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REPORT

Keliber

Pekka Lovn, Markku Merilinen

8.December 2011

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MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF LNTT AND OUTOVESI LITHIUM DEPOSITS

FOR KELIBER OY

Outotec Oyj Riihitontuntie 7 C, PO Box 86 FI-02201 Espoo, Finland Tel. +358 20 529 211, Fax +358 20 529 2200 www.outotec.com Domicile Espoo, Finland Business ID 0828105-4, VAT FI08281054

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Introduction and summary This report is not a comprehensive Minerals Experts Report but is intended to be a part of the Keliber Litium Project pre-feasibility study. The following sections describe the methodology used by Outotec (Finland) Oy in estimating the Mineral Resources and Ore Reserves of the Lntt and Outovesi Lithium projects. Markku Merilainen, MAusIMM and Pekka Lovn MAusIMM(CP) of Outotec (Finland) Oy, both Competent Persons as defined by Joint Ore Reserves Committee (JORC) prepared the Lntt and Outovesi project mineral resource and ore reserve estimates. Markku Merilainen visited the project area 19.20.8.2010. The estimates comply with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (Joint Ore Reserve Committee JORC-code). The Li2O grade cut-off used to determine the mineral resources is 0.5 %. The tables below summarize the Mineral Resources of the Lntt and the Outovesi deposits.
LnttMineralResource@0.5%Li2Ocutoff Li2O % ResourceClass Tonnage Measured 433000 1.12 Indicated 868000 1.06 Measured+Indicated 1301000 1.08

OutovesiMineralResource@0.5%Li2Ocutoff Li2O ResourceClass Tonnage % Measured 0 0.00

Indicated Measured+Indicated

289000 289000

1.49 1.49

The Ore Reserve estimates of the Lntt and Outovesi are given in the tables below.

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Lntt Ore Reserve @ 0.5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Waste/Ore ratio Tonnage Li2O %

472000 513000
985 000

0.98 0.96
0.97

6.9

Ore reserve tonnage and grade include 95% mining recovery and 15% waste rock dilution at 0% Li2O grade

Outovesi Ore Reserve @ 0.5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Waste/Ore ratio Tonnage Li2O %

0 277000
277 000

0.00 1.17
1.17

6.0

Ore reserve tonnage and grade include 95% mining recovery and 25% waste rock dilution at 0% Li2O grade

Ore Reserves are not additional to Mineral resources.

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MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF LNTT Geology Deposit Geology

The Lntt mining licence area (as also Outovesi) is located on the Pohjanmaa schist belt between the Central Finland Granite Complex and the Vaasa Migmatite Complex. The schist belt is composed of mica schists and greywackes with some sulphide bearing black schists and volcanic rocks. The Lntt veins represent an example of homogenous albite-spodumene pegmatite. The deposit consists of two, partly boudinage veins, with maximum vein width of about ten meters. Also small parallel veins exist in connection to these main veins. The host rock is mainly intermediate-mafic volcanic rock with some mica schist. The vein strike is SW-NE and dip 70 to SE with close to vertical lineation. Overburden averages 4 m at Lntt varying from almost 0 to 7 m and is almost totally till with some peat on the surface.
Data Drill Hole Database The drill hole database was obtained from Keliber as Excel spreadsheets and was transferred into Microsoft Access for use in Surpac software. The Lntt database contains information on 54 drill holes with a total length of 5691.4m. The number of assayed intervals is 553. Assay file contains the fields for Li2O, Na2O, Al2O3, SiO2, K2O, CaO, Fe2O3, Rb, Nb, Be, Li, Ta, BeEO, Ta2O5, ROCKCODE, DENSITY. The database contains 111 density records with constant value of 2.7. The density of 2,7 tonne/m3 was used throughout the estimates. Only about half of the drillholes have been downhole surveyed for azimuth and dip. The rest of drillholes have only collar azimuth and dip. Unsurveyed holes are quite short and all the holes have a good matching with the very straightforward pegmatite vein model. Outotec (Finland) Oy has not validated the database against the original drill logs but is in opinion that the database integrity is good and sufficient for the purpose.

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Resource Estimate Orebody Model

The resource outlines were constructed on cross sections at intervals of 5 30 m based on the lithological and assayed intervals. The nominal cutoff grade used was 0.5% Li2O. In some occasion it was necessary to include material below the cutoff in order to maintain the continuity of the structure. The 3D model was continued only about 5 m from the last drilled cross section in the northwestern and southeastern ending of the deposit. Downward the model was also continued some 5 m from the lowermost drill hole information, where the grade was above the cutoff. The modeled dikes quite probably continue outside of the modeled area. Three separate, parallel veins, which dimensions were sufficient for mining, were modeled. The mineralized envelopes with blockmodel are shown in the Figure 1. Each of the resource wireframe was used as a hard boundary for grade interpolation.

Figure 1. Top view of the Lntt deposit.

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Basic Statistics The assay data was coded using the wireframes of the mineralized zones to define the resource intersections. The intersection codes were used to extract samples for statistical analysis and for compositing the data for grade interpolation. Compositing of drill hole samples is carried out in order to
standardize the database for further statistical evaluation. This step eliminates any effect relating to the sample length, which may exist in the data. The summary of basic summary statistics of the composites is presented in the table below.
Trisolation Variable Numberofsamples Minimumvalue Maximumvalue Mean Median Variance StandardDeviation Coefficientofvariation 5 Li2O 6 0.71 1.98 1.06 0.79 0.22 0.47 0.44 Composites 7 8 Li2O Li2O 84 0.25 2.05 1.20 1.26 0.15 0.38 0.32 122 0.00 2.11 1.03 1.08 0.23 0.48 0.47

Table 1. Basic statistics of the composites data used in the grade estimations The data sets show low Coefficient of Variation which indicates that there is no need for any top cutting the high grade assays.

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Block Model

The resource block model was created using Surpac software. The parent block size of 10m x 5m x 5m with sub-blocking to 5m x 2.5m x 5m was selected partly on a basis of the drilling density and partly to honor the geometry of the mineralized lenses. The summary of the block model parameters is in the table 2.
MinimumCoordinates MaximumCoordinates UserBlockSize Min.BlockSize Rotation Attribute Name avgdst class dst2ns li2o material ns nsr Northing Easting Elevation 7057700 2506900 100 7058400 2507450 125 10 5 5 5 2.5 5 45 0 0 Type Decimals BackgrounDescription Float 1 1 Integer 3 1=measured,2=indicated,3=inferred Float 1 1 Float 3 0 Integer 2 1=ovb,2=waste,3=ore Integer 0 li2o*145 Calculated

Table 2. Lntt resource blockmodel parameters.

Grade Interpolation
Prior to the grade interpolation the assay data was composited to 2m downhole composites honoring the mineralised lens boundaries. The composite length was chosen on the basis of the average length of the samples inside the mineralized envelopes of 1.8m rounded up to nearest full meter. Inverse Distance squared method was used to interpolate the Li2O grade into the blocks. Each domain was estimated separately using the composites belonging to the estimated domain. The blocks inside each wireframe were filled maximum search distances of 60 m. The search ellipsoids were aligned to honor the main continuity directions of the ore lenses. A minimum of 3 and a maximum of 20 composites were used to estimate the grades into the blocks.

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Blockmodel validation The block model validation includes visual inspection and comparing the mean between the composited and estimated data. The visual inspection did not show any unusual problem when compared with drill hole grade across sections and statistical comparisons of global block mean and median grades and corresponding composite grades showed expected correlation.
Trisolation Variable Numberofsamples Minimumvalue Maximumvalue Mean Median Variance StandardDeviation Coefficientofvariation 5 Li2O 6 0.71 1.98 1.06 0.79 0.22 0.47 0.44 Composites 7 8 Li2O Li2O 84 0.25 2.05 1.20 1.26 0.15 0.38 0.32 122 0.00 2.11 1.03 1.08 0.23 0.48 0.47 Blockmodel Li2O 2925 0.00 1.74 1.08 1.07 0.05 0.22 0.20

Table 3. Basic statistics of the blockmodel and composites used to estimate the block grade.

Mineral Resource Classification The Lntt deposit consists of three parallel pegmatite veins. The composition of the veins is quite homogenous and consists of albite, potash feldspar, quartz and spodumene. Spodumene occurs in the pegmatite veins from contact to contact and is orientated close to perpendicularly to the contact of the vein. According to Outotec, Lntt Mineral Resource is classified as Measured Mineral Resource and Indicated Mineral Resource. The classification is based on the drilling density, a detailed magnetic survey, surface mapping and trenching results. The old contradiction of the lithium grade (close to ten percent) between the two drilling stages (2001/2004) and between the two laboratories (GTK/ALS) is now checked and proved to be caused by natural grade variability between the drilling stages (Sandberg, E., 2011, Lntt Analytical method check 2011: Keliber oy). The geophysical magnetic survey (Lehtonen, T,. 2009, A Detailed Magnetic Survey Over the Lntt Deposit: Keliber Oy) confirms the continuation of the pegmatite host

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rock veins between the drilling profiles. The magnetic survey results match well with the information got from the diamond drilling and the trenching. Detailed geological surface mapping was completed during 2010. The results confirm the continuities, the quality of the pegmatite veins and the nature of contacts against hosting volcanic rock and mica shist (Sandberg, E., 2011, Overburden stripping at Lntt in 2010, Keliber Oy). As Measured Mineral Resource are classified the parts of the veins which are located directly below the detailed mapped area to the depth of 70 85 m. In this area also the drilling density is the highest one. The rest of the modeled veins are classified as Indicated Mineral Resource. Inferred Mineral Resource classification is not used at all. The veins are known to continue outside of the modeled area, but there are indications that the veins are thinner and lower grade than in the modeled area. Narrow veins (usually less than 1 m) around the two main veins are not included into the Outotec model and resource classification. Part of these narrow veins may be minable, especially inside the potential open pit.

Figure 2. Mineral Resource classification. Yellow=Measured, Green=Indicated.

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Mineral Resource Statement The table below summarizes the mineral resources calculated by Outotec (Finland) Oy. The mineral resource has been calculated using 0.5% Li2O cut off.
LnttMineral Resource @0.5%Li2Ocutoff Resource Class Tonnage Li2O% Measured 433000 1.12 Indicated 868000 1.06 Measured+Indicated 1301000 1.08

Table 4.Lntt Mineral Resource as of 30.11.2011.

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Ore Reserve Estimate The Lntt deposit is amenable for conventional open pit mining. In the more mature state of the project also underground mining possibilities should be considered. The ore reserve estimate of Lntt is based on the open pit optimization (floating cone algorithm) followed by the open pit design of the highest profit pit shell. The pit optimization parameters are presented in the following table.
Li carbonate price Bi productcredit Exchange rate Flotationrecovery% Conversionrecovery% Waste miningcost Ore miningcost Processingandotheropex Overall slope angle (rock) Slope angle (soil) 10000 Us$/t 7% 1.30 :Us$ 80% 90% 1.4 /t 1.7 /t 45.0 /t 50.0 dec 20.0 dec

Table 5. Open pit optimization parameters. The open pit design criteria is presented in the table 6 below.
Batterangle Interrampangle Overall slope angle Roadgradient Roadwidth Bermwidth 80 dec 65 dec 55 dec 10 % 9m 8m

Table 6. Open pit design criteria. The open pit stripping ratio is 6.9. The mining modifying factors are: Mining recovery Dilution 95%, 15%.

The table 7 summarizes the Lntt ore reserves at 0.5% Li2O cut off.

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Lntt Ore Reserve @ 0.5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Tonnage Li2O %

472000 513000
985 000

0.98 0.96
0.97

Table 7.Lntt Ore Reserve as of 30.11.2011. The ore reserve is not additional to the mineral resource.

Figure 3. Lntt open pit.

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MINERAL RESOURCE AND ORE RESERVE ESTIMATES OF OUTOVESI Geology Deposit Geology

The Outovesi claim area is located on the Pohjanmaa Schist Belt as Lntt. The vein represents an example of homogenous albite-spodumene pegmatite. The vein is SSW-NNE orientated and dipping about 60 to WNW. The total length is 300 m and the vein is partly open to depth. The host rock on both sides is homogenous mica schist including some graphitic schist, greywacke or small greenish skarn interlayers. The overburden (till) thickness is about ten meter. The vein width is up to ten meter and it cuts hosting mica schist bedding almost perpendicularly. Neither smaller parallel spodumene pegmatite veins (as in Lntt) nor mica schist inclusions in pegmatite were discovered. The main minerals are albite, quartz, potassium feldspar and spodumene. Spodumene is light green in color and the crystal thickness is quite uniform, usually 8-10 mm. The long axis of spodumene crystals is orientated typically almost perpendicular to the vein contact. Spodumene is altered to muscovite in places at vein contacts and at narrow (usually < 2 m) ends of the vein spodumene is totally altered.
Data Drill Hole Database

The drill hole database was obtained from Keliber as Excel spreadsheets and was transferred into Microsoft Access for use in Surpac software. The Outovesi database contains information on 20 drill holes with a total length of 1499 m. The number of assayed intervals is 404. Assay file contains the fields for Li2O, Cl, RQD (Rock Quality Designation) and lithology. The database doesnt contain any density determination results. The density of 2,7 ton/m3 was used throughout the estimates. Drill hole collar coordinates were surveyed using differential GPS method. All drillholes have been downhole surveyed for dip. Collar azimuths were surveyed using GPS methods. It is considered that incomplete downhole survey does not cause any significant bias in resource estimation because the geological frame work is very simple and the most of the holes are less than one hundred meters long.

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Outotec (Finland) Oy has not validated the database against the original drill logs but is in opinion that the database integrity is good and sufficient for the purpose.

Resource Estimate Orebody Model

The resource outlines were constructed on cross sections at intervals of 40m based on the lithological and assayed intervals. The cutoff grade used was 0.5% Li2O. The 3D model was continued about 15 m from the last drilled cross section in the northwestern and southeastern ending of the deposit. Downward the model was continued some 5 - 15 m from the lowermost drill hole information. The resource block model inside the mineralized envelopes is shown in the Figure 1. Each of the resource wireframe was used as a hard boundary for grade interpolation.

Figure 4. Top view of the Outovesi deposit.

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Basic Statistics The assay data was coded using the wireframe of the mineralized zone to define the resource intersections. The intersection codes were used to extract samples for statistical analysis and for compositing the data for grade interpolation. Compositing of drill hole samples is carried out in order to
standardize the database for further statistical evaluation. This step eliminates any effect relating to the sample length, which may exist in the data. The summary of basic summary statistics of the composites is presented in the table below.
Variable Numberofsamples Minimumvalue Maximumvalue Mean Median GeometricMean Variance StandardDeviation Coefficientofvariation li2o 39 0.32 2.11 1.45 1.54 1.36 0.18 0.42 0.29

Table 8. Basic statistics of the composites data used in the grade estimations The data sets show low Coefficient of Variation which indicates that the data is of good quality and there is no need for any top cutting the high grade assays.

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Block Model

The resource block model was created using Surpac software. The parent block size of 10m x 5m x 5m with sub-blocking to 5m x 2.5m x 5m was selected partly on a basis of the drilling density and partly to honor the geometry of the mineralized lens. The summary of the block model parameters is in the table 9.
Type MinimumCoordinates MaximumCoordinates UserBlockSize Min.BlockSize Rotation Attribute Name avgdst dst2ns li2o material ns nsr Y 7066600 7067350 10 5 30 Type Float Float Float Integer Integer Calculated X 3338350 3338650 5 2.5 0 Z 25 95 5 5 0

Decimals BackgrounDescription 1 1 1 1 2 0 2 1=ovb,2=waste,3=ore 0 li2o*146

Table 9. Outovesi resource blockmodel parameters.

Grade Interpolation
Prior to the grade interpolation the assay data was composited to 2m downhole composites honoring the mineralised lens boundaries. The composite length was chosen on the basis of the average length of the samples inside the mineralized envelopes and above 0.5%Li2O grade of 1.2m rounded up to nearest full meter. Inverse Distance squared method was used to interpolate the Li2O grade into the blocks. The blocks inside each wireframe were filled maximum search distances of 60 m. The search ellipsoids were aligned to honor the main continuity directions of the ore lenses. A minimum of 3 and a maximum of 20 composites were used to estimate the grades into the blocks.

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Blockmodel validation The block model validation includes visual inspection and comparing the mean between the composited and estimated data. The visual inspection did not show any unusual problem when compared with drill hole grade across sections and statistical comparisons of global block mean and median grades and corresponding composite grades showed expected correlation.
Variable Numberofsamples Minimumvalue Maximumvalue Mean Median GeometricMean Variance StandardDeviation Coefficientofvariation Composites li2o 39 0.32 2.11 1.45 1.54 1.36 0.18 0.42 0.29 Blockmodel li2o 691 0.00 1.95 1.47 1.51 NotCalculated 0.07 0.27 0.18

Table 10. Basic statistics of the blockmodel and composites used to estimate the block grade.

Mineral Resource Classification According to Outotec, Outovesi Mineral Resource is classified as Indicated Mineral Resource. The classification is based on the drilling density and a very simple geological frame work. All the core logging, sampling and assaying have been done according to the procedures of Keliber (Sandberg E., 2011, Methods and results of the Keliber drilling programme on the Kaustinen area from Sep 2010 to Jan 2011, Keliber Oy). Inferred Mineral Resource classification is not used at all, because it seems quite obvious that the spodumene containing mineralization is mainly changed to muscovite downwards and along the strike to NE and SW at least in the thinner parts of the vein.

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Mineral Resource Statement The table below summarizes the mineral resources calculated by Outotec (Finland) Oy. The mineral resource has been calculated using 0.5% Li2O cut off.
Outovesi Mineral Resource @0.5%Li2Ocutoff Resource Class Tonnage Li2O% Measured 0 0.00 Indicated 289000 1.49 Measured+Indicated 289000 1.49

Table 11.Outovesi Mineral Resource as of 30.11.2011.

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Ore Reserve Estimate The Outovesi deposit is amenable for conventional open pit mining. The ore reserve estimate of Outovesi is based on the open pit optimization (floating cone algorithm) followed by the open pit design of the highest profit pit shell. The pit optimization parameters are presented in the following table.
Li carbonate price Bi productcredit Exchange rate Flotationrecovery% Conversionrecovery% Waste miningcost Ore miningcost Processingandotheropex Overall slope angle (rock) Slope angle (soil) 10000 Us$/t 7% 1.30 :Us$ 80% 90% 1.4 /t 1.7 /t 45.0 /t 50.0 dec 20.0 dec

Table 12. Open pit optimization parameters. The open pit design criteria are provides in the table 13 below.
Batterangle Interrampangle Overall slope angle Roadgradient Roadwidth Bermwidth 80 dec 65 dec 55 dec 10 % 9m 8m

Table 13. Open pit design criteria. The open pit stripping ratio is 6.0. The mining modifying factors are: Mining recovery Dilution 95%, 25%.

The table 14 summarizes the Outovesi ore reserves at 0.5% Li2O cut off.

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Outovesi Ore Reserve @ 0.5% Li2O cut-off Reserve Class Proven Reserve Probable Reserve Total Ore Reserve Tonnage Li2O %

0 277000
277 000

0.00 1.17
1.17

Table 14.Outovesi Ore Reserve as of 30.11.2011. The ore reserve is not additional to the mineral resource.

Figure 5. Outovesi open pit