Agata DSO Feasibility Study August 30 2013 Report

TVI Resource Development (Phils) Inc.
Technical Report for the

Agata North Nickel Laterite DSO Project, Mindanao, Philippines
30 August 2013
AGNDSO-TR-30 August 2013

Title Page
The “Technical Report for the Agata North Nickel Laterite DSO Project, Mindanao, Philippines” (Technical
Report) is produced at the request of Mr Jake Foronda, VP Operations of TVI Resources Development
(Phils) Inc. (TVIRD). The Project includes the development, mining and direct shipping of high iron
limonite ore at the Agata North nickel laterite deposit which is located in an established mining district of
Surigao in Northern Mindanao in the Philippines.
Independent Qualified Persons:
Mark Gifford M.Sc. (Hons), FAusIMM, Geological Consultant
Dallas Cox, B.Eng (Mining), MAusIMM(CP), Principal Consultant of Crystal Sun Consulting Limited (CSC)
Michael Conan-Davies, BSc (Hons) Geology, MSc Mineral Economics, MAusIMM(CP), Director of MCD
Geo Pty Ltd
Effective Date:
30 August 2013
Submitted to:
TVI Resources Development (Phils) Inc.
Distribution:
Jake Foronda, TVI Resources Development (Phils) Inc.
Clifford M. James, TVI Pacific Inc.
AGNDSO-TR-30 August 2013 i

Table of Contents
1 Summary 6
1.1 Description of Property 6
1.2 Location 6
1.3 Project Ownership 7
1.4 Seismicity 7
1.5 Geology and Mineralisation 8
1.6 Deposit type 9
1.7 Exploration 9
1.8 Mineral Resource Estimate 10
1.9 Mineral Reserve Estimate 11
1.10 Mining 12
1.11 Investigations 13
1.12 Direct Shipping Operations 14
1.13 Port Loading Facility location 15
1.14 Environment and Community 16
1.15 IFC Performance Standards on Social and Environmental Sustainability 16
1.16 Philippine Environmental Impact Statement System 16
1.17 Environment Inputs and Controls 17
1.18 Social and Community 17
1.19 Economic Analysis 17
1.20 Capital Costs 18
1.21 Operating Costs 19
1.22 Sensitivity Analysis 19
2 Introduction 21
2.1 For Whom the Report Has Been Prepared 21
2.2 Purpose of the Report 21
2.3 Sources of Information 21
2.4 Scope of Personal Inspections 21
3 Reliance On Other Experts 22
3.1 Ownership and Land Tenure 22
3.2 Statutory Fees and Taxation Information Statutory Fees and Taxation Information22
3.3 Environmental Baseline Study 22
4 Property Description and Location 23
4.1 Location 23
4.2 Land Tenure 24
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography 25
5.1 Topography 25
5.2 Accessibility 26
5.3 Climate 26
6 History 28
7 Geological Setting and Mineralisation 29
7.1 Introduction 29
7.2 Geological Setting 30
8 Deposit Types 32
9 Exploration 34
10 Drilling 35
10.1 BHP-Billiton (2006) 35
10.2 MRL phase 1 (2007) 36
10.3 MRL phase 2 (2007/08) 36
AGNDSO-TR-30 August 2013 ii

10.4 MRL phase 3 (2008) 36
10.5 MRL phase 4 (2010) 36
11 Sample Preparation, Analyses and Security 38
11.1 Sampling Method and Approach 38
11.2 MRL sampling protocols 38
11.3 MRL core sampling 38
11.4 Sample Preparation, Analysis and Security 40
11.5 Laboratory protocols 41
11.6 McPhar Geoservices (Phil.), Inc. 41
11.7 Intertek Testing Services Phils., Inc. 42
11.8 Internal check assays (McPhar and Intertek) 42
11.9 External check assays (MRL) 43
11.10 Nickel standards 43
11.11 Field duplicates 44
11.12 Coarse rejects 45
11.13 Pulp rejects analysed by primary laboratory 47
11.14 Pulp rejects analysed by umpire laboratory 48
11.15 Summary 48
12 Data Verification 49
12.1 Data Verification 49
12.2 Bulk density determinations 50
13 Mineral Processing and Metallurgical Testing 53
14 Mineral Resource Estimate 54
14.1 Geometric Interpretation 54
14.2 Exploratory Data Analysis 56
14.3 Variography and Estimation 62
14.4 Resource Classification 68
14.5 Interpretation and Conclusions 74
15 Mineral Reserve Estimate 76
15.1 Introduction 76
15.2 Pit Optimisation 76
15.3 Pit Design Parameters 76
15.4 Mineral Reserves 77
16 Mining Methods 78
16.2 Site preparation 78
16.3 Grade control 78
16.4 Excavation and Haulage 78
16.5 Ore Stockpiling and Drying 79
16.6 Topsoil and Overburden Disposal 79
16.7 Road Sheeting 79
16.8 Fleet selection 79
16.9 Ore Haulage 80
16.10 Drainage and sediment control 80
16.11 Environment and rehabilitation 80
17 Recovery Methods 82
17.2 Port Loading Facility 82
17.3 Design basis 82
17.4 Design concepts 82
17.5 Location 82
17.6 Design criteria 83
AGNDSO-TR-30 August 2013 iii

17.8 Assay Laboratory 90
17.9 Design Basis 90
17.10 Buildings 92
17.11 Power, Water and Utilities 93
18 Project Infrastructure 94
18.2 Infrastructure Study 95
18.3 Transport Infrastructure 96
18.4 Road summary 96
18.5 Access roads 96
18.6 Site roads 97
18.7 Water Supply 99
18.8 Power 100
18.9 General Service Buildings and Ancillary Facilities 101
18.10 Buildings 101
18.11 Base Camp accommodation 102
18.12 Buildings 103
18.13 Base Camp services 106
18.14 Construction camp 106
18.15 Water 107
18.16 Sewerage 107
18.17 Communications & IT Summary 107
18.18 Radio communications 107
18.19 Conventional multi service network 107
19 Market Studies 108
19.1 Recent History of DSO 108
19.2 Recent high iron DSO Market Situation 109
19.3 Forecast Iron Market Situation 111
19.4 High Iron DSO off takers 111
19.5 DSO Sales Agreement 112
20 Environmental Studies, Permitting, and Social or Community Impact 114
20.1 Overview 114
20.2 Regulatory Requirements 116
20.3 Environmental and Social Baseline Studies 119
20.4 Land Resources 120
20.5 Water Resources 128
20.6 Air Quality, Climate and Noise 143
20.7 Conservation Values 145
20.8 Social and Community Issues and Effects 152
20.9 Closure Plans 157
21 Capital and Operating Costs 160
21.1 Scope of Estimate 160
21.2 Accuracy of Estimate 160
21.3 Summary of Capital Cost Estimate 160
21.4 Exclusions 161
21.5 Summary of Operating Cost Estimate 161
21.6 Operating cost estimate 161
21.7 Mining operating cost estimate 165
21.8 Exclusions 165
22 Economic Analysis 166
22.2 Economic Model Input Parameters 166
22.3 Capital Costs 167
22.4 Operating Costs 167
AGNDSO-TR-30 August 2013 iv

22.5 Life of Mine Project Financials 169
22.6 Sensitivity Analysis 172
23 Adjacent Properties (MRL) 174
24 Other Relevant Data and Information 175
24.1 Mine Operating Costs 175
24.3 Operating hours 175
24.4 Equipment productivity 175
24.5 Site Preparation 177
24.6 Mining Operations 177
24.7 Barging Costs 177
24.8 Environment and rehabilitation 179
24.9 Manning 179
24.10 Equipment requirements 181
24.11 Equipment hours Equipment hours 181
24.12 Mining Schedule 181
25 Interpretations and Conclusions 185
25.1 Geological Setting and Mineralisation 185
25.2 Drilling 185
25.3 Sample Preparation, Analyses and Security 185
26 Recommendations 187
26.1 Geological Setting and Mineralisation 187
26.2 Drilling 187
26.3 Sample Preparation, Analyses and Security 187
26.5 Mining 187
26.6 Integrated Mining Study 188
26.7 Permitting 188
27 References 189
AGNDSO-TR-30 August 2013 v

1 Summary
1.1 Description of Property
1.2 Location
The Agata North Nickel Laterite DSO Project (ANDP) is located within the northern part of
Agusan del Norte province in Northeastern Mindanao, Republic of the Philippines. It lies within
the Western Range approximately 10 km south of Lake Mainit. The Project falls within the
political jurisdiction of the municipalities of Tubay, Santiago and Jabonga. The Project is located
o
47 km north of Butuan City and 73 km south of Surigao City. The ANDP is centred at 125 32’,
o
9 17’.
Figure 1: Project Location
AGNDSO-TR-30 August 2013 6

1.3 Project Ownership
TVI Pacific Inc. (TVI) is a publicly-traded Canadian company that, through affiliate TVI Resource
Development (Phils.), Inc. (TVIRD), is focused on the production, development, exploration and
acquisition of resource projects in the Philippines. TVI produces copper and zinc concentrates
from the Canatuan mine, is in pre-development at the Balabag gold and silver project, and is
carrying out exploration programs on other North Zamboanga tenements. TVI also has an
interest in an offshore Philippine oil property.
MRL Nickel Philippines, Inc (MRL) is a Philippine subsidiary of Mindoro Resources Limited
(Mindoro); a company incorporated in Alberta, Canada which is are listed on the TSX Venture
Exchange (as MIO), the Australian Securities Exchange (as MDO) and the Frankfurt Stock
Exchange (as WKN 906167). MRL, formerly as MRL Gold Philippines, Inc has been working in
the Philippines since 1997 in partnership with various Philippine companies. MRL entered into
an agreement in 1997 with Minimax Mineral Exploration Corporation (Minimax) on several
projects in the Philippines. MRL subsequently generated 20 porphyry copper-gold prospects, 5
epithermal gold prospects and five nickel laterite prospects, which are at various stages of
evaluation of development.
TVI announced in July 2012 that it has entered into a Heads of Agreement (HOA), dated July 6,
2012, which set out the terms of various proposed transactions with Mindoro. The proposed
transactions consisted of a loan to, investment in, and joint ventures with, Mindoro (or
affiliates/subsidiaries of Mindoro). The joint ventures involve TVIRD.
Under the HOA, TVI, through its affiliate TVIRD, has the exclusive right or option to enter into
joint venture arrangements with Mindoro (and its affiliates) with respect to the Agata North
Nickel Laterite DSO Project (ANDP) and the Pan de Azucar Project. The HOA provides that all
joint ventures entered into between TVIRD and Mindoro will be operated by TVIRD and will be
overseen by a management committee that includes representatives of TVI and Mindoro in
proportion to their joint venture interests (provided that during the earning period of the joint
ventures, TVIRD will control each management committee).
The HOA contemplates that stage one of the proposed TVIRD joint venture will involve a direct
shipping ore (DSO) operation. TVIRD is required to fund 100% of the required expenditures to
enable the project to advance the DSO operation, upon the completion of which TVIRD is to
earn a 60% interest in the DSO operation (subject to a minimum expenditure of $2 million within
12 months of the joint venture agreement and DSO operations having commenced within three
years of the date of that agreement).
Mindoro will retain a 15% interest in the Agata Joint Ventures and has an Option Agreement
over the remaining 25% interest held by private Philippines company Minimax Mineral
Exploration Corporation.
The Agata nickel laterite deposit is secured by the Mineral Production Sharing Agreement
MPSA 134-99-XIII and Exploration Permit EP 00021-XIII registered to Minimax and Estrella
Bautista respectively. Application has also been made for the Agata Extension EP 107-XIII to
the south and east of the Agata MPSA. The MPSA is a form of Mineral Agreement for which the
government grants the contractor exclusive right to conduct mining operations within, but not
title over, the contract area during a defined period. An Exploration Permit (EP) is an initial
mode of entry in mineral exploration allowing a Qualified Person to undertake exploration
activities for mineral resources in certain areas open to mining in the country.
1.4 Seismicity
Mindanao is located in the southern portion of the Philippine Archipelago. Two main fault
systems: the Philippine Fault and Mindanao Fault and hundreds of fault splay and lineaments

criss-cross the region. The Philippine Trench borders the eastern side of the archipelago and
the Philippine Fault traverses the Philippines in a north-west direction. The presence of tectonic
structures within and around Mindanao accounts for intense seismic activities in the island.
At the proposed project site, ground shaking effects on the rock and soil components are
estimated to yield Peak Ground Acceleration (PGA) values ranging from 0.38g in rock and
0.87g in soft soil.
1.5 Geology and Mineralisation
The Agata North lateritic nickel resource in the Philippines forms part of the resource base of
MRL and has been under active exploration by this company since 1997, with the first lateritic
nickel resource drilling program completed in 2006. This is the fourth mineral resource estimate
for the ANDP located within the northern areas of Mindanao, the southernmost Island within the
Philippines (Figure 2).
Figure 2: Map of the Philippines Showing MRL Project Areas Mineralisation
Nickeliferous laterite deposits in the Agata area are a series of mineralised plateaus along the
western range of the Surigao region of Mindanao. They form specific terrains within the range
atop of the predominant underlying ultramafic rocks.
The laterites have been developed over ultramafic rocks that lie along the Western Range and
are variably mineralized. The rock types within the ultramafics are harzburgite, serpentinised

harzburgite, peridotite, serpentinised peridotite, pyroxenite, serpentinised pyroxenite,
serpentinite with localised lenses of dunite or serpentinised dunite.
Nickel laterites are the products of intense chemical weathering of the ultramafic rocks,
especially the olivine-rich varieties like harzburgite and dunite. The high rainfalls and intense
weathering breaks down the easily weathered harzburgite and dunite and the more mobile
elements of Mg and Si tend to leave the profile at a much faster rate than the less mobile Fe
and Ni or Co. Thus high Fe laterite and limonite zones overlie the weathered saprolite of the
ultramafic rocks and, where erosion of the upper Fe laterite is low, significant depths of
weathering (>10m) can occur within the saprolitic zone.
Nickel mineralisation is predominantly at the base of the Fe laterite and the top of the saprolite
and in more primary, Mg rich clays (saponite and stevensite) in the ultramafic saprolite. When
weathering is very deep then more Ni can be located in the Fe laterite, but the greatest Ni
enrichment is predominantly within the saprolite of the underlying ultramafic rock near the
contact zone with the Fe laterite.
1.6 Deposit type
The Agata Nickel Laterite deposits located along the western range of the Surigao region,
Mindanao Island all have had significant laterite formation and consequent nickel enrichment.
The mineralisation can occur in both low and high relief terrains with the high relief terrains
generally having lower limonite thicknesses and some exposure of bedrock. The low relief
terrain however has no exposures of bedrock on its hillcrests, with the laterite being well
developed and containing thick and highly mineralised limonite or saprolite and on occasions a
transitional unit. Some boulders occur within the laterite profile and this is predominantly related
to harder residual rocks within the laterite profile.
1.7 Exploration
Lateritic nickel mineralisation was known within the ANDP area since the early 1990s and
grades were confirmed in the development of test pits in 1997. In June 2004, Taganito Mining
Corporation was selected from several interested parties and granted the non-exclusive right to
assess the nickel laterite potential of the ANDP. Taganito carried out two phases of evaluation
and reported encouraging results. Subsequently, MRL elected to allow Queensland Nickel
Phils., Inc. (QNPH) to proceed with a reconnaissance drill program in 2006 under an undefined
option arrangement. QNPH elected not to pursue the opportunity. Subsequently MRL has
conducted four drilling programs, the initial three testing the Agata North nickel laterite only and
the most recent 2010/2011 program also testing regional prospects up to 20 km to the north of
Agata including definition of new resources at Bolobolo and Karihatag, and 5 km to the south of
Agata North at Agata South.
All drilling to date has been completed by the use of small open-hole NQ coring rigs, which are
highly mobile in difficult to access terrain. Recovery from these drill rigs is high, with losses
generally occurring where there are changes in the hardness of the drilled material. A variety of
contractors have been used over time, with the drilling rate being the only variation with regards
to their performance and sampling rate.

1.8 Mineral Resource Estimate
The Agata North nickel laterite deposit has an estimated combined measured and indicated
resource of 33.9M dmt at 1.10% Ni using a cut-off grade of 0.5% Ni for limonite and 0.8% Ni for
saprolite.
Table 1: Agata North Mineral Resource Estimate 1 April 2013

M
Classification Horizon dmt Ni Co Fe Al Mg SiO2 CaO Cr2O3 MnO
Limonite 0.24 1.00 0.11 48.1 3.05 1.0 4.9 0.05 3.58 1.00
Saprolite 0.48 1.19 0.03 11.3 0.39 17.9 41.6 0.32 0.89 0.23
Measured Sub Total 0.72 1.13 0.06 23.5 1.27 12.3 29.4 0.23 1.78 0.49
Limonite 9.76 0.94 0.11 46.3 3.39 1.0 5.1 0.22 3.05 0.90
Saprolite 23.46 1.16 0.03 11.9 0.55 16.5 40.3 0.35 0.91 0.25
Indicated Sub Total 33.22 1.10 0.05 22.0 1.38 11.9 30.0 0.31 1.54 0.44
Limonite 10.00 0.94 0.11 46.3 3.38 1.0 5.1 0.22 3.06 0.90
Saprolite 23.94 1.16 0.03 11.9 0.55 16.5 40.3 0.35 0.91 0.25
Measured +
Indicated Total 33.94 1.10 0.05 22.0 1.38 11.9 30.0 0.31 1.55 0.44
Limonite 0.26 1.08 0.11 44.0 3.25 1.8 10.5 0.06 3.03 0.90
Saprolite 1.83 1.04 0.03 12.4 0.63 16.2 41.5 0.35 0.99 0.26
Inferred Total 2.09 1.04 0.04 16.3 0.96 14.4 37.7 0.32 1.24 0.34

1.9 Mineral Reserve Estimate
The DSO Mineral Reserve is based on the designed pits at Agata North. The general layout of
the DSO pit and facilities is shown in Figure 3.
Figure 3: General layout of the DSO pit and facilities
The Proven and Probable DSO reserves are based on a cut-off grade of 44 Fe%. A 44 Fe%
cutoff was chosen as at this cutoff grade the average grade of Limonite equates to the
marketable shipping grade of 48 Fe% in current and historical high iron DSO markets. The
Proven and Probable DSO Reserves are shown in Table 2.
There is potential to exploit (in the order of +11M dmt) of the saprolite resource using onsite
processing. As the study for this process is still in progress, saprolite ore has not been included
in this reserve base.

Table 2: DSO Mineral Reserves

Classification Horizon M dmt M wmt Ni% Co% Fe% Al% Mg% SiO2%
Proven
Limonite 0.18 0.26 1.00 0.11 47.1 3.0 1.6 5.6
Saprolite
Subtotal 0.18 0.26 1.00 0.11 47.1 3.0 1.6 5.6

Probable
Limonite 6.61 9.44 0.93 0.11 48.3 3.4 0.5 3.0
Saprolite
Subtotal 6.61 9.44 0.93 0.11 48.0 3.4 0.5 3.0

Proven + Probable
Limonite 6.79 9.70 0.93 0.11 48.0 3.4 0.5 3.0
Saprolite
TOTAL 6.79 9.70 0.93 0.11 48.0 3.4 0.5 3.0
1.10 Mining
The primary mining fleet selected consists of 36 tonne hydraulic excavators and 30 tonne
capacity articulated trucks in the pit, hauling to stockpiles on the top of the plateau where it will
be dried and blended. A secondary fleet consisting of front end loaders and 18 tonne capacity
on-highway trucks will be utilised for haulage of ore to the Loading Facility at Payong-Payong.
An ancillary fleet includes dozers, graders and a water truck. A small fleet of excavators, trucks
and dozers has been allocated to ancillary works including site preparation, topsoil stripping,
drainage, rehabilitation and road maintenance works.
Pit areas were split into 100m x 100m mining panels for scheduling. A total of 230 mining
panels at Agata North were scheduled over a life of the DSO project. The mining schedule was
scheduled over quarterly periods with a peak mine production rate of 5,400 bcm per day in Year
2.

Figure 4: Mine production- first 4 years
The DSO Mining Inventory was categorised into 4 limonite material types and blended to meet
iron and nickel grade shipping targets.
The DSO Shipping schedule allows for the ramp-up of throughput over the first 3 years of
operations to 2.5M wmt per annum. Completion of mining was stretched over 10 years to
comply with bureaucratic governmental stipulation for approval, however the margins are
improved over extraction in a 4 year period. DSO production targets are shown in Table 3.
Table 3: DSO Production Targets
YEAR wmt Ni% Fe%

2013 - - -
2014 2,000,000 0.9 48.0
2015 2,500,000 0.9 48.0
2016 1,800,000 0.9 48.0
2017+ 500,000 0.9 48.0
1.11 Investigations
Since 2010 MRL has commissioned numerous studies and site investigations at the Agata
North site.
In 2010 GHD was commissioned to carry out conceptual design and evaluation of the
recommended alignment for road development at Agata North.
In 2010 Philipp’s Technical Consultants Corporation were engaged to carry out detailed
topographic survey at the northern extents of the Agata North deposit.

In 2010 GHD coordinated a geotechnical and geophysics investigations at the proposed
Loading Facility, including the geological and geotechnical profile along the shoreline and into
Payong Payong, depth to rock, suitable founding stratum for the foundations of the proposed
development concept. Four boreholes were drilled at Payong Payong and offshore seismic
investigation extended approximately 1km along the coast and 500m offshore. The seismic
survey was completed by sub-contractors Trinav Surveys.
In 2010 A Hydrographic Survey was carried out by EGB and Associates.
In 2010 GHD was commissioned to carry out a Marine Study which included a port engineering
review and assessment of the preferred port site at Payong Payong, conceptual drawings of the
loading jetty arrangements for barge options, and commentary on the relative merits of different
vessel options.
In 2011 GAIA South completed and Environmental Baseline Study for the entire Agata area.
This report focused on major environmental and social aspects including Land, Water, Air, and
Community. Primary data gathering was accomplished through the conduct of actual survey on-
site. Samples for soils, water, and air were collected for analysis in a DENR-accredited
laboratory. Observation, identification, and documentation of flora and fauna species were
done. Focus Group Discussions and Key Informant Interviews were conducted. Secondary
data collection involved the acquisition of documents from related institutions or agencies such
as the Barangay Offices and Health Centres, Rural Health Units, and Municipal Offices.
In 2013 Philipp’s Technical Consultants Corporation carried out design cost estimates for the
Causeway and Payong Payong Port Facility.
1.12 Direct Shipping Operations
The proposed ore production rate ramps up to 2.5M wmt annually of ferruginous laterite and
limonite ore over the first 3 years. Completion of shipping was stretched over 10 years to
comply with Philippines Mines and Geosciences Bureau (MGB) stipulation for approval for the
Declaration of Mine Production Feasibility for the project, however the margins are improved by
acceleration of operations to complete the DSO project in a 4 year period.
Ore will be transported approximately 3.5km from stockpiles on the plateau to the port at
Payong-Payong and loaded onto 5,000 wmt barges.
The barges will transport the ore to waiting ships for loading. Ship capacity has been estimated
at 50,000 wmt per shipment, but will generally vary between 50,000 - 60,000 wmt per ship. Ore
will be shipped to customers in China. Shipping has been scheduled for 10 months per year
with reduced shipping rates in the wet season in the December and March quarters.

Figure 5: DSO Shipping Schedule - first 4 years
DSO ORE SHIPPED 2013 2014 2015 2016 2017+ TOTAL

M wmt - 2.00 2.50 1.80 0.50 9.70
Ni % - 0.93 0.93 0.90 0.90-0.93 0.93
Co % - 0.11 0.11 0.10 0.10-0.11 0.11
Fe % - 48.0 48.0 48.0 48.0 48.0
Mg% - 0.5 0.9 0.6 0.5-0.8 0.7
Table 4: DSO Shipping Schedule
1.13 Port Loading Facility location
The Port Loading Facility will be situated at Payong-Payong, approximately 3.5km from the ore
stockpile on the plateau. It will consist of a causeway extending approximately 160m offshore.
The design will allow for two barges to be moored and loaded simultaneously with sufficient
space for equipment manoeuvrability. Six mooring dolphins will be provided to moor two
barges.
The core and armour materials used to construct the causeway will consist of locally sourced
rock of suitable sizing.
The causeway will also serve as an unloading area for equipment and supplies transported from
Butuan or Cebu.
A shipping office and assay laboratory will be located adjacent to the Port Loading Facility.

1.14 Environment and Community
The ANDP is planned to eventually develop into an integrated mining and processing project
which will result in some social and environmental impacts. These will require comprehensive
assessment and planning of mitigating measures to ensure they are appropriately managed.
The Company shall implement this in accordance with the International Finance Corporation
Performance Standards on Social and Environmental Sustainability the requirements under
Philippine laws and Best Management Practices.
1.15 IFC Performance Standards on Social and Environmental Sustainability
The Company commits to manage the potential social and environmental impacts in a manner
consistent with the applicable IFC Performance Standards in addition to the requirements under
Philippine laws, regulation, and permits that pertain to social and environmental matters. The
Particular Performance Standards to be referenced include the following:
PS1: Social and Environmental Assessment and Management Systems
PS2: Labor and Working Conditions
PS3: Pollution Prevention and Abatement
PS4: Community Health, Safety and Security
PS5: Land Acquisition and Involuntary Resettlement
PS6: Biodiversity Conservation and Sustainable Natural Resource Management
PS7: Indigenous Peoples
PS8: Cultural Heritage
The Company has committed to a Health, Safety, Environment and Community Policy (HSEC)
document previously developed jointly with the IFC. The Company has also agreed on an
‘Environmental & Social Action Plan’ to cover all HSEC aspects related to exploration activities,
feasibility work and potential future mine development. The Company is also preparing a
Stakeholder Engagement Plan which will describe their strategy and program for engaging with
stakeholders in a culturally appropriate manner.
1.16 Philippine Environmental Impact Statement System
The Philippine Environmental Impact Statement System (PEISS), established through

Presidential Decree (PD) 1586 in 1978, sets a systematic Environmental Impact Assessment
(EIA) System. It requires Environmental Impact Statements (EIS) to be submitted to the
Environmental Management Bureau (EMB) of the Department of Environment and Natural
Resources (DENR) for review, evaluation, and approval. It further stipulates that the President
or his duly authorised representative issues the Environmental Compliance Certificate (ECC) for
a positive review of the EIA Report for Environmentally Critical Projects (ECP) and projects
within Environmentally Critical Areas (ECA). Administrative Order No. 42 specifies that the
DENR Secretary has the power to grant or deny ECCs on behalf of the President and further
designates the EMB Central and Regional Directors as approving authorities for ECC
applications.

1.17 Environment Inputs and Controls
Extensive environmental baseline data for the project area and surroundings is available in
previous studies prepared in support of the Environmental Impact Statement (EIS). Potential
impacts and control/mitigating measures are identified with the EIS. Detailed environmental
controls are further identified in the Environmental Protection and Enhancement Plan (EPEP) as
required by Philippine regulations.
Impacts and controls are divided into five categories: Land Resources, Water Resources,
Noise, Air Quality and Conservation Values. Erosion and Sedimentation are the most prominent
impacts expected throughout the phases of the project. This will require significant attention to
erosion and water management controls.
Secondary impacts and control measures will focus on air quality and noise associated with the
exposure of large surface areas and dust generation. Conservation values associated with the
loss of forested areas and gross lands will also require mitigation and control measures relative
to biodiversity loss.
As required by Philippine regulations, annual environmental protection programs will be

prepared prior to each calendar operation years. In addition to legal environmental management
requirements, IFC protocols will also be included in the annual plans and programs.
A final reclamation and closure plan has also been prepared prior to project implementation.
Costs associated with this program have been identified and a special fund and deposit
schedule will be put into place prior to the start of operations.
1.18 Social and Community
Previous baseline studies have characterized the communities and culture within surrounding of
the project area. These data are also available in the project EIS and supporting documents
included in the social/community characterization are Heritage and Cultural Values, Social
Demographics, Issues and Indigenous Peoples’ issues and Political issues.
Impacts and control strategies are addressed in the Social Development and Management Plan
(SDMP) prepared and approved by the National Government prior to project implementation.
This document identifies impacts, community development strategies and projects to allow
positive community participation. The plans and programs are monitored quarterly and revisions
made accordingly.
1.19 Economic Analysis
The Feasibility Study economic model has confirmed that Direct Shipping of High Iron limonite
ore from the Agata North DSO resource is economically feasible.
The economic analysis using the discounted cashflow (DCF) methodology has been prepared
based on direct shipping high iron limonite ore to customers in China.
The project has an after tax net present value (NPV) of USD 37.9 million, with an internal rate of
return (IRR) of 187% using an 10% discount rate and the mining schedules, capital and
operating costs estimates provided in this report together with and a long term average selling
ore price of USD 22/wmt FOB.
The ANDP is characterised by very strong free cashflow following the initial capital
development. Payback is achieved in the first year of operation.
A summary of the Feasibility Study financial model is presented in Table 5.

Table 5: Summary of Financial Analysis Results
High Iron Limonite DSO sale price USD/wmt 22
NPV (10% discount rate) Post Tax USD M 37.9
Payback Years 1.0
IRR Post Tax % 187%
Accelerating mining and shipping rates to complete the Agata North DSO operations, ideally
over a 4 years period instead of 10 years, increases the NPV of the project by USD 10.2M;
from USD 37.9M to USD 48.1M.
Sensitivity analysis also shows that the project is robust to changes in economic modelling
assumptions. The analysis has identified that the project is most sensitive to factors which
impact on selling price, followed by operating costs. The project is least sensitive to capital cost
estimates.
1.20 Capital Costs
The project capital costs presented in Table 6 were developed by Crystal Sun Consulting
based on information provided by local Philippine service providers and suppliers, and are
expressed in US dollar (USD) values. The base date of the estimate is April 2013.
Table 6: Capital Cost Estimate for ANDP
Capital Costs
Description
(Million USD)
Mobilisation 0.15
Site Preparation 0.04
Road Construction/Upgrading/Widening 1.14
Causeway Construction 2.62
Building Construction 1.89
General Services and Transportation 0.21
Mechanical/Electrical Equipment 0.07
Laboratory and Equipment/Apparatus 0.24
Office Equipment 0.06
Miscellaneous Services 0.20
Subtotal 6.62
Working Capital 2.64

Sustaining Capital 0.95
Subtotal 3.59
Contingency 0.93
VAT Payable (@ 12%) 1.31
Total 12.45

1.21 Operating Costs
Operating costs presented in Table 7 were developed by Crystal Sun Consulting based on
information provided by local Philippine service providers and suppliers, and are expressed in
US dollar (USD) values. The base date of the estimate is April 2013.
Table 7: Operating Cost Estimate
LOM Cost USD /wmt

(Million USD) shipped
Mining & Haulage Cost 33.5 3.45
Ore Drying 6.5 0.67
Stockpile Load & Haulage Cost 16.8 1.73
Barging 21.7 2.24
Roads, Drainage and Rehabilitation 9.7 1.00
G&A 17.9 1.84
Fees & Royalties 7.5 0.78
MPSA Compensation & Rates 3.0 0.31
VAT Payable (@ 12%) 10.9 1.12
TOTAL OPERATING COSTS 127.4 13.14
1.22 Sensitivity Analysis
Sensitivity analysis shows that the project viability is robust to changes in economic modelling
assumptions. The analysis has identified that the project is most sensitive to factors which
impact on volume and DSO selling price, followed by operating costs.
The project is least sensitive to capital cost estimates. The relative sensitivity of the project to
revenue, capital and operating cost estimates is illustrated in the sensitivity chart below.
Figure 6: Sensitivity Analysis

The sensitivity analysis undertaken on the financial model has identified DSO selling price as
the highest risk factor in the financial performance of the ANDP.
A summary of risks identified and strategy to mitigate risk is provided in Table 8.
Table 8: Risk Assessment and Mitigation
Risk Factor Mitigant
Revenue
DSO Selling Price Robust project with significant operating margin
Operating costs and revenue denominated in USD – self

Exchange Rate
hedging
Capital Cost
Contingency Maintain a high level of contingency
Operating Cost
Fees & Compensation Negotiate agreements with federal, provincial and local
jurisdictions
Taxes
Operating margin is currently in excess of 50%, sufficient
Mining Costs risk mitigant built-in
Permitting & Approvals
Mining permitting and access TVI to continue with permitting and land acquisition
Project Delays
Permitting TVI to continue with permitting and land acquisition

Construction Focus on project management
Adequate resourcing for procurement
Weather Maximise production during driest operating conditions

2 Introduction
2.1 For Whom the Report Has Been Prepared
This Technical Report has been prepared at the request of TVI Resources Development (Phils)
Inc. (TVIRD). TVIRD is an affiliate of TVI Pacific Inc. (TVI) is a publicly-traded Canadian
company .
2.2 Purpose of the Report
This Technical Report has been prepared for the sole use of TVIRD to provide TVI with an
estimate of the capital and operating costs to a level of ± 15% for the Agata North Nickel
Laterite DSO Project (ANDP). TVIRD intends to use this report as an input to its decision on the
future of the Project. TVIRD’s reliance on, or use of, this report extends to the whole of the
report and not any part or parts thereof.
2.3 Sources of Information
Three consultants have been involved in the preparation of this report, each acting as
independent qualified persons in their respective areas. Each is listed below with their
respective items of responsibility and sources of information.
2.3.1 Mark Gifford Consulting
Mark Gifford, a geological consultant, is the independent qualified person responsible for
geological and resource estimation aspects of the report.
2.3.2 Crystal Sun Consulting Limited
Dallas Cox of Crystal Sun Consulting (CSC), is the independent qualified person responsible for
supervision of the report, the capital and operating cost estimates, and mine design and
planning aspects of the report.
2.3.3 MCD Geo Pty Ltd
Michael Conan-Davies of MCD Geo Pty Ltd, is the independent qualified person responsible for
the financial modelling aspects of the report.
2.4 Scope of Personal Inspections
2.4.1 Mark Gifford Consulting
Mark Gifford has visited the project area numerous occasions since February 2010, with the last
visit to site in July 2011.
2.4.2 Crystal Sun Consulting
Dallas Cox visited the project area in 2007 (July), 2008 (January and November), 2010 (July,
August and December) and 2011 (January, April and May).

3 Reliance On Other Experts
3.1 Ownership and Land Tenure
Edsel Abrasaldo, President of MRL Nickel Philippines, Inc provided property description,
location, ownership and land tenure information. These are found in Section 4 of this report,
dated 30 August 2013.
3.2 Statutory Fees and Taxation Information Statutory Fees and Taxation Information
Luis Jovito A. Santos Jr, Chief Financial Officer of TVI Resources Development (Phils) Inc.
reviewed the statutory fees and tax information. This information was used in the derivation of
financial metrics found in Section 22 of this report, dated 30 August 2013.
3.3 Environmental Baseline Study
Ebert Bautista, Project Director of Gaia South Inc (Environmental Consultants) completed the
environmental baseline study for the Agata Nickel Project prefeasibility study in 2011. This
baseline study is referenced in Section 20 of the report dated 30 August 2013.

4 Property Description and Location
4.1 Location
The ANDP is located within the northern part of Agusan del Norte province in Northeastern
Mindanao, Republic of the Philippines. It lies within the Western Range approximately 10 km
south of Lake Mainit. The Project falls within the political jurisdiction of the municipalities of
Tubay, Santiago and Jabonga. The Project is located 47 km north of Butuan City and 73 km
south of Surigao City. See Figure 7.
The ANDP’s resources are located in barangays Lawigan and Tinigbasan in the municipality of
Tubay, barangay E. Morgado (formerly Agata) and La Paz in the municipality of Santiago and
barangay Colorado in the municipality of Jabonga, all in the province of Agusan del Norte. The
majority of MRL’s past exploration activities on the Project are located in barangays Lawigan
and E. Morgado. The ANDP is centred at longitude 125° 31’ 9” / latitude 9° 17’ 20”.
The location offers several advantages including proximity to established infrastructure, fresh
water supply from Tubay River, several sources of limestone supply in close proximity,
protected deep ocean access and a short shipping distance to China and other Asian locations.
MRL’s exploration applications total 4,995 hectares.
Figure 7: Project Location

4.2 Land Tenure
The ANDP (including Agata North and Agata South Laterites) was explored under a
Memorandum of Agreement signed on 19 January, 1997 between Mindoro and Minimax
Mineral Exploration Corporation (Minimax), a 100% Filipino company owned by the De Guzman
family of Quezon City and Atty. Roberto San Jose of Manila. The operating rights of Mindoro
under the said MOA were eventually assigned to MRL by virtue of a Deed of Assignment by and
between Mindoro and MRL, dated 27 June, 1997. Minimax granted MRL the right to operate
and conduct exploration activities on its Contract/Permit Areas in Surigao del Norte, Agusan del
Norte, and Iloilo. Through this, MRL acquired the option to earn varying percentages of
economic interest in Minimax’ Projects. Said Agreements were registered with the Mines and
Geosciences Bureau in accordance with the Mining Law of the Philippines.
Minimax applied for a Mineral Production Sharing Agreement with the Mines and Geosciences
Bureau Region XIII, denominated as APSA-XIII-007 (Agata APSA), on 04 July, 1997, covering
an area of 1,620 ha located in the Municipality of Santiago, Agusan del Norte. The mineral
commodities applied for were gold, copper and other minerals. MPSA-XIII-007 was amended on
28 August, 1997 to include additional areas covering 6,480 ha contiguous to the proposed
original area (an increase from 1,620 to 8,100 ha). On 26 May, 1999, The Philippine
Government, represented by Department of Environment and Natural Resources (DENR)
Secretary Antonio H. Cerilles, and Minimax executed MPSA-134-99-XIII (Agata MPSA). This
Agreement covers a total area of 7,679 ha situated in the Municipalities of Jabonga, Santiago,
and Tubay, Province of Agusan del Norte and was registered with the Mines and Geosciences
Bureau Region XIII on 17 June, 1999. On 18 May, 2000, a Notice of Relinquishment for a
portion of the Agata MPSA was issued. 2,684 ha was relinquished from the total contract area
of 7,679 ha retaining 4,995 ha.
The second and third Exploration Periods for the MPSA were July 23, 2004 to July 22, 2006
and February 7, 2007 to February 6, 2009, respectively. The fourth and last Exploration Period
was granted on June 19, 2009 and expired on June 18, 2011. MRL on behalf of Minimax
requested for an extension of the Exploration Period, prior to the expiry, on the grounds that it
was not economically feasible to conduct mining operations on the ANDP during the fourth
Exploration Period. On September 13, 2011, MGB-CO approved the extension for another two
(2) years. However, it required MRL/Minimax to submit a Declaration of Mining Project
Feasibility on or before the fifth Exploration Period’s expiry on September 12, 2013. Since the
first Exploration Period in 1999, submission of all quarterly and annual accomplishment reports
and quarterly drilling reports, and the payment of the mandated occupation fees, were
accomplished by MRL on behalf of Minimax.

5 Accessibility, Climate, Local Resources, Infrastructure and Physiography
5.1 Topography
Within the ANDP area, the nickel laterite is developed on a broad ridge bounded by the east
and west by steep slopes incised by gullies and ravines. Elevations on the plateau range from
200 m to 320 m. The plateau on which the laterite is developed was formerly rainforest. Since
being logged it is now open grassland, with a few secondary growth trees lining the streams
along the lower levels.
Figure 8 is a photograph taken from the north of the deposit, looking south with Butuan Bay
lying along the west.
The photograph in Figure 9 is taken from Butuan Bay, showing limited flat coastal area with
steep terrain up to the ANDP deposit and surrounding mountains.
Figure 8: Agata North Deposit – View to the South

Figure 9: Agata North Deposit - View from Butuan Bay
5.2 Accessibility
The Agata laterite deposit is accessible by any land vehicle from Surigao City, Butuan City or
Davao City via the Pan-Philippine Highway (AH26). Daily flights are available from Manila and
Cebu City to either Butuan or Surigao City. Commercial sea transport is available from
Singapore, Jakarta, Manila, Batangas and Cebu to Surigao City or Nasipit ports.
5.3 Climate
The climate of Jabonga, Santiago and Tubay municipalities where the project area is situated
belongs to Type II on the Philippines Atmospheric Geophysical & Astronomical Services
Administration (PAGASA) Modified Coronas Classification. It has no dry season with very
pronounced rainfall months. Climate averages from 1981-2000 show that peak rainfall months
are from October to February. The highest mean monthly rainfall is 308 mm during January and
the lowest mean monthly rainfall is 104.8 mm during May while mean annual rainfall is
2027 mm.

Table 9: Climate Averages and Extremes 1961 - 20001
Temperature Wind Cloud

RH
Month Rainfall
Dry Wet Dew % Amt
Max Min Mean Dir Spd
Bulb Bulb Pt (okta)
Jan 308 21 30.1 22 26.1 25.7 24.2 23.6 88 NW 1 6
Feb 212 15 30.8 22 26.4 26.0 24.2 23.5 86 NW 1 6
Mar 150 16 31.8 22.4 27.1 25.7 24.5 23.7 83 NW 1 5
ES
Apr 107 12 33.1 23.1 28.1 27.7 25.2 24.3 82 1 5
E
ES
May 105 14 33.8 23.8 28.8 28.3 25.8 25 82 1 6
E
ES
Jun 135 16 33 23.6 28.3 27.8 25.5 24.7 83 1 6
E
Jul 158 16 32.5 23.3 27.9 27.5 25.3 24.5 84 NW 1 6
ES
Aug 105 12 32.8 23.5 28.1 27.8 25.4 24.6 82 2 6
E
Sep 140 14 32.8 23.3 28.1 27.7 25.4 24.6 83 NW 2 6
Oct 195 17 32.3 23.2 27.8 27.4 25.3 24.6 84 NW 1 6
Nov 194 18 31.6 22.9 27.2 26.9 25.1 24.5 86 NW 1 6
Dec 218 19 30.8 22.5 26.7 26.3 24.7 24.1 88 NW 1 6
Annual 2,027 190 32.1 23 27.6 27.1 25.1 24.3 84 NW 1 6
1
Based on Butuan City Synoptic Station

6 History
The earliest recognised work done within the area is mostly from government-related projects
including:
• The Regional Geological Reconnaissance of Northern Agusan reported the presence of

gold claims in the region (Teves et al. 1951). Mapped units include sedimentary rocks
(limestone, shale and sandstone) of Eocene to mid-Tertiary age.
• Geologists from the former Bureau of Mines and Geosciences Regional Office No. X
(BMG-X) in Surigao documented the results of regional mapping in the Jagupit
Quadrangle within coordinates 125°29´E to 125°45´ east longitude and 9°10´ to 9°20´
north latitudes. The geology of the Western Range was described as a belt of pre-Tertiary
metasediments, metavolcanics, marbleized limestone, sporadic schist and phyllite and
Neogene ultramafic complex. (Madrona, 1979) This work defined the principal volcano-
sedimentary and structural framework of the region and recognised the allochtonous
nature of two areas of ultramafic rocks that comprise serpentinized peridotite in the
Western Range, one between the Asiga and Puya rivers in the ANDP area and the other
west of Jagupit. These were mapped by Madrona (1979) as blocks thrust westward, or
injected into the metavolcanics between fault slices.
• The United Nations Development Program (UNDP, 1982) conducted regional geological
mapping at 1:50,000 scale and collected stream sediment samples over Northern
Agusan. The UNDP report of 1984 described the geological evolution of this region and
included a detailed stratigraphic column for the Agusan del Norte region. Two anomalous
stream sediment sites were defined near the ANDP during this phase of work. The Asiga
porphyry system that lies east of the Agata tenements was explored by Sumitomo Metal
Mining Company of Japan in the 1970’s and 1980’s (Abrasaldo 1999).
La Playa Mining Corporation, financed by a German company in the late 1970’s, explored within
the ANDP area for chromiferous laterite developed over weathered ultramafic rocks. There were
five (5) test pits dug in the area.
In 1987, Minimax conducted reconnaissance and detailed mapping and sampling. Geological
mapping at 1:1,000 scale was undertaken in the high-grading localities, and an aerial
photographic survey was conducted and interpreted. MRL established a mining agreement with
Minimax in January 1997, and commenced exploration in the same year.
Several artisanal miners are active within the project site since the 1980’s up to the present.
These miners are conducting underground mining operations at the Assmicor and American
Tunnels area and gold panning of soft, oxidised materials within Assmicor and Lao Prospect
areas and of sediments in major streams including that of Tubay River. The region of small-
scale mining activity was later named “Kauswagan de Oro” (translated: “progress because of
gold”). The majority subsequently left the region for other high-grading areas in Mindanao. In
more recent years, a group of copper “high-graders” emerged in the American Tunnels area
mining direct-shipping grade copper ore. However, this new trend waned due to the softening of
metal prices in the latter part of 2008, and depletion of near-surface high-grade veins.

7 Geological Setting and Mineralisation
7.1 Introduction
The Agata North lateritic nickel resource in the northern part of the Agata MPSA in the
Philippines forms the bulk of the resource base of MRL and has been under active exploration
by this company since 1997, with the first lateritic nickel resource drilling program completed in
2006 and subsequent programmes in 2007/2008 and 2010/2011. The latter program also drilled
laterite targets and defined resources at Bolobolo and Karihatag located 20km to the north of
Agata North, and at Agata South, 5km south of Agata North, which were reported in November
2011.
This portion of the report provides comprehensive discussion of the Agata North resource as it
forms the bulk of the resource and resultant reserves. The latest NI43-101 resource estimate
for the Agata North deposit was announced to financial markets and posted on SEDAR in April
2013.
Since resource drilling commenced there have been 4 further drill programs completed, with this
report summarising and re-evaluating all the historic data as well as including the latest infill
drilling results into the resource estimate.
This is the fourth mineral resource estimate for the ANDP located within the northern areas of
Mindanao, the southernmost island within the Philippines (Figure10). The first four technical
reports were completed from 2008 – 2009 and were compiled by Dallas M. Cox BE (Min) a
qualified person as defined by National Instrument 43-101. All drilling programs have been
completed so as to aid in the better estimation of the global lateritic nickel resource at Agata–
this information is to aid MRL in determining the best approach to exploiting the resource in the
short to long term.
Figure 10: Map of the Philippines showing MRL Project Areas

The resource estimate presented in this report has been completed by Mike Job, a qualified
geological statistician and Principal Consultant for Quantitative Group (QG) – a geological
consulting firm based in Perth, West Australia. The estimation methodology and geochemical
modelling used on the resource was defined by discussions with the author and QG so as to
provide the most comprehensive and accurate resource estimate possible considering the data
spacing and continuity.
7.2 Geological Setting
The principal tectonic element of the Philippine archipelago is the elongate Philippine Mobile
Belt (PMB – Rangin, 1991) which is bounded to the east and west by two major subduction
zone systems, and is bisected along its north-south axis by the Philippine Fault ( Figure 11).
The Philippine Fault is a 2000 km long sinistral strike-slip wrench fault. In the Surigao district,
this fault has played an important role in the development of the Late Neogene physiography,
structure, magmatism and porphyry copper-gold plus epithermal gold metallogenesis. There
has been rapid and large-scale uplift of the cordillera in the Quaternary, and limestone of
Pliocene age is widely exposed at 1000-2000 meters elevation (Mitchell and Leach 1991). A
cluster of deposits on the Surigao Peninsula in the north consists chiefly of epithermal gold
stockwork, vein and manto deposits developed in second-order splays of the Philippine Fault
(Sillitoe 1988). The mineralisation-associated igneous rocks in Surigao consist mostly of small
plugs, cinder cones and dikes dated by K-Ar as mid-Pliocene to mid-Pleistocene (Mitchell and
Leach 1991; Sajona et al. 1994; B.D.Rohrlach, 2005).
The basement rocks consist of the Concepcion greenschist and metamorphic rocks of
Cretaceous age overthrusted by the pillowed Pangulanganan Basalts of Cretaceous to
Paleogene age, which in turn, were overthrust by the Humandum Serpentinite. Its emplacement
probably occurred during the late Cretaceous. The Humandum Serpentinite occupies a large
part in the tenement area, and through its subsequent weathering the area has a high potential
for nickel laterite mineralisation. (Tagura, et.al., 2007).
The Humandum Serpentinite is overlain by Upper Eocene interbedded limestone and

terrigenous clastic sediments of the Nabanog Formation. These are in turn overlain by a mixed
volcano-sedimentary package of the Oligocene Nagtal-O Formation, which comprises
conglomeratic andesite, wacke with lesser pillow basalt and hornblende andesite, and the
Lower Miocene Tigbauan Formation. The latter is comprised of conglomerates, amygdaloidal
basalts, wackes and limestones. Intrusive events associated with the volcanism during this
period resulted in the emplacement of plutons and stocks that are associated with porphyry
copper-gold and precious metal epithermal mineralisation in the region. (Tagura, et.al., 2007)
Lower Miocene Kitcharao Limestone and the lower part of the Jagupit Formation overlie the
Tigbauan Formation. The Jagupit Formation consists of conglomeratic sandstone, mudstone
and minor limestone. The youngest stratigraphic unit is the Quaternary Alluvium of the Tubay
River floodplain.
Mineral deposits within the region are dominated by epithermal precious metal deposits and
porphyry copper-gold. There is a rather close spatial and probably genetic association between
epithermal precious metals and porphyry deposits. These deposits exhibit strong structural
control. First order structures are those of the Philippine Fault system, which play a role in the
localisation of the ore deposits, while the second order structures that have developed as a
result of the movement along the Philippine Fault system are the most important in terms of
spatial control of ore deposition (Tagura, et.al., 2007)
Other mineral deposits are related to ultramafic rocks of the ophiolite suite and comprise lenses
of chromite within harzburgite and lateritic nickel deposits that have developed over weathered
ultramafic rocks.

Figure 11: Geological Map of Surigao Mineral District

8 Deposit Types
The widespread occurrence of harzburgite, peridotite, pyroxenite, their serpentinised

equivalents, serpentinite, and localised lenses of dunite/serpentinised dunite comprise the
lithology in the project area. These rocks are confined to broad ridges extending down to the
footslopes of the Western Range. The ultramafic bodies are of probable late Cretaceous age,
and were emplaced as part of an ophiolite sequence during the Upper Eocene (Abrasaldo,
1999). Schists are also present in the extremities of the laterite area. Several of these rock
types were likewise identified in petrographic/mineragraphic analyses of drill core and rock
samples as wehrlite (peridotite), serpentinised wehrlite, serpentinised websterites (pyroxenite),
websterites, serpentinites and cataclasite. The location of these samples is shown in Figure 12.
Lineaments trending NE within the ultramafic (and underlying green schist) are interpreted as
either fault splays or zones of weakness in the area.
Figure 12: Local Geological Map of Agata North Area
Geological mapping in the project area showed favorable development of laterite along the
broad ridges characterised by peneplane topography. These areas are where the drilling
activities are concentrated. In areas with moderate to semi-rugged topography, erosion
proceeds much faster than soil development, hence the laterite is thinner.

The ANDP deposits located along the western range of the Surigao region, Mindanao Island all
have had significant laterite formation and consequent nickel enrichment. The mineralisation
can occur in both low and high relief terrains with the high relief terrains generally having lower
limonite thicknesses and some exposure of bedrock. The low relief terrain however has no
exposures of bedrock on its hillcrests, with the laterite being well developed and containing thick
and highly mineralised limonite or saprolite and on occasions a transitional unit. Some boulders
occur within the laterite profile and this is predominantly related to harder residual rocks within
the laterite profile. Test pits that were excavated by a previous company showed a maximum
depth of 9.40 m and an average depth of 4.96 m. All these test pits have bottomed in limonite.
Drilling by QNI, Phils. (QNPH) and MRL showed a thicker laterite profile than was revealed by
previous test pitting.

9 Exploration
Lateritic nickel mineralisation was known within the ANDP area since the early 1990’s and
grades were confirmed with the development of test pits in 1997. The project since this initial
definition has moved ahead so as to better define the resource and to provide better technical
information with regards to eventual exploitation.
In June 2004, Taganito Mining Corporation (Taganito) was selected from several interested
parties and granted the non-exclusive right to assess the nickel laterite potential of the ANDP.
Taganito carried out two phases of evaluation and reported encouraging results. Forty-eight
surface laterite and rock samples were collected from an area of about 300 ha within a much
more extensive area of nickel laterite mineralisation. Nickel contents range from very low to a
high of 2.09%, with most of the values exceeding 0.5%. Taganito considered these values to be
within the range that normally cap the secondary nickel enriched zone and recommended a
detailed geological survey and drilling. However, MRL elected to allow Queensland Nickel
Phils., Inc. (QNPH) to proceed with a reconnaissance drill program in 2006 under an undefined
option arrangement. QNPH did not pursue the opportunity.
Subsequent MRL exploration has been carried out by the use of open core drilling on a drill
pattern that has been successively closed down with each subsequent drill program so as to
enhance the accuracy of the future reported lateritic Ni resource. All drilling to date has been
completed by the use of small mobile open hole NQ coring rigs, which are highly mobile in
difficult to access terrain. Recovery from these drill rigs is high, with losses generally occurring
where there are changes in the hardness of the drilled material, causing material to be disrupted
at the bit face. The major ore zone is generally a softer material and losses within the ore zones
have been minimal at all stages of the drilling programs. A variety of contractors have been
used over time, with the drilling rate being the only variation with regards to their performance
and sampling rate.

10 Drilling
Each of the individual drill programs will be discussed and summarised.
10.1 BHP-Billiton (2006)
QNPH, then a subsidiary of BHP-Billiton, conducted reconnaissance drilling over the ANDP
from January 23, 2006 to April 26, 2006 at an initial drilling grid of 200m x 200m followed by
limited in-fill drilling at 100-metre grid spacing. A full report of the drilling program entitled
“Evaluation of Preliminary Exploration on Agata Nickel Laterite prospect of MRL Gold
Philippines, Inc,, Agusan del Norte, Philippines” was completed by QNPH in June 2006 and
submitted to MRL immediately thereafter. A total of 35 holes were drilled over an area of
approximately 80 ha, which is 21% of the 340-hectare ANDP. The drillhole locations are
incorporated in the MRL’s AGL Drillhole Location Map (Figure 13).
Figure 13: Agata North Drillhole Location Map – BHP-Billiton and MRL (2007) Drilling
This drilling program was subsequent to a Memorandum of Understanding (MOU) signed

between MRL and QNPH on December 5, 2005. The MOU allowed QNPH to conduct
exploration in the property, which also include technical review and geological mapping. It was
intended to evaluate and establish resource potential of the area and as a possible Yabulu
Refinery ore source, and to present a resource model. QNPH were looking for high Ni/high Fe

ore and were not intending to formalise any agreements with MRL until the results of the
exploration proved positive.
To evaluate the potential of the ANDP for the Chinese market, MRL commissioned Denny
Ambagan to re-evaluate QNPH’s data with the aim of estimating low-grade resources for the
Chinese market. Ambagan is a geologist, who worked for Crew Minerals in its Lagonoy and
Mindoro nickel laterite exploration areas for three years. An in-house estimate was tabled and
QNPH did not take up an option with MRL with regards to the ANDP.
10.2 MRL phase 1 (2007)
The first drilling program in the ANDP managed and developed by MRL was conducted from
February 22 to August 3, 2007 with 100 holes completed and a total meterage of 2267.12.
Drilling was confined to the area defined for an initial DSO operation. The drilling area related to
areas covered by initial Exploration Targets A and B. The drilling rate averaged 3.8 m/day per
drill rig and the recovery of drill core over the program was 88.2%.
10.3 MRL phase 2 (2007/08)
A follow-up infill drilling program in ANDP was conducted from December 17, 2007 to May 30,
2008, completing 773.12 m in 48 drill holes (37 new drill holes and 11 twin holes). The purpose
of this exercise was to better define the mineralisation and extend the initial resource. The
drilling rate averaged 4.6 m/day per drill rig and the recovery of drill core over the program was
93.9%.
10.4 MRL phase 3 (2008)
From June 18, 2008 to September 26, 2008, step-out drilling was carried out with hole spacing
widened to 100 m by 100 m centres. Drilling totalled 3,601 meters in 225 holes. This program
was aimed to drill out the greater part of Agata North resource potential based on areas covered
by Exploration Targets C and D. The drilling rate averaged 11.5 m/day per drill rig and the
recovery of drill core over the program was 95.0%.
A total of 408 vertical holes were completed during the first 4 phases of drilling in the ANDP,
including the previous BHP-Billiton drilling. The drilling patterns are all located on a 50 m- to
100 m spaced grid. Total meterage is 7,300.83 with an average depth of 17.89 m/per hole, a
maximum of 46.6 m, and a minimum of 4.35 m.
10.5 MRL phase 4 (2010)
During 2010 the program MRL continued to infill the resource so as to gain both a greater level
of accuracy for the resource estimate, but also to be able to study the variography of the
resource within a close spaced pattern combining both high grade limonite and saprolite ores.
From April 23, 2010 to July 10, 2010 infill drilling totalled 147 drill holes for 2682 m of drilling.
The drilling rate averaged 13.6 m/day per drill rig and the recovery of drill core over the program
was 91.5%. Lower recovery is explained by the variably lithified ultramafic in the close spaced
pattern to be used for variographical purposes, this is not common throughout the deposit but
the location weighting in this program has skewed the recovery data. For the resource being
compiled in this report the total number of drill holes completed is 593 for 10,851.84 m of drilling
with an average drill hole depth being 18.30 m. All drill holes completed within the ANDP area
are located on Figure 14.

Figure 14: Agata North Drillhole Location Map – All Drilling Summary
All exploration completed to date has been systematic and appropriate with regards to the
development of a resource estimate. The author considers the drilling methodology used within
the ANDP area, and the various sample recovery rates, appropriate and accurate with regards
to providing a sampling platform for resource estimation.

11 Sample Preparation, Analyses and Security
11.1 Sampling Method and Approach
The ANDP QA/QC Procedures for the whole ANDP drilling program were set up by MRL
geologists and followed by all personnel involved in all stages of the program. These were
adapted from the QA/QC Protocols of QNPH for the 2006 drill program carried out on the
ANDP. Periodically, the protocols were evaluated and improvements implemented. The core
handling, logging and sampling procedures applied in the program are briefly described below.
Core checkers, under the supervision of MRL technical personnel, are present on every drill rig
during operation. This is to record drilling activities from core recovery, core run, pull-out and
put-back, casing and reaming at the drill site. Once a core box is filled, it is sealed with a
wooden board then secured with a rubber packing band. This is placed in a sack and manually
carried to the core house some 300 m to 1 km m from the drill area.
Core logging was carried out in the core shed by MRL geologists. For standardisation of logging
procedures, the geologists are guided by different codes for laterite horizon classification,
weathering scale, boulder size, and colour.
After logging, the geologist determines the sampling interval. The core sampling interval is
generally at 1-metre intervals down the hole, except at laterite horizon boundaries, when actual
boundaries are used. The sample length across the boundaries is normally in the range of
1.0 ± 0.30 m to avoid excessively short and long samples. In the saprolitic rocks and bedrock
layers, some sample intervals have lengths greater than 1.30 m to a maximum of 2.00 m.
11.2 MRL sampling protocols
As in all stages of the program, the ANDP QA/QC Procedures were diligently followed during
the sample preparation and security procedures. The analyses for the first 2,689 core samples
were performed by McPhar Geoservices (Philippines), Inc. (McPhar), which follows
internationally-accepted laboratory standards in sample handling, preparation and analysis.
For the rechecking of the integrity of laboratory assays, independent consultant Dr. Bruce D.
Rohrlach, also a qualified person, provided MRL geologists with sampling procedures in May,
2007 after several site visits. These were incorporated into the QA/QC Procedures.
Following the recommendations of another qualified person, F. Roger Billington in May, 2008,
the sampling protocols were slightly modified. The most important modification was the insertion
of pulp rejects in the same batch as the mainstream samples. This is to ensure that all
conditions in assaying are similar, if not completely the same, for both the mainstream and
check samples. All of the analyses are completed by Intertek Testing Services, Phils., Inc. (ITS)
for analysis using the XRF analytical method, and thus all 8,411 core samples since have been
analysed by this group.
The ITS Phils. facility is among Intertek’s global network of mineral testing laboratories. It
provides high quality assay analysis of mineral samples for nickel deposit exploration projects.
Intertek mineral testing laboratories implement quality protocols.
11.3 MRL core sampling
During the first two phases of drilling, whole core sampling was conducted for 132 drill holes,
and 17 holes were split-sampled. Whole core was used, considering the relatively small core
diameter, and to achieve better precision by assaying the largest possible sample.

Whole core splitting was manually performed. The core was laid on a canvas sheet, pounded
and crushed by use of a pick, thoroughly mixed, quartered, then the split sample is taken from
two opposite quarter portions. The other two quarters are combined and kept as a duplicate in a
properly sealed and labelled plastic bag and arranged in core boxes according to depth. The
duplicates are stored in the core house at the Agata Base Camp, some 1.5 km from the drill
area.
For the third and latest drilling phase, split-sampling was conducted to ensure the availability of
reference samples in the future (except for 45 drillholes from the third drilling phase). The cores
were cut in half using either a core saw or spatula. The remaining half is stored in properly
labelled core boxes at the Mindoro Camp site in Agata.
The sampling interval is marked in the core box by means of masking tape/aluminium strip
labelled with the sampling depth. The sample collected is placed in a plastic bag with dimension
of 35 cm x 25 cm, secured with a twist tie. The plastic bag is labelled with the hole number and
sample interval.
After the samples are collected, they are weighed then sun-dried for about 5 hours and weighed
again before final packing for delivery to the laboratory. In cases where there is continuous rain,
the samples are pan-dried for 5-6 hours using a constructed drying facility or wood-fired oven.
MRL prepared its own sample tags for all samples including pulp repeats, pulp standards, and
coarse rejects samples. The samples were placed in a rice sack and then in a crate to ensure
the security of the samples during transport.
For all of the 2007 cores and batch 2008 AGL 10, the prepared samples were sent to the
McPhar laboratory in Makati City, Metro Manila via a local courier (LBC Express). The samples
were carefully packed in crates with proper labels, and accompanied by an official Submission
Form and a Courier Transmittal Form. The crates were transported to Butuan City where LBC
Express branches are present. The transportation of the crates containing the samples is
always accompanied by designated MRL staff. The courier received the package and provided
MRL with receipts indicating contents. For batches 2008 AGL 1, 3 and 6, the samples were
delivered by MRL to McPhar’s sample preparation facility in General Santos City. The assaying
was performed in their laboratory in Makati City.
Counting and cross-checking of samples vis-à-vis the McPhar Submission Form were
performed by McPhar supervisors. Notice is given to MRL if there are discrepancies, otherwise
it is understood that sample preparation and analysis will be carried out as requested. A sample
tracking, quality control and reporting system was maintained between MRL and McPhar.
For batches 2008 AGL-13, 16, 18 and onwards, the core samples were delivered to Intertek’s
sample preparation facility in Surigao City. Likewise, checking of samples against the list was
done upon submission. Once prepared, Intertek-Surigao sends the samples to their assay
laboratory in Muntinlupa City, Metro Manila.
The core sampling and logging facility was under the supervision of an MRL geologist or mining
engineer at all times. This facility was originally within the drill area and is about 300 m to 1 km
from the drill pads, however although logging of the core was completed at the drill rig for the
phase 4 drilling, core trays were delivered to barangay E. Morgado base camp for sample
splitting preparation under the guidance of MRL staff. A civilian guard secures the base camp
premises during the night.
The ANDP drilling was under the direct supervision of James A. Climie, P. Geol., President of
MRL Gold Phils., Inc.

11.4 Sample Preparation, Analysis and Security
In addition to stringent sampling protocols, QA/QC procedures were also employed following
Dr. B. Rohrlach’s and F.R. Billington’s (MRL independent consultants) guidelines. Standard
reference materials, field duplicates, coarse rejects and pulp rejects were resubmitted to the
analysing laboratory to check the accuracy of the primary laboratory results. A total of 1269
analyses of check samples were used in confirming the accuracy and repeatability of all assays
to be used within the resource estimation of the ANDP. Selection of check samples were spread
throughout all holes and in various laterite horizons.
The field duplicates totalled 325 or 2.93% of the 11,100 mainstream core samples of MRL.
Normally, 1 in every 20 core samples is duplicated. The duplicate sample is selected to
ascertain that the full range of different laterite horizons is systematically covered. The samples
were selected to cover the full range of Ni grades at Agata, and to extensively cover the
different stages and spatial distribution of the drill program, so as to provide a representative
check on the reliability of the original sample splitting process undertaken by MRL at Agata
North. Originally, the splitting method is the same as for obtaining duplicates for storage but ¼
part of the prepared sample represents the field duplicate while the ¾ part is the regular
sample. For the half-core sampling, the field duplicates were taken by cutting the remaining ½
core into 2. These samples were sent to the laboratory in the same batch and were treated in
the same way as the mainstream core samples.
A set of 81 coarse reject samples, comprising 0.73% of the 11,100 core samples, were
submitted to the laboratory where the original samples were analysed for resampling and
assaying. Resampling was done by taking a duplicate split from the coarse rejects and then
placing it back into the assay stream for analysis. Again, as in all duplicates, the submitted
samples were chosen to cover the natural range of assays. The reanalysis of the coarse reject
samples was undertaken as an internal check on the crushing and sub-sampling procedures of
the laboratory to ensure that the samples taken for analysis were representative of the bulk
sample.
There were two sets of pulp rejects sent for re-assaying. One was sent to the laboratory where
it was originally analysed. A total of 250 pulp rejects were sent under this category. The other
set was sent to an umpire laboratory wherein a total of 319 pulp rejects were analysed. This is
to establish reproducibility of analysis and determine the presence or absence of bias between
laboratories. Samples were taken on all of the different laterite horizons. Originally, pulp rejects
were collected and sent in separate batches. Starting on June 2008, pulps were inserted
together with the mainstream samples (1 in each set of 40 samples). The pulp rejects for inter-
laboratory checking were sent at a later date.
The umpire laboratory for the 2007 drilling program was Intertek in Jakarta. Selected pulp
samples were sent by MRL to Intertek’s Manila office, after which they forward the samples to
Jakarta at Intertek Cilandak Commercial Estate 103E, JI Cilandak KKO, Jakarta 12560. Intertek
(Jakarta) acquired an ISO 17025 2005 accreditation from KAN (National Accreditation Body of
Indonesia) denominated as LP 130_IDN, valid until 2010. With the change of primary laboratory
to Intertek Phils., McPhar becomes the umpire laboratory. In 2008, McPhar samples/assays
were checked by Intertek Phils. and vice-versa.
Nickel standards or certified reference materials are routinely inserted to the batches of core
samples sent for assaying. This is done as a double check on the precision of the analytical
procedures of McPhar and Intertek on a batch by batch basis. The standards, which have
known assay values for Ni, were provided by Geostats Pty Ltd of Australia in pulverized (pulp)
form weighing about five grams contained in 7.5 cm X 10 cm heavy duty plastic bags. Originally,
one standard sample is inserted for every batch of 40 to 45 samples. However, there were
some standards inserted in smaller intervals of 25-35 samples. Starting with Batch 2008 AGL-

18, one standard sample was included in every set of approximately 40 samples. In all, 294
standards equivalent to 2.65 % of the core samples were used.
Eighteen types of Ni standards were used with grade ranging from 0.01% to 2% Ni. Each one
comes with a certificate that shows the accepted mean Ni value and standard deviation, which
are available on the website of Geostats (www.geostats.com.au). The specific nickel standards
and the frequency of using each one are listed in Table 10.
Table 10: Ni Standards used at ANDP and frequency
Ni Standard # Assays %Ni Ni Standard # Assays %Ni
GBM305-9 32 0.25 GBM906-7 6 0.56
GBM307-13 16 2 GBM996-1 5 1.27
GBM901-1 55 0.8 GBM302-8 6 1.08
GBM903-2 27 0.11 GBM397-6 5 0.03
GBM905-13 41 1.51 GBM901-4 6 0.02
GBM906-8 44 0.55 GBM903-5 10 0.18
GBM398-4 5 0.41 GBM995-4 10 0.03
GBM900-9 5 1.16 GBM997-4 5 0.01
GBM901-2 8 0.88 GBM998-3 8 0.03
Standards 233 Standards 61
11.5 Laboratory protocols
11.6 McPhar Geoservices (Phil.), Inc.
McPhar carries out high quality sample preparation and analytical procedures. It is an ISO
9001-2000 accredited laboratory and has been providing assay laboratory services to both local
and foreign exploration and mining companies for more than 35 years. It served as the primary
laboratory for the ANDP drilling. Its address is 1869 P. Domingo St., Makati City, Metro Manila.
At McPhar’s Geoservices each sample is analysed for nickel (Ni), cobalt (Co), iron (Fe),
magnesium (Mg), aluminium (Al), silica (SiO2) and some samples for phosphorous (P). The Ni,
Co, Fe, Mg and Al are assayed by dissolving a 25 g charge with a two acid digest using hot
hydrochloric (HCl) and nitric acid (HNO3) and reading the results by Atomic Absorption
Spectroscopy (AAS). The SiO2 and P are analysed by a gravimetric process.
McPhar has its own Quality Assurance/Quality Control (QA/QC) program incorporated in their
sample preparation and analyses procedures. Every tenth sample and samples with
"anomalous" results, i.e., samples having abnormally high or low results within a sample batch,

are routinely checked. This is done by preparing a solution different from the solution on the
regular sample taken on the same pulp of a particular sample.
11.7 Intertek Testing Services Phils., Inc.
Intertek Testing Services Phils., Inc. is among Intertek’s global network of mineral testing
laboratories. It provides quality assay analysis of mineral samples for nickel deposit exploration
projects. Measures are taken by Intertek mineral testing laboratories to ensure that correct
method development and quality protocols are in place to produce good quality results.
Each sample is analysed for nickel (Ni), cobalt (Co), iron (Fe), magnesium (Mg), aluminium (Al),
silica (SiO2), CaO, Cr2O3, K2O, MnO, Na2O, P2O5, and TiO2. Whole rock analyses are
performed by XRF. The samples are fused using lithium metaborate. XRF analysis determines
total element concentrations that are reported as oxides.
For its internal QA/QC, Intertek performs repeat analyses plus split sample analyses every
15-20 samples. Furthermore, on the average, one sample of standard reference material is
inserted in every 40 samples, and one blank in every 60 samples.
11.8 Internal check assays (McPhar and Intertek)
The laboratories of McPhar and Intertek in Manila have QA/QC programs incorporated into their
sample preparation and analyses procedures. The two laboratories regularly conduct duplicate
analysis of Ni and other elements as a check on analytical reproducibility within their own
laboratories. Repeats are routinely conducted on all elements being analysed and are typically
on every 10th sample for McPhar and on every 20th sample for Intertek. All in all there are 770
(6.94%) repeat analyses that are spread evenly throughout the entire database.
In analysing the correlation between the original and duplicate sample, the Variance between
the primary assay and the duplicate was computed as follows:
Var = (a – b) x 100
a
Where: a - is the original sample analysed

b - is the duplicate sample analysed
Var - is the percentage relative difference.
To interpret the Variance value, a value of zero means the two values are identical and the
duplication is perfect, a negative value means the duplicate is higher, while a positive value
means the original is higher. Values less than 10% variance (either negative or positive), are
considered excellent when reviewing comparative samples within lateritic Ni deposit assays.
There is an excellent correlation for all of the elements within an internal repeat with all below
Variances <1% (0.03 – 0.28%) as shown in Table 11, which is consistent with high precision
repeatability. There is generally a very even spread of the check assay being both higher and
lower than the primary assay which indicates that there is no systematic bias occurring in the
check analyses routine.

Table 11: Variance of Original and Internal Laboratory Duplicate Analyses
Ni Co Fe Al Mg Si
McPhar
Variance from 1st Assay 0.05% -0.26% -0.15% -0.08% 0.28% 0.03%
Duplicates = 1st Assay 98 204 4 98 23 16
Duplicates < 1st Assay 84 38 146 94 137 120
Duplicates > 1st Assay 90 30 122 80 112 136
Intertek
Variance from 1st Assay -0.06% 0.36% 0.09% -0.04% 0.33% 0.01%
11.9 External check assays (MRL)
MRL has also set up its own QA/QC protocols vis-à-vis the laboratories’ sample preparation and
analytical procedures, which the author has observed in the field and analysed the results for
this report. The external laboratory checks determine the assaying laboratories to replicate a
known standard, the repeatability of the assay from the field splitting and the pulp repeats (i.e.
external and internal repeats of the primary assays), the consistency of grade between
laboratories, and the determination of any bias within the sample preparation process through
the analyses of the coarse rejects. It is a comprehensive series of analyses compiled to ensure
grade estimates are of the highest calibre.
11.10 Nickel standards
As a double check on the precision of the analytical procedures of both McPhar and Intertek
laboratories, nickel standards were inserted by MRL into the sample runs at approximately 1 to
45 samples on average. A total of 303 nickel standards, representing 2.73% of the 11,100 core
samples were sent. These standards were purchased from Geostats Pty. Ltd of Australia.
Twelve types of standards were used for the whole drilling course to date, with grade ranging
from 0.11 to 2.00% nickel. Table 12 presents the data standards for nickel for two of the Ni
standards used by MRL which were lateritic nickel standards and most closely related to the
ANDP samples submitted. From the statistical analyses it is confirmed that the external
standards submitted by MRL fell within a small range from the accepted mean, and that
comparative statistics were well within acceptable standards. A point to note is that both
McPhar and Intertek consistently underestimated Fe for both standards, and although the

variation is <3.2% of the Ni standards for Fe grade, it was the only example of a systematic
variation encountered within the dataset.
Table 12: Variance of Ni Standard and Laboratory Assays
Ni Standard GBM901-1 Ni Standard GBM905-13
Ni Co Fe Ni Co Fe
Variance from -1.7% -8.6% 3.15% Variance from -0.3% -4.25 1.92%
Standard Standard %
# Assays = Std 0 0 0 # Assays = Std 0 2 0
# Assays > Std 46 45 0 # Assays > Std 25 20 0
# Assays < Std 9 10 55 # Assays < Std 16 19 41
The graphical representation of the standards data shows that the Ni grade is extremely
consistent within the standard, and within both standards the check assays vary above and
below the standard’s value (Figure 15). However, when a new batch of the same standard was
put into the sample runs the minor elements within the standard varied (especially Co), and this
indicates the difficulty of ensuring an even spread of the minor elements within a product like a
Ni standard. The variation for the minor elements can therefore be explained by batch variation
rather than a systematic error within the assaying process.
11.11 Field duplicates
The analytical reproducibility of field duplicate samples is a measure of the representativity of

the original split of the sample, a check on the reliability of the sample reduction procedure
(splitting) undertaken by MRL at the field area.
The field duplicates were sent together with the regular core samples for assaying. A total of
325 core field duplicates (2.93% of the 11,100 core samples) were analysed. Of these, 134
were analysed by McPhar (1 in 20 cores) while 191 duplicates were analysed by Intertek (1 in
every 40 samples).

Table 13: Variance of Field Duplicate and Original Assays
Ni Co Fe Al Mg Si
Variance from Assay -0.16% -2.1% 0.1% 0.3% -0.6% -0.9%
(Abs Variance from Assay) 3.30% 7.2% 3.1% 6.1% 9.5% 6.2%
The results presented in Table range from 0.3% to -2.1% for all elements, which indicates that
there is an extremely high repeatability for all field samples. When reviewing the Absolute
Variance, i.e. the maximum variance from the sample average, all values for all elements are
still under 10% of the average grade which supports the consistency of the splitting method and
the reliability of the assays. Reviewing the split of duplicate samples being higher or lower in
grade on average, the total count indicates that there is an equal chance of any duplicate being
higher or lower than the original assay.
The author confirms that the field splitting and sampling protocol was excellent and supports the
validity of the samples to be assayed for use in estimation purposes for all elements.
11.12 Coarse rejects
The re-analysis of the coarse reject samples was undertaken as an internal check on the
crushing and sub-sampling procedures of McPhar and Intertek to ensure that the samples taken
for analysis were representative of the bulk sample. The Variance results for the coarse fraction
post crushing in comparison to the primary assay are shown in Table 14.
Table 14: Variance of Coarse Reject and Original Assays
Ni Co Fe Al Mg Si
Variance from Assay -0.04% 4.0% -0.4% -0.6% 1.9% -0.9%
Coarse Rejects = Assay 5 19 0 3 1 0
Coarse Rejects < Assay 42 38 45 46 45 39
Coarse Rejects > Assay 34 24 36 32 35 42

The results presented in Table 14 range from 4.0% to -0.9% for all elements, which indicates
that there is an extremely good correlation of the coarse rejects with the passing material that
formed the pulp for assaying. When reviewing the Absolute Variance, i.e. the maximum
variance from the sample average, there are 3 elements (Co, Fe and Mg), that are more
variable and this may be due to specific minerals that may crush less evenly due to hardness or
platiness (Corundum for Al as an example) – but even with these minor variances for some
minor elements the coarse sample rejects are very similar to the fines material. Reviewing the
split of coarse rejects being higher or lower in grade on average, the total count indicates that
there is an equal chance of any duplicate being higher or lower than the original assay.
The author confirms that the protocol for crushing of the primary sample was excellent and
supports the validity of the resultant pulps to be assayed for use in estimation purposes for all
elements.

Figure 15: Graphs of Nickel Standards Assays.
11.13 Pulp rejects analysed by primary laboratory
A total of 30 of the McPhar pulp rejects during the first and second drilling phases were re-
sampled and analysed, representing 1.07% of the 2,793 core samples. These were selected
from previously submitted batches covering a range of sample grades, a range of horizons and
a range of holes from the core drilling programs, so as to be representative of all the samples.
The method of pulp reject sampling for Intertek Laboratory was modified in June 2008. Starting
with batch 2008 AGL-18, pulp rejects were randomly selected one in every set of 40 and were
pre-numbered. These pulps were inserted to their assigned numbers right after sample
preparation and were analysed in the same batch as their sources. A further 220 pulp rejects
were submitted to the completion of the 2010 drill program.
The duplicate pulp analyses were conducted to test for homogeneity of the pulps generated by
the two laboratories. Insufficiently milled samples will lead to multiple assaying of pulps with
poor precision (i.e. poor repeatability). Inversely, agreement between assays of duplicates of
the pulp would indicate that the milling procedure in the laboratory was efficient and generated a
suitably homogeneous pulp.
Table 15: Variance of Pulp Duplicate and Original Assays
Ni Co Fe Al Mg Si
Variance from Assay 0.59% -2.6% 0.0% -0.6% -0.3% 0.4%
Pulp Duplicates = Assay 13 58 0 8 1 1
Pulp Duplicates < Assay 102 108 117 147 119 117
Pulp Duplicates > Assay 135 84 133 95 130 132

The results presented in Table 15 range from 0.59% to -2.6% for all elements, which indicates
that there is an extremely high correlation of the repeat pulp assay with the primary assay.
When reviewing the Absolute Variance, i.e. the maximum variance from the sample average,
the range is extremely small at 1.3-6.0% which indicates an extremely good repeatability for the
pulps presented to the laboratories prior to assaying. Reviewing the split of pulp repeats being
higher or lower in grade on average, the total count indicates that there is an equal chance of
any pulp duplicate being higher or lower than the original assay.
The author confirms that the pulp repeatability was excellent and supports the validity of the
primary pulps to be assayed for use in estimation purposes for all elements.
11.14 Pulp rejects analysed by umpire laboratory
Two laboratories have been used since the inception of the laterite Ni exploration at ANDP, and
during the drilling programs check pulps have been forwarded to the alternate laboratory to
confirm assay reliability. There are minor issues for some element analyses due to the varying
assay methodologies (McPhar use an AAS method and Intertek use an XRF method), but this is
predominantly within the minor elements and not the Ni assay.
The results presented in Table 16 range from -0.9% to 2.7% for all elements, which indicates
that there is an extremely high correlation of the interlab repeat pulp assay with the primary
assay, and in fact are very similar to the range of variance encountered within the single lab
pulp repeats. When reviewing the Absolute Variance, i.e. the maximum variance from the
sample average, the range is larger at 1.0-20.5% which indicates that although there is good
repeatability for the pulps, the differing methodologies do provide some contrast in the minor
elements (Al and Mg especially). Reviewing the split of pulp interlab repeats being higher or
lower in grade on average, the total count indicates that there is an equal chance of any pulp
duplicate being higher or lower than the original assay.
Table 16: Variance of Pulp Duplicate and Interlab Assays
Ni Co Fe Al Mg Si
Variance from Assay 1.97% -0.9% 1.2% 2.7% 2.4% 0.0%
McPhar = Intertek 9 60 0 7 1 1
McPhar < Intertek 117 127 135 140 129 74
McPhar > Intertek 193 132 184 172 189 81
The author confirms that the pulp interlab repeatability was excellent and further supports the
validity of the primary pulps to be assayed for use in estimation purposes for all elements.
11.15 Summary
In the author’s opinion the sampling protocols, procedures and methods performed by MRL,
and their implementation, are of acceptable standards. Assays performed by McPhar and
Intertek in Metro Manila are also of acceptable standards. Variations encountered in the McPhar
and Intertek QA/QC program on the Agata samples were all within acceptable limits.

12 Data Verification
12.1 Data Verification
The author has visited site numerous times in the past 18 months and on each occasion has
reviewed protocols and processes set in place at the Mindoro base camp in Agata. The
datasets provided by Mindoro were checked and verified by comparing a random portion
against original field sheets and official Certificates of Analytical Results. Selected core trays
were visually inspected against the logs. In addition, the core photos were viewed and
compared with the cross sections showing laterite horizons generated by MRL. The lithology
was checked in the field and in the drill cores. The digital file was checked for logical errors or
data entry errors. There were a few but very minor errors found.
Previously Dallas Cox, who has compiled the four previous resource reports, also completed a
series of random checks made in the field, to corroborate the acceptable quality of the data. As
a further test, he collected twelve field duplicate samples and sent them to the same laboratory
at which they were originally assayed. Five samples came from the limonite horizon, six from
the saprolite and one from the saprolitic rock horizon. Table 17 and Figure 16 show the results
and the correlation vis-à-vis the original MRL assay values.
Table 17: Results of Independent Check on Drill Core Assays
DMC Mg %
DMC Co %
MRL Mg %
MRL Co %
DMC Fe %
MRL Fe %
DMC Ni %
DMC Al %
MRL Ni %
MRL Al %
FROM
RUN
TO
HOLE ID
AGL 2008-
1.00 2.00 1.00 1.46 1.43 0.09 0.09 38.94 39.75 2.45 2.64 1.07 1.13
281
AGL 2008-
2.00 3.00 1.00 1.02 0.91 0.07 0.07 30.47 31.55 2.57 2.61 2.28 1.44
355
AGL 2008-
2.60 3.45 0.85 1.59 1.58 0.05 0.05 23.32 23.60 0.74 0.66 10.51 10.32
175
AGL 2008-
6.00 7.25 1.25 0.92 0.95 0.03 0.03 15.22 15.89 0.71 0.69 12.93 12.64
194
AGL 2008-
3.40 4.20 0.80 1.31 1.35 0.03 0.03 14.45 15.25 0.46 0.45 15.57 15.63
174
AGL 2008-
8.00 9.00 1.00 1.27 1.25 0.14 0.13 52.05 50.62 3.88 3.36 0.36 0.42
297
AGL 2008-
1.00 2.00 1.00 1.20 1.32 0.14 0.13 47.57 44.50 1.82 1.69 2.75 3.89
299
AGL 2008-
2.00 3.00 1.00 0.87 0.92 0.03 0.03 14.24 14.64 0.52 0.55 15.89 15.65
355
AGL 2007-
27.00 28.00 1.00 1.33 1.31 0.02 0.02 6.38 8.14 0.11 0.21 15.02 17.24
17
AGL 2008-
5.55 6.45 0.90 1.03 1.12 0.12 0.11 50.10 50.73 2.46 2.12 0.71 0.77
135
AGL 2008-
17.40 18.40 1.00 0.46 0.51 0.01 0.01 5.40 6.07 0.15 0.16 14.66 15.43
74A

AGL 2008-
13.55 14.85 1.30 0.80 0.97 0.02 0.02 8.48 10.20 0.16 0.19 14.53 15.15
14A
* DMC - Dallas M. Cox
Figure 16: Comparison of Independent Checks and MRL Assays
The graphs show good correlation between the MRL assays and those of Dallas Cox’s
samples. This is attested by the values of the coefficient of determination R2, which range from
0.947 for nickel to 0.996 for iron.
12.2 Bulk density determinations
MRL have completed a significant number of bulk density tests so as to provide data for
estimating the tonnages of each specific mineralised zone within the ore body. Samples were
predominantly taken from test pits prepared for the taking of density samples. A total of 30
samples from 15 test pits were used for the ferruginous laterite horizon; 37 samples from 19 pits
for limonite; and 17 pit samples from 6 pits for saprolite. In addition 19 core samples were
tested from the saprolite zone.
For BD measurements done on site, large samples ranging in volume from 0.005 m3 to 0.08 m3
were collected from twenty test pits. The locations of these test pits are distributed around the
drilling area. The bulk samples were measured for volume, wet weight, and dry weight.
The BD and moisture content were computed using the following formulae.
Weight (kg)
Bulk Density = ÷ 1000 (kg/ton)
Volume (m3)
Weight wet – Weight dry

% Moisture Content = x 100
Weight wet
For the drill cores, relatively solid, less compressed portions of 10 cm - 20 cm lengths were
selected from drill holes that are spatially distributed and coated in paraffin wax to preserve the

moisture. These were then dispatched to McPhar Laboratories where the samples were tested
using the water displacement method. It is standard practice for McPhar to check the wax
coating and perform re-waxing if needed.
Table 18: Summary of Bulk Density Measurements
Moisture No. of
Horizon Wet Density Dry Density Content % Samples
FERRUGINOUS LATERITE 1.72 1.20 30.49 30
LIMONITE 1.81 1.24 31.74 37
SAPROLITE (Pit Samples) 1.98 1.46 26.11 17
SAPROLITE (Core Samples) 1.82 1.45 20.60 19
Table 18 shows the summary results of these measurements, and the dry density values used
in the resultant block model were 1.24 dmt/m3 for limonite and 1.45 dmt/m3 for saprolite. A dry
density of 1.8 dmt/m3 for bedrock has been applied in the model, but there is no mineralised ore
within this defined region and as such is simply a differential figure to aid in planning and de
With the separation of the upper and lower limonite and the upper and lower saprolite within the
resource modelling a further refinement of the dry bulk density values was required. In regards
to the limonite values, the bulk density test work as shown in Table 18 successfully allocated
the upper limonite (ferruginous laterite), and lower limonite values (limonite). However for
saprolite there was no distinction and a review of all the saprolite data confirmed that there was
a significant difference between these two layers and a gross average could not be applied.
Based on the spread of the data and the presence of smectite mineralogy it can be assumed
that the moisture content will be approximately 24% in situ. This provides a bulk density of 1.32
t/m3 for the upper saprolite. One other factor needs to be considered and this is the presence
of boulders within the upper saprolite and used in the estimation, this lithology has a greater
density and forms ~19% of the upper saprolite material. As it is impossible to accurately predict
the tonnes of this rock, or the actual density due to its varying level of hardness and weathered
status, thus we can only predict a small impact on overall density.
Considering all of these factors the following density values for the newly formed upper and
lower saprolite layers in the ANDP 2013 resource have been interpreted as below.
3
Upper Saprolite Dry Density = 1.34 tonnes/m
3
Lower Saprolite Dry Density = 1.45 tonne/m

Figure 17: Agata North Bulk Density Test Pit Location Map

13 Mineral Processing and Metallurgical Testing
There will be no mineral processing of limonite ore carried out onsite.
The key parameters that affect the saleability of high iron limonite ore are iron, nickel and
phosphorus grades, and moisture content.
The testwork that has been done on ore with respect to iron and nickel grades has been
outlined in Sections 11 and 12 of this report.
The results of analysis of field duplicates indicates that there is an extremely high repeatability
for all field samples. When reviewing the absolute variance, all values for all elements are still
under 10% of the average grade which supports the consistency of the splitting method and the
reliability of the assays. Reviewing the split of duplicate samples being higher or lower in grade
on average, the total count indicates that there is an equal chance of any duplicate being higher
or lower than the original assay.
The results of the analysis of pulp assay variance indicates that there is an extremely high
correlation of the repeat pulp assay with the primary assay. When reviewing the absolute
variance, the range is extremely small at 1.3% - 6.0% which indicates an extremely good
repeatability for the pulps presented to the laboratories prior to assaying. Reviewing the split of
pulp repeats being higher or lower in grade on average, the total count indicates that there is an
equal chance of any pulp duplicate being higher or lower than the original assay.
The testwork that has been done on ore with respect to moisture content has been outlined in
Section 11 and 12 of this report. Whilst the average insitu moisture measured at 30% is below
the target limit of 35%, it is the impact of precipitation that will largely determine how much
drying time will be required. Shipping of ore has been substantially reduced in the period of the
year subject to higher than normal precipitation.
The testwork that has been done on ore with respect to phosphorus was done conjunction the
other elements. A review of the raw assays of samples having iron grades greater than 44
Fe%, showed that approximately 25% of samples fall in the range above 0.01 P%. As with iron,
nickel and moisture content, this is will be dealt with by blending off multiple stockpiles to ensure
shipment specification criteria are met for all parameters.

14 Mineral Resource Estimate
The resource Estimate calculations were completed by Mike Job, Principal Consultant for
Quantitative Group based out of Fremantle, West Australia. All data was checked and
forwarded by the author, and all modelling methodologies were discussed prior to
commencement of developing the resource.
14.1 Geometric Interpretation
There is a total of 633 drillholes in the dataset. All of the holes are vertical and relatively
shallow, with the deepest hole ending at 46.6m depth. The UTM coordinates (rather than the
local grid) have been used. Basic validation of the dataset was previously conducted by QG in
2010.
As reported in Gifford (2010) the limonite/saprolite contact point was based on an abrupt
change in the level of Mg in limonite (usually less than 1% Mg) to saprolite (generally well over
10% Mg, although sometimes down to about 5% Mg). There is also an abrupt drop of Fe in
limonite (~40% to 50%) to saprolite (less than 10%). The saprolite/bedrock contact was
identified by using the Ni assay data (bedrock generally less than 0.4%) and the geological
logging. The geological logging provided in the dataset matched these grade-determined
boundaries extremely closely (Gifford, 2010).
As discussed in the introduction, the division of the limonite domain into sub-domains was
based on a 44% Fe grade boundary. The higher Fe grade occupies the greatest proportion of
the limonite domain and is positioned above the lower Fe grade sub-domain. Likewise for the
saprolite sub-domains, based on a 0.7% Ni boundary, the higher Ni grade occupies the upper
portion of the domain and represents the greatest proportion of the total domain. The sub-
domains are shown graphically in Figure 19.
The topography surface was used to cut the base of limonite and base of saprolite wireframes,
which were in turn subdivided by the respective sub-domain wireframes (Figure 18). These 5
surfaces were used to select and flag the drill samples. The sample selection and flagging
processes were conducted using Datamine software.
Figure 18: Wireframe surfaces and drilling, Agata North (Ni on left, Fe on right side of drill trace).

Sample selection and flagging was checked on screen and demonstrated robust adherence to
the interpretation parameters, with accurate selection and flagging of the samples.
The domain and sub-domain codes (DOMAIN and SUBDOM fields respectively) are shown in
Table 19.
Table 19: Domain and Sub-Domain codes for Agata North Laterite.
Domain & Sub-Domain Domain Code Sub-Domain Code
Limonite >44% Fe (Upper Limonite) 1 11
Limonite <44% Fe (Lower Limonite) 1 12
Saprolite >0.7% Ni (Upper Saprolite) 2 21
Saprolite <0.7% Ni (Lower Saprolite) 2 22
The same wireframe surfaces used for sample selection were also used for the construction of
a 3D block model. The parent cell size used by Gifford (2010) of 20m x 20m x 1m with 10m x
10m x 1m sub-blocking was used here. The model origin was chosen so that the drillholes
would mostly be located in the centre of a parent block (Gifford, 2010).
Table 20: Block Model Properties
Easting (m) Northing (m) RL (m)
Origin 775,625 1,025,225 0

Parent block size 50 50 1
Sub-block size 10 10 1
Extent 778,225 1,029,025 400

Figure 19: Block model sub-domains.
14.2 Exploratory Data Analysis
The flagged samples were composited to 1m to allow EDA on comparative, additive samples.
The majority of raw samples were at or less than 1m in length.
A number of drillholes had exactly the same collar coordinates; AGL 2008-196 and -196, and
holes AGL 2008-247and 248. Therefore, holes -196 and -248 were removed. Compositing was
conducted in Datamine using ‘Mode = 1’, which divides the down-hole intercept in each (sub)
domain equally to be as close to 1m as possible. A minimum composite length of 0.5m was
used.
More sample length is lost compositing in the sub-domains compared to compositing in just the
main domains, but the amounts lost are relatively small. Table 21 shows the raw and composite
lengths for both domains and sub-domains, and the percentage of the length lost.

Table 21: Comparison by of raw sample lengths to composite sample lengths.
Domain / Sub- Raw Sample Length Composite Sample % Length

Domain Length Lost
1 3058 3016 1.4
11 2563 2526 1.4
12 496 480 3.2
2 5701 5653 0.8
21 4336 4296 0.9
22 1373 1337 2.6
Preparation of the three additional variables, Cr2O3, CaO and MnO, included dealing with a
number of grade values given as <0.01%. This indicates the variable was below detection limit
for that sample. These values were converted to a grade of 0.01% to allow their consideration
in the analysis and prevent their loss in the case of subsequent estimation, which could allow
higher grades to possibly over inform the estimate in those areas.
Assessment of the validity of the sub-domains for each of the variables was conducted by
comparison of the basic statistics of the composited samples for each domain and sub-domain,
consideration of their distribution in the form of histograms and by contact analysis. The results
of each of these processes are given in Appendix 5.
Note that the variables of interest are not informed to the same levels; Ni, Co and Fe are best
informed and CaO, Cr2O3 and MnO are the least informed (Appendix 5).
Assessment of the main limonite and saprolite domains, including the additional 3 variables,
CaO, Cr2O3 and MnO, supports the use of a hard boundary between these domains as
concluded by Gifford (2010).
Basic summary statistics for each of the sub-domain composites within each domain are given
in Table 22.

Table 22: Composite statistics for sub-domains
There is a clear change in the mean and variance for some variables, most obviously the
variables providing the basis of the sub-domaining (Fe in limonite and Ni in saprolite) but also
for some of the other variables e.g. Fe in saprolite and Mg in limonite. These distribution
changes are reflected in the histograms (Appendix 5).
Care does need to be taken in some cases where isolated extreme values can affect the
statistics in one sub-domain or the other without necessarily indicating the validity of a sub-
domain boundary. An example of this is Cr2O3 in the saprolite sub-domains where a single
high grade sample in the upper saprolite has a significant effect on the variance of the
distribution. This is shown in Figure 20.
Figure 20: Histograms for composited Cr2O3 for saprolite sub-domains (upper saprolite uncut
on left; upper saprolite top-cut in middle and lower saprolite on right).

CaO in the limonite domain appears to be problematic, particularly in the upper sub-domain,
with what appears to be two populations rather than a single population. This indicates there
may be a separate control on CaO distribution in the upper sub-domain. The histogram for CaO
in the upper limonite sub-domain is given in Figure 21.
Figure 21. Histogram for composited CaO in the upper limonite sub-domain (histogram for
higher grade population inset).
Contact analysis considers two ‘domains’ at a time (one contact) - samples are ‘binned’
according to their distance either side of the contact and the average grade of each bin is
calculated for each variable of interest. The mean grades across the contact are plotted,
providing a visual guide as to whether the transition is gradational or sharp.
Contact analysis plots are contained in the figures below and in Appendix 1 (Contact Analysis
worksheet). In the plots the mean grade by distance from the contact is represented by the red
line series; the interpreted contact itself is represented by the vertical black line (at zero
distance).
For the limonite domain, the contact analysis plots for the upper and lower sub-domain contact
shows two clear groupings of variables; those that demonstrate a trend of grade through the
sub-domain boundary, and those that show a distinct statistical shift either side of the boundary.
Those that show a gradational trend in grade across the limonite sub-domain boundary are Ni,
Co, Al and (to a lesser degree) Mn. The contact analysis plots for these are shown in Figure
22.
Variables demonstrating a distinct statistical shift either side of the boundary are Fe (as would
be expected), Mg and SiO2, and Cr2O3. The contact analysis plots for these are shown in
Figure 23.

Figure 22: Contact analysis for the upper and lower limonite sub-domains for Ni, Co, Al and Mn
respectively.
Figure 23: Contact analysis for the upper and lower limonite sub-domains for Fe, Mg, SiO2 and
Cr2O3 respectively.
The contact analysis for CaO is less clear, possibly affected by some other control on
distribution.
The contact analysis for CaO in the limonite sub-domains is shown in Figure 24.
Figure 24: Contact analysis for the upper and lower limonite sub-domains for CaO.
For the saprolite domain, only three variables show evidence of an abrupt statistical change
across the 0.7% Ni sub-domain contact. The most distinct, was Ni, but Co and Fe also
displayed a marked change at the sub-domain boundary, as shown in Figure 25. Less distinct
or lower magnitude statistical shifts are shown by Al, Mg, Cr2O3 and MnO, given in Figure 26.

Gradational distributions across the contact are demonstrated by SiO2 and CaO, shown in
Figure 27.
Figure 25: Contact analysis for the upper and lower saprolite sub-domains for Ni, Co and Fe
respectively.
Figure 26: Contact analysis for the upper and lower saprolite sub-domains for Al, Mg, Cr2O3
and MnO respectively.
Figure 27: Contact analysis for the upper and lower saprolite sub-domains for SiO2 and CaO
respectively.
From the statistical analysis and assessment of the validity of the Fe based sub-domains in the
limonite domain and the Ni based sub-domains in the saprolite domain, it is seems evident that
the sub-domains are valid for a number of variables. These variables would benefit from
separate estimation using the sub-domain contact as a hard boundary while others would not

benefit, and may in fact be adversely affected, by the imposition of a hard sub-domain
boundary. It also needs to be noted that for some variables in the lower limonite sub-domain
there is a significant reduction in the number of assays available for estimation, for example
CaO, Cr2O3 and MnO are reduced to 295 samples.
In the limonite domain, Fe, Mg and SiO2 would benefit from separate estimation into the sub-
domains while Ni, Co and Al would be more robust with estimation into the parent domain.
The cases for CaO, Cr2O3 and MnO are less clear cut, so these variables were estimated into
the domains and sub-domains in parallel for assessment (see the Final Model section).
For the saprolite domain, Ni, Co and Fe are likely to benefit from separate estimation into the
sub-domains, but CaO estimation will likely be more robust into the parent domain.
The cases for SiO2, Al, Mg, Cr2O3 and MnO are less clear cut and these variables were
estimated into the domains and sub-domains in parallel for assessment.
14.3 Variography and Estimation
Experimental variograms were generated for the nine variables in the two main domains and
the four sub-domains. Given the orientation and geometry of the domains and sub-domains
variography was generated in the horizontal plane with an additional downhole direction to help
model short range structure and calculate the nugget. Little anisotropy is evident in the
horizontal plane so all but three of the variogram models are omni-direction in the horizontal
plane.
A lag value of 30m to 60m in the horizontal plane was used with 1m in the vertical direction.
Using a slicing height of 2m to 5m in the horizontal plane provided an improvement in variogram
structure. The models are tabulated in Table 23 and Table 24.
For the variables estimated into both the main domains and sub-domains in parallel the domain
variogram models were used for both estimates.
The grade variables showed relatively low nuggets being less than 10% for the limonite domain
rising to about 20% for the saprolite domain. The nuggets rose for the sub-domain up to 40% in
the case of Mg in the lower limonite and Co in the lower saprolite but were generally around or
below 20% otherwise.
The majority of the variance was taken up in the nugget and first structure with the range of the
first structure rarely exceeding 40m. The second structure ranges were generally below 150m
with a very few exceeding that range.

Table 23: Limonite Variogram Models
Estimation was performed using ordinary kriging (OK) and followed the general methodology
and parameters used in Gifford (2010). OK was run for each of the variables into either the
domains or sub-domains as determined by the Phase 1 assessment. The domains or sub-
domains estimated for each variable is given in Table 25.

Table 24: Saprolite Variogram Models
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Table 25: Domains and sub-domains estimated for each variable
(Sub)Domains Ni Co Fe Al Mg SiO2 CaO Cr2O3 MnO
Limonite Yes Yes Yes Yes Yes Yes
Upper Limonite Yes Yes Yes Yes Yes Yes
Lower Limonite Yes Yes Yes Yes Yes Yes
Saprolite Yes Yes Yes Yes Yes Yes
Upper Saprolite Yes Yes Yes Yes Yes Yes Yes Yes
Lower Saprolite Yes Yes Yes Yes Yes Yes Yes Yes
The search ellipses were oriented according to the local dip and dip direction using the
Datamine dynamic search feature, which allows the search neighbourhood ellipse dip and dip
direction to be defined separately for each block (in this instance, the variogram was also
rotated to align with the search, but this does not always need to occur). This has the advantage
of having a locally-varying orientation over a domain, where an ‘average’ dip and dip direction
would not necessarily honour the local grade geometry.
The local dips and dip directions were calculated from the orientation of the limonite/saprolite
boundary wireframe triangles, approximating the dip of each of the mineralised domains. Note
that tolerances can be set during this process, so that ‘erroneous’ points will not be generated,
such as vertical dips at the edges of the wireframe.
These points were then used to produce the dip and dip direction for each parent block -
essentially the dip and dip direction are treated as variables and estimated into the block model
using special parameters (to account for dip between 90° and -90°, and dip direction between 0°
and 360°).
Then, during estimation of the grade variables, the search ellipse and variogram orientation is
rotated appropriately for each parent block.
To limit the effect of downhole drift evident for many of the variables a restricted search was
used for the vertical direction. Three estimation runs were conducted with less restrictive
parameters for each successive run to inform the maximum number of blocks as possible. The
main neighbourhood search parameters are given in Table 26 and a block discretisation of
5x5x1was used.

Table 26: Estimation neighbourhood parameters.
Estimation X direction Y direction Z direction Minimum Maximum

run number (m) (m) (m) number of number of
samples samples
Run 1 150 150 5 10 40
Run 2 300 300 10 4 40
Run 3 600 600 20 4 20
The results of the estimates into each domain or sub-domain are provided in Appendix 5 (Model
Stats worksheet). This includes the number and percentage of uninformed cells and negative
kriging values.
The percentage of uninformed cells for each estimate was extremely low, being less than 0.3%
for the poorly informed variables and less than 0.05% for the well informed variables. The
exception to this was for lower limonite, which has the fewest sample numbers, and has up to
3% uninformed cells.
Five variables reported negative kriging results for all estimates. These negative results are an
artifact of grades receiving a negative weight at the periphery of the search ellipse. These were
very minor in number with a maximum of 0.37% cells for CaO in the upper limonite (Appendix
5).
For the final model these uninformed cells and those with negative kriging results were
assigned positive values. The assigned values were determined by visual inspection of the
areas affected in the model for each domain or sub-domain with a general value of the
surrounding grades used. These minor numbers of affected cells will not have affected the
overall quality of the estimation.
As an indication of the level of sample support, Table 27 shows the percentage of cells informed
in each estimation run and the mean number of samples used for Ni in the limonite and upper
and lower saprolite and Fe in the upper and lower limonite.
Table 27: Percent cells informed in estimation runs and mean number of samples used
Dry bulk density was assigned to the model (limonite 1.24, saprolite 1.45).
Validation of the estimates was conducted by comparison of the estimate statistics to the
informing composite sample statistics, swath plots and on-screen visual validation.

Statistical comparison of the model to samples shows a very close match between means, and
a sensible reduction in variance. The comparison of sample to model means is given in Table
28 with a more comprehensive comparison provided in Appendix I (Model Stats worksheet).
Swath plots were generated for each variable on E-W and N-S slices at 50m spacings and
compared the mean grade of the block model and composites in each slice. The swath plots
are contained in Appendix II. An example is illustrated in Figure 28 which compares Ni in the
limonite domain. In all cases the block model follows the trends of the composites with the
expected reduction in variability.
To assist in assessment of the variables estimated using both the main domains and sub-
domains, the sub-domain swath plots for these variables also had the domain model (restricted
to the sub-domain) plotted as well. An example is given in Figure 29, with all sub-domain plots
given in Appendix II.
Table 28: Composite vs. block estimate comparison
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Figure 28: Comparison of composites against the block model for Ni in limonite.
Figure 29: Comparison of composites against the sub-domain and domain block models
for Cr2O3 in upper saprolite.
On the basis of the validation process it was evident that for variables estimated into both
domains and sub-domains both produced valid estimates with little difference between them.
14.4 Resource Classification
As only 40 holes had been added to the previous estimation data set, and those were in 5
tightly spaces ‘grade control’ grids, the classification applied to the previous estimate (Gifford,
2010) was applied in this study.

The resource classification reflects confidence in both geometric interpretation and confidence
in geostatistical grade estimates, and also classifies the resource in a spatially coherent
manner, avoiding small areas of different categories. The vast majority of the deposit is drilled
on 50m x 50m or 100m x 100m grids, which is sufficient to support an Indicated Resource
category. The only areas of Inferred Resource are around the steep-sided creek systems,
where the drilling is on a broader pattern and the laterite horizons thin out. Measured Resource
is restricted to that part of the resource where the drilling has been on 25m x 25m centres
(Figure 30).
Figure 30: Resource classification, Agata North Deposit
Decisions on whether the variables were better estimated into domains or further divided into
sub-domains was made on the basis of the EDA, contact analysis and the validation of the
estimation results.
Ni, Co and Al for limonite and CaO for saprolite demonstrated clear continuous trends across
the sub-domain boundaries and were estimated into the main domains only. Fe, Mg and SiO2
in the limonite and Ni, Co and Fe in the saprolite showed a distinct statistical shift across the
sub-domain boundaries and were estimated into the sub-domains only.

For the other variables, CaO, Cr2O3 and MnO in the limonite and SiO2, Al, Mg, Cr2O3 and
MnO in the saprolite, the statistical shift across the sub-domain boundaries were less distinct or
of lower magnitude but did not exhibit a clear continuous trend. These variables were estimated
into both domains and sub-domains with validation indicating both approaches resulted in
acceptable results. However, the sub-domain validation appeared marginally superior and with
no evidence of an adverse effect from the hard sub-domain boundaries, the sub-domain
estimates for these variables were used in the final model.
The Mineral Resource Estimate figures above a 0.5% Ni cut-off for limonite and above a 0.8%
Ni cut-off for saprolite are presented in Table 29. (variable grades are in %).
Table 29: Agata North Mineral Resource Estimate as at 18th March 2013.
In comparison to the August 2010 resource there is an increase of 4.1Mt in the Measured and
Indicated. Including a Ni grade increase in comparison to the previous estimate (from 1.03% to
1.10%), thus contained Ni metal for the Measured and Indicated has increases by 21% (from
307kt Ni to 373kt Ni).
Nickel grade-tonnage curves for the Measured plus Indicated resource at 0.05% incremental
cut-offs shown for the domains and sub-domains are shown in Figure 31 to Figure 36.

Figure 31: Grade-tonnage curve, Measured + Indicated, Limonite.

Figure 32: Grade-tonnage curve, Measured + Indicated, Saprolite.
Figure 33: Grade-tonnage curve, Measured + Indicated, Upper Limonite.

Figure 34: Grade-tonnage curve, Measured + Indicated, Lower Limonite.
Figure 35: Grade-tonnage curve, Measured + Indicated, Upper Saprolite.

Figure 36: Grade-tonnage curve, Measured + Indicated, Lower Saprolite.
14.5 Interpretation and Conclusions
The presence of large areas of an exposed Ultramafic along the Western Range, an upthrust
ridge east of the Philippine Fault, has provided a location for lateritic weathering of the
ultramafic. The area known as Agata North has been enriched within the laterite profile in Ni
and Co.
The ANDP has two distinct geomorphic features that have influenced laterite formation and
consequent nickel enrichment. The Eastern part of the delineated body has a moderate relief
whose bedrocks are exposed in ridge tops and in the nearby creeks. The Western laterite
occurs on a low relief terrain and with no exposures of bedrock on its hillcrests. In the Western
area, the laterite is well developed and contains thick and highly mineralized limonite/saprolite.
The Eastern Laterite Zones contain some boulders within the laterite profile. Its limonite zone is
usually thinner.
The laterite profile in the ANDP consists of the ferruginous laterite, limonite and saprolite zones
or horizons, and the saprolitic rock, from surface to increasing depth. The limonite zone is
characteristically iron oxide-rich, where the predominant minerals are hematite, goethite and
clays, and with moderate nickel content (over 1%), which overlies the saprolite zone that has
much less oxidised, is magnesium -rich, and has a slightly higher nickel content than the
limonite horizon, with grades in both zones generally at their highest near or adjacent to the
contact zone.
This report is based on the data that were produced and compiled by MRL. Data verification
performed by the author found no discrepancies in the sampling and analyses that biased the
data set. Hence the database is considered adequate to meet industry standards to estimate
mineral resources.

The resource was calculated by Quantitative Group using Ordinary Kriging as the estimation
method. Both the limonite zone and the saprolite zones were estimated independently as the
form of mineralisation in both zones were unique and could not be used for comparative
statistics. Each of the limonite and saprolite zones were further subdivided and specific
elements re-estimated to account for both geochemical and mineralogical variation seen within
the major lithologies. The measured and indicated resource estimated from this report is as
below:
33,938,000t ore @ 1.10%Ni, 0.05%Co, 22%Fe
The cut-offs applied to the resource were 0.5%Ni for Limonite and 0.8%Ni for Saprolite (as per
the previous estimates completed upon the ANDP, (Cox, 2008 2009a 2009b, Gifford 2010). The
last resource calculated on the ANDP (Gifford, 2010), had the following tonnage and grade:
29,790,000t ore @ 1.03%Ni, 0.05%Co, 23%Fe
Variations in grade can be explained by the application of a grade restrictive delineation

between the upper and lower saprolite and variation in tonnes are explained by the restriction
on the influence of lower grades within the lower saprolite thus giving a greater tonnage
>0.8%Ni estimated (Appendix 6). With the increase in tonnage there is also a tonnage increase
in total Ni tonnes (from 307kt to 373kt contained Ni).

15 Mineral Reserve Estimate
15.1 Introduction
This section outlines the pit optimisation parameters and pit design methodology used to
determine the Proven and Probable Mineral Reserve estimate for that part of the ANDP
resource amenable to a direct shipping of high iron limonite. The source block model was a
10m x 10m x 1m regularised version of the block model developed by Quantitative Group (QG)
in March 2013.
15.2 Pit Optimisation
This section discusses the pit optimisation parameters that were used to define the economic pit
limits.
The pit optimisation process was run using Mintec's MineSight Economic Planner software.
The selling price estimate used for pit optimisation was USD 19/wmt FOB. This is a
conservative estimate as the average selling price advised by off takers over the last 18
months has been USD 24/wmt FOB, and the base case sale price used in this study is USD
22/wmt FOB.
o
The overall slope used in the pit optimisation process was 34 . This is conservative given that
the outer walls generally daylight to the natural topography, and the average wall height to base
of limonite is typically less than 8 metres.
Ore Mining Cost - The mining cost of ore used in the analysis was USD 10/wmt, inclusive of ore
drying, blending, rehandling, road maintenance, environmental, administration, VAT, fees and
other services associated with the mining and rehandling ore.
Ore Mining Cost - The mining cost of waste used in the analysis was USD 7.50/wmt, inclusive of
road maintenance, environmental, administration, VAT, fees and other services associated with
the mining waste.
Barging Cost - The barging cost used in the analysis was USD 2.00/wmt inclusive all services
associated with barging operations.
The pit optimisation process was rerun using MineSight Economic Planner software to generate
an optimised pit surface that was used as a basis for pit design. The pit optimisation process
was rerun using a net value technique based on a pre-tax margin of USD 7.00/wmt for material
grading higher than 44 Fe%.
15.3 Pit Design Parameters
The pit surface generated was trimmed of non-contiguous or spotty mining areas, zones less
than 1.5m thickness, and areas on slopes considered too steep to mine. This formed the basis
for the pit design using overall batter slope assumption of 36o.
Whilst the depth from natural surface to the base of limonite varies up to 10 metres at Agata
North, the height of the outer pit walls is generally below 5 metres.
Most of the roads and ramps are of a temporary nature, and have been predominantly confined
within the pit extents. All roads within the pit were designed at a width of 15 metres (including
safety berm and drain) at a maximum gradient of 10%.
A perspective view of the pit design for Agata North is shown in Figure 37.

Figure 37: Agata North Pit Design (3m benches) and main road network
15.4 Mineral Reserves
The DSO Mineral Reserve is based on the designed pits at Agata North. The Proven and
Probable DSO Reserves are shown in Table 30.
The Proven and Probable DSO reserves are based on a cut-off grade of 44 Fe%. A 44 Fe%
cutoff was chosen as at this cutoff grade the average grade of Limonite equates to the
marketable shipping grade of 48 Fe% in current and historical high iron DSO markets.
Table 30: Mineral Reserves

Classification Horizon M dmt M wmt Ni% Co% Fe% Al% Mg% SiO2%
Proven
Limonite 0.18 0.26 1.00 0.11 47.1 3.0 1.6 5.6
Saprolite
Subtotal 0.18 0.26 1.00 0.11 47.1 3.0 1.6 5.6

Probable
Limonite 6.61 9.44 0.93 0.11 48.3 3.4 0.5 3.0
Saprolite
Subtotal 6.61 9.44 0.93 0.11 48.0 3.4 0.5 3.0

Proven +
Probable Limonite 6.79 9.70 0.93 0.11 48.0 3.4 0.5 3.1
Saprolite
TOTAL 6.79 9.70 0.93 0.11 48.0 3.4 0.5 3.1

16 Mining Methods
TVI will employ a contour mining system that involves several phases including the following:
Pre-mining drainage works and land clearing
• Overburden Removal and Storage

• Ore Mining, Ore Stockpiling and Ore Rehandling
• Progressive Rehabilitation
16.1 Introduction
Mining operations will be maximised in the dry season, and no areas will be disturbed until
drainage control measures and erosion control facilities such as settling ponds, fascines and/or
mini rock dams have been installed to minimise erosion and siltation.
16.2 Site preparation
Land clearing will commence ahead of mining and includes clearing of shrubs, and removal of
humus just ahead of overburden removal. Dozers, excavators and trucks will undertake this
work. This material will be stockpiled at designated areas for use in future rehabilitation works.
Prior to any earthworks being carried out, excavators and dozers will be used to construct
drainage and diversion channels to direct runoff into settling and sedimentation ponds.
16.3 Grade control
To ensure that optimal material classification will be implemented during the pre-development
and mining stages, considerable attention will be committed to grade control prior to and during
mining operations.
Face/slope sampling at 3 meter intervals between sample channel/cut and/or XRF grade control
monitoring will be carried out during mining. One sample/reading shall be collected for every
one meter at the channel. Samples will be dried, split and assayed at an onsite laboratory.
Colour coded ribbons will be installed at the face and on benches signifying the grade and
classification of the ore thus aiding the excavator operators and grade control personnel on the
type of material being excavated.
Grade control personnel will be assigned to active mining areas as required.
16.4 Excavation and Haulage
Mining is planned initially, as simple benching operations using hydraulic excavators. Generally
an area to be mined will be developed with an on-contour terrace, bench or road. The
maximum bench height will be 3 metres.
Ore will be loaded into either 30 tonne capacity articulated mining trucks or 25 tonne on-
highway trucks, depending on bench or weather conditions. The trucks will operate on
unsheeted bench roads or sheeted permanent mine haul roads with gradients up to 12%
(articulated trucks), but generally between 5-10% gradients. It is has been estimated that bench
and weather conditions will be suitable for haulage from the pit using on-highway trucks only
50% of the available time, with the remainder of time allocated to utilisation of articulated trucks
in wet or soft bench conditions.

The trucks will haul ore to the main stockpile are on the plateau where it will be dumped on the
appropriate stockpiles according to its material type categorisation.
A lower bench will be developed once the bench above has advanced sufficiently to allow for a
15m working bench width. The excavator will retreat to the position where initial bench
development commenced to develop the new bench.
The mining schedule is based on 2-3 areas being mined at any given time; however one or
more fleets could work on separate benches within one area, depending upon operational and
blending requirements.
16.5 Ore Stockpiling and Drying
Stockpiling will be done at the main stockpile area on the plateau. Grade controllers will control
dumping onto various stockpiles in accordance with material categorisation based on iron,
nickel and phosphorus grades.
Ore will be dried using a combination of excavators and front end loaders and diligently
sampled to ensure that the ore meets moisture criteria for shipping prior to rehandling. This is
targeted at or below 35% moisture content.
16.6 Topsoil and Overburden Disposal
Topsoil and overburden material removal will be carried out by hydraulic excavators, loading 30
tonne capacity articulated mining trucks for transport to overburden dumps, stockpiles, or mined
out areas.
Throughout the DSO mine life, the location of topsoil and overburden dumps will be optimised to
minimise erosion, runoff, and rehandle haulage distances.
16.7 Road Sheeting
Road sheeting will be sourced from suitable sub-grade material from the limestone quarry which
is approximately 3.5 km from the pit. The road sheeting material will be loaded into either 30
tonne capacity articulated trucks or 25 tonne capacity on-highway trucks, and
hauled/placed/compacted in 300 mm thick layers using dozers, graders, water trucks and a
rollers.
Table 31 shows the allowance for road sheeting materials over the life of the project.
Table 31: Road Sheeting
1 1-3 4-11
Year
Sheeting Km 10.4 5.0 3.5
16.8 Fleet selection
Fleet selection was based on a combination of criteria with consideration to production

requirements, operational flexibility, minimum mining widths and ability to operate continuously
in light to moderate wet weather conditions.

The primary fleet will consist of a 36 tonne hydraulic excavators loading unit and 30 tonne
articulated dump trucks. The secondary fleet will consist of a 22 tonne Front End Loaders and
25 tonne on-highway trucks. Additional 36 tonne hydraulic excavators will provide backup
support for the primary and secondary loading units as well as providing loading capacity at the
limestone quarry and functioning as an ancillary unit for drainage, environmental and
rehabilitation works.
Trucking requirements, cycle times and average truck speeds were determined using Caterpillar
Fleet Production Cost (FPC) software. The trucking requirements fluctuate throughout the mine
life due to fluctuation in haulage distances.
Tracked dozers (150 kW) will be utilised for pit development and floor maintenance, and
stockpile and dump maintenance, and rehabilitation works.
Motor graders (145 kW) and Water Trucks will be utilised to maintain pit haul roads, the port
haulage road and all access roads on the project site.
16.9 Ore Haulage
The secondary fleet (22 tonne Front End Loader and 25 tonne on-highway trucks) will be
primarily used for haulage from the Pit stockpile to the Port Loading facility.
The Pit stockpile is located 3.5 km from the Port Loading facility. Samples will be taken from
trucks enroute to the Port Loading facility, composited and assayed to ensure shipments comply
with iron, nickel and phosphorus grade, and moisture content specifications.
16.10 Drainage and sediment control
During construction, diligent effort will be made to minimize the duration of soil exposure by
scheduling earthworks during the dry season and completing remedial works as soon as
possible after grubbing, retaining existing vegetation where possible, and grading disturbed
areas to a stable slopes.
Drains will be developed to divert water from entering disturbed areas. The general channelling
of the water from benches and mine roads will be toward areas with space and elevation
adequate for settling ponds or sumps. These ponds and sumps will be positioned as close as
possible to the disturbed area.
Reduced runoff velocities will be achieved by using gentle drainage grades, lining erodible soils
with suitable material (rip-rap or brush), construction of check dams in ditches, and sizing the
ditches to handle the expected runoff from precipitation.
A critical element of the storm water and runoff management is the maintenance of the drains
and sediment retention structures. This entails periodic removal of sediment load, proper
disposal and encapsulation of the sediment.
16.11 Environment and rehabilitation
Rehabilitation will commence after mined-out excavations are backfilled and in-pit dumps are
established. The details of the work programme within a given area will depend on the local
bench configurations and ultimate landform design. Some small steep benches will be left
exposed, while mined areas will be backfilled and graded to long-term stable slopes.
Buffer zones will be set up along the slopes of haul roads and at the margins of the pit extents.
The buffer zones will perform filter, barrier, and sink functions for the projects emissions and
effluents.

The progressive rehabilitation methodology will minimise the extent of disturbance and the time
of exposure of disturbed areas.
Mitigating measures such as sumps, fascines, mini rock dams, and settling ponds will be
constructed to minimize the impact of erosion. The fascines and mini rock dams will prevent
sediments from moving downhill and impacting areas adjacent to the construction or mining
sites. The settling ponds will slow down water and provide some time for the sediment to drop
out of suspension leaving a cleaner water effluent.

17 Recovery Methods
17.1 Introduction
There will be no ore processed at the project site. Blending and ore drying activities will occur
at the Pit stockpile on the top of the plateau approximately 3.5km from Payong Payong.
Following blending and drying, all ore will be trucked to a Port Loading Facility at Payong
Payong bay and directly unloaded onto barges that will be moored at two berth causeway.
An Assay Laboratory and a Shipping Office will be located adjacent to the Port Loading facility.
17.2 Port Loading Facility
This section describes the Port Loading Facility proposed for the ANDP. The design basis is
outlined together with a detailed process description of each plant area, an outline of the major
equipment within each area and ancillary facilities such as utilities and reagents.
17.3 Design basis
The Port Loading Facility presented in the FS was developed from the concept of establishing a
causeway and barging facility at Payong Payong bay which is on the coast adjacent to the
Agata North deposit.
The criteria was to design a facility capable of handing up to 2.5M wmt of High Iron limonite ore
per annum. Vessel characteristics that are expected to utilize the facility were given in the
requirements provided by TVI. The vessel is about 5,000 DWT barge and its properties were
used to evaluate the mooring forces to be applied in the structural design of the mooring dolphin
structures.
17.4 Design concepts
17.5 Location
The selection criteria for the location of the Port Loading facility was based on the following:
• vessel characteristics
• hydrography
• geotechnical characterization
• environmental conditions
Figure 38 shows the preferred causeway position near the proposed access road development.
This site is preferable because it does not interfere with the flow of nearby creeks, and is
accessible to a possible site for a jetty for a potential on-site processing facility.

Figure 38: Location of Causeway
The barging and shipping operations are scheduled to occur for 10 months of the year on a
continuous basis of 24 hours per day, 7 days per week.
17.6 Design criteria
17.7 Introduction
The design concept of the proposed causeway allowed for two barges to be moored and loaded
at the same time with sufficient space for truck manoeuvrability. The causeway will also serve
as a temporary ramp for the delivery of equipment, construction and heavy lift materials.
Hydrographic survey mapping, conducted by EGB and Associates on the topography of the
area surrounding the proposed loading facility, was indicated in the Geophysical Investigation
and Geophysical Survey Report and was used as reference to define the water depth. The
survey data was initially traced and became the source of the seabed profile elevation.
Hydrographic survey points and the cad file of the bathymetric survey were later issued for
design work.
The Geotechnical Investigation and Geophysical Survey Report, November 2010 showed the
four drill holes at the onshore side of the proposed project location conducted by a local soil
investigation subcontractor.
Hydrodynamic and meteorological data adopted were based on the GHD Port Facilities Report
for Agata Nickel Project done in December 2010.
A site inspection on the proposed location and its surrounding area was carried out by two
PTCC engineers from March 4 to March 6, 2013. Photos, notes and other relevant data were
collected.

Based on the GHD report, the prevailing wind pattern in the area are the North East and South
West winds. South West wind occurs during July to October. North East monsoon winds occur
from October to March, but the ANDP is relatively sheltered from these. During the course of the
inspection at the proposed site, it was observed that there are four (4) waterways along the
shore that shows signs of scouring as evident by exposed roots of small trees. Corals are
approximately within 10m off the shore.
Figure 39: Locations of creeks on shoreline
The particular criteria adopted in the Port Loading Facility site selection include:
• Caters two (2) - 5,000DWT barges at causeway
• Caters one (1) 50,000 DWT bulk carrier at the jetty (in the future)
• Least distance to possible stockpile/s area
• Least distance of ore source and access road to the shoreline
• Minimal interference of creeks flow/discharge
• Nearest distance to rock material sources
• Nearest location to uniformly aligned seabed at El. -15.0 m for jetty (in the future)

Applicable Codes and Standards
• Design Manual for Ports and Harbor Facilities in the Philippine Port Authority (PPA) - 1995
• National Structural Code of the Philippines NSCP, Vol. I Buildings, Towers and vertical
Structures 5th Edition - 2001
• American Institute of Steel Construction (AISC), Manual of Steel Construction, 9th Edition
• American Concrete Institute (ACI Publications), ACI 318-08 for Reinforced Concrete and ACI
315 for Detailing of Concrete Reinforcement, 2005
• American Welding Society (AWS)
Basic Design Loads
Dead Loads
Concrete 24.00 kN/m3
Steel 77.00 kN/m3
Soil 18.00 kN/m3
Salt Water 10.00 kN/m3
Live Load
Truck load 10 wheeler truck
Environmental Loads
Wave Wave height = 2.0m
Wind loads Zone 2 - 200kph
Seismic Loads
Zone 4; z = 0.40
Vessel Parameters
Carrying 5,000 DWT
Overall Length 80 m
Beam 22 m

Laden Draft 4m
Vessel Type Barge
Berthing Type Front Berthing
Tractive Force 50 Tonnes
Materials
Concrete
All materials and workmanship shall conform to the latest building code of American Concrete
Institute (ACI-318-08). The minimum compressive strength at 28 days (f’c) for each class of
concrete shall be as follows:
Steel
All reinforcing steel shall be deformed bars conforming to ASTM 615 (AASHTO M31) with the
following minimum yield strengths:
Rocks
All rocks shall conform to the specification:
Earthworks
Earthworks shall conform to DPWH 2004 Specification:

Design
The rock fill causeway design is shown in Figure 40.
Figure 40: Rock FIll Causeway Design
The rock filled causeway consists of fill core materials with run-off quarry rocks weighing 20
kilograms to 1.5 tons. This fill material is protected by armour rocks weighing 1.5 to 3 tonnes. In
this scheme, the causeway needs a large supply of rock and preferably the source of material
should be nearer to the site to avoid the high cost of hauling.
No permanent surface of the causeway, such as concrete slab, is recommended to avoid

unnecessary replacement due to cracks since allowance for settlement/consideration of the fill
materials is taken into consideration. The surface will instead be a 300mm thick base course
and a 500 mm thick sub-base course. A geotextile lining shall be laid between the core fill
materials and the armour rocks to prevent the fines from coming out.

Figure 41: Causeway Cross Section
The approach causeway is about 10m wide to cater two ten wheeler trucks with a capacity of 20
cubic meters during the mining operation. The length of the causeway is measured from the
shoreline to the point where El -5 is located to accommodate a 5000 DWT barge.
Based on the bathymetric survey the resulting length is approximately 120m, however a 160m
length is recommended. The length is broken down into a 100m long approach while the jetty
head is a 60m long rock-fill structure and 70m wide to allow manoeuvrability of at least eight
trucks transporting the nickel ore. Armour rock weight ranges from 1.50t to 3t while core rocks
weight is from 20 kg to 1.50t. The two materials are separated by a geotextile lining.
Four mooring dolphins having a dimension of 3.5m x 3.5m x 1.2/1.5m thick are provided to
secure the ship while in berth. The mooring dolphins are supported by steel piles. Additional
mooring dolphins with a dimension of 1.50m x 2.50m x 1.20m thick were also provided. 50t
mooring bollards are also provided to secure the ship during berthing.

Figure 42: Port Loading Facility Layout and Bathymetry
Construction Materials
The selected scheme will require a large amount of fill materials and armour rock as well as
materials for sub-base and base course,
The preferred source of materials is Payong Payong limestone deposit which is within 2km of
the proposed site. Results from 4 diamond drill holes indicated that there is a contiguous
limestone unit averaging 55 metres in thickness over an area exceeding 3.6ha, and in excess of
5 million tonnes of limestone.
Transportation will be by 30t articulated trucks via an access road from the material source to
the Port Loading Facility site.
Construction Timeline
Figure 43 shows a construction timeline encapsulating the key elements of the construction
activities, the relationship among the activities and the respective time frame for each activity.
The construction schedule is based on the 2-3 km distance of the material source to the site.

Figure 43: Causeway Construction Timeline
17.8 Assay Laboratory
This section describes the Assay Laboratory for proposed for the ANDP.
17.9 Design Basis
Based on grade control, blending and QC for shipping requirements, the ANDP assay
laboratory will require to carry out sample preparation and assaying on up to 300 sample per
day for elements including but not limited to Nickel, Iron, Cobalt and Phosphorus.
Assay Laboratory equipment requirements and cost estimates were provided by Intertek
McPhar (Manila). Table 32 lists Assay Laboratory equipment requirements.

Table 32: Assay Laboratory requirements
Sample Preparation Equipment

Hot air circulating Oven 1 ea
500L Drying Oven 1 ea
Analytical Balance - 30Kg/ 0.1g 1 ea
Analytical Balance - 1.2Kg/ 0.01g 1 ea
Compressor 15HP screw, With Air Drier, & Filters 1 ea
Dust Extraction System 1000cfm & Ducting 1 ea
LM2-P pulveriser 380v 60hz 3ø 2.2 kW 2 ea
Work station 1200*750*900h, bottom exhaust ( LM2) 1 ea
Terminator crusher 380v 60hz 7.5hp+Safety hopper &
enclosure 1 ea
Sample Splitting Hood 1500*800, 1 ea
Riffle Splitter 11mm chutes 1 ea
Sample Storage Shelving 1 ea
Sieves- 200mm 4 ea
Sample prep Benches 2 ea
Balance Room Equipment XRF Press
Balance Analytical 310g/ 0.001g 1 ea
XRF Pellet Press ( 25T)- Manual 1 ea
XRF - 40mm Die Set 1 ea
XRF- Dessiccator 1 ea
Calibration Mass weights (certified)- Kit Class F1/F2 1 ea
Calibration Mass weight 1Kg 1 ea
Calibration Mass weight 2Kg 2 ea
Calibration Mass weights 20Kg? 1 ea
Instrument Room –XRF
XRF- EDS Bench top, including Vacuum pump. 1 ea
XRF- UPS 6KVA 1 ea
Computer
Computers, HP Compaq 8200 Elite MT 1 ea
Microsoft Office Software 1 ea
UPS for PC, APC ES 500VA 1 ea
Laser Printer HP 2055DN 1 ea

17.10 Buildings
The Assay Laboratory and Shipping Office will be located in the same complex adjacent to the
Port Loading Facility. Figure 44 and 45 show perspective views and the general layout of the
Assay Laboratory and Shipping Office.
Figure 44: Perspective view of Assay Laboratory and Shipping Office
Figure 45: General Layout of Assay Laboratory and Shipping Office

17.11 Power, Water and Utilities
Power to Assay Laboratory and Shipping Office will be supplied by a 50kVA generator.
The Payong-Payong creek will supply the water requirements of the complex. This water will
only be used for bathing and daily requirements of the camp for cleaning, whilst potable or
drinking water will be supplied by a water refilling station in nearby municipality.

18 Project Infrastructure
18.1 Introduction
This section presents infrastructure requirements for the proposed ANDP.
The existing infrastructure in the vicinity of Agata North consists of MRL's exploration camp and
compound adjacent to the deposit, and the Colorado road; a gravel road of about 5 m width
which provides access to Jabonga in the north.
Key factors that have influenced the current proposed location and layout of the infrastructure
for the project include:
• the site topography and current land usage

• accessibility to the Pan-Philippine highway national road
• proximity to the Colorado road
• proximity to the laterite deposit and the Payong-Payong bay
The infrastructure has been developed on the following basis:
• General Infrastructure requirements assessment; such as a base camp, ore transport

road and communications.
• Temporary Construction Facilities assessment; such as the construction camp,
warehousing, lay down areas, temporary power supply and waste disposal which will be
required during construction of the Port Loading facility.

18.2 Infrastructure Study
Table 33: Infrastructure Study
Task Comment
Design developed for ore haulage route including

Delivery of ore to Stockpile access road to Pit Stockpile and Port Loading
facility
Fresh water storage, supply and Raw water requirement has been determined and
distribution supply sources identified.
Diesel gensets will used for the duration of the DSO

Power Supply
operations
Fuel storage requirements have been determined

based on potential disruption of supply to the
Fuel storage, supply and distribution
gensets, mining fleet and general site support
vehicles for one month.
Civil works including accommodation,

site offices, stores and maintenance Preliminary sizing of service buildings, construction
workshops and miscellaneous camp and miscellaneous infrastructure has been
infrastructure identified during the undertaken
study
Design for communication and IT facilities for

buildings, offices, base camp and other facilities
Communication & IT facilities
including the mine support facility, have been
completed.
The overall plan layout was developed during the feasibility study as follows:

Figure 46: Overall Layout Plan
18.3 Transport Infrastructure
18.4 Road summary
An existing gravel road of approximately 5 m width provides access to the area from the main
sealed road at Tubay. This road passes through La Fraternidad and Binuangan villages and
continues on to Jabonga at an elevation varying from 20 to 60 m above sea level.
This existing road will be upgraded to be 6 m for two lanes of light vehicle traffic. This road will
be the public road as before since the mining and process plant activity will have an exclusive
operational road as the JV owned private road.
18.5 Access roads
The project’s mine site is accessible by any land vehicle from Butuan City or Surigao City via
the Pan-Philippine Highway and the connecting municipal roads.

The access road to the ANDP is from Lawigan/Jabonga to the mine site by municipal road.
The access road was upgraded to a farm to market road by MRL in 2006. The road requires
resurfacing and widening in several locations to handle the increase in light traffic, and a back-
up to sea transportation.
18.6 Site roads
Site roads are described as the roads connecting facilities and areas for the ANDP on-site.
These roads include the haul roads which are used for transporting the ore from the mine site to
stockpile area on the plateau, ore from the stockpile to Payong Payong Port Loading Facility,
sheeting material from the quarry.
Figure 47: Road Sections
Haul roads
The purpose of the haul roads is for the transport of ore and road sheeting materials using
either 30t articulated trucks or on-highway trucks, as well as general access for light vehicles,
ancillary fleet and service vehicles.
Public use will be prohibited in this area with the concern for HSEC and incidents with large
haulage trucks and mine support vehicles.
Haul trucks
The major vehicles using the Stockpile to Port haul road will be Isuzu Giga, Volvo Truck FMX
type or similar type with a 25.2 tonne pay-load capacity, gross vehicle weight (GVW) of

approximately 48 metric tonnes. The haul road will periodically be used by 30 tonne capacity
articulated trucks hauling ore from the mine to the ore stockpile area.
Typical haul trucks, and specifications for articulated and on-highway trucks are shown in Figure
48.
Figure 48: Typical Haul Trucks

Table 34: Road Development Summary
Existin
Design
Descriptio g
Section Category
n
Lengt
Width Width Pavement
h
base course =
Section Colorado Upgraded road = 6 m
4m 3.2km 15 cm
1 Road - Main access road
Gate shoulder = 2x1
m
Section subbase
Main Gate - New road road = 9 m
2 - 2.0km course = 30 cm
Mine
Section subbase
Mine Area - New road road = 15 m
3 - 4.0km course = 50 cm
Port
Quarry subbase
Section road = 15 m
Access New road course = 50 cm
4 - 1.2km
Road
Haul Road parameters
• Batter slope : Cut Horizontal : Vertical 1:1

• Rill slope : Horizontal : Vertical 2:1
• Maximum road gradient : 10%
• Maximum design speed : 40 km/hr
• Road design life : 10 years with regular maintenance
18.7 Water Supply
The Mantiawas Creek supplies the water requirements of the camp. This water is only used for
bathing and daily requirements of the camp for cleaning, garage and the nursery, whilst the
potable or drinking water is supplied by a water refilling station in nearby municipality.
Raw water infrastructure was developed for mining, as well as domestic requirements such as
administration facilities, base and construction camps.
Preliminary raw fresh water requirements are:

3
• 10 m /h for construction camp
3
• 50 m /h for the Base Camp

The Tubay River is the fresh raw water source for dust suppression on site roads. It flows from
Lake Mainit at the north to Tubay bay at the south. The Kalinawan River meets the Tubay River
near Santiago Municipality.
The GHD road and river survey mentioned the Tubay River advantages were:
• Fresh water
• Adequate flow rates
• Water available in all seasons
Figure 49: Tubay River with Lake Mainit in background
For the anticipated routine floods in the area, as stated in GHD’s Hydrological Study report for
the Tubay (Kalinawan) River, the intake pump will be mounted on a pontoon and will pump the
water to a pond at higher ground level nearby. From this point water will be pumped to the base
camp and other facilities.
The pump system has redundancy built in with duty and standby pumps allocated for all areas
with remote monitoring and start capacity provided and priced accordingly in the capital
estimate.
A Reverse Osmosis plant will be installed at the base camp for potable water supply.
18.8 Power
The MRL Agata Camp is connected to the existing cooperative power supply with a single
phase, secondary line, approximately 500 meters away from a single 50KVA transformer. This
transformer is supplying the barangay of E. Morgado, Santiago, Agusan Del Norte. The lines
supply the whole village including the activity/equipments like pumps, motors, and ball mill of
the Small Scale Miners (SSM) within the barangay.

The primary line will be extended and 100 KVA transformers installed to supply the required
peak consumptions of about 80 KVA to the base camp.
Power requirements during construction will be supplied by 150KVA diesel generators.
18.9 General Service Buildings and Ancillary Facilities
General service buildings and ancillary facilities have been assessed for supporting the DSO
operation, maintenance, administration and amenities.
These buildings are categorized as:
• Service Buildings
These buildings are related to service functions for diesel generator buildings.
• General Buildings
These general buildings include offices and mine workshop.
18.10 Buildings
All buildings and facilities will be located within the MPSA area.
Table 35: Building Facility
Location Building Requirement General Description
General
Administration • Offices • Designed for 45

persons
Gate house / Barracks • Building • Security Office area for

20 persons
HSEC and HRD • Building • Designed for 100

personnel
Other facility: ablutions,

conference room, meeting
room.
Area allocated 100 m x 50 m.
Mining Compound • Workshop • The Workshop will

house the mining
• Mine Office
contractors office,
heavy and light vehicle
maintenance
equipment , welding
bays, tools stores, and
toilet facilities.

All buildings will be fabricated on-site and based on the following:
• 100 mm reinforced concrete slab using concrete that shall have a minimum UCS of 3000
psi at 28 days
• Walls constructed from Concrete Hollow Blocks with minimum UCS 45psi at 28 days, with
PVC window and timber door frames.
• Light metal truss roof structure with Duracoor sheets
18.11 Base Camp accommodation
Base Camp means the permanent accommodation facilities for the company employees who
are working for mining and shipping operations, or supporting departments.
The base camp will cater all staff. It is expected that some of the more senior locally recruited
staff will stay in the existing nearby towns.
The following formed the basis for the feasibility study:
• Current indications are that there will be up to 250 people in mining and associated
operations.
• The Base Camp was designed to accommodate up to 300 staff and employees.
The base camp will be located on the north eastern extent of the Agata North area, adjacent to
the access road.
Figure 50: Base Camp layout

18.12 Buildings
The buildings for the site are proposed as follows:
Table 36 - Village Buildings
Building Quantity Description
VIP/Guest House 1 building 180 m2
Staff Housing 3 buildings 9 m2
Ladies Dormitory 1 building 280 m2

2
Rank and File 2 buildings 260 m
Laundry & Bath Areas 3 buildings 160 m2
Mess Hall 1 building 420 m2

2
Club House 1 buildings 330 m
2 2
270 m basket ball & 81 m badminton
Sports facility 2 complex
court
2
Power House 1 building 40 m
2
Administration 1 building 200 m
Mine Office 1 building 150m2

2
Mine Workshop – Warehouse 1 building 670 m
The building type will be fabricated on-site and was based on the following:
• Floor system – reinforced concrete with ceramic tile

• Structure – concrete hollow block and light steel truss with PVC window and timber door
frames
• Wall - typical prefabricated gypsum
• PVC piping and plumbing
• Insulation – insulation and buiding foil wrapping to roofs.

Figure 51: Plan Layout for Accommodation buildings and Hall
Figure 52: Perspective View of Mine Workshop

Figure 53: Plan Layout for Mine Workshop

18.13 Base Camp services
Base Camp services are provided to support the Base Camp daily activities and summarised as
follows:
Building/Plant Quantity/Capacity Description
Raw water supply
• Raw water storage 5mx5mx3m

3
• submersible pump 50 m /day capacity
Domestic water system

3
• Transfer pump from 50 m /day capacity Including piping – valve
storage to WTP
• RO Treatment Plant 50 m3/day capacity Clean water product into 2x

10,000 L PE tank
• Water reticulation By gravity feed to buildings HDPE piping– throughout the

village building
Sewage system
• Septic Tanks
Power supply 2 buildings Gensets
Communication system Mobile Mobile service / sat dish
Security 1 gate post
Fenced perimeter
18.14 Construction camp
The small construction camp will provide the temporary construction accomodation facilities for
TVI and contractor personnel who would be engaged on-site during the construction of the Port
Loading Facility and the haul and access roads from Payong Payong to connect to the Colorado
road.
The camp has been designed to accommodate initially 50 personnel.
The camp would be located adjacent to the Payong Payong Port Loading Facility site.
The accommodation camp consists of:
• Staff accommodation and non-staff accommodation

• Kitchen and Mess Hall
• Camp office, HSE and Security
• Diesel Genset

• Firefighting equipment
• Septic Tanks
Construction Camp Buildings
The buildings will be fabricated on-site and were based on the following:
• Floor system – reinforced concrete.

• Structure; concrete hollow block and light steel truss with PVC window and timber door
frames
• Wall’s - typical prefabricated gypsum
• PVC piping and plumbing
• Insulation - insulation and building foil wrapping to roofs.
18.15 Water
The Payong-Payong creek will supply the water requirements of the construction camp. This
water will only be used for bathing and daily requirements of the camp for cleaning, whilst
potable or drinking water will be supplied by a water refilling station in nearby municipality.
18.16 Sewerage
The camp will be equipped with eight septic tanks.
18.17 Communications & IT Summary
Communication and IT systems were provided for the following areas:
• Administration area and Base Camp

• Mining area including buildings, offices and facilities
• Port area
18.18 Radio communications
A conventional UHF/VHF radio communication and repeater system is provided for

communications within the mine, administration and port areas.
18.19 Conventional multi service network
All offices and amenities buildings will be internally connected with TCP/IP Ethernet Local Area
Network system.
The data centre will be located in the Administration building.

19 Market Studies
19.1 Recent History of DSO
The unparalleled demand for low nickel DSO began when Chinese steel manufacturers
developed a different technology processing low grade nickel ores to produce nickel pig iron
(NPI). Nickel laterite DSO with nickel grades of 0.9 - 1.1 Ni% from South East Asian suppliers
in the Philippines and Indonesia were consumed by the Chinese to feed blast furnaces, which
became a backyard industry.
Nickel laterite DSO exports from the Philippines saw a 1,288% increase in 2006. The price of
this low grade DSO reached as high as USD 80 per wmt. At this time the Tubay nickel laterite
project (operated by San Roque Metals Incorporated since 2006) approximately 5km south of
Agata North was able to complete four DSO shipments. A record of its production schedule
showed its DSO was then averaging 1.04 Ni% and 45.7 Fe%. The Zamora group of nickel
laterite mining companies in Surigao took advantage of the high demand of low grade DSO with
all its 3 mines (Cagdianao, Hinatuan, and Taganito) producing that category of ore in addition to
the production of high nickel DSO products which these operations shipped to Japan and
Queensland.
In 2007 the pricing of DSO was professionalised and based on a transfer pricing system that
was a function of nickel grade tied to LME nickel prices. By August of that year, 1.1 Ni% DSO
was being sold in the range from USD 26 - 28 per wmt. There were some Chinese buyers who
bought DSO at USD 20 - 24 with a grade of 0.9 Ni%. Also by 2007, the 1.4 Ni% DSO sold at
USD 54 - 60 per wmt. By late 2007 several DSO mines in eastern Surigao del Norte were put
into operation including projects operated by Carrascal Nickel Corporation (CNC), CTP
Construction and Mining Corporation, Platinum Group Metals Corporation and Shuley Mine
Incorporated.
The world economic slowdown in 2008 took its toll on metal prices affecting the price of Nickel
Pig iron. Also affecting the DSO price was the oversupply of low nickel DSO. Millions of tonnes
of this material sat idle in Chinese ports. The price of 0.9 - 1.1 Ni% with minimum 45 Fe%
dropped to USD12 per wmt and the market for this product became restricted. Companies such
as CNC, who have direct links with Chinese steel producers, were still able to market the 0.9 -
1.1 Ni%. Overall, the market for DSO became selective in that only the +1.4% Ni% sustained
its relatively higher price (USD 24 - 30 per wmt for 1.4 Ni%, USD 56 for 1.7 - 1.9 Ni%). The +1.4
Ni% DSO was exported mostly to China, Japan and Australia.
By 2009 iron content for DSO became an important requirement. Where before minimum 45
Fe% was required for 0.9 – 1.1 Ni% DSO, it increased to 48 Fe%. DSO, of grade specification
0.9 - 1.1 Ni% and minimum 48 Fe%, sold at USD 12.50 per wmt. The continuous increase in the
price of iron ore in the world market positively affected the price of what now has become a new
DSO category; high iron DSO.
Table 37 below shows nickel laterite DSO production in Caraga Region of the Philippines for CY
2011 to 2012.

Company 2011 2012
wmt wmt
Cagdianao Mining Corp.-Dinagat Island 273,139 182,378
Hinatuan Mng. Corp.- Hinatuan Island 1,789,433 1,601,892
Taganito Mining Corp.- Claver, SDN 728,703 1,266,026
Platinum Group Metals Corp.- Claver, SDN 2,805,646 3,614,058
CTP Const. and Mining Corp.-Adlay Project 2,452,425 3,192,644
CTP Const. and Mining Corp.- Dahican Project 564,640 27,563
Carrascal Nickel Corporation – SDN 4,814,622 3,177,783
Marcventures Min. & Dev. Corp-Cantilan, SDS 383,467 578,194
SR Metals, Inc.-Tubay, AND 967,781 2,080,033
Oriental Synergy Mining Corp. - Dinagat Is. 98,258 353,009
Claver Mineral Dev. Corp. / Shenzhou-SDN 1,341,501 566,981
Pacific Nickel Phil. Inc. / Shuley Mine Inc.-Nonoc Is 670,744 -
AAM-PHIL Natural Resources Exploration-Dinagat Is. - 154,325
Adnama Mining Resources Inc.-Urbiztondo, SDN 438,931 2,361,793
Sinosteel Philippines H.Y. Mining Corp. - 48,612
Total 17,329,290 19,205,291
Table 37: Production in Caraga Region of the Philippines for CY 2011 to 2012
19.2 Recent high iron DSO Market Situation
Figure 54 show actual DSO pricing for the Philippine market, expressed as USD/wmt FOB for
2013.
Figure 54: USD/wmt FOB for 2013 (source: www.ferroalloynet.com)

Figure 55: High DSO pricing since January 2012
TVI has been in discussion with several potential off takers since early 2013. Historical pricing
provided by China Nickel Resources Holdings since 2012 is shown in Figure 55
The spot prices attracted by high iron DSO commodities are readily available from several
sources including:
• www.ferroalloy.net
• www.mysteel.com

19.3 Forecast Iron Market Situation
Whilst high iron DSO shipping prices are not directly related to iron ore prices, the medium term
outlook for iron ore is steady; although declining by up to 10%.
Table 38: Global Iron Ore price $/t forecasts (Source: Metal Expert LLC, January 2013)
19.4 High Iron DSO off takers
Over recent years, both TVI or MRL have been in discussion with numerous off takers who
have expressed an interest in their Agata North high iron DSO product. Potential off takers
include but are not limited to:
• China Nickel Holdings Limited
• Weil Group Resources
• MRI Trading AG
• Transamine Trading
• Trafigura Group
• Cliveden Trading AG

A list of DSO buyers provided by the Mines and Geosciences Bureau in Region XII of the
Philippines in 2013 included:
• Burwill Resources Limited.
• Shandong Huaxin Industry Co. Ltd.
• Minecore Resources Inc.
• Tewoo Hoperay (Singapore) Pte. Ltd.
• D.H. Kingstone Holding Co. Ltd.
• Tianjin Materials and Equipments Group Corporation
• Honour Metal Trading Co. Ltd
• Hua Yi Copper Holding Ltd
19.5 DSO Sales Agreement
TVI entered into a MOU with China Nickel Holdings Limited (CNHL) in April 2013 in respect to
the purchase of high iron DSO with the following specifications:
• 0.9 - 1.1 Ni%
• 48 - 50 Fe%
• 2.5 - 3.0 SiO2
• 33 - 35 Moisture%
• 0.0 - 0.01 P%
The essence of the agreement in April 2013 was for CNHL was to buy up to 0.3M wmt of the
high iron DSO for the year of 2013 and 1.5M wmt per year from 2014.
Delivery of the first shipment would start within a reasonable period from the time of full
completion and development of the port construction and availability of all regulatory licenses
and permits by TVI, and actual quantity and date of delivery of each shipment shall be stated in
the Sales Contract to be executed by the parties.
The base price, shall have Free on Board terms, and shall be reviewed and adjusted
proportionally according to the market situation every two (2) months or every three (3)
consecutive shipments; whichever one comes first.
The mechanism for the price adjustment will be based on the published data for low nickel high
iron laterite ore from the website www.mysteel.com.
The Sale Price will be varied +/- in respect to variance to base nickel grade, iron grade, and/or
moisture content.

Based on the contract price as stated in the Sales Contract, the CNHL shall open a
Documentary Irrevocable Letter of Credit payable at sight to cover 100% of the contract value of
each shipment within ten (10) days from the signing of the Sales Contract.
CNHL has the right to reject shipments based on non compliance in respect to specifications
related to nickel, iron and phosphorus grades, and/or moisture content, or higher than the
Transportable Moisture Limit.

20 Environmental Studies, Permitting, and Social or Community Impact
20.1 Overview
The Project as outlined in previous sections will entail the removal of lateritic soils containing high
concentrations of iron and nickel for direct shipment to other markets for processing. The depth of
materials removal is estimated to be in the range of 10 to 12 meters and will not entail underground
mining methods. Also, the planned operations will not include any plant processing or concentrate
production. Seven primary and distinct activities will be carried out on a continuous basis over the
planned mining period.
• Planning - Quarterly mine planning to identify the areas to be mined, materials handled and
economic/cost evaluations.
• Surface Clearing and Topsoil Removal – Tree cutting, clearing and grubbing of surface materials,
removal of topsoil and storage of topsoil in a secured area for future use.
• Overburden Removal – Stripping of the overburden materials to expose the higher grade ore and
storage of the overburden materials in a secured location for future use.
• Ore Grade Control – Ore exposed by the stripping operations is sampled and tested for quality,
grade and other elements affected by the offtake agreements.
• Excavation, Hauling and Stockpiling – Ore meeting the grade and quality requirements is removed
by heavy equipment, loaded in trucks and hauled to designated and secured stockpile storage
areas.
• Stockpile Management – Stockpiles will be managed by different means to reduce the moisture
content within the ore, if required, to enhance the handling characteristics of the ore. Blending or
different grade and quality of ores may also be done to better conform to the offtake agreements.
Samples from the stockpiles will also be assayed to better define the quality and characteristics
of the ore.
• Materials Handling and Ship Loading – Ore that meets to requirements of the offtake agreements
will be loaded into trucks and transported to an onsite port for loading into barges. Loading will
be direct from the trucks to the barges. The barges will then transport the ore to a larger
oceangoing ship for loading and further transport to the market.
Although the approved Mineral Production Sharing Agreement covers an area of 4,995 hectares, the
direct ore shipping mining operations will be limited to an area of 195 hectares. Three political
jurisdictions will be affected by the Project and include the Municipalities of Jabonga, Santiago and
Tubay. All three are located within the Province of Agusan del Norte. All three have expressed their
acceptance of the Project during previous consultations and Focus Group Discussions.
From the standpoint of the Philippine regulatory environmental permitting and approval process, the
Project has secured the key Environmental Compliance Certificate (ECC) and other permits required
within the regulatory guidelines. Three other key documents, the Environmental Protection and
Enhancement Plan (EPEP), the Final Mine Rehabilitation and Decommissioning Plan (FMRDP) and the
Social Development Management Plan (SDMP) have been prepared and are in the review process.
Exploration activities within and around the Project area have been ongoing for the past 7 years and
resulted in long term interaction with the communities. This has been a positive experience and has
allowed for a good understanding of the project by the community. Several environmental and social
baseline studies have been completed during this time and provide a good basis for understanding and
managing the impacts and issues of the Project. The most current baseline study was produced by Gaia

South Inc. in Year 2012. The majority of information and data provided in this Section is based on that
study.
Identification of Project Impacts and Control Strategies as they pertain to environmental and social issues
are based on the topics identified by the Philippine Environmental Impact Assessment process. These
consist of Land Resources, Water Resources, Air Quality and Noise, Conservation Values and Social and
Community Values.
Mining and support activities will result in changes to the local topography through the removal of soil and
rock material. Mining will generally follow the natural contours resulting in a terraced topography made up
of benches and uniform slopes. Topsoil and overburden waste materials will be segregated and placed in
separate stockpiles within the natural valleys. Impacts and management control measures will primarily
focus on landform stability, soil erosion and transport and sedimentation of the streams and rivers.
The increased soil erosion potential and exposure of the soils will impact both the groundwater and
surface water regimes within and outside the Project area. This includes both the hydrologic regime and
water quality. Water management programs will be one of the singular most important impact
management control activities to be implemented throughout the Project activities. These activities will
include a large number of interception and diversion canals for surface water control and a significant
number of sedimentation/water treatments ponds for flood control and water quality treatment purposes.
Air quality and noise impacts will be less critical primarily due to the more rural nature of the Project area
and limited mining area. Fugitive dust will be the primary air quality impact. Control strategies will rely to
some extent on the high rainfall within the area to minimize the dust. Noise impacts will not likely be
significant due to the distances to the local municipalities and residential areas.
Conservation values include terrestrial flora and fauna conditions, freshwater and coastal marine aquatic
resources and oceanographic conditions along the Project area coastline. The terrestrial flora and fauna
conditions can be expected to be significantly impacted through the removal of forests and vegetation and
the attendant decrease in the area biodiversity. Changes in the topography and landforms and the
increased soil erosion will result in physical impacts to the freshwater aquatic resources. Impact control
measures will focus on a rapid progressive rehabilitation program to restore the vegetation and soil cover
and stream and creek restoration programs to replace the lost aquatic habitat conditions.
As with the water management programs within the mining area, similar programs along the Project area
coastline will also be one of the singular most important impact mitigation strategies. The coastal marine
resources are generally rich in diversity and importance to the local economy. The potential for water
quality degradation is high which also translates into a significant potential for negative biodiversity
impacts. Impact control strategies include similar water control management facilities, restrictions in the
operations areas and strict operations controls during ore handling and shipping activities.
Community consultations over the past 7 years have indicated support for the Project with an
understanding of the need for strict environmental management controls throughout all phases of the
Project. In addition to this, the local communities and local government units are expecting economic
benefits from the Project which will allow for the improvement in basic services, increase the economic
conditions of the area and increase the quality of life. The presence of other similar mining projects within
the region have provided examples of the good and the bad of these operations and provide a basis for
expectations of appropriate environmental management programs.
Based on previous consultations with the regulatory agencies, there does not appear to be any issues
associated with Indigenous People’s claims or cultural/heritage values associated with the Indigenous
Peoples.
Mine rehabilitation and closure activities will be initiated immediately after the mining operations begin.
The mining plan as currently developed will allow for Progressive Rehabilitation to be initiated within the
first year of operation and provide for continuous rehabilitation activities throughout the mine life. The

focus of the activities will be revegetation and reforestation, stream restoration and inclusion of agri-
forestry programs to enhance post mine life livelihood/community programs.
20.2 Regulatory Requirements
20.2.1 Philippine Environmental Regulatory Framework

Mining in the Philippines is governed by several environment legislations of which Republic Act (RA) 7942
or the Philippine Mining Act of 1995 is the primary legislation. The framework for environmental
management and protection is outlined in this Act and the details are identified in the Implementing Rules
and Regulations. Implementation of the Act is under the mandate of the Mines and Geosciences Bureau
(MGB) which is a line agency of the Department of Environment and Natural Resources.
Companies are assigned mining rights over government and mineral reservation areas through the
approval of mineral permits or mineral agreements. Mineral exploration shall be undertaken only with an
Exploration Permit valid for a period of two years renewable for like periods, but not to exceed a total term
of four years for non-metallic mineral exploration of six years for metallic mineral exploration. If
exploration activities reveal the presence of mineral deposits sufficient to support a mining operation, a
Declaration of Mining Project Feasibility (DMPF) will need to be submitted and approved by the DENR.
Once approved, the company will be granted the exclusive rights to explore and operate in the area
through a mineral agreement.
In addition to mineral permits or mineral agreements, no Project shall operate without an Environment
Compliance Certificate (ECC) as provided in Presidential Decree (PD) 1586: Establishing An
Environmental Impact Statement System including other Environmental Management Related Measures
and for other Purposes. This Decree identifies and sets forth the requirements for initiating and
completing an Environmental Impact Assessment (EIA) pertinent to the specific project and project
location.
A mining project is considered an Environmentally Critical Project (ECP) and requires preparation of an
Environmental Impact Statement (EIS) Report to document the EIA Project planning process. The EIS is
submitted to the DENR- Environmental Management Bureau (EMB) where it is reviewed by an EIA
Technical Review Committee. Upon approval of the EIS, a draft ECC is prepared in concert with the
project proponent and the Technical Review Committee. In most cases, a series of conditions are
attached to the ECC to further define the roles and responsibilities of the project proponent and the
environmental management actions required. These conditions are based on the environmental baseline
data, project impacts and management and monitoring programs identified during the EIA process and
preparation of the EIS. The draft ECC is then endorsed to the EMB Director for approval and issuance of
the ECC with the authority of the DENR Secretary. The project proponent then has five years to begin
the project under the ECC. Should the five year period lapse without project implementation, the ECC is
considered expired.
Two key environmental documents are required as part of the ECC conditions associated with mining
projects. These are the Environmental Protection and Enhancement Plan (EPEP) and the Final Mine
Rehabilitation and Decommissioning Plan (FMRDP). Both documents are submitted to the MGB for
review and approval and are required as part of the DMPF package.
Prior to project operation, several environmental permits need to be secured at the regional level. Key
permits include a Wastewater Discharge Permit in compliance with DENR Administrative Order No. 1990-
35: Revised Effluent Regulation of 1990, a Permit to Operate Air Pollution Source/ Control Installations in
compliance to DENR Administrative Order 2000-81: Implementing Rules and Regulations of RA 8749:
The Philippine Clean Air Act of 1999, Hazardous Waste Generator’s ID and Chemical Control Order
Registration for Substances under the Priority Chemical List in compliance to DENR Administrative Order
No. 1992-29: Implementing Rules and Regulations of RA 6969: Toxic Substances and Hazardous and
Nuclear Wastes Control Act of 1990 and water rights for use during project operations under PD 1067:

Water Code of the Philippines. These permits are generic for all industries and not for the mining industry
alone. Tree Cutting permits, if necessary, will also need to be secured at the regional and possibly the
National level depending on the agency jurisdiction of the mining area.
Similarly, a number of environmental management based permits will need to be secured at the local
level through the Local Government Units (LGU) having jurisdiction over the project. These include
building permits, special land use permits, solid waste management and port facility construction and
operation. The 1995 Mining Act also identifies a regulatory framework for social and community issues
related to mining projects as well as Indigenous Peoples within a mining area. This framework is
discussed in Section 20.1.31.
20.2.2 Mining Project Specific Environmental Regulatory Requirements

In addition to the environmental regulatory framework identified in the 1995 Mining Act, the Implementing
Rules and Regulations also identify the mechanism for establishing environmental management and
guarantee funds. This is detailed in Department Administrative Order (DAO) 2010-21, Chapter 18:
Contingent Liability and Rehabilitation Fund. Multiple funds are identified and are collective know as the
Contingent Liability and Rehabilitation Fund. Five separate funds are required to be established by the
project proponent. The funds, their relationship with the other funds and their respective deposit amounts
are shown in Figure 56. Overall management of the funds is done by the Contingent Liability and
rehabilitation Fund Steering Committee (CLRF).
Figure 56: Diagram of Environmental Management and Rehabilitation Funds
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Multi-sectoral environmental monitoring is also included as a requirement of the 1995 Mining Act and
provides for the participation of different stakeholders including the government regulatory agencies and
civil sector societies. The framework for the monitoring programs is described in Section 182 of DAO
2010-21 and provides for the creation of the Mine Rehabilitation Fund Committee (MRFC). A diagram of
the compliance monitoring organization is shown on Figure 57.

20.2.3 Current Status of Environmental Regulatory Requirements

The majority of environmental permits and approvals for the Project have been granted by the respective
Philippine government agencies. Key to this is the Environmental Compliance Certificate (ECC 0710-
025-2140) which was issued by the DENR-EMB on May 20, 2008. The 5-year expiration period was
subsequently extended by the DENR-EMB on May 10, 2013. The conditions attached to the original ECC
which remain in effect. The project parameters/description within the ECC limit the operations to a Direct
Ore Shipping Operation (DSO) within a designated 600 ha area. The maximum production capacity
during the first year of operations is limited to 1,500,000 dry metric tonnes. All years subsequent to the
first year are limited to a maximum production capacity of 2,000,000 dry metric tonnes.
The Declaration of Mining Project Feasibility (DMPF) package has been prepared and submitted to the
DENR-MGB for review and approval. This process is ongoing. Included in the DMPF package are the
two key environmental documents; the EPEP and the FMRDP. Separate ECC’s have been issued for
construction of a port facility (ECC-R13-1306-0084) and construction of a relocation village for those
residents affected by the port construction (ECC-R13-1306-0086). Formation of the Project MRFC has
been initiated and members identified. The Cahir of the MRFC will be the MGB Region 13 Director.
Figure 57: Diagram of the Philippine Environmental Compliance Monitoring Organization

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20.2.4 International Finance Corporation Environmental and Social Framework
In addition to adhering to the Philippine regulatory standards and laws, implementation of the Project will
also incorporate environmental and social Performance Standards and protocols recommended by the
International Finance Corporation (IFC). The January 1, 2012 document entitled IFC Performance
Standards on Environmental and Social Sustainability will provide the basis for developing environmental
management and mitigation programs as well as social management programs. The Performance
standards are identified in Table 39.
Table 39: International Finance Corporation Performance Standards
Performance Standards 1 through 8 Year 2012

1 - Assessment and Management of
5 - Land Acquisition and Involuntary Settlement
Environmental and Social Risks and Impacts
6 - Biodiversity, Conservation and Sustainable
2 - Labor and Working Conditions
Management of Living Natural Resources
3 - Resource Efficiency and Pollution Prevention 7 - Indigenous Peoples
4 - Community Health, Safety and Security 8 - Cultural Heritage
Source: IFC, January 1, 2012
20.3 Environmental and Social Baseline Studies
20.3.1 Previous Studies

Several environmental baseline studies have been completed within and around the Project Area
beginning in Year 2007. The most recent study was conducted by Gaia South, Inc. in Years 2011 and
2012. These data are included in the Project Pre-Feasibility Study Report completed by Ausenco Venture
and dated January 3, 2012. Previous studies were completed by Coffey Philippines Inc. in Year 2008 and
Technotrix Consultancy Services, Inc. and Mediatrix Business Consultancy in Year 2007.
The discussions within the Gaia South Inc. Report focus on the land, water and air aspects of the
environment and community issues within and around the Project Area. Primary data were collected on
site during the period June to August, Year 2011. Secondary data and documents were collected from
different government agencies including National, Local Government Units and Barangay offices.
Laboratory testing for soil, water and air were performed by local laboratories accredited by the
Department of Environment and Natural Resources (DENR).
Social and community baseline studies were included as part of the Gaia South, Inc. environmental
baseline studies. Secondary data was collected from various agencies and local government offices. The
perception of the local stakeholders regarding the mining operations was accomplished through Focus
Group discussions and Key Informant interviews. The community and social studies data collection was
done during the period June to August, Year 2011. The social and community investigations focused on
socio-economics, public health, infrastructure and demographics.
Baseline data, impacts and control strategies discussed in the sections below are primarily based on the
work performed by Gaia South, Inc. These data and information represent the most complete and most
recent baseline descriptions of the Project Area and surrounding areas.

20.3.2 Known Environmental and Social Issues

There are no known environmental or social/community issues that will provide a significant impediment
to development and operation of the Project. Other similar mining operations within the region have
provided examples of key environmental issues that will need to be addressed and for which impact
control strategies will need to be implemented. Two key environmental management issues focus on the
inland freshwater resources and the coastal marine resources.
Soil erosion, transport and sedimentation within the streams and creeks of the Project area and the
downstream rivers are unavoidable impacts. The exposure of large areas of bare soil and the resulting
steeper slopes from mining operations combined with the high rainfall will result in higher erosion rates.
Water management programs will need to be well designed, well constructed and well managed to
control and mitigate these impacts. The eastern one-half of the Project area drains to the Tubay River
which is noted for its high quality water. Lower quality water and increased sediment from the Project
area tributaries will affect the Tubay River and downstream water users.
The western one-half of the Project area drains to Butuan Bay which will also be the location of the port
and the offshore loading/shipping facilities. The coastal area has a diverse marine environment which is
sensitive to changes in water quality and especially surface water runoff and sediment transported from
the mining and other disturbed areas. Water management programs implemented in the eastern one-half
will need to be equally well managed in the western one-half of the Project area. Also, the transport,
handling and loading of the ore at the port will provide further opportunities for coastal marine water
quality impacts. These are very visual impacts and have been well documented at other mining
operations within the region.
Social issues are focused on the need for continuous community interaction and the continuous
implementation of responsible mining practices. The communities and local government units are also
anticipating visible economic benefits as well as improvements to the basic services of the area. Meeting
and discussions with the National Commission on Indigenous Peoples to date have indicated there are no
cultural or heritage issues.
20.4 Land Resources
20.4.1 Land Use
The topography of the project area ranges from gently rolling to steep. The eastern portion is generally
more rolling with flat areas adjacent to the Tubay River floodplain. The steeper areas are located within
the central and western portion of the Project area and most especially the stream valleys.
Land use within the Project area is based primarily on vegetation cover. Five land use vegetative units
were mapped and consist of Forest Areas, Coconut and Forest Areas, Coconut Areas, Ferns and
Grasslands. A map of the different land use units is shown on Figure 58.
Forest areas can be found in all barangays covering the Project area and consist primarily of secondary
forest growth. They are located within both the eastern and western areas of the project area. They can
be found on some of the steeper slopes and adjacent to the streams and creeks.
Coconut land use units are generally coconut plantations and are found on the gentler slopes. The
majority are located within the western portion of the Project area. The combination of Forest and
Coconut is the largest land use within the Project area and is located within the western portion. Fern
areas are also located on the gentler slopes and ridge tops and are the second largest land use unit.
They are primarily located within the eastern portion of the Project area.

Grasslands exist in patches within the Project area and are generally dominated with cogon and carabao
grasses with some pioneering tree species. There are also some small patches of cultivation within the
grasslands. Grasslands can be found in both the western and eastern portions of the Project area.
20.4.2 Soil, Slopes and Erosion Susceptibility
Three soil types and 7 soil mapping units were identified and mapped within the Project area. The 3 soil
types consisted of the Malalag clay loam, the Kabatohan sandy clay loam and the Umigan clay loam.
The soil mapping units were defined by the slope of the land surface for each soil type. The Malalag clay
loam was categorized into slope ranges of 8% to 18% and 30% to 50%. The Kanatohan sandy clay loam
was categorized into sloppe ranges of 8% to 18%, 18% to 30% and >50%. The Umingan clay loam
slopes were categorized as having 0% to 3% slopes.
The Malalag clay loam developed from the weathering of the metamorphic igneous rocks while the
Kabatohan sandy clay loam developed from the weathering of the ultramafic rocks. The Umigan clay
loam developed from the weathering of river and alluvial deposits. Characteristics and properties of the
soils are summarized in Table 40.
Ground slopes within the Project area range from flat to greater than 50%. Both the Malalag and
Kabatohan soil types can be found on slopes within this range. The Umigan soil type is found on slopes
ranging from flat to 3%.
Erosion susceptibility within the Project area was identified based on four criteria; rainfall, soil depth and
texture, land use/vegetation and slope. The 5 different land use unit erosion susceptibility ranged from
slightly susceptible to moderately susceptible. The majority of the Project area falls within the moderately
susceptible category. The slightly susceptible land use units are within the western portion of the Project
area and include Forest and Coconut land use units located with clay loam soils as well as the Grassland
areas also within clay loam areas.
River sediments were sampled at 13 locations within the Project area to characterize the quality of the
soil lost by erosion and transported to the local streams. Twelve creeks were sampled and 8 heavy
metals were tested. The results were compared to Dutch and Taiwanese standards for soil contamination
limits. The majority of the samples tested indicated concentrations below the standards. Nickel
concentrations exceeded the standards at most locations as expected. Results of the sediment sample
testing are summarized in Table 41.

Figure 58: Project Area Land Use Map

Table 40: Project Area Soils Physical and Chemical Properties
Malalag Clay Kabatohan Sandy Umingan

Loam Clay Loam Clay Loam
Soil Properties
Slope 8%- Slope Slope Slope Slope Slope
18% 8% -18% 30%-50% 8%-18% 30%-50% 0%-3%
Moderately Moderately Moderately Moderately
Well Well
Drainage well well well well
drained drained
drained drained drained drained
Sandy Sandy
Texture Clay loam Clay loam Clay Loam Clay loam
clay loam clay loam
Soil Depth (cm) 40 >100 70 >100 >100 >100
pH 6.15 5.4 5.8 5.88 5.88 6.66
Total Nitrogen (%) 0.045 0.056 0.065 0.016 0.046 0.014
Organic Matter (%) 1.6 2.05 2.5 2.19 3.58 1.57
Phosphorous (mg/kg) 2.8 0.2 1.55 1.6 0.9 1.0
Potassium (cmol/kg) 0.16 0.06 0.1 0.045 0.14 0.07
CEC (cmol/kg) 19.24 20.26 34.75 3.17 18.36 20.17
Cadmium (mg/kg) 4.47 3.74 4.08 8.61 5.11 5.21
Cobalt (mg/kg) 43.49 35.00 65.12 298.77 343.26 280.15
Copper (mg/kg) 78.62 34.23 77.57 53.51 23.64 48.22
Iron (%) 4.08 3.23 4.33 30.47 10.04 11.6
Nickel (mg/kg) 145.62 113.37 415.26 5297.5 2234.68 4654.79
Lead (mg/kg) <0.10 <0.10 <0.10 <0.10 <0.10 <0.10
Mercury (mg/kg) 0.018 0.025 0.026 0.108 0.059 0.037
Copper as Nutrient (ppm) 3.29 0.67 2.34 1.40 1.17 1.86
Zinc as Nutrient (ppm) 0.49 0.71 0.66 1.65 1.3 0.57
Iron as Nutrient (ppm) 81.14 37.39 84.74 19.84 100.25 89.32
Manganese as Nutrient
11.18 71.04 57.98 29.99 141.07 29.79
(ppm)
Source: Gaia South Inc., 2012.

Table 41: River Sediment Metals Analysis
Sampling Arsenic Cadmium Cobalt Copper Iron Nickel Lead Mercury

Station (mg/kg) (mg/kg) (mg/kg) (mg/kg) (%) (mg/kg) (mg/kg) (mg/kg)
SEDQ 1 <0.017 2.56 31.64 156.86 7.09 98.44 <0.10 0.021
SEDQ 2 1.60 2.20 137.37 31.61 7.85 1237.85 <0.10 <0.004
SEDQ 3 <0.01 1.95 116.32 27.12 7.82 2621.13 154.06 <0.004
SEDQ 4 0.71 2.19 165.43 16.33 10.32 4196.00 <0.10 <0.004
SEDQ 5 14.70 1.83 51.86 136.91 4.80 903.77 23.30 <0.004
SEDQ 6 16.49 2.01 63.70 65.60 5.98 125.05 <0.10 0.055
SEDQ 7 9.79 1.75 48.94 113.49 5.84 499.20 <0.10 0.195
SEDQ 8 6.07 2.01 26.19 152.54 5.96 36.86 <0.10 <0.004
SEDQ 9 3.39 1.84 22.94 183.94 5.85 58.71 28.31 <0.004
SEDQ
<0.01 1.74 46.03 94.0 5.51 785.66 <0.01 <0.004
10
SEDQ
4.13 2.29 53.74 34.71 5.26 1131.64 <0.01 <0.004
11
SEDQ
2.50 3.46 36.82 49.79 3.77 347.47 41.93 <0.004
12
SEDQ
4.13 2.20 47.68 71.0 5.59 598.84 <0.10 <0.004
13
Table 41: River Sediment Metals Analysis (continued)
List of River Sediment Sampling Locations:

SEDQ 1 Kalinawan River at confluence with Bangonay River
SEDQ 2 Nangka Creek downstream of road culvert along Nangka Creek
SEDQ3 Paiton Creek upstream of road culvert along Paiton Creek
SEDQ 4 Mantiawas Creek upstream of Mantiawas Reforestation Area
SEDQ 5 Duyangan Creek downstream of small scale mining tailings disposal area and upstream of
road culvert
SEDQ 6 Agata Creek downstream of road culvert
SEDQ 7 Dinaringan Creek downstream of Dinaringan Creek and upstream of confluence with the
Kalinawan River
SEDQ 8 Kalinawan River at midstream of the river
SEDQ 9 Sua Creek No. 1 downstream of Sua Creek No. 1
SEDQ 10 Sua Creek No. 2 downstream of Sua Creek No. 2
SEDQ 11 Payong payong Creek downstream of Payong paying
SEDQ 12 Tinigbasin Creek along the confluence of two tributaries of Tinigbasin Creek
SEDQ 13 Tagpangahoy Creek
Source: Gaia South Inc., 2012.

20.4.3 Mine and Waste Generation Management Impacts and Control Strategies
Mining and waste handling activities result in changes to the local landforms and topography. This in turn
will affect vegetation and habitat areas, hydrologic conditions and water quality of the streams and creeks
and overall land use of the Project area.
Based on the mining and operations plan, approximately 140 to 150 hectares of the Project area will be
disturbed over the life of the Project. The outline of the disturbed areas is shown on Figure 59. Not all of
these areas will be disturbed at one time but will be staggered over the mining life. Years 2 and 3 will
have the largest areas of incremental disturbance which will then begin to decrease in subsequent years.
Mining widths or benches will be restricted to 15 to 20 meter wide panels. These panels will be advanced
along the contour, with the truck loaded from beside or below the excavator, depending on the surface
operations design and the condition of travelling surfaces. Where bench widths are less than 10 meters,
mining will be done by pushing ore down the slope to an excavator.
The final pit slope angle will have an overall slope (toe to toe) of 45 degrees. The planned mining cut
slopes will comprise of a batter slope angle of 80 degrees and bench width of 3 meters. Temporary
slopes in the working face will have an overall slope of 40 degrees and the cut slope configuration will
comprise a batter slope angle of 60 degrees and bench width of 3 meters.
Extraction of the ore will require the excavation and removal of overburden waste materials as well as
topsoil covering the overburden. The overburden materials will be used as backfilling materials during the
progressive rehabilitation programs and upon final rehabilitation and decommissioning of the Project.
Interim storage of the overburden will be within designated areas. Each stockpile area will be designed to
hold a specific volume with the placement of material in a staged manner to increase the stability and
prevent landslides and slope failures. Topsoil excavated as part of the overburden removal process will
be placed in separate stockpiles for future use.
Water management facilities consisting of interceptor channels around the mining areas and the waste
stockpiles will be constructed prior to the initiation of mining operations. These will discharge into
sedimentation facilities designed to operate as wet detention ponds. The ponds are designed to meet the
objectives of water quality control, flood control and stream base flow management.
A continuous progressive rehabilitation program is a key component to the overall environmental control
and mitigation programs related to land resources as well as water resources and conservation values.
Progressive rehabilitation will focus on staged treatment of disturbed areas during the construction,
development and

Figure 59: Project Area Disturbed Lands Map

mining operations. This will minimize the extent of disturbance, and thereby the area of land requiring
significant post mining rehabilitation. Rehabilitation will be initiated in areas that are considered inactive.
As part of the environmental work program, progressive rehabilitation and re-vegetation will be
implemented on a programmed schedule depending on the quarterly mining schedule and progress. A
four stage approach will be implemented which includes; ground preparation, species selection,
establishment of a nursery for onsite seedling propagation and a planting scheme to maximize the
survival rate and increase the species diversity. A graphic diagram of the rehabilitation program is shown
on Figure 60.
Figure 60: Diagram of Progressive Rehabilitation Program

20.5 Water Resources
20.5.1 Hydrology and Hydrogeology
The MPSA and the Project area are located within two watersheds. The eastern portion is within the
Tubay River (also known as the Kalinawan River) watershed and the western portion drains directly to
Butuan Bay along the western coastline of the Province of Agusan del Norte. The Tubay River is the
largest watershed within the immediate region and encompasses a drainage area of 99, 757 ha. The
headwaters of the river are the southern outlet of Lake Mainit whereupon it flows south and then west to
Butuan Bay. The watershed itself can be divided into two distinct hydrologic units (Northern and
Southern) based on climate conditions and rainfall patterns. The Project area is located within the
Southern hydrologic unit which is characterized by rainfall patterns indicated by the PAGASA Butuan
Weather Station.
Some Tubay River streamflow data are available for a gauging station located near the east central
boundary of the Project area at Brgy Colorado. The tributary watershed at the station is 49,037 ha and
the streamflow data period of record is limited to 10 years (1968-1970 and 1973-1979). Mean monthly
streamflow and watershed yield data at the gauging station are shown in Table 42.
Table 42: Tubay River Mean Monthly Discharge and Watershed Yield
Monthly Discharge Monthly Yield Unit Monthly Yield

Month
(m3/sec) (million cubic meters) (cubic meters/ha)
January 109.0 291.9 5950
February 94.5 228.5 4660
March 82.1 219.8 4480
April 59.3 153.8 3140
May 51.3 137.5 2800
June 43.2 112.1 2290
July 48.4 129.8 2650
August 44.3 118.6 2420
September 40.9 106.0 2160
October 42.3 113.3 2310
November 61.3 159.0 3240
December 85.6 229.3 4680
Annual 63.4 1999.6 3400
Note: Data from DPWH stream gauging station at Brgy. Colorado
Source: Gaia South Inc., 2012 and TVIRD, 2013.
The Project area is well drained with numerous creeks and streams. Most are ephemeral and fed by
springs and groundwater. The watersheds within the Project area are generally small and are generally
east-west in orientation. There are 24 individual watersheds that will be directly affected by the Project
activities. Fifteen of these drain directly to Butuan Bay and 9 drain directly to the Tubay River. The
affected western watersheds account for a total tributary area of approximately 513 hectares while the
affected eastern watersheds account for approximately 545 hectares. The individual watershed areas
range in size from 2 hectares to 141 hectares and are shown on Figure 61.

Storm event rainfall analyses were done using daily rainfall data from the PAGASA Butuan Station for the
period Years 1981 to 2012. Results of daily rainfall depth-frequency analyses are shown in Table 43.
These results compare favorably to point rainfall-frequency analyses performed in Year 2011 as part of a
Lake Mainit-Tubay River Master Plan Study. Rainfall data at the Magpayang PGASA Station located
northeast of the project area were used for the Master Plan Study.
Water balance studies performed for the Tubay River watershed indicate approximately 84% or rainfall
results in direct runoff to the streams, 10% of the rainfall results in evapotranspiration loss and the
remaining 6% is attributed to groundwater recharge.

Figure 61: Project Area Watershed Map

Table 43: Point Rainfall Frequency- Depth Analyses Butuan City
Return Period
Return Period (years) 24-hour Rainfall (mm) 24-hour Rainfall (mm)
(years)
2 124 (151) 20 214 (220)
5 160 (185) 50 252 (250)
10 187 (206) 100 283 (267)
Note: Log Perason Type III Analysis. Values in ( ) from Master Plan Lake Mainit-Tubay River, 2011.
Source: PAGASA, 2013. TVIRD, 2013, DPWH, 2011.
Field studies performed by Gaia South, Inc. identified 8 stream sources that serve as community water
supply for portions of the municipalities of Tubay, Jabonga and Santiago. These sources experience
reduced discharge during the drier seasons and increased turbidity during the rainy seasons. There are
no data relative to the discharge rates of these 8 sources. The location of these sources is shown on
Figure 63.
The regional hydrogeology is defined by three distinct geohydrologic units; the northwest trending
mountain range west of the Tubay River floodplain, the mountains along the eastern boundary of the
Tubay River floodplain and the floodplain itself. The MPSA covers all three units however the Project
area is located only within the northwest trending mountains west of the Tubay River flooplain. This area
is underlain by ultramafic and metamorphic rocks. They are generally dense and impermeable with little
groundwater. What groundwater is found is located within the weathered portions and open fracture
zones. The quantity of groundwater diminishes during the dry season resulting in reduced streamflow and
spring discharge.
Groundwater flow in the area follows the surface topography direction. About half of the Project area
drains west to Butuan Bay and the other half drains east to the Tubay River. The wells within the Tubay
River floodplain are shallow with depths of 6 meters or less. There are no wells within the mountainous
region of the Project area.
Field studies performed by Gaia South, Inc. identified 10 spring/groundwater sources that serve as
community water supply for portions of the municipalities of Tubay, Jabonga and Santiago. These
sources experience reduced discharge during the drier seasons. There are no data relative to the
discharge rates of these 10 spring/groundwater sources.
20.5.2 Water Quality
Surface water quality sampling and testing was performed at 17 locations within the Project area. Ten of
the locations are within the Tubay River watershed and the remaining 7 locations are within streams
draining to Butuan Bay. Groundwater/spring sampling and testing was done at 5 locations. Four of the
sampling locations are for springs draining to Butuan Bay. One station was located within the Tubay
River floodplain. Coastal marine water samples were also collected at 6 locations along the coastline of
Butuan Bay west of the Project area. The location of each sampling point (surface water, groundwater
and marine waters) is shown on Figure 62.
Results of the laboratory testing for surface waters and groundwater/springs are shown in Table 44 and
Table 45 respectively. Comparison of these data with the Philippine National Standards for Drinking
Water (PSNSDW) indicated non compliance with E-coli standards and Biological Oxygen Demand
requirements at some stations. Metals and other parameters were either non-detectable or within the
PNSDW standards. Results of the surface water quality testing also indicate the waters can generally be

classified as Class A under the stream water quality classification parameters set by the DENR. For
reference, the Tubay River was assigned a Class A stream water quality designation by the DENR in
Year 2004.
Results of the coastal marine water quality sampling and testing are shown in Table 46. Results at all
sampling stations were within the DENR Class A marine coastal water standards.

Figure 62: Baseline Sampling Locations Map Water Quality, Air Quality and Noise

Figure 63: Water Source Location Map

Table 44: Surface Water Quality Baseline Data
Surface Water Quality Sampling Stations

Parameter Units
FW-1 FW-2 FW-3 FW-4 FW-5 FW-6 FW-7 FW-8 FW-9
pH - 7.5 8.54 8.07 8.13 8.00 8.18 8.44 7.65 7.98
BOD mg/l 1 <1 <1 <1 21 11 6 1 1
COD mg/l 10 <5 <5 <5 49 20 5 5 5
DO mg/l 8.6 8.4 8.3 9.2 8.5 7.4 8.5 7.1 8.4
TSS mg/l 94 1 1 1 2790 21 374 91 2
TDS mg/l 82 241 199 105 180 196 119 36 250
Chromium
mg/l <0.01 0.02 <0.01 0.01 0.29 <0.01 <0.01 <0.01 <0.01
(hex)
Nitrate mg/l 0.14 <0.01 <0.01 0.36 0.07 <0.01 0.08 <0.01 0.04
Phosphoro
mg/l 0.04 <0.01 <0.01 <0.01 0.15 <0.01 0.11 2.16 2.16
us
Oil &
mg/l <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0
Grease
Turbidity NTU 235 10.5 10.5 10.9 1248 90.5 363 217.5 11.9
as
1750.9
Hardness CaC 75.78 173.9 175.9 131.81 169.18 265.2 57.57 206.98
3
O3
MPN
Total per 17 x 22 x 92 x 92 x 45 x 17 x 92 x
330 490
Coliforms 100 102 102 103 102 104 103 103
ml
MPN
Fecal per 13 x 13 x 54 x 92 x 20 x 13 x 54 x
230 330
Coliforms 100 102 102 103 102 104 103 103
ml
Positiv Positiv Positiv positiv positiv positiv positiv positiv positiv
E.coli -
e e e e e e e e e
Arsenic mg/l <0.001 <0.001 0.02 <0.001 0.144 <0.001 <0.011 <0.001 <0.001
Cadmium mg/l <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003
Cobalt mg/l <0.02 <0.02 <0.02 <0.02 0.27 <0.02 <0.02 <0.02 <0.02
Copper mg/l <0.005 <0.005 <0.005 <0.005 1.007 <0.005 <0.005 <0.005 <0.005
Iron mg/l 8.86 0.12 0.09 0.10 382.99 2.74 25.38 7.28 0.25
Lead mg/l <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01
Nickel mg/l <0.02 <0.02 <0.02 <0.02 3.22 <0.02 0.07 <0.02 <0.02
<0.000 <0.000 <0.000 <0.000 <0.000 <0.000 <0.000 <0.000 <0.000
Mercury mg/l
1 1 1 1 1 1 1 1 1
Source: Gaia South Inc., 2012

Surface Water Quality Sampling Station Descriptions:
FW-1 Kalinawan River, Brgy. Colorado. Confluence of Kalinawan and Bangonay River.
FW-2 Nangka Creek, Brgy. Colorado. Downstream of road culvert along Nangka Creek.
FW-3 Paiton Creek, Brgy. Colorado. Upstream of road culvert along Paiton Creek.
FW-4 Mantiawas Creek, Brgy. Colorado. Upstream of Mantiawas Reforestation Area.
FW-5 Duyangan Creek, Brgy. E Morgado. Downstream of small scale tailings disposal area,
upstream of road culvert.
FW-6 Agata Creek, Brgy. E. Morgado. Downstream of road culvert.
FW-7 Dinaringan Creek, Brgy. E Morgado. Downstream of Dinaringan Creek before confluence with
Kalinawan River.
FW-8 Kalinawan River, Santiago. Midstream of Kalinawan River.
FW-9 Sua Creek1, Brgy Lawigan. Downstream of Sua Creek1.
Table 44: Surface Water Quality Baseline Data (continued)
Surface Water Quality Sampling Stations

Parameter Units FW-
FW-11 FW-12 FW-13 FW-14 FW-15 FW-16 FW-17
10
pH - - - - - - - - -
BOD mg/l - - - - - - - -
COD mg/l - - - - - - - -
DO mg/l - - - - - - - -
TSS mg/l - - - - - - - -
TDS mg/l - - - - - - - -
Chromium
mg/l - - - - - - - -
(hex)
Nitrate mg/l - - - - - - - -
Phosphorous mg/l 0.40 <0.01 <0.01 0.01 <0.01 0.02 0.09 0.01
Oil & Grease mg/l 2 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0
Turbidity NTU - 10.8 11.4 12.7 11.3 0.9 13.3 17.5
As
Hardness CaCO - 209.8 225.48 205.87 129.8 126.83 225.48 79.03
3
MPN
Total per 92 x 92 x 16 x 24 x 24 x 16 x 23 x
5000
Coliforms 100 103 102 103 103 102 105 102
ml
MPN
Fecal per 54 x 35 x 54 x 24 x 24 x 54 x 23 x
-
Coliforms 100 103 102 102 103 102 104 102
ml
positiv
E.coli - - positive positive positive positive positive positive
e
Arsenic mg/l 0.05 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001
Cadmium mg/l 0.01 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003 <0.003
Cobalt mg/l - 0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Copper mg/l 0.05 <0.005 <0.005 <0.005 <0.005 <0.005 <0.005 <0.005

Iron mg/l - 0.05 0.18 0.17 0.25 <0.02 0.19 3.93
Lead mg/l 0.05 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.02
Nickel mg/l - <0.02 <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
<0.000 <0.000 <0.000 <0.000 <0.000
Mercury mg/l 0.002 <0.0001 <0.0001
1 1 1 1 1
Surface Water Quality Sampling Station Descriptions:

FW-10 Sua Creek 2, Brgy. Lawigan. Downstream of Sua Creek 2.
FW-11 Payongpayong Creek, Brgy. Tinigbasin. Downstream of Payongpayong.
FW-12 Tinigbasin Creek, Brgy. Lawigan. At the confluence of two tributaries of Lawigan Creek.
FW-13 Tagpangahoy Creek, Brgy. Tagpangahoy. Downstream of a road culvert along Tagpangahoy
Creek.
FW-14 Binuangan Creek, Brgy. Binuangan. At the confluence of two tributaries of Binuangan Creek.
FW-15 Binuangan Creek, Brgy. Binuangan. Downstream of Binuangan Creek adjacent to the intertidal
zone, Butuan Bay.
FW-16 Kalinawan River, Tubay. Downstream of the confluence of the Kalinawan River and the
Santiago River.
FW-17 Kalinawan River. Tubay. Downstream of Kalinawan River near the Tubay Bridge.
Table 45: Groundwater Quality Baseline Data
Groundwater Quality Sampling Stations

Parameter Units
DW-1 DW-2 DW-3 DW-4 DW-5
pH - 7.66 6.84 7.43 6.67 7.45
BOD mg/l <1 <1 <1 <1 <1
COD mg/l <5 <5 <5 <5 <5
DO mg/l 7.2 9.1 9.0 9.4 9.7
TSS mg/l 1 2 <1 <1 <1
TDS mg/l 115 260 239 174 236
Chromium
mg/l <0.01 <0.01 <0.01 <0.01 <0.01
(hex)
Nitrate mg/l 0.34 1.04 0.28 0.02 0.16
Phosphorous mg/l <0.01 0.04 <0.01 <0.01 0.01
Oil & Grease mg/l <1.0 <1.0 <1.0 <1.0 <1.0
Turbidity NTU 1.1 1.0 0.9 12.7 0.8
Hardness as CaCO3 143.59 233.57 269.74 130.77 253.59
MPN per
Total Coliforms 350 33 4.5 49 54 x 100
100 ml
MPN per
Fecal Coliforms 240 23 2.0 23 34 x 100
100 ml
E.coli - positive positive positive positive positive
Arsenic mg/l <0.001 <0.001 <0.001 <0.001 <0.001
Cadmium mg/l <0.003 <0.003 <0.003 <0.003 <0.003
Cobalt mg/l <0.02 <0.02 <0.02 <0.02 <0.02

Copper mg/l <0.005 <0.005 <0.005 <0.005 <0.005
Iron mg/l <0.02 <0.02 <0.02 <0.02 <0.02
Lead mg/l <0.01 <0.01 <0.01 <0.01 <0.01
Nickel mg/l <0.02 <0.02 <0.02 <0.02 <0.02
Mercury mg/l <0.0001 <0.0001 <0.0001 <0.0001 <0.0001
Groundwater Quality Sampling Station Descriptions:

DW-1 Brgy. E Morgado, Jabonga
DW-2 Sitio Payongpayong Brgy. Tinigbasin, Tubay
DW-3 Brgy. Tinigbasin, Tubay
DW-4 Brgy. Tagpanghoy, Tubay
DW-5 Brgy. Binuangan, Tubay
Table 46: Coastal Marine Water Quality Baseline Data
Coastal Marine Water Quality Sampling Stations

Parameter Units
MW-1 MW-2 MW-3 MW-4 MW-5 MW-6
pH - 8.02 8.16 8.26 8.33 8.27 8.19
BOD mg/l <1 <1 <1 <1 <1 <1
COD mg/l 151 101 503 377 503 804
DO mg/l 6.5 8.2 8.4 9.0 8.6 8.8
TSS mg/l 4 2 <1 3 8 4
TDS mg/l 19380 18590 25914 11995 10103 19363
Chromium
mg/l <0.01 <0.01 <0.01 <0.01 <0.01 <0.01
(hex)
Nitrate mg/l <1.0 <1.0 <1.0 <1.0 <1.0 <1.0
Phosphorous mg/l <1.0 <1.0 <1.0 <1.0 <1.0 <1.0
Oil & Grease mg/l <1.0 <1.0 <1.0 <1.0 <1.0 <1.0
Turbidity NTU 1.5 10.7 0.7 1.3 12.8 11.8
as
Hardness 7797.41 4743.9 8336.46 7072.58 7204.46 7658.43
CaCO3
Arsenic mg/l <0.001 <0.001 <0.001 <0.001 <0.001 <0.001
Cadmium mg/l <0.003 <0.003 <0.003 <0.003 <0.003 <0.003
Cobalt mg/l <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Copper mg/l <0.005 <0.005 <0.005 <0.005 <0.005 <0.005
Iron mg/l <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Lead mg/l <0.01 <0.01 <0.01 <0.01 <0.01 <0.01
Nickel mg/l <0.02 <0.02 <0.02 <0.02 <0.02 <0.02
Mercury mg/l <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001

Coastal Marine Water Quality Sampling Station Descriptions:
MW-1 Brgy. Lawigan Coastal Area, Tubay
MW-2 Sitio Payongpayong Coastal Area. Tubay
MW-3 Brgy. Tinigbasin Coastal Area, Tubay
MW-4 Brgy. Tagpanghoy Coastal Area, Tubay
MW-5 Brgy.Binuangan Coastal Area, Tubay
MW-6 Brgy. La Fraternidad Coastal Area, Tubay
20.5.3 Water Management Impacts and Control Strategies
Clearing and stripping operations followed by overburden removal and mining will result in a significantly
greater susceptibility to soil erosion, soil transport and sediment deposition within the creeks and
waterways of the Project area. This will be a long term impact throughout the mining operations period
and for some time after operations until such time as the post mining rehabilitation and reclamation
programs are established. The impacts will be associated with water quality as well as the physical and
hydrologic conditions of the water resource features.
Construction of the port facilities will also result in potential erosion, soil transport and sediment
deposition within the near shore coastal area. This is expected to be a short term impact however,
loading operations at the port have the potential to create similar near coastal sedimentation impacts over
the long term.
Impact control strategies will focus on physical facilities and mining plans with the objectives of capturing
surface water runoff that may be contaminated with metals and/or high suspended solids and diverting
surface water runoff around the active mining areas and disturbed areas. The incremental surface mining
areas will be designed and constructed such that most of the surface water will drain to the lowest bench
for detention and possible treatment. Diversion and interceptor canals will be constructed to segregate
surface water runoff from disturbed and undisturbed areas. Surface runoff from disturbed areas will be
conveyed to water quality control facilities designed as wet detention/retention ponds. These ponds will
be designed and operated for the purposes of water quality treatment, flood control and stream discharge
base flow management.
These ponds will be constructed in the natural soil with embankment heights ranging for 3 m to 5 m. All
ponds will include reduced discharge outflow structures to allow longer term storage and settling of the
sediments. Each pond will also include an emergency overflow spillway for safety. The embankments will
be constructed with slopes no steeper than 3 horizontal to 1 vertical. A schematic diagram of a typical
water quality treatment facility pond system is shown in Figure 64.
The ponds are designed to operate as wet detention ponds with the objective of providing enough storage
volume to contain the surface water runoff volume from a specified storm event for a minimum of 24
hours. The detention period will be maintained by an outlet control structure that will limit the pond
discharge. Sediment transported by the surface water runoff will be allowed to settle out within the pond
during the 24 hour detention period.
Sufficient storage will be provided within each pond to contain the estimated sediment volume generated
over a specified period. Removal of the sediments and cleaning of the ponds may occur annually or
quarterly depending on the volume of sediment deposited. The lower portion of the pond will remain in a
wet condition. This is to help reduce the potential for re-suspension of the stored sediments during
surface runoff inflow events. A wetland planting bench is also envisioned around the upper portion of the
wet pond. This is intended to provide some vegetative filtering of the sediment and will serve as a safety
bench.

A forebay may also be provided as part of each pond. This will be a smaller dry pond for the collection,
deposition and storage of larger sediment and debris before water enters the main settling pond area.
The forebay will require more frequent cleaning.
Construction of the water quality control facilities and the interception/diversion canals will be done on an
incremental basis as the mining operations continue from year to year. Based on the mining plan,
between 25 and 30 facilities will be constructed over the mining period. The majority of these will be
constructed in the first and second years of operation. An overall facilities map and water management
plan is shown on Figure 65.
From the perspective of groundwater resources, the local communities exhibit poor groundwater
potential. The underlying ultramafics are generally impermeable and not conducive to the development of
a large aquifer system. The local springs come from fractured zones that yield minimal amounts of water
and offer minimal storage. These springs may be affected by sediment transported by surface water
runoff from disturbed areas.
Changes in the land cover, topography and stream hydrologic conditions may affect the quantity and
quality of the existing springs. Exposure of the highly fractured / sheared underlying ultramafic rocks will
also increase the potential for infiltration that may result in increased runoff of poor quality water and
erosion from spoil piles; recharge of poor quality water to shallow aquifers; and / or poor quality flow to
the nearby streams. This process may further result in the contamination of the groundwater. Impact
control strategies for groundwater are limited to specific source controls in conjunction with the water
quality facilities construction and the progressive rehabilitation activities.

Figure 64: Schematic Diagram of Water Quality Treatment Facility
Control strategies at the port area will be similar and will consist primarily of structural measures to
intercept, collect and transport the surface water runoff to detention.
Water quality monitoring will be a continuous activity throughout the entire operations period. Sampling
stations will be established for all the water quality control facilities, receiving streams and the coastal
area. Stations outside the project area will also be established to identify and evaluate any downstream
impacts. Control stations will also be established outside the project influence to serve as control
stations.

Figure 65: Water Management Plan

20.6 Air Quality, Climate and Noise
20.6.1 Meteorology and Climate
The Project Area as well as the entire Province is located within a Type 2 climate zone as defined by the
Modified Coronas Climate Classification developed by the Philippines Atmospheric, Geophysical and
Astronomical Services Administration (PAGASA). This particular climate type is characterized by an
absence of a dry season. Rainfall occurs throughout the year with the heaviest rainfall occurring during
the months of December and January. The mean annual rainfall at the PAGASA station at Butuan is
2,026 mm with the period of October to February being the wettest months. The northeast monsoon
season occurs from November to April with the remaining months being subject to the southwest
monsoon.
Other meteorology and climate data available for the Butuan station include temperature and evaporation.
Monthly mean rainfall values for the period Years 1981 to 2012 are shown in Table 47. Temperature and
evaporation data shown in the Table cover the period Year 1981 to 2000.
Table 47: Climate Data Mean Monthly Values, Butuan City, Agusan del Norte (1981-2000)
Rainfall Temperature Evapotranspiration Monsoon

Month
(mm) (C) (mm) Season
January 331 26.1 84 Northeast
February 236 26.4 80 Northeast
March 150 27.1 93 Northeast
April 112 28.1 80 Northeast
May 116 28.8 80 Southwest
June 157 28.3 81 Southwest
July 147 27.9 88 Southwest
August 105 28.1 78 Southwest
September 126 28.1 87 Southwest
October 180 27.8 88 Southwest
November 200 27.3 79 Northeast
December 240 26.7 81 Northeast
Annual 2100 27.5 999 -
Note: Evapotranspiration values represent estimates based on actual water available and are calculated
from the potential evapotranspiration.
Source: Gaia South, Inc, 2012 and PAGASA, 2013.
Based on past records of PAGASA, the area is subject to an average of 1 typhoon or tropical cyclone per
year. Recent years however have shown a higher occurrence of typhoons affecting Mindanao. The
average monthly wind speed for non typhoon events is a constant 2 meters per second on a year round
basis.

20.6.2 Air Quality and Noise
Baseline air quality sampling was completed at eight locations within and around the Project area. The
locations were established based on areas having the most probable key receptors. Ambient air quality
sampling and testing was done for three parameters; sulphur dioxide, nitrogen dioxide and total
suspended particulates. Concentrations of all three parameters were considered to be very low and
representative of natural background concentrations. Results of the sampling and testing are shown in
Table 48 and the locations of the sampling stations are shown on Figure 62.
Ambient noise levels were monitored at two locations that were also subject to ambient air quality
monitoring; AQ-1 (Barangay La Fraternidad) and AQ-2 (Barangay Lawigan Proper). Monitoring was done
during the daytime hours (9:00 am to 6:00 pm) only. The results are shown in Table 49 and are typical of
expected low values within remote rural areas. The sampling locations are shown on Figure 62.
Table 48: Results of Ambient Air Quality Baseline Sampling and Testing Year 2011
(values in ug/Ncm)
Sampling AQ-1 AQ-2 AQ-3 AQ-4 AQ-5 AQ-6 AQ-7 AQ-8

Location Brgy. La Brgy. Sitio Sitio Brgy. Brgy. Brgy. Brgy. E.
Fraternida Lawaiga Sua Payong Tinigbasi Tagpangah Binuanga Morgad
d n Proper Brgy. Payong n Proper oy n o
Paramet Lawiga Brgy.
er n Tinigbasi
n
SO2 6.76 10.66 11.39 9.81 9.41 10.61 10.21 11.06
non non non non non non
NO2 7.4 1.08
detect detect detect detect detect detect
non non non non non non
TSP 56.29 90.71
detect detect detect detect detect detect
Note: SO2 = Sulfur Dioxide, NO2 = Nitrogen Dioxide, TSP = Total Suspended Particulates
Source: Gaia South, Inc. 2012
Table 49: Results of Ambient Noise Level Testing Year 2011 and Philippine Standards
(values in dBA)
AQ-1 AQ-2 Category Categor Category Categor Categor

Sampling Location Brgy. La Brgy. AA y B y y
Fraternida Lawaigan Standard A C D
d Proper s Standard Standar
Parameter Standar s Standar ds
ds ds
Morning
(5:00 am to 9:00 - - 45 50 60 65 70
am)
Daytime
38.0 – 39.8 –
(9:00 am to 6:00 50 55 65 70 75
56.5 56.8
pm)
Evening
(6:00 pm to 10:00 - - 45 50 60 65 70
pm)

Nighttime
(10:00 pm to 5:00 - - 40 45 55 60 65
am)
Source: Gaia South, Inc, 2012
20.6.3 Air Quality and Noise Management Impacts and Control Strategies
The primary air emission associated with the Project is fugitive dust generated from ore storage
stockpiles, road dust, overburden waste and topsoil stockpiles and daily mining activities. Dust generation
will be the most problematic during the normal mining operations involving clearing and stripping, ore
extraction, stockpile operations, and ore loading activities at the port. Higher dust production is expected
during the drier season (March to October) and lower dust production during the wetter season
(November to February).
Fugitive dust emissions will be controlled through the use of direct water application, by spraying, wetting
agents and rapid revegetation of disturbed areas, roads, and other working areas concurrent with
operations. Additionally, loaded trucks will be covered with tarpaulins to prevent dust from escaping.
From an operations planning standpoint, dust generation can be controlled by minimizing the areas to be
cleared and exposed. Progressive rehabilitation activities will be implemented as soon as possible to
reduce the area of bare soil and minimize dust generation. Other control measures to be implemented
include the following:
• During the dry months, access roads and ore stockpile areas within the project area and at the Port
shall be regularly sprayed with water.
• Avoid stockpiling of ore for long periods of time to avoid windblown fugitive dust.
• Regular road maintenance such as grading and surface compaction.
• Formulate and implement rapid re-vegetation program along perimeter of operations and exposed
areas.
• Conduct regular ambient air quality monitoring.
• Implement speed regulation protocols for moving vehicles; especially those involve in hauling,
transporting, stockpiling and loading.
Noise generation will be the result of equipment operations and movements. There will be no blasting
activities as part of the mining operations. Given the distance to the nearest residential community is
approximately 1 kilometer, the noise impact will be minimal, if at all. Nonetheless, noise impact control
strategies will still be implemented. These will focus on relocation of residents within the immediate
Project area. Progressive rehabilitation activities will also incorporate tree planting zones around the
perimeter of the mine area to provide sound barriers over time.
20.7 Conservation Values
20.7.1 Terrestrial Biology Flora and Fauna
The Project area is generally characterized by three ecosystem types; forest over ultramafic rocks,
tropical lowland evergreen rain forest and plantations. The ultramafic forest is the primary vegetation type
with only a few tall and large trees. The tropical lowland evergreen forest is found in patches throughout
the Project area and may be remnants of the vegetation that previously existed. The forest patches are
generally found along the ridges and the streams/gullies within the Project area. The plantations within

the area are primarily mangium, yemane and falcata and are a result of previous reforestation efforts of
the DENR.
Specific baseline data for the terrestrial flora characteristics of the Project area was gathered from 14
transects and 17 quadrats. The dominant plant form within the Project area is trees, followed by herb,
shrubs and vines. A summary of the plant habitats found within the Project area are shown in Table 50.
Within the plant habitats a total of 172 species were identified. A summary of the different ecosystem
characteristics is also included in Table 50.
Table 50: Plant Habitats and Ecosystem Species Data
Number of Specie Shanno

Plant Habitat Total Average
Species Ecosyste s n
Individu Individu
m Richne Diversity
Trees 123 als als
ss Index
Herbs 15 Forest
over
223 45 57 2.93
Shrubs 13 Ultramafi
c Rocks
Vines 11 Tropical
Lowland
Palms, Pandans, Cycad 119 40 38 2.07
9 Rain
and Bamboo Forest
Plantatio
Fern and Fern Allies 5 108 38 36 1.98
n
Total 176 Total 450 - 172 -
Other vegetation systems located within the Project area include limestone forests, beach forests and
some agroforestry ecosystems. There are some areas of previous beach forest that have been replaced
by coconut plantations. These plantations are visible in most of the lower landscape of most barangays.
Some plantations have also incorporated intercropping practices.
Low Diversity Indices were indicated for the different ecosystems. The Shannon Diversity Index for each
ecosystem is included in Table 50.
Within the Project area there are 9 flora species recorded that are considered threatened by the DENR.
Two are considered critically endangered, 3 are considered endangered and 1 is considered vulnerable.
Baseline data collection for fauna was done for 8 transects. A total of 58 species of wildlife were observed
and recorded within the Project area. Birds accounted for 42 species, mammals accounted for 7 species
and herps accounted for 9 species.
With respect to the bird species, most are resident and common. There is only 1 bird that is on the IUCN
Red List and listed as Vulnerable (Philippine Duck). Most of the flying mammals observed in the area are
common and include fruit bats. They are abundant and the populations are stable however their habitat
is threatened due to forest degradation. The reptiles (herps) within the area are also common.

20.7.2 Freshwater Aquatic Resources
Fourteen locations within 13 creeks and rivers were sampled to characterize the baseline freshwater
aquatic resources. Other than the Kalinawan River, the other creeks are short in length, are low in organic
matter and do not support many organisms. As such, the sampling locations within these creeks were
done near the mouth of each creek. The location of each sampling point and designation is summarized
in Table 51. The creeks are shown on Figure 61.
Table 51: Sampling Points for Freshwater Aquatic Resource Assessment
Biotic Biotic
Station Creek/River Area Station Creek/River Area
Index Index
E.
Curva,
FW 1 Candiis Morgado, - FW 8 Kalinawan 4.34
Santiago
Santiago
E.
Tagmamarcay,
FW 2 Nangka Morgado, 9 FW 9 Kalinawan 6
Santiago
Santiago
E.
Binuangan,
FW 3 Paiton Morgado, 5 FW 10 Binuangan 6
Tubay
Santiago
E.
Tagpangahoy,
FW 4 Mantiawas Morgado, 1.35 FW 11 Tagpangahoy 3
Tubay
Santiago
E.
Tinigbasin,
FW 5 Guyangan Morgado, - FW 12 Tinigbasin 3.15
Tubay
Santiago
E.
Payong Payong
FW 6 Agata Morgado, 4.35 FW 13 -
payong payong, Tubay
Santiago
E.
Lawigan,
FW 7 Bikangbikang Morgado, 4.16 FW 14 Sua 3
Tubay
Santiago
All creeks sampled have permanent flows with the exception of Candiis Creek (FW 1). This is an
ephemeral creek. Sampling location FW5 (Guyangan Creek) is located near the small scale mining area
and is subject to disturbance and murky waters. No samples were collected at this location. Sampling
data collected at all other locations included benthic profiles, phytoplankton, zooplankton and heavy
metals analysis for fish.
The biotic/ecological index determined from the benthic profile at each sampling point is shown in Table
51. The higher values indicate greater potential of organic pollution and poorer water quality. With
respect to phytoplankton, diatoms dominated most of the sampling sites. This suggests a high primary
productivity within the creeks that may support secondary productivity. Some algae were observed at
Stations FW7, FW8 and FW12 which is indicative of high nutrient situations. This may be the result of
surface water runoff from agricultural or livestock land use areas.
Zooplankton observations suggest the larval forms dominate over the adult forms. Most creeks and the
Kalinawan River are dominated by arthropods (insects and copepods). The adult forms of zooplankton
included rotifers which are associated with the presence of organic matter.

Heavy metals analysis was done for only one fish species known locally as Snakehead. The fish was
caught from the Kalinawan River. Results of the analysis of the flesh are shown in Table 52. Lead
concentrations exceeded the Australian and European Standards and suggest potential bioaccumulation
by this particular fish.
Table 52: Heavy Metals Analysis for Freshwater Fish
Chromium
Parameter (hexavalent Arsenic Cadmium Copper Nickel Lead Mercury
)
Concentration
<0.10 <0.01 <0.03 32.25 <0.2 1.97 0.034
(mg/kg)
Australian Standard
- 1 0.2 70 - 1.5 0.5
(mg/kg)
EU Standard
- - 0.05 - - 0.3 0.5
(mg/kg/week)
20.7.3 Coastal Marine Aquatic Resources
Eight coastal marine locations were established for the baseline biological assessment. Station
identification and locations are shown in Table 53 and referenced on Figure 62.
Table 53: Coastal Marine Sampling Locations
Statio Statio
Location Location
n n
Sitio Locbon Gamay, Brgy.
MW 1 Brgy. Lawigan, Tubay MW 5
Tinigbasin, Tubay
Brgy. Tagpangahoy Proper Coastal
MW 2 Sitio Sua, Brgy. Lawigan, Tubay MW 6
Area, Tubay
Sitio Payong payong, Brgy.
MW 3 MW 7 Brgy. Binuangan, Tubay
Tinigbasin, Tubay
Brgy. Tinigbasin Proper Coastal Brgy. La Fraternidad Coastal Area,
MW 4 MW 8
Area, Tubay Tubay
The coastline within this area is typical of volcanic islands. The beaches and shelves are narrow with the
reefs being considered as fringing or patch reefs. Sampling location MW1 is at the southern most
boundary of the 10 hectare Lawigan Marine Sanctuary. The limits of the Sanctuary are shown on Figure
62. The proposed port facilities, to be constructed in support of the Project materials handling activities,
are located near Station MW3.
Sampling and survey data collected at each stations were used to characterize the benthic profile,
phytoplankton and zooplankton of the area. Fisheries characterization was also done for the area and
included fish biomass estimates and heavy metals analysis. A summary of the benthic profile at each
station is shown in Table 54.

Table 54: General Benthic Profile at Each Sampling Location
Life Forms and MW

MW 1 MW 2 MW 4 MW 5 MW 6 MW 7 MW 8
Abiotic Factors 3
Corals (%) 11.5 40.06 32.18 2.58 3.94 4.76 12.84 12.43
Others (%) 24.4 13.02 16.40 5.79 19.96 6.44 1.10 1.53
Abiotic Factors (%) 64.1 46.92 51.42 91.63 76.10 88.80 86.06 86.03
Note: Abiotic Factors consist of silt, rubble, sand dead corals with algae and rock with algae.
Except for Station MW8, all stations are dominated by diatoms (microalgae). Station MW8 was
dominated by several species of dinoflagellates which are also referred to as Harmful Algal Bloom
Species (HABS). These species may produce toxins or may decrease oxygen in the water column and
may occur as a result of sediment deposition from terrestrial sources. These particular species also
dominate the water column during red tide events.
The total phytoplankton density at each station, except Station MW8, was comparable at approximately
1,000 cells per litre. The density at Station MW8 was more than 7,000 cells per litre.
Larval forms were the dominating members of the zooplankton at all stations. Station MW1 was
dominated by gastropod larvae while the other stations were dominated by copepods. The number of
species at each location ranged from 10 to 16.
With respect to the fisheries, angelfishes were the dominant species in terms of density and number of
species. The biomass was dominated by the wrasses, surgeonfishes and emperor fishes. The highest
calculated harvestable biomass was at Station MW1 (approximately 60 kg per hectare) with the next
highest at Station MW4 (slightly more than 20 kg per hectare). All other stations had significantly less
biomass.
Heavy metals analysis was done on the meat of 3 trophic fishes caught within the surveyed area. These
consisted of pelagic fishes and two benthic species considered as a carnivore and a herbivore. Results
of the flesh analysis are shown in Table 55. Comparison of the test results with Australian and European
Union Standards indicated the pelagic fish species were within the standards for human consumption.
The benthic species were also within the standards with the exception of lead concentrations. Both the
carnivore and herbivore species exceeded both standards.
Table 55: Heavy Metals Analysis for Coastal Marine Fish
Chromium
Parameter (hexavalent Arsenic Cadmium Copper Nickel Lead Mercury
)
Pelagic Fish
Concentration <0.10 <0.10 <0.03 33.46 <0.20 1.08 0.143
(mg/kg)
Benthic Fish
Carnivore
<0.10 <0.01 <0.03 34.62 0.2 2.12 0.116
Concentration
(mg/kg)
Benthic Fish
Herbivore
<0.10 <0.01 <0.03 34.62 0.2 2.12 0.116
Concentration
(mg/kg)

Australian Standard
- 1 0.2 70 - 1.5 0.5
(mg/kg)
EU Standard
- - 0.05 - - 0.3 0.5
(mg/kg/week)
20.7.4 Coastal Oceanography
Three oceanographic stations were established along the coastline to provide baseline data within areas
that may be affected by future project operations and potential pollutant discharges. The first station
(OC1) was located near Binuangan, the second station (OC2) was located near Tapangahoy and the
third station (OC3) was located near Payong payong. Ocean current data was collected from current
meters moored at the three stations (5 meters below the ocean surface) and by drogues near each of the
current meters. Current velocity and seawater temperature data are summarized in Table 56.
Table 56: Ocean Current Data by Current Meter Measurements
Ebb Tide Current (cm/sec) Flood Tide Current (cm/sec) Seawater

Station Current Temperature
Direction Current Velocity Direction (C)
Velocity
OC 1 1.4 to 24.4 WSW to NNW 3.2 to 12.8 WNW to N 28.9 to 29.5
OC 2 2.8 to 16.4 To NW 0.6 to 29.0 To NW 28.9 to 29.8
OC 3 2.0 to 24.0 SSE to WSW 4.8 to 16.0 S to SE 29.25 to 30.25
Note: Measurements taken June 20-21, 2011.
Primary tide data for the Project coastal area was taken from the Tide and Current Tables for 2011 as
published by the National Mapping and Resources Information Authority (NAMRIA). The Cebu tidal
station is the reference station for Butuan Bay. Tidal observations at Binuangan for the period June 19 to
20, 2011 indicated a semi-diurnal type following the Cebu tidal station characteristic. The tidal elevation
ranged from a low of 70 cm at 2000 hours June 19 to a high of 217 cm at 1300 hours on June 20. A
secondary low of 105 cm was recorded at 0700 hours on June 20 and a secondary high of 124 cm was
recorded at 0200 hours on June 20.
Seawater temperatures were recorded at each of the three stations at three depth intervals. The
temperature data indicate a typical pattern of higher temperature near the surface and lower
temperatures at depth. The data are summarized in Table 57.

Table 57: Seawater Temperature Data
Depth Station OC 1 Station OC 2 Station OC 3

28 meters above
29.5 to 31.17 C 29.45 to 31.88 C 29.85 to 30.86 C
seabed
15 meters above
28.95 to 29.35 C 28.56 to 30.15 C 29.05 to 29.55 C
seabed
5 meters above seabed 28.75 to 29.25 C 27.65 to 29.45 C 28.56 to 29.85
Temperature Gradient 0.1 to 1.9 C 1.80 to 2.43 C 1.40 to 1.90 C
Note: Measurements taken June 20-21, 2011.
Bathymetry data were collected at the 3 stations to establish a depth profile for construction of port
facilities. The depth profile at Station OC1 (Binuangan) indicates a gradient of 5.3% within the first 140
meters from the shore with a maximum water depth of 10 meters. From 140 meters to 220 meters from
the shore the gradient increases to 47.9% with a maximum water depth of 40 meters.
The depth profile at Station OC2 (Tagpangahoy) indicates a gradient of 13.6% within the first 70 meters
from the shore with a maximum water depth of 10 meters. From 70 meters to 200 meters from the shore
the gradient increases to 39.1% with a maximum water depth of 47 meters.
The depth profile at Station OC3 (Payong payong) indicates a gradient of 2.4% within the first 440 meters
from the shore with a maximum water depth of 10 meters. From 440 meters to 560 meters from the
shore the gradient increases to 23.8% with a maximum water depth of 38 meters.
20.7.5 Conservation Value Management Impacts and Control Strategies
The majority of the Project area is devoid of forest cover. A dense homogenous community of ferns and
grasses sparsely interspersed with forest tree seedlings/saplings, shrubs, herbs, and vines, predominate
in almost every portion of the area. This vegetation cover comprises approximately ninety percent (90%)
of the Project total land area.
The remaining vegetation cover is forest communities occurring in narrow strips or small patches. They
are mostly confined at the lower slopes and along the creeks, and gullies. They are characteristically
remnants of second growth type of forest where dominant vegetation consists mainly of timber producing
pioneer trees. Seedlings and saplings of these tree species together with other common pioneer trees,
shrubs, lianas, herbs, ferns and grasses constitute the underlying vegetation.
Most of this vegetation cover (approximately 141 hectares) will be removed during the mining operations.
This will impact the habitat of the fauna species within the area, the biodiversity and the visual aesthetics.
Given the majority of the area is primarily grassland with low biodiversity values the flora impacts will be
minimized. Six species are identified as endangered or vulnerable. These will be impacted by the
activities.
Similarly, the fauna impacts will also be minimized given the limited habitat and common species found
in the area. Only 1 species (Philippine Duck) is listed as vulnerable on the IUCN Red List. It is however
mobile and will likely relocate to other areas.
Impact control measures for the flora and fauna resources will primarily focus on two activities. The first
will be the staged or phased approach of the mining operations wherein on limited areas will be disturbed
in any given year. This will limit the loss of vegetation and habitat and allow the migration of the fauna

species to other areas. The second control measure will focus on a continuous progressive rehabilitation
program. Once an area has been mined, rehabilitation activities will be initiated to replace the vegetation
cover and stabilize the landforms. A large percentage of the disturbed areas will be under various stages
of rehabilitation prior to the final year of operations.
Fast growing species (pioneer and reforestation species) and those with substantial high tolerance to sun
exposure will be selected due to the area climatologic conditions. Monoculture practices will be avoided
in the program to minimize occurrences of damaging viruses, pests and other similar plant illnesses. The
development of these selected species will create conditions conducive to growth of climax species. The
introduction of fruit-bearing species within certain areas will also be explored during the progressive
rehabilitation process. Some vines and grasses are considered to be effective to reduce soil erosion and
ffor slope stabilization. These will be used throughout all stages of the progressive rehabilitation period.
Collection of the endemic and endangered flora species within the area will also be done prior to mining
operations. Wildlings will be collected and seedlings propagated within onsite nurseries. Various erosion
control measures will be implemented to protect the newly planted seedlings and monitoring programs
will be implemented on a regular basis.
Thirteen of the 24 watersheds within the Project area will be affected by the operations. Impacts to the
freshwater aquatic resources will occur throughout the operations period. These will include physical
alterations of the stream and creeks, changes in the hydrologic regimes and water quality degradation
due to surface runoff and sedimentation. Permanent physical changes will occur for approximately 1.6
kilometres of stream channels and temporary changes will occur in several additional kilometres. Stream
restoration techniques will be implemented as part of the progressive rehabilitation programs to control
and mitigate these impacts. Impacts to the aquatic species are not expected to be significant given the
current conditions of the streams and limited freshwater species. Water quality degradation control
measures will focus on the construction and operation of interceptor and diversion canals and water
quality control ponds.
The coastal marine aquatic resources within the coastline of the Project area have been affected by
fishing and destructive practices associated with fishing. Nonetheless, portions of the coastal marine
areas near the proposed port do exhibit some fair to good coral and fisheries conditions. These were
recently identified and mapped in mid Year 2013. As part of this process, more than 8,000 corals were
relocated from the proposed port area to the nearby Marine Sanctuary as an impact control strategies.
Near shore water quality degradation is a significant potential impact and will affect the aquatic resources
as well as the visual resources. The water quality management plans and programs to be used land and
water resources mitigation will also be used to manage the potential for near shore coastal impacts.
20.8 Social and Community Issues and Effects
20.8.1 Philippine Social and Community Regulatory Framework
The regulatory framework for social and community issues management is identified under Chapter 14 of
DENR Administrative Order No. 2010-21: Consolidated DENR Administrative Order for the Implementing
Rules and Regulations of RA 7942, otherwise known as the Philippine Mining Act of 1995. This
framework is applied to the host community and selected neighboring communities that may be directly or
indirectly affected by the Mining Project. Additionally, the well-being of affected communities are also
addressed in the Local Government Code of 1991 and the Indigenous Peoples Rights Act of 1997.
Combined, these laws and the regulatory framework are applied to all phases of mining; exploration,
development, operations and mine closure.
Generally, the regulations are grounded on the principle that the rights of the affected communities are
protected. Mechanisms are in place whereby all community and social sectors participate during each of

the mining phases with the objective that benefits from mining operations are cascaded to all affected
sectors.
During the exploration stage, preparation and implementation of a Community Development Program
(CDP) is required. The CDP is developed in consultation and in partnership with the host communities
and appropriate neighboring communities. Planned programs and activities are supported by a fund
equivalent to a minimum of 10% of the budget of the Exploration Work Program (EWP). The programs
are focused on a set of limited social and economic programs designed to aid the host communities in the
areas of poverty alleviation, better health and better education. The framework for this program is
identified in DENR Administrative Order (DAO) 13 issued in Year 2010.
Should an exploration project move to an operating project, the Philippine Mining Act requires the
preparation and implementation of a Social Development and Management Plan (SDMP). At a minimum,
1.5% of the annual operating costs shall be allocated to the SDMP each year. This amount shall be
apportioned for implementation of the Social Development and Management Program (SDMP) a Program
for the Development of Mining Technology and Geosciences and an Information and Education
Campaign (IEC) Program. Other details of the SDMP are provided in Administrative Order 2000-99.
Similar to the CDP, the SDMP shall be developed in consultation and in partnership with the host and
neighboring communities. The SDMP shall cover a 5-year incremental periods and shall include
programs, projects and activities (PPAs) focused towards enhancing the development of the immediate
stakeholders. The SDMP shall also be developed such that the PPA’s are in alignment with the programs
of the Local Government Unit (LGU) responsible for the Project area.
20.8.2 Community Consent Framework
Community consent is required prior to initiation of a mining project. Key to this is the determination of
whether or not the potential mine and operations areas are located within an identified ancestral domain
of a particular indigenous peoples (IPs) tribe. To ensure the protection of the rights of the IPs, Section 18
of the Mining Act stipulates that… “mining applications may not be granted without the prior consent of
the concerned indigenous cultural communities “. The government agency tasked to implement this
aspect of the mining industry is the National Commission on Indigenous Peoples (NCIP). The NCIP is
responsible for addressing concerns regarding the country’s indigenous peoples.
DENR Administrative Order 2010-21 defines ancestral lands as “all lands exclusively and actually
possessed, occupied or utilized by Indigenous Cultural Communities by themselves or through their
ancestors in accordance with their customs and traditions since time immemorial, and as may be defined
and delineated by law”.
Implementation of the informed consent principle of the mining regulation, the NCIP has prepared the
Revised Guidelines on Free and Prior Informed Consent (FPIC) and Related Process Guidelines of 2012
also known as NCIP 2012-Administrative Order 3. This regulatory document identifies the specific
processes and requirements that are needed to secure the “informed consent” of the IP community and is
applicable only to declared and identified ancestral lands.
In capsule, the process calls for an extensive community consultation, field validation and investigation
facilitated by the NCIP that will indicate the IP consent or rejection of a mining company application. As
proof of the IP consent and social acceptability of a mining project, the NCIP issues a Certificate of
Precondition (CP). This is one of the major requirements for approval of exploration and mining permit
applications.
In the case of mine areas located within an ancestral domain, the mine operator and the IP community
shall agree on a royalty payment in favor of the IP community. The minimum royalty is 1% of the gross
output of the mine operation. It may be increased by negotiations between the IP group and the mining
company. The royalty payment shall be used for the socio-economic development of the IP community

and shall be held and managed by the IP community themselves. The NCIP has specific Administrative
Orders governing the planning, allocation and use of the royalty payments by the IP community.
For areas that are not declared or identified as ancestral lands, the Local Government Code of 1991 is
the applicable law. The NCIP however will conduct an area investigation and verification process that will
certify that the applied mining area is not covered by any ancestral domain claims and that no IP group
will be affected by mining activity. This document is issued by NCIP and is referred to as the Certificate of
Non-Overlap.
For mining areas considered to be non-ancestral lands, the social interests of the community are
protected by the requirement that any mining application requires proof of consultation from the Local
Government Units where the mining project will be located. The LGU’s are the Barangay Government,
Municipal Government and the Provincial Government. Under the Local Government Code of 1991, no
projects or programs shall be implemented unless the consultation is complied with and the prior approval
of the LGU is obtained. Compliance with this provision requires the mining applicant to conduct
consultations with the affected communities, barangay, municipal and provincial governments.
20.8.3 Project Area Demographics and Community Data
The municipalities of Tubay, Jabonga and Santiago are identified as the primary impact areas associated
with the Project activities. Community and social studies of the area were conducted by Gaia South Inc.
during the period June through August, 2011 to identify social issues and potential community impacts.
Secondary data were also collected during this period to characterize the social and community
environment prior to the beginning of the Project.
Jabonga is one of the oldest towns within the area and is associated with Lake Mainit. The hierarchy of
settlements classifies Santiago as a satellite municipality and is identified as a mainly agricultural area.
Tubay is reportedly the second Spanish settlement within the area with a settlement date of 1751. It was
a center of trade through the 1920’s which eventually declined due to road construction connecting Tubay
with Santiago and Cabadbaran. The size and population of the three municipalities is summarized in
Table 58.
Table 58: Municipal Population Data

Municipality Population (2010) No. Barangays Land Area (ha) Classification
Jabonga 23,833 15 29,300 4th Class
th
Santiago 20,955 8 28,665 4 Class
Tubay 20,426 13 13,800 5th Class
Source: Gaia South, Inc, 2012. Coffey, 2011.
Other data collected by the Gaia South Inc. studies included social and community demographics,
community services and economic activity. These data are summarized in Table 59.
Focused Group Discussions (FGD) and Key Informant Interviews (KII) were also conducted within the
Project area during the June to August, 2011 data collection period. These two activities were focused on
identifying the issues of the key stakeholders and their acceptance/non-acceptance of the Project. The
results indicated general acceptance of the Project by the three communities as a mode of development.
Many participants of the FGD and KII activities felt the pace of development under the current agriculture
and tourism programs will be slow.

Political acceptance of the Project was also indicated to be high. The overall perception by the
communities and the political landscape is that the environmental and social issues/risks the economic
benefits may outweigh these issues and risks. Furthermore, community and political comments indicate
the environmental and social programs implemented to date indicate a positive approach by the
Company and demonstrate their adherence to responsible mining practices.
Table 59: Community and Social Data Year 2008
Data Parameter Jabonga Santiago Tubay
No data Elementary Schools – 9 Elementary Students – 3,424

Primary Schools - 1 Elementary Classrooms - 107
Education Secondary Schools – 2 Secondary Students – 890
Secondary Classrooms – 21
Housing No data No. Households – 3,157 No. Housing Units = 3,667
No data Day Care Centers - 10 Day Care Centers – 13

Social Elderly Centers - 1
Assistance Women’s Centers - 1
Facilities
Protective
No data Police Personnel – 21 PNP Police Personnel – 25 PNP
Services
Fire Protection
1 Fire Truck None None
Services
Roads – 100 km Roads – 59 km Roads – 83 km

Infrastructure
Bridges – 6 Bridges - 4 Bridges – 9
Households Served – 3,368 Households Served – 2,261 All Barangays area served by
Power Supply Households Unserved – 896 power from ANECO
Level 2 Supply – 3,780 Community System Individual Wells Shared (Level 1) – 1,320
Source of Water Supply – 794 Wells Shared (Levels 2 and 3) –
Supply by Community System Shared 2,069
Number of Supply – 2,188
Households Wells Shared – 121
Served River/Springs – 40
Solid Waste No data 55 m3 per week at designated No Solid Waste Facility

Management Solid Waste Facility
Rice – 682 ha / 4,993 tonnes Rice – 70 ha / 350 tonnes Rice – 25 tonnes

Corn – 232 ha / 835 tonnes Corn – 176 ha / 365 tonnes Corn – 240 tonnes
Banana – 517 ha / 1,550 Banana – 1,559 ha / 6,281 Banana – 875 tonnes
tonnes tonnes Coconut – 5,275 tonnes
Agricultural Crop Vegetables – 39 ha / 238 Vegetables – 73 ha / 593 tonnes
Area and tonnes Coconut – 2,032 ha / 4,064
Production Coconut – 6,760 ha / 8,112 tonnes
tonnes Root Crops – 84 ha / 630 tonnes
Root Crops – 164 ha / 3,877
tonnes
Livestock – 274,327 kg Swine – 2,657 kg No data

Poultry – 4,947 kg Cattle – 365 kg
Livestock Carabao – 369 kg
Production Goat – 1,441 kg
Poultry – 16,260 kg
Duck – 245 kg

Inland Fisheries – 213,070 kg Inland Fisheries – 10,340 tonnes Inland Ocean Fisheries – 209.7
Fisheries Ocean Fisheries – 113,079 Fish Cages – 2.5 tonnes tonnes
Production tonnes
Source: Gaia South, Inc, 2012.
20.8.4 Public Health
Public health data for the 3 impact municipalities is limited however enough data is available to provide a
health baseline condition for each municipality. Birth rates within the municipalities are slightly more than
the overall Philippines birth rates but have shown a decreasing trend. The mortality rate for each is less
than the national rate. Acute Respiratory Infection and Bronchitis/Bronchiolitis are the leading causes of
morbidity within the municipalities. Heart disease and vascular system disease are the leading cause of
deaths.
Each of the municipalities has 1 Rural Health Unit (RHU). These RHU’s have adequate health
professionals except for Jabonga which is lacking in doctors, dentists and midwives.
20.8.5 Cultural and Heritage Values
The majority of the local inhabitants within and surrounding the Project area are of Visayan heritage. The
area is also the home of the Mamanwa-Manobo indigenous peoples. Historical account of the area
suggest the earliest inhabitants came from mainland Asia and were followed by Malayans, Arabs,
Chinese, Japanese, Spanish and Americans. In more recent times migrants from the Visaya and Luzon
Provinces have settled in the area. Most residents speak the Cebuano dialect and reside in rural areas.
On May 11, 1999 the National Commission on Indigenous People (NCIP) Office issued a certification that
the MPSA application for the Project area had no recognized Indigenous Peoples (IPs) living within the
applied areas nor were there any existing applications for a Certificate of Ancestral Domain Claim
(CADC) or Certificate of Ancestral Domain Title (CADT).
On July 14, 1999, with guidance of the NCIP, the Project proponents executed a Memorandum of
Understanding (MOU) with the IPs of Sitio Coro, Brgy. Colorado, Jabonga that led to the execution of a
Memorandum of Agreement (MOA) with the Mamanwa and Manobo Tribes. This then led to the eventual
compliance of the Free and Prior Informed Consent (FPIC) and the issuance of a Compliance Certificate
by the NCIP on February 6, 2008.
20.8.6 Social and Community Management Impacts and Control Strategies
The Project is anticipated to provide positive impacts to the community in terms of revenue, job
opportunities, increased income and improvement of basic services such as infrastructure, health,
education and communication services. These will be particularly focused within the host barangays.
Positive impacts are also anticipated relative to Information and Education Campaigns and
implementation of the SDMP. Access to communication facilities within the Project area will also be
provided to the community for emergency cases. Priority for job opportunities and employment will be
given to the host community.
Health personnel will be hired to monitor and treat common illnesses of the workers. Medical and dental
missions will be conducted on a regular basis within the nearby communities to address and manage any
negative health impacts of the Project.

20.9 Closure Plans
20.9.1 Regulatory and Functional Objectives
The overall objective of the rehabilitation and closure plan is to rehabilitate the Project Area in such a
manner as to promote a sustainable environment and social community using a multiple land use
planning concept. From a regulatory standpoint, closure of the operations will be guided by an approved
Final Mine Rehabilitation and Decommissioning Plan (FMRDP). Requirements for preparation and
implementation of the FMRDP are part of the 1995 Philippine Mining Act as amended by implementing
rules and regulations identified in DAO 2005-07 entitled Amendments to Chapter 18 of Administrative
Order 96-40 as Amended, Providing for the Establishment of a Final Mine Rehabilitation and
Decommissioning Fund.
In addition to preparation and approval of the functional portion of the FMRDP, the regulations also
require the establishment of the Final Mine Rehabilitation and Decommissioning Fund to be administered
by the Company and the MGB. This fund is based on the estimated closure costs identified in the
FMRDP and is subject to revision during every two year review period. A graduated deposit schedule is
identified in the regulations and is based on the projected mine life and the overall closure cost. Funds
may only be withdrawn for closure activities once the mining operations have ended and the final closure
activities are ready to be implemented. Reclamation and rehabilitation activities completed prior to mine
closure are considered part of Progressive Rehabilitation and are not subject to the FMRDP Fund deposit
requirements.
From the Company standpoint, preparation and successful implementation of the FMRDP activities
focuses on two primary objectives:
• To prevent or eliminate long term environmental impacts by returning mining disturbed land to
physically and chemically stable, visually acceptable, productive or self sustaining condition,
taking in consideration the beneficial uses of the land and surrounding areas and as agreed with
the stakeholders, and
• To ensure that sustainable alternative livelihood opportunities are established and left behind to the
host and neighboring communities.
There should also be the recognition that restoration of the disturbed areas to their pre-mining condition is
for the most part unachievable. A pre-requisite to development and implementation of the FMRDP is
development of an overall land use concept for the overall MPSA and specifically for the disturbed areas
within the MPSA. A land use concept is generally based on a multiple land use concept with the focus on
retaining what natural forest areas remain, returning some disturbed areas to a natural regenerative forest
area and establishing the opportunity for agricultural based livelihood programs.
20.9.2 Rehabilitation and Closure Program
An initial closure plan has been prepared in response and in conformance with the Philippine regulatory
requirements. The FMRDP has been subject to Project stakeholder consultation and review and is
currently under review by the regulatory agency. A Community Technical Working Group has been
established to develop, evaluate and review the closure plans. Key to the identifying the program and
activities is the full implementation of the progressive rehabilitation program during the mining operations.
Successful implementation of this program will significantly reduce the closure rehabilitation schedule and
costs.
The closure program will consist of an Active Care Phase and a Passive Care Phase. Objectives of each
phase are as follows.

• Active Care Stage – The stage occurs immediately after the end of mining operations. During this
phase, activities are implemented to decommission any equipment, process facilities and
infrastructure that will not remain. The mine and other disturbed areas will be rehabilitated and
returned to an agreed land use. In this case, this will be an agri-forest concept with the possibility
of plantation zones and forest management zones to assist in post project livelihood programs.
Also includes in this stage is the identification and cleanup of any potential contamination.
• Passive Care Stage – This stage is a period of monitoring and evaluation of the Active Care Stage
to determine the effectiveness of the Active Care Stage. The end of this stage should result in
the issuance of a Certificate of Relinquishment from the DENR, certifying the objectives of the
FMRDP have been met.
Implementation of the FMRDP is planned to occur over a 4 year period. The first two years will represent
the Active Care Stage and the final two years will represent the Passive Care Stage. Components and
associated activities for this 4 year period are shown in Figure 66.

Figure 66: Progressive Rehabilitation and Closure Activities
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21 Capital and Operating Costs
21.1 Scope of Estimate
The scope of the estimate covers mining, stockpile rehandling, barging , site preparation, road
construction, Port Loading Facility, general infrastructure, equipment and materials supply,
construction and installation of facilities.
21.2 Accuracy of Estimate
The capital and operating cost estimates have been developed to an intended level of accuracy
of ± 10 to 15%.
21.3 Summary of Capital Cost Estimate
The capital cost estimate summarised in Table 60 was estimated by CSC based on information
provided by local Philippine service providers and suppliers, and is expressed in US dollar
(USD) values. The base date of the estimate is April 2013.
Description Cost USD M
Installed Start-up Capital 9.26
Contingency at 10% 0.95
VAT at 12% 1.31

TOTAL 12.45
Table 60: Summary of Capital Costs
Elements of capital cost estimates are subject to VAT at 12%. Due to the nature of the DSO
export operation VAT has assumed to be non-refundable.
There is no allowance for mining fleet capital as the project is based on contract mining.
Details of the components of the Installed Start-up Capital, before VAT, are shown in Table 61.
Mobilisation – Mining 0.15

Site Preparation Infrastructure & Site 0.04
Road Construction/Rehabilitation/Widening 1.14
Port Loading Facility Construction 2.62
Mechanical/Electrical Equipment 0.07
Laboratory Equipment/Apparatus 0.24

Office Equipment 0.06

Miscellaneous Services: 0.20
Working Capital (2 months operating costs) 2.64
TOTAL 9.26
Table 61: Summary of Installed Start-up Capital Costs (before VAT)
21.4 Exclusions
The following items were excluded from the capital cost estimate:
• Pre-production land acquisition and relocation costs - in progress

• Mine closure and rehabilitation costs - included in operating costs
21.5 Summary of Operating Cost Estimate
21.6 Operating cost estimate
A quarterly operating cost estimate has been developed for the mining, stockpile rehandling,
barging and all administrative, environmental, community relations and supporting departments
for the ANDP.
The following costs have been included in the analysis:
• All local, provincial and federal government fees

• Royalties
• Import duties
• Export duties
• Value-added tax
The annualized operating costs for the project presented in Table 62 were estimated by CSC,
based on information provided by local Philippine service providers and suppliers, and are
expressed in US dollar (USD) values. The base date of the estimate is April 2013.
Contract mining costs have been estimated from mine physicals schedules and quotations from
TVI's existing contractors and equipment suppliers in the Philippines. Mining costs are inclusive
of labour cost, waste mining, stockpile rehandle, and haulage costs.
All other site consumables costs have been derived from current costs from the TVI's Canatuan
operation and quotations from TVI's existing suppliers in the Philippines. The diesel price
estimate was 38 PhP/litre, based on current supplier pricing.

Table 62: Operating Cost Summary
LOM Cost USD /wmt

Ore Drying 6.5 0.67
Barging 21.7 2.24
G&A 17.9 1.84
VAT Payable (@ 12%) 10.9 1.12
Figure 67 shows the cost distribution for the resulting Operating Cost (excluding contingency).
Figure 67:Cost Distribution of Operating Cost

Table 63: Mining Operating Costs by Year

Table 64: Other Operating Costs by Year

21.7 Mining operating cost estimate
Refer to Section 24 for the mining operating cost estimate detail.
21.8 Exclusions
The following costs have been excluded from these estimates but included in the economic
analysis:
• Depreciation
• Corporate taxes
• Value-added tax

22 Economic Analysis
22.1 Introduction
A financial model has been prepared and the results are presented on an after tax basis in
constant September 2013 US dollars. The model has been prepared on a stand-alone basis
and contains no head-office or external sources of revenue or costs. Revenues and costs are
estimated in US dollars converted from local currency where applicable at the rate of 41
Philippine Peso to 1 USD. The final cashflow, NPV discounted at 10% and IRR are presented in
Section 22.5.
22.2 Economic Model Input Parameters
The financial model is based on the case put forward by TVI as follows:
• A pre-production and construction period of 3 months
• A mining schedule, estimated on a quarterly basis which optimises the use of current
resource
• A Direct Shipping Operation (DSO) of High Iron Limonite at rate up to 2.5M wmt per
annum
• Limonite is blended to meet the nickel and iron specifications required by off-takers.
The economic parameters applied to the model are based on the following:
• US dollar to Philippine Peso exchange rate of 41 PhP based on the prevailing rate
• A medium-term average ore sale price of US$22/wmt, being 10% lower than the
average off-takers sale price over the last 18 months.
• A discount rate of 10% has been applied to the after-tax cashflows on the basis of the
3.8% Philippines Central Bank discount rate plus a 6.2% risk premium
The taxation and royalty assumptions incorporated into the financial model are as follows:
• The Philippines corporate tax rate of 30%.
• Value Added Tax (VAT) is payable at the rate of 12% on operating and direct capital
costs
• All capital fully depreciated over the life of the project.
• No tax-holiday has been applied.
• No carried forward tax losses have been applied
• A 2% Government Excise Tax on gross sales
• A 1% Indigenous persons royalty on gross sales
• Other local government and environmental and rehabilitation levies applied in

accordance with the Philippines Mining regulations

22.3 Capital Costs
Installed capital cost estimates are based on the feasibility study figures provided by Philippine
suppliers and documented in this report. The life-of-mine capital costs used in the economic
analysis are summarised in Table 65.
Table 65: Capital Cost Estimates
Description Capital Costs USD M
Mobilisation 0.15
Road Construction/Site Preparation 1.18
Causeway Construction 2.62
Laboratory and Equipment/Apparatus 0.30
Office Equipment & Miscellaneous Services 0.26
Working Capital 2.56
Total Direct Cost 9.26
VAT 1.31
Contingency 0.92
Total Capital Cost 11.50
Total Life-of-Mine Capital 12.45
Development costs include causeway, buildings and workshop, general site, construction
services, temporary construction facilities and establishment costs. A further 10% contingency is
applied to all the installed capital costs. The total installed capital cost is including indirect costs
is USD 11.50M.
Sustaining capital cost of USD 0.95M has been included over the life of the project.
Value Added Tax (VAT at 12%) has been assumed not to be refunded.
The sensitivity of the project to Capital Costs is discussed in Section 22.6.
22.4 Operating Costs
Key assumptions which drive the operating costs are summarised in Table 66.

Table 66: Operating Cost Assumptions
LOM Cost USD /wmt

Ore Drying 6.5 0.67
Barging 21.7 2.24
G&A 17.9 1.84
VAT Payable (@ 12%) 10.9 1.12
Contract mining costs have been estimated from mine physicals schedules and quotations from
TVI's existing contractors and equipment suppliers in the Philippines. Mining costs are inclusive
of labour cost, waste mining, stockpile rehandle, and haulage costs.
All other site consumables costs have been derived from current costs from the TVI's Canatuan
operation and quotations from TVI's existing suppliers in the Philippines. The diesel price
estimate was 38 PhP/litre, based on current supplier pricing.
Fixed, general and administration costs have been estimated on the basis TVI's current
Canatuan operation in Mindanao.
The operating cost profile over the life of mine expressed in USD per wmt shipped is shown in
Figure 68.
Figure 68: Operating Cost by Cost Centre

22.5 Life of Mine Project Financials
The summary cashflows after tax and before financing for the ANDP are summarised in Table .
Table 67: Summary Cash Flow
LOM
USD M
Revenue 213.4
Capital Expenditure ( 12.5 )
Operating Expenditure ( 127.4 )
Tax Paid ( 22.8 )
Free Cashflow 50.7
NPV (10%) 37.9
IRR 187%
Payback 1.0 years
A chart illustrating the cumulative cashflow of the project is shown in Figure .
Figure 69: Total Free Cash Flow

Figure 70: Operating Cost Pareto

Table 68: Project Production & Cash Flow
2013 2014 2015 2016 2017+ LOM
PHYSICALS Pa Total
Laterite Mined M wmt - 2.3 2.6 2.1 0.7-0.2 10.7
Laterite Shipped M wmt - 2.0 2.5 1.8 0.5-0.4 9.7
CASHFLOW
M USD
Cash Receipts - 44.0 55.0 39.6 11.0-8.8 213.4
M USD
Capital Expenditure 6.9 4.7 0.2 0.2 0.2 12.5
M USD
Operating Expenditure 23.0 26.5 18.8 7.6-5.9 127.4
Tax Paid M USD 5.7 7.7 5.6 1.6-0.6 22.8
M USD
Total Free Cash Flow -6.9 10.6 20.6 15.0 1.7-1.1 50.7
M USD
NPV 37.9
IRR 187%

22.6 Sensitivity Analysis
Sensitivity analysis on the financial model shows that the project is robust to changes in
modelling assumptions and requires adverse changes in excess of 20% to make the project
marginal on an NPV basis. The sensitivity study has identified that the project is most sensitive
to factors which impact revenue followed by operating cost. The relative sensitivity of the project
to revenue, capital and operating cost estimates is illustrated in Figure 71.
Figure 71: Project Sensitivity
172

NPV (USD Million)
Change 70% 80% 90% 100% 110% 120% 130%

Revenue M USD 3.3 15.5 27.0 37.9 48.9 59.8 70.8
Operating
M USD 64.6 55.7 46.8 37.9 29.0 20.1 11.2
Costs
Capital Costs M USD 40.7 39.8 38.9 37.9 37.0 36.1 35.1
NPV (USD Million)
Sale Price USD/wmt 14 16 18 20 22 24 26

NPV M USD -4.4 6.6 17.7 27.9 37.9 47.9 57.8
Table 69: Project Sensitivity
173

23 Adjacent Properties (MRL)
The Surigao peninsula in northeastern Mindanao, where the ANDP is located, is a significant
mining district of the Philippines. There are four commercially significant nickel laterite
resources, including Taganito, Cagdianao, Hinatuan and Nonoc Island. There are also other
known but undeveloped nickel laterite resources in the area. Nickel laterite has been mapped
beyond the immediate boundaries of the TVI/MRL tenements. These occurrences may be of
future interest to TVI/MRL but are not contemplated or provided for in the current Feasibility
Study. In addition both TVI/MRL and other companies have interests in epithermal gold and
porphyry copper-gold projects in the area.
174

24 Other Relevant Data and Information
24.1 Mine Operating Costs
Mine operating costs are expressed in US dollars.
24.2 Introduction
A Mine Operating cost model was developed using information from equipment suppliers and
similar sized operating mines in the Philippines.
24.3 Operating hours
The mine operation has been scheduled to operate for 365 days per annum, with allowance for
stoppages during moderate-high rainfall conditions. Mine production has been scheduled for
304 days per annum.
A three panel roster system has been assumed with mine personnel working three 8 hour shifts
per day.
24.4 Equipment productivity
Equipment productivity has been based on load/haul simulations, assuming equipment

performance parameters from equipment suppliers and material properties of the deposit.
The weighted average dry bulk density and weight average moisture content from resource
3
calculations are 1.20 tonnes/m and 30% respectively. A material swell factor of 30% has been
assumed.
The primary load/haul fleet consists of a Caterpillar 336 excavators loading Caterpillar 730
articulated trucks which will be predominantly used in the pit. The secondary load/haul fleet
consists of a Caterpillar 950 Front End Loader loading Isuzu Giga on-highway trucks and will be
predominantly used for Stockpile rehandle.
An additional excavator unit has been included in the fleet to be used in the limestone quarry.
Loading Unit productivity assumptions are shown in Table .
Haul profiles were developed for the 48 mining panels. The profiles were based on the
temporary in-pit road network and the distance to the centroid of each mining panel. The
average gradient for the temporary road network was 5% and the rolling resistance was
assumed at 3%. Load/haul simulations were carried out on 48 panels to estimate average haul
and return speeds, and interpolated for the remaining mining panels.
Hauler productivity assumptions are shown in Table
175

Table 70: Loading Unit Productivity
Load Unit Excavator Loader
Make/Model CAT 336 CAT 950
Bucket Capacity Lcm 2.4 3.3
Bucket Fill Factor % 90 90
Bucket Load per Pass wmt 3.2 4.5
Swell Factor % 30% 30%
Density (In Situ) wmt/m3 1.74 1.74
Hauler Unit Articulated 6x4
Hauler Make/Model CAT 730 Isuzu Giga
Rated Hauler Capacity (by weight) wmt 28.1 20.0
Rated Hauler Capacity (by volume) lcm 16.9 8.5
Number of Passes # 4 3
Hauler Payload wmt 23.0 12.0
Spot Time sec 30.0 30.0
Load Unit First Pass sec 6.0 10.0
Load Unit Cycle sec 21.0 30.0
Total Loading Time min 2.0 2.0
Effectiveness min/hr 55 55
Loader Productivity mt/op hr 198 365
Hauler productivity options are shown in Table
Table 71: Hauler Productivity
Pit to Stockpile/Dump CAT730 (ADT) Unit Minimum Maximum Average
Haul distance m 800 3,250 1,950
Wtd Avg Speed Waste (Loaded) kph 23 26 25
Wtd Avg Speed Waste (Empty) kph 28 32 30
Total Cycle Time min 10.4 20.3 15.5
176

Effectiveness min/hr 55 55 55
Hauler Productivity wmt/op hr 65 130 95
Pit to Stockpile/Dump Isuzu Giga Unit Minimum Maximum Average

(OHT)
Haul distance m 800 3,250 1,950
Wtd Avg Speed Waste (Loaded) kph 23 26 25
Wtd Avg Speed Waste (Empty) kph 28 32 30
Total Cycle Time min 9.4 20.2 14.5
Effectiveness min/hr 55 55 55
Hauler Productivity wmt/op hr 40 60 49
24.5 Site Preparation
Allowance has been made for ancillary equipment to establish drainage controls, strip topsoil,
establish temporary access roads and bench face development. Initially, topsoil will be
stockpiled adjacent to the Pit Ore Stockpile.
24.6 Mining Operations
Equipment operating costs have been developed using information from several sources,
including equipment suppliers and contractor estimates from TVI's Canatuan operation.
A Full Maintenance Service Contract agreement for the maintenance of plant and equipment
has been assumed, with the costs inclusive of Labour, but exclusive of fuel.
Equipment hourly operating costs (including an estimate for fuel) for major equipment are
shown in Table 72.
Diesel fuel cost has been estimated at USD 0.93/litre. Diesel consumption is shown in Figure
Diesel consumption will peak at 14,000 litres per day in 2015.
24.7 Barging Costs
Pricing for ore barging was obtained from a local Philippine contractor currently conducting
barging operations of a similar scale at several DSO sites in Mindanao. The quotation for
barging costs is USD 2.00/wmt within 3.0 km from the Port Loading Facility.
177

Figure 72: Diesel Consumption
Table 72: Equipment Costs (including fuel and lube)
Make/Model Equipment USD/hr
Cat 336 Excavator 82
Cat 950 Front End Loader 55
Cat 730 Articulated Truck 105
Isuzu Giga On-highway Truck 38
Cat 938 Excavator 52
Isuzu Giga Water Truck 44
Cat D7 Dozer 102
Cat 120 Grader 51
Cat CS533E Roller 31
Workshop Crane 37
Service Truck 43
178

24.8 Environment and rehabilitation
Allowance has been made for ancillary equipment to maintain drainage controls and carry out
work as described in Section 4.6.11.
The total area disturbed by mining operation excavations, infrastructure and roads at Agata
North is estimated at 195 hectares, which will be progressively rehabilitated with transitional
sub-grade saprolite material and topsoil prior to seeding and revegetation. Approximately
3
390,000 m of this material has been allocated for rehabilitation purposes at Agata North.
Costs associated with these activities have been allocated to the Environmental and
Rehabilitation item in the Mining Costs summary.
24.9 Manning
Staff and labour costs are based on TVI operations that are currently in operation in 2013. Staff
and Labour cost estimates are inclusive of on-costs.
The mine department will be manned by 100% Philippine National personnel. All labour will be
sourced from the local region. Most staff will work a rotational roster system, whilst labour
personnel will work an 8 hour day for 6 days per week.
Manning levels in peak production periods are shown in Table 73. Manning levels are inclusive
of labour requirements for operating the limestone quarry.
179

Table 73: Manning Levels in peak production periods
180

24.10 Equipment requirements
A summary of equipment requirements is shown in Table 74.
Table 74: Equipment requirements
24.11 Equipment hours Equipment hours
A summary of equipment hours is shown in Table 75.
Table 75: Equipment requirements
24.12 Mining Schedule
A graphical summary of the mIning schedule is shown in Figures 73 to 75.
AGNDSO-TR-30 August 2013 Appendices

Figure 73: Mining Schedule



25 Interpretations and Conclusions
25.1 Geological Setting and Mineralisation
The weathering of significant outcropping Ultramafic units within the Western Range of the
Surigao Mineral District has led to the formation of a widespread and significant lateritic Ni/Co
resources. Mineralisation occurs within both the ferruginous upper zone, which is
predominantly limonite, and the underlying less altered saprolite zone, which contains
predominantly serpentinites and primary clays of the smectite series (stevensite / saponite). Ni
enrichment has occurred due to the loss of Si and Mg from the profile, concentrating minor
elements from the primary ultramafic (Ni, Co, Fe), to economic levels for exploitation.
This lateritic Ni geological setting is common throughout the world, with the only difference
being the rate of weathering, the climate during the weathering period, and the depth of
weathering. The Agata North and satellite deposits have formed recently and have many
similarities to deposits located within Surigao, Mindanao, Philippines, and globally (Cuba, New
Caledonia etc) – and the mining and exploitation of these deposits is well documented and well
known.
It can be concluded that the Agata North and satellite lateritic Ni deposits are reliably
mineralised based on the global understanding of these deposits in both their formation and
their residual nature. However, the rate of erosion and the fickle nature of the mineralisation in
parts ensures that a systematic approach is required in defining the mineralisation and this has
been carried out by TVI/MRL at every step of the exploration process.
25.2 Drilling
TVI/MRL has completed a series of significant drill programs in the definition of the Agata North
Lateritic Nickel deposit. All drilling to date has been completed by the use of small mobile open
hole NQ coring rigs, which are highly mobile in difficult to access terrain. Recovery from these
drill rigs is high, with losses generally occurring where there are changes in the hardness of the
drilled material, causing material to be disrupted at the bit face. The major ore zone is generally
a softer material and losses within the ore zones have been minimal at all stages of the drilling
programs. A variety of contractors have been used over time, with the drilling rate being the only
variation with regards to their performance and sampling rate.
As the drilling technique has provided TVI/MRL with core from which to sample and log, the
level of detail has been extremely high and this has provided the resource with very accurate
boundary definitions and sampling runs specific to geology and lithology. Issues such as
boulders within the saprolite, extensive nature of transition zones, and the relative hardness of
various ferruginous layers have been able to documented and reviewed giving TVI/MRL a
significant advantage for modelling and grade resource estimation.
The drill spacings have been tested geostatistically and shown to meet the standards of both
indicated and measured for most of the Agata North deposit. A geostatistical drilled grid of 25m
centres within the Agata North deposit has provided a significant amount of detail within the
short range data and provided confidence in the drill spacings being applied.
25.3 Sample Preparation, Analyses and Security
A complete and fully developed series of tests have confirmed the validity and the reliability of
the sample preparation, chemical analyses, and security of the process. The checking is
comprehensive and includes confirmation of the sample prep via analyses of coarse sizing
fractions, and repeats of primary pulps; and confirmation of the analyses through the use of
standards, internal repeats and the use of an independent laboratory.

The security of process is provided through independent sample collation by the author and the
previous report author, with these results matching the primary result. Also physical checks of
the core on site has taken place with logging checked against core as well as referencing
grades to the core to see if any inconsistencies have occurred. There has been no indication of
any core manipulation or grade inconsistencies at any point of the resource reviews.
All the data has been verified by the author through physical checks and reviews, geological
checks and reviews, geochemical checks and reviews, and survey checks and reviews. All data
used in the process of resource estimation is appropriate for the estimate and provides
adequate support for all subsequent resource estimations.
Bulk density data verification has been difficult due to ground conditions and the variable
hardness of the material making many of the simple techniques effectively useless. The primary
data collected from pits and test sites, as well as the knowledge gained from lateritic Ni mines in
the region indicates that the values being applied are applicable and provide a close estimate to
actual tonnages.

26 Recommendations
26.1 Geological Setting and Mineralisation
There are no further recommendations to be made with regards to the geological setting and
mineralisation. The resource region, geology, and type of mineralisation is well understood and
requires no further work within the resource area.
26.2 Drilling
The drilling technique and drill spacing is entirely appropriate for the collation of geological data
and geochemical data. The use of open hole NQ coring rigs has issues associated with core
preservation and recovery, but TVI/MRL has achieved extremely high recoveries (>97%) and a
high level of competency when preserving and logging the core.
There is no recommendation to change or alter the drilling technique currently used by TVI/MRL
within their lateritic deposits at Agata North and satellite deposits. Also there is also no
recommendation to change the drill spacing until such time that resources may require
upgrading to a higher status, or that mining is to commence and grade control data would be
required.
26.3 Sample Preparation, Analyses and Security
The sample preparation, analyses and security are all extremely competent and there is no
recommendation to alter the processes that have been put in place by TVI/MRL. Minor changes
to the range of standards have been discussed with TVI/MRL staff and this change has been
made and implemented.
The complete series of repeats and independent analyses of the lateritic Ni samples of TVI/MRL
highlight the quality of the data provided by TVI/MRL staff. Independent verification has only
ever found minor transcription errors and these were quickly sorted – there is no systematic
errors encountered at any stage of the data verification process.
Bulk density test work will need to be ongoing so as to more accurately define the values for
both limonite and saprolite ore zones. The difficulty of defining densities in friable and high
moisture content ores is well documented, and as such every effort should be made to provide
solid quantitative data as access and weather conditions permit.
26.5 Mining
The recommendations made in the Technical Report for the Agata Nickel Laterite Project,
Mindanao, Philippines, Agata Nickel Laterite Project (20 December 2011) to investigate the
results of the closely spaced infill drilling program at Agata North was carried out. The
reconciliation between tonnage, nickel grades, cobalt grades and iron grades in limonite was
+1.9%, -0.3%, -1.3% and -0.3% respectively.
The recommendations made in the Technical Report for the Agata Nickel Laterite Project,
Mindanao, Philippines, Agata Nickel Laterite Project (20 December 2011) to reduce the mining
panel size from 250m x 250m to 100m x 100m was done for this study. There were no issues
in regard to stockpile capacity requirements and ore blending requirements.
There are no further recommendations to be made with regards to mining aspects.

26.6 Integrated Mining Study
An onsite processing study is currently in progress to develop a viable project to extract nickel
from saprolite ore beneath the limonite ore at Agata North. The ramp and bench configuration
of the DSO pit design has made allowance for access to the saprolite below. Should the onsite
processing study prove to be viable an additional 0.8M wmt of High Iron limonite will be
available for shipping; currently locked up in benches and ramp systems. This potential DSO
ore has a grade of 0.93 Ni% and 48.7 Fe%.
26.7 Permitting
Should the onsite processing study prove viable and progress to development stage, with
potentially an additional +15 year project life, then this leaves the way open to accelerate the
High Iron Limonite DSO mining schedule and complete shipping of DSO in 4 years, after
statutory approval. This has the potential to increase the NPV of the DSO component of the
ANDP by at least of USD 10.2M.

27 References
Ausenco Vector, Agata Nickel Project Scoping Study, Sep 2010.
Department of Health. Department of Health District Health System in a Devolved Setting 2002.
Dorotan E. and Mogyorosy. Making your local health system work. German Agency for
Technical Cooperation (GTZ) 2004.
Environmental Health Service, DOH. Philippine National Framework and Guidelines for
Environmental Health Impact Assessment (EHIA) 1997.
Gaia South, Inc. Social Profiling and Environmental Impact Assessment. 2006.
Ausenco. Technical Report for the Agata Nickel Laterite Project, Mindanao, Philippines, Agata
Nickel laterite Project, 20 December 2011 (SEDAR).
Gifford, M. G. Independent Report on the Nickel Laterite Resource – Agata North, Philippines,
Agata Nickel laterite Project, 1 April 2013 (SEDAR).
Geotech investigations – JCP Geo-Ex Services.
LaDou J. Current Occupational and Environmental Medicine. McGraw Hill 2004.
PTTC Conceptual Design of the Causeway for Agata Mining Ventures Inc. Payong Payong Port
Facilities - April 15, 2013

Appendix 1 – Certificates of Qualified Persons

CERTIFICATE OF QUALIFIED PERSON
Mark Gifford
Geological Consultant
636 Bramley River Rd
Margaret River
WA 6285, Australia
I, Mark Gifford am a qualified geologist working from a private consultancy.
The technical report to which this certificate applies is entitled “Technical Report for Agata North
Nickel Laterite DSO Project (ANDP), Mindanao, Philippines” and dated 30 August 2013.
I graduated with a Master’s degree with honours in Earth Sciences at the University of Waikato
in 1988.
I am a fellow of The Australasian Institute of Mining and Metallurgy.
My relevant experience with respect to the ANDP includes managing the exploration and mine
geology of the Murrin Murrin lateritic Ni mine in the goldfields West Australia for 5 years, as well
as consulting to numerous small Ni laterite explorers in both Australia and abroad
I have visited the Agata Northl site on numerous occasions since February 2010, with my last
visit to site in July 2011.
I am responsible for the preparation of report Sections 1.2, 1.3, 7, 8, 9, 10, 11, 12, 14, 25.1 to
25.4 and 26.1 to 26.4
I am independent (as defined by Section 1.5 of NI 43-101) of TVI Pacific Inc..
I have been involved in the project since February 2010. The nature of this involvement is the
development of resources based upon exploration completed by Mindoro Resources Limited.
I have read the National Instrument 43-101 and the Technical Report, to the best of my qualified
person’s knowledge, information, and belief, the technical report, or part that the qualified
person is responsible for, has been prepared in compliance with this Instrument.
As of the date of this Certificate, to the best of my knowledge, information and belief, the
Technical Report, or part that the qualified person is responsible for, contains all scientific and
technical information that is required to be disclosed to make the Technical Report not
misleading.

Dallas Cox
Principal Consultant
Crystal Sun Consulting Limited
3713 The Center
99 Queen’s Road
Central
Hong Kong
I, Dallas Cox am Principal Consultant of Crystal Sun Consulting Limited.
I graduated with a degree in Mining Engineering at the University of New South Wales,
Kensington in 1986.
I am a member of The Australasian Institute of Mining and Metallurgy and Chartered

Professional (CP) with membership number 201098.
My relevant experience with respect to the ANDP includes operational and technical services
functions for Queensland Nickel Greenvale operations from 1987 to 1990, and mining and
resource studies for Acoje Nickel Project (Zambales, Philippines), Adlay Nickel Project (Surigao
del Norte, Philippines), Verdant Vale Nickel Project (Bukidnon, Philippines) and Chaldag Nickel
Project (Turkey) between 2007 and 2011. In addition, I have worked as a mining engineer for
27 years, including 9 years as a mineral industry consultant.
I have visited the ANDP site and MRL’s regional nickel deposits in Agusan del Norte,
Philippines in the 2007 (July), 2008 (January and November), 2010 (July, August and
December) and 2011 (January, April and May).
I am responsible for the preparation of Sections 1.1, 1.4 to 1.8, 2, 3, 15 to 21, 23, 24 and 26.5 of
the report.
I am independent (as defined by Section 1.5 of NI 43-101) of TVI Pacific Inc..
I have been involved with the project since August 2007. The nature of this involvement has
been site visits, meetings with technical staff, preliminary resource estimation, preliminary
economic evaluations and mining and mineral reserve studies.
misleading.

Michael Conan-Davies
Director
MCD Geo Pty Ltd
25 Albion Street
Surrey Hills Victoria
Australia 3127
I, Michael Conan-Davies am a Director of MCD Geo Pty Ltd.
I graduated with a degree in Geology (Honours) from the Australian National University,
Canberra, Australia in 1987 and a Masters of Mineral Economics from Curtin University, Perth in
1997.
I am a member of The Australasian Institute of Mining and Metallurgy and a Chartered

Professional (CP) with membership number 106953.
My relevant experience with respect to the ANDP includes over 15 year of technical economic
evaluations and due diligence of extractive mineral resource projects including the Nonoc,
Waigeo, Cawse, Bulong, and Murrin Murrin nickel laterite projects.
I am responsible for the economic analysis aspects of Sections 1.9 and 22 of this report.
I am independent (as defined by Section 1.5 of NI 43-101) of TVI Pacific Inc.
I have been involved in the project since May 2011.
misleading.

Appendix 2 – Consents of Qualified Persons

Consent of Author
Mark Gifford
Geological Consultant
636 Bramley River Rd
Margaret River
WA 6285, Australia
I, Mark Gifford, consent to the public filing of the technical report titled “Technical Report for
Agata North Nickel Laterite DSO Project (ANDP), Mindanao, Philippines” and dated 30 August
2013 by TVI Pacific Inc.
I also consent to any extracts from a summary of the Technical Report in the news release
issued on 11 September 2013 of TVI Pacific Inc.
I certify that I have read the news release that the report supports being filed by TVI Pacific Inc
and that it fairly and accurately represents the information in the sections of the technical report
for which I am responsible.
8 September 2013
Mark Gifford
ref: SCAN0304.jpg

Consent of Author
Dallas Cox
Principal Consultant
Crystal Sun Consulting Limited
3713 The Center
99 Queen’s Road
Central
Hong Kong
I, Dallas Cox, consent to the public filing of the technical report titled “Technical Report for
Agata North Nickel Laterite DSO Project (ANDP), Mindanao, Philippines” and dated 30 August
2013 by TVI Pacific Inc.
8 September 2013
___________________________
Dallas Cox
Ref: NI 43 101 DSO 30August2013_v2_DallasCoxConsentPageSigned.jpg

Consent of Author
Director
MCD Geo Pty Ltd
25 Albion Street
Surrey Hills Victoria
Australia 3127
I, Michael Conan-Davies, consent to the public filing of the technical report titled “Technical
Report for Agata North Nickel Laterite DSO Project (ANDP), Mindanao, Philippines” and dated
30 August 2013 by TVI Pacific Inc.
8 September 2013
___________________________
Ref: NI 43 101 DSO 30August2013_v2_MichaelConanDaviesConsent-signed.pdf

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TVI Resource Development (Phils) Inc.

Technical Report for the

AGNDSO-TR-30 August 2013

Independent Qualified Persons:

Mark Gifford M.Sc. (Hons), FAusIMM, Geological Consultant

TVI Resources Development (Phils) Inc.

Jake Foronda, TVI Resources Development (Phils) Inc.

Clifford M. James, TVI Pacific Inc.

AGNDSO-TR-30 August 2013 i

AGNDSO-TR-30 August 2013 ii

AGNDSO-TR-30 August 2013 iii

AGNDSO-TR-30 August 2013 iv

AGNDSO-TR-30 August 2013 v

1.1 Description of Property

Figure 1: Project Location

AGNDSO-TR-30 August 2013 6

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1.5 Geology and Mineralisation

Figure 2: Map of the Philippines Showing MRL Project Areas Mineralisation

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1.6 Deposit type

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Table 1: Agata North Mineral Resource Estimate 1 April 2013

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Figure 3: General layout of the DSO pit and facilities

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Table 2: DSO Mineral Reserves

Subtotal 0.18 0.26 1.00 0.11 47.1 3.0 1.6 5.6

Subtotal 6.61 9.44 0.93 0.11 48.0 3.4 0.5 3.0

TOTAL 6.79 9.70 0.93 0.11 48.0 3.4 0.5 3.0

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Figure 4: Mine production- first 4 years

Table 3: DSO Production Targets

YEAR wmt Ni% Fe%

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In 2010 A Hydrographic Survey was carried out by EGB and Associates.

1.12 Direct Shipping Operations

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Figure 5: DSO Shipping Schedule - first 4 years

DSO ORE SHIPPED 2013 2014 2015 2016 2017+ TOTAL

Table 4: DSO Shipping Schedule

1.13 Port Loading Facility location

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1.15 IFC Performance Standards on Social and Environmental Sustainability

PS1: Social and Environmental Assessment and Management Systems

PS2: Labor and Working Conditions

PS3: Pollution Prevention and Abatement

PS4: Community Health, Safety and Security

PS5: Land Acquisition and Involuntary Resettlement

PS6: Biodiversity Conservation and Sustainable Natural Resource Management

PS7: Indigenous Peoples

PS8: Cultural Heritage

1.16 Philippine Environmental Impact Statement System

The Philippine Environmental Impact Statement System (PEISS), established through

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As required by Philippine regulations, annual environmental protection programs will be

1.18 Social and Community

1.19 Economic Analysis

A summary of the Feasibility Study financial model is presented in Table 5.

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