6.1_1 – Exploration Before 1995 33

Table 6.1_2 – Ity: Historical Mineral Resources 2011 34

Table 6.4_1 – Daapleu: Exploration after 1995 35

Table 6.8_1 – Walter: Exploration 36

Table 6.9_1 – Gbeitouo: Exploration after 1995 37

Table 6.10_1 – Historic Gold Production Ity Mine 38

Table 7.3_1 – Approximate Dimensions of the Deposits 45

Table 10.1_1 – Drilling Summary 53

Table 11.5.2_1 – Summary of Certified Reference Standards Used 62

Table 11.5.2_2 – Summary of the Number of Quality Control Samples 62

Table 11.5.2_3 – Summary of the Number of Quality Control Samples 63

Table 13.2.3_1 – Leach Summary Results 76

Table 14_1 – Pit Shell Input Parameters 78

Table 14.1.6_1 – Aires: Raw Statistics per Domain (Au g/t) 80

Table 14.1.7_1 – Aires: Summary of High Grade (Au) Cut Statistics 80

Table 14.1.8_1 – Aires: Bulk Density 81

Table 14.1.10_1 – Aires: Block Model Construction Parameters 81

Table 14.1.12_1 – Aires: Search Parameters 82

Table 14.1.15_1 – Aires: Confidence Levels of Key Criteria 84

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page x

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.1.17_1 – Aires: Mineral Resource July 2015 (Cut off 0.0g/t) 86

Table 14.2.6_1 – Techraie Composite Statistics per Domain (Aug/t) 87

Table 14.2.10_1 – Techraie Block Model Construction Parameters 88

Table 14.2.12_1 – Teckraie Search Parameters 89

Table 14.2.15 _1 – Teckraie: Confidence Levels of Key Criteria 91

Table 14.2.17_1 – Techraie Mineral Resource (Cut off 0.0g/t) 93

Table 14.3.6_1 – Verse Ouest: Composite Statistics per Mineralized Zones (Au g/t) 94

Table14.3.8_1 – Verse Ouest: Hydrostatic Bulk Density 95

Table 14.3.10_1 – Verse Ouest: Block Model Construction Parameters 95

Table 14.3.12_1 – Verse Ouest: Search Parameters 96

Table 14.3.15_1 – Verse Ouest: Confidence Levels of Key Criteria 98

Table 14.3.17_1 – Verse Ouest: Mineral Resource (Cut off 0.0g/t) 99

Table 14.4.3_1 – Daapleu: Geological Modelling Search Parameters 101

Table 14.4.6_1 – Daapleu: Composite Statistics (Au g/t) per Domain 106

Table 14.4.8_1 – Daapleu: Hydrostatic Bulk Density 107

Table 14.4.9_1 – Daapleu: Experimental Semi-Variogram Parameters 108

Table 14.4.9_2 – Daapleu: Variography Parameters 108

Table 14.4.10_1 – Daapleu: Block Model Construction Parameters 108

Table 14.4.11_1 – Daapleu: Search Parameters 109

Table 14.4.15_1 – Daapleu: Confidence Levels of Key Criteria 116

Table 14.4.17_1 – Daapleu: Mineral Resource (Cut off 0.5g/t) 120

Table 14.5.4_1 – ZiaNE: Geological Modelling Search Parameters 128

Table 14.5.6_1 – ZiaNE: Statistics within the Mineralized Zones 131

Table 14.5.7_1 – ZiaNE: Summary of Cut Statistics 132

Table 14.5.8_1– ZiaNE: Hydrostatic Bulk Density 132

Table 14.5.10_1 – ZiaNE: Block Model Construction Parameters 133

Table 14.5.12_1 – ZiaNE: Search Parameters 133

Table 14.5.15_1 – ZiaNE: Confidence Levels of Key Criteria 135

Table 14.5.17_1 – ZiaNE: Mineral Resource (Cut off 0.5g/t) 138

Table 14.5.17_2 – ZiaNE: Carbonate Mineral Resource (Cut off 0.5g/t) 138

Table 14.5.17_3 – ZiaNE: Granodiorite Mineral Resource (Cut off 0.5g/t) 138

Table 14.6.6_1 – Mont Ity: Statistics per Domain (Au g/t) 141

Table 14.6.8_1 – Mont Ity: Hydrostatic Bulk Density 142

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page xi

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.6.9_1 – Mont Ity: Experimental Semi-Variogram Parameters 142

Table 14.6.9_2 – Mont Ity: Variography Parameters 142

Table 14.6.10_1 – Mont Ity: Block Model Construction Parameters 143

Table 14.6.12_1 – Mont Ity: Search Parameters 143

Table 14.6.15_1 – Mont Ity: Confidence Levels of Key Criteria 147

Table 14.6.17_1 – Mont Ity: Mineral Resource (Cut off 0.5g/t) 149

Table 14.7.6_1 – Walter: Statistics per Domain (Au g/t) 153

Table 14.7.8_1 – Mont Ity: Hydrostatic Bulk Density 154

Table 14.7.10_1 – Walter: Block Model Construction Parameters 155

Table 14.6.12_1 – Walter: Estimation and Search Parameters 156

Table 14.7.15_1 – Walter: Confidence Levels of Key Criteria 158

Table 14.7.17_1 – Walter: Mineral Resource (Cut off 0.5g/t) 162

Table 14.8.6_1 – Gbeitouo: Raw and Composite Statistics per Domain 165

Table 14.8.9_1 – Gbeitouo: Variography Modelled Parameters 167

Table 14.8.10_1 – Gbeitouo: Block Model Construction Parameters 167

Table 14.8.12_1 – Gbeitouo: Estimation Parameters 168

Table 14.8.15_1 – Gbeitouo: Confidence Levels of Key Criteria 170

Table 14.8.17_1 – Gbeitouo: Mineral Resource (Cut off 0.8g/t) 172

Table 14.9_1 – Mineral Resource as of the Effective Date of 31 July 2015 173

Table 15.1.1_1 – Call Factors Calculation for Mont Ity Deposit 174

Table 15.1.1_2 – Mining Parameters used for the Mineral Reserve Estimate of the Heap Leach Deposits 175

Table 15.1.2_1 – Processing and G&A Costs by Deposits for the Heap Leach 176

Table 15.1.3_1 – Cut-off Grade Calculation for the Heap Leach Operation 176

Table 15.1.4_1 – Technical and Economic Parameters used for the Whittle Optimisations 177

Table 15.1.5_1 – Mineral Reserves for Heap Leach Operation as at 31 July 2015 178

Table 15.2_1 – Mineral Reserves for Carbon-in-Leach Operation 179

Table 15.2.1_1 – CIL Operations: Dilution and Recovery 180

Table 15.2.1_2 – Effective Dilution from Reblocking Process 180

Table 15.2.2_1 – Process Recovery 182

Table 15.2.3_1 – Cut-off Grade Calculation for the CIL Operation 183

Table 15.2.4_1 – Technical and Economic Parameters used for the Whittle Optimisations 183

Table 16.2_1 – Geotechnical Parameters 186

Table 16.4.5_1 – Mine Schedule per Year 197

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page xii

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 21.1.2_1 – Summary of Unit Operating Costs 225

Table 21.2.1_1 – Capex Breakdown Summary 227

Table 21.2.2_1 - Mining Costs CIL 228

Table 21.2.2_2 – Summary of unit operating costs 231

Table 22.9.1_1 – Heap Leach Mine Schedule 234

Table 22.9.1_2 – Heap Leach Processing Schedule 234

Table 22.9.1_3 – Heap Leach Business Plan 235

Table 22.9.1_4 – Heap Leach Project Economics 235

Table 22.9.2_1 – CIL Mine Schedule 236

Table 22.9.2_2 – CIL Processing Schedule 236

Table 22.9.2_3 – CIL Business Plan 237

Table 22.9.2_4 – CIL Project Economics 238

List of Figures

Figure 1.1_1 – Location of the SMI Properties, Côte d’Ivoire 2

Figure 1.1_2 – Permit Areas SMI, Côte d’Ivoire 3

Figure 4.1_1 – Location of the SMI Properties, Côte d’Ivoire 23

Figure 4.1_2 – Permit Areas SMI, Côte d’Ivoire 24

Figure 4.1_3 – SMI Operations and Gold Projects, Côte d’Ivoire 25

Figure 5.3_1 – Topography of the Côte D’Ivoire 30

Figure 7.1_1 – Simplified Geology of the West African Craton 39

Figure 7.1_2 – Simplified Geological Map of the Toulépleu-Ity Klippe 42

Figure 8.2_1 – Schematic Geological Section of the Mont Ity deposit. 47

Figure 8.2_2 – Interpreted Pre-alteration Stage of the Ity Deposit 48

Figure 8.2_3 – Schematic Diagram of the First Phase of Alteration 49

Figure 10.1_1 – General Procedures RC and AirCore 52

Figure 10.1_2 – General Procedures Diamond Drilling 52

Figure 11.1.2_1 – Diagram of the RC Splitting Sequence 56

Figure 12.1_1 – Photograph of the Comparison of RC and Diamond Core Twins 67

Figure12.3.3_1 – Teckraie: Twin Borehole Drilling Comparison 69

Figure 12.3.4_1 – Daapleu: Twin Borehole Drilling Comparison 70

Figure14.1.16_1 – Aires: Mineral Resource Classification 85

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page xiii

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.2.16_1 – Teckraie: Mineral Resource Classification Cross Sections 92

Figure 14.3.13_1 – Verse Ouest: Section through the model and borehole fence 97

Figure 14.3.16_1– Verse Ouest: Mineral Resource Classification 99

Figure 14.4.3_1 – Daapleu: A section of the Geological Model and Lithological Contact 103

Figure 14.4.4_1 – Daapleu: Domains Plan View 104

Figure 14.4.4_2 – Daapleu: North Domain Cross Section DA14-098– Gold and Lithology 105

Figure14.4.13_1 – Daapleu: Boreholes and Sections Plan Map 111

Figure14.4.13_2 – Daapleu: Section C-C 112

Figure14.4.13_3 – Daapleu: Section E-E 113

Figure14.4.13_4 – Daapleu: Section F_F’ 114

Figure14.4.16_1 – Daapleu: Mineral Resource Classification Cross Section G-G 118

Figure14.4.16_2 – Daapleu: Mineral Resource Classification Cross Section H-H 119

Figure 14.4.18_1 – Daapleu: 2014 Mineral Resource compared to 2015 boreholes DA15-171 to DA15-165 122

Figure 14.4.18_2 – Daapleu: 2014 Mineral Resource compared to 2015 boreholes DA15-179 to DA15-141 123

Figure 14.4.18_3 – Daapleu: 2014 Mineral Resource compared to 2015 boreholes DA15-142 to DA15-183 124

Figure 14.5.3_1 – ZiaNE: Section showing the Original Geological Model 127

Figure 14.5.4_1 – ZiaNE: Borehole plan showing locations of Sections 129

Figure 14.5.4_2 – ZiaNE: Section A-A’ 2015 showing the boreholes and the mineralization 130

Figure 14.5.16_1 – ZiaNE: Cross Sectional View A-A Showing Mineral Resource Classification Looking North East
July 2015 136

Figure 14.5.16_2 – ZiaNE: Cross Sectional View A-A Showing Grade Distribution Looking North East July 2015137

Figure 14.6.4_1 – Mont Ity: Drawn Section 1 140

Figure 14.6.15_1 – Mont Ity: Drilling Plan view with Sections Indicated 145

Figure 14.6.13_2 – Mont Ity: Section C-C’ Through the Model and Borehole Fence 146

Figure 14.6.16_1 – Mont Ity: Section A-A’ Through the Model and Borehole Fence 148

Figure 14.7.4_1 – Walter: Geological Interpretation of Veins Digitized Section 8 towards NW showing Mineralised
Solids. 151

Figure 14.7.4_2 – Walter: Geological Interpretation of Veins. Digitized Section 5 towards NW showing the
Geological Model 152

Figure 14.7.16_1 – Walter: Drilling Plan view with Sections Indicated 159

Figure 14.7.16_2 – Walter: Section C-C’ Grade Distribution Through the Model and Borehole Fence 160

Figure 14.7.16_3 – Walter: Mineral Resource Classification. Section C-C’ Through the Model and Borehole Fence
161

Figure 14.8.4_1 – Gbeitouo: Schematic Section of the Deposit. 163

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page xiv

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.8.6_1 – Gbeitouo: Gold grades histograms for the reduced and oxidised domains. 164

Figure 14.8.15_1 – Gbeitouo: Drilling grid and Section Showing Grade Distribution 171

Figure 14.8.16_2 – Mont Ity: Section A-A’ Through the Model and Borehole Fence Showing Model Classification
172

Figure 16.3.4_1 – Plan View Showing Mont Ity Pit – Heap Leach Scenario 190

Figure 16.3.4_2 – Walter Heap Leach Pit in Plan View and Oblique View Showing Mineralized Blocks 191

Figure 16.3.4_3 – ZiaNE Heap Leach Lateritic Pit - Plan View 192

Figure 16.3.4_4 – Teckraie Heap Leach Pit - Isometric View 193

Figure 16.4.1_1 – Plan View Showing the 2014 Designed Pits, Dumps and Haulage Distances 194

Figure 16.4.4_1 – Daapleu and ZiaNE Pit - Plan View 195

Figure 16.4.4_2 – Walter CIL and Gbeitouo Pit in Plan View 196

Figure 17.1_1 – Heap Leach Flow Sheet 199

Figure 17.2_1 – CIL Flow Sheet 203

Figure 18.4.1_1 – River Diversion and Perimeter Dikes Plan View 212

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page xv

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

1 SUMMARY

1.1 Introduction

Coffey Mining (South Africa) Pty Limited (Coffey) has been requested by Endeavour Mining
Corporation (Endeavour), the Issuer, to compile an Independent Technical Report on the Ity
Gold Mine (Ity Mine) in Côte d’Ivoire which is operated by Société des Mines d’Ity (SMI), a
subsidiary of La Mancha Holding S.àr.l. (La Mancha). This document complies with
disclosure and reporting requirements set forth in the Toronto Stock Exchange Manual,
National Instrument 43-101 (NI43-101) Standards of Disclosure for Mineral Project,
Companion Policy 43-101CP and Form 43-101F1.

SMI operates the open-pit and heap leach gold mine in the Ity district of western Côte d’Ivoire.
Production commenced in 1991, with a total of over 1.0 million ounces (Moz) produced to date
from multiple deposits. The mine currently processes 950 ktpa of ore and produced 82,000
ounces of gold in 2014 and 45,000 ounces of gold production from the first six months of
2015.

As the mining progresses and deeper ore is extracted, over the next several years recoveries
from the heap-leach plant for several ore types will be reduced and the construction of a
carbon-in-leach (CIL) plant may result in an improvement in overall project economics.

In 2014, SNC-Lavalin Inc.conducted a Pre-Feasibility Study (PFS) on behalf of SMI to evalute

the potential of a CIL plant using a processing rate of 1.5Mtpa. The results of the study were
positive and in late 2014 through to early 2015, SMI carried out drilling programs at the
Daapleu, Zia NE and Mont Ity deposits designed to upgrade all Inferred Mineral Resource
material from the 2014 mineral resource estimate to Indicated Mineral Resources, the
Daapleu deposit Indicated Mineral Resource to Measured Mineral Resource, and to delineate
each deposit further along strike. The resulting 2015 mineral resource estimate update
yielded a significant increase in Measured and Indicated Mineral Resources to 2.9Moz of gold
contained in five deposits, two dumps, decommissioned leach pads and a stockpile. SNC-
Lavalin was mandated by SMI to update the PFS for the CIL Project using a processing rate
of 2.0Mtpa. The results of that study are summarized in this report.

The mineral deposits described in this report are all part of the mine property of SMI’s
exploitation permit or the adjacent exploration permit in the Côte d’Ivoire and are centred on
06o 52’ 16” north latitude and 08o 06’ 30” west longitude. Côte d’Ivoire is located in West
Africa at the extreme west of the Gulf of Guinea and is bordered by Ghana in the east, Mali
and Burkina Faso in the north and Guinea and Liberia in the west. The Ity gold deposits are
located in the west of Côte d’Ivoire, 480km (direct) from the economic capital of Abidjan, near
the border with Liberia and Guinea (Figure 1.1_1 and 1.1_2).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 1

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 1.1_1
Location of the SMI Properties, Côte d’Ivoire

The Ity Mine currently operates two open pits; Mont Ity and Tontouo. As of the Effective Date
of this report the Tontouo open pit is near the end of its life and is not included in this technical
report. Recent drill programs have defined additional mineral resources for Mont Ity, as well
as new in-situ mineral resources at Daapleu, Zia North East (ZiaNE), Walter and Gbeitouo
and also the decommissioned heap leach pads at Aires de Lixiviation (Aires) and the former
waste dumps of Verse Ouest and Teckraie.

The SMI properties, which are the subject of this report, include two permits which contain the
Ity gold deposits (Figure 1.1_2). These permits are:

 Permis d'Exploitation PE26 (Mining Permit)

 Permis de Recherche PR61 (Exploration Permit)
PR61 is situated over parts of the Zouan-Hounien and Blolequin prefectures. The permit has
a surface area of 153km2 and is oriented northeast-southwest and is comprised of two sub
portions, including the following deposits and prospects: Gbeitouo, Daapleu, Yacetouo,
Morgane, Mlambopleu to the east of the Cavally River and Floleu to the west of the river.
PR61 was first issued in 1995 and extended in two year intervals with land area reductions
down to the current holdings.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 2

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Mining Permit PE26 with an area of 25km2 comprises the Ity Gold Mine which includes the
Mont Ity, ZiaNE and Walter deposits, the Aires (decomissioned heap leach pads) and the
Verse Ouest and Teckraie dumps which are to the west of the Cavally River.

Mineral rights are 100% held by SMI, a registered company of Côte d’Ivoire at address 08 BP
872 Abidjan 08 – Cocody 180 logements Boulevard Latrille, immeuble Palm Club, 2nd floor.
La Mancha holds a 55% stake and management control of SMI, the remainder is held 30% by
SODEMI (the State Mining Agency), 10% by the Government of Côte d’Ivoire, and 5% by a
private investor.

Figure 1.1_2
Permit Areas SMI, Côte d’Ivoire

1.2 History

Copper and gold were first discovered near the village of Ity in the 1950’s during regional
exploration by the Bureau Minière de la France d’Outre-Mer. Initial attempts to recover the
gold were unsuccessful due to the fineness of the gold and the rheology of the ore. In 1983
the Société Minière d’Ity was incorporated to develop the Flotouo deposit which poured it first
gold in 1991. Substantial exploration was done in the 1990s and many of the deposits were
discovered or expanded at the time. Since then ownership has changed several times until
the La Mancha Group acquired a large stake in SMI in 2012. In 2014 a change in
shareholders was authorized by the Government of the Côte d’Ivoire leading to the current
ownership structure.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 3

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

1.3 Geology

The Ity deposits are located in the Lower Proterozoic Birimian Formations of the Toulépleu-Ity
klippe. The Toulepleu-Ity klippe is a small remnant of Birimian within the older Archean
portion of the West African Craton. The Ity area is characterized by a series of granodioritic
intrusions into a sedimentary sequence of volcano-sediments and carbonates with a general
NE-SW strike. The volcanic rocks are generally tuffaceous with chemistry that ranges from
basic to acidic. All formations have been subjected to regional metamorphism.

The deposits of Ity, ZiaNE, and Walter are skarns developed at the contacts of the
granodiorite with the carbonates. The remaining in-situ deposits are more typical shear-
hosted, greenstone deposits. The Daapleu deposit is characterized by the presence of a
“rhyolitic” intrusive surrounded by a package of volcanosediments. The “rhyolite” is locally
called “daaplite” and is leucocratic (grey to white), microgranular, schistose and rich in micas,
essentially a fine grained granite. The Gbeitouo deposit is hosted within volcano-sediments.

The Teckraie and Verse Ouest deposits are rock dumps of the now depleted Flotouo (skarn)
open pit and sit on top of weathered granodiorite. Aires consists of the decomissioned heap
leach pads from the historic operation of the mine.

1.4 Exploration

La Mancha’s evaluation of the Ity Mine began in 2012 following the change in ownership and
management. Exploration since then has been carried out under the supervision of
technically qualified personnel applying standard industry approaches. All data acquired
meets or exceeds industry standards and all exploration work has been carried out by, or
supervised by technical personnel of the operator. Work prior to 2012 has been validated or
replaced with new information.

1.5 Data

A summary of the drilling for all eight deposits is given in Table 1.5_1.

Table 1.5_1
SMI Gold Project
Drilling Summary

Deposit Method Boreholes Metres

Aires leach pads AirCore 159 6,455
Verse Ouest dump Diamond 32 1,180
AirCore 85 3,191
Teckraie dump RC 2 28
Diamond 31 1,079
RC 47 3,892
Daapleu
Diamond 559 45,329
ZiaNE RC 10 926

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 4

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 1.5_1
SMI Gold Project
Drilling Summary

Diamond 243 26,920

RC 286 13,287
Mont Ity
Diamond 299 39,918
RC 103 6,919
Walter RC‐DD 6 613
Diamond 32 3,916
RAB 19 2,240
Gbeitouo
Diamond 67 6,854

Drilling and survey procedures observed are to acceptable industry standards, are appropriate
to the deposits being drilled and are appropriate for mineral resource estimation.

The Walter and Gbeitouo deposits still have a large proportion of historical boreholes utilized
in the mineral resource estimates. Historical drilling was poorly documented between 2002
and 2012. Sufficient additional drilling allowed verification of historic drilling for use in industry
standard resource estimates. Drilling practices from 2012 onward were all documented and
regularly assessed by independent senior consultants and are to acceptable industry
standards, are appropriate to the deposits being drilled and are appropriate for mineral
resource estimation.

Control samples used during drill campaigns on the Aires, Teckraie, Verse Ouest, Daapleu,
ZiaNe and Mont Ity project areas contained within this report comprised the insertion of
standards, blanks and field duplicates into the sample stream. The intended aim should be
approximately 5% coverage for standards, blanks and duplicates. The quality control data
was analysed on an on-going basis and generated some queries with the laboratory that were
resolved.

During the different campaigns on the deposit areas the duplicates were comprised of a
quarter split of the core, a second coarse-split of the RC sample or a second split of the pulp.
A total of 18 different commercial standards (Geostats, Gannet Holdings and Rock Labs of
Australia) were used, of various grades. Two different sources of blank material were used,
beach sand and coarse rock chips that were confirmed to not contain any gold.

All assays for the most recent exploration campaigns were done by Bureau Veritas laboratory,
Abidjan, Côte d’Ivoire with 50g fire-assay analyses. In addition to the above, six batches of
samples were sent to ALS Chemex, Ouagadougou, Burkina Faso as umpire checks. These
samples came from the Mont Ity and ZiaNE project areas.

In general the results of the assays were within acceptable limits and deemed suitable for use
in the mineral resource database. Any data deemed not to be suitable was removed from the
database.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 5

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

1.6 Metallurgy and Heap Leach Process

No heap leach testwork has been conducted on the project during the last number of years
and anything completed historically is no longer available. The heap leach has been in
operation for many years and remains in operation and as such production data can be used
to give an indication of the metallurgical performance expected from the plant.

It is reported by mine management that regular bottle-roll tests are completed to determine
the recoverable gold from a -2mm pulverised 50 gram sample.

Historically, as reported in 2008, regular column leach tests were completed, but this practise
has been discontinued.

The analytical techniques available on the mine do not include total contained gold methods
and as such the actual head grade samples cannot be determined. Comparing gold
recovered with the above determined leachable gold content results in a historical yield of
between 75% and almost 80%.

1.7 Metallurgy and CIL Process

Considerable metallurgical testwork has been conducted to confirm the metallurgical

response for a CIL plant. The metallurgical testing used for the 2.0Mtpa CIL project was
completed during 2014 at ALS Minerals Division (Metallurgy) located in Kamloops, BC,
Canada. Additional work was conducted in 2015 but has not been integrated into this report
and is part of ongoing feasibility studies.

Mineralogical and metallurgical test work was completed in order to generate sufficient
mineralogical and metallurgical information to:

 Establish the processing route (process flow diagrams);

 Determine the plant operating parameters for the ores to be processed;
 Evaluate the variability in metallurgical performance for the different deposits, and;
 Define parameters required for the engineering and design of the plant (process design
criteria, mass and water balance and equipment sizing).
The mineralogical study and metallurgical test work program were executed on the geological
samples from the following deposit and facies:

 Daapleu deposit included three different geological facies called Daaplite, Volcano
sediment and a High Grade contact zone between both;
 Gbeitouo deposit included two different geological facies called Oxidized Clay and
Meta-volcano sediment;
 Mont Ity Deep Extension test work was on two different geological facies called
Oxidized Clay and Reduced Clay;
 ZiaNE deposit test work was on two different geological facies called Oxidized Clay and
Laterite;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 6

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Aires – four composite samples representing four geographical areas of the heap leach
pads.
The sample material was selected and prepared by SMI geologists and personnel to create
what is believed to be the most representative facies samples. The metallurgical test work
results allowed the process development steps described in the following paragraphs.

A mineral sizer type crusher has been selected for the soft sticky ore facies, such as oxidized
clay, reduced clay and heap leach residues. A jaw crusher has been selected for the more
competent (hard) ore facies, such as daaplite and volcano-sediments.

The preliminary results from the test grinds indicate the grinding mill has been sized to
process ore at an average rate of 254tph (tonnes per hour) with a finished product 80%
passing 75μm.

Gravity concentration did not improve overall gold recoveries and has not been considered in
the process development as the mean gold particle diameter is only in the 18 µm range.

A high rate thickener has been selected for the pre-leach thickener. The thickener underflow
density of 43% (w/w) is anticipated.

Whole ore cyanidation leach tests were performed and a final grind of 75µm has been
selected with air sparging for the process design criteria. The cyanide leach kinetic curves
developed during the test work show that gold extraction with 32-hour retention time was
selected for the CIL plant process design criteria. The gold extraction for the composite
samples averaged about 93% for the non-sulphide composites and 72% for the sulphide
composites.

1.8 Mineral Resources

Ity is an operating gold mine. The mineral resource models supporting the current mineral
reserves estimates for Ity were updated as of July 31st, 2015 by independent consultants,
Coffey and Arethuse Geology Sarl (Arethuse).

Coffey estimated the mineral resource for the Mont Ity, Daapleu, ZiaNE, Aires, Teckraie, and
Verse Ouest deposits using a combination of Nearest Neighbour, Inverse Distance methods.
The volume modelling and mineral resource estimation was completed in the 3D software
package MicromineTM, Datamine™ Studio 3 and Isatis.

Arethuse estimated the mineral resources for the Walter and Gbeitouo deposits using a
combination of Ordinary Kriging and Inverse Distance methods. Geological modelling and
mineral resource estimation was done using GEOVIA Surpac 6.6, XLStat, Autotats and Isatis
software packages.

The mineral resource estimates were prepared by conventional block modeling techniques.
Grade shells were generally defined using a threshold assay of 0.50g/t Au as the lower limit
for inclusion within the grade shell.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 7

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Samples were composited to standard one-metre lengths, starting from the top of the
mineralized zone wireframe for each hole. Statistical analysis was employed to define high-
grade outlier gold assays, and all composites inside the grade shells were capped. Capping
strategies ranged from Daapleu and Verse Ouest deposits where capping was deemed
unnecessary to Walter where gold values were capped to 40g/t.

The quality of the estimations was validated using summary statistics, comparison of the
estimate mean versus the mean of the composite dataset, visual checks of cross sections,
long sections, and plans and comparison of different estimation methods.

The mineral resources are defined within an optimal pit shell generated using the following
parameters:

 Overall pit slope of approximately 30 to 40 degrees;

 Commodity price of USD1,500/oz Au;
 Process recovery between 73% and 96%;
 Process cost between USD12.1/t and USD16.5/t;
 Refinery, selling and royalty costs of 4% of sell price.
Mineral resource estimates from five in-situ deposits, two rock dumps and the
decommissioned heap leach pads are given in Table 1.8_1. The weathered zones are
generally feed for the Heap Leach Plant over the next three years. The rest of the material is
planned as feed for the CIL plant and is mostly comprised of material which cannot be as
effectively treated in the Heap Leach process. The Verse Ouest dump has not yet been
considered for mineral reserve heap leach processing or for the CIL project.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 8

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 1.8_1
SMI Gold Project
Mineral Resources as At Effective Date 31 July 2015

Measured Indicated Inferred

Cut-off
Deposit
grade kt g/t Au oz kt g/t Au oz kt g/t Au oz

Mont Ity 0.5g/t Au 5,100 2.35 385,600 140 2.75 12,400

Daapleu 0.5g/t Au 21,188 1.45 984,700 9,604 1.46 452,000 1,553 1.21 60,500

ZiaNE 0.5g/t Au 6,741 1.56 337,900 3,838 1.78 219,800

Walter 0.5g/t Au 2,613 2.24 188,500 200 1.42 9,100

Gbeitouo 0.8g/t Au 1,954 2.30 144,700 57 1.29 2,300

Aires leach
0.0g/t Au 6,134 1.04 205,900
pads
Verse Ouest
0.0g/t Au 3,844 1.22 150,800 3,591 1.25 144,300
dump
Teckraie
0.0g/t Au 1,945 1.11 69,500 304 1.01 9,900
dump

Total 27,322 1.36 1,190,600 31,801 1.69 1,729,000 9,682 1.47 458,300
Note:
 Mineral resources include mineral reserves
 Numbers may not sum exactly due to rounding.

1.9 Mineral Reserves (Heap Leach)

The deposits planned to be mined during the current mine plan have been optimized for a
“Heap Leach and CIL scenario” that envisioned a 2016 construction decision on the CIL plant
with commercial operation at the start of 2018. If the CIL construction decision was deferred
then the “Heap Leach scenario” would have to be revised. The material to be mined is often
overlying material that will be mined later and included in the optimization of the “”Carbon-In-
Leach scenario”. The goal was to identify the most profitable shell for a “Heap Leach
scenario” for each suitable deposit with the constraint of processing only the oxidized material.
The material mined for the “Heap Leach” i.e. the open pit shells, are contained within the
locations of the material to be mined as the “CIL” shells. Mineral reserves in the “Heap Leach
scenario” pit design shells are inclusive of mining dilution and mine recovery, considering
plant recovery and are summarized in Table 1.9_1.

Some material that is not processable using the Heap Leach facility (essentially reduced clay
material and granodiorite) and will be mined before the CIL plant will be operational. SMI
aims at stockpiling this material in a dedicated stockpile until the start of the CIL plant. This
limited amount of material located inside the Heap Leach pit limit is considered as “mineral
reserve material” and will be accounted for in the CIL production plan scenario

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 9

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Process costs, inclusive of the general and administrative (G&A) costs, and recoveries were
used to generate the mineral reserves for the Heap Leach operation. The metallurgical
recoveries used to calculate the mineral reserves are based on SMI recommendations and
are in line with 2014 actual results.

The cut-off grade parameters used for the models are based on costs, royalties, process
recoveries and metal prices supplied by SMI.

Table 1.9_1
SMI Gold Project
Mineral Reserves for Heap Leach Operation as of the Effective Date of 31 July 2015

Deposit Contained
Tonnes Contained Processing
Category Grade (g/t) Gold
(‘000) Gold (kg) Method
(’000oz)
Mont Ity Probable 775 3.71 2,874 92 Heap Leach

Walter Probable 356 2.82 1,004 32 Heap Leach

ZiaNE Probable 213 1.48 315 10 Heap Leach

Teckraie
Probable 913 1.31 1,199 39 Heap Leach
dump
Total Probable 2,257 2.39 5,393 173 Heap Leach

* The material within the HL pit limit that cannot be processed using HL processing method will be stockpiled
until the CIL plant starts operation

1.10 Mineral Reserves (Carbon-in-Leach)

The base case mining production schedule for the CIL operation was completed on a bench-
by-bench level for all deposits. Daapleu and Ity were designed with interim pits targeting high-
grade material. In order to mine the Daapleu pit a section of the Cavally River requires
diversion creating at risk exposure related to hydrogeology.

The mining recovery used is industry standard for similar type operations and material types.
The mine operation cost estimation is based on the tonnage of each type of material from the
different pits and the specific pit location. Using these parameters, the cycle times were
calculated based on SMI production factors and hauling distances for each pit. Finally, an
operating cost per type of material was calculated based on the labour cost, fuel consumption,
maintenance cost, etc. Table 1.10_1 presents the mineral reserves for the CIL operation.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 10

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 1.10_1
SMI Gold Project
Mineral Reserves for Carbon-in-Leach Operation as of the Effective Date of 31 July 2015

Proven Reserve Probable Reserve

Description Tonnes Tonnes
Au g/t Au (‘000oz) Au g/t Au (‘000oz)
(‘000) (‘000)
Mont Ity 187 7.51 44
Daapleu 15,219 1.61 787
Walter 1,053 2.00 68
ZiaNe 3,952 1.60 204
Gbeitouo 1,264 2.56 104
Aires leach pads 6,135 1.04 206
Stockpiles 161 3.17 16
Total 0 0 0 27,968 1.59 1,429

Currently the CIL recovery rate is estimated to be between 93% for the non-sulphide
composites and 72% for the sulphide composites. The planned ongoing DFS will investigate
processing technologies that may enhance the recovery rate.

1.11 Mining

The Ity Heap Leach mine is an existing conventional open pit mine using articulated trucks
(40t class) and hydraulic backhoes or front shovel excavators (80t class). Limited drill and
blast activities are required as the material that is currently mined is largely oxidized (clay or
laterites). This material is processed at the existing heap leach facility.

Mining for the CIL scenario is envisioned to be a similar operation developing five in-situ open
pits, one decommissioned leach pad and two former waste dumps.

1.12 Infrastructure

SMI started its mining operation in the area in 1991 with a 200ktpa processing capacity with
all open-pit mining. Since that time the facilities have been upgraded to process
approximately 950ktpa of ore using heap leaching as the processing method.

The current mine facilities include:

 Mining administration building;

 Main workshop and repair facilities;
 Mining equipment re-fuelling centre;
 Explosive storage, located away from the main facilities;
 Plant administration buildings such as the security office, workshop, administration
offices and metallurgical lab;
 Warehouses;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 11

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Camp accomodations for 200 persons;

 Water services inclusive of raw water abstraction, potable water, fire water, and;
 Medical facilities.
The electrical power is supplied from the Ivorian national grid as well as back-up diesel
generators.

The CIL operation will require infrastructure development as described in this report. This will
include, within the property limits, a CIL plant, the diversion of the Cavally River to allow
development of the Daapleu pit and associated bridge, construction of the haulage roads for
the new pits, and the construction of a staged Tailing Storage Facilities (TSF) for disposal of
the related tailings from the CIL plant.

Outside the property limit, a new power transmission line will have to be installed by the local
electrical utility.

1.13 Environmental

Several environmental studies have been conducted in the last 15 years. Geostat Systems
International Corporation has conducted two internal reports for SMI: an environmental
management plan (Plan de Management Environnemental) dated March 2000 and a
rehabilitation plan (Réaménagement du site minier d'Ity) dated June 2005. An Environmental
Impact Study (EIS) for the Ity Mine has been carried out in 2000 by SMI. This study has been
used as a reference in the rehabilitation report titled "Réaménagement du Site Minier d'Ity"
(SMI, 2005). The Ministry of the Environment also conducted an environmental audit of the
Ity Mine at the end of December 2005.

In order to renew the Mining Permit PE26 and in consideration of the plans for the CIL project,
two social and environmental impact assessments (SEIA) have also been completed:

 Étude d’impact environnemental et social du projet de construction d’une usine de

traitement de minerai de type CIL sur le permis d’exploitation PE26 de la mine d’or ITY
(Roche, 2013).
 Étude d’impact environnemental et social dans le cadre du projet d’exploitation des
gisements de Gbeitouo et de Daapleu dans le département de Blolequin (2D
Consulting, 2015).
In addition to the exploitation of two new deposits, the CIL project includes the diversion of the
Cavally River (four river closure dams), the construction of a bridge and of three perimeter
dikes to protect the Walter, Gbeitouo and Daapleu deposits.

There is an SEIA in progress related to this planned infrastructure for the CIL project. The
public meeting process is planned to start at the end of September 2015. It is anticipated that
the decree, which authorizes the construction and operation of the planned infrastructure, may
be granted as early as the fourth quarter of 2015.

The three SEIAs were performed according to the Loi Cadre No. 96-766 of 3 October 1996 on
the Environmental Code, the Décret No. 96-894 of 8 November 1996 establishing the rules

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 12

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

and procedures applicable to studies of the environmental impacts of development projects

and the Arrêté No. 00972 of 14 November 2007 on the application of Décret No. 96-894.

The SEIA for the construction for the CIL plant was approved by the Ivorian authorities in
December 2013 (Arrêté 008/Mine SUDD/ANDE). A revision will be required for a larger
throughput rate of the CIL plant and modifications to the locations of some of the associated
infrastructure.

A resettlement action plan is also currently in preparation.

1.14 Capital Costs

Heap Leach

The total capital expenditure planned for the Heap Leach operation until the end of 2017 is
approximately at 18.3 MUSD (16.6 MEUR).

The planned expenditures are as follows:

 Mining fleet equipment renewal and/or additional equipment – 8.0MUSD (7.3MEUR);

 Mine dewatering equipment and borehole drilling – 2.2MUSD (2.0MEUR);
 Processing plant sustaining capital and permanent infrastructure - 2.8MUSD
(2.5MEUR);
 Other smaller capital items (light vehicles, buses, IT, security, etc.) – 5.3MUSD
(4.8MEUR).
CIL Project

SNC-Lavalin’s mandate for the CIL project was to develop a PFS level capital and operating
cost estimate with a target accuracy of ±30%.

The total estimated CAPEX for the project is 219 MUSD (199 MEUR), which includes:

 Total Direct Costs – 128.5 MUSD (116.8 MEUR);

 Total EPCM Indirect Costs – 65.4 MUSD (59.5 MEUR);
 Total Owner’s Costs – 25.1 MUSD (22.8 MEUR).
1.15 Operating Costs

Heap Leach

Ongoing operating costs based on costs incurred operationally in 2014 include:

 Mining Costs – 2.1 USD/t moved;
 Milling Costs – 20.4 USD/t processed;
 G&A Costs – 13.6 MUSD/a.
The AISC for 2014 and for the first 6-months of 2015 are respectively US$921/oz and
US$696/oz.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 13

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

CIL Project

The data used to prepare the operating cost estimate are based on the June 2015 geological
block model and associated mining schedule. This mining schedule was based on a mining
plan that excludes Inferred Mineral Resources. The target accuracy of this OPEX estimate
update is ±30%.

The mine operation cost was calculated based on the tonnage of each type of material from
the different pits and the specific pit location. Using these parameters, the cycle times were
calculated based on SMI production factors and hauling distances for each pit. Finally, an
operating cost per type of material was calculated based on the labour cost, fuel consumption,
maintenance cost, etc.

The mining costs used in the PFS are presented for each facies of each of the deposits and
range from USD 1.45 /t (1.32 €/t) to USD 3.11 /t (2.83 €/t).

The processing cost per material type was evaluated in laboratory tested on samples taken
from the site. These samples were subjected to various tests to simulate reagent dosing,
wear factors and other parameters. The combination of all these results was used to
calculate the processing cost per material type. It is important to mention that metallurgical
testing results used in this PFS update are not including the recent laboratory testing results
performed in 2015. The processing costs in the PFS are estimated to be USD 13.67 /t (12.43
€/t) on average over the life of the CIL project.

The building maintenance and administrative supplies have been calculated based on building
CAPEX value and factored plant labour cost. The labour cost has been estimated based on a
plant general crew by function and salary.

Site G&A costs, estimated at USD 9.7 /a (8.8m €/a), were provided by SMI.

1.16 Economic Analysis

An economic analysis has been conducted using a cash flow model prepared on the basis
and assumptions as stated in the following discussion. The results of the economic analysis
represent forward-looking information (production rates, cash flows, net present value, etc.)
that are subject to a number of unknown risks, uncertainties and other factors that may cause
actual results to differ materially from those presented here.

Table 1.16_1 summarizes the property’s valuation, on the basis of the below described
assumptions. The base case has been run using a flat gold price of USD1,150/oz
(€1,045/oz), net of USD4.55 (€5/oz) bullion transport, insurance and refining costs. A flat
USD/euro exchange rate of 1.10 has been assumed. A 3.5% gold royalty, payable to the
State of Côte d’Ivoire, has been applied over the life of both the Heap Leach and CIL
operations based on the retained gold sale price assumptions. This royalty is in accordance
with the rate applicable, under the Ivorian mining code.The financial analysis supports the
economic viability of both the Heap Leach operation and the CIL project.

The Heap Leach mine production schedule currently extends to 2017. The CIL project at 2.0
Mtpa has a life of mine of 14 years.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 14

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 1.16_1
SMI Gold Project
Basis and Assumptions of the Economic Model for the HL and CIL Project

On a 100% basis Flat US$1,150/oz Flat €1,045/oz

HL Physicals
Tonnes moved (Mt) 12.083
Ore processed (Mt) 2.257
Grade processed (g/t) 2.39
Production (‘000oz) 147
CIL Physicals
Tonnes moved (Mt) 89.399
Ore processed (Mt) 27.967
Grade processed (g/t) 1.59
Production (’000oz) 1,144
Financials MUSD MEUR
EBITDA 612.5 556.8
CAPEX 289.6 263.3
TAXES 77.8 70.7
Post Tax Free Cash Flow 245.2 222.9
Valuation (100% basis) MUSD MEUR
HL – Post Tax NPV (5% discount) 32 29
CIL – Post Tax NPV (5% discount) 87 79

1.17 Conclusions

Historical exploration activities have been of variable quality while the work undertaken in the
last three years is to international standards. Current exploration practices are appropriate to
the deposits being evaluated. All historical data has been assessed for accuracy and
incorporated into the database and it was found acceptable for use in geological and mineral
resource evaluations.

The mineral resources and mineral reserves at the Ity property are robust. There remain
sufficient Heap Leach reserves to be economically exploited over the next several years until
the CIL project construction decision is made and construction is completed. Additional
opportunities exist to increase the Heap Leach reserves with known oxidized mineral
resources should an extension of the Heap Leach operation life be required.

The quality and quantity of metallurgical testwork performed for the 2Mtpa CIL is considered
adequate for the PFS level developed for the project. The ore facies not containing sulphide
are substantially free-milling and do not show any preg-robbing characteristics. However, the
ore facies containing sulphide are partially refractory and direct cyanidation (CIL process)
yields a lower gold recovery.

The PFS demonstrated the economic potential of the CIL project with the possibility of
extending the Ity Mine Life of Mine by over 10 years by adding substantial mineral reserves.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 15

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The positive results of the PFS justify proceeding to the Definitive Feasibility Study (DFS)
which is now underway.

Several additional targets at different stages of exploration (i.e. Verse Ouest and others) have
been identified in the very close vicinity of present Ity facilities, on both the Exploitation Permit
and Exploration Permit. The company considers that additional resources could be defined
and potentially provide additional feed for the Heap Leach operation to extend its life by 2 to 3
years and also to increase the CIL project mineral resource and mineral reserve base.

1.18 Recommendations

A follow-up exploration program aiming at achieving the targets of: (1) providing additional
feed for the Heap Leach operation to extend its life by 2 to 3 years; and (2) increasing the CIL
project mineral resource and mineral reserve base has been proposed for the Ity Project. The
program consists of approximately 25,000m of drilling (80% diamond/20% RC drilling) and is
designed to maximize the opportunity to expand the potential of known deposits and for
discovery of new zones of gold mineralization for the minimum exploration expenditures in the
shortest time frame. The total exploration budget to complete most of the required work is
estimated to be roughly USD 5.5M. This program is scheduled to begin in Q4 2015 and to be
completed within 9 to 12 months.

The mining plan shows that, while most of the planned plant feed was tested, some geological
facies have not been tested during the PFS stage. These facies should be tested to confirm
the adequacy of the currently developed process.

Additional mineralogical and metallurgical test work is also required to firm up the process
flowsheet that has been developed. The additional test work will allow determination of
optimum operating parameters (final grind, reagent consumption, etc.) in order to minimize
CAPEX and OPEX.

Additional rheology and settling testwork is also recommended for equipment selection sizing
and design, as there are wide variability characteristics in the various facies.

The increase in mineral resources of the sulphide facies (particularly in the Daapleu deposit)
may warrant investigation of alternate processing methods such as pressure oxidation
process (POX) for these sulphidic facies. Pressure oxidation followed by POX product
cyanidation along with the flotation tailings stream, will likely produce a higher gold recovery
than direct cyanidation of the ore. However the additional CAPEX and OPEX associated with
the POX processing needs to be investigated and evaluated to demonstrate the economics.

It is recommended, at the next stage of technical reporting, that a more detailed scheduling
exercise be undertaken to determine the optimal scenario for feeding ore from the various pits
and stockpiles to the mill, particularly with the different types of ore coming from the pits (hard
versus soft, and also based on sulphide contents).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 16

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

A more detailed pit phasing plan for ZiaNE and Daapleu should also be carried out in future
studies of the project as these pits have the potential to bring higher grade material to the mill
earlier in the production schedule, especially from Daapleu.

During the next phase of the work, an optimization of the TSF in terms of location, dam
alignment and footprint will need to be carried out.

During the next phase of the study, significant work will be required to optimize the design
diversion of the Cavally River and minimize the environmental and social impacts.

A geotechnical investigation program for all proposed pits to obtain the geotechnical
information required for the DFS level open pit slope design is recommended in addition to a
geotechnical field investigation for all infrastructure.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 17

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

2 INTRODUCTION

Coffey has been requested by Endeavour, the Issuer, to compile an Independent Technical
Report on the Ity Mine in Côte d’Ivoire which is operated by SMI, a subsidiary of La Mancha
Holding S.àr.l. This document complies with disclosure and reporting requirements set forth
in the Toronto Stock Exchange Manual, NI43-101 Standards of Disclosure for Mineral Project,
Companion Policy 43-101CP and Form 43-101F1.

SMI operates the open-pit and heap leach gold mine in the Ity district of western Côte d’Ivoire.
Production commenced in 1991, with a total of over 1.0Moz produced to date from multiple
deposits. The mine currently processes 950 ktpa of ore and produced 82,000 ounces of gold
in 2014 and 45,000 ounces of gold production from the first six months of 2015.

A Scoping Study for the exploitation of the mineral resource using an alternative processing
method was conducted in 2013. The preliminary financial analysis carried out during this
study showed promising results and SMI decided to continue through the PFS stage.

In 2014, SNC-Lavalin Inc. conducted a PFS on behalf of SMI to evaluate the potential of a CIL
plant using a processing rate of 1.5Mtpa. The results of the study were positive and in late
2014 through to early 2015, SMI carried out drilling programs at Daapleu, Zia NE and Mont Ity
designed to upgrade all Inferred Mineral Resource material from the 2014 mineral resource
estimate to Indicated Mineral Resource, the Daapleu deposit Indicated Mineral Resource to
Measured Mineral Resource and to delineate each deposit further along strike. The resulting
2015 mineral resource estimate update yielded a significant increase in Measured and
Indicated Mineral Resources for all three areas and SNC-Lavalin was mandated by SMI to
update the PFS for the CIL Project using a processing rate of 2.0Mtpa.

All units in this report are metric and distances are in metres, unless otherwise stated.
All geographic coordinates are UTM WGS84 Zone N29. Elevation Datum is mean sea
level

2.1 Scope of the Report

This report is intended to document the results of the latest mineral resource estimates, the
results of the mining studies for the Heap Leach operations and the results of the PFS for the
CIL Project available to date.

The mineral resource estimates for the Daapleu, ZiaNE and Mont Ity deposits, the Aires Heap
Leach pads, and the Verse Ouest dump are provided as of the Effective Date of July 31,
2015. The 2014 or earlier mineral resource estimates for the Walter and Gbeitouo deposits,
and the Teckraie dump have also updated to this Effective Date. The report documents the
results of the Heap Leach mining study and the CIL plant PFS of 2014 which was updated to
the July 2015 Effective Date.

This report is prepared under the guidelines of NI43-101 and the Canadian Institute of Mining
and Metallurgy (CIM) guidelines and is intended to meet the filing requirements of the Issuer.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 18

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

2.2 Principal Sources of Information

Principal sources of information are documents supplied by SMI, study results, site visits
(Section 2.3) and information in the public domain. A reference list is given in Section 27.

2.3 Site Visits

A site visit was made to the mine/exploration site between 20 and 28 May 2014 by
Ms Kathleen Body. During the site visit the following activities were undertaken:

 Visit to drilling operations at Walter (not part of the current evaluation). Both operating
drill sites were inspected as well as site recently cleared on the same project;
 Visit to the deposit sites at Daapleu, ZiaNE, Teckraie rock dumps and the Aires
(Decommissioned Heap Leach pads);
 Inspection of the sample processing facilities at the exploration camp;
 Inspection of the sample and core storage facilities at the exploration camp;
 Discussions with project geologists on geological interpretations, quality control
processes and data validation, processing requirements;
 Data collection where additional information was needed.
Mr Mpfariseni Mudau visited the Ity projects between 12 and 21 April 2015. The following
activities were undertaken during the visit:

 Discussion of the current geological models and cross-sections;

 Discussion of the regional and deposit geology with SMI geologists;
 Inspection of the drilling and sampling sites and assessment of collection methods;
 Validation of the geological logging against the drill cores;
 Inspection of the core yard (for sample storage) and preparation laboratory;
 Visit to the mining area;
 Collection of the database and additional technical information.
Site visits were made to the mine site between July 2012 for a period of 3 days, and
December 2013 for one week by Mr. Rémi Bosc representing ARETHUSE GEOLOGY.
During the site visits the following activities were undertaken:

 Supervision of ARETHUSE staff engaged in staffing exploration and drilling program

from 2012 to 2014;
 Assessment of drilling, sampling, data-acquisition and reporting practices along CIM
recommendation and subsequent training for SMI staff;
 Review of cores and sampling facilities, discussion and review of geological models;
 Frequent visit to drilling operations and deposits sites of Walter, Verse Ouest Teckraie,
Mont Ity and extension, Colline Sud, Tontouo;
 Review the Ity mine geology and grade control practices;
 Visit heap leach operation.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 19

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

A site visit was made to the mine/exploration site between 6 and 15 October 2014 by
Mr. Patrick Perez of SGS. During the site visit the following activities were undertaken:

 Discussions with the Mine Manager and the Site General Manager concerning the
mining operations;
 Review with the Mine Manager the operating practices and ensured the geotechnical
recommendations for the mine design of the Mont Ity mine were followed;
 Review with the Mine Manager the mining parameters (dilution and recoveries) and
ensured they were consistent with the parameters used for the mine planning (short
term and long term) and mineral reserve estimates;
 Discussion with the site geologist of the current geological models.
A site visit was made to the mine / exploration / processing site between January 23rd and 28th
by Mr. Daniel Gauthier. During the site visit the following activities were undertaken:

 Inspection of the sample and core storage facilities at the exploration camp;
 Inspection of the sample processing facilities at the exploration camp;
 Discussions with project geologists on geological interpretations, quality control
processes and data validation, processing requirements;
 Visit to the Mont Ity mine site, and dumps;
 Visit to the current Heap Leach operations, including the crushing and agglomeration
station, conveying and stacking systems, heap leach pads;
 Visit to the current processing installation, including the solution ponds, carbon-in-
column circuit, carbon regeneration kiln, and acid wash and elution vessels;
 Visit to the current maintenance (mechanical and electrical) shops;
 Visit to the metallurgical (column) testing installation;
 Visit the SMI site to identify possible locations for the construction of the future CIL
plant;
 Data collection where additional information was needed.
Two site visits were originally made to the mine site during the PFS by Dr. Henri P.Sangam.
The first site visit was held between 22 and 29 January 2014. During the site visit the
following activities were undertaken:

 General site reconnaissance and observations of site geotechnical conditions with

special attention to areas of :

 Pit areas at West Cavally;

 Plant site; and
 Tailings Storage Facility.
 Meetings and discussions with SMI geologists on regional and deposit geology as well
as on the current geological models and cross-sections;
 Visit to core shed to observe rock cores for each proposed pit;
 Visit to Ity pit to observe current operational practices and performance of the pit
slopes.
The second site visit was held between 20 and 28 May 2014 to kick-off the preliminary
geotechnical work. During the site visit the following activities were undertaken:

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 20

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Visit to Ity pit to establish pit wall mapping procedures;

 Visit to coreshed for the selection of geological boreholes to be logged;
 QA/QC of pit wall mapping at Ity pit;
 Start developing the field investigation program for DFS.
Two additional visits were also conducted during the DFS study to start the geotechnical field
investigation campaign between 10 and 21 January 2015 and between 20 to 27 June 2015 for
additional site reconnaissance and observations of site geotechnical conditions.

2.4 Qualifications and Experience

The following personnel were nominated to the project team and their specific areas of
responsibility are shown below. The qualifications and appropriate experience of the authors
are detailed in the Authors’ Certificates and summarised Table 2.4_1.

Table 2.4_1
SMI Gold Project
List of Qualified Persons and Responsibilities SMI Gold Project

Qualified Person Company Sections

Kathleen J. Body, Coffey Mining (South Africa) (Pty) 1-5, 6.1-6.7,6.10, 7-9, 14.1-14.6,
Pr.Sci.Nat. Ltd 14.9, 18.1, 23-27

Mpfariseni Mudau, Coffey Mining (South Africa) (Pty) 10.1-10.4, 11.1-11.4, 11.5.1-
Pr.Sci.Nat., Ltd 11.5.3, 11.6, 12.1-12.3.6,12.4

Gordon I. Cunningham, Pr.

Turnberry Projects (Pty) Ltd. 13.1, 17.1
Eng.

6.8-9, 10.5, 11.5.4,11.5.5, 12.3.7-

Rémi Bosc, Eur.Geol. Arethuse Geology Sarl
8, 12.5 and 14.7-8

Patrick Perez, P.Eng. SGS Canada 4.4, 15.1, 16.3, 19, 21.1, 22

Jason Baker, P.Eng. SNC-Lavalin Inc. 15.2, 16.4

Daniel Gauthier, Eng. SNC-Lavalin Inc. 13.2, 17.2

Pierre Larochelle, Eng. SNC-Lavalin Inc. 18.2-18.4, 20, 21.2

Henri P. Sangam, P.Eng. SNC-Lavalin Inc. 16.1, 16.2

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 21

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

3 RELIANCE ON OTHER EXPERTS

This report was prepared using NI43-101 Technical Report guidelines, in accordance with
Form 43-101F1 by Coffey for Endeavour. The quality of information and conclusions
contained herein is consistent with the level of effort involved in Coffey’s services and based
on:

 Information available at the time of preparation supplied,

 Third party technical reports prepared by Government agencies and previous tenement
holders,
 Other relevant published and unpublished third party information.
This report is intended to be used by Endeavour, subject to the terms and conditions of the
contract between Coffey and SMI. This contract permits Endeavour to file this report as a
Technical Report with Canadian Securities Regulatory Authorities pursuant to NI43-101,
Standards of Disclosure for Mineral Projects. Except for the purposes legislated under
Canadian provincial and territorial securities law, any other uses of this report by any third
party is at that party’s sole risk.

A final draft of this report was provided to Endeavor, along with a written request to identify
any material errors or omissions, prior to lodgement.

Neither Coffey, nor the authors of this report, are qualified to provide extensive comment on
legal facets associated with ownership and other rights pertaining to SMI’s mineral properties
described in Section 4. Neither Coffey nor the authors of this report carried out any legal due
diligence confirming the legal title of SMI to the properties. It is assumed that SMI has and will
continue to have the legal right to explore and exploit these properties.

QP Comment Pierre Larochelle: In the preparation of Item 20, the responsible QP has relied
to a very large extent on Mr. Richard Fontaine’s expertise. Mr. Fontaine graduated in Forestry
Engineering and is a seasoned Environmental and ESIA (Environmental and Social Impact
Assessment) specialist with over 25 years of experience in the field of Environmental
Engineering as related to similar projects.

QP Comment Gordon Ian Cunningham: I am familiar with the specific type of deposit found
in the property area and its metallurgical aspects and have been involved in similar
evaluations and technical compilations. I have not visited the site prior to 31 July 2015. I
have relied upon outside sources of information from both La Mancha and Ity Mine used in the
completion of Items 15.1 and 17.1. I am aware of no reason to believe the dataset is not
accurate and reliable.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 22

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

4 PROPERTY DESCRIPTION AND LOCATION

4.1 Location

The mineral deposits described in this report are all part of the mine property of SMI or the
adjacent exploration permit in the Côte d’Ivoire, centred on 06o 52’ 16” north latitude and
08o 06’ 30” west longitude. Côte d’Ivoire is located in West Africa at the extreme west of the
Gulf of Guinea and it is bordered by Ghana in the east, Mali and Burkina Faso in the north
and Guinea and Liberia in the west. The gold deposits of Ity are located in the west of the
Côte d’Ivoire, 750km from the economic capital of Abidjan, near the border with Liberia and
Guinea (Figures 4.1_1 to 4.1_3).

Figure 4.1_1
Location of the SMI Properties, Côte d’Ivoire

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 23

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 4.1_2
Permit Areas SMI, Côte d’Ivoire

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 24

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 4.1_3
SMI Operations and Gold Projects, Côte d’Ivoire

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 25

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

4.2 Mineral Rights

The SMI properties which are the subject of this report are located on two permits in the area
on and near the Ity gold deposit (Figure 4.1_2). These permits are:

 Permis d'Exploitation PE26 (Mining Permit), coordinates are given in Table 4.2_1, and
 Permis de Recherche PR61 (Exploration Permit), coordinates are given in Table 4.2_2.
Mining Permit PE26 comprises an area of 25km2 and includes the Ity Gold Mine, the deposits
ZiaNE and Walter, the Aires (decommissioned Heap Leach Pads), the rock dumps Verse
Ouest and Teckraie and surrounding areas most of which are to the west of the Cavally River.
Mining Permit PE26 was first granted in 1989 as Arrête 197/MINES/DM/ (14 October 1989)
and renewed as:

 Arrête 081/MME/DM (13 December1994);

 Arrête 0038/MRMP/DM27/07/1998;
 Arrête 003/ME/DM 3 March 2006 (prorogation de validité), and ;
 Arrête 005/MME/DM/26/03/2008 for a further period of seven years from 1 November
2006 (Appendix A).
The PFS required for the renewal of the permit was lodged with the Minister of Mines in May
2013. The renewal of the exploitation permit was granted on 28 August 2014 as Arrête 8-
002/MIM/DGMG. The renewal is for 10 years from 14 November 2014.

The Environmental and Social Impact study (ESIS) for the construction of CIL gold plant was
approved on 17 December 2013 as Arrête 008/MINESUDD/ANDE.

Table 4.2_1
SMI Gold Project
Coordinates Mining Permit PE26

Point Longitude (West) Latitude (North)

A 8°08’30” 6°53’30”
B 8°05’46” 6°53’30”
C 8°05’46” 6°50’44”
D 8°08’30” 6°50’44”

Exploration Permit PR61 is situated over parts of the Zouan-Hounien and Blolequin
prefectures. The permit has a surface area of 153km2 and is oriented northeast-southwest
and is comprised of two sub portions, with prospects Gbeitouo, Daapleu, Yacetouo, Morgane,
Mlambopleu to the east of the Cavally River and Floleu to the west of the river. Exploration
Permit PR 61 was first issued in 1995 and extended in two year intervals with land area
reductions up to the current holdings as ministerial decree n°0072/MMPE/DGMG/DDM (7
September 2012) and is valid until September 12, 2014.

 5 September 2014: SMI asked for extension of Mining Permit PE26 to PR61;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 26

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 29th May 2015: SMI renounced to the demand above;

 29th May 2015: LMCI made an exploration permit request for PR609 (ex PR61).
In order to obtain the Exploration Permit into a Mining Permit, the company will have to lodge
a request to the Ministry of Mines with the following documents:

 The ESIS under the terms of the national environmental agency (Agence Nationale De
l’Environnement: “ANDE”);
 A report demonstrating the economic and technical feasibility of the project.

Table 4.2_2
SMI Gold Project
Coordinates PR61

Point Longitude (West) Latitude (North)

A 7°58’57” 7°00’16”
B 7°58’57” 6°54’10”
C 8°00’46” 6°58’16”
D 8°09’37” 6°48’50”
E 8°10’58” 6°49’53”
F 8°08’30” 6°52’00”
G 8°08’30” 6°50’44”
H 8°05’46” 6°50’44”
I 8°05’46” 6°53’30”
J 8°06’47” 6°53’30”

4.3 Ownership

Mineral rights are 100% held by SM,I a company of the Côte d’Ivoire, at a registered address
08 BP 872 Abidjan 08 – Cocody 180 logements Boulevard Latrille, immeuble Palm Club, 2nd
floor.

The shareholders of SMI are:

 Société pour le Développement Minier de la Côte d'Ivoire (SODEMI) effective 30%;

 State of Ivory Coast effective 10%; and
 Keyman Investment (Didier Drogba Group) 5%

4.4 Royalties

A 3.5% gold royalty, payable to the State of Côte d’Ivoire, has been applied over the life of
both the Heap Leach and CIL operations based on the retained gold sale price assumptions.
This royalty is in accordance with the rate applicable, under the Ivorian mining code, as
presented in Table 4.4_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 27

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 4.4_1
SMI Gold Project
Royalty Rates Applicable Under The Ivorian Mining Code

Spot gold price ‐ London PM Fix Royalty rate

≤ US$1000 3%
US$1000 ≤ US$1300 3.5%
US$1300 ≤ US$1600 4%

AREVA holds a royalty payable to Franco Nevada on Ity’s production on the basis of 2% NSR
for the cumulative production since January 1st 2001 comprised between 13 and 22 tonnes,
and of 3% while this cumulative production is comprised between 22 and 35 tonnes.

4.5 Risk Factors

Significant factors and risks that may affect access, title, or the right or ability to perform work
on the property include the recent political unrest in Côte d’Ivoire. SMI management
continues to believe that the Ivorian political situation will not have a significant impact on the
long-term of the mine or the recoverability of its investments in the Ity property.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 28

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE

AND PHYSIOGRAPHY

5.1 Climate

The climate of Côte d’Ivoire is tropical with a dry season from December to May and a wet
season with intermittent sunny days from June to November. Climatic conditions at Ity are
tropical and the seasons are distinguished by changes in precipitation and wind direction.
Temperatures are fairly constant throughout the year. The rainy season at Ity runs from April
to October, and the dry season from November to April. Annual rainfall is 1800mm and
temperatures are generally average between 25-30°C. Operations are carried out year round
however access to exploration sites on the east side of the Cavally River may be restricted
during heavy rains.

5.2 Vegetation and Soils

Two types of vegetation cover are found in the Côte d’Ivoire and have a very specific
distribution. The vegetation types are delimited by a concave boundary that runs from Man-
Toumodi south to Abengourou (Section 5.3, Figure 5.3_1).

 The equatorial forest covers the southern domain.

 The northern domain is a mixed dense humid forest, guinea-type savannah and
wooded savannah.
Three types of soils cover are mapped (from north to south)

 Ferralitic red soils in forested areas. These are deep, leached, mostly dry and very
acidic
 Ferrisols rich in iron hydroxides at the savannah-forest boundaries, and
 Tropical soils of the savannahs rich in iron.
5.3 Topography

The topography of Côte d’Ivoire is characterised by an ensemble of hills and flat-topped

plateaus in undulating plains. The elevation rises from sea-level at the coast to approximately
1700m at Mt Nimba at the border with Guinea and Liberia in the west (Figure 5.3_1). The
regions in the west and northwest are marked by the mountains of Dans, Touras and Touba.

The Ity deposit is situated on a peneplain dominated by small hills typical of humid tropical
forest morphology. The area hosts a series of hills of approximately 300m high. The four
dominant hills being Mounts Zia, Ity, Flotouo and Zouatouo.

The Cavally (Cavalla) River is situated approximately 1km from the current operations and
runs through the Daapleu deposit. The river winds in a serpentine fashion, runs roughly north
to south draining the western portion of Côte d‘Ivoire and forms part of the border with Liberia
in the south.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 29

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 5.3_1
Topography of the Côte d’Ivoire

http://www.mappery.com/Iory-Coast-Topography- Blue line is the northern limit of the equatorial forest

Map (Section 5.2)
http://www.mappery.com/Ivory-Coast-Physical-Map

5.4 Access and Infrastructure

The Ity property and associated exploration areas are located in a remote region. Access to
site is possible by road from Abidjan and is a ten hour trip. The mine can be supplied via this
route. Access for staff is generally by air from Abidjan to Man and then by road from Man to
the mine site. Flights are run weekly, currently on a Tuesday.

Roads to the mine are generally tarred but may be in poor repair in places and as in most
tropical areas can deteriorate rapidly during the rainy season.

There are no large towns near the mine site but there are numerous villages and settlements
that could be classified as small towns nearby. Basic goods supplying the local population
needs can be found but most supplies and services needed by the mining operation must be
brought in from Abidjan or imported.

5.5 Security

Security issues that affect the SMI property are general lack of access and limited
transportation due to the remote location. Political uncertainty due to political conflict in the
last few years is a concern. The recent Ebola epidemic did not reach the area but the
property is close to the border with Guinea and Liberia and the potential for a spread into the
areas exists if there is another outbreak in neighbouring countries. SMI management is
aware of these risks and procedures are in place to deal with potential security threats.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 30

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

5.6 Surface rights

Surface rights are sufficient for all current mining and milling operations, exploration activities,
and for all required mine facilities.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 31

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

6 HISTORY

6.1 General History of the Property

The general history of the property up to 2008 is taken from reports by Febvey and Bottero
2013 and Danjou and Furic 2014. Site specific histories are given in Sections 6.2 - 6.9.

In the 1950’s, copper and gold discovered in placers near the village of Ity attracted the
attention of Bureau Minière de la France d’Outre Mer (BUMIFOM). BUMIFOM was initially a
copper exploration company before switching to gold exploration. France’s state-owned
Bureau de Recherches Géologiques et Minières (BRGM) estimated an in-house geological
resource in 1970. However, various attempts to economically extract gold from the Flotouo
deposit failed because of metallurgical problems, mainly due to the fineness of the gold and
the rheology of the ore.

In 1984, SMI was incorporated in Côte d’Ivoire as a vehicle for developing the Flotouo
deposit. Further exploration conducted by BRGM and SMI in the 1980’ yielded another in-
house geological resource that confirmed and increased the mineralized zones found earlier.
Mine construction began in 1990. The first gold from the Flotouo deposit was poured in
January 1991. COFRAMINES was later replaced by Mine Or in 1993, and then by Normandy
La Source, who raised its stake in SMI to 51% by acquiring 11% from SODEMI in 1997.
Mining at Zia (the northeast extension of Flotouo) began in 2000.

La Compagnie Minière Or (COMINOR) was created in 1999 by the BRGM in France to

receive some of the assets (including SMI and other Côte d’Ivoire exploration properties) from
the Normandy Mining Group. In 2000, COMINOR was transferred to Compagnie générale
des matières nucléaires (COGEMA), now part of the AREVA group, and in March 2002,
COMINOR acquired its 51% shareholding in SMI from the Normandy Mining Group.

In September 2002, Côte d’Ivoire was essentially divided in half following civil unrest and the
mining operations were abandoned from December 2002 to June 2003. Production resumed
in February 2004.

In 2006 COMINOR was subsumed into the La Mancha Group via a reverse takeover of La
Mancha by Compagnie Française de Mines et Métaux (CFMM), a wholly-owned subsidiary of
the Areva group. This gave La Mancha an effective 45.9% interest in the Ity Gold Mine. La
Mancha took over operation of the mine. La Mancha has subsequently made operational
improvements to increase gold production and carried out a series of drilling programme
resulting in the extension of the known deposits and discovery of additional deposits in the
permit areas.

The early exploration history of the Ity area is summarised in Table 6.1_1

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 32

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 6.1_1
SMI Gold Project
Exploration Before 1995

Dates Company Exploration Results

1956-1958 BUMIFOM Soil geochemistry for Cu and Au Discovery of the laterite deposit at Flotouo
over the KroZyale, Ity and Pepleu
areas
Pits over Ity, Flotouo and Zia
1959-1962 BRGM Exploration for Cu and Au using No anomaly is known to have been found
grids of pits in the low areas and soil and no documentation appears to have
geochemistry over a 100m x50m been preserved
grid at Ity-Flotouo, east of the
Cavally River and Zones of Neo
(Morgan)-Doui
1968-1972 BRGM Exploration for Cu unknown

1973-1975 BRGM Stream sediment sampling for Au Several anomalies found with values 100-
500ppb Au
1979 GEOTEREX Airborne geophysics: magnetics, 23 Electromagnetic (EM) anomalies
EM, over the Toulepleu-Ity belt identified
radioactivity
1980 BRGM Ground geophysics over the main
anomalies and soil geochemistry
Prospection sulphide masses and
Au

Exploration between 1995 and 2011 concentrated on areas that are not the subject of this
report. Exploration carried out over the properties which are the subject of this report is
detailed in Sections 6.2-6.5.

On November 12, 2012 La Mancha delisted from the Toronto and Frankfort stock exchanges
(http://www.lamancha.ca/en/news/2012/la-mancha-announces-completion-of-compulsory-
acquisition-by-weather-ii ). The last publically reported mineral resources and mineral
reserves for the Ity Mine were as at December 31, 2011 (Table 6.1_2).

In 2014 a change of shareholders was authorised by the government of the Côte d’Ivoire.
La Mancha was able to acquire additional shares for SODEMI giving it a majority of the
shares in SMI. The new set of shareholders is: Groupe La Mancha (55%), SODEMI (30%),
State of Côte d’Ivoire (10%) and Groupe DIDIER DROGBA (5%).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 33

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 6.1_2
SMI Gold Project
Ity Historical Mineral Resources 2011

La Mancha (45.9% attributable) Tonnes Au (g/t) Au (oz)

Proven Reserves - - -
Probable Reserves 535,450 4.85 83,540
Total Reserves 535,450 4.85 83,540

Measured Resource 1,147,500 4.46 164,600

Indicated Resource 1,520,200 2.69 131,500
Total Measured and Indicated 2,667,700 3.45 296,100
Inferred Resource 4,053,900 1.60 208,700

A qualified person has not done sufficient work to classify the historical estimate as current
mineral resources or mineral reserves; and the Issuer is not treating the historical estimate as
current mineral resources or mineral reserves.

The mineral resources shown include the mineral reserves. The mineral resources and
reserves were reported in accordance with the requirements of NI43-101.

This is a historic resource estimate which has been replaced by the current mineral resource
estimation reported in this document.

6.2 History: Aires de Lixiviation (Heap Leach Pads)

The Aires de Lixiviation (Heap Leach Pads) represents the residues of the leach pads which
were in operation from 1990 to 2009. In 2010 the residues were estimated at 5.68Mt at
1.11g/t Au (Islip, 2014). This Inferred Mineral Resource (reported in accordance with the
requirements of NI43-101) was estimated from production records over the period the leach
pads were in operation.

A qualified person has not done sufficient work to classify the historical estimate as current
mineral resources or mineral reserves; and the Issuer is not treating the historical estimate as
current mineral resources or mineral reserves.

This is a historic resource estimate which has been replaced by the current mineral resource
estimation reported in this document.

No other evaluation work was undertaken prior to 2013.

6.3 History: Teckraie

Teckraie is the historical waste dump from the Flotouo deposit. The cut-off grade at the time
was 3g/t Au. No evaluation work has been done on this dump prior to the current study.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 34

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

6.4 History: Daapleu

Historical exploration at Daapleu is presented in Table 6.4_1

Table6.4_1
SMI Gold Project
Exploration Undertaken At Daapleu After 1995

Dates Type of Work Results

1995 Geophysics Analysis of Data from Geoterrex Surveys
1996 Stream sediment sampling 2059 Samples taken
11365 samples taken on a 200x50m grid reduced to
1995-1996 Soil Geochemistry
100m x50m
34 boreholes totalling 3751m from three sites, Le Plaque,
1997 Drilling Core
Daapleu and Morgan
1998 Evaluation Study of gold mineralization at Le Plaque
Over areas of Le Plaque-Floleu, Daapleu, Gbeitouo and
1999 Ground Magnetics Bakatouo (Morgan)
248000 stations over a grid 100m x12.5m

Three large pits are exploited by the artisanal miners. Two of these are oriented east-west
and a third at N50°near the village. The artisanal miners extract the mineralized oxidized
saprolites and the adjacent altered daaplites. The gold is washed at the Cavally River and
recovered as a fine grained “gold powder”.

6.5 History: ZiaNE

Historical exploration at ZiaNE was included as part of the overall exploration and evaluation
programme of SMI. In 2008 52 boreholes for 4234.55m of core, were drilled. There are an
additional 32 boreholes drilled in the 2015 campaign with a total meterage of 19,526m.

6.6 History: Verse Ouest Rock Dump

Between 1996 and 2007, the cut-off of the mine was 2g/t Au. The material with gold grade
less than 2g/t Au was dumped at Verse Ouest. The low grade clays with 1 to 2g/t Au were
dumped at Verse Ouest from 2008 to 2013. No evaluation work has been done for this dump
prior to the current evaluation.

6.7 History: Mont Ity

Refer to general history of Ity deposits (Section 6.1). New drilling was done in 2014 and
comprised 31 boreholes of which six were for metallurgical samples, five were for hydrology
studies. The remainder were drilled to confirm the geological model and are incorporated into
the mineral resource estimate.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 35

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

6.8 History: Walter

Two exploration campaigns have been undertaken at Walter, the first in 2008-2009 and a
second 2013-2014. At total of 97 boreholes were drilled of which 72 were cored and 25 were
Reverse circulation drilling. A summary of the drilling is given in Table 6.8_1. The earlier
campaign was to delineate the deposit to enable a mineral resource to be estimated. The
second campaign tested the extensions to the northeast, southwest and filled in gaps to
reduce the drilling grid to 25m x25m.

Table 6.8_1
SMI Gold Project
Walter Exploration

Cumulative Average
Number of
Campaign Drilling Type Drilling metres Length per
Boreholes
(m) borehole (m)

Diamond Drilling 34 2092 62

2008
Reverse Circulation 2 120 60

Reverse Circulation 4 242 61

2009
Reverse Circulation - Diamond
6 613 102
Drilling

2013 Diamond Drilling 3 530 177

Diamond Drilling 29 3386 117

2014
Reverse Circulation 19 1891 100

Total : Diamond Drilling 72 6621 92

Total : Reverse Circulation 25 2253 92

Total 97 8874 92

6.9 History: Gbeitouo

Gbeitouo was discovered during regional exploration in the 1990. Drilling began in 2007. The
history of Gbeitouo exploration is given in Table 6.9_1.

Gbeitouo was explored through four drilling campaigns from 2007 to 2013 and two initial well
campaigns (in 1996 and 1999) that have not been considered for the mineral resource
estimations because of the lack of information. A total of 156 holes for a total length of
12,998m were drilled, either by diamond core (7,307m), reverse circulation (4,666m) or rotary

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 36

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

air blast (1,025m). The first DD-RC campaign and the second RAB campaign (2007-2009)
were to delineate the deposit to enable a mineral resource estimation. The third DD
campaign (2010) tested the extension of the mineralization to the Southwest. The fourth and
last DD campaign (2013) tested the Northeast, Southwest and depth extensions of the
deposit, and duplicated drill holes from previous campaigns. The drilling grid was 40m x 30m
intercepting the main ore bodies with an angle close to perpendicular.

Table 6.9_1
SMI Gold Project
Gbeitouo Exploration after 1995

Year Work Description

Regional Géoterrex Survey of 1979 : magnetics,

1995
Geophysics electromagnetic

Regional
1996 2,059 samples
Stream Sediment Sampling

Regional 11,365 samples on a grid of 200x50m, reduced

1995-1996
Soil Geochemistry 100x50m

1996 Pits 64 pits on a grid 30x25m and 30x12.5m

1999 Pits 74 pits totalling 1058m, grid 200x25m

1999 Magnetics 2 rectangles and 2 dipôle-dipôle profiles

78 boreholes totalling 6,898m (4666m RC + 2.232m

2007-2009 RC et DD Drilling
DD)

2007-2009 RAB Drilling 41 boreholes totalling 1,025m

2010 DD Drilling 4 boreholes totalling 522m

2013 DD Drilling 33 boreholes totalling 4,554m

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 37

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

6.10 Historic Gold Production

Historic gold production from the Ity Mine is given in Table 6.10_1.

Table 6.10_1
SMI Gold Project
Historic Gold Production Ity Mine

Ore Mined Gold Produced Gold Produced

Year Grade Mined (g/t)
(t) (kg) (oz)
1990/91 160,937 10.3 723 23,259

1991/92 112,597 8.7 1,248 40,124

1992/93 170,181 9.6 1,192 38,324

1993/94 320,559 10.3 1,246 40,060

1994/95 2,093 9.1 1,326 42,632

1995/96 395,695 6.9 1,276 41,024

1996/97 324,595 6.2 1,582 50,862

1998 303,355 6.3 1,464 47,069

1999 310,449 6.8 1,432 46,040

2000 330,136 5.7 1,542 49,576

2001 404,415 5.2 1,858 59,736

2002 283,151 5.4 1,600 51,441

2003 0 - 0 0

2004 483,577 3.9 1,263 40,606

2005 443,581 3.8 1,335 42,920

2006 387,836 3.6 1,323 42,535

2007 444,047 3.6 1,243 39,963

2008 520,051 4.4 1,694 54,463

2009 490,198 3.3 1,608 51,698

2010 367,721 4.0 1,155 37,134

2011 385,523 3.0 1,143 36,748

2012 530,114 4.0 1,693 54,431

2013 706,192 4.2 2,552 82,062

TOTAL 7,877,003 5.0 31,498 1,012,710

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 38

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

7 GEOLOGICAL SETTING AND MINERALIZATION

7.1 Regional Geology

The description of the regional geological setting is taken primarily from the End of Campaign
reports prepared by SMI for the Aires de Lixiviation, Teckraie and Daapleu (Febvey and
Bottero 2013). The Qualified Person is familiar with most of the references used and is in
agreement that the description fairly represents the generally accepted interpretation of the
regional geology.

The Ity deposits are located in the Lower Proterozoic Birimian Formations of Toulépleu-Ity
klippe. The Toulepleu-Ity klippe is a small remnant of Birimian in the West African Craton
which spans ten countries, between Côte d'Ivoire, Senegal, Niger and Ghana.

Milesi et.al. (1989) and BRGM (1986, 1989), proposed a definition of the Birimian with a
lithostratigraphic succession separated into two large groups:

 A Lower Birimian (B1) set essentially flyschoid basin fill. The whole basin is affected by
three cycles of deformation:
 D1 (2090-2100Ma) phase of major collision: duplication of the lower Proterozoic on the
gneissic Archaean basement, a break in all B1 sedimentation and intrusion of syn-
kinematic granites;
 D2 and D3 (2090-1970Ma) responsible for the intrusion of granites mantle between
2080 and 1945my (D2 large sinistral offsets, related overlaps and folding; D3 dextral
offsets and associated folds);
 The upper Birimian (B2), volcanic-dominated, with where fluvio-deltaic formations are
intercalated in volcano-sedimentary facies.
Figure 7.1_1 shows a simplified geology of the West African Craton, the location of the
principal gold and base metal deposits and the Birimian window which contains the Ity
deposit.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 39

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 7.1_1
Simplified Geology of the West African Craton

According to Milesi et.al. (1989), the Eburnean metallogenic cycle, rich in gold and base
metals lasted 150Ma with:

 A first period at the time of the filling of the B1; stratiform deposits of Mn, Fe, Au, Zn-Ag
are being put in place at about 2150Ma at the top of the stratigraphic pile. This period
ends with the deposition of gold mineralization in conglomerates;
 The second, late-orogenic metallogenic period appears with the latter brittle
deformation phases of D1 and D2. It is marked by mesothermal mineralization,
followed by quartz veins and paragenetic Pb-Zn-Ag-Bi deposits dated at approximately
201Ma.
The deposits encountered in West Africa in the Birimian are diverse. Examples of deposit
types are:

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 40

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Gold mineralization associated with major shear zones for example, Obuasi (AngloGold
Ashanti/Randgold Resources) along Ashanti Fault Zone in Ghana.
 Gold Mineralization associated with conglomerates at the base of paleo-channels
(placers) as in the deposit at Tarkwa in Ghana (Iamgold).
 Volcanic Massive Sulphides in the lower Birimian for example the Zinc deposit at
Perkoa in Burkina Faso (Blackthorn Resources and Glencore International, project in
development).
 Sedex deposits of the Nstuta manganese mine in Ghana operated by the Ghana
Manganese Company Limited since 1916. Mineralization is associated with turbidites
within a volcano-clastic terrane (van Bart, 2001).
 Gold skarn at Ity. Ity is the only known Au skarn in the Birimian however iron skarns
are known in the Kéniéba-Kedougou Inlier of the Faleme District in Mali and Senegal
(Shartz & Melcher, 2004).
Figure 7.1_2 shows the location of the Toulépleu-Ity klippe and the location of the SMI
permits. Two different packages of Birimian rocks are found in the klippe.
 On the west, plutonic and metamorphic rocks;
 Sediments and volcano-sedimentary packages (B1) to the east.
Birimian formations overlie the Archaean basement and were emplaced by large regional
thrust-faulting.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 41

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 7.1_2
Simplified Geological Map of the Toulépleu-Ity Klippe

The Birimian B1 formations correspond to meta-sedimentary series (pelites, gresopelites and

carbonates) which have been subjected to greenschist-lower amphibolite facies regional
metamorphism. The Toulépleu-Ity klippe is oriented NE-SW. The emplacement of diorites
and granodiorites in the meta-carbonate sediments resulted in contact metamorphism causing
skarn development with masses and stockworks of sulphides and magnetite containing gold
mineralization. These phenomena are accompanied by extensive hydrothermal alteration
(Palanque, 2004). Sedimentary and volcano-sedimentary formations of the Toulépleu-Ity
klippe are part of the B1 terrane and are therefore affected by the three tectonic phases
described previously.

7.2 Local Geology

The Ity area is characterized by a series of granodioritic intrusions into a sedimentary

sequence of volcano-sediments and carbonates. The volcanic deposits are tuffaceous with
chemistry that ranges from basic to acidic. All formations have been subjected to regional
metamorphism.

The deposits of Ity, Zia, Walter and Flotouo are skarns developed at the contacts of the
granodiorite with the carbonates. The Teckraie is the rock dump of the Flotouo open pit and
sits on top of a weathered granodiorite. The Daapleu deposit is characterized by the

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 42

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

presence of a “rhyolitic” intrusive surrounded by a package of volcanosediments. The

“rhyolite” is locally called “daaplite” and is leucocratic (grey to white), microgranular, schistose
and rich in micas, essentially a fine grained granite. The Gbeitouo deposit is in the volcano
sediments.

Abbreviations below represent stratigraphic codes used in the Ity database.

7.2.1 Laterites
Laterites are soils without texture, formed by supergene alteration of iron rich rocks and are
generally red in colour. Four categories have been identified on Mining Permit PE26. The
succession described below has been observed to be generally less than 10m thick.

 Lateritic clays (LF) these are found at the top of the sedimentary pile and include
limonites and the topsoil. Residues of organic material found in this layer give the
laterite a dark red-brick to brown colour.
 Lateritic gravels (LG) have a brick-red to brown clay matrix (about 30% of the volume)
and contain abundant concretions of iron oxides and hydroxides (hematite, goethite and
magnetite) as rounded pisoliths from millimetres to centimetres in size. Dendrites of
manganese oxide (pyrolusite) several centimetres long coat fractures and pore spaces.
 Mixed Laterites (LM) are similar to the gravels in appearance but have a higher
proportion of matrix to concretions.
 Mottled laterites (LT) vary in colour from red-orange to yellowish orange with patches
of white kaolinite. Rare pisoliths and traces of iron oxides are present in this layer.
In all lateritic profiles millimetre scale fragments of magnetite and quartz are present.

7.2.2 Saprolites (Argiles)

The saprolites in the Ity area have a plastic texture and a grainsize of less than 2m. The
saprolites are designated silts, sandy silt and breccia and all retain texture of the protolith to a
greater or lesser extent. The saprolites are the result of supergene alteration, hydrothermal
alteration or a combination of the two. The facies vary in colour as a function of the protolith
and degree of oxidation.

Oxidized Saprolites (Argiles Oxidées AO) - are essentially oxides and hydroxides of iron
(Fe2+ and Fe3+) which are present in a wide range of colours, yellow, orange, brick-red violet
etc. The oxidized saprolites are subdivided into three types, Redox front (AOR), saprolite rich
in iron oxides and manganese (AOX) and sandy saprolites (AOS).

Reduced Saprolites (Argiles Réduites AR) - are coloured green to white or light grey. They
are generally found deeper than that oxidized saprolites and correspond to the water table
limit. The minerals in this zone are principally kaolinite and hydrated minerals, tremolite and
actinolite. There is a subtype which has a higher percentage of sandy material and is
designated ARS in the geological logs.

In the saprolites breccias are coded BAO and BAR depending on the surrounding lithology.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 43

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

7.2.3 Rock Dumps

Rock Dumps present as oxidized saprolite breccia with a brownish orange matrix with an
assemblage of centimetre sized clasts of different colours (orange, green, grey, whitish,
yellow, mauve and some with granular textures) giving a multi-coloured deposit. Various
clasts of competent material have been identified in the dumps. These include centimetre
sized fragments of quartz and gravels, lateritic zones contain pisoliths and iron oxides. In the
northern area at Teckraie, the base of the rock dump is lined with fine grey material,
compacted by the weight of the surrounding material. These fine particles impregnate the
laterites which separate the rock dump from the altered granodiorite below. This facies is also
in the leach pads.

7.2.4 Daapleu Rhyolite (Daaplite, IFMD)

The granitic intrusive at Daapleu is locally called a rhyolite as it has a fine texture. The
rhyolite is leucocratic (grey to white), microgranular, schistose and rich in sericite and contains
fine-grained pyrite or magnetite disseminated and in fractures. Numerous pink tinged silicified
zones have been identified (possibly hematite). Several zones of intercalated volcano-
sediments have been intersected near the edges. The rhyolites are crossed by veins of
quartz ± tourmaline.

7.2.5 MetavolcanoSediments
The volcano-sediments present are dark greyish-brown to grey-green and finely laminated.
Minerals are primarily amphibole, chlorite, biotite, traces of magnetite, calcite as veinlets and
fracture coatings, and quartz veins with tourmaline. Disseminated and massive pyrite is found
within the lamination in proximity to the daaplite contact and diminishes with depth (away from
the contact). In some places the metavolcanic sediments contain abundant amounts of
calcite (ex. Borehole DA13-016).

7.2.6 Other Lithologies

Greenish microcrystalline carbonates (CM) with chlorite-epidote alteration, disseminated
pyrites and magnetite (DA13-023).

Coarse-grained grey-green mafic intrusive (IMG) composed of amphibole, magnetite and

chlorite with fine-grained disseminated pyrite and calcite veins.

Coarse-grained grey felsic intrusive (IFG) riche in sericite, magnetite and large straw-like
crystals of muscovite (borehole DA13-015).

Grey-green mafic-porphyritic intrusive (IMP) with chlorite alteration and phenocrysts of

green amphibole (borehole DA13-023).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 44

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

7.3 Deposit Geometry

A plan of the SMI operations with the positions of the deposits is given Figures 4.1_3.
Approximate dimensions of the deposits are shown in Table 7.3_1

Table 7.3_1
SMI Gold Project
Approximate Dimensions of the Deposits

Deposit Length Width (Plan) Depth Extent Strike Dip

(Plan) (m) (m) (vertical) (m)

Aires 460 500 40m NA NA

Teckraie 360 215 35m NA NA

Verse Ouest 550 430 35m NA NA

Daapleu 1,200 350 >200m N50°E, N78°E 50-68°W-NW

ZiaNE 545 245 125m N40°E 25°NW

Mont Ity 990 540 250m N34°E 32-43°NW

Walter 600 150 150m N45°E 22-60°NW

Gbeitouo 300 25 (thick) 150m N30°E 40-55°NW

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 45

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

8 DEPOSIT TYPES

8.1 Introduction

The SMI property deposits are part of a class of deposits called orogenic gold deposits.
These can be described as gold-bearing quartz veins, stringers and wall rock replacement
accompanied by only minor sulphides that are localized by brittle to ductile structures within
variable rock types.

These deposits account for up to 18% of the world’s gold production, ranking them second
only to production from placer deposits. Deposits range in size from 0.5t to 1,600t of
contained gold with most, typically, containing between 1t and 20t gold. Gold grades are
highly variable, but values of >1g/t Au for open-pit and >5g/t Au for underground operations
can be economic. Deposits of this type occur in various countries, including Australia, Brazil,
DRC, Canada, Ghana, Tanzania, the USA and Zimbabwe.

The rock types that host orogenic gold deposits are highly varied. Orogenic gold deposits are
hosted by rocks that have been subjected to a range of metamorphic conditions (from sub-
greenschist though to granulite facies). However, the majority of deposits (and especially the
larger ones) occur within rocks that have been metamorphosed to greenschist facies (within a
metamorphic pressure-temperature regime broadly corresponding to the brittle-ductile
transition).

Where gold deposits have been described, the nature of the gold distribution was found to be
highly variable between deposits. Mineralization occurs in swarms of discontinuous veins of
varying thickness and extent and as disseminated impregnations in sheared and altered rock.
Gold occurs as native gold and/or associated with sulphides, with pyrite and arsenopyrite
being the most commonly reported, however other metals such as copper and nickel can
occur in economic quantities. Veins follow brittle fractures, bedding planes, shear zones and
schistosity.

8.2 Skarn Deposits

The following is a short description of the Ity deposit geology to indicate the style of
mineralization at ZiaNE, Mont Ity and Walter and of the material from which the Aires and
Teckraie dumps have been derived. The primary difference between Mont Ity and ZiaNE
appears to be the lack of karst development at ZiaNE due to the position of the granite in the
footwall. Walter is considered the North-eastern extension of Mont Ity, and is composed of a
mix of endo- and exo-skarns developed at the interface between the carbonate and the
granodiorite.

The interpreted section (Figure 8.2_1) is situated in the centre of the Zia NE and Mont Ity
deposit. In this section four types of mineralization are seen.

 Skarns in fresh rock;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 46

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Reduced saprolites;
 Oxidized saprolites;
 Laterites.
The skarn corresponds to a sulphur rich skarn (pyrite-pyrrhotite-chalcopyrite, 3-10%) with
accessory magnetite. These mineralized zones form discontinuous, sub parallel lenses at the
contact with the granodiorite. In the north part of the deposit economic grades and
thicknesses were intercepted in the boreholes from the 2013 campaign. The sulphide
mineralization was intersected in the carbonates and the granodiorite at ZiaNE and is
continuous with the mineralization in the oxidized portions of the skarn.

The mineralized portions of the reduced saprolites correspond to the skarns which have been
oxidized and have had the carbonates dissolved. These are rocks rich in chlorite, tremolite
and/or actinolite. The sulphides are partially oxidized. The reduced saprolites are the
transition zone between the oxidized material and the fresh rock.

The oxidized saprolites form the major part of the mineralization at Mont Ity. The
mineralization was originally a skarn which has undergone severe supergene alteration. The
alteration was enhanced by the dissolution of the sulphides. The alteration was responsible
for the generation of karst into which the saprolite material collapsed. This is the explanation
for the geometry of the deposit. The laterites have historically been mined at Mont Ity and are
found in a small zone in the southeast of the pit.

Figure 8.2_1
Schematic Geological Section of the Mont Ity deposit.

The Mont Ity deposit is an unusual deposit not only because Proterozoic skarn deposits are
rare but because the supergene alteration has completely changed the deposit geometry.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 47

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 8.2_2 shows the Mont Ity deposit as interpreted before the supergene alteration. The
primary mineralization is found in the endo- and exoskarn. The mineralized zones is found as
discontinuous, sub parallel lenses in contact with the granodiorite and carbonates The
primary Au (Cu-Mo-Ag-Zn) is associated with the intrusion of the granodiorite. The intrusion
of the granodiorite is accompanied by the emplacement of a dyke of similar composition in the
carbonates.

Figure 8.2_2
Interpreted Pre-alteration Stage of the Ity Deposit

The first stage of supergene alteration is characterized by the infiltration of meteoric water.
The meteoric water reacted with the sulphide rich mineralization, especially in the massive
sulphide zones. Oxidation of the pyrite in an aqueous solution generates sulphuric acid. The
acid then reacts with the host carbonate. The Fe is found as goethite, ferrihydrite and other
Fe-Mn oxides. The dissolution of the carbonated results in the formation of CO2 and voids.

Oxidation of the sulphides results in the dissolution of the adjacent carbonates and creates
cavities (Figure 8.2_3). The instability in the system causes the collapse of the mineralized
zone into these karsts. The carbonates and the calcsilicates zones in the skarns were not
pure calcite. This results in the formation of different decarbonized clays. The well
mineralized zones in the karst are described a zones rich in iron and magnesium oxides, the
products of the oxidation of the primary mineralization. This oxidation was accompanied by a
loss of volume in the mineralized zones resulting in an enrichment of the gold.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 48

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 8.2_3
Schematic Diagram of the First Phase of Alteration

The alteration process became self-propagating as the oxidation front went deeper. The
dissolution became deeper and collapse followed. Erosion and laterization affected the upper
parts of the deposit. The laterite zones rich in gold in the southwest of the pit are probably
oxidised clays which collapsed as erosion removed the surface and were themselves
laterized. Such a phenomenon would explain the lack of root zone in the mineralization. This
also implies that there is a lack of mobility of the gold in the laterites at Mont Ity.

8.3 Shear Zone Deposits

The Daapleu and Gbeitouo deposits resemble typical shear zone deposits of the West African
granite-greenstone terrane. The deposit itself is associated with a major regional shear zone
but is developed on a secondary structure (Figure 7.1_1 and 7.1_2). The host-rock lithologies
can be any form of sediment, carbonate or igneous rock with the main feature being a shear
zone between two contrasting lithologies. Mineralization may also be spatially related to the
emplacement of intrusives. The gold mineralization is mesothermal in origin and occurs as
free gold in quartz vein stockworks and zones of silicification, associated with arsenopyrite
and to a lesser extent pyrite and antimony. Depending on the geological terrane other metals
may be associated with the gold and arsenic.

The gold mineralization is found in linear zones in or near the contacts between two different
rock types. The contacts show evidence of shearing. Alteration is weak to severe depending
on the development of the system.

The Daapleu deposit is hosted at the contact of the granitic intrusive and the volcano-
sediments and within the intrusive itself. The Gbeitouo deposit is mostly hosted in meta-
volcanosediments is considered to be a structurally controlled deposit similar to Daapleu.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 49

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

9 EXPLORATION

The Aires de Lixiviation are residues of a heap leach operation, Verse Ouest is a rock dump
and Teckraie is a rock dump of the Flotouo open pit. No exploration has been done over
these areas. Walter and Gbeitouo have been assessed in historical campaigns and most
recently in 2013-2014. ZiaNE is on the Ity Gold Mine property and has been assessed in
historical campaigns and most recently in 2015. Mont Ity is an operational mine and has been
assessed in historical campaigns or more recently by drilling. All recent evaluation has been
in the form of drilling and is detailed in Section 10.

Daapleu has been the subject of both historical evaluation and recent work in 2013 and 2104.
Such work is described in detail in Kone and Furic, 2014 and summarized below.

 No soil or stream sediment sampling has been undertaken on the property in the latest
exploration campaign.
 No trenches or pits have been dug for mapping and sampling.
 No geophysical surveys have been undertaken in this exploration campaign.
 Mapping and prospecting consists of mapping and sampling of the artisanal workings at
Daapleu in October and November 2013. Mapping of the pits was to establish the
chemical signature of the mineralization, structural control on the mineralization and to
map the lithological contacts.
Sampling was in the form of grab samples horizontal channel samples and vertical channel
samples. Some evidence of the horizontal sampling was still in existence the time of the site
visit by Coffey. Most of the sampling evidence has been destroyed by mining or erosion.

The following are general observations for the pit mapping.

Brick-red lateritic gravels cover most of the area mapped. Thickness does not exceed 3m.
They cover a thin zone of red saprolites. Mauve coloured sandy saprolites were encountered
in all three pits. They are interpreted as either altered mafic intrusives or as altered meta-
volcano-sediments. Yellow sandy saprolite with sericite is common in the material extracted.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 50

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

10 DRILLING

Due to the large number of boreholes drilled and samples taken it is not feasible to record all
intersections. The reader is referred to Section 14, Mineral Resource Estimates for
representative sections and distributions of gold values.

Drilling procedures referred to in this section are for the drilling campaigns 2013-2015. All
other drilling is considered historical as it was done by a previous owner. Methodologies
would not necessarily have been the same. Historical information is discussed under Data
Verification (Section 12).

10.1 Drilling Methods

Drilling methods used by the drilling contractors follow generally accepted industry practice.
AirCore drilling was not in progress at the time of the sites visits and no assessment has been
made. Diamond drilling (DD) was in progress on Mining Permit PE26 at Walter during the
2014 site visit and on Daapleu and Ity Flat area the 2015 site visit. There are no specific
procedures manuals relating to the actual drilling as this is the responsibility of the drilling
contractor.

Drilling was observed and the following general comments apply. The drilling equipment
appeared to be in good repair, the drilling team appeared to be experienced and familiar with
the equipment. Technicians on site worked fluently and appeared to be well trained. The
sites were well ordered, clean and set up so that there was enough space to work safely.

SMI has a comprehensive procedures document that describes the standards procedures for
both diamond drilling and reverse-circulation (RC) drilling (Conventional and AirCore) at the
drill site. The manuals suggest site layouts and give procedures and examples of the
handling of samples, marking of boxes, cores, chipbags and boxes etc. The general
procedures for RC, AirCore and DD are shown in Figure 10.1_1 and general procedures for
DD are shown in Figure 10.1_2.

Core is boxed, marked and oriented at the drill rig. Friable core is packed in plastic to
minimized loss during transport and handling. Meterage is measured, recorded and recovery
calculated at the drill site. Once drilling is completed the site is cleared, sumps drained and
boreholes marked with PVC pipe with all relevant borehole information.

RC samples are collected in bags and either spilt on site (older drilling) or split in the core
shed (newer drilling). Reference samples are stored in chip trays for logging.

A summary of the drilling for all eight deposits is given in Table 10.1_1.

In Gbeitouo, only the South-Western half has been estimated. Three of the diamond
boreholes, most of RAB drilling, and a large part of historical drillings were therefore not
included in the mineral resource estimate.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 51

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 10.1_1
General Procedures RC and AirCore Drilling

Figure 10.1_2
General Procedures Diamond Drilling

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 52

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 10.1_1
SMI Gold Project
Drilling Summary

Deposit Method Boreholes Metres Year Purpose

AirCore 89 4,249 2014‐2015 40 x40m grid to sample the residues
Aires
AirCore 70 2,206 2015 Sampling of slopes
Verse
Diamond 32 1,180 2013‐2014 Irregular grid sampling of residues
Ouest
Diamond 31 1,079 2013 Test for deeper mineralization and twin holes
Teckraie RC 2 28 2013 Delineation
AirCore 85 3191 2013‐2014 Test for Au grades, infills and twin holes
RC 19 1,926 2003 Delineation
Diamond 13 995 2008 Delineation
RC 23 1,558 2008 Delineation
RC 5 408 2013 Delineation
Daapleu
Diamond 48 7,507 2013 Infill
Diamond 44 6,480 2014 Resource definition to the south and twining
25 x50mgrid, 4 vertical , rest inclined 50‐60
Diamond 79 10,821 2014‐2015
degrees, Infill
2008 holes reassayed only geometry and
Diamond 375 19,526 2008/2014
sampling
Diamond 9 1,025 1996 Reconnaissance
Diamond 42 3,524 2008 Delineation
RC 10 926 2008 Delineation
ZiaNE Diamond 74 10,414 2012 Infill and extension
Diamond 16 1,902 2013 Infill and extension
Diamond 70 7,276 2014 Infill and extension
Diamond 32 2,779 2015 Infill
Diamond 31 2,519 2000‐2001 Check for deeper mineralization
RC 89 7,402 2000‐2001 Check for deeper mineralization
Twin holes and sterilizing the area west of the
Diamond 1,101 2002
18 Mount Ity deposit.
Twin holes and sterilizing the area west of the
RC 1,635 2002
36 Mount Ity deposit.
RC 156 3,727 2011‐2012 Define the clay mineralization at depth
My Ity Diamond 10,435 2011‐2012 Define the clay mineralization at depth
53
30X30m grid to define the laterites and deeper
Diamond 20,726 2013
139 mineralization
30X30m grid to define the laterites and deeper
Diamond 3,045 2014
24 mineralization
30X30m grid to define the laterites and deeper
RC 523 2014
5 mineralization
Diamond 34 2,092 2008 Delineation
RC 2 120 2008 Delineation
Walter
RC 4 242 2009 Delineation

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 53

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 10.1_1
SMI Gold Project
Drilling Summary

Deposit Method Boreholes Metres Year Purpose

(RC)‐DD 6 613 2009 Delineation
Diamond 3 530 2013 Infill and extension
Diamond 29 3,386 2014 Infill and extension
RC 19 1,891 2014 Infill and extension
RC 78 4,666 2007‐2009 Delineation
Diamond 31 2,237 2007‐2009 Delineation

Gbeitouo* RAB 19 2,240 2007‐2009 Surface exploration

Diamond 3 63 2010 Infill
Diamond 33 4,554 2013 Infill
In Gbeitouo, only the South‐Western half has been estimated. Three of the diamond holes. most of the RAB drilling,
and a large part of historical drilling were therefore not included in the mineral resource estimate
*Boreholes included in the resource estimate

10.2 Other Sources of Data Used for Resource Definition

No other sources of subsurface data were used in the mineral resource estimation.
Topography is affected by the underlying geology and artisanal workings on the surface
expressions of the mineralization. Both the topography and artisanal workings along with
geological maps, where available, were used to verify the geological and mineralization
models at Daapleu and ZiaNE.

10.3 Surveying

10.3.1 Borehole Collars

All borehole collars are sited and checked by DGPS by qualified staff. Some Daapleu drilling
is visible in satellite images. Collar positions were plotted on the satellite images to verify
positions and the coordinate transformations applied. Collars plot where expected.
Elevations are compared to the topographic survey and can be corrected if necessary.
Positions appear to be accurate.

10.3.2 Downhole Surveying

Deviations on diamond and reverse circulation boreholes at Daapleu were measured using
the Reflex EZ SHOTTM system. The first measurement is between 10 and 15m to verify the
inclination and orientation of the borehole. Measurement is taken at 25m intervals for the first
100m then at 50m intervals until the end of borehole. The last measurement is at the end of
the borehole. Orientation of the core was undertaken on fresh rock using the ACTII system
with measurements approximately every 30m.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 54

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

A full procedures manual for downhole surveying including a quality control/verification

procedure has been prepared by SMI.

Coffey did not observe any surveying as there were no boreholes at the drilling stage where
surveying was possible. However the database was interrogated and where anomalies were
found the data was either corrected or removed.

Three boreholes at the Aires were checked for deviation from vertical. No significant deviation
was found and all boreholes are considered to be similar. Aircore boreholes are not surveyed
as the side walls are not stable. Boreholes are shallow and no significant deviation is
expected.

10.3.3 Surface Topography

Surface topography for the Daapleu, Verse Ouest, Zia, Walter is from a Lidar survey over both
Mining Permit PE26 and PR61.

Surface topography of the Aires and Teckraie, Mont Ity and Gbeitouo are from surface
surveys by the SMI survey staff. Survey data is collected in MARREC system used at the
mine and converted to UTM-WGS84. The conversion system is documented and is available
from the mine.

10.4 Qualified Person’s Comments (Mudau)

Drilling and survey procedures observed are to acceptable industry standards, are appropriate
to the deposits being drilled and are appropriate for mineral resource estimation.

10.5 Qualified Person’s Comments (Bosc)

Walter and Gbeitouo still have a large proportion of historical boreholes for their mineral
resource estimates. Historical drilling was poorly documented between 2002 and 2012.
Sufficient additional drilling allowed verification of historic drilling for use in industry standard
resource estimates. Drilling practices from 2012 onward were all documented and regularly
assessed by independent senior consultants and are to acceptable industry standards, are
appropriate to the deposits being drilled and are appropriate for mineral resource estimation.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 55

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

11 SAMPLE PREPARATION, ANALYSES AND SECURITY

11.1 Sampling

Sampling of all SMI projects follows the same protocols. The processes described below
applies to all four project areas for drilling campaigns of 2013-2014 and any resampling of
historical drilling during this period. SMI has procedures manuals which document all
sampling protocols in detail. In addition regular monitoring of sampling procedures is
undertaken to ensure compliance and to make changes any procedures that may not be
appropriate for the intended outcomes of the exploration programme.

11.1.1 Diamond Core Samples

The sampling procedures are documented in standard procedures manuals. The following is
a summary of the main features;

 Sample lengths should be between 0.5 and 1.5m;

 There is a procedure for dealing with loss zones, ground core etc;
 Intact core is cut with a diamond saw; friable core is cut with a blade;
 Specific formats for marking core and sample bags are laid out.

11.1.2 RC Samples
The sampling procedures are documented in standard procedures manuals. The sample
splitting procedure at the rig or at the sample preparation facility for RC samples is presented
in Figure 11.1.2_1.

Figure 11.1.2_1
RC Splitting Sequence

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 56

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

It is noted that SMI does not use a cyclone splitter to collect the samples but rather splits
manually. It is also noted that a three stage splitter is used to reduce the samples.

Qualified Person’s Comments (Mudau): The splitting equipment was discussed with SMI
exploration staff and the reasons for not using a splitter mounted on the cyclone. Equipment
quality, availability and wet samples appeared to be the main problem. Manual splitting can
lead to sample bias especially with the three stage splitter which are not always manufactured
or assembled correctly. Problems generally are lack of good alignment of the three splitters,
poor levelling and fatigue in the technical staff are the main contributors to biased sampling.
SMI appears to be aware of the problem and has the correct equipment.

11.1.3 Sample Preparation

Sample preparation facilities were inspected in May 2014 by K. Body and April 2015 by
M Mudau. Sample preparation facilities were set up in early 2014 and comments below apply
to these facilities. Assay methods are discussed in Section 11.3.

Qualified Person’s Comments (Mudau): SMI has established a sample preparation facility
on site for the preparation of exploration samples for analysis. This facility is separate from
the mine sampling and testing facility. The QP did not visit Bureau Veritas (BV) in Abidjan but
did visit the site facility to view the preparation process.

 The facility is an open air facility but with closed sections for the splitting and millings
stages;
 Core cutting is in a separate room that does not open onto the preparation facility;
 Equipment is new and appears in good repair;
 Staff appear to be well trained and could explain, with understanding, the processes
they were carrying out and the potential sources of error;
 Errors in insertion of quality control standards continue to occur however steps are
being put in place to reduce the potential for error;
 Supervision by experience exploration staff is necessary to ensure that procedures are
followed;
 The 2015 site visit noted some housekeeping issues. Recommendations have been
made to SMI to address the problems of dust in the open air portion of the facility.
Qualified Person’s Comments (Bosc): Walter and Gbeitouo databases contain historical
samples, which, until 2012, were processed and assayed on-site. Historical sample
preparation documentation shows a number of similarities with later sample preparation.
Quality and repeatability has been carefully assessed by samples from historical boreholes re-
submitted as umpire samples to an accredited laboratory with fire-assay with recent drilling
campaigns.

From 2012 to 2104, half core and split-RC samples were submitted to Bureau Veritas in
Abidjan, who performed all sample preparation and assay with procedures similar to other
gold projects in the region.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 57

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

11.2 Assaying

SMI uses four analysis techniques on the samples from the exploration programmes. Fire
Assay with an Atomic Absorption finish is the primary technique for gold. Three other
methods are used depending on the gold grades. Full assay certificates are provided by the
laboratories.

Fire Assay (BV code FA450) –Nominal 50g charge analysed. Silver used as secondary
collector, Au is determined with AAS finish. Samples are analysed at the Abidjan facility.

ICP-ES (BVcode ACQ300) is carried out at the Acme labs facility in Vancouver for samples
greater than 0.5 g/t Au

Fire Assay with gravimetric finish (BV FA550) is carried out on all samples with grade
greater than 30g/t

ICP- multi-element analysis by Aqua Regia digest for 36 elements is done for samples of
greater than 0.5g/t Au by AMCE laboratories in Vancouver Canada. It must be noted that
Aqua Regia is a partial digest and major elements are not used for whole rock analysis.

Qualified Person’s Comments (Mudau): Assay methods are appropriate for the deposit
types encountered on the property. The full suite of boreholes for Daapleu has not been
analysed for minor and major elements and not all of the ICP assay results were available at
the time of the mineral resource estimation. Of the results analysed only arsenic as was
useful for defining the mineralized zones at Daapleu. No ICP results were available for the
other deposits. Usefulness of ICP results for other deposits is still to be assessed.

11.3 Other Samples - Verification Assays

Samples from historical boreholes have been taken for analysis to verify the accuracy of the
assays. Historical sampling from Daapleu appears to be accurate and can be used in mineral
resource estimation. Where samples have been rejected the samples along with reasons
have been recorded in the exploration database.

Historical boreholes from ZiaNE have been reanalysed. The verification exercise showed that
historical assays done at the SMI laboratory at the time are unreliable. There was no
correlation between the historical assays and the verification assays. To this extent all
boreholes have been reanalysed and these new assays used for the mineral resource
estimation.

11.4 Bulk Densities

11.4.1 Methodologies
Bulk densities have only been measured on core for all deposits. Measurements have been
taken according the SMI procedures manual. For the 2015 drilling campaign the procedures

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 58

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

manual has been extensively edited. However the actual measurement procedures have not
changed.

SMI uses various methodologies to measure density. The method chosen depends on the
type of material. Three general methods are used, described as hydrostatic, filled volume
and volume displacement.

The hydrostatic method is used for whole core and consists of taking measurement of the
mass of the core in air and suspended in water. The density is calculated as a ratio of the dry
weight: difference dry wright and suspended weight.

The filled volume method is used for unconsolidated material from core or RC drilling. In
this method a container of known mass is filled, lightly compacted and weighed. The density
is calculated as the ratio of Mass:volume.

The volume displacement method uses a graduated cylinder filled to a set volume. The
piece or pieces of rock are immersed in the water and the change in volume recorded. The
density is calculated as the mass of the rock:change in volume. This method has a large error
due to the lack of accuracy of the graduated cylinder used for measurement. This method is
only used where the other two methods are not feasible.

Porous samples are covered with plastic wrap (food grade) or paraffin wax before immersion
in water. Procedures are set out in the manual for calculating densities if the sample is wet or
covered with paraffin wax.

Densities are normally measured on dry samples. Where samples are not dried, this is
documented and a separate calculation is used.

11.4.2 Deposit Densities

Densities statistics are presented for each deposit in Section 14.

11.4.3 Qualified Person’s Comments (Mudau)

The QP has reviewed the various methods for measuring and calculating density. The
methods used are reasonable and there are several methods available which are considered
appropriate for the material being measured. Because the samples are small, errors will be
fairly common. It has been suggested to the site geologists that a bulk density be calculated
per box from the nominal drilling diameter, length of core and weight of core as a check
against densities measurements on small pieces. SMI has scales that can measure the larger
weighs of full boxes.

A second bulk method for RC samples is to plot the histogram of the RC full sample
weights/m3 recovered and assess the statistical distribution of the samples. Where recoveries
are high the mean gives a good estimate of the density of the rock drilled.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 59

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

11.5 Analytical Quality Control (QA/QC) Procedures and Data

11.5.1 Introduction
A 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 mineral resource estimate. It is possible to identify samples that have 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 in the mineral resource estimate is of sufficient quality.

The control samples used during the campaigns on the Aires, Teckraie, Verse Ouest,
Daapleu, ZiaNe and Mont Ity project areas contained within this report comprised of
standards, blanks and field duplicates. The intended aim should be approximately 5%
coverage for standards, blanks and duplicates. The quality control data was analysed on an
on-going basis and generated some queries with the laboratory.

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/replicate is the split of a sample taken at a particular stage of the sampling

process; e.g. Field Duplicate.

Certified Standards – Client

Commercial reference standards sourced from three different manufacturers

Standards – Laboratory
Commercial reference standards sourced from three different manufacturers

Field Duplicates Diamond Core – Client

Field duplicates are a split of the unprocessed sample- quarter core in the case of diamond
drill boreholes. The aim of which is to assess the total sampling error.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 60

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Field Duplicates RC – Client

Field duplicates are a split of the unprocessed sample- a split off of the original sample
collected from the drilling rig. The aim of which is to assess the total sampling error. This is
routinely done every 50 samples.

Coarse Reject Duplicates – Client

Coarse rejects are taken on the split after the first crush. Normally undertaken at the sample
preparation site. This is routinely done every 50 samples.

Coarse Reject Duplicates – Laboratory

Coarse rejects are taken on the split after the first crush. Coarse rejects are taken by the
Bureau Veritas laboratory to check their own sample preparation.

Pulp Duplicates (“B” sample) – Client

Routinely done every 50 samples.

Pulp Duplicates (“B” sample) – Laboratory

Pulp duplicates are taken by the laboratory to check their own systems. The frequency varies
but appears to be a minimum of five per batch at Bureau Veritas, Abidjan.

Repeat Assays (Same Pulp) – Laboratory

Routinely done.

Umpire and Check Assaying

Check assaying, where pulp rejects are submitted to a second, independent laboratory, has
been undertaken on all historical drilling especially where a recognised commercial laboratory
was not used. Umpire assays have not been performed on the current drilling.

11.5.2 Quality Control Assessment

Quality control monitoring protocols involved submission of blanks, duplicates and certified
reference standards with the core sample batches. These control samples were inserted
within the samples in a systematic manner on each project area. During different campaigns
on these project areas the duplicates have comprised of a quarter split of the core, a coarse
split or a pulp. A total of 18 different standards have been used of varying grades. A
summary of the expected values for all these standards can be seen in Table 11.5.2_1. The
standards were supplied by Geostats, Gannet Holdings and Rock Labs of Australia. Two
different sources of blank material were used, beach sand and coarse rock chips that were
confirmed to not contain any Au. All assays for the most recent exploration campaigns were
done by Bureau Veritas laboratory, Abidjan, Côte d’Ivoire. In addition to the above, six
batches of samples were sent to ALS Chemex, Ouagadougou, Burkina Faso as umpire

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 61

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

checks. These samples came from the Mont Ity, and Zia NE project areas. A summary of the
Quality Control samples used is given in Tables 11.5.2_2 and 11.5.2_3.

Table 11.5.2_1
SMI Gold Project
Summary of the Expected Au Value of the Certified Reference Material Used

Standard EV Au ppm -2stddev + 2stddev Supplier

G303-2 4.15 3.81 4.49 Geostats Pty Ltd
G310-10 48.53 45.19 51.87 Geostats Pty Ltd
G311-9 10.01 10.97 9.05 Geostats Pty Ltd
G397-3 1.72 1.5 1.94 Geostats Pty Ltd
G901-7 1.52 1.4 1.64 Geostats Pty Ltd
G901-8 47.24 44.14 50.34 Geostats Pty Ltd
G908-8 9.65 8.89 10.41 Geostats Pty Ltd
G909-5 2.63 2.43 2.83 Geostats Pty Ltd
G910-5 5.23 4.81 5.65 Geostats Pty Ltd
G912-1 7.29 6.69 7.89 Geostats Pty Ltd
G912-4 1.91 1.73 2.09 Geostats Pty Ltd
G912-7 0.42 0.38 0.46 Geostats Pty Ltd
G996-4 0.51 0.43 0.59 Geostats Pty Ltd
G998-1 2.95 2.71 3.19 Geostats Pty Ltd
G998-6 0.8 0.92 0.68 Geostats Pty Ltd
SK62 4.075 3.795 4.355 Rock Labs
SN60 8.595 8.149 9.041 Rock labs
ST502 48.53 45.19 51.87 Gannet Holdings Pty Ltd

Table 11.5.2_2
SMI Gold Project
Summary of the Number of Control Samples

Aires, Teckraie, Verse Ouest, Daapleu, ZiaNe and Mont Ity

Submitted Rate Total Number

Control Type Coverage%
of Control of Samples

STANDARDS 4044 2.70%

BLANKS 7502 5.10%
147,756
DUPLICATES 5443 3.70%
UMPIRE 509 0.30%

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 62

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 11.5.2_3
SMI Gold Project
Summary of the Number of Control Samples

Gbeitouo

Submitted Rate Total Number

Control Type Coverage%
of Control of Samples

STANDARDS 85 2%
BLANKS 181 4%
4,547
DUPLICATES 292 6%
UMPIRE - -
Walter

Submitted Rate Total Number

Control Type Coverage%
of Control of Samples

STANDARDS 301 6%
BLANKS 388 8%
4,974
DUPLICATES 354 7%
UMPIRE - -

11.5.3 Qualified Person’s Comments (Mudau)

In general the results of the assays were within in acceptable limits. Standards which return
values within acceptable limits, usually two standard deviations, more than 90% of the time
are considered to indicate accurate assays. Only four standards had greater than the number
of fails in batches. Two of these have very low grades, <=0.5g/t, and the poor performance is
attributed to the poor accuracy of the assay method at these concentrations. Of the two other
standards, G998_01 and ST502, G998-01 falls within acceptable limits 85% of the time but
ST504 was outside limits 50% of the time. This standard generally performed poorly and it is
considered that the standard itself was the problem and not the analytical method. This
standard is no longer used. Minor sporadic contamination is evident in some blanks with 14
samples returning grades above 0.5ppm. This contamination, whilst minor, should be closely
monitored with the laboratory.

Of all duplicate pairs 81% are within 20% HARD precision limits. Many duplicate pairs can be
identified as fails. It is not unexpected that the precision slightly poor even once all samples
below ten times the detection limit have been removed. A number of duplicate samples
submitted were quarter core rather than a split of the original after initial crushing which
provides a poor comparison. It is also understood that all project areas except Daapleu
contain coarse gold and therefore a high nugget effect is likely. With this in mind the precision
of the assay results is deemed acceptable however it is suggested that the obvious outright
fails be checked in case of sample transposition.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 63

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Only 509 samples have been submitted for Umpire analysis. The samples were selected
from Mont Ity and ZiaNE project areas and were submitted in two batches during the 2013
campaign. The comparison between the two laboratories is very poor with only 48% of the
data falling within 10% HARD precision limits. In order to complete Umpire analysis correctly
the pulp tested at the primary laboratory should be re-submitted to the umpire laboratory.
From the data regarding the umpire samples it is not clear if this was done. Some samples
are identified as pulps others are not and appear to have been created from the reject
material and crushed and pulverised before being sent to the umpire laboratory. However,
even if the precision limit is increased to 20% approximately 70% fall within acceptable limits.
These samples are not acceptable as umpire samples and the results should be rejected.

The quality control program has improved in the last three years. SMI has migrated to an
Acquire database for its data management and all quality control analyses are routinely run
using the built-in analysis routines. In general the quality control programme is well managed
on the sample collection, preparation and analytical side. The lack umpire of samples is a
significant gap in the programme. The analytical results presented for use in the mineral
resource estimation are considered to be within the acceptable limits of accuracy and
precision for the deposits being evaluated.

11.5.4 Quality Control for Walter (Bosc)

During the 2013 campaign, quality control procedures involved the systematically insertion of
blanks, certified standards and duplicates which represent about 20% of the total samples
(Table 11.5.2_3). All assays were done by fire assay by Bureau Veritas laboratory, Abidjan,
Côte d’Ivoire.

There were two kinds of blank: (i) beach sand collected close to Abidjan (190 samples); (ii)
granite from SISAG quarry in Attinguié (198 samples). They were previously tested and were
confirmed barren. Only two blank samples were contaminated (0.5% of total blanks) during
Walter samples analyses. Three standards provided by Geostats Pty were used: G310-10,
G909-8 and G912-1. Refer to Table 11.5.2_1 for expected values.

Three hundred and one (301) standard samples were used for Walter study and only seven of
them were anomalous (2.3% of total standard samples), probably due to transposition. Three
hundred and fifty four (354) “field duplicates” were collected as quarter core.

The pair results showed important dispersion linked to gold inherent variability, but still the
correlation was good with no visible sampling errors. The Rank HARD plot was established
using Au values higher than 0.3ppm and indicated that 28% of the data had a HARD higher
than 20% representing a medium repeating quality. Still it can be explained by the gold
inherent variability. In 2014, five drill holes from the 2008 campaign were re-assayed with
quarter cores and by fire assay by Bureau Veritas laboratory in Abidjan, representing 4.5% of
the total campaign samples. Twenty two percent (22%) of the samples analysed were quality
control samples (blank, standard, duplicate). Good repeatability was observed although there
was still some dispersion issue due to gold inherent variability. The analytical results

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 64

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

presented for use in the mineral resource estimation are considered to be within the
acceptable limits of accuracy and precision for the deposits being evaluated.

11.5.5 Quality Control for Gbeitouo (Bosc)

During the 2013 campaign, quality control procedures involved the systematically insertion of
one blank, one certified standard and one duplicate about every 25 samples (Table 11.5.2_3).
All assays were done by fire assay by Bureau Veritas laboratory, Abidjan, Côte d’Ivoire. The
blank was made of beach sand that had not been tested and certified by an external
laboratory at the time of the study. It was used to test the contamination during pulverisation
and gave generally gold values lower than 0.05ppm. However minor contamination was
noticed with values between 0.1ppm and 0.2ppm. The standards that were used were
supplied by Geostats Pty and are G901-7, G397-3, G909-5 and G998-1. Refer to
Table 11.5.2_1 for expected values.

The results of the analyses indicated that the high-value standard (G901-8) systematically
showed a positive bias which was considered acceptable as sulphides-rich layers were
scarce. The other standards were most of the time within the -2stddev / +2stddev range
showing that the laboratory analyses were of good quality. The duplicates were obtained
using two separate quarters of core, belonging to the right half of the initial core. The
analytical results presented for use in the mineral resource estimation are considered to be
within the acceptable limits of accuracy and precision for the deposits being evaluated.

11.6 Data Management

11.6.1 Database
Historically data management was done through used of a custom built database using public
domain software as a base. This was used during previous campaigns to address the need
for some form of standard data capture. The author was not a professional programmer or
database expert and while useful, the software has failings. SMI migrated to the AcQuire
database software in 2014. This is a widely used commercial database that is especially
appropriate to operations such as SMI. Validation of historical data has been undertaken by
SMI with reviews by Coffey and Arethuse over the last few years. All historical data has been
migrated and validated in this new system. The software is still new to SMI and modifications
to some portions of the database may be needed. More operator training is also needed.

11.6.2 Borehole Logging

Borehole logging uses standard logging templates and codes. Logging protocols are given in
the exploration procedures manuals.

11.6.3 Sampling Records

Sample logging uses standard templates and procedures compatible with the working
database software. Protocols are defined in the relevant procedures manuals.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 65

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

11.6.4 Sample Storage

Sample storage for all drilling is at the SMI exploration camp at the Ity Gold Mine. The core
storage facilities were catalogued in 2014/2015 to assist in housekeeping and easy access of
the borehole samples or cores. Core is stored in either wooden boxes or metal trays. RC
samples are stored in containers with shelving installed. Two archive samples are stored,
washed samples in chip trays and an archive sample taken at the drill rig before sample
preparation.

Pulps are retrieved from the analytical laboratory and stored in containers in boxes.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 66

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

12 DATA VERIFICATION

12.1 Site Visit

All Coffey site visits were undertaken between 20 and 28 May 2014 (Body, 2014) and
between 12 and 21 April 2015 (Mudau, 2015). Amongst numerous visits, ARETHUSE
specifically performed two assessments of exploration procedures in February and October
2013. One of the objectives was to verify data used in the mineral resource estimation.
Aspects of the drilling and borehole identification are discussed in Sections 10. Assay and
sampling have been discussed in Sections 11. Additional verification was made by random
selection of boreholes from Daapleu, Mont Ity, ZiaNE, the Aires, Teckraie and Verse Ouest to
check the accuracy of logging and data records. Boreholes were chosen from different areas
of the deposits. Some of the boreholes chosen were twins of diamond core and RC drilling.
Borehole logging is acceptable and rock identification between diamond core and RC chips is
consistent. However, some boreholes from Mont Ity and Daapleu need to be relogged
because there are logging errors. This has been communicated to the SMI geologists.

Figure 12.1_1
Comparison of RC and Diamond Core Twins

12.2 Historical Data Validation

There is a large volume of data collected from various exploration programmes prior to the
current programmes, which began in 2013. In converting this data to electronic format
substantial validation of the data has been done to confirm consistency and accuracy.
Accuracy and completeness of record keeping, logging, surveys and assays have been
assessed in the validation procedures.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 67

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

All data that has been validated to date has validation codes attached to them in the
database. Where there are multiple data sets of the same type the data sets are ranked on
accuracy and a preferred data is recorded for use in geological modelling and mineral
resource estimation. Assay procedures have been evaluated for accuracy. Assays have
been validated for individual campaigns, laboratories and methods. Validation has included
reassaying of many of the older boreholes. Where data is found to be accurate, the historical
data is flagged for use. In the case of ZiaNE, reassaying of historical boreholes showed the
assays to be inaccurate and the entire borehole set was reassayed.

Independent audits and reviews have been undertaken by both Coffey and Arethuse since
2013. Validation exercises are extensively documented in SMI reports as well as mineral
resource estimation reports by Arethuse and Coffey.

12.3 Off-Site Data Validation

Off-site data validation by Coffey and Arethuse includes:-

 Quality control analysis to identify any irregularities.

 Comparison of twin boreholes.
The findings of the quality control results are discussed in Section 11 and the twin borehole
drilling below.

12.3.1 Aires
Four diamond drill boreholes were drilled by SMI to verify the results obtained from the initial
RC drilling. This drilling enabled a comparison to be made between the two different types of
drilling undertaken and the variability of mineralization over a short distance.

The twin borehole drilling although limited to four boreholes confirmed that the mineralization
is fairly well defined by the RC drilling. From the limited data the average grade of the dump
decreased in two twin diamond drilled boreholes and mean grade increased in two, compared
to the original RC drilling. The RC average grade for all 196 samples within the four
mineralized zones was 1.16g/t compared to 0.94g/t for the diamond drilling a difference of
23%. The difference in grade is attributed to the high nugget nature of gold mineralization and
one outlier of 52.7g/t returned for borehole S831 from 0m to 1m, which was not replicated in
the twin borehole S1372. Capping the outlier to 15.6g/t as per Section 2.7, the average grade
is reduced to 0.96g/t or a 2% difference between the original borehole and the twinned
borehole.

12.3.2 Verse Ouest

No boreholes were twinned at Verse Ouest.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 68

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

12.3.3 Teckraie
Twelve diamond drill boreholes were drilled by SMI to verify the results obtained from the RC
drilling at Teckraie. This drilling enabled a comparison to be made between the two different
types of drilling and the variability of mineralization over a short distance. Comparisons of the
original boreholes compared to the twin boreholes are presented below Figure 12.3.3_1.

The comprehensive twin drilling confirmed that the mineralization is fairly well defined by the
RC drilling. From the data, the average grade of the dump decreased in seven twin diamond
drilled boreholes while the remaining five increased in grade. The difference in grade
between the individual twin samples is attributed to the random construction of the dump and
the high nugget nature of gold mineralization. There however appears a bias at the upper
assay grades, with higher grade outliers associated with the diamond drilling. For example an
assay grade of 72.0g/t Au was returned for borehole S905 at 20m to 21m which was not
replicated in the original borehole. This difference is attributed to the different drilling and
sampling methodologies applied, with the air drilling results tending to be smoothed in
comparison to the core drilling. This is not regarded as critical for the mineral resource
estimation and has been partly addressed by high grade capping (Section 14.2.7)

Figure 12.3.3_1
Teckraie
Twin Borehole Drilling Comparison

12.3.4 Daapleu
RC boreholes were drilled by SMI in 2013 to verify the results obtained from the initial
diamond drilling undertaken in 1997. This drilling enabled a comparison to be made between
the two different types of drilling undertaken and the variability of mineralization over a short
distance. A comparison of the original boreholes and the twin boreholes is presented in
Figure 12.3.4_1.

From the data there is a moderate to good correlation between the original and current drilling
for three of the four twin boreholes with the fourth (DA13-039 and S162) displaying a

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 69

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

moderate to poor correlation. The average grade of the deposit was lower in three of the four
original boreholes compared to the current RC drilling. One sample of 64.43g/t Au returned
for borehole DA13-038 was not replicated in the original borehole S167, although high grades
in excess of 10g/t Au were obtained in close proximity to the outlier. The difference in grade
between the individual twin samples is attributed to the high nugget nature of gold
mineralization, the boreholes not being exact twins and the mineralization being slightly off set
between boreholes e.g. DA13-047 and S164.

Figure 12.3.4_1
Daapleu
Twin Borehole Drilling Comparison

12.3.5 ZiaNE
No twin borehole comparison is available for Zia Northeast. Data used for the estimation is
from the 2014 and 2015 drilling campaign. Assay data from the 2008 drilling campaign has
been assessed deemed unreliable and has been replaced with the results of the reassay, in
2014, of all of these cores.

12.3.6 Mont Ity

There are seven diamond boreholes were drilled to confirm the results obtained from the RC
samples. Overall, the boreholes compare favourably. Due to nuggety nature of gold and the
separation between boreholes of up to 10m, some variation is expected between boreholes
but the width of the mineralized zone and major trends in the mineralization are expected to
be similar.

12.3.7 Walter
There are five twin borehole sets at Walter. One set of RC/diamond boreholes from 2008
drilling over a 60m interval, two pairs from the 2008 twinned with 2013-14 drilling campaigns
and another two sets of RC/Diamond from the 2013-2014 campaign. The boreholes from the
2008 campaign show a highly variable mineralization in the weathered zone. But the higher
grade zone below 20m has similar trends in both boreholes.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 70

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

In the set comparing the 2008 and 2013 drilling the following comments are made:

 Mineralized zones are all defined by a 0.5g/t cut-off, but will present distinct grade
variation within the same mineralised envelope;
 The very high grade interval in S1162 is absent from its twin W08-577BIS. These
boreholes are 5m apart;
 The grades are generally lower for the 2008 boreholes suggesting a possible under
estimation of the grades from these boreholes.
The twin boreholes drilled in the 2013-2014. There is some offset in the high grades between
the boreholes. But they show a good correlation between the RC and diamond results. The
better similarity between the RC/Diamond of the 3013-2014 campaign can be explained by
the smaller distance separating the boreholes than in the other campaigns.

The offsets of mineralization and variation in grades is similar to that seen at Daapleu
(Figure 12.3.4_1)

12.3.8 Gbeitouo
An extensive validation exercise has been undertaken to assess the accuracy of historical
data and correct errors where possible. Errors were found in most of the data sets.

 Collars were projected to the topographic surface where no elevations were recorded or
errors in the elevation were found;
 Grid survey coordinates were converted to UTM;
 Where no downhole surveys were available, the inclination of the collar was taken for
the entire hole;
 Minor errors were corrected in the logging and density sampling;
 Cleaning of the assay data to correct errors in records and assign below detection limit
codes.
In spite of the cleaning and correction the quality of the data is only sufficient for, at most,
Indicated Mineral Resources. This is primarily due to the large amount of historical data in the
data set. Since this review was done, SMI has migrated data into a good quality database
using commercial software and has undertaken extensive validation of the historical data.

There are 19 sets of twin boreholes to compare the 2008 and 2013 campaigns.

The mineralized zone is well defined by historic boreholes which is acceptable for defining the
limits of the mineralization. The offsets of the mineralization and variation in the grades are
similar to that seen at Daapleu (Figure 12.3.4_1).

The variability in the results is similar to the results of the 2013 drilling and demonstrate and
acceptable sampling method.

The values of the historic assay show a bias of +25% when compared with the 2013 results.
This bias is essentially caused by the low grades in the interior of the mineralized zones. If

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 71

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

this is a significant error it will cause errors in the interpretation of the mineralized zones and
estimation of the grade distribution.

12.4 Qualified Persons Opinion (Mudau) Aires, Teckraie, Verse Ouest, Daapleu,
ZiaNE and Mt Ity

The QP’s opinion is that the data from twinned boreholes shows that the mineralized zones
are predictable and that the differences between the twinned boreholes represent the
variability on the deposits. The borehole logging and sampling data for the Aires, Teckraie,
Verse Ouest, Daapleu, ZiaNE, and Mont Ity used in this technical report is satisfactory for the
purpose of mineral resource estimation and classification reported.

12.5 Qualified Persons Opinion (Bosc) Walter and Gbeitouo

Historical work has been assessed through a varied programme of twinning boreholes,
comparing assay populations and geology and databases were thoroughly verified. It’s the
QP’s opinion that most of the results are comparable for resources at an indicated level, and
remaining variability is due to both the varied range of practices, all within acceptable level of
practices, and the intrinsic variability of the deposits.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 72

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

13 MINERAL PROCESSING AND METALLURGICAL TESTING

13.1 Heap Leach Operations

No heap leach testwork has been conducted on the project during the last number of years
and anything completed historically is no longer available. The heap leach has been in
operation for many years and remains in operation and as such production data can be used
to give an indication of the metallurgical performance expected from the plant.

It is reported by mine management that regular bottle-roll tests are completed to determine
the recoverable gold from a -2mm pulverised 50 gram sample.

Historically, as reported in 2008, regular column leach tests were completed, but this practise
has been discontinued.

The analytical techniques available on the mine do not include total contained gold methods
and as such the actual head grade samples cannot be determined. Comparing gold
recovered with the above determined leachable gold content results in a historical yield of
between 75% and almost 80%.

This is not based on test work but actual production data.

13.2 Carbon-in-Leach (CIL) Operations

Considerable metallurgical testwork has been conducted to confirm the metallurgical

response for the CIL plant.

The metallurgical testing used for the 2.0Mtpa CIL project was completed during 2014 at ALS
Minerals Division (Metallurgy) located in Kamloops, BC, Canada. Additional work was
conducted in 2015 but has not been integrated into this report.

Mineralogical and metallurgical test work was completed in order to generate sufficient
mineralogical and metallurgical information to:

 Establish the processing route (process flow diagrams);

 Determine the plant operating parameters for the ores to be processed;
 Evaluate the variability in metallurgical performance for the different deposits; and
 Define parameters required for the engineering and design of the plant (process design
criteria, mass and water balance and equipment sizing).
The mineralogical study and metallurgical test work program were executed on the geological
samples from the following deposit and facies.

 Daapleu deposit included three different geological facies called Daaplite, Volcano
sediment and a High Grade contact zone between both;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 73

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Gbeitouo deposit included two different geological facies called Oxidized Clay and
Meta-volcano sediment;
 Mont Ity Deep Extension test work was on two different geological facies called
Oxidized Clay and Reduced Clay;
 ZiaNE deposit test work was on two different geological facies called Oxidized Clay and
Laterite;
 Aires – four composite samples representing four geographical areas of the heap.

13.2.1 Test Work Program

Master composite samples were created, representing the majority of the SMI deposits facies
detailed above.

The complete test work program comprised the following:

 Chemical analysis (Head Characterization);

 Physical characterization (Specific Gravity, Bulk Densities (loose and packed));
 Hardness (Hard Unconfined compressive strength (UCS) determinations);
 Grinding test work, including:

 SMC test work (for SAG mill amenability);

 JK simulation (for mills sizing);
 Bond Abrasion Index (Ai) determinations;
 Bond Rod Work Index (RWi) determinations;
 Bond Ball Work Index (BWi) determinations;
 Cyanidation/CIL test work (with air and oxygen sparging);
 Gravity concentration;
 Flotation amenability followed by concentrate ultrafine grinding and cyanidation / CIL of
products;
 Detoxication test work (cyanide destruction and arsenic precipitation);
 Settling test work;
 Tailings acid generation potential (Acid Base Accounting (ABA)).
13.2.2 Qualified Person’s Comments
The sample material was selected and prepared by SMI geologists and personnel to create
what is believed to be representative facies samples. The samples were packaged into 19
steel drums and sealed.

Upon arrival at ALS laboratories in Kamloops, the drums were inspected and stored until QP
arrival. It was noticed that the seal of two of the drums were broken (Daapleu – Daaplite and
Mont Ity Deep Extension – Oxidised Clay). It is believed that the drums were opened and
inspected by Canadian customs officers in Vancouver.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 74

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

13.2.3 Discussion and Process Development

The metallurgical test work results allowed the process development steps described in the
following paragraphs.

Crushing
A mineral sizer type crusher has been selected for the soft sticky ore facies, such as oxidized
clay, reduced clay and heap leach residues. A jaw crusher has been selected for the more
competent (hard) ore facies, such as Daaplite and Volcano sediments.

Grinding
The test work allowed a preliminary sizing of the mills. The grinding mill has been sized to
process ore at an average rate of 254tph (tonnes per hour) with a finished product 80%
passing 75μm. These results are preliminary and the mills sizing will need to be revisited
during the definitive study phases of the project.

Gravity Concentration
Gravity concentration did not improved overall gold recoveries and not been considered in the
process development as the mean gold particle diameter is only in the 18µm range.

Pre-leach Thickening
A high rate thickener has been selected for the pre-leach thickener. The thickener underflow
density of 43% (w/w) is anticipated. The settling test results are preliminary and the thickener
sizing will need to be revisited during the definitive study phases of the project.

Carbon-In-Leach (CIL)
Whole ore cyanidation leach tests were performed and a final grind of 75µm has been
selected with air sparging for the process design criteria.

The cyanide leach kinetic curves developed during the test work show that gold extraction
with 32-hour retention time has selected for the CIL plant process design criteria.

The gold extraction for the composite samples averaged about 93% for the non-sulphide
composites and 72% for the sulphide composites.

The leach results are summarized in Table 13.2.3_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 75

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 13.2.3_1
SMI Gold Project
Leach Summary Results

Au Extraction Calc Head Cyanide cons. Lime cons.

Deposit Facies
% g Au/t (kg/t) (kg/t)
Heap Leach Residues R01 94.4 1.07 1.1 1.7
Heap Leach Residues R02 94.1 1.18 0.9 1.9
Heap Leach Residues R03 89.3 1.32 1.2 1.8
Heap Leach Residues R04 88.7 0.67 1.0 1.8
Daapleu Daaplite 67.7 2.52 0.7 0.6
High Grade
Daapleu 56.4 17.7 0.7 1.6
Contact
Metavolcano
Daapleu 79.2 2.64 0.9 0.6
sediment
Gbeitouo Oxidized Clay 94.9 3.58 0.6 2.6
Metavolcano
Gbeitouo 58.6 3.67 1.3 1.5
sediment
Zia Nord Est Oxidized Clay 90.9 5.28 1.2 4.6
Zia Nord Est Laterite 97.7 1.65 0.5 5.7
Mont Ity Oxidized Clay 96.1 8.42 1.4 6.0
Mont Ity Reduced Clay 96.1 5.88 3.3 2.3

Flotation
Most of the ore types tested are free-milling. However the facies containing sulphide
minerals, namely Daapleu –Daaplite, High Grade contact and Metavolcano sediment and
Gbeitouo Metavolcano sediment have shown to be partially refractory in nature.

Flotation of these sulphide minerals followed by ultrafine grinding to below 20μm and
cyanidation have not improved gold recovery over direct cyanidation.

Thus flotation has not been considered at this stage for the project, but this may be reviewed,
subject to more test work.

Cyanide Detoxification
Four cyanidation tailings samples were subjected to cyanide destruction test work using the
SO2/air process. Residual CNWAD levels less than 2.0mg/L were attained for all four
cyanidation tailings samples to confirm that this process is acceptable for detoxification.

The inclusion of an arsenic removal stage after cyanide detoxification will need to be
considered, as some treated effluents contained an elevated level of arsenic. An arsenic
removal test was undertaken on treated detox slurry to demonstrate that arsenic can be
removed using standard practices such as ferric sulphate and sulphuric acid. The arsenic
level in solution was reduced to 0.1mg/L.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 76

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Inadequate work has been completed around the tailings detoxification and more work will be
required.

13.2.4 Additional Metallurgical and Geochemical Test Work

The mining plan shows that some geological facies have not been tested during the PFS.
These facies should be tested to confirm the adequacy of the currently developed process.

Additional mineralogical and metallurgical test work is also required to firm up the process
flowsheet that has been developed. The additional test work will allow determination of
optimum operating parameters (final grind, reagent consumption, etc.) in order to minimize
CAPEX and OPEX.

The increase in mineral resources of the sulphide facies may warrant to investigation of the
pressure oxidation process (POX) of the sulphidic facies. In doing so, previous flotation will
need to be repeated and optimized to produce the sulphide concentrate.

Screening level geochemical test work program will also be required to characterize key rock
types in the vicinity of ore zone of the multiple deposits. This is to determine probable
loadings of acidity, metals and sulphate salinity that may be associated with tailings materials
and confirm problematic rock types that will be the focus of the test work program required to
characterize waste rock materials generated by the project.

13.2.5 Status of Testwork

The quality and quantity of testwork performed for the 2Mtpa CIL is considered adequate for
the PFS level developed for the project.

The ore facies not containing sulphide is substantially free-milling and is not preg-robbing in
nature. The ore facies containing sulphide is partially refractory and direct cyanidation (CIL
process) yields lower gold recovery.

The additional test work is to include additional variability samples and is to concentrate upon
the ore to be delivered during the first five years of the project.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 77

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14 MINERAL RESOURCE ESTIMATES

All mineral resources are declared as at 31 July 2015. Mineral resources as reported in this
section have been constrained by pit shells using the Lerchs-Grossman algorithm, cost, pit
slope angles and recovery parameters relevant to the deposits at Ity. The gold price used is
US$1500 which is approximately 30% higher than the spot price at 31 July 2015. This allows
a broader package, including marginal mineralization, to be defined and excludes areas that
are unlikely to be mined. The pit shells included all mineralization regardless of classification.
Input parameters are given in Table 14_1. No pit shells were applied to the Heap Leach
(Aires), Teckraie and Verse Ouest as these have 0g/t Au cut-off and all material is assumed to
be available for mining.

Table 14_1
SMI Gold Project
Pit Shell Input Parameters

Parameter Unit Daapleu Zia NE Mont Ity Walter Gbeitouo

Gold Price $/oz 1,500 1,500 1,500 1,500 1,500
Gold Price €/0z 1,364 1,364 1,364 1,364 1,364
Refining & Selling cost % 4% 4% 4% 4% 4%
Exchange Rate $/€ 1.1 1.1 1.1 1.1 1.1
Process Recovery % 73% 96% 90% 86% 73%
Mining Cost €/t 2 2 2 2 2
Process Cost €/t 13 11 13 11 15
Slope Angle degree 40 30 30 30 40
Reporting cut off g/t 0.5 0.5 0.5 0.8 0.8

14.1 Aires de Lixiviation (Old Heap Leach Pads)

14.1.1 Introduction
Coffey has estimated the mineral resource for the SMI Aires as at 31 July 2015. The volume
modelling and mineral resource estimation was completed in the 3D software package
Datamine™ Studio 3 and Isatis. The Aires were divided into material placed on the leach
pads (Domain 1) and gold in the soil below the leach pad (Domain 2). The grade estimation
was completed using a Nearest Neighbour estimate for the pad and Inverse Distance
Weighting to 3rd power (ID3) for the soil. This estimation approach was considered
appropriate based on review of a number of factors, including the quantity and spacing of
available data, the style and geometry of gold distribution and the constraints imposed by
leach pad design. The estimation was constrained by hard boundaries based on surface
survey data and drilling patterns.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 78

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.1.2 Data Validation

The grade estimation was based on the entire borehole database comprising both RC and
diamond drilling. No boreholes or data were excluded from the mineral resource estimation.

The database has been reviewed and validated by Coffey prior to commencing the mineral
resource estimation. These included:

 Checking for overlapping intervals;

 Consistency of depths between different data tables;
 Checking gaps in the data;
 Replacing less than detection limit samples with half the detection limit (0.005g/t);
 Collar elevation validation.
No samples were deleted from the database. Any missing values due to core loss were
allocated an absent value (“-”).

14.1.3 Geometry and Modelling

The material is partially leached, open pit material, which has been placed on the Aires in 50m
wide by approximately 5m high strips on eight levels. There is some short scale continuity
due to the mining method from the pits. No geological modelling, other than the domaining
between the mined rock and the underlying in-situ soils was attempted.

The boundary between the rock dump and in-situ soil was interpreted from borehole data
using cross sections parallel to the orientation of the drill lines. Lidar survey data was used to
define the outline of the dump.

14.1.4 Mineralization Interpretation

The Aires are the residues of a discontinued heap leach pads. A description of grade
distribution is contained in Section 8.

14.1.5 Compositing
The lengths of the samples were assessed prior to selecting an appropriate composite length
for undertaking statistical analyses and grade estimation. The minimum and maximum
lengths were 0.05m and 4m respectively. Summary statistics of the sample length indicates
that 21.97% of the samples were sampled at less than 1m intervals, 76.67% of the samples
were sampled at 1m intervals, and 1.36% greater than 1m.

Compositing was on 5m intervals, to correspond with the block model vertical dimension,
while the soil was composited at 1m intervals due to the thin nature of the domain.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 79

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.1.6 Statistical Analysis

Statistical analysis was undertaken on assay composites for the complete drilling datasets per
mineralized domain. All composites inside the individual modelled surfaces were flagged by
level. A total of 4,644 samples were used in the modelling process from a total of 151 RC and
diamond boreholes. Separate statistics were generated for each domain and are presented in
Table 14.1.6_1.

Table 14.1.6_1
SMI Gold Project
Aires : Raw Statistics per Domain (Au g/t)

No of
Area Min Max Mean Std Dev Variance CV
Samples
Raw Data
Domain 1 4,644 0.005 100 1.16 2.33 5.43 2.01
Domain2 196 0.030 16.40 0.97 1.44 2.07 1.49

The population of gold grades is lognormal; for both the dump and the soil, which is typical of
many gold deposits.

For both domains the coefficient of variation (CV) is moderate for a gold deposit (high
geostatistically) as a result of mixing due to mining operations. A high CV is consistent with
the presence of high outlier grades that potentially require cutting (capping) for grade
estimation. High grade capping is discussed in Section 14.1.7.

14.1.7 High Grade Capping

For the Aires (Domain 1) six values were capped to 19.1g/t, for the soil (Domain 2) one value
of 16.4g/t Au was capped to 8.54g/t. The impact of the cutting is shown in Table 14.1.7_1.
Estimations were done including and excluding top capping.

Table 14.1.7_1
SMI Gold Project
Aires: Summary of Upper Cuts Including Uncut and Cut Statistics for Mineralized Composites
(Au g/t)

Uncut Statistics Cut Statistics

High Grade

Reduction
in Mean
Grade
Number

Number
Domain

Capped
of Data

Cut
Mean

Mean

Data
Dev.

Dev.
Std.

Std.
CV

CV

Dump 4,644 1.16 2.33 2.01 19.70 1.12 1.51 1.35 6 3.0%
Soil 196 0.97 1.44 1.49 8.54 0.93 1.07 1.15 1 4.0%

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 80

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.1.8 Bulk Densities

While it is noted that density changes with depth from about 1t/m3 at the upper surface to
1.9t/m3 at the base, the change is not uniform. Sampling has only been undertaken on the
diamond boreholes. The density values applied are a single average value for each domain
(Table 14.1.8_1).

Table 14.1.8_1
SMI Gold Project
Aires: Bulk Density (t/m3)

Standard
Attribute Number Minimum Maximum Mean CV
Deviation
Dump 116 1.01 1.96 1.34 0.18 0.13
Soil Property average 1.62

14.1.9 Variography
The material was randomly placed on the dump with only very short range continuity. No
variograms were calculated or modelled for this deposit.

14.1.10 Block Modelling

The parent block sizes selected to estimate the deposit approximates half the borehole
spacing. Sub-blocking (8x8 sub cells) was allowed for good volume definition.

The block models were constructed with parameters as displayed in Table 14.1.10_1.

Table 14.1.10_1
SMI Gold Project
Aires: Block Model Construction Parameters (m)

Domain Direction Origin Extent Parent Block Size

X 597,452 1,180 20

1 Y 760,094 1,220 20

Z -4.5 665 5

X 597,452 1,180 20

2 Y 760,094 1,220 20

Z -4.5 665 5

14.1.11 Grade Estimation

Grade estimation was performed using Nearest Neighbour (Domain 1) ID3 (Domain 2) as this
gave a gold distribution closest to the borehole grades.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 81

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The Nearest Neighbour estimate selects the value of the nearest assay grade and does not
consider the value of the neighbouring points nor does it involve weighting sample values.
This estimation technique was deemed appropriate to be applied to Aires as the pad is man-
made and deposited randomly. Nearest neighbour adequately maps any continuous
mineralization without introducing any smoothing and artificial continuity.

Due to the nature of the soil deposit and the uniformity of the domain, ID3 was considered
appropriate to be applied in the estimation as there is some continuity of the mineralization in
the domain.

Inverse Distance grade estimations were also performed on the Aires material and the
difference in gold grades between the Nearest Neighbour estimate and the ID3 used in the
mineral resource classification to assess variability between the estimations.

14.1.12 Estimation Parameters

Hard domain boundaries were used throughout preventing samples lying outside the domain
from being used for the estimation. A three-pass estimation strategy was applied to each
zone, applying an expanded and less restrictive sample search to the second and subsequent
estimation passes and only considering blocks not previously assigned an estimate.

The sample search parameters are supplied in Table 14.1.12_1.

Table 14.1.12_1
SMI Gold Project
Aires: Search Parameters

Search Distance Min. Max. Max No of

Estimation Search
Domain No of No. of Composites
Pass X(m) Y(m) Z(m) Direction
Comp. Comp. Per Borehole

1 40 40 5 1 1 1 Isotropic
1 2 80 80 10 1 1 1 Isotropic

3 120 120 15 1 1 1 Isotropic

1 40 40 10 6 20 3 Isotropic

2 2 80 80 20 6 20 3 Isotropic

3 200 200 50 2 20 3 Isotropic

14.1.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included:

 Comparison of the estimate mean versus the mean of the composite dataset;
 Visual checks of cross sections, long sections, and plans;
 Comparison of Nearest Neighbour estimate using Inverse distance estimates.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 82

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.1.14 Depletion
No mining has taken place within the area of mineralization hence no depletion has been
applied to the block model.

14.1.15 Mineral Resource Classification

Confidence levels for key criteria are listed in Table 14.1.15_1. Classification may have been
downgraded in some areas due to lower confidence in the data as listed in Table 14.1.15_1.
Applying the following parameters, mineral resource classification codes were assigned to the
block model:

Parameters for Classification (Nearest Neighbour estimate compared to ID3)

 Measured Mineral Resources (all criteria to be fulfilled):

 First search volume

 Absolute difference in grade between the two estimates is less than 0.5g/t Au
 Indicated Mineral Resources(all criteria to be fulfilled):

 First and second volume

 Absolute difference in grade between the two estimates is greater than 0.5g/t Au
and less than 1.0g/t Au
 Inferred Mineral Resources:

 Absolute difference in grade between the two estimates is greater than 1.0g/t Au

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 83

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.1.15_1
SMI Gold Project
Aires: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond / RC - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate
Sub-sampling Techniques
and Diamond and RC sampling performed to industry standard techniques. Moderate/High
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. Moderate/High
Verification of Sampling Coffey has assessed sampling and assaying procedures and considers them
Moderate
and Assaying of appropriate industry standards.
Location of Sampling
Survey of all collars was done with accurate survey equipment High
Points
Data Density and
Drill spacing. 30x30m grid High
Distribution
Audits or Reviews Data reviewed by Coffey on site. High
Database Integrity No major issues were identified. Moderate/High
Geological Interpretation Lithological controls are well understood. High
Estimation and Modelling Estimation methodology is considered to be appropriate given the geological
High
Techniques setting, and grade distribution
A 0g/t Au lower cut-off grade is considered appropriate for reporting of a
Cut-off Grades High
dump
Mining Factors or
Dump Mining High
Assumptions
Metallurgical Factors or Assumed same processing parameters as historical production and
Moderate/ High
Assumptions metallurgical test work

14.1.16 Classification and Grade Models

Sections through the classification and grade models for Aires are shown in Figure 14.1.16_1

The drilling grid is sufficiently tight for this deposit to estimate continuity. The Aires have
some internal structure and the leaching process leads to some redistribution of gold. The
grade distribution reflects this deposition. The mineral resource is classified as Measured
Mineral Resources.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 84

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.1.16_1
Aires
Mineral Resource Classification and Grade Distribution
Cross Section S1639 Looking North East July 2014

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 85

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.1.17 Summary of Mineral Resources

The estimated mineral resources for the Aires are tabulated below per domain perm resource
category at a cut-off grade of 0g/t Au (Table14.1.17_1). A cut of grade of 0g/t Au is the
preferred mineral resources as there may be some selection when the material is
reprocessed.

Table 14.1.17_1
SMI Gold Project
Aires: Mineral Resource (Cut-off 0.0g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Measured Dump Dump 5,860 1.05 197.97
Measured Soil Soil 273 0.919 7.97
Total Mineral Resource 6,134 1.04 205.94
Note Rounding has been applied

14.2 Teckraie

14.2.1 Introduction
Coffey has estimated the mineral resource for the Teckraie as at 31 July 2015. The volume
modelling was completed in the 3D software packages Datamine™ Studio 3. The volume
was divided into; the Teckraie Dump material (Domain 1) and mineralization in the soil below
the dump (Domain 2). The grade estimation was completed using a Nearest Neighbour
estimate for the dump and Inverse Distance Weighting to the second power ID2 for the soil.
This estimation approach was considered appropriate based on review of a number of factors,
including the quantity and spacing of available data, the style and geometry of mineralization
and the constraints imposed by mine design. The estimation was constrained by hard
geological boundaries based on geological interpretations.

14.2.2 Data validation

See Section 14.1.2.

14.2.3 Geometry and Modelling

The mineralization is associated with low grade open pit material randomly placed onto a low
grade stockpile. As a result no modelling, other than the domaining between the rock dump
material and the insitu soils was attempted. For grade distribution and dump geometry refer
to Section 14.2.16. The boundary between the rock dump and insitu soil was interpreted from
cross sections parallel to the orientation of the drill lines. Lidar survey data was used to define
outline of the dump, with the mineral resource estimate confined to 15m (half the drill borehole
spacing) beyond the drilling limits.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 86

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.2.4 Mineralization Interpretation

Teckraie is a rock dump containing waste from the mining of the Flotouo deposit on the
property. A description of the source rock mineralization is given in Section 8.

14.2.5 Compositing
Summary statistics of the sample length indicates that 7.0% of the samples were sampled at
less than 1m intervals, 90.7% of the samples were sampled at 1m intervals, and 2.3% greater
than 1m. For mineral resource estimation compositing was done at 1m intervals.

14.2.6 Statistical Analysis

A total of 2,249 composites were used in the modelling process from a total of 109 RC and
diamond boreholes. Separate statistics were generated for each domain and are presented in
Table 14.2.6_1.

Table 14.2.6_1
SMI Gold Project
Teckraie: Composite Statistics per Domain (Au g/t)

No of
Area Min Max Mean Std Dev Variance CV
Samples
Domain 1 2,078 0.010 31.90 1.13 1.37 1.88 1.22
Domain 2 171 0.050 71.95 1.33 5.45 29.76 4.11

The soil domain has an extremely high CV (4.11) due to the presence of a single high grade
value (71.95 g/t). The impact of capping this high grade value reduces the CV from 4.11 to
0.71. High grade capping is discussed in Section 14.2.7.

The population of gold grades are lognormal; for both the dump and the soil, which is typical
of most gold deposits. For the dump domain the CV is relatively low for a gold deposit
(moderately high geostatistically) as a result of mixing due to mining operations.

14.2.7 High Grade Capping

For the Dump (Domain 1) four values were capped to 10.87g/t, for the soil (Domain 2) one
value of 72.0g/t Au was capped to 4.23g/t. Estimations were done including and excluding
top capping and the results reviewed. It was observed that capping reduced the mineral
resource gold content, at a zero cut off by 2.6%. This is consistent with the grade reduction in
the raw data.

14.2.8 Bulk Densities

The density values applied for Teckraie mineral resource estimate per domain are 1.37t/m3 for
the dump material and 1.62t/m3 for soil. The dump densities were derived from
measurements from dump boreholes. The soil is the average soils density over the mine
property.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 87

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.2.9 Variography
As the material was randomly placed on the dump with no spatial continuity the Nearest
Neighbour estimate was used in preference to constructing variograms and Kriging.

14.2.10 Block Modelling

The block models were constructed with parameters as displayed in Table 14.2.10_1.

Table 14.2.10_1
SMI Gold Project
Teckraie: Block Model Construction Parameters (m)

Domain Direction Origin Extent Parent Block Size

X 597,217 1,470 15

1 (Dump) Y 758,815 1,485 15

Z -243m 1,044 1

X 597,217 1,470 15

2 (Soil) Y 758,815 1,485 15

Z -243 1,044 1

14.2.11 Grade Estimation

Grade estimation was done using Nearest Neighbour and ID2. The dump was estimated
using the Nearest Neighbour estimate, while the soil was estimated using ID2. This estimation
technique was deemed appropriate to be applied to Teckraie, as the dump is man-made and
deposited randomly.

ID2 grade estimations were also conducted on Teckraie dump material and the difference in
gold grades between the Nearest Neighbour estimate and the ID2 used in the mineral
resource classification.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 88

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.2.12 Estimation Parameters

The sample search parameters are supplied in Table 14.1.12_1.

Table 14.1.12_1
SMI Gold Project
Teckraie: Search Parameters

Min. Max. Max No of

Estimation Search Distance Search
Domain No of No. of Composites
Pass Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 30 30 5 1 1 1 Isotropic
1 2 60 60 10 1 1 1 Isotropic
3 90 90 15 1 1 1 Isotropic
1 30 30 6 6 20 3 Isotropic
2 2 60 60 12 6 20 3 Isotropic
3 150 150 30 2 20 3 Isotropic

Hard domain boundaries were used throughout preventing samples lying outside the
mineralized domain from being used for the estimation. A three-pass estimation strategy was
applied to each zone, applying an expanded and less restrictive sample search to the second
and subsequent estimation passes and only considering blocks not previously assigned an
estimate.

14.2.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included:

 Comparison of the estimate versus the mean of the composite dataset.

 Visual checks of cross sections, long sections, and plans.
2 3 4
 Comparison of Nearest Neighbour estimate using ID , ID , ID .
 Change of search parameters
 Swath Plots
The model validation checks confirmed the suitability of the methodologies applied and the
estimation results.

14.2.14 Depletion
Teckraie is on the edge of the Ity pit and some of the eastern portions have been removed in
the pushback. The volumes are small and differences between the topographic surface and
the current surface are not material to the overall mineral resource for SMI. Depletion due to
mining has not been accounted for in the geological model.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 89

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.2.15 Mineral Resource Classification

All mineral inventory 15m beyond the parameter of the drilling is reported as unclassified due
to lack of data. Confidence levels for key criteria are tabulated in Table 14.2.15_1. Applying
the following parameters, mineral resource classification was based on the following criteria;
 Indicated (all criteria to be fulfilled):

 Estimated using the same estimation pass for both methods

 Absolute difference in grade between NN and ID estimates < 1.0g/t Au
 Inferred:

 Estimated using different estimation passes

 Absolute difference in grade between NN and ID estimates is > 1.0g/t Au
 All soil classified as inferred
 Unclassified:

 15m (half the borehole spacing) beyond the edge of the drill fence perimeter

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 90

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.2.15_1
SMI Gold Project
Teckraie: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond / RC - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate
Sub-sampling
Techniques and Diamond and RC sampling done to industry standard techniques. Moderate/High
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. Moderate/High
Verification of Sampling Coffey has assessed sampling and assaying procedures and
Moderate
and Assaying considers them of appropriate industry standards.
Location of Sampling
Survey of all collars was done with accurate survey equipment Moderate/ High
Points
Data Density and
Drill spacing. 30x30m grid High
Distribution
Audits or Reviews Data reviewed by Coffey on site. Moderate/ High
Database Integrity No major issues were identified. Moderate/High
Geological
Lithological controls are well understood. High
Interpretation
Estimation and Estimation methodology is considered to be appropriate given the
High
Modelling Techniques geological setting, and grade distribution
A 0.0g/t Au lower cut-off grade is considered appropriate for
Cut-off Grades reporting considering an the dump will be mined in totality and High
hence no selectivity applied
Mining Factors or
Dump Mining Moderate
Assumptions
Metallurgical Factors or Assumed same processing parameters as historical production
Moderate/ High
Assumptions and metallurgical test work

14.2.16 Classification and Grade Models

Sections through the classification and grade models for Teckraie are shown in
Figure 14.2.16_1

Classification is shown for Indicated Mineral Resources and Inferred Mineral Resources. The
drilling grid is sufficiently tight for this deposit to estimate continuity. Teckraie is a waste dump
with no internal structure. The grade distribution reflects the somewhat random deposition.
The mineral resource is classified as Indicated Mineral Resources as the entire dump is at a
high enough grade to be considered for reprocessing and the grade distribution is considered
representative of what will be extracted.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 91

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.2.16_1
Teckraie
Mineral Resource Classification and Grade Distribution
Cross Section S1639 Looking North East July 2014

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 92

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.2.17 Summary of Mineral Resources

A summary of the estimated mineral resources for Teckraie is tabulated below per domain per
mineral resource category at a cut-off grade of 0.0g/t Au (Table 14.2.17_1). A cut-off grade of
0.0g/t Au is deemed the preferred scenario as no selective mining will be undertaken.

Table 14.2.17_1
SMI Gold Project
Teckraie: Mineral Resource (Cut Off 0.0g/t)

Tonnes Average Grade

Area Classification Au ('000oz)
(‘000t) (g/t)

Indicated 1,945 1.11 69.52

Dump
Inferred 175 1.04 5.89
Indicated - - -
Soil
Inferred 128 0.96 3.98
Indicated 1,945 1.11 69.52
Total
Inferred 304 1.01 9.87
In addition there is another 260,000-280,000 tonnes of unclassified material at approximately 0.9g/t Au

14.3 Verse Ouest

14.3.1 Introduction
Coffey has estimated the mineral resource for Verse Ouest as at 31 July 2015. The grade
estimation was completed using a Nearest Neighbour estimate. This estimation approach
was considered appropriate based on review of a number of factors, including the quantity
and spacing of available data, the style and geometry of mineralization. The grade estimation
was based on the entire borehole database. No boreholes or data were excluded from the
mineral resource estimation process.

14.3.2 Data validation

See Section 14.1.2

14.3.3 Geometry and Modelling

Three dimensional models were constructed using Datamine and Micromine software. The
base of the dump was interpreted from borehole data using cross sections parallel to the
orientation of the drill lines. The 2013 domain was defined by Lidar data for the top surface
while the 2014 domain was defined by collar data for the top surface and the Lidar data for the
bottom surface. The 2014 domain has small volume. The block modelling and layering is
defined on Sections 14.3.10 and 14.3.13.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 93

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.3.4 Mineralization Interpretation

Verse Ouest is a rock dump containing the waste material from mining operations on the
property. A description of the mineralization is contained in Section 8. Figure 14.3.13_1
presents a typical cross section of the deposit.
14.3.5 Compositing
The minimum and maximum lengths were 0.10m and 1.55m respectively and samples have
an average length of 0.9m. Compositing was done on 5m intervals to correspond with the
block model vertical dimension. The borehole samples were flagged based on the level.

14.3.6 Statistical Analysis

A total of 193 composites were used in the modelling process. Separate statistics were
generated for each domain and are presented in Table 14.3.6_1.

Table 14.3.6_1
SMI Gold Project
Verse Ouest:1M and 5m Composite Statistics per Domain (Au g/t)

No of
Area Min Max Mean Std Dev Variance CV
Samples
Raw Data
2013 1310 0.005 66.46 0.95 2.49 6.18 1.45
2014 31 0.33 7.56 1.66 1.78 3.17 2.62
5m Composite
2013 185 0.12 15.43 1.32 1.51 2.28 0.52
2014 8 0.86 4.05 1.76 0.98 0.96 1.07

14.3.7 Outlier Analysis

Some outlier values were identified but it was not deemed necessary to cut or cap the data as
capping would not have significant impact on the global mean.

14.3.8 Bulk Densities

The density values applied for Verse Ouest mineral resource estimate is 1.71t/m3 for the
dump material. Table 14.3.8_1 gives the density sample population statistics. The volume
replacement method reported unrealistically low densities when compared with the hydrostatic
method. The distribution of density data is normal for hydrostatic method and skewed for
volumetric method. Density distribution for same lithology would be expected to exhibit a
normal distribution rather than the log normal the distribution produced by volumetric method.
The data collected using hydrostatic method was used for mineral resource evaluation. One
outlier (3.11t/m3) was identified and capped (at 2.04t/m3) for mean density determination.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 94

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.3.8_1
SMI Gold Project
Verse Ouest: Hydrostatic Bulk Density (t/m3)

Standard
Attribute Number Minimum Maximum Mean CV
Deviation
Dump 16 1.15 2.04 1.71 0.16 0.10

14.3.9 Variography
As the material was randomly placed on the dump with no spatial; no variograms were
calculated and modelled.

14.3.10 Block Modelling

The parent block sizes selected to estimate the deposit approximates half the borehole
spacing. Sub-blocking (8x8x8 sub cells) was allowed for good volume definition. The block
models were constructed with parameters as displayed in Table 14.3.10_1.

Table 14.3.10_1
SMI Gold Project
Verse Ouest: Block Model Construction Parameters (m)

Direction Origin Parent Block Size Number of Blocks Sub-Cell

X 596850 25 78 Yes

Y 758950 25 64 Yes

Z 160 5 52 Yes

14.3.11 Grade Estimation

Grade estimation used the Nearest Neighbour method. A good Nearest Neighbour estimate
using an appropriate block size will map-out any real continuity in the deposit. This estimation
technique was considered appropriate to Verse Ouest as it is man-made and deposited
randomly.

14.3.12 Estimation Parameters

Hard domain boundaries were used throughout preventing samples lying outside a
mineralized domain from being used for the estimation. A three-pass estimation strategy was
applied, making use of an expanded and less restrictive sample search to the second and
subsequent estimation passes and only considering blocks not previously assigned an
estimate.

The sample search parameters are supplied in Table 14.3.12_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 95

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.3.12_1
SMI Gold Project
Verse Ouest: Search Parameters

Min. Max. Max No of

Estimation Search Distance Search
Domain No of No. of Composites
Pass Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 50 50 50 1 1 1 Isotropic
1 2 100 100 100 1 1 1 Isotropic
3 150 150 150 1 1 1 Isotropic

14.3.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included the following activities:

 Comparison of the estimate versus the mean of the composite dataset;

 Visual checks of cross sections Figure 14.3.13_1);
 Comparison of Nearest Neighbour estimate using ID estimates;
 Comparison of different estimates using composites;
 Change to search parameters.
The model validation checks confirmed the suitability of the methodology applied and the
estimation results.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 96

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.3.13_1
Verse Ouest
Section through the model and borehole fence

14.3.14 Depletion and Geological Loss

No mining has taken place within the area of mineralization hence no depletion has been
applied to the block model. The dump is man-made feature expected to be mined in its
entirety. No geological/volume losses are applied.

14.3.15 Mineral Resource Classification

Confidence levels for key criteria are tabulated in Table 14.3.15_1. Classification may have
been downgraded in some areas due to lower confidence in the data. Applying the following
parameters, mineral resources were classified based on:

 Measured Mineral Resources were not considered as the boreholes are not closely
spaced enough to establish continuity with high confidence.
 Indicated Mineral Resources (all criteria to be fulfilled)

 First search-volume and extrapolated for 25m beyond the drill fence perimeter.

 Inferred Mineral Resources

 Second pass beyond the edge of the drill fence perimeter.

 Up to 100m beyond the drill fence perimeter.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 97

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.3.15_1
SMI Gold Project
Verse Ouest: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate
Sub-sampling
Techniques and Diamond sampling performed to industry standard techniques. Moderate/High
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. Moderate/High
Verification of Sampling Coffey has assessed sampling and assaying procedures and
Moderate
and Assaying considers them of appropriate industry standards.
Location of Sampling Survey of all collars was performed with accurate survey
Moderate/High
Points equipment
Data Density and
Average Drill spacing. 50x50m grid Moderate/High
Distribution
Audits or Reviews Data reviewed by Coffey. Moderate/ High
Database Integrity No major issues were identified. Moderate/High
Geological
Lithological controls are well understood. High
Interpretation
Estimation and Estimation methodology is considered to be appropriate given the
High
Modelling Techniques grade distribution
Cut-off Grades A 0g/t Au lower cut-off grade is considered appropriate for
High
reporting as the dump should be mined completely
Mining Factors or
Dump Mining (Surface mining) High
Assumptions
Metallurgical Factors or
Assumed same processing parameters as historical production. Moderate/ High
Assumptions

14.3.16 Classification and Grade Models

Sections through the classification and grade models for Verse Ouest are shown in
Figure 14.3.16_1. Classification is shown for Indicated Mineral Resources and Inferred
Mineral Resources. The drilling grid is sufficiently tight for this deposit to estimate continuity.
The grade distribution reflects the random deposition of gold-bearing material. The mineral
resource is classified as Indicated Mineral Resources where there is drilling and extrapolated
in layers for the Inferred Mineral Resources.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 98

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.3.16_1
Verse Ouest
Mineral Resource Classification

14.3.17 Summary of Mineral Resources

A summary of the estimated mineral resources for the Verse Ouest dump is tabulated below
per mineral resource category at a cut-off grade of 0.0g/t Au (Tables 14.3.17_1). A cut-off
grade of 0g/t Au is appropriate since the Verse Ouest dump is expected to be mined with no
selection.

Table 14.3.17_1
SMI Gold Project
Verse Ouest: Mineral Resource (Cut-off 0.0g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Indicated Dump Dump 3,844 1.22 150.78
Inferred Dump Dump 3,591 1.25 144.32
Total Indicated Mineral Resource 3,844 1.22 150.78
Total inferred Mineral Resource 3,591 1.25 144.32
Note Appropriate Rounding has been applied

14.3.18 Comparison with Historical estimates

There are no historical estimates for the Verse Ouest dump.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 99

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.4 Daapleu

14.4.1 Introduction
Coffey has updated the geological model and mineral resource for the Daapleu deposit as at
31 July 2015. The deposit was divided into three domains North, Central and South, based
on the geometry of mineralization. The grade estimation was completed using Ordinary
Kriging estimates per domain. The estimation was constrained by hard geological boundaries
within the zone of mineralization and soft boundaries between mineralized domains.

14.4.2 Data Validation

See section 14.1.2

14.4.3 Geological Interpretation and Modelling

The geological modelling was completed in the 3D software package Datamine™ Studio 3.
The model was based on information from survey data, geological mapping, RC and diamond
borehole data and sample analyses. The modelling also considered the artisanal mining pit
positions.

The geological data and cross sections were used to map the base of the weathered zone.
The weathered zone has a depth of about 25m to 35m. The weathered zone is deeper where
there are structural features such as shear zones or the Cavally River. The dataset was
coded with indicator values based on degree of oxidation;

The partially weathered and fresh lithologies were considered the same as they have similar
physical properties. The base of the weathered surface was modelled using DTM Creation
routine in Datamine and the oxidation indicators.

Geological Mapping Methodology

The geological model was produced using indicator estimation of the metamorphosed volcano
sedimentary unit (VSM) and felsic intrusive - daaplite (IFMD) lithological units. Daapleu is
ideally suited to indicator-type estimation because it has two distinct units of sufficient
thickness to establish lithological domains. The contact between the two is a zone of mixed
layers of IFMD and VSM with poor correlation between individual boreholes. Stratigraphy in
the borehole logs was retained as given in the original data set. Only the IFMD and VSM
units were considered in the initial exercise

Borehole spacing in the densely drilled northern domain is 20m - 40m. Various models at
different block sizes have been run during the current and previous mineral resource
estimations at 10m, 5m and 2.5m blocks. A block model of 2.5m x 2.5m x 2.5m was chosen
as being suitable for estimating the geology with enough detail to identify the main mineralized
zones.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 100

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The initial estimation method used was ID2 to test the search parameters. This gave good
results and mapped the logged lithologies well. In an attempt to better the estimation,
variograms were modelled for the IFMD. While good omnidirectional variograms were
produced, directional variograms in the plane of the main structural trend were less
satisfactory. Laterally there is little variation and the variograms were not showing the
variability in the mixed zone at all due to the overwhelming amount of data in the thick main
body of the deposit. Since the ID2 estimation gave a good result the kriging option was not
pursued further.

The search parameters used in the estimation of geology are presented on Table 14.4.3_1.

Table 14.4.3_1
SMI Gold Project
Daapleu: Geological Modelling Search Parameters

Min. Max. Max No of

Estimation Search Distance Search
Domain No of No. of Composites
Pass Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 10 60 50 20 50 10
North 2 20 120 100 20 50 10 050/050
3 30 180 150 10 50 10
1 10 60 50 20 50 10
Central 2 20 120 100 20 50 10 078/068
3 30 180 150 10 50 10
1 10 60 50 20 50 10
South 2 20 120 100 20 50 10 078/060
3 30 180 150 10 50 10

The results were compared against the raw borehole data using the criteria of the proportion
of samples informing the block were greater than 75% IFMD then the block was classified as
IFMD. Likewise if the samples informing the block were greater than 75% VSM the block was
considered as VSM for the purposes of the geological interpretation. Blocks between the
VSM and IFMD where the proportions were both nonzero are considered as contact zone. All
other blocks are considered as waste in the mineral resource estimation. The mapped
lithologies from the model correlated well with the borehole data and mapped especially well
against the artisanal pits (Figure 14.4.3_1). The artisanal pits were generally dug at the
lithological contact zone between the VSM and IFMD. The contact has high grade
mineralization in the northern portion of Daapleu.

For structural mapping the contact between the IFMD and VSM was taken as 50% level.

14.4.4 Mineralization Interpretation

The gold mineralization models have similar problems to the geological models. The
mineralization is spread over a broad zone with no definite contacts. Because gold
mineralization is inherently nuggetty defining the edge of the zone based on the gold values of

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 101

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

individual samples is likely to result in incorrect boundaries being chosen. Because the
mineralization is spread over a broad zone with no definite contacts, the same mapping
method as for the geology was applied to the gold using the borehole data. Indicator sets
were defined for gold at cut-offs of 0.5g/t, 1.0g/t, 1.5g/t, 2g/t and 3g/t and for arsenic at 50ppm
and 5000ppm. Cut-off grades were chosen mostly for convenience however, 0.5g/t Au is the
generally agreed cut-off for defining mineralization in this deposit and is close to the cut-off
grade from the mining PFS (SNC, July 2015). The higher grades are to check for continuity of
mineralization.

The same estimation parameters were used as for the geological mapping.

A set of grade shells were produced for gold using the following criteria

 >30% samples informing the block were greater the 0.5g/t Au;
 >30% of the samples were greater than 1g/t Au;
 >30% of the samples were greater than 2g/t Au;
 >30% of samples greater than 50ppm arsenic;
 >30% of samples greater than 5000pm arsenic.

Of the six shells the model with >30% of sample over 1g/t Au mapped the mineralized
package well. The As shell >30% of samples over 50ppm mapped the mineralization in the
upper IFMD. It was less useful for the lower areas of the IFMD but does map the higher
grade mineralization in the VSM.
The mineralization structure/orientation was then mapped from the gold grade shells and the
IFMD and VSM distributions. These structures were used in the domaining of the
mineralization into North, Central and South areas. Domaining was used for calculation
convenience; there are no distinct geological boundaries between theses domains. The
differences are primarily in data density and structural orientation of the VSM/IFMD contact.
The mapped mineralization envelopes for 2014 and 2015 mineral resource estimations are
shown in Figures 14.4.4_1 and 14.4.4_2. The differences are minor and show that the grades
are predictable with high degree of confidence.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 102

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure14.4.3_1
Daapleu
A section through the Geological Model and Lithological Contact

Contact
20m

IFMD

VSM

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 103

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.4_1
Daapleu
Drilling pattern and Domains Plan View July 2015

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 104

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.4_2
Daapleu
North Domain Cross Section DA14-098– B/H Gold Grade (Au g/t) and Model Lithology (looking North East)

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 105

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.4.5 Compositing
Most of the samples were collected at 1m interval. For the mineral resource estimation,
compositing was performed per rock type at 1m intervals to preserve the deposit variability in
the estimates.

14.4.6 Statistical Analysis

A total of 10,466 composites were used in the estimation process from a total of 181 RC and
diamond boreholes within the mineralized zone. Separate statistics were generated for each
domain and are presented in Table 14.4.6_1.

Table 14.4.6_1
SMI Gold Project
Daapleu: Composite Statistics per Domain (Au g/t)

No of
Domain Min Max Mean Std Dev Variance CV
Samples
North 7538 0.005 62.00 1.61 2.97 8.82 1.84
Central 4229 0.005 38.10 1.01 1.54 2.37 1.43
South 481 0.005 20.87 1.21 1.65 2.72 1.37

For estimation purposes the oxide and fresh domains were treated as a single mineralization
domain. Statistics were calculated for the two oxidation zones (oxide and fresh) and for the
North, Central and South Domains. All domains and oxidation zones have similar lognormal
grade distributions typical of gold deposits. Oxidation and alteration do not appear to have
resulted in substantial remobilization or concentration of gold. For estimation purposes the
oxide and fresh domains were treated as a single mineralization domain.

14.4.7 High Grade Capping

There are no outliers and no high grade capping was applied.

14.4.8 Bulk Densities

The density values applied for the mineral resource estimate, per rock type, are derived from
3 3
measurements of the core: oxidized material 1.60t/m , Fresh VSM 2.84t/m and IFMD
2.67t/m3. The standard deviation and CV are low showing that the average density is suitable
for use in mineral resource estimation (Table 14.4.8_1).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 106

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.4.8_1
SMI Gold Project
Daapleu: Hydrostatic Bulk Density (t/m3)

Standard
Attribute Number Minimum Maximum Mean CV
Deviation
Oxidized Material 146 1.22 2.29 1.60 0.22 0.09
Fresh IFMD 431 1.77 3.71 2.67 0.13 0.03
Fresh VSM 416 1.93 3.71 2.84 0.13 0.03

14.4.9 Variography
For the North and Central Domains experimental directional variograms were generated in
Datamine, using all the RC and diamond drilling data composited at 1m interval and contained
within the mineralized modelled surface. Soft domaining was applied to include an additional
line of boreholes as the boundary between the domains is gradational rather than sharp.
Variograms per domain were constructed parallel to the Domains mineralization strike and dip
directions. To reduce variance and assist in the variogram construction, the maximum grade
outliers per Domain were excluded from the experimental variogram construction.

Down-the-hole variograms were constructed using Isatis software, perpendicular to the

mineralization, defining the nugget-sill ratio to be applied for the ordinary kriging (OK)
estimate. The down-the-hole variograms were well defined and the relatively low nugget ratio
obtained compared to similar deposits is attributed to domaining.

The 2014 variogram parameters were used in the 2015 modelling as there was no significant
change in the variograms between the two data sets. The nugget, sills and ranges were all
tested per domain in 2015 and found to be the same as those used in the 2014 estimation.
This implies that Daapleu grade distribution is stable and highly predictable.

Two structure spherical models were fitted with a nugget value determined by down-the-hole
variograms. For the South Domain there was insufficient data to construct meaningful
variograms and the variography modelled for the Central Domain was applied to the South
Domain.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 107

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.4.9_1
SMI Gold Project
Daapleu: Experimental Semi Variogram Parameters

Rotation Number
Lag of
Domain Direction Lag (m)
Tolerance
Z Y X Lags

North 50 50 - 90/0 0/0 15 50% 10

Down-the-
1 50% 20
Hole

Central 70 68 - 90/0 0/0 15 50% 10

Down-the-
1 50% 20
Hole

Table 14.4.9_2
SMI Gold Project
Variography Modelled Parameters

Direction Nugget Sill 1 Sill 2 Range 1 (m) (X,Y,Z) Range 2 (m) (X,Y,Z)

North Domain

Anisotropic Semi-
1.641 5.868 1.678 17, 44, 4.25 60, 100, 16.6
Variogram

Central and South Domains

Anisotropic Semi-
0.45 0.497 0.595 4, 33, 3 57, 110, 10
Variogram

14.4.10 Block Modelling

A three-dimensional block model was constructed for Daapleu. Parent block sizes were
based on the data configuration (average drill spacing), compositing interval, geometry of the
mineralization and suitability for mine planning.

The block models were constructed with parameters as displayed in Table 14.4.10_1.

Table 14.4.10_1
SMI Gold Project
Daapleu: Block Model Construction Parameters - Au Estimation (m)

Domains Origin Extent Parent Block Size

X 599,000 2400 10

All Y 75,400 1900 10

Z -60 500 10

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 108

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.4.11 Grade Estimation

Grade estimation was done using OK for all Domains. North and Central Domains were
estimated using the modelled variograms and search parameters as supplied in
Table 14.4.11_1. The South Domain was estimated using the variogram modelled for the
Central Domain. Statistical analysis of the gold distribution in the oxidized and fresh zones
(Section 14.4.6) indicates that they are one population and they were combined and
estimated as if there was no difference in the host rock. Likewise with the gold mineralization
in the IFMD and VSM which were combined as if there was no difference in host rock within
each domain.

Table 14.4.11_1
SMI Gold Project
Daapleu: Search Parameters

Min. Max. Max No of

Estimation Search Distance Search
Domain No of No. of Composites
Pass Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 10 60 50 20 50 10
North 2 20 120 100 20 50 10 050/050
3 30 180 150 10 50 10
1 10 60 50 20 50 10
Central 2 20 120 100 20 50 10 078/068
3 30 180 150 10 50 10
1 10 60 50 20 50 10
South 2 20 120 100 20 50 10 078/060
3 30 180 150 10 50 10

14.4.12 Estimation Parameters

Hard domain boundaries were used preventing samples lying outside the mineralized domain
from being used for the estimation. Soft domaining within the mineralized domains was
permitted, to include an additional line of boreholes outside of the domain boundaries, as the
domain boundaries are gradational. A three-pass estimation strategy was applied to each
zone, applying an expanded and less restrictive sample search to the second and subsequent
estimation passes and only considering blocks not previously assigned an estimate
(Table 14.4.11_1).

14.4.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included the following activities:

 Comparison of the estimate versus the mean of the composite dataset.

 Visual checks of cross sections, long sections, and plans (Figures 14.4.13_1 to
14.4.13_4).
 Swath Plots

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 109

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The model validation checks confirmed the suitability of the methodologies applied and the
accuracy of the estimation results.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 110

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.13_1
Daapleu
Boreholes and Sections Plan Map

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 111

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.13_2
Daapleu
Cross Section C-C’

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 112

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.13_3
Daapleu
Cross Section E-E’

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 113

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.13_4
Daapleu
Cross Section F-F’

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 114

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.4.14 Depletion and Geological Losses

No mining has taken place within the area of mineralization. No depletion has been applied to
the block model. Geological losses where known are accounted for in the geological model
and classified as waste. Artisanal mining has been accounted for in the topographic survey.
All other losses will be treated at the mine planning stage.

14.4.15 Mineral Resource Classification

Classifications are based on the confidence levels of the key criteria that were considered
during the mineral resource estimation. Confidence levels for key criteria are listed in Table
14.4.15_1. Classification may have been downgraded in some areas due to lower confidence
in the data. Mineral resource classification is based on:

 Measured Mineral Resources:

 Estimated within the first search volume;

 Minimum of three boreholes;
 20m borehole spacing.
 Indicated Mineral Resources:

 Estimated within the first or second search volume.

 Inferred Mineral Resources:

 Estimated within the second or third search volume.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 115

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.4.15_1
SMI Gold Project
Daapleu: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond / RC - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate
Sub-sampling
Diamond and RC sampling performed to industry standard
Techniques and Moderate/High
techniques.
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. Moderate/High
Verification of Sampling Coffey has assessed sampling and assaying procedures and
Moderate/High
and Assaying considers them of appropriate industry standards.
Location of Sampling Survey of all collars was performed with accurate survey
Moderate/High
Points equipment
Data Density and
Drill spacing. 20x20m grid High
Distribution
Audits or Reviews Data reviewed by Coffey on site. Moderate/ High
Database Integrity No major issues were identified. Moderate/High
Geological
Lithological controls are well understood. High
Interpretation
Estimation and Estimation methodology is considered to be appropriate given the
High
Modelling Techniques geological setting, and grade distribution
A 0.5g/t Au lower cut-off grade is considered appropriate for
Cut-off Grades High
reporting
Mining Factors or
Open Pit Moderate/High
Assumptions
Metallurgical Factors or Assumed same processing parameters as historical production
Moderate/ High
Assumptions and metallurgical test work

14.4.16 Classification and Grade Models

Sections through the classification and grade models for Daapleu are shown in Figures
14.4.16_1 and 14.4.16_2.

Classification is shown for Measured, Indicated and Inferred Mineral Resources. The drilling
grid is sufficiently tight for this deposit to estimate continuity. In Section S1168 (Figure
14.4.16_2) there is insufficient information in the adjacent lines to give the same confidence
as the North domain.

Gold mineralization in the North domain occurs in three zones, at the top of the IFMD, in and
near the contact between the IFMD and VSM and in the VSM. Only the first two are
considered for inclusion in the mineral resources. The zone in the metasediments is thin,
poorly defined by drilling, not connected to the main zone of mineralization and would need
more information to be considered as potentially economically minable. The mineralization in
upper part of the IFMD is a persistent low to moderate grade zone with an arsenic anomaly.
The gold mineralization in the contact zone is moderate to high grade with continuity over a
few hundred metres. The zone is persistent over all domains.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 116

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Gold grades in the Central Domain follow those of the North but with lower grades. The
mineralization in the IFMD is persistent but the grade in the contact zone is lower.

Mineralization in the South Domain appears to be only associated with the contact zone.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 117

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.16_1
Daapleu
Mineral Resource Classification Cross-Section G-G’

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 118

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.16_2
Daapleu
Mineral Resource Classification Cross Section H-H”

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 119

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.4.17 Summary of Mineral Resources

A summary of the estimated mineral resources for Daapleu are tabulated per facies,
oxidization level and mineral resource category at a cut-off grade of 0.5g/t Au (Table
14.4.17_1). A cut of grade of 0.5g/t Au is the preferred scenario.

Table 14.4.17_1
SMI Gold Project
Daapleu: Mineral Resource (Cut-off 0.5g/t) 31 July2015

Category Domain LITH Au g/t Tonnes (Mt) Au(’000oz)

Measured Fresh VSM 2.13 4370 298.6
Measured Fresh IMFG 1.10 13207 467.8
Measured Fresh MIXED 2.54 1642 133.9
Measured Fresh IM 1.06 657 22.5
Measured Oxidised AO 1.51 1113 53.9
Measured Oxidised AR 1.47 43 2.0
Measured Oxidised LAT 1.14 105 3.9
Measured Oxidised IM 1.29 51 2.1
Total Measured Mineral Resources 1.45 21,188 984.7
Indicated Fresh VSM 2.06 1835 121.7
Indicated Fresh IMFG 1.06 6001 205.2
Indicated Fresh MIXED 2.46 1373 108.7
Indicated Fresh IM 1.16 176 6.5
Indicated Oxidised AO 1.44 190 8.8
Indicated Oxidised AR 1.21 4 0.1
Indicated Oxidised LAT 1.28 11 0.5
Indicated Oxidised IM 1.04 14 0.5
Total Indicated Mineral Resource 1.46 9,603 452.0
Inferred Fresh VSM 1.62 571 29.7
Inferred Fresh IMFG 0.88 715 20.2
Inferred Fresh MIXED 1.87 79 4.7
Inferred Fresh IM 1.00 80 2.6
Inferred Oxidised AO 0.95 94 2.9
Inferred Oxidised AR 1.37 0 0.0
Inferred Oxidised LAT 0.98 10 0.3
Inferred Oxidised IM 0.91 3 0.1
Total Inferred Mineral Resource 1.21 1,553 60.5

Note Appropriate Rounding has been applied

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 120

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.4.18 Comparison with Historical Estimates

Coffey estimated Daapleu mineral resource in 2014. The 2014 model is compared against
the 2015 boreholes as shown in Figures 14.4.18_1 to 14.4.18_3. The figures show that the
mineralization was correctly identified and the grades are predictable. This has been
considered when classifying the mineral resource.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 121

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.18_1
Daapleu
2014 Model versus the 2015 boreholes DA15-171 to DA15-165

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 122

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.18_2
Daapleu
2014 Model versus the 2015 boreholes DA15-179 to DA15-141

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 123

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.18_3
Daapleu
2014 Model versus the 2015 boreholes DA15-142 to DA15-183

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 124

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.5 ZiaNE

14.5.1 Introduction
Coffey has updated the mineral resource for the ZiaNE deposit as at 31 July 2015. The
geological modelling was completed in the 3D software packages Micromine and Datamine™
Studio 3. The grade estimation was completed using an ID2 which was considered
appropriate based on review of a number of factors, including the quantity and spacing of
available data, randomness of the grade; and geometry of mineralization and the constraints
imposed by mine design. The grade estimation was constrained by hard geological
boundaries based on geological interpretations.

14.5.2 Data Validation

See Section 14.1.2.

14.5.3 Geological Interpretation and Modelling

Introduction
The geological modelling was completed on the 3D software packages Datamine™ (CAE
Mining) Studio 3 and Micromine. The geological model was based on information from survey
data, geological mapping, RC and diamond borehole data and sample analyses. This
geological model was based on current assays results. Historical data was found to be
inaccurate and replaced with results of the reassay of this historical drilling.

Geological Modelling
The 2D mineralization sections constructed by the project geologist were analysed and used
in improving the understanding of the mineralization style. The sections contained the grade
shells of gold above a nominal 0.5g/t Au. The sections were drawn at 335° Azimuth assuming
that the mineralization dips at strikes at 335°. The sections showed that the mineralization is
interpreted as a series of parallel veins but is highly discontinuous (Figure 14.5.3_1). The
veins and gold mineralization are not restricted to any lithology.

Lithological data from the historical boreholes was still considered accurate and this data was
combined with the new assays data to form the basis for a new geological model. Geological
interpretations were available from the project geologists as hand drawn sections due to
insufficient time to prepare a digital geological model on site. Discussions with SMI geologists
on possible interpretations guided the modelling process.

The lithologies were categorized into five main groups:

 Laterite;
 Oxidised Saprolites;
 Reduced Saprolites;
 Granite; and

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 125

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Dolomite.
 The mafic intrusives are irregular and were ignored when constructing the geological
model.
The lithologies were composited so that top and bottom surfaces could be defined. The
laterite is fairly flat and other lithologies have irregular dips. The top and bottom surfaces of
major lithologies were mapped using Datamine’s Studio 3 DTM creation routine. The
dolomite and weathering surfaces were mapped in Micromine and then exported to Datamine
for further manipulation.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 126

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.5.3_1
ZiaNE
Original Geological Model Grade Shells (2014 interpretation)(cut-off 0.5g/t gold)

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 127

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Weathered Zone
The geological logs and cross sections were used to map the base of the weathered zone.
The weathered zone has a depth of 25m to 100m. The transition zone (partially weathered) is
very thin and non-existent in some areas. Partially weathered materials were included in the
highly weathered zone as they have similar characteristics. The surface was mapped as a
DTM using borehole contacts to define the base of the zone.

14.5.4 Mineralization Interpretation

Due the complexity of the mineralized zone the same modelling method as used at Daapleu
was tested for ZiaNE. A nominal cut-off of 0.5g/t Au was used at ZiaNE in creating the
mineralization volumes. Gold grades above the cut-off were coded 1 and the grade below the
cut-off and absent values were coded 0. The indicator estimation was carried out with the
coded data (0 and 1) and was completed using the search volume presented in Table
14.5.4_1. The estimation method used was ID2 as this method tends to map contacts well.

Table 14.5.4_1
SMI Gold Project
ZiaNE: Geological Modelling Search Parameters

Min. Max. Max No of

Search Distance Search
Estimation Pass No of No. of Composites
Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 40 40 10 6 20 5
2 80 80 20 6 20 5 040/025
3 30 180 150 6 20 5

The isosurfaces on the calculated proportions were created in Datamine. The 0.3 (>=30% of
samples above 0.5g/t Au) cut-off isosurface provided the best results when compared against
the raw borehole data. The cut-offs of 0.3g/t Au mapped the mineralization well while a cut-off
below 0.3g/t Au included a large amount of unmineralized material.

The ID2 estimation provided acceptable results and the model was retained for the grade
estimation. A plan and section showing the mapped mineralized envelope is shown in
Figures 14.5.4_1 and 14.5.4_2.

The Nearest Neighbour estimation technique was used to extrapolate the extent of the
potential mineral resource model, up to 40m from the boreholes. Outside the 40m
extrapolation, everything was considered waste.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 128

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.5.4_1
ZiaNE
Borehole plan view showing where the mineralization cross-sections were taken

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 129

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.5.4_2
ZiaNE
A section A-A’ showing the boreholes and the mineralization volume defined by >30% of samples above 0.5g/t

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 130

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.5.5 Compositing
The lengths of the samples were assessed prior to selecting an appropriate composite length
for undertaking statistical analyses and grade estimation. The minimum and maximum
lengths were 0.010m and 7.0m respectively. Summary statistics of the sample length
indicates that 21% of the samples were sampled at less than 0.5m intervals, 30% of the
samples were sampled between 0.5m and 1m interval, 38% at a 1m interval, and 11% greater
than 1m. The sample length mode is 1m.

14.5.6 Statistical Analysis

Statistical analysis was undertaken on composited and length weighted un-composited (raw)
datasets per domain. All composites inside the individual modelled surfaces were flagged as
separate domains. A total of 8,759 composites were used in the estimation process from a
total of 248 RC and diamond boreholes within the mineralized zone. The statistics generated
for the project are presented in Table 14.5.6_1.

Table 14.5.6_1
SMI Gold Project
ZiaNE:1m Composite Statistics within the Mineralized Zone (Au g/t)

No of
Area Min Max Mean Std Dev Variance CV
Samples
Raw Data (Length Weighted)
ZiaNE 8759 0.005 299.3 1.602 6.191 14.93 3.864

The population of gold grades are lognormal, which is typical of many gold deposits. The CV
is high which is consistent with the presence of high outlier grades that potentially require
cutting (capping) for grade estimation. High grade capping is discussed in Section 14.5.7.

14.5.7 High Grade Capping

For ZiaNE no grade clustering of high values was observed and five values were capped to
100g/t. The impact of the cutting is shown in Table 14.5.7_1.

Grade estimations were performed including and excluding top capping and the results
reviewed. It was observed that capping reduced the mineral resource gold content, at a zero
cut off by 3.1%. This is consistent with the grade reduction in the raw data.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 131

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.5.7_1
SMI Gold Project
ZiaNE: Summary of Upper Cuts Including Uncut and Cut Statistics for Mineralized Composites
(Au g/t)

Uncut Statistics Cut Statistics

Number Data
High Grade
Data Points

Reduction
Number of

in Mean
Capped
Project

Grade
Mean

Mean
Dev.

Dev.
Std.

Std.
Cut
CV

CV
ZiaNE 8759 1.60 6.19 3.864 100.00 1.55 4.77 3.066 5 3.1%

14.5.8 Bulk Densities

The density values applied for the ZiaNE mineral resource estimate is an average value per
rock type per oxidation level as per Table 14.5.8_1. Density data was collected as explained
3
in Section 11.5. No density values were available for the limestone and a value of 2.6t/m
was applied which appropriate for a limestone with 5 to 20% porosity.

Table 14.5.8_1
SMI Gold Project
ZiaNE: Hydrostatic Bulk Density (t/m3)

Standard
Attribute Number Minimum Maximum Mean CV
Deviation
Laterite 34 1.04 2.02 1.58 0.28 0.18
Oxidized Clay 101 1.00 2.94 1.43 0.26 0.18
Reduced Clay 22 1.00 2.31 1.45 0.37 0.25
Granodiorite 51 1.01 3.09 2.56 0.28 0.11

14.5.9 Variography
The mineralization appears to be randomly distributed within the mineralized zone with limited
spatial continuity. Variograms calculated show no structure.

14.5.10 Block Modelling

A three-dimensional block model was constructed for ZiaNE. Parent block sizes were based
on the data configuration (average drill spacing), compositing interval, geometry of the
mineralization and suitability for mine planning. The parent block sizes selected to estimate
the deposit approximates half the borehole spacing. Sub-blocking (8x8 sub cells) was
allowed for good volume definition

The block models were constructed with parameters as displayed in Table 14.5.10_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 132

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.5.10_1
SMI Gold Project
ZiaNE: Block Model Construction Parameters (m)

Project Direction Origin Extent Parent Block Size

X 597,750 1450 10

ZiaNE Y 759,950 1350 10

Z -100 500 5

14.5.11 Grade Estimation

Due to the nature deposit, ID2 was used to give a good balance between local weighting and
smoothing. A Nearest Neighbour estimate with a 40m search radius confined the model to a
maximum distance of 40m beyond the drilling extremities. All mineralization outside of the
40m perimeter area was excluded from the estimate. The mineral resource estimate
excluded only mineral resources within the laterites and Saprolites (Argiles).

14.5.12 Estimation Parameters

The sample search parameters are supplied in Table 14.5.12_1.

Table 14.5.12_1
SMI Gold Project
ZiaNE: Search Parameters

Min. Max. Max No of

Estimation Search Distance Search
Domain No of No. of Composites
Pass Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 40 40 10 30 50 6 040/025
1 2 80 80 20 30 50 6 040/025
3 120 120 30 3 20 6 040/025

Hard domain boundaries were used throughout preventing samples lying outside the
mineralized domain from being used for the estimation. A three-pass estimation strategy was
applied to each zone, applying an expanded and less restrictive sample search to the second
and subsequent estimation passes and only considering blocks not previously assigned an
estimate.

14.5.13 Model Validation

The grade estimates were reviewed visually and statistically prior to being accepted. The
review included the following activities:

 Comparison of the estimate versus the mean of the composite dataset;

 Visual checks of cross sections, long sections, and plans;
 Changes to search parameters;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 133

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Swath Plots;
 Distribution of error plots (relative standard deviation) confirmed the random gold
distribution.

The model validation checks confirmed the suitability of the methodology applied and the
estimation results.

14.5.14 Depletion
No mining has taken place within the area of mineralization; hence no depletion has been
applied to the block model.

14.5.15 Mineral Resource Classification

Confidence levels for key criteria are listed in Table 14.5.15_1. Classification may have been
downgraded in some areas due to lower confidence in the data. Applying the following
parameters, the mineral resource was classified based on:

 Indicated Mineral Resource:

 Estimated within the laterite or saprolites stratigraphical units.

 Estimated within a maximum of a 40m radius of drilling.
 Estimated within the first search volume.
 Minimum number of samples 30.
 Inferred Mineral Resource (Laterite and Saprolite):

 Estimated within the laterite or saprolite stratigraphical units.

 Estimated within a maximum of a 40m radius of drilling.
 Estimated within the second and third search volumes.
 Minimum number of samples 3.
 Inferred Mineral Resource (Carbonate and Granite):

 Estimated within the carbonate or granite stratigraphical units.

 Estimated within a 40m radius of drilling.
 Estimated within continuity of saprolite mineralization.
 Estimated within first, second or third volumes.
 Minimum number of samples 12.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 134

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.5.15_1
SMI Gold Project
ZiaNE: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond / RC - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate
Sub-sampling
Diamond and RC sampling performed to industry standard
Techniques and Moderate/High
techniques.
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. Moderate/High
Verification of Sampling Coffey has assessed sampling and assaying procedures and
Moderate/High
and Assaying considers them of appropriate industry standards.
Location of Sampling Survey of all collars was performed with accurate survey
High
Points equipment
Data Density and
Drill spacing. 20x20m grid High
Distribution
Audits or Reviews Data reviewed by Coffey on site. Moderate/ High
Database Integrity No major issues were identified. Moderate/High
Geological
Lithological controls on mineralization are not well understood. Moderate
Interpretation
Estimation and Estimation methodology is considered to be appropriate given the
Moderate/High
Modelling Techniques geological setting, and grade distribution
Cut-off Grades A 0.5g/t lower cut-off grade is considered appropriate for reporting High
Mining Factors or
Open Pit High
Assumptions
Metallurgical Factors or Assumed same processing parameters as historical production
Moderate/ High
Assumptions and metallurgical test work

14.5.16 Classification and Grade Models

Sections through the classification and grade models for ZiaNE are shown in Figures
14.5.16_1 and 14.5.16_2.

The drilling grid is sufficiently tight for this deposit to estimate continuity of a mineralized zone.
The gold mineralization within the mineralized zone is random, highly variable and patchy.
Variograms calculated showed pure nugget over distances greater than 7m. This appears to
be the nature of the deposit and is considered inappropriate to declare Measured Mineral
Resource due to the high grade variability of the deposit.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 135

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.5.16_1
ZiaNE
Cross Sectional View A-A Showing Mineral Resource Classification Looking North East July 2015

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 136

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.4.16_2
ZiaNE
Cross Sectional View A-A Showing Grade Distribution Looking North East July 2015

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 137

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.5.17 Summary of Mineral Resources

The estimated mineral resources for ZiaNE are tabulated below at a cut-off grade of 0.5g/t Au
(Tables 14.5.17_1 to 14.5.17_3). Mineral resources have been reported by geological zone.
The saprolites and laterites are combined as they are expected to be processed partially on
the Heap Leach. The carbonates and granodiorite are reported separately as they are
mineralogically different to the saprolites and laterites and may be suitable for processing in a
planned CIL plant.

Table 14.5.17_1
SMI Gold Project
ZiaNE: Mineral Resource (Cut-off 0.5g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Indicated Oxide Oxide 6,531 1.25 262.5
Indicated Fresh Fresh 209 1.29 8.7
Total Indicated Mineral Resource 6,741 1.25 270.9
Inferred Oxide Oxide 398 2.44 31.2
Inferred Fresh Fresh 380 1.83 22.4
Total Inferred Mineral Resource 778 2.14 53.5

Note Rounding has been applied

Table 14.5.17_2
SMI Gold Project
ZiaNE: Carbonate Mineral Resource (Cut-off 0.5g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Inferred Oxide Oxide 94 0.80 2
Inferred Fresh Fresh 772 1.27 31
Total Inferred Mineral Resource 866 1.22 33

Table 14.5.17_3
SMI Gold Project
ZiaNE: Granodiorite Mineral Resource (Cut-off 0.5g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Inferred Oxide Oxide 94 2.28 6
Inferred Fresh Fresh 2,651 1.53 130
Total Inferred Mineral Resource 2,745 1.56 136

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 138

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.6 Mont Ity

14.6.1 Introduction
Coffey has estimated the mineral resource for the Mont Ity deposit as at 31 July 2015. The
grade estimation was completed using the OK estimation technique. This estimation
approach was considered appropriate based on review of a number of factors, including the
quantity and spacing of available data, data spatial relationship, the style and geometry of
mineralization. The grade estimation was based on the entire borehole database. No
boreholes or data were excluded from the mineral resource estimation process.

14.6.2 Data Validation

See Section 14.1.2.

14.6.3 Geological Interpretation and Modelling

Three dimensional modelling was completed using Datamine and Micromine software. The
mineralized veins, the bottom surfaces of the oxidation and laterites, oxidized clays, reduced
clays (mixed lithology) and solids for carbonates and cavities were modelled in Micromine.
The surfaces were extrapolated to cover large area for mining studies.

The blocks above and below the oxidization surface were coded accordingly. The top and
bottom surfaces were added to define a lithological package. The topographic surface was
taken as top of the laterite. The surface defining the bottom of the laterites was used as a top
of the oxidized clays. The reduced clay (mixed lithology) was defined by bottom surface of
the oxidised clay and top surface of the granodiorite. The granodiorite was defined as
anything below its top surface. The model was coded according to the lithology.

The solids (carbonates and cavity) were filled with blocks and coded accordingly. Their
models were added to the main geological model.

14.6.4 Mineralization Interpretation

A description of mineralization is contained in Section 8. The two dimensional sections
defining the geometry of the mineralization was provided to Coffey by the SMI site geologist.
Figure 14.6.4_1 presents typical cross sections of the deposit. The sections defined Au
envelopes using a nominal cut-off of 0.5g/t. The sections were geo-referenced and digitized
in Micromine and 3D mineralization envelopes were created.

Based on the physical and chemical properties, the mineralization was separated into three
domains, namely oxidized, partially oxidized and fresh domains. There were few samples in
the partially oxidized domain and the domain has some resemblance of oxidized zone. The
partially oxidized material has similar processing characteristics as the oxidized material. In
consultation with project geologists, a decision was taken to combine partially oxidized and
oxidized zone into one domain called oxidized domain and estimate as a single unit. The final
model was re-coded both with partial and fully oxidized zones for completeness.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 139

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.6.4_1
Mont Ity
Drawn Section 1

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 140

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.6.5 Compositing
A majority of the samples were taken at 1m interval. A 1m interval was chosen for the
composite length.

14.6.6 Statistical Analysis

Two domains (Oxidized and Fresh) detailed in Section 14.6.3 were statistically assessed. All
composites inside the individual modelled surfaces were flagged as separate domains.
Separate statistics were generated for each domain and are presented in Table 14.6.6_1.

Table 14.6.6_1
SMI Gold Project
Mont Ity: Raw, 1m and 2.5m Composite Statistics per Domain (Au g/t)

No of
Domain Min Max Mean Std Dev Variance CV
Samples
Raw Data
Oxide 4544 0.005 116.00 3.187 7.20 51.84 2.26
Fresh 1954 0.005 100.00 2.47 6.35 40.32 2.56
Capped Raw Data
Oxide 4544 0.005 30.00 2.92 5.23 27.35 1.79
Fresh 1954 0.005 30.00 2.25 4.40 19.36 1.96
1m Composites
Oxide 4339 0.005 30.00 2.93 4.97 24.70 1.70
Fresh 1810 0.005 30.00 2.20 4.186 17.52 1.90
2.5m Composites
Oxide 2480 0.005 30.00 2.87 4.56 20.79 1.60
Fresh 1064 0.005 30.00 2.25 3.96 15.68 1.74

Population of gold grades are lognormal; which is typical of most gold deposits. For both
domains the CV is high, typical for a gold deposit.

14.6.7 Outlier Analysis

Capping was motivated by the histograms and probability plots. Using a 99% probability, the
capping was applied at 30g/t Au.

14.6.8 Bulk Densities

Table 14.6.8_1 shows the distribution of densities. Refer to Section 11.5 for density
determination methods. The volume replacement method reported lower density than
hydrostatic method. As with Verse Ouest, the hydrostatic method produced a normal
distribution which is expected distribution for density. Only hydrostatic measurement were
used in the mineral resource estimate

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 141

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.6.8_1
SMI Gold Project
Mont Ity: Hydrostatic Bulk Density (t/m3)

Standard
Attribute Number Minimum Maximum Mean CV
Deviation
Laterite 16 1.23 2.06 1.52 0.24 0.16
Oxidized Clay 124 1.02 2.63 1.49 0.26 0.18
Reduced Clay 48 1.10 2.76 1.65 0.35 0.21
Carbonate 215 1.07 3.26 2.72 0.29 0.11

14.6.9 Variography
The parameters used to calculate the experimental semi-variograms are given in Table
14.6.9_1. Two structure spherical models were fitted with a nugget value determined by
down-the-hole variograms. The modelled variograms and parameters are shown in Table
14.6.9_2.

Table 14.6.9_1
SMI Gold Project
Mont Ity: Experimental Semi Variogram Parameters

Rotation Number
Lag of
Domain Lag (m)
Tolerance
Azimuth Dip Plunge Lags

Oxide 214 43 - 20 50% 10

Fresh 214 32 - 20 50% 10

Table 14.6.9_2
SMI Gold Project
Mont Ity: Variography Modelled Parameters

Range 1 Range 2
Domain Nugget Sill 1 Sill 2
(m) (m)

Oxide 0.416 0.718 0.470 5 40

Fresh 1.00 1.015 0.785 5 91

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 142

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.6.10 Block Modelling

The parent block sizes that were selected to estimate the deposit are approximately half the
borehole spacing. Sub-blocking was allowed for good volume definition. A parameter file
confined the estimate to a maximum distance of 50m for the Indicated Mineral Resource and
100m for the Inferred Mineral Resource beyond the drilling extremities. The block models
were constructed with parameters as displayed in Table 14.6.10_1.

Table 14.6.10_1
SMI Gold Project
Mont Ity: Block Model Construction Parameters (m)

Direction Origin Parent Block Size Number of Blocks Sub-Cell

X 597,500 10 169 Yes

Y 758,490 10 179 Yes

Z -500 5 258 Yes

14.6.11 Grade Estimation

The estimation was carried-out using OK, lognormal OK and ID techniques for both domains.
The veins in each domain were added and estimated together. Adding veins together has
several advantages:

 Variography was possible as there were enough data points.

 The veins show that there are from a same system, are basically one population.
Separating them will mean dividing the population into sub-domain which in turn has
numerous problems.
 Practical and is time saving while using the best approach available so far.
14.6.12 Estimation Parameters
The sample search parameters are supplied in Table 14.6.12_1.

Table 14.6.12_1
SMI Gold Project
Mont Ity: Search Parameters

Min. Max. Max No of

Estimation Search Distance Search
Domain No of No. of Composites
Pass Direction
Comp. Comp. Per Borehole
X(m) Y(m) Z(m)
1 40 40 10 6 30 5 Isotropic
Oxide 2 80 80 20 6 30 5 Isotropic
3 120 120 30 6 30 5 Isotropic
1 90 90 10 6 30 5 Isotropic
Fresh 2 180 180 20 6 30 5 Isotropic
3 270 270 30 6 30 5 Isotropic

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 143

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Hard domain boundaries were used throughout preventing samples lying outside a
mineralized domain from being used for the estimation. A three-pass estimation strategy was
applied, making use of an expanded and less restrictive sample search to the second and
subsequent estimation passes and only considering blocks not previously assigned an
estimate.

14.6.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included the following activities:

 Comparison of the estimate versus the mean of the composite dataset;

 Visual checks of cross sections;
 Comparison of OK, Lognormal OK and IDW estimates.
The model validation checks confirmed the suitability of the methodology applied and the
estimation results.

The section positions are shown on Figure 14.6.13_1 and the sections through the model are
shown in Figure 14.6.13_2

14.6.14 Depletion
Mining has taken place within the area of mineralization. Depletion has been subtracted from
the block model after estimation of the mineral resources. The June 2015 mining surface was
used to deplete the mineral resource.

14.6.15 Mineral Resource Classification

Levels for key criteria are tabulated in Table 14.6.15_1. Applying the following parameters,
mineral resource classification codes were assigned to the block model:

 Measured Mineral Resource:

No measured category was declared due to complex geology and mineralization style.
 Indicated Mineral Resource:

 First and second search-volume and

 Difference between Au estimated using OK and OKL is less than 1g/t.
 Inferred Mineral Resource:

 First and second search volume, if the difference between Au estimated using OK
and OKL is greater than 1g/t
 and third pass.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 144

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.6.15_1
Mont Ity
Drilling Plan view with Sections Indicated

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 145

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.6.13_2
Mont Ity
Section C-C’ Through the Model and Borehole Fence

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 146

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.6.15_1
SMI Gold Project
Mont Ity: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate
Sub-sampling
Techniques and Diamond sampling done to industry standard techniques. Moderate/High
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. Errors are
Moderate/High
identified and corrected or
Verification of Sampling Coffey has assessed sampling and assaying procedures and
Moderate
and Assaying considers them of appropriate industry standards.
Location of Sampling Survey of all collars was performed with accurate survey
Moderate/High
Points equipment
Data Density and
Average Drill spacing. 50x50m grid Moderate/High
Distribution
Audits or Reviews Data reviewed by Coffey. Moderate/ High
Database Integrity No major issues were identified. Moderate/High
Geological
Lithological controls need to be fully studied. Medium
Interpretation
Estimation and Estimation methodology is considered to be appropriate given the
High
Modelling Techniques grade distribution
Cut-off Grades A 0.5 g/t Au lower cut-off grade is considered appropriate for
High
reporting
Mining Factors or
Open Pit Mining High
Assumptions
Metallurgical Factors or
Assumed same processing parameters as historical production. Moderate/ High
Assumptions

14.6.16 Classification Models

Plans and Sections through the classification for Mont Ity are shown in Figure 14.6.16_1.

Classification is shown for Indicated Mineral Resources and Inferred Mineral Resources. The
drilling grid is sufficiently tight for this deposit to estimate continuity. The mineral resource is
classified as an Indicated Mineral Resource where there is dense drilling and extrapolated in
layers for the Inferred Mineral Resource.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 147

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.6.16_1
Mont Ity
Section A-A’ Through the Model and Borehole Fence

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 148

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.6.17 Summary of Mineral Resources

The estimated mineral resources for Mont Ity are tabulated below per category at a cut-off
grade of 0.5g/t Au (Tables 14.6.17_1).

Table 14.6.17_1
SMI Gold Project
Mont Ity: Mineral Resource (Cut-off 0.5g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Indicated Oxidised AO 732 2.45 57.6
Indicated Oxidised AR 273 3.32 29.2
Indicated Oxidised LAT 393 1.01 12.8
Indicated Oxidised CC 47 2.91 4.4
Indicated PO AO 212 2.86 19.4
Indicated PO AR 607 3.05 59.6
Indicated PO CC 166 3.74 20.0
Indicated Fresh CC 2,117 2.23 151.5
Indicated Fresh MIXED 553 1.75 31.1
Total Indicated Mineral Resources 5,101 2.35 385.5
Inferred Oxidised AO 18 2.89 1.7
Inferred Oxidised AR 3 4.28 0.5
Inferred Oxidised LAT 25 0.77 0.6
Inferred Oxidised CC 1 4.23 0.1
Inferred Transition AO 6 2.62 0.5
Inferred Transition AR 17 4.84 2.7
Inferred Transition CC 17 4.95 2.6
Inferred Fresh CC 14 2.25 1.0
Inferred Fresh MIXED 39 2.13 2.7
Total Inferred Mineral Resources 140 2.75 12.4
14.6.18 Note Rounding has been applied

14.6.19 Comparison with Historical Estimates

Historical estimates are not relevant as this is the remainder of a partially mined deposit.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 149

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.7 Walter

14.7.1 Introduction
Arethuse has estimated the mineral resources for the SMI Mont Ity deposit as at 301 July
2015. Geological modelling and mineral resource estimation was done using GEOVIA Surpac
6.6, XLStat, Autotats and Isatis software packages. The grade estimation was completed
using the both ID and OK estimation techniques. This estimation approach was considered
appropriate based on review of a number of factors, including the quantity and spacing of
available data, data spatial relationship, the style and geometry of mineralization. The grade
estimation was based on the entire borehole database. Six of the twin boreholes were
excluded from the mineral resource estimation process.

14.7.2 Data Validation

See Section 14.1.2.

14.7.3 Geological Interpretation and Modelling

Comments for this section are included in Section 14.7.4.

14.7.4 Mineralization Interpretation

Walter is a vein system similar to Ity and ZiaNE. Walter was modelled in manner similar to Ity
where the individual veins were modelled as separate domains with a nominal cut-off of
0.5g/t Au Figure 14.7.3_1. This is considered a real physical limit on gold concentration for
this deposit and is less than the current mining cut-off grade. Given the erratic nature of the
gold mineralization this lower grade allows for better modelling of continuous units.

Intersections were required to be at least 1m thick with a maximum of 3m internal dilution.

Some flexibility in the creation of solids was allowed to preserve the continuity of the
mineralization and simplify modelling. The mineralized zones were extended up to 50m from
the nearest data point.

The model consists of 16 solids of which two have large volumes and good continuity. The
remaining solids are much more restricted. In other cases mineralization was not modelled
because the extent was too localized and continuity could not be determined.

The mineralization was found into four rock facies, namely laterites, granodiorite, marble and
volcanosediments (Figure 14.7.4_2). Based on the physical and chemical properties, the
mineralization was separated into three domains, namely oxidized, partially oxidized and fresh
domains.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 150

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.7.4_1
Walter
Geological Interpretation of Veins
Digitized Section 8 towards NW showing Mineralised Solids on a 25m drilling grid

Lenses endoskarn
(In proto-granodiorite)

Lenses Meta-
Lentilles volcanosediments
exoskarn (in proto-
marbles)

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 151

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.7.4_2
Walter
Geological Interpretation of Veins
Digitized Section 5 towards NW showing the Geological Model on a 25m drilling grid

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 152

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.7.5 Compositing
Most of the samples were taken at 1m interval. A 1m interval was chosen for the composite
length.

14.7.6 Statistical Analysis

Mineralized intersections were taken from within mineralized domains on composites of 1m.
Five of the domains had too few samples to calculate meaningful statistics. Population
statistics are given in Table 14.7.6_1

Table 14.7.6_1
SMI Gold Project
Walter: Composite Statistics per Domain 1-9 (Au g/t)

solid 1 solid 2 solid 3 solid 4 solid 5 solid 6 solid 7 solid 8 solid 9

Number of
780 266 95 56 14 21 93 87 104
Samples
Minimum 0.07 0.0605 0.11 0.26 0.4 0.37 0.13 0.06 0.15
Maximum 108.06 39.60 8.10 3.09 4.12 7.14 7.83 6.78 23.93
Median 1.17 0.94 0.79 0.62 1.08 0.75 0.76 0.87 1.13
Mean 2.59 2.05 1.24 0.88 1.38 1.54 1.28 1.37 1.9
Variance 39.87 14.72 1.41 0.4 0.98 3.36 1.98 1.65 7.99
Ecart Type 6.31 3.84 1.19 0.63 0.99 1.83 1.41 1.28 2.83
CV 2.43 1.87 0.96 0.72 0.72 1.19 1.1 0.94 1.49
Trimean 1.34 1.09 0.92 0.71 1.14 0.92 0.85 0.98 1.18
solid solid solid solid solid solid
solid 16 (laterites)
10 11 12 13 14 15
Number of
123 23 15 28 4 18 227
Samples
Minimum 0.113 0.23 0.36 0.2045 0.37 0.4029 0.06
Maximum 25.52 1.37 3.16 9.56 22.64 4.58 7.88
Median 1.7 0.7 0.6 0.96 4.58 0.84 0.81
Mean 3.92 0.82 0.83 1.49 8.04 1.13 0.96
Variance 25.62 0.15 0.46 3.36 102.87 0.93 0.48
Ecart Type 5.06 0.39 0.68 1.83 10.14 0.96 0.69
CV 1.29 0.48 0.81 1.23 1.26 0.86 0.72
Trimean 2.28 0.79 0.65 1.01 2.9 0.9 0.84

Population of gold grades are lognormal; which is typical of most gold deposits. For both
domains the CV is high, typical for a gold deposit. A low CV in this data set reflects a lack of
data rather than a low variability.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 153

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.7.7 Outlier Analysis

Capping was applied at 40g/t Au as motivated by the histograms and probability plots, and
clustering for the largest mineralized domain. This has the apparent effect of lowering the
metal content by 7% relative to the uncut population. This top cut was applied to all domains.

14.7.8 Bulk Densities

Walter has a bimodal density distribution with the softer oxidized/weathered saprolites being
one population and the hard fresh rock another one. Several attempts have been made to
establish a density against lithology but data remained too widely distributed to be used here.
Eventually dry bulk densities have been assigned per domains (Figure 14.7.8_1).

Table 14.7.8_1
SMI Gold Project
Walter: Hydrostatic Bulk Density (t/m3)

Attribute Standard Assigned

Number Minimum Maximum Mean CV
Deviation density
Laterite 6 1.04 1.85 1.51 0.30 0.20 1.45
Clay Rocks 67 1.04 2.84 1.71 0.40 0.23 1.60
Fresh Rocks 64 1.29 3.25 2.55 0.54 0.21 2.70

14.7.9 Variography
Variograms were modelled for domains 1- 3, 7, 8-10 and 16. The other domains had too few
data to calculate variograms. Domains 8-10 were modelled together as they are geologically
similar (exoskarn) and to ensure enough samples for the calculations. The variogram models
have a spherical structure for solids 1-3 and 8-10, and a Gaussian structure for solids 7 and
16. Ellipsoids are sub-parallel to the ore bodies, and the main axis is most of the time sub-
horizontal and in the lengthening of the solids. Along the main axis the ellipsoids are slightly
elongated (major/semi-major ratio around 1.0-1.5). The ranges are generally 40m, except for
solids 7 and 16 which are 90 and 200m respectively. No minor axis was modelled for solid
16, thus an omnidirectional variogram was used.

The variogram models parameters are given in Table 14.7.12_1.

14.7.10 Block Modelling

The parameters of the block model are displayed in Table 14.7.10_1. The block model was
orientated according to the mean orientation of the mineralised lenses. The blocks
dimensions were selected according to the drilling grid mesh, the dimensions of the
mineralised lenses and the level of characterisation of the Au grades. The blocks dimensions
are about a third of the drilling mesh (25mx25m).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 154

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.7.10_1
SMI Gold Project
Walter: Block Model Construction Parameters (m)

Direction Origin Parent Block Size Number of Blocks Sub-Cell

X 598,970 5 80 No

Y 760,320 10 110 No

Z 100 5 40 No

Rotation Bearing 045 Dip:0 Plunge:0

14.7.11 Grade Estimation

The estimation was carried-out using the ID and OK techniques depending on the amount of
data in each domain. Domains with variograms modelled (Section 14.6.9) were modelled
using OK and the rest with ID3. Estimation Parameters are given in Section 14.7.12_1.

14.7.12 Estimation Parameters

The sample search parameters are supplied in Table 14.7.12_1.

Hard domain boundaries were used throughout preventing samples lying outside a
mineralized domain from being used for the estimation. A three-pass estimation strategy was
applied, making use of an expanded and less restrictive sample search to the second and
subsequent estimation passes and only considering blocks not previously assigned an
estimate.

14.7.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included the following activities:

 Comparison of the estimate versus the mean of the composite dataset.

 Visual checks of cross sections.
 Swath Plots
The model validation checks confirmed the suitability of the methodology applied.

14.7.14 Depletion
Mining activity resumed in April 2015, and resulted in 139,[email protected]/t Au = 5.4koz depletion
of total mineral resources (5% of total ore, and 2.7% of contained gold). Although not material
compared to the total mineral resources of the deposit, and given the indicative confidence
level of the resources, mineral resources at 31 July 2015 have been adjusted accordingly

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 155

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.6.12_1
SMI Gold Project
Walter: Estimation and Search Parameters

Domain Granodiorite Marble Volcased Laterite

Solids 1 2 3 4 5-6 7 8-10 11-12 13-15 16
Max solid size 450m 450m 300m 375m 170m 400m 400m 130m 90m 400m
Solid dip -30 -25 -32 -30 -30 -26 -30 -30 -60 0
Solid dip direction 310 310 315 310 310 310 305 310 300 0
INTERPOLATION METHOD OK OK OK ID3 ID3 OK OK ID3 ID3 OK
Plunge -9.6 -7.9 2.6 0 0 -7.8 -20 0 0 0
Bearing 22.9 22.7 49.2 35 35 23.7 354 30 30 2.66
SEARCH
Dip 37.3 27.5 34.5 30 30 24.9 23 28 60 0
ELLIPSOID
M /Sm 1 1.1 1.3 1 1 1 1 1 1 3
M / Mi 7.9 10 12.8 10 10 35 1.2 10 10 50
max dist major (m) 40 40 40 80 60 150
max dist vert. (m) 30 30 30 40 40 20
PASS 1

min samples 20 20 20 20 20 20
max samples 30 30 30 30 30 30
discretisation pts 4 4 4 4 4 4
max dist major (m) 100 80 80 70 60 150 160 60 70 206
max dist vert. (m) 30 30 40 40 40 60 60 40 40 20
PASS 2

min samples 10 10 10 10 10 10 10 10 10 10
max samples 30 30 30 30 30 30 30 30 30 30
discretisation pts 4 4 4 4 4 4 4 4 4 4
max dist major (m) 999 999 999 999 999 999 999 999 999 999
max dist vert. (m) 999 999 999 999 999 999 999 999 999 999
PASS 3

min samples 1 1 1 1 1 1 1 1 1 1
max samples 30 30 30 30 30 30 30 30 30 30
discretisation pts 4 4 4 4 4 4 4 4 4 4
nugget 0.1 0.11 0.13 0.08 0.27 0.06
PARAMETERS

type struct sph sph sph gau sph gau

KRIGING

S1 0.97 0.85 1 0.86 0.88 0.92

P1 40 40 43 90 33 206
S2 x x x x 0.09 x
P2 x x x x 77 x

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 156

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.7.15 Mineral Resource Classification

Levels for key criteria are tabulated in Table 14.7.15_1. Applying the following parameters,
mineral resource was based on;

 Measured Mineral Resource:

No measured category was declared due to complex geology and mineralization style.
 Indicated Mineral Resource:

 Estimated by OK
 Several intersections in a domain and a large number of samples
 First and second search-volume

 Inferred Mineral Resource:

 Estimated using ID or OK third pass

 third pass.
 Solids with few intersections and low average grade

Topography was also a criterion for the laterites.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 157

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.7.15_1
SMI Gold Project
Walter: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques RC/Diamond - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Diamond drill-holes recoveries are of acceptable standard. RC recoveries
Moderate
are not available.
Sub-sampling Techniques
Diamond sampling done to industry standard techniques. RC sample
and Moderate/High
preparation are less accurate but acceptable.
Sample Preparation
Quality of Assay Data Appropriate quality control procedures are available. No quality control
Moderate/High
data for historical drill-holes.
Verification of Sampling Arethuse has assessed sampling and assaying procedures and considers
Moderate
and Assaying them of appropriate industry standards.
Location of Sampling
Survey of all collars was performed with accurate survey equipment Moderate/High
Points
Data Density and
Average Drill spacing. 25x25m grid Moderate/High
Distribution
Audits or Reviews Site visit by Arethuse on 1-2/10/2013. General Ni43-101 site audit in 2013.
Moderate/ High
All procedures are considered of appropriate industry standards.
Database Integrity No major issues were identified. Moderate/High
Geological Interpretation Geological bodies are well defined in the 2014 end of campaign report.
Mineralized deposits have been outlined with high confidence for the two Moderate
main solids. Other small envelopes are more hypothetic.
Estimation and Modelling Estimation methodology is considered to be appropriate given the grade
High
Techniques distribution
Cut-off Grades A 0.8g/t lower cut-off grade is considered appropriate for reporting. A 0.5g/t
High
geological cut-off grade has been used for wireframing.
Mining Factors or
Open Pit Mining High
Assumptions
Metallurgical Factors or Assumed same processing parameters as historical production or CIL
Moderate/ High
Assumptions project.
Historical Drilling Legacy holes represent 47 % of holes and 33% of samples, are poorly
documented for all items listed above, and lack recovery and QAQC data.
Low
Intensive data verification allowed the inclusion within the resource model
at an indicative level

14.7.16 Classification Models

Plans and Sections through the classification for Mont Ity are shown in Figure 14.7.16_1 to
14.7.16_3.

Classification is shown for Indicated Mineral Resources and Inferred Mineral Resources. The
drilling grid is sufficiently tight for this deposit to estimate continuity. The mineral resource is
classified as Indicated Mineral Resource where there is dense drilling and extrapolated in
layers for the Inferred Mineral Resource.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 158

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.7.16_1
Walter
Drilling Plan view with Sections Indicated

Boreholes are 25m apart

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 159

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.7.15_2
Walter
Section C-C’ Grade Distribution Through the Model and Borehole Fence

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 160

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.7.16_3
Walter
Mineral Resource Classification
C Section C-C’ Through the Model and Borehole Fence C’

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 161

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.7.17 Summary of Mineral Resources

The estimated mineral resources for Mont Ity is tabulated per Facies, oxidized domain and
mineral resource category at a cut-off grade of 0.5g/t Au (Tables 14.7.17_1).

Table 14.7.17_1
SMI Gold Project
Walter: Mineral Resource (Cut-off 0.5g/t) 31 July 2015

Category Domain Facies Tonnes ('000t) Au (g/t) Au ('000oz)

Indicated Oxidized AO 837 2.74 73.7
Indicated Oxidized AR 430 2.16 29.8
Indicated Oxidized Laterite 227 1.04 7.6
Indicated Fresh endoskarn 758 2.14 52.1
Indicated Fresh exoskarn 359 2.20 25.3
Total Indicated Mineral Resources 2,612 2.24 188.5
Inferred OX AO 51 1.16 1.9
Inferred OX AR 50 1.450 2.3
Inferred OX LAT 3 0.75 0.1
Inferred Fresh endoskarn 86 1.6 4.4
Inferred Fresh exoskarn 9.6 1.21 0.4
Inferred Fresh Volcano Sed 1.4 0.99 0.03
Total Inferred Mineral Resources 200 1.42 9.13
Note Rounding has been applied

14.7.18 Comparison with Historical Estimates

Historical estimates are not relevant as this is the remainder of a partially mined deposit.

14.8 Gbeitouo

14.8.1 Introduction
Arethuse has estimated the mineral resource for the Gbeitouo deposit as at 27 November
2013. Geological modelling and mineral resource estimation were done using GEOVIA
Surpac 6.5, XLStat and Autostats software packages. The grade estimation was completed
using the OK and ID estimation techniques. This estimation approach was considered
appropriate based on review of a number of factors, including the quantity and spacing of
available data, data spatial relationship, the style and geometry of mineralization. The grade
estimation was based on the entire borehole database. No boreholes or data were excluded
from the mineral resource estimation process.

14.8.2 Data Validation

See Section 14.1.2

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 162

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.8.3 Geological Interpretation and Modelling

Three dimensional modelling was completed using GEOVIA Surpac 6.5 software. Four
geological entities were modelled: laterites footwall, unaltered carbonates, unaltered
metavolcanosediments and the hanging-wall of the substratum in Metavolcano-sediments.
Thus laterite and clayey saprolite were deduced from these elements. Mineralization was
modelled as envelopes with a minimal cut-off of 0.8g/t Au where intersections were greater
than 1m, internal dilution was not more than 3m and some flexibility was allowed in the
digitization of boundaries to conserve the continuity of the volumes. The model consists of 11
solids, nine in the clayey area and two in the laterites. There is one large continuous solid
with many mineralised borehole intersections. There are another six which are smaller and sit
above the large solid. The last two are of limited extent and uncertain and sit below the large
body.

14.8.4 Mineralization Interpretation

Like Mont Ity, ZiaNE and Walter, Gbeitouo is a series of parallel and subparallel mineralized
lenses which azimuth is N030° and dipping 40-55° to the northwest (Figure 14.8.4_1). The
main mineralised lens is 300m long, 25m thick and has a vertical extension of 150m. The
Gbeitouo mineralization is hosted within a Metavolcano-sedimentary sequence. Carbonates
are found at the hanging wall. The area is covered by a thin soil and laterite layer.

Figure 14.8.4_1
Gbeitouo
Schematic Section of the Deposit.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 163

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.8.5 Compositing
Most of the samples were taken at 1m interval. A 1m interval was chosen for the composite
length.

14.8.6 Statistical Analysis

Two domains (Oxidized and Fresh) detailed in Section 14.8.4 were statistically assessed.
Two domains were statistically assessed: (i) laterites (solids 10-11); (ii) saprolite and fresh
(solids 1-9). All composites inside the individual modelled volumes were flagged as separate
domains. Separate statistics were generated for each domain and are presented in
Table 14.8.6_1. Seven of the solids do not have enough samples to have representative
statistics and are thus only indicative.

The oxidised and reduced domains were also compared separating the samples with the 3D
geological model. The obtained gold grades histograms are displayed in Figure 14.8.6_1.
Population of gold grades are lognormal; which is typical of most gold deposits.

Figure 14.8.6_1
Gbeitouo
Gold grades histograms for the reduced (left) and oxidised (right) domains

14.8.7 Outlier Analysis

Outlier analysis was undertaken considering the CV, confidence interval (95%), metal content,
spatial distribution of high grade samples, and the shape of cumulative frequency plots.
Capping was applied at 15.5g/t.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 164

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.8.6_1
SMI Gold Project
Gbeitouo: Raw and Composite Statistics per Domain (Au g/t)

Raw Samples
Solid 1 Solid 2 Solid 3 Solid 4 Solid 5 Solid 6 Solid 7 Solid 8 Solid 9 Solid 10 Solid 11 Solids 10-11 Solids 2-9 Solids all
Number
720 39 223 44 25 15 14 9 6 20 8 28 375 1123
Samples
Minimum 0.01 0.34 0.02 0.05 0.26 0.24 0.02 0.87 0.28 0.80 0.56 0.56 0.02 0.01
Maximum 45.52 6.04 43.40 2.00 2.75 2.34 2.33 5.64 3.71 2.98 1.08 2.98 43.40 45.52
Median 1.39 1.28 0.96 0.93 1.06 0.97 0.9 1.35 1.56 1.25 0.86 1.05 0.99 1.18
Mean 2.58 1.67 1.6 1.02 1.15 1.13 0.95 2.24 1.62 1.59 0.87 1.38 1.48 2.18
Variance 14.4 1.68 9.87 0.26 0.3 0.41 0.5 3.11 1.65 0.53 0.03 0.49 6.27 11.62
Standard
3.8 1.29 3.14 0.51 0.55 0.64 0.7 1.76 1.28 0.73 0.16 0.7 2.5 3.41
Deviation
CV 1.47 0.78 1.97 0.5 0.47 0.57 0.74 0.79 0.79 0.46 0.18 0.5 1.69 1.56
Trimean 1.62 1.41 1.05 0.94 1.12 1.02 0.82 1.76 1.21 1.34 0.88 1.17 1.08 1.36
Composites
Solid 1 Solid 2 Solid 3 Solid 4 Solid 5 Solid 6 Solid 7 Solid 8 Solid 9 Solid 10 Solid 11 Solids 10-11 Solids 2-9 Solids all
Number of
692 36 206 37 23 15 11 9 4 22 9 31 341 1064
Samples
Minimum 0.01 0.40 0.06 0.06 0.26 0.55 0.02 0.87 1.13 0.80 0.56 0.56 0.02 0.01
Maximum 36.96 6.04 43.40 2.00 1.68 2.34 2.33 5.64 3.71 2.98 1.08 2.98 43.40 43.40
Median 1.53 1.4 1 0.93 1.03 1.37 1 1.35 2.07 1.25 0.86 1.01 1.03 1.32
Mean 2.71 1.69 1.66 1.09 1.09 1.26 1.17 2.24 2.25 1.53 0.89 1.34 1.55 2.3
Variance 13.43 1.71 10.18 0.22 0.19 0.21 0.41 3.11 1.16 0.49 0.02 0.44 6.53 11.15
Standard
3.67 1.31 3.19 0.47 0.43 0.45 0.64 1.76 1.08 0.7 0.15 0.66 2.55 3.34
Deviation
CV 1.35 0.77 1.93 0.43 0.4 0.36 0.55 0.79 0.48 0.46 0.17 0.49 1.65 1.45
Trimean 1.78 1.33 1.11 1 1.07 1.27 1.09 1.77 1.81 1.34 0.88 1.15 1.14 1.5
TOPCUT 15.5 15.5 15.5 15.5
Metal cut (%) 4.4 8.2 5.3 4.5

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 165

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.8.6_1
SMI Gold Project
Gbeitouo: Raw and Composite Statistics per Domain (Au g/t)

Composites
Solid 1 Solid 2 Solid 3 Solid 4 Solid 5 Solid 6 Solid 7 Solid 8 Solid 9 Solid 10 Solid 11 Solids 10-11 Solids 2-9 Solids all
Number of
692 206 341 1064
samples
Minimum 0.01 0.06 0.02 0.01
Maximum 15.50 15.50 15.50 15.50
Median 1.53 1 1.03 1.32
Mean 2.59 1.52 1.47 2.2
Variance 8.81 2.6 1.94 6.65
Standard
2.97 1.61 1.39 2.58
Deviation
CV 1.14 1.06 0.95 1.17
Trimean 1.78 1.11 1.14 1.5

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 166

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.8.8 Bulk Densities

Bulk densities were taken on 246 in the 2013 campaign. Some quality control samples (12
duplicates) tend to show a good repeatability in the measurements. All lithologies show a
range of values and the deposit as a whole is bimodal with a lower density saprolites and
laterite and a higher density for the unaltered rock. Average bulk densities were used in the
estimation.

 Laterites – 1.8t/m3
 Saprolites - 1.4t/m3
 Unaltered rock - 2.75t/m3
14.8.9 Variography
A variogram for the combined volumes of the six vein structures (solids 1-6) are presented in
Table 14.8.9_1. The anisotropy ellipsoid is subparallel to the trend of the mineralization.
Variograms were modelled as nested spherical structures.

Table 14.8.9_1
SMI Gold Project
Gbeitouo: Variography Modelled Parameters

Domain Nugget Sill 1 Sill 2 Range 1 (m) Range 2 (m)

Solids 1-6 0.6 4.9 2.7 39 88

14.8.10 Block Modelling

The block models were constructed with parameters as displayed in Table 14.8.10_1.
Gbeitouo was estimated on a rotated block model to align with the borehole pattern. The
block model was designed to take into account the drilling grid, dimensions of the mineralized
lenses and the grade distribution.

Table14.8.10_1
SMI Gold Project
Gbeitouo: Block Model Construction Parameters (m)

Direction Origin Parent Block Size Number of Blocks Sub-Cell

X 601300 5 60 No

Y 760,400 10 45 No

Z 80 5 44 No

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 167

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.8.11 Grade Estimation

The mineral resource estimation was carried-out using the ID and OK techniques depending
on the amount of data in each domain. Domains with variograms modelled were modelled
using OK and the rest with ID2. Estimation Parameters are given in Section 14.8.12.

14.8.12 Estimation Parameters

The sample search parameters are supplied in Table 14.8.12_1.

Table 14.8.12_1
SMI Gold Project
Gbeitouo: Search Parameters

Au/solid 1 Au/solid 2 Au/solid 3

Ordinary
Type of interpolation
Kriging ID2 ID2
Nugget (c0) 0.59
4.91
1st Structure (c1, a1)
38.5
2.67
Kriging ellipsoid 2nd Structure (c2,a2)
88.7
3x3x3
discretisation points Major/semi-major 1.1
Major / minor 6.4
Bearing Major 331.4
Plunge -42.5
Dip 22.3

Max distance (m) 80 60 60

Major/semi-major 1.1 2 1
Major / minor 6.4 5 5
Bearing Major 331.4 330 0
Plunge -42.5 -34 0
Search Ellipsoid
Dip 22.3 22 0
Search Distance 80 (pass 1)
60 60
Pass 1 and 2 150 (Pass 2)
Search Distance
500 500 500
Other Pass

No of informing
Min 20 8 8
samples
Pass 1 Max 30 30 30
No of informing
Min 10 (Pass 2) 1 1
samples
Pass 2 and Pass 3 Max 1 (Pass 3)

Hard domain boundaries were used throughout preventing samples lying outside a
mineralized domain from being used for the estimation. A three-pass estimation strategy was
applied, making use of an expanded and less restrictive sample search to the second and
subsequent estimation passes and only considering blocks not previously assigned an
estimate.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 168

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.8.13 Model Validation

The estimates were reviewed visually and statistically prior to being accepted. The review
included the following activities:

 Comparison of the estimate versus the mean of the composite dataset;

 Visual checks of cross sections;
 Swath Plots.

The model validation checks confirmed the suitability of the methodology applied.

14.8.14 Depletion
No mining has taken place and no depletion has been applied.

14.8.15 Mineral Resource Classification

Levels for key criteria are tabulated in Table 14.8.15_1. Applying the following parameters,
mineral resource classification codes were assigned to the block model:

Parameters for Classification

 Measured Mineral Resources:

No measured category was declared due to complex geology, mineralization style and
database issues for historical campaigns.
 Indicated Mineral Resources:

 Ordinary kriging
 Good continuity of the mineralised lenses
 Low kriging variance
 Inferred Mineral Resources:

 ID2
 Smaller bodies resulting in a small number of samples
 Weak continuity of the mineralised lenses
 Topography low confidence for laterites

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 169

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 14.8.15_1
SMI Gold Project
Gbeitouo: Confidence Levels of Key Criteria

Factors Discussion Confidence

Drilling Techniques Diamond & RC - Industry Standard approach. Moderate/High
Logging Standard nomenclature has been adopted. High
Drill Sample Recovery Recoveries are of acceptable standard. Moderate/High
Sub-sampling
Techniques and Diamond sampling done to industry standard techniques. Moderate/High
Sample Preparation
Quality of Assay Data Acceptable quality control procedures are available. Medium
Verification of Sampling Arethuse has assessed sampling and assaying procedures and considers
Moderate/High
and Assaying them of appropriate industry standards.
Location of Sampling
Survey of all collars was performed with accurate survey equipment. Moderate/High
Points
Data Density and
Average Drill spacing. 40x30m grid Moderate/High
Distribution
On-site visit by Arethuse in October 2013 (2 days). General Ni43-101 site
Audits or Reviews audit in 2013. All procedures are considered of appropriate industry Moderate/ High
standards.
Database Integrity Several issues were identified and corrected. Moderate/High
Geological
Mineralogy and structural features need to be fully studied. Medium
Interpretation
Estimation and Estimation methodology is considered to be appropriate given the grade
High
Modelling Techniques distribution.
A 0.8g/t lower cut-off grade is considered appropriate for wireframing and
Cut-off Grades reporting.
High

Mining Factors or
Open Pit Mining. High
Assumptions
Metallurgical Factors or Assumed same processing parameters as historical production or CIL
Moderate/High
Assumptions project.
Legacy holes represent 52 % of samples, are poorly documented for all
item listed above and lack recovery and QAQC data. Intensive data
Historical Drilling verification allowed the inclusion within the resource model at an indicative
Low/
level

14.8.16 Classification Models

An example of a section through the classification for Gbeitouo is shown in Figures 14.8.16_1
and 14.8.16_2. Classification is shown for Indicated Mineral Resources and Inferred Mineral
Resources. The drilling grid is sufficiently tight for this deposit to estimate continuity. The
mineral resource is classified as an Indicated Mineral Resource where there is dense drilling
and as an Inferred Mineral Resource elsewhere.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 170

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.8.15_1
Gbeitouo
Drilling Grid and Section Showing Grade Distribution

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 171

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 14.8.16_2
SMI Gold Project
Gbeitouo: Section A-A’ Through the Model and Borehole Fence Showing Model Classification

14.8.17 Summary of Mineral Resources

The estimated mineral resources for the Gbeitouo are tabulated per facies, oxidization zone
and mineral resource category at a cut-off grade of 0.8g/t Au (Table 14.8.17_1).

Table 14.8.17_1
SMI Gold Project
Gbeitouo: Mineral Resource (Cut-off 0.8g/t) 31 July 20151

Category Domain Facies Tonnes (‘000t) Au (g/t) Au ('000oz)

Indicated Oxidised AO 567 2.46 44.7
Indicated Fresh VSM 1,387 2.24 100.0
Total Indicated Mineral Resources 1,954 2.30 144.7
Inferred Oxidised 15.6 1.16 0.6
AO
Inferred Oxidised 39.9 1.35 1.7
LAT
Inferred Fresh 1.3 1.14 0.03
VSM
Total Inferred Mineral Resources 56.8 1.29 2.3
Note Rounding has been applied

14.8.18 Comparison with Historical Estimates

There are no historical estimates for this deposit.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 172

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

14.9 Summary of Mineral Resources

A summary of all mineral resources is given in Table 14.9_1

Table 14.9_1
SMI Gold Project
Mineral Resources as At Effective Date 31 July 2015

Measured Indicated Inferred

Cut-off
Deposit Tonnes Tonnes Tonnes
grade Au g/t Au oz Au g/t Au oz Au g/t Au oz
(‘000) (‘000) (‘000)

Mont Ity 0.5g/t Au 5,100 2.35 385,600 140 2.75 12,400

Daapleu 0.5g/t Au 21,188 1.45 984,700 9,604 1.46 452,000 1,553 1.21 60,500

ZiaNE 0.5g/t Au 6,741 1.56 337,900 3,838 1.78 219,800

Walter 0.5g/t Au 2,613 2.24 188,500 200 1.42 9,100

Gbeitouo 0.8g/t Au 1,954 2.30 144,700 57 1.29 2,300

Aires leach
0.0g/t Au 6,134 1.04 205,900
pads
Verse Ouest
0.0g/t Au 3,844 1.22 150,800 3,591 1.25 144,300
dump
Teckraie
0.0g/t Au 1,945 1.11 69,500 304 1.01 9,900
dump

Total 27,322 1.36 1,190,600 31,801 1.69 1,729,000 9,683 1.47 458,300
Note:
 Mineral resources include mineral reserves
 Numbers may not sum exactly due to rounding.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 173

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

15 MINERAL RESERVE ESTIMATES

15.1 Mining of Heap Leach Operations

Mineral reserves estimates are based on the geological models of April 2014 for Mont Ity,
May 2014 for Walter, September 2014 for ZiaNE and Teckraie. There has been depletion at
Mont Ity and Walter and new mineral resource estimates for Mont Ity and ZiaNE in 2015. The
changes to the mineral resources at ZiaNE are minor in the oxidized zone not material to the
mineral reserve estimation. The changes at Mont Ity and Walter are significant to the
deposits themselves but are a small percentage of the overall mineral resource and mineral
reserve at SMI. Mineral reserves were updated at the end of 2014 and will be updated again
at the end of 2015.

15.1.1 Mining Recovery and Dilution

SMI is an existing conventional Open Pit mine using articulated trucks (40t class) and
hydraulic backhoes or front shovel excavators (80t class). Limited drill and blast activities are
required as most of the material that is current mined is largely oxidized (clay or laterites).

Reconciliation is conducted on a regular basis by the mine technical services on site, and the
results have been reviewed by the Qualified Person.

Table 15.1.1_1 indicates the call factors calculation on the mineral resource block model for
the Mont Ity deposit (the only active deposit in 2013 and 2014).

Table 15.1.1_1
SMI Gold Project
Call Factors Calculation for Mont Ity Deposit

Resource Model Actuals Call factors

Ore Contained Ore Contained
Grade Grade Tonnes Grade Metal
Tonnage metal Tonnage metal
Au g/t Au g/t factor factor factor
(‘000) Au kg (‘000) Au kg
2013
Lateritic Ore 243 1.85 449 178 1.86 331 73% 101% 74%
Clay Ore 432 5.40 2,335 528 5.08 2,680 122% 94% 115%
2014
Lateritic Ore 346 1.74 601 306 1.69 516 88% 97% 86%
Clay ore 484 4.62 2,234 557 4.19 2,337 115% 91% 105%
Note Rounding has been applied

The tonnage and grade numbers shown in the table concerning the resource models have
been estimated using the end of year’s surveys:

 2013, the resource model has been constrained between the end of 2012 and the end of
2013 topographic surfaces;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 174

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 2014, the resource model has been constrained by the end of 2013 and end of 2014
topographic surfaces.

These numbers have been compared to the actual mine production results, and basic call
factors have been estimated. This analysis shows that for both 2013 and 2014, the tonnage
call factor on lateritic ore is negative (the mine actual tonnage results are lower than the
resource model), whereas the tonnage call factor on Clay ore is positive (mine actual tonnage
is higher than the resource model). The grade call factor on the lateritic ore is generally in line
with the resource model (respectively 101% and 97% in 2013 and 2014), whereas it is
negative concerning the clay ore (respectively 94% and 91% in 2013 and 2014).

Overall, the call factor on total metal extracted from mining activities is positive for the clay ore
(115% in 2013 and 105% in 2014) and negative for the lateritic ore (74% in 2013 and 86% in
2014).

The tonnage call factors calculated on site and used to develop the short and medium term
planning sequences are in line with those calculated above: the tonnage call factor on clay
ore is 115% and the tonnage call factor on lateritic ore is 90%. On the other hand, the call
factor used to estimate the metal recovered is more conservative compared to the one
calculated above, especially for clay ore: the call factor on total metal extracted for lateritic ore
is 80% (in line with the 2013 and 2014 calculated call factors), and 92% for clay ore
(compared to 110% on average for 2013 and 2014).

The mineral reserve statement and associated reserves estimation has used the call factors
calculated by the site technical personnel, (Table 15.1.1_2) and used them for short and mid-
term planning for all the deposits that are planned to be processed with the Heap Leach
operation.

Table 15.1.1_2
SMI Gold Project
Mining Parameters used for the Mineral Reserve Estimate of the Heap Leach Deposits

Clay Ore Lateritic Ore

Tonnage call factor 115% 90%

Metal recovery from resource model 92% 80%

15.1.2 Metallurgical Factors and Assumptions

The SMI current operation comprises mining, crushing and stacking at a rate of 0.95Mtpa,
with heap leaching using cyanide to recover just over 80,000 oz. of gold (2014 figures). The
current processing facilities are designed for the treatment of oxidized soft clay and laterite
ore.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 175

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Process costs (inclusive of the general and administrative (G&A) costs) and recoveries used
to generate the mineral reserves for the Heap Leach operation are shown in Table 15.1.2_1.

The recoveries used to calculate the mineral reserves are based on SMI recommendations
and are in line with 2014 actual results.

Table 15.1.2_1
SMI Gold Project
Processing and G&A Costs by Deposits for the Heap Leach

Processing and G&A cost

Deposits Ore Type Recovery
(€/t)

Mont Ity, Tontouo, Zia NE, Laterite 95% 25.04

Walter, Teckraie Oxidized Clay 82% 31.54

15.1.3 Cut-Off Grade Parameters

The cut-off grade parameters used for the models are based on costs, royalties, process
recoveries and metal prices supplied by SMI. The processing costs and recoveries are
calculated for each type of ore separately (laterite and clay) but they are assumed to be
similar for the different deposits (for example, a lateritic ore coming from Zia NE or Mont Ity
will have a same processing cost and recovery). Prices and costs have been supplied in
Euros, with an exchange rate of 1€ = 1.15 US$, the cut-off grades are show for each scenario
(break-even, marginal and resource) of the deposits in Table 15.1.3_1.

Table 15.1.3_1
SMI Gold Project
Cut-off Grade Calculation for the Heap Leach Operation

Reserve Cut-off Reserve Cut-off

grade1 grade1 Resource Cut-off
grade2
(Au g/t) (Au g/t)
(Au g/t)
break-even marginal

Mining costs €/t 1.9 1.9

Processing and G&A €/t 31.5 28.0 31.5

Calculated COG g/t 1.50 1.10 0.95

1
: reserve cut off grade was calculated using 1150 USD/oz gold price
2
: resource cut-off grade was calculated using 1600 USD/oz gold price

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 176

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

15.1.4 Pit Optimization Parameters

Pit optimizations have been undertaken for each deposit using the Lerchs-Grossman
algorithm in the GEOVIA Whittle 4.5 software program.

The deposits planned to be mined during the 3-year mine plan have been optimized for a
“Heap Leach scenario” on top of the optimization done for the “CIL scenario”. The goal was
to identify the most profitable shell for a “Heap Leach” scenario for each suitable deposit with
the constraint of processing only the oxidized material. These “Heap Leach” shells were
contained within the “CIL” shell, and the material mined and processed with the Heap Leach
facility is obviously not included in the mineral reserve material for the CIL plant: a projection
of the topography as of the end of 2017 was used to constrain the resource base to run the
optimizations in the CIL plant PFS.

Some material that is not processable using the Heap Leach facility (essentially reduced clay
material and granodiorite) and will be mined before the CIL plant will be operational. SMI
aims at stockpiling this material in a dedicated stockpile until the start of the CIL plant. This
limited amount of material located inside the Heap Leach pit limit is considered as “mineral
reserve material” and will be accounted for in the CIL production plan scenario.

Optimized pit shells considering only mineral resources of the measured and indicated
categories have been calculated for the Mont Ity, Tontouo, Zia NE, Walter and Teckraie
deposits. Table 15.1.4_1 lists the parameters used in the definition of the optimized pit shells
for mineral reserves.

Table 15.1.4_1
SMI Gold Project
Technical and Economic Parameters used for the Whittle Optimisations

Description Unit Amount

Exchange rates EUR to USD 1.15
Discount Rate % 10
Processing Throughput tpa 950,000
Gold price USD$ 1150
Royalties % 3.5
Slope angles Degrees Cf Section 16.2
Mill recovery % Cf Section 15.1.2
Mining recovery % Cf Section 15.1.1
Mining Dilution % Cf Section 15.1.1
Mining costs €/t 1.9 EUR/t (SMI information)
Milling costs €/t Cf Section 15.1.2

The optimized pit shells are converted into final pit shells (or pit design shells) with the
addition of a dedicated ramp for each different pit and a minimum width in the bottom of each
different pit. The pit design parameters are detailed in Section 16.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 177

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

15.1.5 Mineral Reserves

The mineral reserves calculation for the Mont Ity deposit and the Walter deposit were done
using the end December 2014 topographic surveys from which the mine declared production
for the January 2015 to July 2015 period was removed by depletion.

Mineral reserves in those pit design shells are inclusive of mining dilution and mine recovery,
considering mill recovery and are summarized in Table 15.1.5_1.

Table 15.1.5_1
SMI Gold Project
Mineral Reserves for Heap Leach Operation as at 31 July 2015

Contained
Grade Contained Processing
Deposit Category Tonnes (‘000) Gold
(Au g/t) Gold (kg) Method
(’000oz)
Mont Ity Probable 775 3.71 2,874 92 Heap Leach

Walter Probable 356 2.82 1,004 32 Heap Leach

ZiaNE Probable 213 1.48 315 10 Heap Leach

Teckraie Probable 913 1.31 1,199 39 Heap Leach

Total Probable 2,257 2.39 5,393 173 Heap Leach

Note Rounding has been applied

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 178

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

15.2 CIL Operations

Mineral reserves for the CIL operations on a per pit basis are presented in Table 15.2_1.
Only Measured and Indicated Mineral Resources have been included for the estimation of
Probable Mineral Reserves. The mineral reserves are based on a mine schedule producing
2.0Mtpa ore.

Table 15.2_1
SMI Gold Project
Mineral Reserves for Carbon-in-Leach Operation as at 31 July 2015

Proved Reserve Probable Reserve

Description Tonnes Tonnes Au (‘000
Au g/t Au (’000oz) Au g/t
(‘000) (‘000) oz)
Mont Ity 183 7.51 44
Daapleu 15,219 1.61 787
Walter 1,053 2.00 68
Zia Ne 3,952 1.60 204
Gbeitouo 1,264 2.56 104
Aires 6,135 1.04 206
Stockpiles 161 3.17 16
Total 0 0 0 27,968 1.59 1,429

Base case production scheduling was completed on a bench-by-bench level for all deposits.
Daapleu and Ity were designed with interim pits targeting high-grade material. Initial Whittle
Multimine results were used as a guideline for scheduling pit priorities. Review of the
Multimine schedule showed opportunity to reduce initial capital and risk associated with the
Walter and Gbeitouo deposits. To mine the Daapleu pit an important section of the Cavally
River needs to be diverted and lot of risks related to hydrogeology will remain. For this
reason, Walter deposit was pushed to Year 4. Table 16.4.5_1 depicts the mine schedule.

15.2.1 Mining Recovery and Dilution

The mining dilution and recovery criteria are presented in Table 15.2.2_1. The mining
recovery used is standard from the industry for similar type operations and material types. A
mining dilution exercise was carried out for each deposit where each block model was re-
blocked to different selective mining unit (SMU) sizes to see the effect to mining dilution.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 179

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 15.2.1_1
SMI Gold Project
CIL Operations: Dilution and Recovery

Criteria Unit
Mining Dilution Accounted in the re-blocking. See Table 15.2.1_2
Mining Recovery 95%

The dilution is applied directly in the resource model by creating a mining model that is a
reblocked resource model including all internal and peripheral waste. Effective dilution from
the reblocking process is given is Table 15.2.1_2.

Table 15.2.1_2
SMI Gold Project
Effective Dilution from Reblocking Process

Pit Block Size Dilution

Daapleu 10x10x5 3%

Gbeitouo 10x10x5 4%

Ity 5x5x2.5 8%

Walter 5x5x2.5 8%

Zia 5x5x2.5 8%

Block Size Selection

For the 2Mtpa PFS it was decided that the mining dilution of the various deposits will be
simulated through reblocking of the mineral resource models. Once the reblocking is
performed, a block can only contain one type of rock and one grade, no partial percentage is
allowed within a single block. If the grade of a block is above the economic cut-off grade, it
will be considered as ore and waste otherwise.

This approach simulates SMU that could be selectively mined by the operational team. The
following factors are taken into account in selecting the SMU block size:

 Grade control methodology

 Mining method (Open Pit / Underground)
 Mining equipment size
 Use of blasting
 Return of experience when available

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 180

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The deposits considered for the PFS were split into two main categories:

 Hard rock pits: Gbeitouo / Daapleu

 Clay / soft rock pits: Ity, Zia NE, Walter
Hard rock pits

The hard rock pits are anticipated to be grade controlled through systematic RC drilling and
will require blasting.

 Standard borehole spacing is typically in the range of 10m x 5m to 10m x 10m.

 Drilling burden and spacing will be in the range of 4m x 4m to a depth of 6m in the ore.
Based on the mining practice planned for the deposits a typical block size for the SMU is 10m
x 10m x 5m. This is a very standard block size for the equipment planned in a hard rock pit.
A SMU block size of 10m x 10m x 5m was selected for the Daapleu and Gbeitouo pits

Clay/soft rock pits rock pits

The clay/soft rock pits are anticipated to be grade controlled through trenching as is
performed currently in Mont Ity and will not require blasting.

 Standard GC trenching spacing is typically with 1 meters interval samples along lines
spaced at 6.5m.
 No blasting is required and therefore the GC process can be performed every 2.5m in
elevation.
The various potential block sizes for the clay pits were checked versus past production in
order to check which one provide the best results in a model to mine production reconciliation.
This analysis shows that reblocking the model to a 5m x 5m x 2.5m dimension gives a good
estimate of the grade (grade reconciliation is gives a 1% error with the actuals) and gives a
similar result in term of tonnage dilution compared to the one currently used by the planning
department on site (12% difference between the actuals and the block model predictions).
Thus a SMU block size of 5m x 5m x 2.5m was selected for Ity, Zia NE, Walter pits.

The selected minimum block sizes are as follows:

 Ity, Zia NE, Walter: 5m x 5m x 2.5m

 Daapleu / Gbeitouo: 10m x 10m x 5m

15.2.2 Metallurgical Factors and Assumptions

The processing recoveries are presented in Table 15.2.2_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 181

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 15.2.2_1
SMI Gold Project
Process Recovery

Facies Recovery
Gbeitouo
Argiles oxydées (1AO1) 95%
Laterite (1L1) 95%
MVS (1MV1) 58%
Daapleu
Argiles oxydées (5AO1) 90%
Laterite (5L1) 97%
Daaplite (5D1) 67%
Transition Zone (5DM1) 75%
MSV (5MV1) 80%
Walter
Argiles oxydées (3AO1) 90%
Argiles réduites (3AR1) 96%
Laterite (3L1) 97%
Granodiorite (3G1) 80%
Mont Ity Extension
Argiles oxydées (2AO1) 96%
Argiles réduites (2AR1) 96%
Laterite (2L1) 95%
Granodiorite (2G1) 80%
Carbonate (2C1) 80%
ZiaNE
Argiles oxydées (4AO1) 90%
Laterite (4L1) 97%
Granodiorite (4G1) 80%
Carbonate (4C1) 80%

15.2.3 Cut-off grade selection

The mineral resource cut-off grade is used to demonstrate the potential of the mineral
resource and is not applied prior to pit optimization. The actual ore cut-off is determined
during the pit optimization process. A preliminary cut-off was obtained at the end of the PFS
update as a result of the pit optimization process using the Lerchs-Grossman algorithm.
These cut-off grades were then used for reporting the mineral reserves. See Table 15.2.3_1
for the cut-off grade used in each pit.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 182

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 15.2.3_1
SMI Gold Project
Cut-off Grade Calculation for the CIL Operation

Pit Cut-off Grade Au (g/t)

Gbeitouo 0.60

Ity Ext 0.65

Walter 0.65

Zia 0.60

Daapleu 0.65

15.2.4 Pit Optimization Parameters

The mine operation cost estimation based on the tonnage of each type of material from the
different pits and the specific pit location. Using these parameters, the cycle times were
calculated based on SMI production factors and hauling distances for each pit. Finally, an
operating cost per type of material was calculated based on the labour cost, fuel consumption,
maintenance cost, etc.

The mining costs used in the PFS update are presented in Table 15.2.4_1.

Table 15.2.4_1
SMI Gold Project
Technical and Economic Parameters used for the Whittle Optimisations

Description Unit Amount

Exchange rates EUR to USD 1 Euro = 1.1USD
Discount Rate % 10
Processing Throughput tpa 2,000,000
Gold price USD$ 1200
Royalties % 3.5
Slope angles Degrees Section 16.2.1
Mill recovery % Section 15.2.2
Mining recovery % Section 15.2.1
Mining Dilution % Section 15.2.1
Mining costs €/t Section 21.2.2
Milling costs €/t Section 21.2.2

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 183

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

16 MINING METHODS

16.1 Hydrogeological Work

Hydrogeological studies are common to both the Heap Leach and CIL operations. There is a
lack of hydrogeological studies for the project. The limited available data are related to Mont
Ity area. The most significant works for the Ity pit were reported by BRGM (1993), Durant et
Violet (2003) and ANTEA (2009). According to these studies, there are two different
groundwater flow systems: shallow groundwater (perched) encountered at the interface
between laterite and saprolite and deep groundwater encountered at depth with preferential
flow through fractures and karstic features. It has been reported that the original groundwater
was about 10m below the ground surface. Currently, groundwater level is low at the Ity pit
due to pit dewatering. However, seepage has been observed in the as-built saprolite pit slope
as reported in the technical report. Groundwater levels in saprolite are not clear yet because
no piezometers have been installed to measure the water levels in this material (Mecater,
2014).

The conceptual hydrogeological system and pit dewatering considerations for the PFS are
solely developed based on the review of limited hydrogeological studies carried out at Mont
Ity area.

Dewatering of existing pits is carried out using wells both perimeter and in-pit. This water is
pumped to a holding tank before being released into the environment. The recent
measurement at the Ity pit indicated that wells installed in granodiorite west of the pit have
production rate of less than 10m3/hr while the wells in karstic zones associated with
carbonate-rich rocks and marbles have the highest productivities with values higher than
100m3/hr. Wells in the footwall have productivities in the range of 10-50m3/hr.

For the other pits in the vicinity of the Ity pit (Walter, Zia Nord Est), permeability is expected to
be less than observed in the Ity pit because the formations are observed to be less karstic.
Therefore, it is expected that a dewatering scheme used at Ity pit will be used for the future
pits.

No data exist for sites east of the Cavally River (Daapleu, Gbeitouo). Due to the proximity to
the river, it is anticipated that the water table could be very high, potentially close to the
surface or the water level in the river. It is also anticipated that some inter-connexion will exist
between the river and the surrounding aquifers. It can also be speculated that the fact that
the geological formations in the area appear tighter and that there are no significant karsts in
the area, groundwater inflow to the pits at east Cavally will be reduced. Therefore the
dewatering requirement for on both sides of the river could be different. This needs to be
investigated and confirmed during the next phase of the project. In the analyses carried out
for the design of the pit slopes, it was assumed that the pit walls are effectively depressurised
through the dewatering of the pits.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 184

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

In 2015, SMI has carried out a hydrogeological campaign to better define the hydrogeological
systems and groundwater flow regimes for each pit. The results are being analysed and
therefore were not included in this report.

16.2 Mine Geotechnical Work

Geotechnical work is common to both the Heap Leach and CIL operations. Geotechnical
work was undertaken during the PFS by SNC-Lavalin during the CIL Plant PFS, and based as
well on the actual observations at the current operating mines. The study undertaken by
SNC-Lavalin was limited to pit slopes assessment and was carried out in two steps: fieldwork
and slope design.

 Field work: It consisted of geotechnical mapping at the Ity Pit and review of existing
exploration cores from the boreholes at the Mont Ity Extension, Daapleu, Gbeitouo,
rd th
Walter and ZiaNE pits. The work was conducted from 23 May to 9 June 2014 as
interim geotechnical work. During the fieldwork, a total of 15 windows were mapped at
the current Ity pit; and the core from 12 exploration boreholes was reviewed. The
findings of the fieldwork are presented in the technical report.
 Pit slope design: The pit slope design involved the following:

 Development of preliminary geotechnical model;

 Selection of geotechnical parameters;
 Sectorization of the pits;
 Kinematic analyses at different slope angles for deferent materials in different
sectors at different scales;
 Mass failure analyses considering circular failure at different slope angles for
different materials for inter-ramp and overall slopes;
 Design for bench slopes, interamp slopes and overall pit slopes.
All stability analyses were conducted for the Ity Extension and Daapleu pits. As stated above,
two types of analyses carried out are kinematic analyses and rock/soil mass failure. Stability
analyses have been conducted for the pit slopes at the bench scale, inter-ramp scale and
overall pit slopes. In general, the results of the stability analyses suggest that the failures of
the soil pit slopes are controlled by both structures and strength of the soil mass; the rock
slope stability is controlled by the geological structures.

The summary of the pit slope recommendations for the Heap Leach and CIL operations is
presented in the Table 16.2_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 185

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 16.2_1
SMI Gold Project
Geotechnical Parameters

Geotechnical bench

Bench Vertical
Bench Bench Inter-
Material Face interval
Domain Height width ramp
Name Angle between two
(m) (m) angle () Width (m)
() adjacent
geotechnical
benches (m)

Mont Ity Extension

Laterite /
45 10 9 28
saprolite
25 40
Northwest Granodiorite
(270 to 360°) 60 10 11 31
and skarn

Marble 73 10 7 45 20 60

Laterite /
Saprolite- 47 10 11 26 25 40
<80m high

Southeast Laterite /
(90 to 180°) Saprolite 42 10 11 24 25 40
>80m high

Marble 73 10 7 45 20 60

1. 30m wide geotechnical bench should be maintained at saprolite/rock contact,

2. Slope angle of the bench face adjacent to and under a ramp should be 30° in saprolite, granodiorite and
skarn.
3. Due to the potential for excessive wedge failures in the bench faces of granodiorite and skarn slopes in the
hanging wall area, bolting should be considered to stabilize bench faces in order to increase rock fall
catchment in this area.

Walter

Hanging wall Laterite

45 10 9 28
(North-West /saprolite
wall) (270 to
360°) Skarn 60 10 11 31
40
Foot wall Laterite /
47 10 11 26
(South-East Saprolite
wall) (90 to
180°) Skarn 60 10 11 31

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 186

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 16.2_1
SMI Gold Project
Geotechnical Parameters

Geotechnical bench

Bench Vertical
Bench Bench Inter-
Material Face interval
Domain Height width ramp
Name Angle between two
(m) (m) angle () Width (m)
() adjacent
geotechnical
benches (m)

1. Only one 25m wide geotechnical bench is recommended,

2. Slope angle of the bench face adjacent to and under a ramp should be 30°.
3. Due to potential for excessive wedge failures in the bench faces of skarn slopes, bolting should be
considered to stabilize bench faces in order to increase rock fall catchment in this area.

ZiaNE

Hanging wall
(North-West Laterite /
45 10 9 28
wall) (270 to saprolite
360°)
N/A N/A
Foot wall Laterite /
(South-East saprolite
47 10 11 26
wall) (90 to
180°)

1. Slope angle of the bench faces adjacent to and under a ramp should be 30°.

Gbeitouo

Hanging wall Laterite

45 10 9 28
(North-West /Saprolite
wall) (270 to
360°) Volcanic
64 10 7 40
sediment
N/A N/A
Foot wall Laterite
47 10 11 26
(South-East /Saprolite
wall) (90 to
180°) Volcanic
60 10 9 34
sediment

1. In the hanging wall rock slopes, the high potential for toppling failure exists. Therefore, bolting should be
used to stabilize the bench face to mitigate the potential toppling failures.
2. The potential for excessive wedge failures in the bench faces of rock slopes is high in the footwall domain
according to current data. Bolting should be considered to stabilize bench faces in order to increase rock
fall catchment in the areas.
3. Slope angle of the bench face adjacent to and under a ramp should be 30° in saprolite and 40° in volcanic
sediment.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 187

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 16.2_1
SMI Gold Project
Geotechnical Parameters

Geotechnical bench

Bench Vertical
Bench Bench Inter-
Material Face interval
Domain Height width ramp
Name Angle between two
(m) (m) angle () Width (m)
() adjacent
geotechnical
benches (m)

Daapleu

NW Domain Laterite
45 10 9 28 25 40
(270 to 360°) /Saprolite

Daaplite 64 (50) 10 7 40

25 60
Volcanic
64 10 7 40
sediment

NE Domain Laterite
45 10 9 28 25 40
(0 to 90°) /Saprolite

Daaplite 70 (50) 10 8.5 40

25 60
Volcanic
70 10 8.5 40
sediment

South Domain Laterite

47 10 11 26 25 40
/Saprolite

Daaplite 60(50) 10 9 34

25 60
Volcanic
60 10 9 34
sediment

1. 30m wide geotechnical bench at saprolite/bed rock contact should be maintained if overlying soil is ≥ 30m
thick.
2. In the NW domain, the potential for toppling failure is high in the rock slopes. Therefore, bolting should be
used to stabilize the bench face to mitigate the potential toppling failures.
3. In the rock slopes in the South domain and NE domain, the potential for excessive wedge failures in the
bench faces is high according to current data. Bolting should be considered to stabilize bench faces in
order to increase rock fall catchment in the areas.
4. Slope angle of the bench face adjacent to and under a ramp should be 30° in saprolite in all sectors, and
40° in daaplite and volcanic sediment in the South domain.
5. Angles in the brackets are the bench face angles for the slopes in the upper most 10m contact zone.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 188

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

16.3 Heap Leach Operations

16.3.1 Introduction
SMI started its mining operation in the area in the early 90’s with a 200ktpa processing
capacity. Since that time the facilities have been upgraded to process approximately 950ktpa
of ore using Heap Leaching processing method.

The typical mining equipment used for ore and waste extraction is a 70-80t class excavator
and 40t class articulated trucks. Another smaller excavator (2m3 bucket) is also available for
better selectivity in some areas where waste and ore zones are closely alternating.

The main method currently used for geological grade control is based on trenching, done by a
small excavator (Liebherr R924 type of excavator). The trenches are dug over a depth of
approximately 50cm. All the trenches are perpendicular to the main geological structures
controlling the shape of mineralization, and they are 7.5m apart. A sample of 3kg to 5kg is
taken every meter inside the trenches. Geological mapping is then done based on
observations made in the trenches. After being surveyed all the information is imported into
the mining software used on site (Surpac).

This grade control method provides good quality results and good reliability, but it has some
limitations as it tends to slow down the mining rate.

16.3.2 Geotechnical Engineering Assumptions

Refer to Section 16.2.

16.3.3 Pit Designs Parameters

The selected optimum shells were then designed using Surpac mining software in order to
integrate ramp access and catchment berm design. The mining method being conventional
open pit using excavators and haul trucks (as well as drilling and blasting when required), the
design criteria used for the pit designs were the following:

 Haul road width: 15m

 Ramp grade: 10%
 Final bench height: 5m or 10m depending on the deposits.
 Batter angle: according to geotech recommendations
 Berm width: according to geotech recommendations
 Minimum mining width: 20m

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 189

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

16.3.4 Pit Designs

Mont Ity

The Mont Ity deposit is the main source of fresh ore of the current operation, and will be the
main source of ore during the next three years of Heap Leach operation.

The “Heap Leach” pit is shown on the Figure 16.3.4_1. It has been designed to optimize the
recovery of oxidised material (laterites and oxidized clays) and consists of three different
spatially independent phases (“pushbacks”) with the dumping areas on the North (Verse
Flotouo) or East (Verst Est) of the pit. The Mont Ity pit strip ratio will average approximately
8.78:1 (Waste:Ore), which is low compared to industry average in Western Africa.

Figure 16.3.4_1
Plan View Showing Mont Ity Pit – Heap Leach Scenario (blocks are 100mx100m)

Walter

Mining of the Walter Pit (Figure 16.3.4_2) will occur in two phases: the first phase is part of
the 3-year plan aimed at recovering only the oxidized and shallow ore of this deposit in order
to be processed in the Heap Leach operation.

Walter Heap Leach pit is supposed to be mined in 2017, and will need a temporary dyke on
the east side of the pit, between the pit limit and the Cavally River, in order to prevent flooding
from the river. The Walter “Heap Leach” pit strip ratio will average approximately 1.33:1 (t:t),
which is extremely favourable compared to the industry average.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 190

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 16.3.4_2
Walter Heap Leach Pit in Plan View and Oblique View Showing Mineralized Blocks (grid blocks are
50mx50m)

ZiaNE

Like the Walter deposit, mining at ZiaNE (Figure 16.3.4_3) will occur in two distinct phases. A
first phase of the pit will be mined for the Heap Leach operation, targeting only the shallower
lateritic material to be processed in years 1-3. The optimization done on ZiaNE for the Heap
Leap operation considered only the lateritic ore as the current mining will need more lateritic
ore in the near future in order to have the proper blend between clay and laterite in the heaps.
ZiaNE “Heap Leach pit” is supposed to be mined in 2015 and its strip ratio will average

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 191

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

approximately 1.57:1 (t:t), which is again extremely favourable compared to the industry
average.

Figure 16.3.4_3
ZiaNE Heap Leach Lateritic Pit - Plan View (grid blocks are 100mx100m)

Teckraie

The Teckraie dump will be mined in 2016-2017 towards the end of the heap leach operation,
as its average grade is less favourable than the previously mined deposits. The Teckraie pit
strip ratio will average approximately 1.73:1 (t:t). Figure 16.3.4_4 shows an isometric view of
the pit design.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 192

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 16.3.4_4
Teckraie Dump Heap Leach Pit - Isometric View (grid blocks are 100mx100m)

16.4 CIL operations

16.4.1 Pit Optimization Parameters

The block models for the Mont Ity Gold deposits (Ity Flat, Gbeitouo, Walter, Zia and Daapleu)
were provided by Arethuse Geology and Coffey in various block model formats. SNC-Lavalin
standardized each block model for import into Whittle as a Multimine project. Pit
optimizations for design purposes were conducted using the Lerches-Grossman algorithm in
GEOVIA Whittle. SNC-Lavalin and SMI jointly selected the required optimization parameters
to determine the most economic open pit profile. The mine plan based on June 2015 mineral
resource models and inclusive of pit design parameters discussed in Section 16.4.3 and is
shown in Figure 16.4.1_1

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 193

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 16.4.1_1
Plan View Showing the Designed Pits, Dumps and Haulage Distances

16.4.2 Geohydrology and Geotechnical Engineering Assumptions

Refer to Section 16.1and 16.2, respectively

16.4.3 Pit Designs Parameters

The selected optimum shells were then designed using Minesight mining software in order to
integrate ramp access and catchment berm design. The mining method being conventional
open pit using excavators and haul trucks, as well as drilling and blasting, the design criteria
used for the pit designs were the following:

 Haul road width: 15m;

 Ramp grade: 10%;
 Final bench height: 5m or 10m depending on the deposits;
 Batter angle: according to geotech recommendations;
 Berm width: according to geotech recommendations;
 Minimum mining width: 20m.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 194

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

16.4.4 Pit designs

Daapleu and ZiaNE

Figure 16.4.4_1 shows a plan view of the pit design.

Figure 16.4.4_1
Daapleu Pit – Plan View (grid blocks are 200mx200m)

Zia NE CIL - Plan View (grid blocks are 200mx200m)

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 195

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Walter and Gbeitouo

Figure 16.4.4_2 shows an isometric view of the pit design.

Figure 16.4.4_2
Walter CIL Pit in Plan View (grid blocks are 200mx200m)

Gbeitouo Pit – Plan View (grid blocks are 200mx200m)

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 196

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

16.4.5 CIL Mine Schedule

Table 16.4.5_1 summarises the mine schedule of the pit design.
Table 16.4.5_1
SMI Gold Project
Mine Schedule per Year

Production Plan by Pit Total/Avg Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14

Ore, kt 15,219 1,551 839 947 23 1,955 2,000 2,000 2,000 2,000 1,904
Grade, g/t 1,61 2.09 1.63 1.45 1.13 1.33 1.24 1.43 1.64 1.76 1.96
DAAPLEU
Au, kg 24,476 3,235 1,371 1,370 26 2,592 2,486 2,868 3,274 3,517 3,737
Waste, kt 32,323 5,773 5,708 4,469 1,304 3,307 3,614 3,292 2,301 1,460 1,096
Ore, kt 3,952 217 559 1,161 1,970 45
Grade, g/t 1,60 3.17 1.63 1.61 1.43 1.03
ZIA NE
Au, kg 6,335 687 911 1,873 2,818 46
Waste, kt 14,832 2,401 4,034 4,378 4,019
Ore, kt 1,264 1,264
Grade, g/t 2,56 2.56
GBEITOUO
Au, kg 3,234 3,234
Waste, kt 6,396 6,396
Ore, kt 1,053 1,053
Grade, g/t 2,00 2.00
WALTER
Au, kg 2,104 2,104
Waste, kt 5,303 5,303
Ore, kt 183 6 176
Grade, g/t 7,51 4.27 7.63
ITY
Au, kg 1,372 27 1,346
Waste, kt 2,577 2,088 489
Ore, kt 6,135 96 2,000 2,000 2,039
AIRES
Grade, g/t 1,04 1.04 1.04 1.04 1.04
(Leach Pad
Au, kg 6,405 100 2,088 2,088 2,129
tailings)
Waste, kt
Ore, kt 161 161
Grade, g/t 3,17 3.17
STOCK
Au, kg 511 511
Waste, kt
Ore, kt 27,968 1,935 2,000 2,000 2,000 1,993 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,039
Grade, g/t 1,59 2.31 2.75 1.62 1.74 1.43 1.32 1.24 1.43 1.64 1.76 1.92 1.04 1.04 1.04
TOTAL
Au, kg 44,438 4,460 5,490 3,244 3,475 2,844 2,638 2,486 2,868 3,274 3,517 3,837 2,088 2,088 2,129
Waste, kt 61,431 10,262 10,920 10,085 9,773 5,322 3,307 3,614 3,292 2,301 1,460 1,096

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 197

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17 RECOVERY METHODS

17.1 Heap Leach Operations

The existing heap leach process will continue to be used as long as there is weathered ore to
be treated. Whilst the recovery from the heap leach is not as metallurgically efficient as the
CIL route, the tailings from the heap leach can be reprocessed through the CIL plant.

The heap leach process consists of blending the sources of ore (namely laterite and saprolite)
crushing to nominally smaller than 20mm with agglomeration of the fines with up to 20kg/t Au
of cement. The agglomerated ore is then placed onto the heap leach pads and irrigated for
about 60 days with a cyanide solution, in two stages.

The gold released from the heap leach pads is directed to the solution ponds prior to being
directed to the carbon-in-solution (CIS) columns for gold adsorption. The resulting barren
solution is directed to the barren solution pond and pumped back to an older heap leach pad
for continued gold extraction. The basic flowsheet is as depicted in Figure 17.1_1.

The carbon is recovered and the gold is eluted by the ZADRA process with carbon being
regenerated for reuse in the CIS plant. The gold is recovered by electrowinning and smelted
into doré, prior to be dispatched for refining.

The heap leach process is reportedly recovering between 75% and 80% of the recoverable
gold, but as there is no total gold analysis, the actual recovery is unknown. The old heap
leach pads from the earlier mining operations contain between 1g/t Au and 1.2g/t Au as
reported in the geological section of this report. It is assumed these values are total gold.

During lift management, a 1.2mm HDPE barrier liner is placed between the under material
and the new production. This is one way of managing production from the heap but can
sterilise areas and volumes in the old material from recovery.

Considering the head grade of the Ity Mine, the heap leach process route would not have
been the preferred technical option, but there may have been other considerations during the
selection process for the process route.

Cyanide detoxification with sodium hypochlorite is reported to be conducted on any excess

solution that may flow from the ponds intermittently, but generally during excessive weather
events.

The available heap leach pads can accommodate up to an additional 5Mt by going to lift
number 5, or even more if need be by an additional lift.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 198

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 17.1_1
Heap Leach Flow Sheet

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 199

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17.1.1 Utilities Requirements

Electrical Energy

As this is an operating plant, the actual energy consumption is available from production
records. The heap leach plant consumed 6,372MWhr during the 12 months ending June
2015. This is a consumption rate of about 6.5kWhr/tonne treated.

Water Consumed

The process plant consumed a total of 96,200m3 of fresh water during the 12 months ending
June 2015. This is a consumption of less than 100 litres per tonne treated. All other process
water requirements are made up of rain water and water from the mining pits. The mine pits
provided 231,000m3 during the same period.

17.1.2 Reagents
The major reagents consumed in the heap leach plant are as detailed below:

 Cement: used for agglomeration – 17.4kg/tonne treated

 Cyanide: gold extraction – 2.0kg/tonne treated
 Activated Carbon: gold recovery – not reported but there are excessive quantities of
activated carbon around the CIS plant
Sodium Hypochlorite – detoxification chemical – it was reported that €750,000 was spent on
this reagent during the last 12 months. It is strongly recommended that mine management
investigate alternative methods to detoxify solution prior to release.

17.1.3 Maintenance
During the site visit, whilst some issues were identified, the level of maintenance is generally
acceptable, but requires good management and supervision to ensure that standards are
maintained. The housekeeping is acceptable, although spillage from the many conveyors
could be reduced. Safety issues require continuous management attention.

17.1.4 Future Operations

The future Heap Leach operations are expected to carry on beyond the commissioning of the
CIL plant, scheduled towards the beginning of 2018. The current forecast production, as
detailed in Section 22 of this report, is expecting between 800,000t and 1,000,000t to be
placed per year on the heaps. Based on the historical performance for the last 12 months,
these production rates have been achieved and there is no reason to suspect that they
cannot be achieved going forward, subject to appropriate maintenance regimes being
enforced and adequate control of good safety and housekeeping standards.

The gold recovery is forecast to be greater than 84% of the recoverable gold. This is higher
than has been reportedly achieved on an annual basis, but seems to have been achieved in
recent months.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 200

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17.1.5 Qualified Person’s Comments

The heap leach plant is performing adequately. However maintenance and general
housekeeping requires attention. These aspects can impact significantly upon production.

Based on the achievements during the last 12 months, there is no reason to suspect that the
plant will not be able to achieve up to 1,000,000t placed per annum. It is also apparent that
up to an additional 5Mt can be placed on the heaps.

The heap leach plant is operating on the day-to-day basis with technical support from
metallurgists running column leach tests and other functions, but it is apparent that there is a
lack of experience of similar operations. There are many suggested improvements that can
be implemented to improve production or reduce costs. The management team is very
willing to consider productivity improvements.

17.1.6 Analytical Facilities

There is a basic analytical facility available on the mine which can determine the leachable
gold in the ore, when crushed and pulverised to smaller than 75μm. This is adequate as an
approximation for the mining and processing plant performance but is not regarded by the QP
as adequate for evaluation purposes. The laboratory does send daily samples to an
accredited SGS facility in Abidjan for total gold determination on an irregular basis and the
data between the mine and SGS is compared, eventually. It seems that the laterites are in
close agreement but the clays have a distinct separation, indicating locked gold in this
material.

The laboratory can analyse for gold and copper in solutions only. There is no environmental
laboratory. In the past there was a small wet chemistry section, but this is now in disuse. A
small muffle furnace is available for analysing gold on activated carbon and other techniques
requiring ‘ashing’.

A control laboratory is located at the CIS plant to determine solution gold values, cyanide
strength and solution pH. This is for control purposes only.

A metallurgical laboratory performing ore stability and column leach tests is in operation and
the data generated is used to determine operational parameters such as cement
consumption and cyanide requirements, as well as the release rate of gold from the heap.

This analytical facility is regarded by the QP as adequate for the Heap Leach operation.

The 2Mpta CIL PFS has included staff to operate a laboratory, and a modern laboratory is
specifically mentioned in the infrastructure description but is not detailed.

17.1.7 Qualified Person’s Comments

It is recommended by the QP that a well-managed full analytical and environmental
laboratory be provided with any future projects, or even earlier if possible.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 201

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17.2 CIL operations

The CIL process plant design includes primary crushing, two stage grinding, pre-leach
thickening, leach and carbon-in-leach (CIL), detoxification (cyanide destruction and arsenic
precipitation), gold elution/carbon regeneration and refining operations. The process
flowsheet is illustrated in Figure 17.2_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 202

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 17.2_1
CIL Flow Sheet

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 203

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17.2.1 Primary Crushing

Ore is trucked to the crushing area in mine trucks, and is either directly dumped into the truck
dump hoppers or placed in a run-of-mine stockpile for later reclaim using a front-end loader.

Softer and stickier ores, such as oxidized or reduced clay and laterite lithologies, are sent to a
mineral sizer crusher installation. The mineral sizer has been designed with a capacity of
282tph and will operate 24 hours per day. Harder ore, such as the granodiorite, daaplite and
meta-volcano sediments lithologies, are sent to jaw crusher installation. The crusher has
been designed with a capacity of 282tph and will operate 24 hours per day.

Both crushers discharge are conveyed directly to the primary SAG mill. A coarse ore
stockpile between the crushing stations and the SAG mill is not part of the design because of
the soft and very sticky characteristics of about 50% of the plant feed material, such as
oxidized and reduced clays, heap leach residues, etc. These types of material consolidate
and agglomerate and are extremely difficult to withdrawn from stockpile. With the present
concept including two different crusher types with their own run-of-mine stockpile, each one
having the capacity to meet full plant tonnage, it is anticipated that 90% plant availability can
be maintained, but this will need to be reconsidered during a future feasibility study as
crushing circuits are normally prone to poor availability.

However, at a later stage of the project, at higher tonnage, an intermediate coarse ore
stockpile may have to be introduced. In this instance, reclaiming of the ore is by front end
loader rather than feeders are likely the route to go because of the soft and very sticky
characteristics of a major portion of the material.

17.2.2 Grinding
The primary grinding mill has been sized to process ore at an average rate of 254tph, with a
90% availability. The SAG mill size is 6.7m diameter by 3.4m long (effective grinding length),
driven by a 2,600 kW motor equipped with a variable speed drive (VFS). The secondary ball
mill is 4.8m diameter by 7.2m long driven by a 2,600kW motor.

This circuit is designed to operate with a circulating load of up to 250% utilizing hydro-
cyclones. The cyclone underflow stream is redirected to the SAG and ball mill feed chutes in
the following proportions:

 Circulating load to SAG mill: 50%;

 Circulating load to ball mill: 200%.
The cyclone cluster consists of ten off 375mm diameter cyclones, with eight (8) cyclones in
operation and two on stand-by. Cyclone overflow is collected in a common launder, which
flows to the pre-leach thickening area.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 204

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17.2.3 Pre-Leach Thickening

The purpose of the pre-leach thickening area is to increase the solids content of the ground
ore slurry feeding the leach and CIL circuits from approximately 30.0% solids to 43.0% solids.
The water recovered at the thickener overflow is re-used as process water throughout the
plant.

The pre-leach thickener is preceded by a linear trash screen to prevent oversized grit and
general blasting and other trash from entering the leach and CIL circuits. The screen
undersize falls into a collection launder that feeds the thickener feed box. Diluted flocculant is
added to the feed box to promote particles sedimentation in the thickener. Thickener
underflow is sampled (for head grade determination) and then pumped to the leach and CIL
circuit.

17.2.4 Leach and Carbon-In-Leach

In the leach and CIL circuit, gold present in the pulp is dissolved using cyanide and then
adsorbed onto activated carbon. The circuit consists of two leach tanks followed by six CIL
tanks with a total of 32-hour residence time in the eight tanks.

Cyanide is added to the leach tanks for gold leaching. Lime can also be added to maintain
the pH level at 10.5 - 11.0. Cyanide solution can also be added to the first and third CIL
tanks.

All eight tanks are fitted with an agitator, incorporating dual axial flow impellers. Air is
introduced into each tank through a bottom entering line beneath an inverted cone, located
below the lower impeller of the agitator.

Activated carbon is added to the last CIL tank and carbon is advance intermittently from tank
to tank counter-current to the slurry flow by the vertical recessed impeller pumps. Loaded
carbon recovered from the first CIL tank is pumped to the loaded carbon recovery screen.
The recovered carbon is pumped in 4t batches to the carbon acid wash vessel located in the
carbon acid wash and elution area.

Slurry from the last CIL tank flows by gravity to the linear safety screen.

17.2.5 Detoxification
The detoxification circuit consists of a linear safety screen, used to capture fugitive loaded
fine carbon, and three cyanide detoxification tanks providing about one hour retention time
each.

In the first cyanide detoxification tank, Sulphur dioxide (SO2) is added in the form of sodium
metabisulphite solution. Copper sulphate is added to catalyse the reaction. Compressed, air
is injected to oxidize the cyanide contained in the CIL tails. A second and third detoxification
tanks are installed in order to precipitate the arsenic present in the slurry. A solution of ferric
sulphate and sulphuric acid is used to precipitate the arsenic.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 205

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Slurry exiting the third tank is pumped to the TSF for disposal.

Tailings Storage Facility

The tailings dam is discussed elsewhere in this document. The solution recovered from the
TSF is recycled back to the process plant to be used as make-up water.

17.2.6 Carbon Acid Wash and Elution

The acid wash circuit, using hydrochloric acid, removes acid soluble impurities that have
accumulated on the activated carbon during the CIL process steps, such as lime scale and
some heavy metals. After the acid wash process, residual acid solution is neutralized with a
caustic rinse cycle. The acid wash and neutralization cycle is expected to take up to 4 hours

The acid washed carbon is introduced to the elution column which is operating at elevated
temperature and pressure to strip the gold from the carbon. The stripping cycle starts with
the introduction of cyanide and sodium hydroxide (caustic) solutions. This barren solution is
heated through heat exchangers and a heater prior to entering the elution column. The
eluate solution, at up to 145°C, enters the pressure column and up-flows through the
contained carbon bed. The solution strips the metals that are loaded onto the activated
carbon and exits from the top of the column,

This pregnant solution is pumped to the electrowinning cells via recovery heat exchangers,
where gold (as metal) is recovered onto stainless steel cathodes. The elution operation is
expected to take up to 12 hours. Under normal design conditions, one elution cycle is
required per day. However, when high grade ore is process through the CIL plant, two acid
wash and elution cycles can be accommodated per day.

17.2.7 Electrowinning and Smelting

The purpose of electrowinning is to recover by electrolysis the gold and silver dissolved in the
concentrated solution following the hot elution. After electrolysis, the gold is smelted into
doré (gold bars) in an induction furnace.

Electrowinning and smelting are located within a secured portion of the process plant. The
gold bars are kept into a secured vault prior to shipment.

17.2.8 Carbon Regeneration

Stripped carbon is transferred to the carbon regeneration circuit where the carbon is
screened and delivered to the regeneration kiln, operating at about 700°C. After passing
through the kiln, the carbon discharges into a quench tank.

The carbon regeneration kiln is designed to regenerate the entire carbon stream and restore
the activity of the stripped carbon.

Carbon losses are made up by introducing fresh attrited carbon into the circuit as required.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 206

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

17.2.9 Reagents
The reagents used in the process plant are summarily described as follows:

 Grinding Media: for milling in the SAG and Ball Mills;

 Hydrated lime: for pH control in the grinding, leach and CIL circuit. However, at a later
stage of the project, the usage of quick lime may prove to be advantageous and
considered, particularly at higher plant throughput.
 Sodium cyanide: for gold dissolution in the leach and CIL circuit and for the barren
stripping solution preparation;
 Hydrochloric acid for the carbon acid wash circuit.
 Sodium hydroxide (caustic): for the carbon neutralization in the acid wash circuit, and
for pH control of the barren solution in the elution circuit;
 Flocculant: to assist pre-leach thickener underflow sedimentation and overflow
clarification;
 Sodium metabisulphite: for cyanide destruction;
 Copper sulphate: to catalyse the cyanide destruction reaction;
 Ferric Sulphate: to precipitate arsenic in detoxified tails;
 Sulphuric acid: to dissolve ferric sulphate which requires a pH <3 to solubilize.
17.2.10 Plant Services
Plant/Instrument Air

Three compressors are provided for instrument and plant air requirements.

Low Compressed Air

Process air for leaching is supplied by three low pressure compressors. An air receiver is
provided between the compressor and distribution.

Fresh Water

Fresh water is sourced from existing mine wells and is stored in a fresh/fire water storage
tank. The lower portion of the tank provides for demand of fire water and the top portion of
the tank provides storage for fresh and gland water.

Process Water

The process water tank is fed from three sources. The main source is the pre-leach thickener
over flow, the second source of water is recycled water from the polishing pond located at
TSF, and finally the make-up water is coming from the fresh water well.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 207

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

18 PROJECT INFRASTRUCTURE

18.1 Current Infrastructures

18.1.1 Mining Facilities

The following mining facilities are located on the Ity site:

 Mining administration building;

 Main workshop and repair facilities, to maintain the mining fleet;
 Mining equipment re-fuelling centre;
 Explosive storage, located away from the main facilities;
18.1.2 Process Plant
The processing plant and administration facilities consist of the following:

 Plant administration buildings such as the security office, workshop, administration

offices and metallurgical lab;
 Warehouses;
 Water services inclusive of raw water abstraction, potable water, fire water;
 Medical facilities located at the site entrance.
18.1.3 Power
The electrical power is supplied from the Ivorian national grid as well as diesel generators.
The current power supply from the national grid being unstable, the back-up diesel
generators capacity is sized to maintain all activities on site, including normal operation of the
plants facilities during power outages.

18.1.4 Site Access

Access to the site for employees and contractors is possible via tar road from Abidjan in
approximately eight hours. Alternatively, air transportation is possible from Abidjan to Man in
two hours and then road from Man to the site in additional hours. The current logistical
scheme for people transportation will be used for the future CIL operations as well.

Contracted buses provide transportation to work for personnel living in the nearby villages of
the Ity site.

18.1.5 Security
The main entrance security office is located on the Main Site access road. All visitors to the
mine complex report to this security gate for authorization prior to entry. Personal protection
equipment (PPE) is available for issue from this point if required.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 208

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

18.1.6 Accommodation
The accommodation camp is located on a hill top to house senior and junior staff members.
Staff accommodation consists of:

 Individual block building for senior managers;

 Shared block buildings with 3 bedrooms for junior staff;
 Kitchen and camp dining room;
 Laundry;
 Potable water plant;
The camp can accommodate approximately 200 persons.

18.1.7 Transport and Logistics

Cote d’Ivoire has been developing country infrastructures for years with a wide network of tar
roads available as well as 2 industrial ports (Abidjan / San Pedro). Existing transport
infrastructures are sufficiently developed and maintained to support active mining operations
in the country, including for the Ity operations. SMI has been operating the Ity site for more
than 20 years based on existing infrastructures (roads/port/tc.) without interruption due to
logistical issues. Equipment, Materials and consumables transportation from the port in
Abidjan to the mine site is carried out by a combination of subcontractors. The distance is
approximately 700km (by road), and about 2,000t of consumables are transported each year
to the site of the heap-leach operations..

Airfreight cargo service into Côte d’Ivoire is supplied by several scheduled flights.

In addition, the Ity site is accessible via helicopter for Dore transportation to the Abidjan
airport, from which it is then exported to Europe. The current logistical scheme for gold
export will be used for the CIL operations as well.

18.1.8 Communication
An on-site communication tower allows cellular phone communication through three mobile
phone access providers, and internet access. In addition, a fibre optic access was developed
in 2014.

The mobile network is accessible in the mine site, the processing facilities, the administration
buildings as well as the site camp.

18.2 Site Access and Infrastructure for the CIL Project

Logistics for construction materials and equipment as well logistics for consumables for
current and future operations is considered a low risk given the existing infrastructure in Côte
d’Ivoire.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 209

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

A more comprehensive review of the various accesses to the site will be conducted in the
next phase of the project to improve the existing scheme and secure the best access to the
site for large equipment delivery. In case of oversized and/or overweight equipment,
adequately designed equipment will be purchased to ensure safe and efficient delivery to the
site

New roads will be designed for 40 t articulated trucks at elevation 262.6m to avoid flooding
beyond the 20-year-flood zone limit. A one-way bridge will cross the Cavally River.
Preliminary geotechnical information shows that excavation material can be used as backfill
for civil work. Potable water will be supplied from a well that will be within 500m from the
process plant. The treatment of sewage will be done through a tank followed by a septic
field. A fire water network will surround the process buildings. Electricity will be provided by
a new transmission line of 33kV (transmission Voltage to be confirmed) This new
transmission line will be built by the local Utility CIE ( Cote d’Ivoire Electricity) and must be
further developed at the next phase. A main substation will step down voltage to 6.6kV for
site distribution.

The existing on-site communication system will be available for the CIL Project.

The mobile network is accessible in the mine site, the processing facilities, the administration
buildings as well as the site camp.

Construction facilities will include construction site office, concrete batch plant, prefabricated
shop and store supply, maintenance shop, storage areas, warehouse, and a laboratory. The
construction contractor and labour will be hosted in the hotels of nearby town. A construction
camp may be required. This item will need to be confirmed in the next phase of the study.

Buildings comprise a gatehouse including the dry, an administrative office including the
infirmary, a metallurgical and assay laboratory and a reagent storage building. All other
process plant facilities will be uncovered structures required to support and operate the
process equipment. The only enclose area will be the electrical rooms, compressor room, fire
protection pump room and refinery area.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 210

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

18.3 Tailing Storage Facility for the CIL Project

A site selection study was carried out on four potential sites for the TSF within a short
pumping distance from the future plant. Three of the sites were discarded, two for lack of
detailed topography, proximity to SMI camp and lack of adequate storage capacity and one
for potential presence of mineral reserves in one of the abutments. The remaining site,
namely “Area 1”, was identified as the most suitable location for the future tailings storage
facility. The selected TSF site provides storage for approximately 10 years of operation
provided the tailings reaches an in situ dry density of 1.3t/m3.

The preparation of the TSF basin involves the construction of water management diversion
ditches, preparation and grading of the basin floor for liner installation and the construction of
a retaining structure. The 44m high dam is to be constructed in several stages; the first two
raises are to be constructed using the downstream method and the upstream method
thereafter. The geomembrane on the upstream face is made continuous with that of the
basin; the membrane is installed on a controlled layer of impervious material providing
composite liner effect.

An emergency spillway capable of evacuating the 24-hour probable maximum flood is

provided for every stage.

18.4 Water Management for the CIL Project

18.4.1 Cavally River

The Cavally River watershed is located in the mountainous central western Côte d’Ivoire. The
source of the river is located in eastern Guinea in the area of Nimba Range. Tropical
conditions prevail at the mine site at Ity. The climate in the area is characterized by marked
dry and wet seasons resulting in a large variation in river flows during the year. The rainy
season occurs between April and October and the dry season from November to March

The Cavally River which runs on the eastern side of the current mining operation constitutes a
major constraint for the development of the Walter and Daapleu pits. Hence, a diversion of
the Cavally River and the construction of perimeter dikes around the Walter, Daapleu and
Gbeitouo pits are required.

The original Cavally River diversion plan was to build two diversion canals one for deviating
the river from the area around Walter and the other one for deviating the river from the area of
Daapleu. A trade-off study carried out after the PFS demonstrated that the capital cost and
the risks associated with the diversion of Cavally River for Walter pit were too significant for
the quantity of ore recovered from this location. Hence, SMI decided to partly mine the Walter
pit and slightly reduce the mine reserve associated with that pit. Therefore, the diversion of
Cavally River for Walter pit was cancelled. The layout of the remaining diversion for the
bypass of the river at Daapleu pit is presented in Figure 18.4.1_1.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 211

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Figure 18.4.1_1
River Diversion and Perimeter Dikes Plan View (grid blocks are 500mx500m

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 212

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The proposed trapezoidal shaped diversion channel and closure dikes will ensure the normal
flow of the Cavally River. During a major rain event, the Cavally River will overflow its banks
inundating the floodplain. The diversion channel and closure dikes will then be fully
submerged.

Perimeter dikes are required to ensure the stability and continuous safe operation of the
different pits located in the floodplain, when Cavally River overflows its banks. The proposed
location for the different perimeter dikes is presented in Figure 18.2 and takes into account
the required setback with respect to the pit rim. The typical cross section of the dykes is
homogeneous embankment to be constructed of impervious material covered with erosion
protection material.

18.4.2 Hydrogeology
The conceptual hydrogeological system and pit dewatering considerations at the time of
writing are solely developed based on the review of limited hydrogeological studies carried out
at Mont Ity area. According to these studies, there are two different groundwater flow
systems: shallow groundwater (perched) encountered at the interface laterite and deep
groundwater encountered at depth with preferential flow through fractures and karstic
features. It has also been reported that the original groundwater was about 10m below the
ground surface at Mont Ity.

Groundwater dewatering of existing pit is carried out using wells both perimeter and in-pit.
Dewatering water is pumped to a holding tank before to be released to the environment. The
recent measurement at the Ity pit indicated that wells installed in granodiorite west of the pit
have production rate less than 10m3/hr while wells in karstic zones associated with carbonate
rocks and marbles have the highest productivities with values higher than 100m3/hr. Wells in
the footwall have productivities in the range of 10-50m3/hr.

For the other pits in the vicinity of the Ity pit (Walter, Zia Nord Est), permeability are expected
to be less than observed in the Ity pit because the formations are observed to be less karstic.
Therefore, it is expected that a dewatering scheme used at Ity pit will be used for the future
pits.

No data exist for sites east of the Cavally River (Daapleu, Gbeitouo). Due to the proximity to
the river, it is anticipated that the water table could be very high, potentially close to the
surface or the water level in the river. It is also anticipated that some inter-connexion will exist
between the river and the surrounding aquifers. The geological formations in the area appear
tighter and given that there are no significant karsts in the area, it is possible that the
groundwater inflow to the pits east Cavally River will be reduced. Therefore the dewatering
requirement and scheme for both sides of the river could be different. This needs to be
investigated and confirmed during the next phase of the project.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 213

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

In 2015, SMI has carried out a hydrogeological campaign to better define the hydrogeological
systems for each pit. The results are being analysed and therefore were not included in this
report at the time of writing.

18.4.3 Sitewide Water Balance

The general water management strategy is to divert the non-contact surface runoff away from
the mine facilities and manage (collect, control, monitor and treat, if required) the contact
water prior discharging to the environment. Final effluents from the mine facilities to the
environment should meet the effluent discharge criteria.

Water within the open pits should be collected and pumped out of the active pit areas, and
released to the Cavally River if water quality meets the applicable discharge criteria.

At the time of writing this report, it is assumed that there will be no potential Acid Rock
Drainage (ARD) and toxic metal leaching issues from the waste dumps. Drainage from the
waste dumps could be directly released to the environment with adequate erosion and
sediment control measures in place.

The TSF water management system includes a water pond created within the tailings storage
basin and a Polishing Pond downstream of the TSF dam. Excess water from the tailings
water pond will spill into the Polishing Pond. The two water ponds will provide sufficient
residence time for Total Suspended Solid (TSS) control.

Effluents from the open pits, waste dumps, TSF and other mine facilities should be monitored
and tested. If the test results indicate any chemical issues, water should be collected and
treated prior being discharged to the environment.

A preliminary average annual water balance scheme is developed for the mine site based on
the review of limited information on site climate, hydrology and land use. Detailed water
management strategy, drainage plan and site water balance should be developed in the next
phase of the study.

18.4.4 Geochemistry
Tailings and waste rock materials have yet to be characterized in terms of probable loadings
of acidity, metals and sulphate salinity and thus the requirement for water treatment of
associated contact water is yet to be determined.

To address this information gap, a staged approach has been planned that comprises the
following:

 A screening level geochemical test work program;

 A feasibility level geochemical test work program.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 214

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

The screening level geochemical test work program will seek to identify potentially acid
generating waste rock and tailings materials as well as qualify the likely loadings of acidity,
sulphate salinity and leachable metals and metalloids.

The feasibility level geochemical test work program will focus upon problematic waste rock or
tailings materials that have been identified by the screening level geochemical test work
program. Its intention will be to address data gaps and provide sufficient information to enable
the water treatment design for the project (where required).

The screening level for geochemical testing is not available at the time of writing.

19 MARKET STUDIES AND CONTRACTS

The Ity operations have been an ongoing concern for more than 20 years; no additional
marketing studies were undertaken for the heap-leach operations and future CIL operations.

The current and future operations produce gold doré bullion that is a fungible commodity for
which an efficient global market exists. It is of high value density meaning that the realised
price of the contained gold is insensitive to the ultimate location of the customer and refinery
as freight costs are negligible in comparison to contained value.

The gold price used in the financial analysis is considered net of US$5/oz for bullion transport,
insurance and refining costs.

Gold output from the Ity operations is in the form of doré bars. The doré is shipped to Europe
(Switzerland) for refining at Metalor Technologies S.A. The refining contract currently in place
between SMI and Metalor is valid for an unlimited period of time.

The SMI does not have any hedging program or forward sales contracts for production
coming from the Ity Mine property.

The long term gold pricing forecast used for the heap-leach and CIL operations at €1,045 per
ounce net of bullion transport cost is consistent with current gold prices.

No contracts for the sale of the production have been entered into.

No contracts for the construction of the CIL project have been entered into. A contract for the
development of the feasibility study of the CIL project is currently active with SNC LAVALIN
from Canada. As of the effective date of this report, the main contractors involved with the
mine and current heap-leach operations are:

 Fuel supply: Total Côte d’Ivoire;

 Contract security staff: G4S;
 Contract mining: RAZEL;
 Refining: Metalor;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 215

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Reagent supply (cyanide) for 2015-2016 period: AZAL;

 Other reagents supply: LDC and CHIMTEC;
 Cement supply: SOCIM;
 Tyres supply: TRACTAFRIC;
 Catering services: DJM;
 Air transportation: ELITE CORPORATE.
The various contracts were awarded following a competitive bidding process, prices are within
the industry range and comparable to other operations in Côte d’Ivoire or West Africa.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 216

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

20 ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR

COMMUNITY IMPACT

20.1 Overview

Several environmental studies have been conducted in the last 15 years. Geostat has
conducted two internal reports for SMI: an environmental management plan (Plan de
Management Environnemental) dated March 2000 and a rehabilitation plan (Réaménagement
du site minier d'Ity) dated June 2005. An EIS for the Ity Mine has been carried out in 2000 by
SMI. This study has been used as a reference in the rehabilitation report titled
"Réaménagement du Site Minier d'Ity" (SMI, 2005). The Ministry of the Environment also
conducted an environmental audit of the Ity Mine at the end of December 2005.

Finally, under the mining project CIL and in order to renew the SMI Mining Permit PE26, two
SEIA studies have also been completed:

 Étude d’impact environnemental et social du projet de construction d’une usine de

traitement de minerai de type CIL sur le permis d’exploitation PE26 de la mine d’or ITY
(Roche, 2013).

 Étude d’impact environnemental et social dans le cadre du projet d’exploitation des

gisements de Gbeitouo et de Daapleu dans le département de Blolequin (2D
Consulting, 2015).

In addition to the exploitation of two new deposits, this project includes the diversion of the
Cavally River (four river closure dams), the construction of a bridge and of three perimeter
dikes to protect Walter, Gbeitouo and Daapleu deposits.

There is an SEIA on progress related to these infrastructures. The public enquiry is planned
to start at the end of September 2015. The decree, which authorizes the construction and
operation of the projected infrastructures, should be obtained as early as the fourth quarter of
2015.

The three SEIAs were performed according to the Loi Cadre No. 96-766 of 3 October 1996 on
the Environmental Code, the Décret No. 96-894 of 8 November 1996 establishing the rules
and procedures applicable to studies of the environmental impacts of development projects
and the Arrêté No. 00972 of 14 November 2007 on the application of Décret No. 96-894.

The SEIA for the construction for the CIL plant was approved by the Ivorian authorities in
December 2013 (Arrêté 008/Mine SUDD/ANDE). A revision will be required for a larger
throughput rate of the CIL plant and modifications to the locations of some of the associated
infrastructure.

A resettlement action plan is also currently in preparation.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 217

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

20.2 Project Description

The site currently uses a heap-leach process with cyanide solution application. The
development project encompasses a CIL process plant, water plant services and several on-
site infrastructures. Descriptions of the mining operations current and planned (Section 16),
plant processes (Section 17) and Infrastructure (Section 18) are given in earlier sections.

20.3 Summary of Key Environmental and Social Issues (PFS)

Important social and environmental issues, potential risks and constraints have been
identified during the PFS phase in relation to the CIL Gold Project (Roche, 2013; 2D
Consulting, 2015). Key impacts that have been addressed within the SEIAs have mainly
been derived from project information, field inventories and public consultation, existing
studies and experience on similar projects.

The environmental impact studies carried out within the framework of the Ity Mine expansion
project show that there are two major critical issues that are actually addressed in further
details in the DFS: biodiversity (critical habitats) and the relocation of project-affected people.

No groundwater data exist for east of the Cavally sites (Daapleu, Gbeitouo). Due to the
proximity to the river, it is anticipated that the water table could be very high, potentially close
to the surface or the water level in the river. It is also anticipated that some inter-connexion
will exist between the river and the surrounding aquifers. The geological formations in the
area appear tighter and given that are no significant karsts in the area, it is possible that
groundwater inflow to the pits at east Cavally will be reduced. Therefore the dewatering
requirement for pits located at different side of the river is expected to be different. This
needs to be investigated and quantified during the next phase of the project.

The general water management strategy is to divert the non-contact surface runoff away from
the mine facilities and manage (collect, control, monitor and treat, if required) the contact
water prior discharging to the environment. Final effluents from the mine facilities to the
environment should meet the effluent discharge criteria.

Water within the open pits should be collected and pumped out of the active pit areas, and
released to the Cavally River if water quality meets the applicable discharge criteria.

In the PFS, it is assumed that there will be no potential Acid Rock Drainage and toxic metal
leaching issues from the waste dumps. Drainage from the waste dumps could be directly
released to the environment with adequate erosion and sediment control measures in place.

The TSF water management system includes a water pond created within the tailings storage
basin and a Polishing Pond downstream of the TSF dam. Excess water from the tailings
water pond will spill into the Polishing Pond. The two water ponds will provide sufficient
residence time for Total Suspended Solid (TSS) control.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 218

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Effluents from the open pits, waste dumps, TSF and other mine facilities should be monitored
and tested. If the test results indicate any chemical issues, water should be collected and
treated prior being discharged to the environment.

Tailings and waste rock materials have yet to be characterized in terms of probable loadings
of acidity, metals and sulphate salinity and thus the requirement for water treatment of
associated contact water is yet to be determined.

Many fauna and flora species occurring in the study area depend upon a particular habitat
type (or a combination of habitat types), such as the gallery forests. Loss, fragmentation, and
degradation of these habitats have a negative impact on the fauna and flora species that
depend on them.

Loss of habitat might cause reduction in the populations of species that depend on that
habitat. Under normal circumstances, species populations are at “carrying capacity”
(e.g. species populations expand until they reach the maximum number that the ecosystem is
able to support, thereafter density-dependent mortality keeps numbers at that sustainable
level). Even large, mobile species such as mammals or birds cannot simply “move
somewhere else” if their habitat is destroyed – other areas will either already be at carrying
capacity or be unsuitable.

Habitat fragmentation reduces the viability of populations, because small fragments of habitat
can only support small sub-populations of plants and animals, which are more vulnerable to
extinction. Minor fluctuations in climate, food availability or other factors that would be
unremarkable and quickly corrected in large populations, can be significant in small isolated
populations. Fragmentation can cause particular problems for species requiring extensive
range to satisfy their ecological needs. Habitat degradation can render habitat unsuitable for
many species, or can severely reduce the population size that an area of habitat is able to
support.

Any destruction, alteration or fragmentation of the residual primary forest is thus a threat to
fauna species. Forest habitats are already experiencing strong pressure within the study
area, primarily as a result of clearance for subsistence agriculture.

Among the main threats to the aquatic species, the diversion of the Cavally River may
certainly change significantly the hydrological conditions and consequently affect the habitats
of certain fish species. This issue is addressed closely in the DFS considering that the initial
fish inventory has already identified nine species of conservation concern.

Considering that 18 species of conservation concern (flora, freshwater fish, fauna) are present
in the study area and considering that Côte d’Ivoire has the highest level of biodiversity in
West Africa, the issue of having potential critical habitats in the study area is actually
addressed in accordance with the requirements of the IFC’s Performance Standard 6 during
the DFS stage (Biodiversity Conservation and Sustainable Management of Living Natural
Resources) which is the internationally recognized reference standard on critical habitats.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 219

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Maintaining and expanding the activities of the Ity Mine will have a considerable positive
impact on villages located in the surroundings of the mine. In addition to maintaining the
current jobs, the continued operation of the mine will have a significant structuring economic
effect at the local and regional levels mainly because of the weakness of the industrial sector
at the local and regional level.

Several livelihood activities are currently conducted in the study area. The mining of new
deposits and the construction of supporting infrastructure is likely to generate a negative
impact on some of these traditional activities.

According to 2D Consulting (2015) approximately 330 households in Daapleu will be

displaced in addition to a water point, some cemeteries and farms. A new appropriate site for
the relocated population was proposed and approved by the displaced population and the
Ivorian authorities.

Involuntary resettlement of population is a very sensitive issue and the exercise is usually
implemented within the framework of the recognized best practices such as the World Bank
Safeguard Policy O.P. 4.12. The exercise is composed of two steps: establishment of the
resettlement framework (RF) followed by a resettlement action plan (RAP).

The RF is the resettlement strategy including procedural guidelines for the formulation of
resettlement and compensation principles, organizational arrangements and design criteria to
be applied in the RAP, aiming at linking and adapting resettlement policies, standards and
principles to the project’s specific social context and reality. It should be meant to provide an
extensive understanding of the situation, and tailor guidelines to ensure the resettlement plan
and services will effectively answer the needs of the project and the project affected persons
(PAPs) and communities. The resettlement action plan is actually updated to be consistent
with the resettlement framework.

20.4 Stakeholder’s Identification

Stakeholders consist of organizations and individuals who may be directly or indirectly

affected (positively or negatively), or have an interest in the project.

As part of the environmental approval process for the renewal of the Operation License PE26,
the surrounding villages have been consulted, including: Ity, Bientouo, Floleu, Trogleu,
Krozialé, Ouyatouo and Kouepleu (Roche 2013). People consulted include administrative
and traditional authorities, general population, youth, women, village leaders, owners or
managers of socio-economic activities.

Overall, the results of the consultation indicate that people are supportive of the project but
have several claims (e.g. construction of a water tower, financial aid, local recruitment,
acquisition of an ambulance, etc.). The main impacts raised by local population are related to
the poor management of resettlement, the limited local recruitment and the positive economic
and social benefits.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 220

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Also, within the framework of the SEIA for the exploitation of the Gbeitouo and Daapleu
deposits, 2D Consulting Afrique conducted public consultation activities in the project area in
order to promote a participatory approach in collecting the views of all stakeholders involved
in the project and take them into account during its implementation.

The consultations revealed that these stakeholders held diverse views on the SMI’s gold
mining project in the department of Bloléquin. However, the people consulted can be divided
into two groups: those who view the project positively and those who view it positively subject
to the concerns rose by stakeholders being addressed.

The concerns expressed are diverse and related to the destruction of plantations, pristine
forests, sacred and burial sites, loss of farmlands, relocation of villages and camps and
children’s future. However, the stakeholders in general want the villages affected by the
project to be supported by the Project Developer with the construction of new villages with
modern houses and basic social infrastructure, compensation for destroyed plantations and
sacred sites and cemeteries, and employment for their children.

The public consultations showed that all the stakeholders consulted (12 groups out of 17)
approve the construction of the project on the proposed site. Five (5) other groups welcome
the project, albeit with reservations.

20.5 Environmental and Social Scope of Work for the DFS

The scope of work is currently in progress for the environmental and social component of the
Definitive Feasibility Study comprises the following elements:

 Establish the complementary baseline surveys for the new sites of the CIL plant tailings
site;
 Ensure that the content of the SEIAs for the SMI CIL Gold project fulfills the
requirements of the recognized international standards (Equator principles/IFC
Performance Standards);
 Conduct noise and ambient air quality measurements (background) for the entire study
area;
 Elaborate a synthesis report (SYR) on the three SEIAs to address the cumulative
impact issues, including noise propagation assessment, ambient air quality assessment
and technological risk assessment.
A synthesis report (SYR) of the three SEIAs of the project will be prepared. The objectives of
the impact assessment report are:

 Regroup and synthesize the impacts in a stand-alone report;

 Assess effects on a larger study area;
 Assess effects during a potentially larger period in the future;
 Consider cumulative effects on valued ecosystem components due to interactions with
different sources of actions or components;

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 221

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

 Include existing and future reasonably foreseeable actions;

 Evaluate significance in regards to other than just local or direct effects.
The global noise propagation calculation, ambient air quality modeling and technical risk
assessment will be conducted at the stage of the synthesis report.

The integrated and social assessment report completion is planned for the end of 2015.

20.6 Environmental Legal Framework

It should be noted that the Environmental Code (Law No. 96 766) and Decree No 96-894 on
Environmental impact assessment approval was only adopted in 1996. Consequently, SMI
initially operated in 1991 under the following decree – “Permis d’exploitation”
(No. 147/Mines/DXX-10/14/1989) issued by the Ministry of Mines. This decree has been
reissued several times since 1989 (1994, 1998, 2006, 2008, 2013 and 2014).

According to the legislation of the Côte d’Ivoire Republic there are three major laws which
have a concern with the environment: a mining law (Loi No 95-553, Code Minier), an
environmental law (Loi No 96-766, Code de l'Environnement), and a water law (Loi No 98-
755, Code de l'Eau). Several decrees have been adopted related to these laws.

The mining law No 95-553 dated July 17, 1995 contains a chapter (Articles 76 to 79) on the
protection of the environment. Article 77 obliges the titular of a mine to carry out a complete
Environmental Impact Study (EIS) and an Environmental Management Program which
includes a rehabilitation plan and remediation costs before any exploitation. The obligation of
keeping a rehabilitation fund is also prescribed by the article 85. The decree No 96-634 dated
August 9, 1996 determines the modes of enforcement of the mining law.

The decree No 98-43 dated January 28, 1998 related to the classified installations having a
concern with the environmental protection, fixes the nomenclature of these installations. The
Decree No D-03 dated January 6, 2005 is related to the procedure of the environmental audit.

The water law No 98-755 dated December 23, 1998 is related to the management of the
water resources and the protection against the contamination of the water sources. The
article 49 indicated that any rejects of wastewaters in the receiving medium must respect the
standards. Decree No. 01164 fixes the environmental discharge criteria (water, air quality,
noise).

20.7 Environmental Reports

An Environmental Impact Study (EIS) for the Mount Ity Mine has been carried out in 2000 by
SMI. This study has been used as a reference in the rehabilitation report titled
"Réaménagement du Site Minier d'Ity" (SMI, 2005). According to Amireault (2006), the
Ministry of the Environment conducted an environmental audit of the Mount Ity Mine at the
end of December 2005. The report is not available for review.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 222

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

An environmental management plan (Plan de Management Environnemental) dated March

2000 and a rehabilitation plan (Réaménagement du Site Minier d'Ity) dated June 2005 were
elaborated to oversee the operations (Geostat, 2008).

The environmental management plan described the management of the waste rocks, water
(underground, surface water, streaming and processes water), fuels, chemical products,
wastes, noise and dust. The management of the leaching pads and the cyanide solution
ponds are well protected with impermeable membranes and systems which permit to detect
any leakage into the ground. The wastewater rejected into the environment passes by a
cyanide destruction pound where the cyanide is destroyed with sodium hypochlorite while the
pH is adjusted. Suspended particles are allowed to settle in a settling reservoir. Chemical
analyses of cyanide and pH determination are made on every step of the process. In order to
control the underground water, weekly sampling is carried out in two monitoring wells of the
Ity village, from water springs located around the site, in the Cavally river and two other
monitoring wells used by the mine. The rainy periods represent a preoccupation for overflow
of the pond and also for the runoff water on the site. Precautions have been taking to avoid
the overflowing of the ponds. According to environmental management plan, fuels and
chemical products are well stored and managed. Noises are reduced by a sound attenuation
wall. Heaps are damp by the natural humidity of the ore and by the leaching process.

Wastes are incinerated and buried into the waste rock dumps. These wastes include the
empty sodium cyanide drums, the used PVC piping, the domestic wastes from the mine staff,
the plastic and metallic packaging from the laboratory, a few tons per year of metal scrap, the
solids from the water and oil decanting device and some other waste from the laboratory.
Standard procedures is to separate the waste from the sterile rocks in order to avoid the
lixiviation of the waste into the waste rock dumps. Normally, waste is stored in an
appropriated site as a sanitary landfill constructed with an impermeable layer of clay, thus
complying with the Côte d’Ivoire legislation.

The environmental management plan describes that the empty sodium cyanide drums be
washed with clear water on the platform of supply reagent in order to eliminate any trace of
the solid sodium cyanide. The wash water is drained into the cyanide water pond.

The environmental management plan reveals that the water coming from the dewatering of
the pit is used as drinking water and that one of the dewatering well supplies the Ity village
fresh water.

The solution ponds are protected by a fence and the site is under a 24 hour supervision
preventing animals from drinking in the cyanide water ponds.

The rehabilitation plan (Réaménagement du Site Minier d'Ity) details reclamation procedures,
including preliminary cost estimates and rehabilitating the mine site at the end of the mine life
(approximately US$ 120,000/year). The report was written in 2008 for the period covering
2005 to 2014. The rehabilitation plan explains how the solution ponds will be finally treated

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 223

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

before the evacuation of the water into the environment; the waste rock dumps and the heaps
will be reshaped and reforested; the infrastructures will be dismantled, sold, or buried. The
rehabilitation program does not include a monitoring program after the closure of the site.

The rehabilitation plan was updated in 2011 in compliance with the mining code (Law No. 95-
553) and Decree No. 96-600) that states that the plan should be reviewed every 3 years
(AGTS, 2011). The dismantling of the mine infrastructure and the rehabilitating program
(duration not indicated) is estimated at approximately US$ 6.9 Million.

The elements of the mine closure (remediation, reclamation), the rehabilitation of the section
of the Cavally River that will be dried, including the associated costs, are addressed in the
DFS being prepared.

20.8 Environmental Compliance

SMI mandated an external firm to conduct an audit of the heap-leach operations (Roche,
2013).

Most of the recommendations were related to the improvement process (regeneration, coal
oven, cyanide dosage, hopper capacity, reduction of the elution cycle, etc.) and health and
safety practices. The audit did review neither the environmental management plan nor the
implementation of the rehabilitating program.

In accordance with the Environmental Code and Decree No. 98-43 (1998) on environmental
classified installations, the Ivorian Antipollution Center (Ministry of Environment) conducts
every three months inspections at the mine siteThe following elements are audited:

 Soil contamination;
 Air pollution;
 Water quality;
 Water management;
 Noise.
Preventative and Corrective Actions taken following an audit ensure that non-compliances
identified will be audited at the next inspection.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 224

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

21 CAPITAL AND OPERATING COSTS

21.1 Heap Leach Operations

21.1.1 Capital Costs

The total capital expenditures planned for the Heap Leach operation until the end of 2017 is
approximately at 16.6 MEUR.

The breakdown of the planned expenditures is as follows:

 Mining fleet equipment renewal and / or additional equipment: 7.3 MEUR;

 Mine dewatering equipment and borehole drilling: 2 MEUR;
 Processing plant sustaining capital and permanent infrastructures: 2.5 MEUR;
 Other smaller capital items (light vehicles, buses, IT, security, etc.): 4.8 MEUR.
21.1.2 Operating Costs
The costs presented in Table 21.1.2_1 are all compiled form SMI reports. All the unit costs
presented herein are representative of past historical costs incurred operationally in 2014 and
first half of 2015 and are in line with 2015 all year budget and projections.

Table 21.1.2_1
SMI Gold Project
Summary of Unit Operating Costs

Description Unit Value

Mining costs € /t moved 1.90
Milling costs € /t 18.50
G&A costs € '000/yr 12,386

21.2 CIL Operations

SNC-Lavalin’s mandate was to develop a PFS level capital and operating cost estimate with a
target accuracy of ±30%. The data used to prepare the mining related operating cost
estimate are based on a 2Mtpa mining schedule performed with the new geological block
models received in June 2015. This mining schedule was based on a mining plan that
excludes Inferred Mineral Resource.

21.2.1 Capital Costs (CAPEX)

The estimate has been developed using quoted currencies and converted to Euros using the
exchange rate. The installation labour workweek is based on a sixty hour per week work
schedule (6 days x 10 hours). The labour anticipated rotation included in PFS estimate is 42
working days (6 weeks) followed by 14 days off (2 weeks). Travelling time will be taken on
days off. The construction labour costs are based on sixty-hours per workweek schedule; 6
days 10 hours/day. For the Expatriates, 40 hours per week will be paid at straight time (1.0),

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 225

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

10 hours at time and a half (1½) and the remaining 10 hours at double time (2.0). The rates
are based on the project rotation of 42 days in followed by 14 days off. For the local workers,
a flat rate is presently assumed for the whole 60 hours per week without overtime premium.

Except for civil and concrete work, skilled workforce will mainly be expatriates. This
proportion could be improved during the next phase by assessing the capacity in Côte d’Ivoire
of skilled workforce in the mining industry. The construction hours are based on SLI's
historical data & experience adjusted for the complexity of specific elements of scope.
Material and equipment to site are projected to be transported by the government road from
Abidjan’s Portual Terminal.

The aggregates required for the concrete will be imported from a source to be determined
during the definitive feasibility study, but is presently assumed to be as far as the region of
Yamoussoukro. The concrete unit price includes the transportation of the aggregates.

The material take-offs were provided by engineering after reviewing all MTO considering a
throughput increase of 2Mtpa. An allowance of 5.0% of direct costs has been included to
cover construction indirect. The construction camp has been excluded and is presently
considered as part of owner’s costs. An allowance of 7% of the equipment purchase value is
included under freight item. The assistance during construction and pre-commissioning are
included. The commissioning spare parts have been evaluated based on an allowance of
0.5% of the Permanent Equipment value. An allowance is included to cover the Firsts Fills.
The fuel is excluded from this allowance.

The contingency has been calculated to both direct and indirect costs excluding Owner's
costs, Escalation and Risk. Contingency has been evaluated using a deterministic approach,
which is the SLI’s standard method for contingency evaluation for this stage of project.

The CAPEX summary breakdown is given in Table 21.2.1_1:

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 226

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 21.2.1_1
SMI Gold Project
Capex Breakdown Summary

Disc Description Total 2.0Mtpa

Jul 2015 Fx (€)
4G Mine Area 4,264,188
4M Tailings 14,559,761
4T Civil 11,257,277
41 Concrete 9,105,368
42 Structural Steel 7,177,707
43 Architectural 2,737,145
44 Mechanical 37,524,361
45 Piping 13,350,167
46 Electrical 14,335,947
47 Instrumentation 2,467,941
48 Total Direct Costs 116,779,861

Total EPCM Indirect Costs (under EPCM Control) (excluding owner’s costs) 59,481,162
9210 EPCM- Salaries and Expenses 19,852,576
9300 Training 0
9400 Construction Field Indirects 5,838,993
9460 Scaffolding Services General Site Wide 1,170,000
9480 Heavy Lifts 1,000,000
9490 CONSTRUCTION CAMP (Rental or Purchase, Infrastructure, Catering 0
Meals & Fuel)
9500 Construction & Pre-Commissioning Support 2,389,002
9610 Spare Parts - Commissioning 161,013
9620 Spare Parts - X Years Operation 0
9630 Spare Parts - Capita 966,075
9650 First Fills 502,264
9700 Freight and Handling 2,254,175
9800 Inclement Weather Lost Of Time - Manual Craft Hours Lost + Foremen 0
9910 Contingency 25,347,064

Total Owner’s Costs (under Client control) 22,829,231

9100 OWNER’s Costs 6,898,756
9164 Mine Major Production Equipment 6,396,369
9168 Allowance for upgrade of any offsite facilities (Not included in EPCM 0
Scope)
9170 Construction Camp provided by Client (c/w Meals, Catering Costs & 5,000,000
Energy
9180 Third Parties Costs (Power provider, Natural Gas provider, Jetty, etc.) 4,534,106
Total Costs (including Mining Fleet c/w Owners’ Costs) 199,090,254

9920 Escalation 0
9930 Risk 0

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 227

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

21.2.2 Operating Costs (OPEX)

The data used to prepare the operating cost estimate are based on the June 2015 geological
block model and associated mining schedule. This mining schedule was based on a mining
plan that excludes Inferred Mineral Resources. The target accuracy of this OPEX estimate
update is ±30%.

Mining Related Operating Expenditure

The mine operation cost was calculated based on the tonnage of each type of material from
the different pits and the specific pit location. Using these parameters, the cycle times were
calculated based on SMI production factors and hauling distances for each pit. Finally, an
operating cost per type of material was calculated based on the labour cost, fuel consumption,
maintenance cost, etc.

The mining costs used in the PFS update are presented in Table 21.2.2_1.

Table 21.2.2_1
SMI Gold Project
Mining Costs CIL

Mine OPEX cost

Facies Identification Whittle Code
Euro
Gbeitouo MVS ore 1MV1 2.34 €
Gbeitouo MVS waste 1MV2 1.79 €
Gbeitouo argile oxidée ore 1AO1 2.83 €
Gbeitouo argile oxidée waste 1AO2 -€
Gbeitouo laterite ore 1L1 1.98 €
Gbeitouo laterite waste 1L2 -€
Gbeitouo Carbonate waste 1C2 -€
Ity Carbonate ore 2C1 -€
Ity Carbonate waste 2C2 1.80 €
Ity granodiorite ore 2G1 -€
Ity granodiorite waste 2G2 -€
Ity argile oxidée ore 2AO1 1.92 €
Ity argile oxidée waste 2AO2 1.89 €
Ity argile réduite ore 2AR1 -€
Ity argile réduite waste 2AR2 -€
Ity laterite ore 2L1 -€
Ity laterite waste 2L2 -€
Walter granodiorite ore 3G1 2.11 €
Walter granodiorite waste 3G2 1.78 €
Walter Carbonate ore 3C1 2.11 €
Walter Carbonate waste 3C2 1.78 €
Walter Argile oxidée ore 3AO1 2.06 €
Walter argile oxidée waste 3AO2 1.84 €
Walter argile réduite ore 3AR1 1.58 €
Walter argile réduite waste 3AR2 1.47 €
Walter laterite ore 3L1 1.83 €
Walter laterite waste 3L2 1.70 €
Zia Carbonate ore 4C1 -€
Zia Carbonate waste 4C2 1.91 €
Zia granodiorite ore 4G1 -€
Zia granodiorite waste 4G2 1.90 €
Zia Argile oxidée ore 4AO1 1.95 €
Zia argile oxidée waste 4AO2 1.79 €

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 228

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 21.2.2_1
SMI Gold Project
Mining Costs CIL

Mine OPEX cost

Facies Identification Whittle Code
Euro
Zia argile réduite ore 4AR1 1.97 €
Zia argile réduite waste 4AR2 1.87 €
Zia laterite ore 4L1 1.52 €
Zia laterite waste 4L2 1.57 €
Daapleu Argile oxidée ore 5AO1 -€
Daapleu argile oxidée waste 5AO2 1.98 €
Daapleu argile réduite ore 5AR1 -€
Daapleu argile réduite waste 5AR2 -€
Daapleu Carbonate ore 5C1 -€
Daapleu Carbonate waste 5C2 -€
Daapleu MVS ore 5MV1 -€
Daapleu MVS waste 5MV2 1.73 €
Daapleu IM ore 5IM1 2.27 €
Daapleu IM waste 5IM2 1.73 €
Daapleu daaplite ore 5D1 2.30 €
Daapleu daaplite waste 5D2 1.76 €
Daapleu daaplite mix ore 5DM1 2.30 €
Daapleu daaplite mix waste 5DM2 1.76 €
Daapleu laterite ore 5L1 -€
Daapleu laterite waste 5L2 -€
Daapleu Argile oxidée ore 55AO1 2.48 €
Daapleu argile réduite ore 55AR1 1.77 €
Daapleu laterite ore 55L1 -€
Daapleu Carbonate ore 55C1 -€
Daapleu daaplite ore 55D1 2.44 €
Daapleu daaplite mix ore 55DM1 2.46 €
Daapleu MVS ore 55MV1 2.42 €
Daapleu IM ore 55IM1 2.40 €
Daapleu argile oxidée waste 55AO2 1.98 €
Daapleu argile réduite waste 55AR2 1.49 €
Daapleu laterite waste 55L2 -€
Daapleu Carbonate waste 55C2 -€
Daapleu daaplite waste 55D2 1.86 €
Daapleu daaplite mix waste 55DM2 1.84 €
Daapleu MVS waste 55MV2 1.82 €
Daapleu IM waste 55IM2 1.77 €
Low Grade Stockpile LGS 1.32 €
High Grade Stockpile HGS 1.62 €
Heap Leach 1 ore 6HL1 1.84 €
Heap Leach 2 ore 6HL2 1.58 €

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 229

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Processing Plant Related Operating Expenditure

The processing cost per material type was evaluated in laboratory tested on samples taken
from the site. These samples were subjected to various tests to simulate reagent dosing,
wear factors and other parameters. The combination of all these results was used to
calculate the processing cost per material type. It is important to mention that metallurgical
testing results used in this PFS update are not including the recent laboratory testing results
performed in 2015.

The processing costs in the PFS are estimated to be USD 13.67/t (12.43 €/t) on average over
the life of the CIL project.

The building maintenance and administrative supplies have been calculated based on
building CAPEX value and factored plant labour cost. The labour cost has been estimated
based on a plant general crew by function and salary.

Site G&A costs, estimated at USD 9.7/a (8.8m €/a), were provided by SMI.

Power Related Operating Expenditure

The power requirement for the plant has been evaluated at approximately 10.819MW. The
PFS study initially evaluated a diesel powered power station at the site with a power cost of
0.19 €/kWh. A study to connect the site to the main electrical grid was conducted, by a third
party, and is being considered to supply electrical power for the processing plant. In addition,
the biggest impact is the cost of power which is approximately 0.10 €/kWh from the main grid.

The Site General & Administrative fees were provided by SMI.

Table 21.2.2_2 below presents the operating cost summary for each year.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 230

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 21.2.2_2
SMI Gold Project
CIL Operations Opex Breakdown Summary

2018 2019 2020 2021 2022 2023 2024

Item (€) (€) (€) (€) (€) (€) (€)

Mine Operating Cost 25,059,000 25,572,144 23,969,344 23,262,001 15,075,033 12,054,096 12,434,673
Concentrator Operating
26,535,000 27,585,545 27,134,530 26,868,810 29,196,514 24,658,622 24,486,903
Cost
General Administration
8,842,000 8,842,000 8,842,000 8,842,000 8,842,000 8,842,000 8,842,000
and Infrastructure Cost
Total 60,436,000 61,999,689 59,945,874 58,972,811 53,113,547 45,554,718 45,763,576

2025 2026 2027 2028 2029 2030 2031

Item (€) (€) (€) (€) (€) (€) (€)
Mine Operating Cost 11,795,402 9,999,704 8,450,832 7,496,826 4,306,339 4,306,339 4,377,865
Concentrator Operating
24,428,437 24,498,313 24,586,728 22,684,885 21,566,649 21,566,649 21,896,296
Cost
General Administration
8,842,000 8,842,000 8,842,000 8,842,000 8,842,000 8,842,000 8,842,000
and Infrastructure Cost
Total 45,065,839 43,340,017 41,879,560 39,023,711 34,714,988 34,714,988 35,116,161

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 231

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

22 ECONOMIC ANALYSIS

An economic analysis has been conducted using a cash flow model prepared on the basis and
assumptions as stated in the following discussion. The results of the economic analysis
represent forward-looking information (production rates, cash flows, net present value, etc.) that
are subject to a number of unknown risks, uncertainties and other factors that may cause actual
results to differ materially from those presented here. The analysis shown below does not include
financing issues and is presented on an unleveraged free cash flow basis. All amounts are
presented on a 100% basis unless stated otherwise. All amounts are for the period ended July
2015 unless otherwise stated.

22.1 Gold price and Exchange rates

While various gold price scenarios were run, the central case has been run using a flat gold price
of US$1,150/oz (€1,045/oz), net of €5/oz bullion transport, insurance and refining costs. A flat
USD/euro exchange rate of 1.10 has been assumed. No hedging has been assumed within the
analysis. Gold payable has been assumed to be 100% of the gold produced.

22.2 Royalties and taxes

Royalties applicable are described in Section 4.4.

A corporate tax rate of 25% has been applied on both the Heap Leach and CIL operations. While
there may be a possibility to obtain a 5-year tax holiday on all or some of the deposits mined
during the CIL phase, applicable to new projects under the Ivorian mining code, this optimization
exercise has not been included in the presented financial analysis.

22.3 Inflation

In line with mineral industry practices, no inflation was applied to the cash flow analysis on both
the Heap Leach and CIL operations.

22.4 Operating and Capital Costs

G&A costs integrated into the Heap Leach and CIL operations are based on currently achieved
costs. Starting from year 2029 once mining operations cease and the CIL mill is only
reprocessing tailings, G&A costs have been reduced from 8.8m€/year to 6.0m€/year, No operator
management fees have been included in the model. No exploration costs have been included in
the model.

Operating and Capital mining and processing costs modelled are as described in Section 21

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 232

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

22.5 Sustaining Capital

22.5.1 Heap Leach Operation

Roughly €16.6m of sustaining capital has been included in the Heap Leach operation, inclusive of
€7.3m for fleet replacement.

22.5.2 CIL Operation

The sustaining capital was estimated on an annual basis accounting for equipment maintenance,
infrastructures to access new deposits, TSF upgrades, and replacements necessary to maintain
the mining process and treatment. The sustaining is estimated to be €41 million over the life of
the project.

22.6 Working capital

22.6.1 Heap Leach Operation

No working capital is assumed to be recovered at the end of the Heap Leach operation.

22.6.2 CIL Operation

A working capital assumption, totalling 2 months of reagents, has been applied to the model for
the CIL project.

22.7 Depreciation

22.7.1 Heap Leach Operation

Depreciation schedule has been estimated by allocating investments on a per ounce basis to
deposits mined over the remaining Heap Leach life of mine.

22.7.2 CIL Operation

Depreciation for the mill has been modelled using the straight-line method over the life of the
project. Depreciation for the mining capex has been allocated of the tonnage moved across the
life of mine. Book values of existing assets have been excluded from the depreciation schedule.

22.8 Closure Costs and Salvage Value

The costs for the mine and mill shut-down process and salvage value of the assets have not been
included in the model.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 233

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

22.9 Production Profile and Cash Flow Analysis

22.9.1 Heap Leach Operation

While the Heap Leach operation can extend beyond 2017 based on mineral reserves, the Heap
Leach business plan has been limited to end of 2017 as the CIL project is expected to start at the
beginning of 2018. The Heap Leach and CIL operations are not assumed to run in parallel.

The Heap Leach business plan is summarized in Tables 22.9.1_1 to 22.9.1_4:

Table 22.9.1_1
Project
Heap Leach Mine Schedule

Aug to Dec
Mine Schedule Total/Avg 2016 2017
2015
Tonnes moved, t 12,083,504 4,199,262 6,102,818 1,781,423
Waste, t 9,666,028 3,694,679 5,069,994 901,335
Ore mined, t 2,417,476 504,583 1,032,824 880,304
Grade, g/t 2.44 3.47 2.33 1.98
Metal contained, kg 5,904 1,755 2,408 1,740
Metal contained, oz 189,814 56,441 77,417 55,957

Table 22.9.1_2
Project
Heap Leach Processing Schedule

Aug to Dec
Process Schedule Total/Avg 2016 2017
2015
Processed ore, t 2,256,518 444,347 972,588 839,583
Grade, g/t 2.39 3.48 2.26 1.96
Gold Contained, kg 5,393 1,548 2,200 1,644
Recovery rate, % 85% 87% 84% 84%
Gold Production, kg 4,576 1,347 1,848 1,381
Gold Production, oz 147,135 43,297 59,424 44,414

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 234

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 22.9.1_3
Project
Heap Leach Business Plan

Aug to Dec
Financials ‘000€ Total/Avg 2016 2017
2015
Revenue 153,817 45,263 62,123 46,432
Gold Sold, oz 147,135 43,297 59,424 44,414
Gold Price, €/oz 1,045 1,045 1,045 1,045
Operating Costs -100,142 -22,965 -44,199 -32,978
Mining Costs -22,959 -7,979 -11,595 -3,385
Processing costs -41,757 -8,223 -17,998 -15,536
G&A -30,043 -5,180 -12,432 -12,432
Royalty -5,384 -1,584 -2,174 -1,625
EBITDA 53,676 22,298 17,924 13,454
Sustaining capex -16,614 -3,514 -6,900 -6,200
Taxes paid -6,582 -4,105 -1,646 -832
Post-Tax Free Cash Flow 30,479 14,679 9,378 6,422

Table 22.9.1_4
Project
Heap Leach Project Economics in M€

NPV as at July 31st, US$1,100/oz US$1,150/oz US$1,200/oz US$1,250/oz

2015 (€1,000/oz) (€1,045/oz) (€1,091/oz) (€1,136/oz)

Pre-Tax NPV in €m at 5% 29 36 42 48
various discount rates 10% 28 34 40 46
Post-Tax NPV in €m at 5% 25 29 34 38
various discount rates 10% 24 28 32 37

22.9.2 CIL Operation

The CIL project construction is assumed to start at the beginning of 2016 with the first year of
production occurring in 2018. The total duration of the project is estimated to be 14 years.

The CIL business plan is summarized in the below Tables 22.9.2_1 to 22.9.2_4.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 235

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 22.9.2_1
SMI Gold Project
CIL Mine Schedule

Total/Avg 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Tonnes
moved,t
(‘000) 89,399 12,197 12,920 12,085 11,773 7,316 5,307 5,614 5,292 4,301 3,460 3,096 2,000 2,000 2,039
Waste, t
(‘000) 61,431 10,262 10,920 10,085 9,773 5,322 3,307 3,614 3,292 2,301 1,460 1,096 - - -
Strip ratio 2.20 5.30 5.46 5.04 4.89 2.67 1.65 1.81 1.65 1.15 0.73 0.55 - - -
Ore tonnes, t
(‘000) 27,968 1,935 2,000 2,000 2,000 1,993 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,039
Grade, g/t 1.59 2.31 2.75 1.62 1.74 1.43 1.32 1.24 1.43 1.64 1.76 1.92 1.04 1.04 1.04
Gold
contained,
(‘000oz) 1,429 143 177 104 112 91 85 80 92 105 113 123 67 67 68
*Numbers have been rounded

Table 22.9.2_2
SMI Gold Project
CIL Processing Schedule

Total/Avg 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Ore tonnes,
27,968 1,935 2,000 2,000 2,000 1,993 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,039
(‘000)t
Grade, g/t 1.59 2.31 2.75 1.62 1.74 1.43 1.32 1.24 1.43 1.64 1.76 1.92 1.04 1.04 1.04
Gold
contained, oz 1,429 143 177 104 112 91 85 80 92 105 113 123 67 67 68
(‘000)
Recovery
80% 81% 82% 84% 83% 91% 71% 70% 72% 73% 73% 75% 92% 92% 92%
rate, %
Production,
1,144 116 144 88 92 83 60 56 67 77 82 93 61 61 63
(‘000oz)
*Numbers have been rounded

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 236

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 22.9.2_3
SMI Gold Project
CIL Business Plan (negative values in red)

In €'000 Total/Avg 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Revenues 1,196,147 0 0 121,240 150,798 92,078 96,493 86,793 62,720 58,612 69,703 80,367 85,875 97,354 64,288 64,288 65,538

Gold price, €/oz 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045 1,045

Gold sold, oz 1,144,140 0 0 115,969 144,242 88,074 92,297 83,020 59,993 56,063 66,673 76,873 82,141 93,122 61,493 61,493 62,689

Operating Costs 692,882 0 0 64,680 67,278 63,169 62,350 56,052 47,750 47,815 47,506 46,153 44,885 42,431 34,123 34,123 34,568
Government
41,865 0 0 4,243 5,278 3,223 3,377 3,038 2,195 2,051 2,440 2,813 3,006 3,407 2,250 2,250 2,294
Royalties
Mining Costs 188,145 0 0 25,059 25,572 23,969 23,262 15,061 12,054 12,435 11,795 10,000 8,451 7,497 4,306 4,306 4,378

Processing Cost 347,609 0 0 26,535 27,586 27,135 26,869 29,111 24,659 24,487 24,428 24,498 24,587 22,685 21,567 21,567 21,896

G&A 115,263 0 0 8,842 8,842 8,842 8,842 8,842 8,842 8,842 8,842 8,842 8,842 8,842 6,000 6,000 6,000

EBITDA 503,265 0 0 56,560 83,520 28,909 34,142 30,742 14,970 10,797 22,198 34,214 40,990 54,923 30,165 30,165 30,970
Operating cash
439,130 0 0 54,777 73,195 12,354 31,364 26,441 12,234 10,825 22,207 34,202 37,842 49,075 20,644 27,017 27,971
flow
EBITDA 503,265 0 0 56,560 83,520 28,909 34,142 30,742 14,970 10,797 22,198 34,214 40,990 54,923 30,165 30,165 30,970

Income tax payable 64,135 0 0 0 10,214 16,630 2,823 3,920 3,485 0 0 0 3,133 5,843 9,258 3,148 2,967

Working capital 0 0 0 1,783 112 75 44 380 749 29 10 12 15 6 263 0 32

Investing cash
246,726 48,173 125,251 37,193 4,649 5,736 5,736 2,244 2,244 2,244 2,244 2,244 2,244 1,800 1,800 1,462 1,462
flow
Mill Capex 192,694 48,173 125,251 19,269
Sustaining mill and
20,590 0 0 665 665 1,753 1,753 1,753 1,753 1,753 1,753 1,753 1,753 1,309 1,309 1,309 1,309
TSF capex
Initial mining capex 13,275 0 0 13,275 0 0 0 0 0 0 0 0 0 0 0 0 0
Sustaining mine
20,167 0 0 3,983 3,983 3,983 3,983 491 491 491 491 491 491 491 491 153 153
capex
Unlevered free
192,404 48,173 125,251 17,584 68,546 6,618 25,627 24,197 9,990 8,582 19,964 31,958 35,598 47,274 18,844 25,554 26,509
cash flow

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 237

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

Table 22.9.2_4
SMI Gold Project
CIL Project Economics

NPV and IRR as at project US$1,100/oz US$1,150/oz US$1,200/oz US$1,250/oz

construction start date (€1,000/oz) (€1,045/oz) (€1,091/oz) (€1,136/oz)
Pre-Tax NPV in €m at various 5% 88 123 159 194
discount rates 10% 20 46 72 98
Post-Tax NPV in €m at various 5% 52 79 106 133
discount rates 10% -6 14 34 54
Pre-Tax IRR 12% 15% 18% 20%
Post-Tax IRR 9% 12% 14% 16%

22.10 Conclusion

The financial analysis supports the economic viability of both the Heap Leach and CIL
operations.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 238

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Coffey Mining South Africa (Pty) Ltd

23 ADJACENT PROPERTIES

There are no adjacent properties.

24 OTHER RELEVANT DATA AND INFORMATION

There is no other relevant data

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 239

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
25 INTERPRETATION AND CONCLUSIONS

Data - Historical work has been of variable quality. The work undertaken in the last three
years is to international standards. Current exploration practices are appropriate to the
deposits being evaluated. SMI has assessed all historical data for accuracy and incorporated
this data into the database where it was found acceptable for use in geological and mineral
resource evaluations.

Procedures in the exploration programmes are continually monitored and reviewed.

Procedures are described in detail. Documentation has been updated in 2014/2015 have
been updated to include reporting lines and new formats required by the Acquire database.
Core storage facilities have been substantially reorganized and catalogued since the first site
visit.

Drilling - Drilling is as complete as it can be on the current deposits. Some infill drilling may
be needed at ZiaNE and Mont Ity as mining progresses. This would be to fill gaps in the
deeper portions. Otherwise drilling can be left for the grade control programme.

Additional drilling is needed at Daapleu to close gaps in the drilling grid. The Cavally River
currently prevents drilling these areas. The infill drilling will need to be done once the river
diversion is in place. Additional drilling for deeper resources is indicated for future work.

Mineral Resources - The geological models and mineral resources for Daapleu and ZiaNE
are the first models constructed for these deposits. Geological models constructed in 2014
have been confirmed as accurate by additional drilling in 2015. The geological model for
Mont Ity was substantially revised by site geologist in 2015. Additional drilling has been
undertaken for Aires to allow modelling of the slopes of the leach pad.

Mineralization appears to be well mapped on the dumps, at Daapleu and at ZiaNE. This had
been confirmed by recent drilling. Mont Ity geology was substantially revised in 2015 and
there are still some uncertainties in the Au distributions. This is reflected in the classification
of the mineral resources.

Walter and Gbeitouo, being drilled and estimated in 2013, rely for a part on historical
boreholes. The improvement of drilling and data verification procedures in 2013 together with
the intense in-fill drilling, significantly improved the confidence in the geological model and the
grade continuity. The classification reflects the weaknesses outlined by the historical
practices.

Metallurgy - The quality and quantity of metallurgical testwork performed for the 2Mtpa CIL is
considered adequate for the PFS level developed for the project.

The ore facies not containing sulphide are substantially free-milling and do not show any
preg-robbing characteristics.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 240

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 The ore facies containing sulphide is partially refractory and direct cyanidation (CIL process)
yields to lower gold recovery.

The additional test work is to include additional variability samples and is to concentrate upon
the ore to be delivered during the first five years of the project.

Mineral Reserves - The decision not to divert the Cavally River next to the Walter pit results
in a reduction in mineral reserves from the Walter pit. However, the cost savings from the
river diversion greatly outweighs the loss of revenue from reducing the Walter mineral
reserve.

High strip ratios in the Ity pit are a result of the large pushback of the north-west wall.
Although still economic to mine, there is a small amount of mineral reserve recovered from
this pushback, with most of the mineral reserves coming from the Ity Flat area. In future
studies it may be worth abandoning this pushback to lower the overall strip ratio of the Ity pit.
The resulting loss of mineral reserve would not have a significant impact.

Tailings Storage Facility - Few options were considered for the tailings disposal based on
some important assumptions during the PFS. The quantities for the tailing storage facility
have been updated based on the 2Mtpa production scenario. Some important assumptions
will need to be validated early in the next phase regarding the chosen option.

Geotechnical - A preliminary geotechnical work was carried out during the PFS based on
limited data especially for Daapleu and Gbeitouo pits located east of Cavally River.
Significant assumptions were also made for Zia NE pit. Pit slopes recommendations provided
herein are based on these assumptions.

Hydrogeology - The preliminary assessment of the hydrogeological conditions was solely

based on existing report prepared for current pits operating west of the river as well as review
of geological setting of the site. Based on the assessment, it was assumed that a dewatering
of the pits will be possible via wells and sumps as per current practice at the operating pits.

Geochemistry - No geochemical assessment was performed during the PFS. Daapleu and
Gbeitouo have important quantities of sulphide ore that could potentially be acid generating.
This could have an important impact on water management and could lead to the addition of a
water treatment plant in the project scope of work.

In addition, all aggregate material, with the exception of the concrete aggregates, will come
from the granodiorite facies of Ity Mine or other proposed pits. This represents an important
assumption that needs to be validated with geochemistry tests during the DFS.

Environmental - The current facilities are operated within the applicable environmental legal
framework in the Côte d’Ivoire. These facilities are also subject to a formal inspection every
three months by the Environmental Code and the Ivorian Antipollution Center.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 241

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 The new CIL operations and projected infrastructures are subject to a formal SEIA approval
process; the SEIA for the construction of the CIL plant was approved by the Ivorian authorities
(December 2013). The SEIA for the operation of the Gbeitouo and Daapleu is completed,
and is pending approval. Finally, the SEIA for the projected infrastructures (diversion canal,
roads, dykes) is under way.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 242

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
26 RECOMMENDATIONS

Exploration, Geology and Mineral Resources - At the Effective Date of the report, Coffey
is preparing the mineral resource estimation of the Ity Flat deposit on the property and expect
the final figures to be completed within two months of the effective date. This deposit contains
both oxidized material similar to current Heap Leach material and fresh material that could be
considered for CIL. Recommendations for any additional work on this deposit will be made in
the final report.

Some additional drilling is recommended on Verse Ouest to evaluate the undrilled portion of
the dump to provide material for the Heap Leach operations. There are some changes that
need to be made to the quality control programme and the data management systems still
needs some improvement. SMI is aware of these needs and will be making the changes as
part of the normal exploration activities.

Several additional targets at different stages of exploration (i.e. Verse Ouest and others) have
been identified in the very close vicinity of present Ity facilities, on both the Exploitation Permit
and Exploration Permit, which comprise the Ity Project. The company considers that
additional resources could be defined and potentially provide additional feed for the Heap
Leach operation to extend its life by 2 to 3 years and also to increase the CIL project mineral
resources and mineral reserves base.

A follow-up exploration program aiming at achieving this target and consisting of

approximately 25,000m of drilling (80% diamond/ 20% RC drilling) has therefore been
proposed for the Ity Project. This program is designed to maximize the opportunity to expand
the potential of known deposits and for discovery of new zones of gold mineralization for the
minimum exploration expenditures in the shortest time frame. The total exploration budget to
complete most of the required work is estimated to be roughly USD 5.5M. This program is
scheduled to begin in Q4 2015 and to be completed within 9 to 12 months

Metallurgy - Heap Leach - a Site visit and review if the Heap Leach operations was
scheduled for 14-17 September 2015. Recommendations for any improvement of the current
operations will be addressed in the site visit report to be completed at the end of September
2015.

Metallurgy CIL - The mining plan shows that, while most of the planned plant feed was
tested, some geological facies have not been tested during the PFS stage. These facies
should be tested to confirm the adequacy of the currently developed process.

Additional mineralogical and metallurgical test work is also required to firm up the process
flowsheet that has been developed. The additional test work will allow determination of
optimum operating parameters (final grind, reagent consumption, etc.) in order to minimize
CAPEX and OPEX.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 243

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Additional rheology and settling testwork is also recommended for equipment selection sizing
and design, as there are wide variability characteristics in the various facies

The increase in mineral resources of the sulphide facies (particularly in the Daapleu deposit)
may warrant to investigation of the pressure oxidation process (POX) for these sulphidic
facies. Pressure oxidation followed by POX product cyanidation along with the flotation
tailings stream, are very likely to produce higher gold recovery than the direct cyanidation of
the ore. However the additional CAPEX and OPEX need to be investigated and evaluated to
demonstrate the economics.

Mineral Reserves - It is recommended, at the next stage of technical reporting, that a more
detailed scheduling exercise be undertaken to determine the optimal scenario for feeding ore
from the various pits and stockpiles to the mill, particularly with the different types of ore
coming from the pits (hard vs. soft vs. sulphides). This should be done using mine scheduling
software such as Minesight MSSO or Geovia Minesched.

A more detailed pit phasing plan for Zia and Daapleu should also be carried out in future
studies of the project as these pits have the potential to bring higher grade material to the mill
earlier in the production schedule, especially Daapleu.

Tailing Storage Facility - At next phase of the work, an optimization of the TSF in terms of
location, dam alignment and footprint will need to be carried out. The validation and the
design of TSF should consider key issues such as geotechnical investigation, construction
material sourcing, construction staging, stability, settlement, spillway and liner design.

Water Management - During the next phase of the study, significant work will be required to
optimize the design diversion of Cavally River and minimize the environmental and social
impacts. The work foreseen includes:

 Optimization of the diversion alignment

 Hydrology and Hydraulic studies of the diversion
 Geotechnical design of the diversion channel and related bridge
 Assessment of impact of diversion on current river flow system and flooding pattern

Geotechnical - During the next phase, the following should be carried out:

 A geotechnical investigation program for all proposed pits to obtain the geotechnical
information required for the Definitive Feasibility Study (DFS) level open pit slope
design. This will include drilling inclined holes with core orientation at selected locations
especially for pits located at east of Cavally River. The design of pit slopes based on
the findings of the above investigation program should be re-assessed.
 A geotechnical field investigation for all infrastructure including TSF, process plant,
Cavally River diversion, perimeter protection dykes, bridge, access roads, waste rock
dumps, etc.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 244

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 Hydrogeology - Considering the proximity of the Cavally River from certain deposits, it is
strongly recommended to perform water pumping test to better define the dewatering
requirement and the risk associated with hydrogeology. An extensive site-wide
hydrogeological investigation program including pumping test at selected locations to collect
groundwater data required for the design of an effective pit dewatering program for each pit
should be carried out.

Geochemistry - During the DFS, a geochemical characterization of the waste rock, tailings
and potential aggregate material should be carried out. This will confirm is the material are
acid generating or not and provide the basis for the design of various facilities required for
management of such material.

Environmental - Considering that three different SEIAs were carried out for the expansion
project (CIL operations), we recommend that the results (cumulative impacts) pertaining to the
integrated SEIA be presented to interested parties (mainly local communities).

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 245

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
27 REFERENCES

2D CONSULTING, 2015. Études d’impact environnementale et social (EIES) – Project

d’exploitation des gisements aurifières de Ggeitouo et de Daapleu dans le département
de Blolequin de SMI. Final version. 21p.

AGTS, 2011.Plan de réhabilitation du site minier - Société des Mines d’Ity (SMI). 26p.

AMIREAULT, S, 2006. ITY Mine, Ivory Coast – Technical Report. Geo-Habilis – Multiple
pagination.

Body K J.and Whittaker .W 2014. Exploration Projects Ity Mine, Ivory Coast, Mineral
Resource Estimation, Coffey, Johannesburg South Africa, 31 July 2014

Body, K.J.2014. Exploration Projects Ity Mine Site Visit Memo, Coffey, Johannesburg South
Africa

Bosc R and Falleau N.2014. Gisement d’or de Mont Ity Estimation de Ressource.Arethuse
Geology Sarl, Aix-en-Provence, France.25 March 2014

Danjou, B.and Furic, R., 2014. Rapport de campagne de forage AC 2013-2014, SMI Abidjan
April 2014.Projet Teckraie – Mines d’Ity, Côte d’Ivoire

Douceré, M and Bosc, R. 2013. Gisement d’Or de Gbeitouo, Estimation des Ressource.
Arethuse Geology Sarl, Aix-en-Provence div.Les Milles, France. 27 November 2013

Douceré, M and Bosc, R. 2013. Mines d’Ity, Revue Ni43-101 – Février 2013, Forage
exploration 2013. Arethuse Geology Sarl, Aix-en-Provence div.Les Milles, France. 24
April 2013

Douceré, M and Bosc, R. 2013. Mines d’Ity, Revue Ni43-101 - Octobre 2013, Forage
exploration 2013. Arethuse Geology Sarl, Aix-en-Provence div.Les Milles, France. 11
December 2014

Douceré, M and Bosc, R. 2014. Gisement d’Or de Walter, Estimation des Ressource.
Arethuse Geology Sarl, Aix-en-Provence div.Les Milles, France. 20 June 2014

ENVITECH-CI SARL, 2013. Campagne d’analyse environnementale de la mine d’or d’Ity.

59p. and appendices.

Febvey, M_C.and Bottero, S., 2013. Rapport de campagne de forage 2013 Prospect Aires

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 246

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 (PE26) – Mines d’Ity, Côte d’Ivoire, SMI Abidjan

http://www.lamancha.ca/en/news/2006/la-mancha-closes-transaction-creating-internationally-
diversified-gold-producer

http://www.lamancha.ca/en/news/2014/la-mancha-gains-majority-interest-in-its-ivoirian-ity-
mine

Islip, L., 2014. Aires Leachpad Resources La Mancha internal memorandum February 2014

Kone, M and Furic, R., 2014. Rapport de campagne de forage 2013 Prospect DAAPLEU
(PR61) – Mines d’Ity, Côte d’Ivoire

Milesi, J.P., Feybesse, J.L., Ledru, P., Dommanget, A.,Ouedraogo, M.F., Marcoux, É.,
PROST, A., Vinchon, C., Sylvain, J.P., Johan, V., Tegyey, M., Calvez, J.Y.et LAGNY,
P., 1989. Les minéralisations aurifères de l’Afrique de l’Ouest. Chronique de la
Recherche Minière, v497: 3-98.

Mudau, M.2015. Site Visit to the SMI’s Exploration Projects and Ity Mine, Ivory Coast, Coffey,
Johannesburg, South Africa

ROCHE, 2013. Étude d’impact environnementale et social du projet de construction d’une

usine de traitement de minerai de type CIL sur le permis d’exploitation PE26 de la Mine
d’or d’Ity – Société des Mines d’Ity. 339p.

SMI, 2000.Plan de management environnemental – rapport interne.29 p.

SMI, 2013. Étude de faisabilité pour le renouvellement du permis d’exploitation PE26.152p.

and appendices.

SMI, SERVICES ENVIRONNEMENT, 2008. Réaménagement du site minier d’Ity – Période

2005-2014.43 p.

SNC 2015.SMI CIL GOLD PROJECT - PREFEASIBILITY STUDY.SNC Lavalin, Quebec

Canada, 23 February 2015.

SYSTÊMES GEOSTAT INTERNATIONAL INC., 2008. Preliminary Feasibility Study and

Certification of Reserves of the Ity Mine.59 p.and appendices.

SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 247

Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 CERTIFICATE OF AUTHOR
Kathleen Jane Body
Coffey Mining (South Africa) (Pty)
604 Kudu St, Allen’s Nek, Roodepoort 1737, Gauteng, South Africa

I, Kathleen Jane Body, Pr.Sci.Nat., do hereby certify that:

1. I am Principal Resource Geologist employed by Coffey Mining (South Africa) (Pty) Ltd (the
“Company”) at Roodepoort, South Africa since April 2006.
2. I graduated with a Bachelor of Science, Arts and Sciences degree from the University of
Massachusetts, Amherst Mass, USA in 1986 and a Graduate Diploma in Engineering (Mining-
Geostatistics) in 2010 from the University of the Witwatersrand, Johannesburg, South Africa
3. I am a Professional natural scientist registered with the South African Council for Natural
Scientific Professions (Pr.Sci.Nat.).- Registration Number 400071/07 - and have practiced my
profession for total 20 years since 1986.
4. I have been employed as a geologist in different positions with Goldfields of South Africa (now
Goldfields Ltd.) and the Company. I have 20 years of experience in exploration, evaluation and
mineral resource estimation of gold deposits of the placer (Witwatersrand) and African
“greenstone” type. I also have 10 years’ experience in evaluation and estimation of carbonate-
hosted deposits for precious metals (Au), base metals (Co, Cu, Pb, Zn, Ag, Au) and industrial
minerals.
5. I have read the definition of “Qualified Person” in National Instrument 43-101 (“NI 43-101”) and
certify that by reason of my education, membership in a professional association (within the
meaning given to this term in NI 43-101) and past relevant professional experience, I fulfill the
requirements to be a “Qualified Person” for the purposes of NI 43-101.
6. I am a co-author of the technical report titled “Technical Report for the Ity Gold Mine, Côte
d’Ivoire, West Africa” (the “Technical Report”), with an effective date of July 31, 2015. I am
responsible for Sections 1-5, 6.1-6.7,6.10, 7-9, 14.1-14.6, 14.9, 18.1, 23-27 of the Technical
Report and I am the lead Qualified Person for this Technical Report.
7. I have visited the Ity Mine from May 20-28, 2014.
8. I have had no prior involvement with the property that is the subject of this Technical Report,
other than in connection with the preparation of the mineral resource estimates which are
contained in this Technical Report.
9. I am independent of the Issuer applying all of the tests set out in Section 1.5 of the National
Instrument 43-101.
10. I have read NI 43-101, NI 43-101CP and Form 43-101F1, and I hereby certify that the parts of
the Technical Report I am responsible for were prepared in compliance with the requirements of
NI 43-101, NI 43-101CP and Form 43-101F1.
11. As of the effective date of the Technical Report, to the best of my knowledge, information and
belief, the parts of the Technical Report I am responsible for contain all scientific and technical
information that is required to be disclosed to make the Technical Report not misleading.
12. I consent to the filing of the Technical Report with any stock exchange and other regulatory
authority and any publication by them for regulatory purposes, including electronic publication in
the public company files on their websites accessible by the public, of the Technical Report.
th
Dated at Roodepoort, South Africa this 30 day of September, 2015.

Kathleen Jane Body, Principal Resource Geologist

B.S. Arts and Sci.(Geology), GDE(Mining)., Pr.Sci.Nat.

419897 v1
 Certificate of Author
Mpfariseni Mudau
Coffey Mining (South Africa) (Pty)
604 Kudu St, Allen’s Nek, Roodepoort 1737, Gauteng, South Africa

I, Mpfariseni Mudau, Pr.Sci.Nat., do hereby certify that:

1. I am a Resource Geologist employed by Coffey Mining (South Africa) (Pty) Ltd (the “Company”)
in Roodepoort, South Africa since November 2011.
2. I graduated with a Bachelor of Science with Honours (Geology) degree from the University of
Venda, Thohoyando, South Africa in 2006 and a Masters of Science Degree in Engineering
(Mining-Geostatistics) from the University of the Witwatersrand, Johannesburg, South Africa in
2014.
3. I am a Professional natural scientist registered with the South African Council for Natural
Scientific Professions (Pr.Sci.Nat.).- Registration Number 400305/12 - and have practiced my
profession continuously since 2006.
4. I have been employed as a Resource Geologist in different positions with Anglo American,
Caracle Creek International Consulting, Nkwe Platinum and the Company. I have 9 years of
experience in exploration and mining, including evaluation and mineral resource estimation of
gold deposits in South Africa (Cooke 4 and Drd Surface Operations), greenstone deposits in
Zimbabwe (Tabamali), Zambia (Matala), Mali (Barani) and Ivory Coast (Mt Ity).
5. I have read the definition of “Qualified Person” in National Instrument 43-101 (“NI 43-101”) and
certify that by reason of my education, membership in a professional association (within the
meaning given to this term in NI 43-101) and past relevant professional experience, I fulfill the
requirements to be a “Qualified Person” for the purposes of NI 43-101.
6. I am a co-author of the technical report titled “Technical Report for the Ity Gold Mine, Côte
d’Ivoire, West Africa” (the “Technical Report”), with an effective date of July 31, 2015. I am
responsible for Sections 10.1-10.4, 11.1-11.4, 11.5.1-11.5.3, 11.6, 12.1-12.3.6 and 12.4 of the
Technical Report.
7. I have visited the Ity Mine from April 12 – 21, 2015.
8. I have had no prior involvement with the property that is the subject of this Technical Report,
other than in connection with the preparation of the mineral resource estimates which are
contained in this Technical Report.
9. I am independent of the Issuer applying all of the tests set out in Section 1.5 of the National
Instrument 43-101.
10. I have read NI 43-101, NI 43-101CP and Form 43-101F1, and I hereby certify that the parts of
the Technical Report I am responsible for were prepared in compliance with the requirements of
NI 43-101, NI 43-101CP and Form 43-101F1.
11. As of the effective date of the Technical Report, to the best of my knowledge, information and
belief, the parts of the Technical Report I am responsible for contain all scientific and technical
information that is required to be disclosed to make the Technical Report not misleading.
12. I consent to the filing of the Technical Report with any stock exchange and other regulatory
authority and any publication by them for regulatory purposes, including electronic publication in
the public company files on their websites accessible by the public, of the Technical Report.
Dated at Roodepoort, South Africa this 30th day of September, 2015.

Mpfariseni Mudau, Resource Geologist

BSc (Hons)(Geology), MSc Eng (Mining)., Pr.Sci.Nat.

419892 v1
 Turnberry Projects
(Pty) Ltd
Registration No. 1993/003160/07

CERTIFICATE OF AUTHOR
I, Gordon Ian Cunningham, Principal Metallurgical Engineer, do hereby certify that:
1. I am a Director and Principal Metallurgical Engineer employed by Turnberry Projects (Pty) Ltd (the
“Company”) at Johannesburg, 2092, South Africa since January 2002.
2. I graduated with a Bachelor of Engineering, Chemical Engineering from the University of
Queensland, Brisbane, Queensland, Australia in 1975.
3. I am a member in good standing of the Engineering Council of South Africa and am registered as a
Professional Engineer – Registration No. 920082. I am a Fellow in good standing of the South
African Institute of Mining and Metallurgy – Membership No. 19584 - and have practiced my
profession continuously since 1975.
4. I have worked as a Metallurgist in production for a total of 20 years since my graduation from
university. I have worked as a Consulting Metallurgist for 5 years and a Turnberry Projects for 15
years as a Project and Principal Engineer and Director, primarily associated with mining and
metallurgical projects. I have worked on the following Gold Mines, Libanon, Venterspost, East
Driefontein, Vlakfontein, Kloof, Leeudoorn, Deelkraal (all in South Africa) and Tarkwa (West Africa).
I have consulted to Tarkwa as well as Kusasalethu, Doornkop, ERPM and Evander (also in South
Africa) and Navachab in Namibia, Tasiast in Mauritania, Nimini in Sierra Leone, Twangiza and
Namoya in Democratic Republic of Congo and Luiri in Zambia.
5. I have read the definition of “Qualified Person” in National Instrument 43-101 (“NI 43-101”) and
certify that by reason of my education, membership in professional associations (within the
meaning given to this term in NI 43-101) and past relevant professional experience, I fulfill the
requirements to be a “Qualified Person” for the purposes of NI 43-101.
6. I am a co-author of the technical report titled “Technical Report for the Ity Gold Mine, Côte d’Ivoire,
West Africa” (the “Technical Report”), with an effective date of July 31, 2015. I am responsible for
Sections 13.1 and 17.1 of the Technical Report.
7. I have had no prior involvement with the property that is the subject of this Technical Report, other
than in connection with the preparation of the mineral resource estimates which are contained in
this Technical Report.
8. I am independent of the Issuer applying all of the tests set out in Section 1.5 of the National
Instrument 43-101.
9. I have read the NI 43-101, NI 43-101CP and Form 43-101F1, and I hereby certify that the parts of
the Technical Report I am responsible for were prepared in compliance with the requirements of NI
43-101, NI 43-101CP and Form 43-101F1.
10. As of the effective date of the Technical Report, to the best of my knowledge, information and
belief, the parts of the Technical Report I am responsible for contain all scientific and technical
information that is required to be disclosed to make the Technical Report not misleading.
11. I consent to the filing of the Technical Report with any stock exchange and other regulatory
authority and any publication by them for regulatory purposes, including electronic publication in the
public company files on their websites accessible by the public, of the Technical Report.
Dated at Randburg, South Africa this 30th day of September, 2015.

Gordon Ian Cunningham, Pr Eng.

Principal Metallurgical Engineer

No.8, Sixth Avenue, Melville, Johannesburg, South Africa. Email: [email protected]

PO Box 2199, Rivonia, 2128, South Africa Tel: +27 (0)11 726 1590 Fax: +27 (0)86 607 5125 Cell: +27 (0)83 263 9438
_________________________________________________________________________________________________________
Director: G.I.Cunningham
SMI Gold Projects, Côte d’Ivoire – JSMI02 Page 1
Technical Report for the Ity Gold Mine, Côte d’Ivoire, West Africa
 CERTIFICATE OF QUALIFIED PERSON
Patrick Perez
SGS Canada
10 boulevard de la Seigneurie Est, Suite 203 Blainville, Quebec, Canada J7C3V5

I, Patrick Perez, P.Eng., residing at 4415 Earnscliffe Avenue, Montreal, Quebec, Canada H4A 3E9, do hereby certify
that:
1. I am a Senior Mining Engineer employed by SGS Canada (the “Company”) at Blainville, Quebec, Canada
since September 2015.
2. I graduated with a Master’s degree in Geological Engineering from Ecole Nationale Superieure de
Geologie de Nancy, France in 2003.
3. I have been employed as a mining engineer since my graduation in 2003 and have held different
positions with several companies, including Societe Miniere Georges Montagnat (Etoile du Nord Mine,
Tontouta Property, Hikone Property), Areva (Somair Mine, Cominak Mine, McArthur River and Cigar Lake
Mines), Rio Tinto (IOCC Property), La Mancha (Ity Mine, Hassai Mine, Frogs Leg Mine and White Foil
Mine) and the Company, and in different commodities and geological environments, including lateritic
and saprolitic orebodies (Nickel and Gold), Uranium, Iron Ore, and Gold. I have over 12 years of
experience as a mining engineer.
4. I am a Professional Engineer licensed by the Association of Professional Engineer and Geoscientists of
Saskatchewan - Membership Number #16131 - and have practiced my profession on a continuous basis
for a period of 12 years.
5. I have read the definition of “Qualified Person” in National Instrument 43-101 (“NI 43-101”) and certify
that by reason of my education, membership in a professional association (within the meaning given to
this term in NI 43-101) and past relevant professional experience, I fulfill the requirements to be a
“Qualified Person” for the purposes of NI 43-101.
6. I am a co-author of the technical report titled “Technical Report for the Ity Gold Mine, Côte d’Ivoire,
West Africa” (the “Technical Report”), with an effective date of July 31, 2015. I am responsible for
Sections 4.4, 15.1, 16.3, 19, 21.1, and 22 of the Technical Report.
7. I have visited the Ity Mine most recently from October 6 -15, 2014.
8. I have had no prior involvement with the property that is the subject of this Technical Report, other than
in connection with the preparation of this Technical Report and in the course of my work for La Mancha
as a Group Mining Engineer from June 2014 to July 2015.
9. I am independent of the Issuer applying all of the tests set out in Section 1.5 of the National Instrument
43-101.
10. I have read NI 43-101, NI 43-101CP and Form 43-101F1, and I hereby certify that the parts of the
Technical Report I am responsible for were prepared in compliance with the requirements of NI 43-101,
NI 43-101CP and Form 43-101F1.
11. As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the
parts of the Technical Report I am responsible for contain all scientific and technical information that is
required to be disclosed to make the Technical Report not misleading.
12. I consent to the filing of the Technical Report with any stock exchange and other regulatory authority
and any publication by them for regulatory purposes, including electronic publication in the public
company files on their websites accessible by the public, of the Technical Report.
th
Dated at Montreal, Canada, this 30 day of September, 2015.

Respectfully Submitted,

Patrick Perez, P.Eng.

419899 v1